July 2014

From the editors of CCH's BENE and BAN products, here are hot topics from recent Employee Benefits Management Directions newsletters as well as recent explanatory updates in Employee Benefits Management. Also included are recent explanatory updates to the Benefits Answers Now product.

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Hot Topics in Employee Benefits Management:
Affordable Care Act mandate penalties may not be necessary, after all, study finds, Employee Benefits Management Directions, Issue No. 565, June 3, 2014 — Getting rid of the Patient Protection and Affordable Care Act’s (ACA) employer mandate would have little effect on Americans’ health coverage, and would eliminate labor market distortions and lessen employer opposition to the ACA, according to a brief issued by the Urban Institute.

CMS provides guidance on transitional policy extensions for midsize employers, Employee Benefits Management Directions, Issue No. 565, June 3, 2014 —The Centers for Medicare and Medicaid Services (CMS) has released a set of frequently-asked-questions (FAQs) regarding implementation of certain health insurance market reforms and health insurance marketplace standards established in the Patient Protection and Affordable Care Act (ACA). Specifically, the FAQs include guidance for midsize employers (those with 51 to 100 employees) on the transitional policy extensions provided in March 2014.  

Experts provide FMLA tips for dealing with the DOL, absence reporting policies, and curbing leave abuse, Employee Benefits Management Directions, Issue No. 566, June 17, 2014 — The Department of Labor (DOL) is changing its approach to Family and Medical Leave Act (FMLA) cases to include more frequent audits and onsite visits, according to Franczek Radelet Partner Jeff Nowak, who co-chairs the firm’s Labor and Employment Practice Group. Addressing attendees at the National Employment Law Institute’s (NELI) Annual Mid-Year Employment Law Conference in Chicago, Nowak offered several tips to help employers avoid coming up short should the DOL knock on their door. He also shared several good practices regarding absence reporting policies and curbing intermittent leave abuse.      

CMS provides information on process for paying ACA’s reinsurance fee, Employee Benefits Management Directions, Issue No. 566, June 17, 2014 — The Department of Health and Human Services (HHS) via the Centers for Medicare & Medicaid Services (CMS) has announced that it will implement a streamlined process for the collection of reinsurance contributions.

What's New in Employee Benefits Management:
COBRA notices — Proposed regulations containing amendments to COBRA’s notice requirements have been issued by the Department of Labor (DOL), along with updates to COBRA model notices, clarifying to workers that, if they are eligible for COBRA continuation upon leaving a job, they may, instead, purchase coverage via the Health Insurance Marketplace. See ¶14,060 for more information.

Health exchanges — The Centers for Medicare and Medicaid Services (CMS) has issued a final rule establishing standards related to health insurance exchanges and insurance market standards. The discussion at ¶12,130 has been updated to reflect the rule.

New pension law — The Cooperative and Small Employer Charity Pension Flexibility Act (P.L. 113-97) is designed to help charities and cooperative associations by implementing pension funding rules that reflect the unique designs of their pension plans, rather than subjecting these plans to the funding rules of the Pension Protection Act. Internal Revenue Code changes reflecting the new law are at ¶300,351, ¶300,381, ¶300,461, ¶300,471, ¶300,481, ¶300,595, ¶300,658 ¶300,659 and ¶300,789.

What's New in Benefits Answers Now (BAN):
PBGC final regs streamline certain multiemployer plan reporting rules. The Pension Benefit Guaranty Corporation (PBGC) has finalized amendments to its multiemployer plan regulations designed to make the disclosure of information to the PBGC and to plan participants more efficient and effective and to reduce the administrative burden on plan sponsors. The final regulations reduce certain requirements for multiemployer plans that are terminated by mass withdrawal and mergers and transfers among multiemployer plans. The final regulations, which are unchanged from the proposed regulations, are effective June 27, 2014. Find out more about the final regulations at ¶14,610.

Penalties apply to employer payment plans that don’t comply with ACA’s market reforms. The IRS has issued new Questions and Answers for Affordable Care Act Tax Provisions that address the consequences to an employer if the employer does not establish a health insurance plan for its own employees, but reimburses those employees for premiums they pay for health insurance (either through a qualified health plan in the Health Insurance Marketplace or outside the Marketplace). An overview of employer payment plans can be found at ¶20,135.

Experts provide FMLA tips for dealing with the DOL, absence reporting policies, and curbing leave abuse. The Department of Labor (DOL) is changing its approach to Family and Medical Leave Act (FMLA) cases to include more frequent audits and onsite visits, according to Franczek Radelet Partner Jeff Nowak, who co-chairs the firm’s Labor and Employment Practice Group. While the agency has always had the right to make both announced and unannounced onsite visits, this approach in the FMLA context has been “virtually nonexistent” — until now, he said. Addressing attendees at the National Employment Law Institute’s (NELI) Annual Mid-Year Employment Law Conference in Chicago, Nowak offered several tips to help employers avoid coming up short should the DOL knock on their door. He also shared several good practices regarding absence reporting policies and curbing intermittent leave abuse. See the discussion at ¶31,255 for more information about the what to do in case of a DOL audit.

Definition of spouse for Working Aged policy for group health plans is clarified by CMS in light of Windsor decision. The Centers for Medicare & Medicaid Services (CMS) has issued an alert providing clarification of its Medicare Secondary Payer (MSP) policy for purposes of determining the proper primary payer in light of the U.S. Supreme Court’s invalidation of Section 3 of the Defense of Marriage Act (DOMA) in June 2013 (United States v. Windsor, No. 12-307, (US Sup Ct.) June 26, 2013). In the alert, the CMS explains that the MSP Working Aged provisions previously did not apply on the basis of spousal status to individuals in a same-sex marriage. The CMS now states that, because of the Windsor holding, it is no longer prohibited from applying the MSP Working Aged provisions to those individuals. To find out more about the MSP’s updated definition of spouse, see ¶22,890.

Inherited IRAs do not qualify for bankruptcy exemption, Supreme Court rules. A debtor’s inherited IRA did not qualify for the bankruptcy exemption provided in Section 522(b)(3)(C) of the U.S. Bankruptcy Code because the funds in inherited IRAs were not "retirement funds" within the meaning of Section 522(b)(3)(C), the U.S. Supreme Court has held in an unanimous decision. The case is Clark v. Rameker (US Sup Ct). More information about inherited IRAs can be found at ¶14,940.

What's New in Spencer’s Benefits Reports:
COBRA Notices. The DOL recently issued updated model COBRA notices that contain language informing COBRA-eligible employees that they now can enroll in marketplace coverage instead of COBRA. The updated model notices are reproduced in this report (Report 329.3.-1).

HIPAA. HIPAA requires employers and health plan issuers to comply with group plan portability, access and renewability provisions. This report examines these provisions of HIPAA (Report 501.-15).

Temporary High Risk Pool. The ACA created the Pre-Existing Condition Insurance Plan (PCIP) for high-risk individuals that ran from 2010 to April 30, 2014, when enrollees in the PCIP were transferred into a marketplace plan. This report provides an overview of the PCIP program (Report 504.-1).

Sec. 125 Plans. This report analyzes guidance provided on qualified and nonqualified Sec. 125 plan benefits (Report 351.-1).

Float Income. Service providers should be cautioned that a recent case holding that float income is not a plan asset does not relieve them of the need to fully disclose float income to plan fiduciaries. This report reviews the recent case and warns fiduciaries to be vigilant in addressing float income (Report 605.-35).