June 2012
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:
Keep eye on ACA deadlines while waiting for Supreme Court decision, expert advises, Employee Benefits Management Directions newsletter, Issue No. 515, May 8, 2012 – At the end of March 2012, the United States Supreme Court heard arguments regarding the Patient Protection and Affordable Care Act (ACA). The main question was whether the individual mandate — a requirement that all Americans have health insurance coverage, either through work, a public program like Medicaid or an individual insurance policy — is unconstitutional because it forces Americans to purchase health insurance. To preview what may result when the Supreme Court announces its decision and how it may affect employer-sponsored health coverage, CCH spoke to Kathryn Bakich, Senior Vice President and National Health Compliance Practice Leader at The Segal Company.
CCIIO issues guidance on medical loss ratio rules, Employee Benefits Management Directions newsletter, Issue No. 515, May 8, 2012 – The Center for Consumer Information & Insurance Oversight (CCIIO) has issued guidance in the form of an informational bulletin on the medical loss ratio (MLR) provision of the Patient Protection and Affordable Care Act (ACA). Section 2718 of the Public Health Service Act (PHSA), as added by the ACA, requires health insurance issuers (issuers) to submit a medical loss ratio (MLR) report to the Secretary of Health and Human Services (HHS) and requires them to issue a rebate to enrollees if the issuers’ MLR is less than the applicable percentage established in PHSA Sec. 2718(b).
EBSA clarifies website information on implementation of mental health parity law, Employee Benefits Management Directions newsletter, Issue No. 516, May 22, 2012 — The Department of Labor’s Employee Benefits Security Administration (EBSA) has updated its website with various features addressing the Mental Health Parity and Addiction Equity Act (MHPAEA). The features include a set of 10 frequently-asked questions and answers about the law, which was enacted in 2008.
IRS proposed rule would implement health insurance fee to fund research trust fund, Employee Benefits Management Directions newsletter, Issue No. 516, May 22, 2012 — The Internal Revenue Service and the Treasury Department have issued proposed regulations that implement and provide guidance on the fees imposed by the Patient Protection and Affordable Care Act (ACA) on issuers of certain health insurance policies and plan sponsors of certain self-insured health plans to fund the Patient-Centered Outcomes Research Trust Fund.
What's New in Employee Benefits Management:
Medical loss ratio — The CCIIO’s guidance on the MLR provision of the ACA (see story above) is reflected at ¶10,097.
2013 HSA amounts — The IRS has released the 2013 inflation-adjusted amounts for health savings accounts under Code Sec. 223. For the amounts see ¶39,067.
2013 Part D amounts — The Centers for Medicare & Medicaid Services (CMS) have announced the adjusted cost threshold and cost limit amounts for plan sponsors with qualified prescription that end in 2013, as well as the adjusted parameters (e.g., deductible and out-of-pocket threshold) for Medicare in 2013. For the amounts, see ¶10,360.
Mental health parity — The Employee Benefits Security Administration has updated its website with various features addressing the Mental Health Parity and Addiction Equity Act (MHPAEA). For details, see ¶10,065.
FMLA — A terminated employee was not entitled to proceed with his retaliation claim under the Family Medical Leave Act (FMLA) because he failed to show that his former employer’s cross-training policy or his move from one position to an equivalent one constituted a materially adverse employment action, according to the U.S. Court of Appeals for the Eighth Circuit (CA-8). The court’s decision in Chappell v. The Bilco Company is discussed at ¶68,056.
Retiree health benefits — Evidence of intent to vest is enough to confer lifetime retiree health benefits, the U.S. Court of Appeals for the Sixth Circuit has ruled. The court’s decision in Bender v. Newell Window Furnishings, Inc. is discussed at ¶26,050.
What's New in Benefits Answers Now (BAN):
IRS releases HSA amounts for 2013. The IRS has released the 2013 inflation-adjusted amounts for health savings accounts. For calendar year 2013, the annual limitation on deductions for an individual with self-only coverage under a high-deductible plan is $3,250 ($6,450 for an individual with family coverage). A "high-deductible health plan" is defined as a health plan with an annual deductible that is not less than $1,250 for self-only coverage or $2,500 for family coverage and annual out-of-pocket expenses (deductibles, co-payments and other amounts, but not premiums) that do not exceed $6,250 for self-only coverage or $12,500 for family coverage. To find out more about HSAs and the annual limits, see ¶23,700, ¶23,715, and ¶23,740.
Government officials discuss final regulations for Summary of Benefits and Coverage. Employers and health insurers face a number of changes in 2012 introduced by the Patient Protection and Affordable Health Care Act (PPACA), according to speakers at an April 16 American Law Institute-American Bar Association (ALI-ABA) webinar on health plans. Practitioners and government officials discussed in particular the final regulations issued in February 2012 for the standardized Summary of Benefits and Coverage (SBC) offered to applicants and enrollees that is required of employers. See the discussion at ¶20,060 for more information about the SBC requirements.
CCIIO issues guidance on medical loss ratio rules. The Center for Consumer Information & Insurance Oversight (CCIIO) has issued guidance in the form of an informational bulletin on the medical loss ratio (MLR) provision of the Patient Protection and Affordable Care Act (ACA). Section 2718 of the Public Health Service Act (PHSA), as added by the ACA, requires health insurance issuers (issuers) to submit an MLR report to the Secretary of Health and Human Services (HHS) and requires them to issue a rebate to enrollees if the issuer’s MLR is less than the applicable percentage established by the law. Find out more about the MLR rules at ¶20,059.
EBSA issues more FAQs on mental health parity act. In FAQs released May 2012, the EBSA clarified that the MHPAEA does not require that insurance arrangements be organized in any particular way, says the EBSA, so a health plan would not violate the MHPAEA just because it uses a separate managed behavioral health organization to provide utilization review and other services for mental health and/or substance abuse benefits (carve-out arrangements). The MHPAEA does require that the coverage and management of mental health and substance use disorder benefits be handled in a way that is no more stringent than medical/surgical benefits. More information about the MHPAEA can be found at ¶21,860.
EBSA clarifies application of fee disclosure requirements. The Employee Benefits Security Administration (EBSA) has issued guidance on the application of the fee disclosure regulations under ERISA §404(a) and §408(b)(2). The guidance, issued in the form of a Field Assistance Bulletin, addresses the calculation of the quarterly disclosure of revenue sharing, the reporting of fees under brokerage windows, the treatment of investment management services as a designated investment alternative, and numerous other issues. To learn more about the fee disclosure requirements, see the discussion at ¶10,935.
What's New in Spencer’s Benefits Reports:
Reporting Health Insurance Costs. IRS Notice 2012-9 provides interim guidance to employers on informational reporting on each employee’s annual Form W-2 of the cost of the health insurance coverage they sponsor for employees. This report analyzes this guidance (Report 561.1.-1).
Health Reform: SHOP Exchanges. This report highlights provisions of final rules for state-based Health Benefit Exchanges and Small Business Health Options Program (SHOP) Exchange as provided by the health reform law (Report 540.1.-5).
Long Term Disability: Court Cases. This report reviews federal appeals court rulings that an employer or plan administrator may reduce the benefits payable under a long term disability plan by the amount of benefits received by the beneficiary under other plans (Report 323.4.-29).
Consumer-Driven Health Plans. The types of consumer-driven health plans that plan sponsors typically use one—health savings accounts (HSAs), health reimbursement arrangements (HRAs), medical savings accounts (MSAs), and flexible spending arrangements (FSAs) and other choice plans under IRC Sec. 125—are reviewed in this report (Report 356.-1).
Public Employer Plans. This review of large public employer retirement nationwide includes requirements for normal and early retirement, vesting, employee and employer contributions, cost-of-living adjustments and ad hoc postretirement adjustments, and benefit formulas (Report 108.5.-1).
New Pension/Benefits Titles Added:
401(k) Advisor (June 2012)
Employee Benefit Plan Review (June 2012)
Employee Benefits Answer Book (2012 Cumulative Supplement to the 10th Edition)
Journal of Deferred Compensation (Summer 2012)
Journal of Pension Benefits (Summer 2012)
Pension Benefits (June 2012)
Qualified Domestic Relations Order Handbook (2012 Supplement to the 5th Edition)
Quick Reference to COBRA Compliance (2012-2013 Edition)