Benefits Update - March 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:

Experts discuss where we’ve been, where we are, where we’re going on health care reform journey, Employee Benefits Management Directions newsletter, Issue No. 509, February 7, 2012 – Adopting necessary changes to plan documents and training internal staff regarding the new health care reform requirements are just two of the suggestions that Ann M. Caresani, CPA, and Richard P. McHugh, both partners at Porter Wright Morris & Arthur, LLP, made during a recent webcast sponsored by the International Foundation of Employee Benefit Plans (IFEBP).

U.S. files brief with Supreme Court on severability issue, Employee Benefits Management Directions newsletter, Issue No. 509, February 7, 2012 – The severability of most of the provisions of the Patient Protection and Affordable Care Act (ACA) may not be considered, according to the Solicitor General’s brief on behalf of the U.S. government filed with the Supreme Court in response to two of the pending health reform cases.

Compliance with health reform’s SBC requirement could be complex, expert notes, Employee Benefits Management Directions newsletter, Issue No. 510, February 20, 2012 — CCH asked Sarah Bassler Millar, partner in the Chicago office of Drinker Biddle’s Employee Benefits and Executive Practice Group, to explain the Summary of Benefits and Coverage requirements and how employers and insurers can comply with these provisions.

Departments issue SBC final rule, Employee Benefits Management Directions newsletter, Issue No. 510, February 20, 2012 — The Departments of Health and Human Services, Labor, and the Treasury (the Departments) have issued the final rule and glossary implementing the Summary of Benefits and Coverage (SBC) requirements of the Patient Protection and Affordable Care Act. The final regulations retain many of the provisions of the proposed regulations.

What's New in Employee Benefits Management:

SBC — The final rules on the Summary and Benefits and Coverage (SBC) are discussed at ¶10,240. Preventive services — The final rule that reaffirms the religious employers that are allowed an exemption for covering FDA-approved contraceptives as a part of a health plan is discussed at ¶10,140. FMLA —The Sixth Circuit Court of Appeals’ decision in Thom v. American Standard (regarding liquidated damages) is discussed at ¶68,062. Moving expenses —The 2012 rate for moving expenses has been updated at ¶154,352.

HSAs — The IRS has clarified, in Notice 2012-14, that an individual is not ineligible to establish and contribute to an HSA because he or she is eligible to receive medical services at an Indian Health Service facility. The notice is discussed at ¶39,067.

Fee schedule — The IRS has updated its user fee schedule, generally effective February 1, 2012, for requests for various types of employee plan letter rulings and determination letters, and other matters under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division. For the new schedule, see ¶6020.

Departments issue SBC final rule, uniform glossary. The Departments of Health and Human Services, Labor, and the Treasury (the Departments) have issued a final rule and glossary implementing the Summary of Benefits and Coverage (SBC) requirements of the Patient Protection and Affordable Care Act (ACA). The ACA added PHSA Sec. 2715, which introduced new reporting and disclosure requirements for group health plans and health insurers. These new reporting and disclosure provisions require group health plans and health insurers to provide an SBC that clearly and accurately describes the benefits and coverage under the applicable plan or coverage. Find out more about the SBC requirements at ¶20,060.

EBSA final regs require service providers to furnish detailed fee disclosures to plan fiduciaries. The Employee Benefits Security Administration (EBSA) has issued final regulations that are designed, effective July 1, 2012, to provide plan fiduciaries with sufficient information to evaluate the reasonableness of compensation and fees directly and indirectly paid to certain service providers (including affiliates), and assess the potential for conflicts of interest that may affect the performance of a service provider. See the discussion at ¶10,935 for more information about the fee disclosure requirements.

DOL proposes rules on military family leave provisions. The Department of Labor has issued proposed rules to implement new statutory amendments to the FMLA that would expand military family leave provisions and incorporate a special eligibility provision for airline flight crew employees. Specifically, the proposed rules would extend the entitlement of military caregiver leave to family members of veterans for up to five years after leaving the military. For airline flight crew employees, the proposed rules would add a special hours of service eligibility requirement for them and specific provisions for calculating the amount of FMLA leave used that better take into account the hours worked by crew members. To find out more about these proposed rules, see ¶30,980 and ¶31,275.

IRS clarifies eligibility for HSAs. The IRS has clarified that an individual is not ineligible to establish and contribute to a health savings account (HSA) because he or she is eligible to receive medical services at an Indian Health Service (IHS) facility. Code Sec. 223 permits eligible individuals to establish HSAs, defining such an individual as one who is covered by a high deductible health plan, is not covered by another plan, is not a dependent and is not enrolled in Medicare. More information about HSA eligibility can be found at ¶23,705.

Health accounts continue to grow in numbers, assets. Account-based health plans continued to grow in 2011, increasing to $12.4 billion in assets among 8.4 million accounts, according to the latest survey by the nonpartisan Employee Benefit Research Institute (EBRI) and Mathew Greenwald & Associates (MGA). That’s up more than 55 percent in the number off accounts and almost 70 percent in assets since 2010. To learn more about the EBRI survey results, see the discussions at ¶20,080, ¶21,100, ¶23,600, and ¶23,700.

COBRA and Gross Misconduct. This report, designed to help those responsible for administering benefit plans and the COBRA continuation of coverage provisions, has been updated to reflect court decisions on gross misconduct (Report 329.2.-1).

Investment Advice Arrangements. This report reviews provisions of final regulations, effective Dec. 27, 2011, which, among other specifics define the scope of the fee leveling requirements under an eligible investment advice arrangement and specify the requirements for the certification of model investment advice (Report 605.1.-33).

State Temporary Disability. Information for 2012 has been added to this report detailing the temporary disability benefits required in these five states and Puerto Rico (Report 323.-13).

Retiree Medical And Medicare. The regulations permit employers and labor organizations to offer retirees a wide range of health care plan designs that incorporate Medicare or comparable state health benefit programs without violating the Age Discrimination In Employment Act (Report 328.04.-1).

CLASS Program. Due to actuarial unavailability, the implementation process for the CLASS program ceased in October 2011. The program, a national, voluntary, consumer-funded insurance, was enacted to help participants with significant functional limitations to pay for assistive services and devices to allow them to continue to live in their homes or in a community setting (Report 325.23.-7).

New Benefits Titles Added
Employee Benefit Plan Review (March 2012 issue)

New Pension Titles Added
401(k) Advisor (March 2012 issue)
Journal of Deferred Compensation (Spring 2012 issue)
Pension Benefits (March 2012 issue)