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March 2013

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:
Major decisions on implementation of health care reform must be made in 2013, expert says, Employee Benefits Management Directions, Issue No. 533, February 12, 2013 — After years of wondering when and if health care reform would take effect, employers entered 2013 with the newfound realization that there is no turning back. Although most employers have already had to grapple with some of the smaller mandates, this is the year in which many of the more significant provisions must be implemented. Major decisions will have to be made and action must be taken. To preview what employers can expect in 2013 and what they will need to do, Wolters Kluwer spoke to Kathryn Bakich, Senior Vice President and National Health Compliance Practice Leader at The Segal Company.

EBSA extends March 1 deadline 2013 deadline for employer-provided notice of health exchanges, Employee Benefits Management Directions, Issue No. 533, February 12, 2013 — The Employee Benefits Security Administration (EBSA) has announced that the notice requirement of Fair Labor Standards Act (FLSA) Sec. 18B will not take effect on March 1, 2013, as originally planned. EBSA expects the new deadline to be  late summer or fall of 2013.

Department of Labor issues final rule expanding FMLA protections for families of eligible veterans, airline personnel, Employee Benefits Management Directions, Issue No. 534, February 26, 2013 — The Department of Labor has issued a final rule implementing expansion of FMLA provisions for families of certain veterans and for airline personnel. The rule also includes clarifying changes concerning the calculation of intermittent or reduced schedule FMLA leave, reorganization of certain sections to enhance clarity, the removal of the forms from the regulations, and technical corrections to current regulations.

HHS provides sample HIPAA provisions for business associate agreement, Employee Benefits Management Directions, Issue No. 534, February 26, 2013 —  The Department of Health and Human Services (HHS) has updated sample provisions for use in a business associate contract between a covered entity and its business associate, or between a business associate and its subcontractor, to conform with the HIPAA final regulations released in January (see Directions, Issue No. 532, January 29, 2013).


What's New in Employee Benefits Management:
PCORI fee — EBSA has issued a Frequently Asked Question on the PCORI fee, which the health reform law imposed on sponsors of certain self-insured health plans by the ACA for plan years ending on or after October 1, 2012 and before October 1, 2019. The fee is discussed at ¶10,505.

FMLA final rule — The Department of Labor's final rule implementing expansion of FMLA provisions for families of certain veterans and for airline personnel (see story above) is discussed at ¶68,052 through ¶68,060.

Health insurance exchanges — HHS has issued a proposed rule to implement certain functions of the Affordable Insurance Exchanges, including determining eligibility for, and granting certificates of exemption from, the shared responsibility payment for not maintaining minimum essential coverage under Code Sec. 5000A. The proposed rule is discussed at ¶12,130.

Health reimbursement accounts — EBSA has issued a Frequently asked Question on health reimbursement arrangements and the interaction of the health reform law's prohibition on lifetime or annual limits. For more information, see ¶39,065.

Small business health care tax credit — The latest questions and answers from the IRSon four aspects of the small business health care tax credit are discussed at ¶10,505.

Claims and appeals — An employee benefit plan that gave five different reasons, over the course of a claims and appeals process, for denying a beneficiary’s claim, had made an arbitrary and capricious decision, according to the Fifth Circuit Court of Appeals. The case, Rossi v. Precision Drilling Oilfield Services Corporation Employee Benefits Plan, is discussed at ¶10,425.

Final HIPAA regulations — The full text of the regulations that amend HIPAA’s Privacy, Security, and Enforcement Rules as mandated by the Health Information Technology for Economic and Clinical Health Act (HITECH Act) can be found at ¶700,075.


What's New in Benefits Answers Now (BAN):
Department of Health and Human Services issues final rule to strengthen HIPAA provisions. The Department of Health and Human Services’ (HHS) Office of Civil Rights (OCR) has issued an advance release of a final rule that amends HIPAA’s Privacy, Security, and Enforcement Rules. According to HHS, this final rule is needed to strengthen the privacy and security protections established under HIPAA for individuals’ health information maintained in electronic health records (EHR) and other formats. To find out more about the new rule, see ¶22,085, ¶22,087, ¶22,112, and ¶22,155.

Proposed rules clarify definition of religious employer under ACA’s contraceptive coverage requirement. The Department of Labor’s Employee Benefits Security Administration, the Department of Health and Human Services, and the Internal Revenue Service have issued proposed regulations that clarify the definition of religious employer under the Patient Protection and Affordable Care Act’s (ACA) no-cost sharing contraceptive coverage requirement. In addition, the proposed rules accommodate nonprofit religious organizations that do not qualify as religious employers by providing their enrollees separate contraceptive coverage, with no copayments, but at no cost to the religious organization. See the discussion at ¶20,051 for more information about the preventive services required to be covered under the ACA.

Wage and Hour Division clarifies definition of “son or daughter” for purposes of FMLA leave. The Department of Labor’s Wage and Hour Division (WHD) has issued additional guidance regarding the definition of "son or daughter" for employees seeking leave under the Family and Medical Leave Act (FMLA) in order to care for adult children aged 18 or older. In order to take leave under the FMLA to care for a child under the age of 18, an employee must only show a need to care for the child due to a serious health condition, but if an employee needs to take care of an adult child aged 18 or older, the child must have a mental or physical disability and be incapable of self-care because of that disability. For more information about family members under the FMLA, see ¶31,040.

IRS issues update to EPCRS. The IRS has issued a revenue procedure revising its Employee Plans Compliance Resolution System (EPCRS). The EPCRS permits plan sponsors to correct certain plan qualification failures and thereby continue to provide their employees with retirement benefits on a tax-favored basis. The components of EPCRS are the Self-Correction Program (SCP), the Voluntary Correction Program (VCP), and the Audit Closing Agreement Program (Audit CAP). Find out more about the EPCRS at ¶14,060.

Health account balances resume growth. Account-based health plans (which include both health savings accounts (HSAs) and health reimbursement arrangements (HRAs)) continued to grow in 2012, increasing to $17.8 billion in assets among 11.6 million accounts, according to research from the nonpartisan Employee Benefit Research Institute (EBRI) and Mathew Greenwald & Associates (MGA). The average health account balance was $1,534 in 2012, up 4 percent from 2011. An overview of the HSAs and HRAs can be found at ¶23,600 and ¶23,700.


What's New in Spencer’s Benefits Reports:
Employer Shared Responsibility Payments. Beginning in 2014, the ACA assesses payments on certain large employers with 50 or more employees, including employers that do and do not offer health coverage. The rules that employers will have to follow are detailed in this report (Report 550.-1).

HIPAA Privacy Standards. HIPAA includes three separate sets of administrative simplification provisions: privacy standards, transaction standards, and security standards. This report summarizes the privacy standards (Report 502.-1).

Adoption Assistance. Employers can provide an adoption assistance program that excludes from an employee’s gross income amounts for qualified adoption expenses. The amount excludable in 2013 is $12,970 (Report 327.2.-5).

401k Hardship Withdrawals. An employee may make a hardship withdrawal from a 401k, if they show an immediate financial need that can be met only by receiving a hardship distribution. This report reviews rules regarding hardship withdrawals (Report 225.-1).

Sec. 125 And HRAs Under Health Reform. Several provisions in the ACA affect account-based plans such as IRC Sec. 125 cafeteria plans and health reimbursement accounts (Report 562.-1)


New Pension/Benefits Titles Added:
Benefits Law Journal (Spring 2013)
Employee Benefit Plan Review (March 2013)
401(k) Advisor (March 2013)
Journal of Deferred Compensation (Spring 2013)