May 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:
Department of HHS issues rules for health reform Affordable Insurance Exchanges, Employee Benefits Management Directions newsletter, Issue No. 513, April 3, 2012 – The Department of Health and Human Services (HHS) has issued a final rule on Affordable Health Insurance Exchanges, which combines policies from two Notices of Proposed Rulemaking published in 2011. The final rule offers a framework to assist states in setting up Exchanges. In addition, the rule addresses the Small Business Health Options Program (SHOP), which will provide small employers with new ways to offer employee health coverage.
Insurers working toward compliance with SBC rules will not be penalized during first year, Employee Benefits Management Directions newsletter, Issue No. 513, April 3, 2012 – The Departments of Health and Human Services, Labor and the Treasury (Departments) have issued FAQs implementing the Summary of Benefits and Coverage (SBC) requirements of the Patient Protection and Affordable Care Act. The FAQs indicate that during the first year of applicability, the Departments will not impose penalties on plans and issuers that are working toward compliance with the SBC rules.
Supreme Court grapples with what parts of PPACA should be retained, if insurance mandate is found unconstitutional, Employee Benefits Management Directions newsletter, Issue No. 514, April 17, 2012 — On March 28, in the third and final day of oral arguments on the Patient Protection and Affordable Care Act (PPACA) health reform law, the U.S. Supreme Court heard varying views on the issue of what parts of the law to retain, if they decide to rule the health insurance mandate is unconstitutional.
IRS posts audit procedures for COBRA compliance, Employee Benefits Management Directions newsletter, Issue No. 514, April 17, 2012 — The Internal Revenue Service has posted on its website “Audit Techniques and Tax Law to Examine COBRA Cases (Continuation of Employee Health Care Coverage),” which summarizes the COBRA continuation coverage law and the penalties for noncompliance and explains the steps an IRS examiner will take in determining if a taxpayer failed to comply with COBRA.
What's New in Employee Benefits Management:
FAQs on SBCs — The FAQs About Affordable Care Act Implementation Part VIII, which address the implementation of the Summary of Benefits and Coverage (SBC) rules, are discussed at ¶10,240.
Supreme Court ruling on FMLA — The Supreme Court has ruled that individuals cannot sue states under FMLA’s self-care provision. The ruling is discussed at ¶68,062.
Exchange regulations — The final regulations on Affordable Health Insurance Exchanges are discussed at ¶12,130.
Long-term disability plans — The issuer of long-term disability plans acted properly when it reduced two employees’ payments based on Social Security benefits received by their children, the Seventh Circuit Court of Appeals (CA-7) has ruled. The case, Schultz v. Aviall, Incorporated Long Term Disability Plan, is discussed at ¶30,080.
Health care reform regulations — Regulations have been issued on standards related to reinsurance, risk corridors, and risk adjustment and also on student health plans under the Patient Protection and Affordable Care Act. The regulations are at ¶700,075.
FMLA — A former employee’s failure to present evidence that her employer denied or interfered with her FMLA rights before she exercised them meant that she could not proceed with her FMLA interference claim, according to the Eighth Circuit Court of Appeals (CA-8). The case, Lovland v. Employers Mutual Casualty Company, is discussed at ¶68,062.
What's New in Benefits Answers Now (BAN):
HHS Issues Final Rule On SHOP Exchanges. Beginning in 2014, the Patient Protection and Affordable Care Act (ACA) mandates that each state operate a SHOP Exchange. The SHOP will provide small employers with new ways to offer employee health coverage, better information, easier administration, and access to tax credits that make coverage more affordable. As described in the final rule, the SHOP will allow employers to choose the level of coverage they will offer and offer the employees choices of all qualified health plans within that level of coverage. This allows employees a choice among plans and they can select the one that best fits their needs and their budget. Find out more about SHOP Exchanges at ¶20,065.
Insurers working toward compliance with SBC rules will not be penalized during first year. The Departments of Health and Human Services, Labor, and the Treasury (the Departments) issued final rule and glossary implementing the Summary of Benefits and Coverage (SBC) requirements of the ACA in February. As provided in the final rule, starting on Sept. 23, 2012, health insurers and group health plans will be required to provide the SBC and the uniform glossary to consumers. However, in recently released frequently asked questions (FAQs), the Departments have confirmed that during the first year of applicability, they "will not impose penalties on plans and issuers that are working diligently and in good faith to provide the required SBC content in an appearance that is consistent with the final regulations. The Departments intend to work with stakeholders over time to achieve maximum uniformity for consumers and certainty for the regulated community." To find out more about the SBC, see ¶20,060.
IRS posts audit procedures for COBRA compliance. The Internal Revenue Service has posted on its website "Audit Techniques and Tax Law to Examine COBRA Cases (Continuation of Employee Health Care Coverage)," which summarizes the COBRA continuation coverage law and the penalties for noncompliance—and explains the steps an IRS examiner will take in determining if a "taxpayer" failed to comply with COBRA. This document incorporates the transition of public correspondence and telephone inquiries regarding COBRA to the Cincinnati Compliance Services Campus, Centralized Excise Operation; finalized 2001 interim and proposed rules; and updated audit/compliance requirements. To learn more about the COBRA audit process, see the discussion at ¶22,750.
Employers plan to expand benefits technology to reduce costs. More than half of U.S. employers say they are expanding the use of technology to manage costs associated with employee benefits programs, according to recent research from financial services provider, Prudential Financial. The study, Sixth Annual Study of Employee Benefits: Today & Beyond, found that employers expect the importance of benefits technology to grow substantially over the next five years. More information about the use of technology in benefits administration can be found at ¶50,245.
BLS reports that most workers did not use all of paid sick leave. Full-time private industry workers who had a paid sick leave plan with a fixed number of sick leave days earned did not, on average, use the paid sick leave they were provided, according to a recent analysis of the National Compensation Survey (NCS) from the Bureau of Labor Statistics (BLS). The report, Paid Sick Leave: Prevalence, Provision, and Usage among Full-Time Workers in Private Industry, noted that while there is no federal requirement that employers provide paid sick leave benefits, 73 percent of full-time private industry workers in the U.S. were provided with paid sick leave plans. The BLS found that among full-time workers who participated in paid sick leave plans, 68 percent participated in plans in which a fixed number of days of paid sick leave were provided each year. See the discussion at ¶32,660 for more information about the prevalence sick leave plans.
What's New in Spencer’s Benefits Reports:
ERISA Reporting For Welfare Plans. This report outlines ERISA requirements for reporting, disclosure, and discrimination for welfare benefit plans, and provides a compliance checklist along with a discussion of whether voluntary plans are subject to ERISA (Report 341.-1).
Health Reform And HIPAA Portability. The provisions of the Patient Protection and Affordable Care Act of 2010, enacted in March 2010, implementing reforms to the health insurance market are incorporated into this report (Report 501.-55).
MEWAs And DOL. The Patient Protection and Affordable Care Act increased the DOL’s involvement with MEWAs. This report analyzes the regulations and the DOL’s new responsibilities (Report 606.01.-1).
ERISA Fiduciary Cases. Federal court cases, reviewed in this report, have used ERISA’s broad definition of fiduciary to reach a variety of positions, such as non-trustee owners of a business and illustrate the broad protection afforded to plan participants under ERISA (Report 605.01.-11).
Health Savings Accounts. This report summarizes the most important features of HSAs, including the limits for deductibles and contributions for 2012 (Report 356.-5).
New Pension/Benefits Titles Added
Benefits Law Journal (Summer 2012)
Employee Benefit Plan Review (May 20, 2012)
401(k) Advisor (May 2012)
Journal of Pension Planning & Compliance (Summer 2012)
Pension Benefits (May 2012)
Plan Correction Answer Book (2012 Cumulative Supplement)
Plan Termination Answer Book (2012 Cumulative Supplement)