Benefits Update - November 2010

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.

If you have any comments/suggestions concerning the information provided or the format used, we'd like to hear from you. Please contact me at Tulay.Turan@wolterskluwer.com.

Focus on communication during this year’s open enrollment, expert advises, Employee Benefits Management Directions newsletter, Issue No. 477, October 12, 2010 – The changing leaves, appearance of pumpkins and chill in the air alert us once again to that time of year – open enrollment season. While many aspects of open enrollment are familiar to both employers and employees, there will be some important changes this year due to health care reform. To prepare you for this year’s enrollment, CCH, a Wolters Kluwer business, interviewed Sara Taylor, Health & Welfare Solutions Leader at Aon Hewitt.

EBSA issues guidance in Q&A format on PPACA implementation compliance, Employee Benefits Management Directions newsletter, Issue No. 477, October 12, 2010 – The Employee Benefits Security Administration (EBSA) has issued guidance in a question-and-answer format with regard to compliance with the Patient Protection and Affordable Care Act (PPACA).

Departments answer more questions on health market reform provisions, Employee Benefits Management Directions newsletter, Issue No. 478, October 26, 2010 – The Department of Labor’s Employee Benefits Security Administration, the Treasury Department, and the Department Health and Human Services (the Departments) provided additional guidance on the market reform provisions of the Patient Protection and Affordable Care Act (ACA) in a recently-released frequently asked questions and answers (FAQs). This is the second set of FAQs released from the EBSA on the ACA. The greatest number of questions concerned maintaining grandfathered status.

EBSA publishes guidance on GINA provisions, Employee Benefits Management Directions newsletter, Issue No. 478, October 26, 2010 – The EBSA has issued guidance in the form of Frequently Asked Questions (FAQ) with regard to genetic nondiscrimination provisions of the Genetic Information Nondiscrimination Act of 2008 (GINA) with which group health plan insurers must comply.

PHSA – The full text of the Public Health Service Act (PHSA) as amended by the health care reform laws is at ¶600,093.

ERRP claims – HHS has issued guidance clarifying the claims reimbursement policy under the Early Retiree Reinsurance Program (ERRP). The guidance is discussed at ¶53,260.

Cost reporting on Form W-2 – The IRS has announced that it will defer the new requirement for employers to report the cost of coverage under an employer-sponsored group health plan, making that reporting by employers optional in 2011. For details, see ¶10,240.

Enforcement grace period – EBSA’s enforcement grace period for compliance with certain new internal claims and appeals requirements under PPACA is discussed at ¶10,425.

PPACA FAQs – More guidance on health care reform in the form of Frequently Asked Questions (FAQs) is discussed at ¶10,140 (grandfather plans) and ¶10,550 (excepted benefits).

Per diem rates – Updated per diem rates for travel on or after October 1, 2010 can be found at ¶158,155.

GINA FAQs – Guidance in the form of Frequently Asked Questions (FAQ) with regard to genetic nondiscrimination provisions of the Genetic Information Nondiscrimination Act of 2008 (GINA) is discussed at ¶10,070.

Cell phones – Effective for tax years beginning after December 31, 2009, cellular telephones and other similar telecommunications equipment are removed from the listed property classification, which removes them from the rule that employees must meet the substantiation requirements in order to exclude from income the value of the availability of listed property as a working condition fringe benefit. For details, see ¶100,070.

2011 flat-rate premium – The PBGC has announced the 2011 flat-rate premium. The rate is at ¶82,030.

Social Security COLAs – The 2011 rates are at ¶5020 and ¶5030.

HHS issues guidance on waiver process for annual limits requirements. The Department of Health and Human Services (HHS) has issued guidance on the process for obtaining waivers of the annual limits requirements of the Patient Protection and Affordable Care Act (ACA). The ACA requires the HHS Secretary to impose restrictions on the imposition of annual limits on the dollar value of essential health benefits for any participant or beneficiary in a new or existing group health plan or a new policy in the individual market for plan or policy years beginning on or after September 23, 2010 and prior to January 1, 2014. Specifically, the Secretary is granted the authority to determine what constitutes a "restricted annual limit" that can still be imposed under such plans or policies prior to January 1, 2014. To learn more about the annual limits requirements, see the discussion at ¶20,055.

Enforcement grace period for compliance with claims and appeals regulations announced. The DOL's Employee Benefits Security Administration (EBSA) has provided an enforcement grace period until July 1, 2011 for compliance with certain new internal claims and appeals requirements. Technical Release 2010-02 indicates the grace period is intended to give plans and issuers more time to implement procedures and make changes to computer systems in order to fully comply with some of the claims and appeals standards set forth in interim final regulations, which were published on July 23, 2010. The grace period applies to the following standards: notifying a claimant of an urgent care claims decision, providing notices in a culturally and linguistically appropriate manner, providing broader content and specificity in notices, and failing to strictly adhere to all the requirements of the interim final regulations. Find out more about the internal and external claims and appeals requirements of the ACA at ¶20,057.

Claims policy for reimbursements under ERRP are clarified by HHS. The Department of Health and Human Services (HHS) has posted guidance clarifying the reimbursement policy under the Early Retiree Reinsurance Program (ERRP). The ACA provides that employment-based plans may submit for reimbursement certain claims for "health benefits" which are defined in the statute as "medical, surgical, hospital, prescription drug, and other such benefits as shall be determined by the Secretary...." According to the ERRP website, reimbursable health benefits are items and services normally reimbursable under Medicare. To find out more about the ERRP, see ¶22,875.

Many companies will address health care reform impact in open enrollment. Seventy-five percent of employers plan to address the impact of health care reform in their open enrollment materials, according to data results of HighRoads' annual survey of FORTUNE 1000 companies and their current and future Summary Plan Description (SPD) plans and processes. The survey findings reveal key trends in employee communication and employer compliance with health care reform and other recent legislation. See the discussion at ¶40,756 for more information about communicating health reform changes during open enrollment.

Ambiguity on preventive care regulations threatens to increase costs for new mandates, ERIC says. The ERISA Industry Committee (ERIC), the Washington, D.C.-based trade association representing America's major employers, has submitted comments on the interim final regulation for group health plans and health insurance issuers relating to coverage of preventive services under the ACA. ERIC's letter expresses support for provisions in the interim final regulations that permit employers to apply reasonable medical management techniques to preventive care, but also warns that the regulations impose mandates that are based on recommendations for an audience of health care providers and, as such, are often ambiguous or unclear with respect to their application to health plans. More information about the preventive care requirements can be found at ¶20,051.