by admin | Mar 22, 2017 | Benefit Management, Compliance, Human Resources, Medicare
Entities such as employers with group health plans that provide prescription drug coverage to individuals that are eligible for Medicare Part D have two major disclosure requirements that they must meet at least annually:
- Provide annual written notice to all Medicare eligible individuals (employees, spouses, dependents, retirees, COBRA participants, etc.) who are covered under the prescription drug plan.
- Disclose to the Centers for Medicare and Medicaid Services (CMS) whether the coverage is “creditable prescription drug coverage.”
Because there is often ambiguity regarding who in a covered population is Medicare eligible, it is best practice for employers to provide the notice to all plan participants.
CMS provides guidance for disclosure of creditable coverage for both individuals and employers.
Who Must Disclose?
These disclosure requirements apply regardless of whether the plan is large or small, is self-funded or fully insured, or whether the group health plan pays primary or secondary to Medicare. Entities that provide prescription drug coverage through a group health plan must provide the disclosures. Group health plans include:
- Group health plans under ERISA, including health reimbursement arrangements (HRAs), dental and vision plans, certain cancer policies, and employee assistance plans (EAPs) if they provide medical care
- Group health plans sponsored for employees or retirees by a multiple employer welfare arrangement (MEWA)
- Qualified prescription drug plans
Health flexible spending accounts (FSAs), Archer medical savings accounts, and health savings accounts (HSAs) do not have disclosure requirements. In contrast, the high deductible health plan (HDHP) offered in conjunction with the HSA would have disclosure requirements.
There are no exceptions for church plans or government plans.
By Danielle Capilla, Originally Published By United Benefit Advisors
by admin | Mar 15, 2017 | ACA, Benefit Plan Tips, Tricks and Traps, COBRA, Compliance, Medicare
Our Firm is making a big push to provide compliance assessments for our clients and using them as a marketing tool with prospects. Since the U.S. Department of Labor (DOL) began its Health Benefits Security Project in October 2012, there has been increased scrutiny. While none of our clients have been audited yet, we expect it is only a matter of time and we want to make sure they are prepared.
We knew most fully insured groups did not have a Summary Plan Description (SPD) for their health and welfare plans, but we have been surprised by some of the other things that were missing. Here are the top five compliance surprises we found.
- COBRA Initial Notice. The initial notice is a core piece of compliance with the Consolidated Omnibus Budget and Reconciliation Act (COBRA) and we have been very surprised by how many clients are not distributing this notice. Our clients using a third-party administrator (TPA), or self-administering COBRA, are doing a good job of sending out the required letters after qualifying events. However, we have found that many clients are not distributing the required COBRA initial notice to new enrollees. The DOL has recently updated the COBRA model notices with expiration dates of December 31, 2019. We are trying to get our clients to update their notices and, if they haven’t consistently distributed the initial notice to all participants, to send it out to everyone now and document how it was sent and to whom.
- Prescription Drug Plan Reporting to CMS. To comply with the Medicare Prescription Drug Improvement and Modernization Act, passed in 2003, employer groups offering prescription benefits to Medicare-eligible individuals need to take two actions each year. The first is an annual report on the Centers for Medicare & Medicaid Services (CMS) website regarding whether the prescription drug plan offered by the group is creditable or non-creditable. The second is distributing a notice annually to Medicare-eligible plan members prior to the October 15 beginning of Medicare open enrollment, disclosing whether the prescription coverage is creditable or non-creditable. We have found that the vast majority (but not 100 percent) of our clients are complying with the second requirement by annually distributing notices to employees. Many clients are not complying with the first requirement and do not go to the CMS website annually to update their information. The annual notice on the CMS website must be made within:
- 60 days after the beginning of the plan year,
- 30 days after the termination of the prescription drug plan, or
- 30 days after any change in the creditability status of the prescription drug plan.
- ACA Notice of Exchange Rights. The Patient Protection and Affordable Care Act (ACA) required that, starting in September 2013, all employers subject to the Fair Labor Standards Act (FLSA) distribute written notices to all employees regarding the state exchanges, eligibility for coverage through the employer, and whether the coverage was qualifying coverage. This notice was to be given to all employees at that time and to all new hires within 14 days of their date of hire. We have found many groups have not included this notice in the information they routinely give to new hires. The DOL has acknowledged that there are no penalties for not distributing the notice, but since it is so easy to comply, why take the chance in case of an audit?
- USERRA Notices. The Uniformed Services Employment and Reemployment Rights Act (USERRA) protects the job rights of individuals who voluntarily or involuntarily leave employment for military service or service in the National Disaster Medical System. USERRA also prohibits employers from discriminating against past and present members of the uniformed services. Employers are required to provide a notice of the rights, benefits and obligations under USERRA. Many employers meet the obligation by posting the DOL’s “Your Rights Under USERRA” poster, or including text in their employee handbook. However, even though USERRA has been around since 1994, we are finding many employers are not providing this information.
- Section 79. Internal Revenue Code Section 79 provides regulations for the taxation of employer-provided life insurance. This code has been around since 1964, and while there have been some changes, the basics have been in place for many years. Despite the length of time it has been in place, we have found a number of groups that are not calculating the imputed income. In essence, if an employer provides more than $50,000 in life insurance, then the employee should be paying tax on the excess coverage based on the IRS’s age rated table 2-2. With many employers outsourcing their payroll or using software programs for payroll, calculating the imputed income usually only takes a couple of mouse clicks. However, we have been surprised by how many employers are not complying with this part of the Internal Revenue Code, and are therefore putting their employees’ beneficiaries at risk.
There have been other surprises through this process, but these are a few of the more striking examples. The feedback we received from our compliance assessments has been overwhelmingly positive. Groups don’t always like to change their processes, but they do appreciate knowing what needs to be done.
By Bob Bentley, Originally Published By United Benefit Advisors
by admin | Mar 9, 2017 | ACA, COBRA, Compliance, Human Resources, IRS
The Internal Revenue Service (IRS) recently updated its longstanding Questions and Answers about Information Reporting by Employers on Form 1094-C and Form 1095-C that provides information on:
Generally, the Q&A describes when and how an employer reports its offers of coverage and describes the codes that employers should use when completing Form 1094-C and Form 1095-C for calendar year 2016 that are to be filed in 2017. The Q&A should be used in conjunction with the Instructions for Forms 1094-C and 1095-C which provide detailed information about completing the forms.
The updated Q&A provides information on COBRA reporting that had been left pending in earlier versions of the Q&A for the past year. UBA’s ACA Advisor “IRS Q&A About Employer Information Reporting on Form 1094-C and Form 1095-C” reviews the new information and explains other reporting obligations covered under the Q&A.
Reporting Offers of COBRA Continuation Coverage
An offer of COBRA continuation coverage that is made to a former employee due to termination of employment is not reported as an offer of coverage in Part II of Form 1095-C.
If the applicable large employer is required to complete a Form 1095-C for the former employee (because, for example, the individual was a full-time employee for one or more months of the year before terminating employment), the employer should use code 1H, No offer of coverage, on line 14 for any month that the former employee was offered COBRA continuation coverage. For those same months, the employer should use code 2A, Employee not employed during the month, on line 16 for each month in which the individual is not an employee (regardless of whether the former employee enrolled in the COBRA continuation coverage).
An employer that provides COBRA continuation coverage through a self-funded health plan generally must report that coverage for any former employee or family member who enrolls in that COBRA continuation coverage in Part III of the Form 1095-C. Also, the employer may report the coverage on Form 1095-B for any individual who was not an employee during the year and who separately elected the COBRA continuation coverage.
By Danielle Capilla, Originally Published United Benefit Advisors
by admin | Feb 16, 2017 | Compliance, Employee Benefits, Hot Topics, Human Resources
Recently, the Department of Labor (DOL), Department of Health and Human Services (HHS), and the Treasury (collectively, the Departments) issued FAQs About Affordable Care Act Implementation Part 35. The FAQ covers a new HIPAA special enrollment period, an update on women’s preventive services that must be covered, and clarifying information on qualifying small employer health reimbursement arrangements (QSE HRAs).
HIPAA Special Enrollment Period
Under HIPAA, if an individual loses eligibility for coverage in the individual market, then that individual is entitled to special enrollment in group health plan coverage.
The coverage eligibility loss may include coverage purchased through a Marketplace (other than coverage eligibility loss due to failure to pay premiums on a timely basis or termination of coverage for cause, such as making a fraudulent claim or an intentional misrepresentation of material fact). Further, the individual is entitled to special enrollment in group health plan coverage for which the individual is otherwise eligible, regardless of whether the individual may enroll in other individual market coverage, through or outside of a Marketplace.
To be clear, if an individual has Marketplace coverage and the carrier is discontinuing the plan, the discontinuation event is not a loss of eligibility for coverage; in this case, the individual is not entitled to a special enrollment period.
Women’s Preventive Services
The Health Resources and Services Administration (HRSA) updated its Women’s Preventive Services Guidelines on December 20, 2016, to recommend preventive services and items.
Non-grandfathered group health plans and health insurance issuers must cover, without cost sharing, women’s preventive services consistent with the updated guidelines for plan years beginning on or after December 20, 2017. Until that date, non-grandfathered group health plans and health insurance issuers are required to provide coverage without cost sharing consistent with the previous HRSA guidelines and the Public Health Services Act for recommended services and items.
Generally, under the HRSA guidelines and other federal laws, group health plans established or maintained by religious employers (and group health insurance coverage provided with these plans) are exempt from the requirement to cover contraceptive services.
Qualified Small Employer Health Reimbursement Arrangements
On December 13, 2016, the 21st Century Cures Act (Cures Act) introduced a new type of tax-preferred arrangement called the Qualified Small Employer Health Reimbursement Arrangement (QSE HRA) that small employers may use to help their employees pay for medical expenses.
Under the Cures Act, the QSE HRA is not a group health plan. A QSE HRA is an arrangement offered by an eligible employer that meets the following criteria:
- The arrangement is funded solely by an eligible employer, and no salary reduction contributions may be made under the arrangement.
- The arrangement provides, after the employee provides proof of coverage for the payment to, or reimbursement of, an eligible employee for medical care expenses incurred by the employee or the employee’s family members (as determined under the terms of the arrangement).
- The amount of annual payments and reimbursements do not exceed $4,950 ($10,000 for family) with amounts to be indexed for increases in cost of living.
- The arrangement is provided on the same terms to all eligible employees of the eligible employer.
To be an eligible employer that may offer a QSE HRA, the employer may not be an applicable large employer (ALE) and may not offer a group health plan to any of its employees.
The Departments’ prior guidance concluded that employer payment plans (EPPs) and non-integrated health reimbursement arrangements (HRAs) are group health plans that fail to comply with the group market reform requirements that prohibit annual dollar limits and that require the provision of certain preventive services without cost sharing.
Because a QSE HRA is statutorily excluded from the definition of a group health plan, the group market reform requirements do not apply to a QSE HRA. With respect to EPPs and HRAs that do not qualify as QSE HRAs, the Departments’ prior guidance continues to apply.
The statutory exclusion of QSE HRAs from the group health plan definition is effective for plan years beginning after December 31, 2016. With respect to plan years beginning on or before December 31, 2016, the Cures Act provides that the relief under IRS Notice 2015-17 applies.
Under the extension provided by the Cures Act, for plan years beginning on or before December 31, 2016, the tax penalty will not be asserted for any failure to satisfy the market reforms by EPPs that pay, or reimburse employees for, individual health policy premiums or Medicare Part B or Part D premiums, with respect to employers otherwise eligible for the relief under Notice 2015-17. These employers are not required to file IRS Form 8928 solely because they had such an arrangement for the plan years beginning on or before December 31, 2016.
The Cures Act’s extension of the relief is limited to EPPs and does not extend to stand-alone HRAs or other arrangements to reimburse employees for medical expenses other than insurance premiums. Also, as an employer-provided group health plan, coverage by an HRA or EPP that is not a QSE HRA and that is eligible for the extended relief under the Cures Act would be minimum essential coverage. This means that a taxpayer would not be allowed a premium tax credit for the Marketplace coverage of an employee, or an individual related to the employee, who is covered by an HRA or EPP other than a QSE HRA.
Practically speaking, the Departments’ prior regulations and guidance continue to apply to EPPs and HRAs that do not qualify as QSE HRAs, including arrangements offered by employers that are not eligible employers as defined under the Cures Act, such as ALEs.
By Danielle Capilla, Originally Published By UBA
by admin | Feb 2, 2017 | Compliance, Hot Topics, Human Resources
Recently, the Equal Employment Opportunity Commission (EEOC) issued new guidance on national origin discrimination. National origin discrimination is discrimination because an individual is, or the individual’s ancestors are, from a certain place or has the physical, cultural, or linguistic characteristics of a particular national origin group, including Native American tribes. A member of one national origin group can discriminate against a member of the same group. While many of the previous rules and regulations remain intact, new protections have been added.
One of the key changes is the addition of perceived national origin to the definition. Title VII of the Civil Rights Act of 1964 prohibits employment discrimination based on the belief that an individual is (or the individual’s ancestors are) from one or more particular countries, or belongs to one or more particular national origin groups. The EEOC’s example describes discrimination against someone who is perceived to be from the Middle East, regardless of whether he or she is from the Middle East or ethnically Arab. It is also unlawful to discriminate based on association; for example, you cannot discriminate against an employee because the employee is married to, friends with, or has a child with someone of a different national origin or ethnicity.
Language issues are also emphasized in the new guidance. Specifically, business necessity and material impact on job performance are the only legitimate reasons for basing employment decisions on linguistic characteristics, such as accents. Applying uniform fluency requirements to a broad range of jobs or requiring a greater level of fluency than necessary may result in a violation of Title VII. The EEOC’s long-standing English-only guidelines, issued in 1980, provide that rules requiring employees to speak English in the workplace at all times are presumed to violate Title VII.
Title VII applies to all employment decisions, including those involving:
- Recruitment
- Hiring
- Promotion
- Work assignments
- Segregation and classification
- Transfer
- Wages and benefits
- Leave
- Training and apprenticeship programs
- Discipline
- Layoff and termination
- Other terms and conditions of employment
The new EEOC guidance reinforces and clarifies standing obligations of employers who may be in violation of Title VII if they implement discriminatory practices based on customer, client, or employee preferences. This includes but is not limited to:
- Segregation of employees by protected class, such as one ethnic group working in back rooms while others are customer-facing.
- Failure by employers to take steps to protect employees who are harassed by customers based on the employees’ national origin.
- Failure to take advantage of preventive or corrective opportunities when a supervisor or employees engage in discrimination.
- An employer may also be jointly liable with staffing firms that provide workers if the employer knowingly ignores discriminatory practices. Human trafficking that includes employer misconduct has been added to the definition of unlawful harassment.
The guidance includes “promising practices” for employers that are meant to reduce the risk of Title VII violations. This includes:
- Avoiding word-of-mouth recruitment to attract a diverse applicant pool.
- Establishing written criteria for hiring and promotion and applying the standards consistently.
- Offering training in the languages spoken by employees.
- Developing objective, job-related criteria for identifying the unsatisfactory performance or conduct that can result in discipline, demotion, or discharge.
- Clearly communicating to employees through policies and actions that harassment will not be tolerated and that employees who violate the prohibition against harassment will be disciplined.
Employers should keep in mind that national origin discrimination is often intersectional; individuals can be members of two or more protected classes, such as race, national origin, and sex. Intersectionality can add complexity to discrimination claims.
On the heels of an acrimonious election that has frequently placed national origin in the spotlight, employers should revisit workplace practices, including talent acquisition policies, training and development protocols, anti-harassment training, and complaint resolution practices.
By Nancy Bourque, Originally Published By United Benefit Advisors
by admin | Jan 18, 2017 | ACA, Compliance, ERISA
Proposed regulations for revising and greatly expanding the Department of Labor (DOL) Form 5500 reporting are set to take effect in 2019. Currently, the non-retirement plan reporting is limited to those employers that have more than 100 employees enrolled on their benefit plans, or those in a self-funded trust. The filings must be completed on the DOL EFAST2 system within 210 days following the end of the plan year.
What does this expanded number of businesses required to report look like? According to the 2016 United Benefit Advisors (UBA) Health Plan Survey, less than 18 percent of employers offering medical plans are required to report right now. With the expanded requirements of 5500 reporting, this would require the just over 82 percent of employers not reporting now to comply with the new mandate.
While the information reported is not typically difficult to gather, it is a time-intensive task. In addition to the usual information about the carrier’s name, address, total premium, and payments to an agent or broker, employers will now be required to provide detailed benefit plan information such as deductibles, out-of-pocket maximums, coinsurance and copay amounts, among other items. Currently, insurance carriers and third party administrators must produce information needed on scheduled forms. However, an employer’s plan year as filed in their ERISA Summary Plan Description, might not match up to the renewal year with the insurance carrier. There are times when these schedule forms must be requested repeatedly in order to receive the correct dates of the plan year for filing.
In the early 1990s small employers offering a Section 125 plan were required to fill out a 5500 form with a very simple 5500 schedule form. Most small employers did not know about the filing, so noncompliance ran very high. The small employer filings were stopped mainly because the DOL did not have adequate resources to review or tabulate the information.
While electronic filing makes the process easier to tabulate the information received from companies, is it really needed? Likely not, given the expense it will require in additional compliance costs for small employers. With the current information gathered on the forms, the least expensive service is typically $500 annually for one filing. Employers without an ERISA required summary plan description (SPD) in a wrap-style document, would be required to do a separate filing based on each line of coverage. If an employer offers medical, dental, vision and life insurance, it would need to complete four separate filings. Of course, with the expanded information required if the proposed regulations hold, it is anticipated that those offering Form 5500 filing services would need to increase with the additional amount of information to be entered. In order to compensate for the additional information, those fees could more than double. Of course, that also doesn’t account for the time required to gather all the data and make sure it is correct. It is at the very least, an expensive endeavor for a small business to undertake.
Even though small employers will likely have fewer items required for their filings, it is an especially undue hardship on many already struggling small businesses that have been hit with rising health insurance premiums and other increasing costs. For those employers in the 50-99 category, they have likely paid out high fees to complete the ACA required 1094 and 1095 forms and now will be saddled with yet another reporting cost and time intensive gathering of data.
Given the noncompliance of the 1990s in the small group arena, this is just one area that a new administration could very simply and easily remove this unwelcome burden from small employers.
By Carol Taylor, Originally published by United Benefit Advisors – Read More
