by admin | Feb 12, 2018 | Benefit Management, Compliance, Group Benefit Plans, Medicare
Do you offer health coverage to your employees? Does your group health plan cover outpatient prescription drugs? If so, federal law requires you to complete an online disclosure form every year with information about your plan’s drug coverage. You have 60 days from the start of your health plan year to complete the form. For instance, for a calendar-year health plan, this year’s deadline is March 1, 2018.
Background
The Centers for Medicare and Medicaid Services (CMS) is a federal agency that collects data and administers various federal programs. The agency utilizes the CMS online tool to collect information from employers about whether their group health plan’s prescription drug coverage is creditable or noncreditable. Creditable coverage means the group health plan’s prescription drug coverage is actuarially equivalent to Medicare’s Part D drug plans. In other words, the group plan is considered creditable if its drug benefits are as good as or better than Medicare’s benefits.
To confirm whether your plan provides creditable or noncreditable coverage, check with the plan’s carrier or HMO (if insured) or the plan’s actuary (if self-funded). CMS provides guidance to help plan sponsors, carriers, and actuaries determine the plan’s status.
Deadline for Disclosure
All group health plans that include any outpatient prescription drug benefits, regardless of whether the plan is insured, self-funded, grandfathered, or nongrandfathered, must complete the CMS disclosure requirement. There is no exception for small employers.
Complete the CMS online disclosure form every year within 60 days of the start of the plan year. For instance, for calendar-year plans, this year’s deadline is March 1, 2018.
Additionally, if your plan terminates or its status changes between creditable and noncreditable coverage, you must disclose the updated information to CMS within 30 days of the change.
Completing the Disclosure Form
The CMS online tool is the only method allowed for completing the required disclosure. From this link, follow the prompts to respond to a series of questions regarding the plan. The link is the same regardless of whether the employer’s plan provides creditable or noncreditable coverage.
The entire process usually takes only 5 or 10 minutes to complete. To save time, have the following information handy before you start filling in the form:
- Information about the plan sponsor (employer): Name, address, phone number, and federal Employer Identification Number (EIN).
- Number of prescription drug options offered (e.g., if employer offers two plan options with different benefit levels, the number is “2”).
- Creditable/Noncreditable Offer: Indicate whether all options are creditable or noncreditable or whether some are creditable and others are noncreditable.
- Plan year beginning and ending dates.
- Estimated number of plan participants eligible for Medicare (and how many are participants in the employer’s retiree health plan, if any).
- Date that the plan’s Notice of Creditable (or Noncreditable) Coverage was provided to participants.
- Name, title, and email address of the employer’s authorized individual completing the disclosure.
We suggest you print a copy of the completed disclosure to keep for your records.
Note: Employers that receive the Retiree Drug Subsidy (RDS), or sponsor health plans that contract directly with one or more Medicare Part D plans, should seek the advice of legal counsel regarding the applicable disclosure requirements.
Additional Disclosure Requirement
Separate from the CMS online disclosure requirement, employers also must distribute a disclosure notice to Medicare-eligible group health plan participants. The deadline for distributing the participant notice is October 14 of the preceding year. It often is difficult for employers to identify which employees and spouses may be Medicare-eligible, so most employers simply distribute the notice to all participants regardless of age or status. For information about the notice requirement, see our previous post.
Originally Published By ThinkHR.com
by admin | Jan 26, 2018 | Compliance, Human Resources
This is a reminder that from February 1 through April 30, 2018, impacted employers are required to post a copy of their 2017 Form 300A (Summary of Work-Related Illnesses and Injuries) in a common area where employee notices are usually available.
This annual requirement may not apply to certain employers that are partially exempt from routinely keeping Occupational Safety and Health Administration (OSHA) injury and illness reports. Partially exempt employers are those:
Partially exempt employers may have to maintain illness and injury reports at the request of OSHA, the Bureau of Labor Statistics (BLS), or a state agency operating under the authority of OSHA or the BLS. Additionally, pursuant to 29 CFR § 1904.39, all employers, even those that are partially exempt, must report to OSHA any workplace incident that results in a fatality, in-patient hospitalization, amputation, or loss of an eye.
Originally Published By ThinkHR.com
by admin | Jan 19, 2018 | Compliance, Human Resources, IRS
On January 2, 2018, the U.S. Department of Labor (DOL) published updated, inflation-adjusted penalties for violations of various laws regulated by the DOL and its internal components or divisions, including the Occupational Health and Safety Administration (OSHA). The DOL is required to adjust the level of civil monetary penalties for inflation by January 15 each year pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Inflation Adjustment Act).
Because of the Inflation Adjustment Act, rates for OSHA penalties have increased three times in the last 17 months (August 1, 2016, January 13, 2017, and January 2, 2018). Therefore, for violations occurring after November 2, 2015, the penalty amounts incurred by employers will depend on when the penalty is assessed, as follows:
- If the penalty was assessed after August 1, 2016 but on or before January 13, 2017, then the August 1, 2016 penalty level applies.
- If the penalty was assessed after January 13, 2017 but on or before January 2, 2018, then the January 13, 2017 penalty level applies.
- If the penalty was assessed after January 2, 2018, then the current penalty level applies.
The applicable January 2, 2018 penalty levels for violations of the Occupational Safety and Health Act of 1970 (OSH Act) are as follows:
- Willful violations: $9,239 – 129,936 (up from $9,054 – $126,749 after January 13, 2017 and $8,908 – $124,709 after August 1, 2016)
- Repeated violations: $129,936 (up from $126,749 after January 13, 2017 and $124,709 after August 1, 2016)
- Serious violations: $12,934 (up from $12,675 after January 13, 2017 and $12,471 after August 1, 2016)
- Other-than-serious violations: $12,934 (up from $12,675 after January 13, 2017 and $12,471 after August 1, 2016)
- Failure to correct violations: $12,934 (up from $12,675 after January 13, 2017 and $12,471 after August 1, 2016)
- Posting requirement violations: $12,934 (up from $12,675 after January 13, 2017 and $12,471 after August 1, 2016)
These increases apply to states with federal OSHA programs and states with OSHA-approved state plans. Violations occurring on or before November 2, 2015 are assessed at pre-August 1, 2016 levels.
Employers are encouraged to familiarize themselves with these increased penalties and consult counsel if they have questions about the penalty level applicable to a potential violation.
Originally Published By ThinkHR.com
by admin | Jan 5, 2018 | ACA, Compliance, IRS
The ACA requires employers to report the cost of coverage under an employer-sponsored group health plan. Reporting the cost of health care coverage on Form W-2 does not mean that the coverage is taxable.
Employers that provide “applicable employer-sponsored coverage” under a group health plan are subject to the reporting requirement. This includes businesses, tax-exempt organizations, and federal, state and local government entities (except with respect to plans maintained primarily for members of the military and their families). Federally recognized Indian tribal governments are not subject to this requirement.
Employers that are subject to this requirement should report the value of the health care coverage in Box 12 of Form W-2, with Code DD to identify the amount. There is no reporting on Form W-3 of the total of these amounts for all the employer’s employees.
In general, the amount reported should include both the portion paid by the employer and the portion paid by the employee. See the chart below from the IRS’ webpage and its questions and answers for more information.
The chart below illustrates the types of coverage that employers must report on Form W-2. Certain items are listed as “optional” based on transition relief provided by Notice 2012-9 (restating and clarifying Notice 2011-28). Future guidance may revise reporting requirements but will not be applicable until the tax year beginning at least six months after the date of issuance of such guidance.
|
Form W-2, Box 12, Code DD |
| Coverage Type |
Report |
Do Not
Report |
Optional |
| Major medical |
X |
|
|
| Dental or vision plan not integrated into another medical or health plan |
|
|
X |
| Dental or vision plan which gives the choice of declining or electing and paying an additional premium |
|
|
X |
| Health flexible spending arrangement (FSA) funded solely by salary-reduction amounts |
|
X |
|
| Health FSA value for the plan year in excess of employee’s cafeteria plan salary reductions for all qualified benefits |
X |
|
|
| Health reimbursement arrangement (HRA) contributions |
|
|
X |
| Health savings account (HSA) contributions (employer or employee) |
|
X |
|
| Archer Medical Savings Account (Archer MSA) contributions (employer or employee) |
|
X |
|
| Hospital indemnity or specified illness (insured or self-funded), paid on after-tax basis |
|
X |
|
| Hospital indemnity or specified illness (insured or self-funded), paid through salary reduction (pre-tax) or by employer |
X |
|
|
| Employee assistance plan (EAP) providing applicable employer-sponsored healthcare coverage |
Required if employer charges a COBRA premium |
|
Optional if employer does not charge a COBRA premium |
| On-site medical clinics providing applicable employer-sponsored healthcare coverage |
Required if employer charges a COBRA premium |
|
Optional if employer does not charge a COBRA premium |
| Wellness programs providing applicable employer-sponsored healthcare coverage |
Required if employer charges a COBRA premium |
|
Optional if employer does not charge a COBRA premium |
| Multi-employer plans |
|
|
X |
| Domestic partner coverage included in gross income |
X |
|
|
| Governmental plans providing coverage primarily for members of the military and their families |
|
X |
|
| Federally recognized Indian tribal government plans and plans of tribally charted corporations wholly owned by a federally recognized Indian tribal government |
|
X |
|
| Self-funded plans not subject to federal COBRA |
|
|
X |
| Accident or disability income |
|
X |
|
| Long-term care |
|
X |
|
| Liability insurance |
|
X |
|
| Supplemental liability insurance |
|
X |
|
| Workers’ compensation |
|
X |
|
| Automobile medical payment insurance |
|
X |
|
| Credit-only insurance |
|
X |
|
| Excess reimbursement to highly compensated individual, included in gross income |
|
X |
|
| Payment/reimbursement of health insurance premiums for 2% shareholder-employee, included in gross income |
|
X |
|
| Other situations |
Report |
Do Not
Report |
Optional |
| Employers required to file fewer than 250 Forms W-2 for the preceding calendar year (determined without application of any entity aggregation rules for related employers) |
|
|
X |
| Forms W-2 furnished to employees who terminate before the end of a calendar year and request, in writing, a Form W-2 before the end of the year |
|
|
X |
| Forms W-2 provided by third-party sick-pay provider to employees of other employers |
|
|
X |
By Danielle Capilla
Originally Published By United Benefit Advisors
by admin | Jan 3, 2018 | Compliance, Employee Benefits, ERISA
Two tri-agency (Internal Revenue Service, Employee Benefits Security Administration, and Centers for Medicare and Medicaid Services) Interim Final Rules were released and became effective on October 6, 2017, and were published on October 13, 2017, allowing a greater number of employers to opt out of providing contraception to employees at no cost through their employer-sponsored health plan. The expanded exemption encompasses all non-governmental plan sponsors that object based on sincerely held religious beliefs, and institutions of higher education in their arrangement of student health plans. The exemption also now encompasses employers who object to providing contraception coverage on the basis of sincerely held moral objections and institutions of higher education in their arrangement of student health plans. Furthermore, if an issuer of health coverage (an insurance company) had sincere religious beliefs or moral objections, it would be exempt from having to sell coverage that provides contraception. The exemptions apply to both non-profit and for-profit entities.
The currently-in-place accommodation is also maintained as an optional process for exempt employers, and will provide contraceptive availability for persons covered by the plans of entities that use it (a legitimate program purpose). These rules leave in place the government’s discretion to continue to require contraceptive and sterilization coverage where no such objection exists. These interim final rules also maintain the existence of an accommodation process, but consistent with expansion of the exemption, the process is optional for eligible organizations. Effectively this removes a prior requirement that an employer be a “closely held for-profit” employer to utilize the exemption.
On November 30, 2017, the Centers for Medicare and Medicaid Services (CMS) released guidance on accommodation revocation notices. Plan participants and beneficiaries must receive written notice if an objecting employer had previously used the accommodation and, under the new exemptions, no longer wishes to use the accommodation process. The Interim Final Rules required the issuer to provide written revocation notice to plan participants and beneficiaries. CMS’ recent guidance clarifies that the employer, its group health plan, or its third-party administrator (TPA) may provide written revocation notice instead of the issuer.
CMS’ guidance also clarifies the timing of the revocation notice. Under the Interim Final Rules, revocation is effective on the first day of the first plan year that begins on or after 30 days after the revocation date. Alternatively, if the plan or issuer listed the contraceptive benefit in its Summary of Benefits and Coverage (SBC), then the plan or issuer must give at least 60 days prior notice of the accommodation revocation (SBC notification process). CMS’ guidance indicates that, even if the plan or issuer did not list the contraceptive benefit in its SBC, the employer is permitted to use the 60-day advance notice method to revoke the accommodation as long as the revocation is consistent with any other applicable laws and contract provisions regarding benefits modification.
Further, if the employer chooses not to use the SBC notification process to notify plan participants and beneficiaries of the accommodation revocation and if the employer instructs its issuer or TPA not to use the SBC notification process on the employer’s behalf, then the employer, its plan, issuer, or TPA must send a separate written revocation notice to plan participants and beneficiaries no later than 30 days before the first day of the first plan year in which the revocation will be effective.
Unlike the SBC notification process, which would allow mid-year benefit modification, if an employer uses the 30-day notification process, the modification can only be effective at the beginning of a plan year.
Employers that object to providing contraception on the basis of sincerely held religious beliefs or moral objections, who were previously required to offer contraceptive coverage at no cost, and that wish to remove the benefit from their medical plan are still subject (as applicable) to ERISA, its plan document and SPD requirements, notice requirements, and disclosure requirements relating to a reduction in covered services or benefits. These employers would be obligated to update their plan documents, SBCs, and other reference materials accordingly, and provide notice as required.
Employers are also now permitted to offer group or individual health coverage, separate from the current group health plans, that omits contraception coverage for employees who object to coverage or payment for contraceptive services, if that employee has sincerely held religious beliefs relating to contraception. All other requirements regarding coverage offered to employees would remain in place. Practically speaking, employers should be cautious in issuing individual policies until further guidance is issued, due to other regulations and prohibitions that exist.
By Danielle Capilla
Originally Published By United Benefit Advisors
by admin | Dec 28, 2017 | Compliance, ERISA, Group Benefit Plans, IRS
The U.S. Department of Labor’s Employee Benefits Security Administration (EBSA), the Internal Revenue Service (IRS), and the Pension Benefit Guaranty Corporation (PBGC) released advance informational copies of the 2017 Form 5500 annual return/report and related instructions.
Specifically, the instructions highlight the following modifications to the forms, schedules, and instructions:
- IRS-Only Questions. IRS-only questions that filers were not required to complete on the 2016 Form 5500 have been removed from the Form 5500 and Schedules.
- Authorized Service Provider Signatures. The instructions for authorized service provider signatures have been updated to reflect the ability for service providers to sign electronic filings on the plan sponsor and Direct Filing Entity (DFE) lines, where applicable, in addition to signing on behalf of plan administrators on the plan administrator line.
- Administrative Penalties. The instructions have been updated to reflect that the new maximum penalty for a plan administrator who fails or refuses to file a complete or accurate Form 5500 report has been increased to up to $2,097 a day for penalties assessed after January 13, 2017, whose associated violations occurred after November 2, 2015. Because the Federal Civil Penalties Inflation Adjustment Improvements Act of 2015 requires the penalty amount to be adjusted annually after the Form 5500 and its schedules, attachments, and instructions are published for filing, be sure to check for any possible required inflation adjustments of the maximum penalty amount that may have been published in the Federal Register after the instructions have been posted.
- Form 5500-Plan Name Change. Line 4 of the Form 5500 has been changed to provide a field for filers to indicate that the name of the plan has changed. The instructions for line 4 have been updated to reflect the change. The instructions for line 1a have also been updated to advise filers that if the plan changed its name from the prior year filing or filings, complete line 4 to indicate that the plan was previously identified by a different name.
- Filing Exemption for Small Plans. The instructions indicate that for a small unfunded, insured, or combination welfare plan to qualify for the filing exemption, the plan must not be subject to the Form M-1 filing requirements.
Be aware that the advance copies of the 2017 Form 5500 are for informational purposes only and cannot be used to file a 2017 Form 5500 annual return/report.
By Danielle Capilla
Originally Published By United Benefit Advisors
