by admin | Dec 2, 2025 | Compliance, ERISA
Employers with insured health plans may have received a Medical Loss Ratio (MLR) rebate from their health insurance carrier this year. Rebates were required for plans not meeting the 2024 MLR standards and had to be issued by September 30, 2025, either as premium credits or lump-sum payments.
If any part of the rebate qualifies as a plan asset under ERISA, it must benefit plan participants and beneficiaries exclusively. Employers can fulfill this requirement by distributing the plan asset portion using a fair and reasonable allocation method. Alternatively, if direct payments aren’t practical, the rebate can be used for other allowable plan purposes, such as future premium reductions or benefit enhancements.
ERISA generally requires that plan assets be kept in trust, but this is waived if any rebate amount considered a plan asset is used within three months of receipt, so employers must pay careful attention to the timeline. For example, rebates received on September 30, 2025, must be used by December 30, 2025.
Key points:
- Under the Affordable Care Act, health insurers must spend a minimum percentage of premiums on medical care and quality improvements; if not, rebates are required.
- Employers must determine if any rebate portion qualifies as a plan asset under ERISA.
- Plan assets must only benefit plan participants and beneficiaries and generally must be used within three months of receiving the rebate to remain ERISA-compliant.
Employers should review current obligations to ensure any rebate qualifying as a plan asset is properly allocated and used in accordance with federal requirements.
by admin | Jun 10, 2024 | Employee Benefits, ERISA
Attention Employers: Don’t Miss Your Form 5500 Deadline!
Here’s a simplified breakdown of what you need to know about filing your employee benefit plan report:
Who Needs to File?
- Employers subject to ERISA (Employee Retirement Income Security Act) with employee benefit plans, unless exempt.
What to File?
- Form 5500 (annual report) for each employee benefit plan.
When to File?
- Deadline: July 31, 2024 for calendar year plans (unless exempt).
- Extension: October 15, 2024 by filing Form 5558 with the IRS (paper form only for 2024).
Exemptions:
- Small welfare benefit plans with fewer than 100 participants (unfunded or fully insured).
Filing Electronically:
Late Filings?
Penalties:
- Up to $2,670 per day for non-filing or incomplete filings (can be waived for reasonable cause).
Visit IRS.gov for more information
by admin | Apr 6, 2018 | Benefit Management, Employee Benefits, ERISA
The Department of Labor’s new claim rules for disability benefits took effect April 2, 2018. The changes were announced over a year ago, but the effective date was delayed to give insurers, employers, and plan administrators adequate time for implementation. Although we’ve reported on the key issues in this blog previously, now seems like a good time for a refresher on how the new rules affect employer plans.
Affected Plans
The new claim rules apply to disability benefits provided under plans covered by the Employee Retirement Income Security Act (ERISA); that is, plans sponsored by private-sector employers. Then the new rules apply if the ERISA plan must make a determination of disability in order for the claimant to obtain the benefit. Group short- and long-term disability plans are the most common examples, but pension, 401(k), and deferred compensation plans also may be affected.
Many plans do not make their own determination of disability, but instead condition the plan’s benefit on another party’s determination. For instance, employer plans that base the benefit on a disability determination made by the Social Security Administration (SSA) are not affected by the new rules.
New Rules
For ERISA plans affected by the new rules, the following additional requirements apply to disability claims filed on or after April 2, 2018:
- Disclosure Requirements: Benefit denial notices must explain why the plan denied a claim and the standards used in making the decision. For example, the notices must explain the basis for disagreeing with a disability determination made by the SSA if presented by the claimant in support of his or her claim.
- Claim Files and Internal Protocols: Benefit denial notices must include a statement that the claimant is entitled to request and receive the entire claim file and other relevant documents. (Previously this statement was required only in notices denying benefits on appeal, not on initial claim denials.) The notice also must include the internal rules, guidelines, protocols, standards or other similar criteria of the plan that were used in denying a claim or a statement that none were used. (Previously it was optional to include a statement that such rules and protocols were used in denying the claim and that the claimant could request a copy.)
- Right to Review and Respond to New Information Before Final Decision: Plans are prohibited from denying benefits on appeal based on new or additional evidence or rationales that were not included when the benefit was denied at the claims stage, unless the claimant is given notice and a fair opportunity to respond.
- Conflicts of Interest: Claims and appeals must be adjudicated in a manner designed to ensure the independence and impartiality of the persons involved in making the decision. For example, a claims adjudicator or medical or vocational expert could not be hired, promoted, terminated or compensated based on the likelihood of the person denying benefit claims.
- Deemed Exhaustion of Claims and Appeal Processes: If plans do not adhere to all claims processing rules, the claimant is deemed to have exhausted the administrative remedies available under the plan (unless exceptions for minor errors or other conditions apply). In that case, the claimant may immediately pursue his or her claim in court. Plans also must treat a claim as re-filed on appeal upon the plan’s receipt of a court’s decision rejecting the claimant’s request for review.
- Coverage Rescissions: Rescissions of coverage, including retroactive terminations due to alleged misrepresentations or errors in applying for coverage, must be treated as adverse benefit determinations that trigger the plan’s appeals procedures.
- Notices Written in a Culturally and Linguistically Appropriate Manner: Benefit denial notices must be provided in a culturally and linguistically appropriate manner in certain situations. Specifically, if the claimant’s address is in a county where 10 percent or more of the population is literate only in the same non-English language, the notices must include a prominent statement in the relevant non-English language about the availability of language services. The plan would also be required to provide a verbal customer assistance process in the non-English language and provide written notices in the non-English language upon request.
Action Steps for Employers
Employers are reminded to work with their carriers, third-party administrators, and advisors to make sure their plans comply with the new requirements. Consider these steps:
- Identify all plans that are subject to ERISA. (Plans sponsored by governmental employers, such as cities and public school districts, and certain church plans, are exempt from ERISA.)
- Does the ERISA plan provide any benefit based on disability? If so, is the benefit conditioned on a determination of disability made by the plan or by another party, such as Social Security?
- For insured plans, such as group STD and LTD insurance plans, the carrier generally is responsible for compliance with ERISA’s claim rules. The employer, however, does have a duty to make reasonable efforts to ensure the carrier is complying.
- For self-funded plans, the employer is responsible for compliance. Although the employer may engage the services of a third-party claims administrator, the employer remains responsible for the plan’s compliance with all rules.
Originally Published By ThinkHR.com
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
by admin | Oct 13, 2017 | ACA, ERISA, Group Benefit Plans, IRS
On October 12, 2017, the White House released an Executive Order, signed by President Trump, titled “Promoting Healthcare Choice and Competition Across the United States.”
It is important to note that the Executive Order (EO) does not implement any new laws or regulations, but instead directs various federal agencies to explore options relating to association health plans, short term limited-duration coverage (STLDI), and health reimbursement arrangements (HRAs), within the next 60 to 120 days.
The Department of Labor is ordered to explore expansion of association health plans (AHPs) by broadening the scope of ERISA to allow employers within the same line of business across the country to join together in a group health plan. The EO notes employers will not be permitted to exclude employees from an AHP or develop premiums based on health conditions. The Secretary of Labor has 60 days to consider proposing regulations or revising guidance.
Practically speaking, this type of expansion would require considerable effort with all state departments of insurance and key stakeholders across the industry. Employers should not wait to make group health plan decisions based on the EO, as it will take time for even proposed regulations to be developed.
The Department of the Treasury, Department of Labor, and Department of Health and Human Services (the agencies) are directed to consider expanding coverage options from STLDI, which are often much less expensive than Marketplace plans or employer plans. These plans are popular with individuals who are in and outside of the country or who are between jobs. The Secretaries of these agencies have 60 days to consider proposing regulations or revising guidance.
Finally, the EO directs the same three agencies to review and consider changing regulations for HRAs so employers have more flexibility when implementing them for employees. This could lead to an expanded use of HRA dollars for employees, such as for premiums. However, employers should not make any changes to existing HRAs until regulations are issued at a later date. The Secretaries have 120 days to consider proposing regulations or revising guidance.
To benchmark your current HRA plan with other employers, request UBA’s special report: How Health Savings Accounts Measure Up or download our Fast Facts on HSAs vs. HRAs.
By Danielle Capilla
Originally posted by www.UBABenefits.com
