Archives: Welfare Plans

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Agencies Propose Pilot Program for Wraparound Health Coverage

New proposed regulations modify the rules that would allow employers to offer limited wraparound health coverage as an “excepted benefit” to employees who purchase individual health coverage through an Exchange.  Although the new rules relax some of the controversial requirements proposed in 2013, they also create new restrictions and reporting requirements. The new proposed regulations … Continue Reading

EEOC Seeks to Stop Use of Financial Incentives for Wellness Program Participation

The Equal Employment Opportunity Commission (“EEOC”) has requested that the United States District Court of Minnesota stop Honeywell from implementing a wellness program that would provide financial incentives for undergoing biometric screenings.  The EEOC is challenging Honeywell’s program on grounds that it would violate the Americans with Disabilities Act (“ADA”) and the Genetic Information Nondiscrimination … Continue Reading

IRS Releases ACA Reporting Forms

Starting in 2015, the Affordable Care Act imposes burdensome new reporting requirements on employers and insurers that provide group health coverage.  We described the reporting requirements in earlier posts, here and here. Employers and other reporting entities have anxiously awaited the IRS forms on which these reports will be made, so that they can program … Continue Reading

Key Component of Affordable Care Act Might Be Invalid

Yesterday two federal courts of appeal reached opposite conclusions on the question whether individuals in 34 states are eligible for federal subsidies when they purchase health insurance coverage.  Depending on how this issue is resolved, it could have a significant impact on the future of the Affordable Care Act, including the employer mandate scheduled to … Continue Reading

Health Plans Have an Extra Year to Prepare for ICD-10—And They Might Need It

Group health plans with 50 or more participants, including self-insured plans, must be able to conduct electronic transactions in accordance with HHS standards and operating rules.  One of the more challenging aspects of the electronic transaction rules has been the transition to the new International Classification of Diseases, 10th Revision (ICD-10) codes for health claims.… Continue Reading

EEOC Issues New Guidance on Pregnancy Benefits

The Equal Employment Opportunity Commission has issued new enforcement guidance explaining when an employer’s policies affecting pregnant employees might violate federal law.  The new guidance appears in an updated chapter of the EEOC’s enforcement manual, and in a related set of questions and answers.  Among other topics, the new guidance addresses the rights of pregnant … Continue Reading

Health Plans Must Certify Ability to Conduct Electronic Transactions

By December 31, 2015, group health plans must complete a testing process and certify that they are able to conduct electronic transactions in accordance with uniform standards and operating rules.  Plans must also ensure that third-party administrators and other outside vendors are in compliance with the electronic transaction rules if the vendors conduct transactions on … Continue Reading

Can You Reduce Your VEBA’s Taxable Income?

Recent guidance from the IRS suggests that it will be helpful to segregate funding for retiree health benefits from funding for all other welfare benefits (such as retiree life insurance, disability benefits, and health benefits for active employees) in order to minimize tax liabilities.  A proposed regulation issued earlier this year indicates that segregating the … Continue Reading

Health Plan I.D. Application Deadline Is Approaching

Group health plan sponsors and administrators focused on compliance with ACA’s shared responsibility rules might not be aware that another compliance deadline is looming.   By November 5, 2014, most group health plans must apply to the Centers for Medicare & Medicaid Services (CMS) for a unique health plan identifying number.  (Please visit the “Deadlines” page … Continue Reading

Final Health Coverage Reporting Rules Offer Employers Little Relief

Many employers will face two significant new reporting requirements for employee health coverage starting next year: Section 6055 Return:  Employers and insurers that provide minimum essential coverage must report information to the IRS about each covered individual for each month, and provide a copy of the report to covered employees and retirees. Section 6056 Return:  … Continue Reading

Top Ten Things to Know about the Final Shared Responsibility Regulations

The final shared responsibility regulations under the Affordable Care Act, issued earlier this month, in large part maintain the rules set forth in the proposed regulations.  However, there are several ways in which the final regulations modify or clarify these rules.  Below is a top ten list (which we’re sure David Letterman would use if … Continue Reading

Compliance Strategies for Employee Assistance Programs

If an employee assistance program (“EAP”) provides counseling for substance abuse, stress, depression, and similar health problems, the Labor Department and IRS regard it as a group health plan.  Unless the EAP qualifies for an exception, it will have difficulty complying with the group health plan coverage requirements and other mandates. Recent guidance from the … Continue Reading

New Guidance Clarifies Minimum Essential Coverage Rules

Starting in 2014, most individuals must maintain minimum essential health coverage or pay a penalty.  (Please see our post here for a description of the health coverage mandates that apply to individuals and their families.)  The Internal Revenue Service recently issued a proposed regulation clarifying the minimum essential coverage rules and other aspects of the … Continue Reading

Dust Off HIPAA Policies and Procedures Before HHS Comes Knocking

Employers should be aware that the Department of Human Services (“HHS”) is stepping up its enforcement of requirements for covered entities, such as group health plans, to adopt and implement policies and procedures for protecting and securing protected health information in accordance with the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”).  As our … Continue Reading

Supreme Court Confirms Plan Sponsor’s Right to Set Deadline for Filing Lawsuits

On Monday, the Supreme Court unanimously ruled that a reasonable deadline for filing a lawsuit for benefits was enforceable.  (Heimeshoff v. Hartford Life & Accident Insurance Co.) The decision is important because it confirms that the clock may start before a claim is filed under the plan’s mandatory administrative process.  Plan sponsors who have not … Continue Reading

Could Smoking Cessation Programs Violate Mental Health Parity Rules? Traps for the Unwary in Recent Regulations

The Obama administration recently issued final regulations implementing the Paul Wellstone and Pete Domenici Mental Health Parity and Addition Equity Act of 2008 (the “MHPAEA”).  The regulations implement the MHPAEA’s prohibition against imposing limits on mental health and substance use disorder benefits that are more restrictive than the limits on medical and surgical benefits.  The … Continue Reading

Fiduciaries May Be Responsible for Call Center Statements to Fill in Gaps in SPD

A recent Seventh Circuit case, Killian v. Concert Health Plan (Nov. 7, 2013), highlights two important principles for any plan sponsor or fiduciary: If a plan document or summary plan description leaves out information and says to call a phone number for details, plan fiduciaries can be responsible for call center representatives’ oral statements and … Continue Reading

Potential Savings Opportunity for Sponsors of Self-Insured Medical Plans

By now, employers who sponsor self-insured medical plans are familiar with the fees they must pay to fund Patient-Centered Outcomes Research (“PCORI”) and the Transitional Reinsurance Program. This post describes a detail that can have a significant effect on the amount that each sponsor must pay. Both fees are calculated as a dollar amount per covered … Continue Reading

ERISA Plans’ Valuation of Private Equity and Other Alternative Investments Draws Increased Scrutiny

The Department of Labor’s Office of Inspector General recently issued a report detailing concerns with the valuation of alternative investments (such as private equity funds, hedge funds, and real estate) held by ERISA plans.  ERISA requires plan sponsors and fiduciaries to value investments for several purposes, including to determine funding obligations, select investments, monitor investment … Continue Reading

Supreme Court To Resolve Whether Severance Pay for Layoffs Is Subject to FICA Tax

Earlier today, the Supreme Court agreed to review the Sixth Circuit’s decision United States v. Quality Stores.  In that decision, the Sixth Circuit sided with taxpayers and concluded that certain severance payments that qualify as supplemental unemployment benefit payments (or “SUB” payments) for federal income tax purposes are not subject to tax under the Federal … Continue Reading

IRS Issues Special Administrative Procedures for DOMA Tax Refund Claims by Employers

The IRS issued a notice today setting forth special procedures by which employers may claim a refund of FICA taxes that were paid on employee benefits solely because of the application of the Defense of Marriage Act (“DOMA”).  Section 3 of DOMA prohibited the IRS from recognizing same-sex marriages for federal tax purposes and was … Continue Reading
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