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This UBA Employer Webinar Series is brought to you by United Benefit Advisors in conjunction with Jackson Lewis PowerPoint Presentation
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This UBA Employer Webinar Series is brought to you by United Benefit Advisors in conjunction with Jackson Lewis

This UBA Employer Webinar Series is brought to you by United Benefit Advisors in conjunction with Jackson Lewis

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Download Presentation

This UBA Employer Webinar Series is brought to you by United Benefit Advisors in conjunction with Jackson Lewis

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Presentation Transcript

  1. This UBA Employer Webinar Series is brought to you by United Benefit Advisorsin conjunction with Jackson Lewis For a copy of the following presentation, please visit our website at Go to the Wisdom tab and then to the HR webinar series page.

  2. Lisa deFilippis and Melissa OstrowerJackson Lewis LLP OPEN ENROLLMENT 2014What Employers Need to KnowAugust 13, 2013

  3. About the Firm Represents management exclusively in every aspect of employment, benefits, labor, and immigration law and related litigation Over 700 attorneys in 49 locations nationwide Current caseload of over 5,000 litigations and approximately 300 class actions Founding member of L&E Global

  4. Brief Review2011 Compliance Mostly “market reform” requirements (note that some plans may be grandfathered from compliance with some of the mandates) A grandfathered plan is one that was in existence on March 23, 2010 BUT to MAINTAIN grandfathered status, the plan must maintain documentation, make disclosure and cannot – Eliminate benefits to diagnose/treat a condition Increase any cost-sharing percentage Increase fixed deductible or out of pocket max by more than 15% + medical inflation Increase copayment by more than 15% + medical inflation (or, if greater, by $5 + medical inflation) Decrease employer contribution rate by more than 5%

  5. 2011 Compliance Continued Effective for plan year beginning on/after 9/23/2010 even if grandfathered Eliminate life-time dollar limits on “essential benefits” Cannot rescind coverage except in case of fraud Cover children to age 26 … even if married (with a limited exception which is eliminated in 2014) No pre-existing condition exclusion for children’s services unless grandfathered Claims and appeals process requirements Emergency service requirements Preventive care without cost-sharing OB/Gyn and pediatrician designation requirements

  6. 2011-2012 Compliance Apply regardless of grandfathered status: • Health FSAs, HSAs, HRAs cannot provide tax-free reimbursement for over-the-counter drugs after 2010 • Employers must report the value of each employee’s employer provided health coverage on W-2 • If filed >250 W-2s in prior year (reprieve for small employers and certain arrangements still in effect for 2013) • Employer, for this purpose, not determined on controlled group basis • IRS guidance on required, optional, and not reportable coverage • Standardized summary of benefits and coverage (“SBC”) required for open enrollment • Medical loss ratio rebate allocation according to fiduciary duties

  7. 2013 Compliance Medicare portion of employee FICA tax increased to 2.35% (from 1.45%) for earnings over $200,000 Health FSA contribution must be capped at $2,500 $2/participant per plan year to help fund “Patient-Centered Outcomes Research Trust Fund” ($1/participant for plan year ending before 10/2013) 60-day advance notice of mid-year change to SBC Notice regarding availability of exchange coverage due by October 1, 2013

  8. 2014 Compliance • No pre-existing condition exclusions and no annual limits (i.e., no more mini-meds or stand-alone HRAs) • Max out-of-pocket tied to HSA limit (non-grandfathered plans) • SBC must include statement: • Whether the plan or coverage provides minimum essential coverage; and • Whether the plan or coverage meets the min. value requirements (that is, the plan’s or coverage’s share of the total allowed costs of benefits provided under the plan or coverage is not less than 60 percent of such costs) • Note that HHS has a website with a minimum value calculator • Group plans in existence on 3/23/10 may no longer exclude adult children who are eligible to enroll in an employer GHP • Transitional reinsurance fees effective

  9. Waiting Period Effective in the first plan year beginning on or after January 1, 2014, waiting periods greater than 90 days are not permitted (including waiting periods in grandfathered plans) A “waiting period” is the period that must pass before coverage for an employee or dependent who is otherwise eligible to enroll under the terms of a group health plan can become effective An individual is “otherwise eligible to enroll” if he/she has met the group health plan’s substantive eligibility conditions

  10. Wellness Proposed rules implement changes in the ACA that increase the maximum permissible reward under a health-contingent wellness program from 20 percent to 30 percent of the cost of health coverage, and that further increase the maximum reward to as much as 50 percent for programs designed to prevent or reduce tobacco use Proposed rules would be effective for plan years starting on or after January 1, 2014

  11. Clinical Trials • If health plan provides coverage to a qualified individual, then the plan: • May not deny the qualified individual participation in an approved clinical trial with respect to the treatment of cancer or another life-threatening disease or condition; • May not deny (or limit or impose additional conditions on) the coverage of routine patient costs for items and services furnished in connection with participation in the trial; and • May not discriminate against the individual on the basis of the individual's participation in the trial • This requirement is applicable to non-grandfathered group health plans and health insurance issuers offering group or individual health insurance coverage for plan years beginning on or after January 1, 2014

  12. Compliance Enforcement Pending Compliance requirements pending regulations (meanwhile, not enforced) – • Quality reporting to HHS and participants • Automatic enrollment • Employers with 200 or more fulltime employees • Opt-out and notice to be required • Nondiscrimination rules for non-grandfathered insured plans • Can’t discriminate in favor of highly compensated individuals as to benefits or eligibility • To be “similar to” nondiscrimination rules applicable to self-funded plans under Code § 105(h)

  13. 2015 ComplianceDue to Delay Notice 2013-45 delayed information reporting of health coverage offered to FT employees until 2015 No pay or play requirements/pay or play penalties will be assessed until 2015

  14. Special Cafeteria Plan Election Changes • An employer is permittedto amend its cafeteria plan to permit either or both of the following changes in salary reduction elections: • An employee who elected to defer through the cafeteria plan for GHP coverage with a fiscal plan year beginning in 2013 is allowed to prospectively revoke or change an election once, during that plan year (even if no change in status event); and • An employee who did not elect to defer through a cafeteria plan for GHP coverage with a fiscal plan year beginning in 2013 on a timely basis is allowed to make a prospective salary reduction election for GHP coverage on or after the first day of the 2013 plan year of the cafeteria plan, without regard to whether the employee experienced a change in status event

  15. Participant Notices

  16. Exchange Notice The Fair Labor Standards Act (FLSA) Section 18B requirement to provide a notice to employees of coverage options applies to employers to which the FLSA applies (a very broad group) Employers must provide a notice of coverage options to each employee, regardless of plan enrollment status or of part-time or full-time status (free of charge). Employers are not required to provide a separate notice to dependents or other individuals who are or may become eligible for coverage under the plan but who are not employees

  17. Content of Exchange Notice • Notice must: • Include information regarding the existence of a new marketplace and contact information and description of the services provided by a marketplace • Inform the employee that he/she may be eligible for a premium tax credit if he/she purchases a qualified health plan through the marketplace • Include a statement informing the employee that if the employee purchases a qualified health plan through the marketplace, the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for federal income tax purposes

  18. Model Notice/Timing • DOL created two model exchange coverage notices: one for employers who do not offer a health plan and the other for employers who do offer a health plan for some or all employees • Employers may use the model or a modified version as long as the notice meets the content requirements • Employers are required to provide the notice to each new employee at the time of hiring beginning October 1, 2013 • For 2014, the DOL will consider a notice to be provided at the time of hiring if the notice is provided within 14 days of an employee’s start date • With respect to employees who are current employees before October 1, 2013, employers are required to provide the notice not later than October 1, 2013

  19. Privacy Notice • What changes do employer have to make to Notices of Privacy Practices (NPPs)? • Describe certain uses and disclosure that require authorization, including: • Psychotherapy notes (where appropriate), • Marketing purposes, • Disclosures that constitute a sale of protected health information, and • Mention that other uses and disclosures may require an authorization • Inform individuals of the right of affected individuals to be notified following a breach of unsecured PHI; simple statement sufficient • Include a statement that PHI includes genetic information

  20. Privacy Notice • Are these changes to the NPP “material”, and how do we provide notice of the changes? • Yes, these changes are material • If NPP is posted on website: • Prominently post material changes or revised NPP on its website by the effective date of the material change – Sept. 23, 2013, and • Provide the revised NPP, or information about the changes and how to obtain a revised NPP, in its next annual mailing to individuals then covered by the plan, such as during the open enrollment period • If NPP is not posted on website: • Provide a revised NPP (or information about the changes and how to get a revised NPP) to individuals covered by the plan within 60 days of the material revision to the NPP

  21. Women’s Health & Cancer Rights Act (WHCRA) Notice Health plans are required to provide participants with a notice of their rights under WHCRA Notice must be provided upon enrollment Annual notice is required as well (usually included in SPD or enrollment materials)

  22. HIPAA Special Enrollment Notice HIPAA portability regulations require a notice of special enrollment rights that summarizes the plan's special enrollment right provisions, as required under federal law These rights include the right to special enroll within 30 days of the loss of other coverage, as a result of marriage, birth of a child, adoption or placement for adoption. Must be provided at or before the time an employee is initially offered the opportunity to enroll in the group health plan.

  23. Certificate of Creditable Coverage Proposed regulations eliminate the requirement to issue a certificate of creditable coverage effective as of December 31, 2014 HIPAA certificates of creditable coverage must be provided through the end of 2014 so individuals who may need to offset a preexisting condition exclusion under a fiscal year plan still have access to a certificate for proof of coverage through 2014

  24. CHIP Notice Employers that maintain a group health plan in a state that provides premium assistance under Medicaid or CHIP must notify all employees of potential opportunities for premium assistance in the state in which the employee resides Must give by first day of plan year (often provided in SPD)

  25. Notice of Grandfather Status • To maintain status as a grandfathered health plan, a plan: • Must include a statement, in any plan materials provided to participants or beneficiaries describing the benefits provided under the plan, that the plan believes that it is a grandfathered health plan within the meaning of section 1251 of the Affordable Care Act and must provide contact information for questions and complaints • Model language is available

  26. Patient Protections When applicable, individuals enrolled in a plan must know of their rights to (1) choose a primary care provider or a pediatrician when a plan requires designation of a primary care physician; or (2) obtain obstetrical or gynecological care without prior authorization Regulations regarding patient protections under the Affordable Care Act require plans to provide notice to participants of these rights when applicable The notice must be provided whenever the plan or issuer provides a participant with a SPD This notice must be provided no later than the first day of the plan year

  27. Summary of Benefits and Coverage • What is it? • Tool for comparing and contrasting benefit options on standardized basis • In addition to the plan’s SPD

  28. Summary of Benefits and Coverage • Compliance • Persons who enroll/re-enroll through open enrollment – first day of open enrollment period beginning on or after September 23, 2012 • Persons who enroll other than through open enrollment – first day of plan year that begins on or after September 23, 2012

  29. Summary of Benefits and Coverage • What is Required? • Template materials to be used in 2014 plan year are the same as used in 2013 plan year except the SBC must include statements regarding whether the plan provides minimum essential coverage and whether the plan meets the applicable minimum value (MV) requirements (i.e., the plan’s share of total allowed costs of benefits provided under the plan is not less than 60% of such costs) • Focus of agencies is on assisting (rather than imposing penalties) with compliance for companies working diligently and in good faith to comply

  30. Summary of Benefits and Coverage • Renewal and continuation provisions • Contact information • Coverage examples • Whether the plan provides minimum essential coverage and minimum value • What to include: • Uniform definitions • Description of coverage • Exceptions and limitations on coverage • Cost sharing provisions • Reference to plan documents for governing provisions

  31. Summary of Benefits and Coverage • Delivery • Electronically to persons eligible, but not enrolled, if provided on website, SBC is provided free of charge, and format is “readily accessible” • Follow DOL electronic disclosure regulations for persons covered under the plan

  32. Summary of Benefits and Coverage • Delivery continued • On renewal, must provide SBC automatically for package options in which participant is enrolled • No automatic SBC for package options in which participant is not enrolled, but must provide if participant requests and is eligible • If beneficiary’s last known address is different from participant, then SBC must be sent to the beneficiary’s last known address

  33. Summary of Benefits and Coverage • Form of SBC • Use of template provided by the agency is required • Can be provided as stand alone document or coupled with SPD or other summary documents • Culturally and linguistically appropriate • when 10% or more of the population in the county are literate only in the same non-English language - include a statement that language services are available

  34. Summary of Benefits and Coverage • Form of SBC • Premium information should be added at the end, but it is not required • Different coverage tiers can be combined in one SBC along with add-ons – HFSA, HRA wellness, etc.

  35. Summary of Benefits and Coverage • Furnishing - Timing • Upon application – if provided, include SBC in application/enrollment materials. If not, SBC must be provided no later than date of employee eligibility • First day of coverage – if changes to SBC provided upon application • Special enrollees – provide no later than the date on which SPD must be provided – 90 days from enrollment

  36. Advance Notice of Material Modification to SBC • 60-day advance notice of material modification of coverage (under prior law, similar notice was required only if there was a material reduction in services or benefits) • Note that this only applies to MID YEAR changes.

  37. Advance Notice of Material Modification to SBC • “Material modification of coverage” • Enhancement of benefits or more generous policy • Elimination or reduction of benefits • Increases in premiums, deductibles, coinsurance, etc. • Reduction in HMO’s service area • New conditions to obtain benefits

  38. Revised COBRA Election Notice The DOL model election notice that plans may use to satisfy the requirement to provide the election notice under COBRA has been revised to help make qualified beneficiaries aware of other coverage options available in the marketplace The model election notice is available at Use of the model election noticeis considered by the DOL to be good faith compliance with the election notice content requirements of COBRA

  39. Summary Plan Description Remember that plan sponsors must notify participants of plan amendments Amendments can be communicated through a Summary of Material Modification or an updated SPD Plan sponsors should review their SPDs to make sure that they have been updated to reflect amendments made to plan (whether required by law or at the election of the plan sponsor)

  40. List of Open Enrollment Notices Exchange Notice Privacy Notice Women’s Health & Cancer Rights Act (WHCRA) Notice HIPAA Special Enrollment Notice CHIP Notice Notice of Grandfather Status Summary of Benefits and Coverage Advance Notice of Material Modification to SBC

  41. Electronic Distribution Rules Many of the notices and other disclosure documents referred to earlier can be delivered electronically. The Department of Labor has established rules governing electronic communication by employee benefit plans (§2520.104b-1): • Generally apply to all documents required under Title I of ERISA (other than disclosures over which the Treasury has authority) • Act as “Safe Harbors” and are not the only way a plan can satisfy the ERISA disclosure requirements • Cover communication from plans to employees, participants and beneficiaries only

  42. Electronic Distribution Rules • Documents which can be delivered electronically under the DOL rules include: • Summary Plan Descriptions • Summaries of Material Modifications • Summary of Benefits and Coverage • Exchange Notice Under FLSA Section 18B • Summary Annual Reports • COBRA Notices • HIPAA Notices of Creditable Coverage

  43. Electronic Distribution Rules DOL Safe Harbor Plan administrator must take appropriate and necessary measures reasonably calculated to ensure that the electronic system results in actual receipt of the transmitted information and protects the confidentiality of personal information The electronic documents must be prepared in a manner that is consistent with the style, format and content requirements of ERISA A the time the electronic document is provided, an electronic or paper notice must be provided to the individual that describes the significance of the electronic document Upon request, the individual is furnished a paper version of the document (with reasonable charges, if applicable)

  44. Electronic Distribution Rules • The DOL rules apply differently to two groups of individuals: • “Integral Employees” • Participants who are able to effectively access electronic documents “at a location where a participant is reasonably expected to perform his/her duties as an employee” and for whom “access to the electronic information system is an integral part of those duties” • Includes employee who work from home and access the employer’s electronic information system as part of their duties • Does not include participants whose only access is to a shared workstation or kiosk, if use of the electronic system is not an integral part of the participant’s job

  45. Electronic Distribution Rules Consent employees (cont.) 2. “Consent Employees” • Participants, beneficiaries and other persons entitled to disclosures who affirmatively consent to receiving documents electronically • Before providing consent, individual must be given a clear and conspicuous notice stating:

  46. Electronic Distribution Rules Consent employees (cont.) • Consent will apply to the named documents • Consent may be withdrawn at any time • The procedures to withdraw consent or to change an address for receiving electronic information • The right to request paper version (and applicable charge) • The software and hardware requirements to access and retain the documents • Consent must demonstrate ability to access • Different delivery methods may be used for different groups of employees

  47. Electronic Distribution Rules Electronic delivery of SBC to Employees Who Are Eligible But Not Enrolled • As discussed earlier, an SBC may be delivered electronically to employees who are eligible but not enrolled for coverage if: • The format is readily accessible (html, MS Word, or pdf) • SBC is provided in paper form free of charge upon request • SBC is provided via Internet posting (including glossary on HHS web portal), the employees are timely advised that the SBC is available on the Internet and provides the Internet address (can notify by e-postcard)

  48. Affordable Care Act:What Has Been Delayed? IRS Notice 2013-45 issued July 9, 2013 provided a one-year enforcement delay for 2014 from: • The information reporting requirements applicable to insurers, self-insuring employers who provide minimum essential coverage under IRC §6055 • The information reporting requirements for large employers under IRC §6056 • The employer shared responsibility provisions under IRC §4980H

  49. Affordable Care Act:What Has Been Delayed? IRC §6055 Reporting Information reporting requirements for insurers and self-insuring employers that provide health insurance coverage which had initially been required beginning in 2014 plan years is now optional for 2014 and required for 2015 • Requires that every entity that provides “minimum essential coverage” to any individual in a calendar year report the names of individuals receiving coverage, dates of coverage and whether coverage is qualified under an exchange

  50. Affordable Care Act:What Has Been Delayed? IRC §6055 Reporting(cont.) • Insurers and self-insuring employers are encouraged to voluntarily comply once information reporting rules have been issued by the IRS • No penalties will be applied for failure to comply with the IRC §6055 reporting rules for 2014