Below is information provided during a seminar titled, The Affordable Care Act: An Overview of What to Expect, hosted by the Lansing Chamber of Commerce. In this first of three sessions, Fraser Trebilcock Lawyers, along with Blue Cross Blue Shield and Grotenhuis, helped area business leaders to understand the ACA. You can learn more about the session and upcoming sessions here: LRCC Programs on Health Care Reform. Scroll to the bottom for more links related to ACA.
Archive for the ‘Employment’:
Client Alert: Updated SBC Guidance and Templates for Second Year of Applicability
April 25th, 2013
A group health plan and a health insurance issuer offering group health insurance coverage must provide an SBC to participants and beneficiaries (including COBRA qualified beneficiaries under certain circumstances) with respect to each benefit package offered by the plan or issuer for which the participant or beneficiary is eligible.
Client Alert: Final PCORI Rules – Payment Due July 31st
March 11th, 2013
Please remember that $1/covered life under your health plans must be reported and paid by July 31, 2013. This is applicable for any plan with a plan year that ended on or after October 1, 2012. Please see below for more details. Read More
Client Alert: New Final HIPAA Regulations Released
January 29th, 2013
Health plans, their sponsors, associated employers, and business associates have a lot of HIPAA work to do (including major updates to current documents) over the next several months. On January 25, 2013, pursuant in part to the statutory framework of the HITECH Act, the Department of Health and Human Services (“HHS”) published long-awaited final regulations modifying HIPAA’s privacy, security, enforcement, and breach notification rules.
Reminder: Disclosure Due to CMS for Medicare Part D/Form W-2 Reporting Due/Notice of Exchanges Delayed
January 25th, 2013
Deadline Coming Up for Calendar Year Plans to Submit Medicare Part D Notice to CMS
As you know, group health plans offering prescription drug coverage are required to disclose to all Part D-eligible individuals who are enrolled in or were seeking to enroll in the group health plan coverage whether such coverage was “actuarially equivalent,” i.e., creditable. (Coverage is creditable if its actuarial value equals or exceeds the actuarial value of standard prescription drug coverage under Part D.) This notice is required to be provided to all Part D eligible persons, including active employees, retirees, spouses, dependents and COBRA qualified beneficiaries. Read More
Health Care Reform Year-End Compliance Measures – Reminder
October 19th, 2012
As the end of the year is quickly approaching, please take a moment to ensure your year-end compliance measures are in place. While this Alert does not set forth all compliance obligations, it highlights some of the new obligations set forth under the Patient Protection and Affordable Care Act (i.e. Health Care Reform).
Specifically, plans must ensure that all relevant SBCs are drafted and distributed no later than the first day of open enrollment (and at other times briefly set forth below). Employers who sponsor health flexible spending accounts must also ensure that the salary reduction amount does not exceed $2,500 for plan years beginning on or after January 1, 2013. Additionally, larger employers must be prepared to report the cost of coverage provided in 2012 on their employee’s 2012 Form W-2. Plans with plan years ending on or after October 1, 2012 must report and pay a comparative effectiveness fee ($1 for 2012 calendar year plans and increasing thereafter) for patient-centered outcomes research. Measures must also be in place with regard to the additional Medicare tax going into effect in 2013. Finally, employers and employees should be aware that the threshold for which individuals can itemize their unreimbursed medical expenses is being increased.
These issues are briefly set forth below. For more information, please see our previously issued Alerts.
Summary of Benefits and Coverage (SBC)
With varying compliance dates for disclosure, in general, the requirement went into effect September 23rd of this year. Group health plans must provide a summary of benefits and coverage that: (1) is in either color or grayscale; (2) is presented in a uniform format; (3) uses terminology understandable by the average plan enrollee; (4) does not exceed four double-sided pages in length; and (5) does not include print smaller than 12-point font. The SBC, notice of material modification, and uniform glossary requirements apply to self-funded and fully-insured group health plans, including grandfathered plans. However, an SBC need not be provided for plans, policies, or benefit packages that constitute HIPAA excepted benefits under 26 CFR 54.9831-1(c).
Group health plans and health insurance issuers must provide the SBC to participants and beneficiaries, including COBRA qualified beneficiaries no later than the first day of open enrollment occurring on or after September 23, 2012. SBCs also must be provided upon application, special enrollment, by the first day of coverage, and upon request.
If you have not done so, please contact your insurer and/or third-party administrator (TPA) to ensure they are working on the SBC.
Please keep in mind that these requirements not only apply to your medical and prescription coverage, but may also apply to other benefits, including but not limited to, dental / vision / health FSA (unless HIPAA excepted benefits), health reimbursement arrangements, wellness programs, and employee assistance programs. For more detailed information, please see our previously issued Alerts.
Health FSA Limitation to $2,500
Effective for plan years beginning after December 31, 2012 (i.e., January 1, 2013 for calendar year plans), the salary reduction amount for health flexible spending accounts (health FSAs) under a cafeteria plan cannot exceed $2,500, adjusted in future years for changes in the cost of living.
If your plan currently offers a health FSA in excess of $2,500, you must have it amended.
Form W-2 Reporting of Cost of Employer-Sponsored Health Coverage
(January 1, 2013)
Employers (who were required to file 250 or more Forms W-2 in the preceding calendar year) must report the aggregate cost of employer-sponsored coverage provided in 2012 on their employees’ Form W-2 (Code DD in Box 12) issued in January 2013. “Applicable employer-sponsored coverage” is group health plan coverage that is non-taxable to the employee (i.e., excludable from an employee’s gross income under Code section 106); however, exceptions do apply. The cost of coverage includes both the employer and employee contribution, so for an insured plan, using the insurance premium is acceptable. Transition relief exists for at least another year for small employers. For more detailed information, please see our previously issued Alerts.
Comparative Effectiveness Fee / Patient-Centered Outcomes Research Trust Fund (2012)
In April 2012, the IRS / Department of Treasury issued proposed regulations on the Comparative Effectiveness Fee. A public hearing was scheduled for August 8th so we anticipate final regulations soon.
As of now, fees on insured and self-insured plans in the amount of $1 per covered life for plan years ending on or after October 1, 2012, and ending before October 1, 2013, are required. There are a number of different ways to calculate the “covered lives” which are set forth in the regulations. The approach used by a plan, however, must be consistent. The fee will increase to $2 for the next plan year (ending on or after October 1, 2013 and ending before October 1, 2014) and will again increase and be calculated as indicated for future plan years until the fee ceases for years ending on or after October 1, 2019.
This does not apply to HIPAA excepted benefits (however, it is applicable to retiree-only plans), and some self-funded plans having the same plan year with the same plan sponsor may be considered a single plan for purposes of the fee (examples given in the regulations are medical/prescription and medical/HRA combinations). Again, a thorough review of each of your benefits is necessary.
For insured plans, the insurer is liable for the fee. For self-funded plans, the plan sponsor is liable for the fee, which must be reported on Form 720 and filed by July 31 of the calendar year immediately following the last day of the plan year. Therefore, the plan sponsor of a self-funded calendar year plan must report and pay the fee by July 31, 2013 and each year thereafter until the obligation ceases.
Additional Medicare Tax (2013)
In 2013, an additional Medicare tax of 0.9 percent goes into effect. The tax is applicable for individuals making over a certain threshold depending on filing status, namely:
Filing Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Threshold Amount
Married filing jointly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$250,000
Married filing separately. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$125,000
Single . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $200,000
Head of household (with qualifying person) . . . . . . . . . . . . .$200,000
Qualifying widow(er) with dependent child . . . . . . . . . . . . .$200,000
The below link includes information in a question and answer format about this tax:
Increase of AGI Percentage to Deduct Unreimbursed Medical Expenses (2013)
Beginning 2013, the cost of unreimbursed medical expenses must exceed 10% of adjusted gross income (AGI) in order for individuals to itemize deductions for such expenses, versus the current 7.5% threshold.
Health care reform is an incredibly complex law. If you have any questions about the above, other aspects of health care reform, or with regard to employee benefits in general, do not hesitate to contact us.
Medicare Part D Notices Due Prior to October 15th!
September 24th, 2012
As a reminder, Medicare Part D notices (of either creditable or non-creditable coverage) are due for distribution prior to October 15th.
As you know, if you as an employer offer prescription coverage to any Medicare-eligible employees (whether or not retired), or Medicare-eligible spouses or dependents, you must provide those individuals with a Notice of Creditable or Non-Creditable Coverage to advise them whether your drug plan’s total gross value is at least as valuable as the standard Part D coverage (ie, creditable). Medicare Part D notices must be provided to Medicare-eligible individuals prior to October 15th of each year.
The initial notices were due by November 15, 2005 and have been modified numerous times. The newest model notices and guidance were issued for use after April 1, 2011. Therefore, any notices you send from this point forward must conform to the new guidelines. Use of the former model notices will not suffice.
Downloads to the updated guidance and various notices can be found on the CMS website at: https://www.cms.gov/creditablecoverage/ and https://www.cms.gov/Medicare/Prescription-Drug-Coverage/CreditableCoverage/Model-Notice-Letters.html
As a reminder, there are five instances in which such notice must be provided: (1) prior to an individual’s initial enrollment period for Part D; (2) prior to the effective date of enrollment in your company’s prescription drug coverage; (3) upon any change in your plan’s creditable status; (4) prior to the annual election period for Part D (which begins each October 15); and (5) upon the individual’s request.
Providing the notice above is important as a late enrollment penalty will be assessed to those persons who go 63 days or longer without creditable coverage (for example, if they enroll in an employer’s prescription plan which is not as valuable as the Part D coverage instead of enrolling directly in the Medicare Part D coverage).
If your plan does not offer creditable prescription drug coverage and if the Part D eligible person enrolls in your plan instead of the Part D plan for at least 63 days, a permanent late enrollment penalty of 1% of the premium is added to the Medicare premium for each month the person does not enroll in Part D.
Please contact us if you need assistance with your Notice of Creditable (or Non-Creditable) Coverage.
Reminder: Submit Medicare Part D Notice to CMS
As discussed above, group health plans offering prescription drug coverage are required to disclose to all Part D-eligible individuals who are enrolled in or were seeking to enroll in the group health plan coverage whether such coverage was “actuarially equivalent,” i.e., creditable. (Coverage is creditable if its actuarial value equals or exceeds the actuarial value of standard prescription drug coverage under Part D.) This notice is required to be provided to all Part D eligible persons, including active employees over age 65.
The regulations also require group health plan sponsors with Part D eligible individuals to submit a similar notice to the Centers for Medicare and Medicaid Services (“CMS”). Specifically, employers must electronically file these notices each year through the form supplied on the CMS website.
The filing deadline is 60 days following the first day of the plan year.
At a minimum, the Disclosure to CMS Form must be provided to CMS annually and upon the occurrence of certain other events including:
1) Within 60 days after the beginning date of the plan year for which disclosure is provided;
2) Within 30 days after termination of the prescription drug plan; and
3) Within 30 days after any change in creditable status of the prescription drug plan.
The Disclosure to CMS Form must be completed online at the CMS Creditable Coverage
Disclosure to CMS Form web page at: https://www.cms.gov/Medicare/Prescription-Drug-Coverage/CreditableCoverage/CCDisclosureForm.html
The online process is composed of the following three step process: (1) Enter the Disclosure Information; (2) Verify and Submit Disclosure Information; and (3) Receive Submission Confirmation.
The Disclosure to CMS Form requires employers to provide detailed information to CMS including but not limited to, the name of the entity offering coverage, whether the entity has any subsidiaries, the number of benefit options offered, the creditable coverage status of the options offered, the period covered by the Disclosure to CMS Form, the number of Part D eligible individuals, the date of the notice of creditable coverage, and any change in creditable coverage status.
For more information about this disclosure requirement (instructions for submitting the notice), please see the CMS website for updated guidance at: https://www.cms.gov/Medicare/Prescription-Drug-Coverage/CreditableCoverage/CCDisclosure.html
As with the Part D Notices to Part D Medicare-eligible individuals, while nothing in the regulations prevents a third-party from submitting the notices (such as a TPA or insurer), the ultimate responsibility falls on the plan sponsor.
If you would like further information regarding this disclosure requirement, please contact our office, or contact attorney Elizabeth Latchana directly at 517-377-0826 or by email at elatc@fraserlawfirm.com.
Client Alert: Revised Notice Under CHIRPA
August 21st, 2012
The government has revised the CHIP Notice as of July 31, 2012. As you are likely preparing and updating your open enrollment materials, if you are required to send the CHIP notice, please be sure to use the attached revised notice.
The Children’s Health Insurance Program Reauthorization Act of 2009 (“CHIPRA” or the “Act”), signed into law in 2009, extends the State Children’s Health Insurance Program established under the Social Security Act (“CHIP”).
CHIPRA allows states to subsidize premiums for employer-provided group health coverage for eligible children and families. Under the Act, states may elect to provide a premium assistance subsidy (the “Subsidy”) to low-income employees who want to change their single coverage to family coverage in order to cover a CHIP or Medicaid eligible dependent. Pursuant to the Act, a state may elect to offer the Subsidy for “qualified employer-sponsored coverage”.
Michigan currently does not offer such subsidy, but if you have any employees living in another State which does, you must provide the attached CHIPRA notice to those employees. [The attached notice sets forth those States which do offer the subsidies].
Under the Act, group health plans will have to notify each employee of potential Subsidy opportunities currently available in the state in which the employee resides. Where there is a state Subsidy in place, each employer that maintains a group health plan will be required to give notice to participants about the Subsidy. Under the Act, group health plans may distribute notices concurrently with the group health plan enrollment materials, open enrollment materials, or the SPD.
This is an ANNUAL notice which must be provided free of charge to employees living in affected States before the start of each plan year (i.e., for calendar year plans, prior to each January 1st).
If you would like further information regarding the above matters, health care reform, or employee benefits in general, please feel free to contact our office. You can reach attorney Elizabeth Latchana at elatc@fraserlawfirm.com or 517-377-0826.
Deadline This Month for Calendar Year Plans to Submit Medicare Part D Notice to CMS
February 13th, 2012
As you know, group health plans offering prescription drug coverage are required to disclose to all Part D-eligible individuals who are enrolled in or were seeking to enroll in the group health plan coverage whether such coverage was “actuarially equivalent,” ie, creditable. (Coverage is creditable if its actuarial value equals or exceeds the actuarial value of standard prescription drug coverage under Part D.) This notice is required to be provided to all Part D eligible persons, including active employees, retirees, spouses, dependents and COBRA qualified beneficiaries.
The regulations also require group health plan sponsors with Part D eligible individuals to submit a similar notice to the Centers for Medicare and Medicaid Services (“CMS”). Specifically, employers must electronically file these notices each year through the form supplied on the CMS website.
The filing deadline is 60 days following the first day of the plan year. If you operate a calendar year plan, the deadline is the end of February.
At a minimum, the Disclosure to CMS Form must be provided to CMS annually and upon the occurrence of certain other events including:
1) Within 60 days after the beginning date of the plan year for which disclosure is provided;
2) Within 30 days after termination of the prescription drug plan; and
3) Within 30 days after any change in creditable status of the prescription drug plan.
The Disclosure to CMS Form must be completed online at the CMS Creditable Coverage Disclosure to CMS Form web page at: https://www.cms.gov/CreditableCoverage/45_CCDisclosureForm.asp
The online process is composed of the following three step process: (1) Enter the Disclosure Information; (2) Verify and Submit Disclosure Information; and (3) Receive Submission Confirmation.
The Disclosure to CMS Form requires employers to provide detailed information to CMS including but not limited to, the name of the entity offering coverage, whether the entity has any subsidiaries, the number of benefit options offered, the creditable coverage status of the options offered, the period covered by the Disclosure to CMS Form, the number of Part D eligible individuals, the date of the notice of creditable coverage, and any change in creditable coverage status.
As with the Part D Notices to Part D Medicare-eligible individuals, while nothing in the regulations prevents a third-party from submitting the notices (such as a TPA or insurer), ultimate responsibility falls on the plan sponsor.
If you would like further information regarding the above matters, health care reform, or employee benefits in general, please feel free to contact our office. You can reach attorney Elizabeth Latchana at elatc@fraserlawfirm.com or 517-377-0826.
Do Your Employees Have the Right Stuff?
November 23rd, 2011
Using Competency Models in Strategic Human Resource Management
By: Michael P. James, J.D., M.B.A.
Human Resource Management Professionals:
Have you been asked to complete a skill or competency analysis for employees in your organization? Are you in charge of evaluating or designing a talent/knowledge-based compensation system? Would you like to create training and certification programs to ensure that employees possess the skills required for the positions they hold in your company? These responsibilities can be overwhelming, yet they are also critical to the success of your organization. Where should you start?
I recommend that you begin each of these projects by examining the competency models developed by the Employment and Training Administration (ETA). The ETA works with business and industry leaders, educators, economic developers and public workforce investment professionals to create competency models that outline the skills and competencies required for workplace success. Each model contains a number of elements to help you accomplish your skill/competency-based project. First, the models offer a detailed account of each competency determined to be relevant to the industry. Second, the models provide descriptions of the activities and/or behaviors associated with each competency. Finally, the models are visually presented in a pyramid structure divided into tiers and blocks. The tiers are categorized into the following broad competency areas, as read from the bottom of the structure to the top: Personal; Foundational; Industry; and Occupation. Within each tier, there are a number of blocks, each representing a different skill set. Ultimately, the ETA’s competency models may offer valuable guidance and potentially serve as a guidepost for external alignment with competitors in your industry.
Currently, the ETA offers 19 competency models based on the following industries:
Advanced Manufacturing; Aerospace; Automation; Bioscience; Construction – Commercial; Construction – Heavy; Construction – Residential; Energy; Entrepreneurship; Financial Services; Geospatial Technology; Health: Electronic Health Records; Hospitality/Hotel and Lodging; Information Technology; Long-term Care, Supports, and Services; Mechatronics; Retail; Transportation; and Water Sector.
Do you need assistance developing a customized competency model for your organization or business? Contact Michael James to discuss and construct a competency structure that is aligned with your organizational and human resource objectives and strategies. Michael James, an attorney at Fraser Trebilcock Davis & Dunlap, P.C., handles all matters related to business law, employment law and health care law and represents clients in complex commercial and civil litigations. For more information, you can contact Michael at mjames@fraserlawfirm.com, (517) 377-0823 or www.fraserlawfirm.com.
*Article reposted with author’s permission.