Welfare Benefit Plan ERISA News
August 2013

Exchange Notices Due by October 1
Employers must provide a notice of coverage options to each employee, regardless of plan enrollment status or of part-time or full-time status. However, they are not required to provide a separate notice to dependents. The Notice is required to be provided automatically, free of charge. Current employees must receive the Exchange Notice before Oct. 1, 2013. Employers are required to provide the notice to each new employee at the time of hiring beginning Oct. 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. Employers and brokers may assume that the carriers and TPAs will prepare the Notice for them. However, that may not be the case. The requirement to notify employees of the Exchanges is solely the responsibility of the employer. To avoid potential misunderstandings, brokers and other advisors should be proactive by notifying their clients and offering to assist. (More details)
Enforcement of Employer Mandate Delayed One Year
In a surprising but generally welcome move, the Obama administration has delayed the employer mandate to provide health care coverage under ACA from 2014 to 2015. However, there are about 5,700,000 U.S. employers. About 96% of them, or 552,000, are not subject to this aspect of ACA because they employ less than 50 employees. (Source) Many, perhaps most, employers with over 50 employees may already be in compliance.
Just fewer than 26 million Americans are expected to be legitimately eligible for subsidies, worth about $5,000 per person annually. The exchanges will not be able to verify whether someone's coverage is affordable, thus eligible for subsidies. The IRS will have a hard time policing fraud.
The administration left the individual mandate in effect for 2014. The law further imposes a penalty on people who fail to obtain coverage. But those whose employer-sponsored policy is unaffordable - defined as more than 9.5 percent of household income - do not have to pay the penalty even if they do not buy insurance. To check whether someone is truly exempt, the IRS has to know whether the employer offers coverage and at what price. If the IRS doesn't have information about the plans large employers offer, it will be very hard to verify that. (More on Shared Responsibility)
BAA Deadline Looming
HIPAA regulations require Covered Entities (e.g., employers/plan sponsors, health care providers, health plans, and insurers) to enter into Business Associate Agreements (BAAs) with all contracted parties (e.g., brokers, TPAs, and other vendors who assist in plan administration) who: (1) perform a function on behalf of the Covered Entity and (2) have access to protected health information (PHI) of a Covered Entity as a result of that function. The purpose of the BAA is to ensure that the business associates will appropriately safeguard PHI. The general date for compliance is September 23, 2013; however, there is a one-year grace period in certain circumstances. Here is a link on the HHS website for details and to obtain a sample BAA.
ERISA Trivia

Last month we asked: "My company covers 128 participants in a self-insured medical plan. The company owns a specific stop loss policy to protect itself from high claims. Our employees pay their share of the cost through a cafeteria plan. We received a Schedule C from our TPA and a Schedule A from our Stop Loss Carrier. Do I need to file these schedules on our Form 5500?"

The answer is "No." An employer is generally exempt from filing Schedule A if it owns and is the beneficiary of the stop-loss policy and pays all premiums for it from its general assets without employee contributions. Employee contributions made through a Cafeteria Plan are not considered premiums for this purpose. An employer is also exempt from filing Schedule C if premiums and benefits are paid from the employer's general assets, contributions are forwarded and insurer refunds are returned within 3 months of receipt, a trust does not hold Plan assets, and, in the case of a self-insured plan, employee contributions are made through a Cafeteria Plan. (Source)


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© 2017 ERISAPros, LLC, All rights reserved. Information on ERISAPros' website, its newsletter, “News & Views,” and its blog, “ERISA Wonk,” is published as a general informational source. Information and articles are general in nature and are not intended to constitute legal or tax advice in any particular matter. Blog posts and comments reflect the personal views of their respective authors - not those of ERISAPros. Transmission of this information does not create an attorney-client relationship. ERISAPros, LLC is not a law firm and is not giving legal or tax advice. It does not warrant and is not responsible for errors or omissions in the content on its website or in its newsletters. ERISA is a complicated and confusing law. Summary Plan Descriptions (SPDs), Wrap Plan Documents, and Form 5500s require review and updating by qualified ERISA compliance professionals.


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