Welfare Benefit Plan ERISA News
August 2014

HIPAA Audits Are Coming (Again) - Are You Ready?
The Office of Civil Rights "OCR" is expected to select 350 covered entities for audit from October 2014 through June 2015. Covered entities will have two weeks to respond. Auditors will not contact the covered entity for clarifications or to ask for additional information, so it is important that submitted documentation be complete and up-to-date.
These audits are expected to be focused on enforcement (i.e., imposition of civil monetary penalties or resolution agreements). Thus, the importance of getting your HIPAA documents in order sooner rather than later cannot be overstated.
Business Associates will also be audited. Audited covered entities will be asked to identify and provide contact information for their business associates. Click here for a detailed discussion from Chris Rylands & Serena Yee, Bryan Cave, LLC
Although recent resolution agreements have focused on electronic PHI, this $800,000 HIPAA settlement in a recent medical records dumping case is a reminder that "low-tech" PHI must also be protected.
Employer's SPD Saves Insurer in
$255,000 Subrogation Case
"An insurer won recovery of health expenses paid from a member's $255,000 settlement after the member refused to reimburse the insurer for the medical payments it had paid. It did so in spite of an affidavit from the company's plan administrator saying the insurer was not authorized to collect the funds from the member's settlement proceeds." Read more
$1,000,000+ Claims Increase Tenfold Over 4 Years
A Sun Life study ranks the top ten most costly stop-loss catastrophic claims filed between 2010 and year-end 2013. The report shows the aggregate cost for each claim condition reimbursed by Sun Life. The cost reflects two factors: (1) severity, or the underlying cost of the claim and, (2) frequency, or the number of times the claim occurs. Download a free copy of the "2014 Sun Life Stop-Loss Top Ten Catastrophic Claims Conditions" report to find out more.
ERISA Trivia
Last month we asked: My company provides a non-contributory $200,000 group term life policy to me, $10,000 for my spouse, and $5,000 for each of my three children. I know that the cost of $50,000 of my coverage will be tax free, but how much of the dependent life insurance cost will be tax free? The answer is $0. An employer can generally disregard the cost of up to $2,000 for a spouse and each dependent child as de minimis. However, if the face amount is greater than $2,000, the cost of the entire dependent coverage must be reported as wages - not just the excess over $2,000. Therefore, the cost of the total $25,000 dependent group life (in addition to $150,000 employee group life) will be taxable to you. IRS Publication 15-B, page 13. Congratulations to Bernard Gleeson of Syracuse, NY for submitting the correct answer.
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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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