Welfare Plans

On April 23, 2013, the Departments of Labor, Health and Human Services and the Treasury (the “Departments”) issued an updated template and sample completed template for summaries of benefits and coverage (“SBCs”) that must be provided for coverage beginning in 2014.  The Departments also released Frequently Asked Questions that include the following guidance:

  • The only change to the existing SBC template is the addition of statements regarding whether a group health plan offers minimum essential coverage that meets the requirements for providing minimum value.  (See ACA’s Cost-Sharing Limitations on Employer Health Coverage for an explanation of the minimum essential coverage and minimum value requirements.)  If an employer or issuer is unable to modify the SBC template to include this additional information and continues to use the template provided for 2013, the new information for 2014 may be disclosed in a separate document that is provided with the SBC.  No other changes have been made to the SBC template, including to the examples that must be included, to the instructions for providing SBCs, or to the uniform glossary.
  • The Departments have extended for another year enforcement relief that they issued last year.  Pursuant to this relief, the Departments will not impose penalties on plans and issuers that are working diligently and in good faith to provide the required SBC content in a format that is consistent with the final regulations.  In addition, the Departments have also extended the safe harbor for providing SBCs electronically to participants and beneficiaries in connection with their online enrollment or online renewal of coverage under the plan.
  • Because annual limits on essential health benefits will no longer be permissible starting in 2014, a plan may, at its option, delete the following row that appears on the first page of the SBC template:  “Is there an overall limit on what the plan pays?”.  Otherwise, the plan should answer “no” to this question.
  • If an educational institution, such as an institution of higher education, maintains insured health coverage for its students, the institution will have met its requirements for providing SBCs if another party, such as the health insurance issuer, timely provides completed SBCs to the students.
    Continue Reading Departments Publish Updated SBC Template, Making Few Changes for 2014

If the Supreme Court holds that the Defense of Marriage Act (“DOMA”) is unconstitutional, those involved with the administration of employee benefits plans will be very busy.  Under DOMA, a benefit plan is not required to recognize same-sex marriage and, in many cases, must treat same-sex spouses differently than opposite-sex spouses.  If DOMA is struck down, employers might need to amend their benefit plans, and plan administration will necessarily change.  Many changes will need to be implemented quickly.
Continue Reading While the Supreme Court considers DOMA’s fate, what’s an in-house benefits lawyer or HR professional to do?

The Affordable Care Act has numerous provisions that restrict the amounts that employer-sponsored health plans may require employees to pay for health care.  These provisions include prohibitions on annual and lifetime dollar limits on essential health benefits, restrictions on out-of-pocket maximums, and requirements to provide preventive care services and items at no cost to participants.  The rules apply to insured and self-insured plans and some, but not all, apply to grandfathered plans as well as non-grandfathered plans.  This article summarizes ACA’s cost-sharing requirements for employer-sponsored group health plans and guidance that the Departments of Labor, Health and Human Services, and Treasury (the “Departments”) have recently released implementing these requirements. 
Continue Reading ACA’s Cost-Sharing Limitations on Employer Health Coverage

The Affordable Care Act requires an employee to have a minimum amount of health coverage starting in 2014, and requires an employer to offer affordable health coverage to its employees.  But how do these health mandates apply to the employee’s spouse and dependents?  Recent IRS regulations fill in several pieces of this puzzle.

Several provisions of the Affordable Care Act work together to expand health coverage.  An individual mandate requires most individuals to maintain minimum essential health coverage or pay a penalty.  In order to encourage employers to offer health coverage to their employees, an employer mandate imposes an excise tax on large employers that fail to offer affordable, minimum value coverage to their full-time employees.  If a lower-income individual is not eligible for affordable coverage from another source and purchases individual health insurance, the individual receives a refundable premium tax credit that helps make the coverage affordable.  Although these provisions are related, each provision applies in a different way to an employee’s family members.  The family coverage rules have important implications for the design and administration of employer group health plans.Continue Reading IRS Clarifies Family Health Coverage Mandates

The HIPAA / HITECH omnibus rule published in the Federal Register late last week includes a number of changes that will require action by employers, health plans, and business associates in the coming months.  The new requirements take effect on March 26, although group health plans and business associates have until September 23, 2013, to comply with most of the new requirements. 
Continue Reading New HIPAA / HITECH Rule Requires Health Plan Changes

Starting in 2014, large employers will have to pay a “shared responsibility” excise tax up to $3,000 per employee if they fail to provide affordable health coverage to full-time employees and their dependents.  The Treasury Department and IRS have published a proposed regulation and frequently-asked questions that make important changes in prior guidance. 
Continue Reading IRS Proposes Shared Responsibility Tax Rules for Employers

In the coming year, we expect to see continued activity on the part of the agencies and Congress with respect to employee benefits and executive compensation.  The following is a preview of major guidance anticipated in 2013. 
Continue Reading 2013 Preview of Expected Developments in Employee Benefits and Executive Compensation

Regardless of how the so-called fiscal cliff is “resolved” – and whether this occurs before the end of 2012 – the expiration of educational assistance and adoption assistance tax provisions at the end of this year is already causing headaches for employers who provide (or hope to provide) their employees with these tax-advantaged benefits.  However, employers can take some steps now to mitigate the uncertainty of whether these tax benefits will be retained or shelved for 2013 and beyond.
Continue Reading Are the Educational and Adoption Assistance Tax Exclusions Going to Expire?