The Departments of Labor, Health and Human Services, and Treasury – the departments responsible for implementing certain health care reform requirements – have released guidance on several key health care reform provisions effective in 2014.  The guidance – in the form of FAQs from employers and other stakeholders – covers automatic enrollment, employer shared responsibility, and the 90-day limitation on waiting periods and outlines rulemaking approaches under consideration by the departments and invites public comments.

Below find a brief overview of each health care reform provision covered by the FAQs and the key takeaways. 

·        Automatic Enrollment – Employers with more than 200 full-time employees and those subject to the Fair Labor Standards Act are required to automatically enroll new full-time employees in one of the employer’s health benefit plans (with adequate notice and the opportunity to opt out) and to continue the enrollment of current employees.  The FAQs indicate that regulations...

Last week, the IRS released updated FAQs regarding reporting of employer provided health coverage on Form W-2. The updated FAQs incorporate guidance set forth in Notice 2012-9. Generally, employers filing more than 250 Forms W-2 must report the value of employer provided health coverage starting in calendar year 2012 (on Forms W-2 furnished to employees in 2013).

Find the FAQs here: http://www.irs.gov/newsroom/article/0,,id=237894,00.html

The FAQs include a link to a helpful chart that breaks down which types of coverage employers need to report on Form W-2.

Find the chart here: http://www.irs.gov/newsroom/article/0,,id=254321,00.html

The IRS lowered the Medical Mileage rate from 23.5 cents per mile to 23 cents per mile, effective January 1, 2012 to December 31, 2012.

Participants can use their BESTflex Plan – Health Care FSA to be reimbursed for mileage costs associated with traveling to and from doctor’s visits, dental appointments, eye exams and to pick up prescription medications as long as the primary purpose of travel is for and essential to obtaining medical care.

The House of Representatives and the Senate have passed a bill to extend the payroll tax cut. President Obama plans to sign the bill into law immediately.

The payroll tax cut reduces how much workers pay into Social Security on their first $110,100 in wages, from 6.2% to 4.2%. Originally set to expire in February, the bill will extend the payroll tax cut until the end of 2012.

It’s been a busy week!

The Departments of Labor and Health and Human Services, along with Treasury/IRS, released a final rule on the health care reform requirement that group health plans provide a summary of benefits and coverage (SBC) to consumers.

Originally slated for March 23, 2012, the final rule requires plans with plan years that start September 23, 2012 or later to supply SBCs in their next open enrollment. Other changes from the proposed rule include:

· allowing the SBC to be incorporated into the Summary Plan Description (SPD) if the SBC information is intact and prominently displayed at the beginning of the SPD;

· permitting reasonable attempts to comply with the 4 page, double-sided, page limit;

· reducing the number of coverage examples from three to two (normal delivery childbirth and Type 2 diabetes);

· recognizing that if a plan’s terms cannot be reasonable described using the template, the plan or insurer’s best efforts to comply with the template is permissible;

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Recently, the Department of Health and Human Services (HHS) issued a statement indicating that nonprofit employers who, based on religious beliefs, do not currently provide first dollar contraceptive coverage in their health insurance plan, have until August 1, 2013 to comply with the rule. Some expected that such employers would be completely exempt from the rule because churches and other houses of worship are exempt. Since the statement was released, all sides have weighed in and tensions surrounding the issue are escalating.

In August of 2011, HHS issued an interim final rule, stemming from Health Care Reform, requiring most health insurance plans to cover preventative services for women, including FDA-approved contraceptives like the birth control pill and morning-after pill, without charging a co-pay, co-insurance or a deductible, effective August 1, 2012. In order to be exempt from the rule concerning contraceptives, an organization must serve primarily persons who share its religious tenets. After...

There are four types of leaves of absences: (i) Paid Leave of Absence; (ii) Unpaid Family and Medical Leave Act (FMLA) Leave of Absence; (iii) Non-FMLA Unpaid Leave of Absence; and (iv) Uniformed Services Employment and Reemployment Rights Act (USERRA) Unpaid Leave of Absence. Each type of leave is subject to different regulations and will affect a participant’s benefits differently.

Paid Leaves of Absence are easy. A participant on a Paid Leave of Absence, regardless of whether the leave is covered by FMLA, is regarded as being employed throughout the leave because they are still receiving a paycheck. Thus, because the participant has not lost eligibility for the Plan, the participant may NOT make any changes to their cafeteria plan election amounts.

Enacted in 1993, FMLA was one of the first major pieces of legislation that President Bill Clinton signed into law. FMLA protects individuals from losing their jobs and benefits while taking leave from work for their own serious medical condition...

Recently the Department of Health and Human Services (HHS) issued interim final rules adopting HIPAA transaction standards for health care electronic fund transfers (EFT) and electronic remittance advice (ERA).

Background

The interim final regulations implement parts of the Affordable Care Act – health care reform – which requires the adoption of standards to support and facilitate health care EFT transactions.

Health plans send health providers EFT payments separately from ERA because the information is sent in different electronic formats, through different networks and with different data for different business uses. The ERA contains information regarding the adjustments that the health plan has negotiated with the provider – rarely does a health plan pay the provider the exact amount that the provider bills. In turn, the providers use the ERAs to post payments, but cannot automatically link the postings to the EFT. Providers end up spending a significant amount of time manually reconciling...

Participants can make mid-year election changes to their Health Care FSA due to a status change for the employee, their spouse or dependents. See Treas. Reg. §1.125-4. When a status change event occurs, such as a spouse gaining or losing employment or eligibility for their employer’s plan, our participant is allowed to make changes to their Health Care FSA that are on account of and consistent with the event.



When a participant’s spouse gains employment or becomes eligible for benefits, our participant can MAINTAIN, DECREASE, or DROP their Health Care FSA election – all of which would be consistent with their spouse gaining employment or becoming eligible for benefits.



When a participant’s spouse loses employment or loses eligibility for their employer’s plans, our participant can MAINTAIN or INCREASE their current election or ELECT a Health Care FSA – all of which would be consistent with their spouse losing employment or losing eligibility for benefits.



Here,...

In recent blog posts, our guest contributor, Peter Antonie, summarized IRS guidance on Form W-2 reporting requirements and I’ve covered the $2,500 Health Care FSA limit. I’d like to send readers on over to our News Center for some excellent coverage of W-2 Reporting and the $2,500 limit.

Some quick comments on the $2,500 limit. We’ve received several questions regarding how the $2,500 Health Care FSA limit) applies to plan years that cross into 2013. Employers with plan years beginning at any point between February 1, 2012 and December 1, 2012 who plan to set a Health Care FSA limit above $2,500, should ensure that employees understand the implications of their elections.

Example: Company QRS offers a Health Care FSA with an upcoming plan year of February 1, 2012 – January 31, 2013. Company QRS does not set a maximum salary reduction contribution limit for the Health Care FSA. Edward is expecting some pretty high medical expenses for the upcoming plan year, so he elects $12,000 for his Health Care FSA ($12,000 / 26 pay periods = $461.53 per pay period in salary reductions). Come February 1, 2013 Edward decides to elect the maximum of $2,500 for his Health Care FSA ($2,500 / 26 pay periods = $96.15 per pay period in salary reductions). This will result in salary reduction contributions of $3,230.66 for taxable year 2013 (2 pay periods * $461.53 + 24 pay periods * $96.15 = $3230.66). Edward will need to be taxed on the $730.66 that exceeds the limit.

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