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Our news articles are posted on a regular basis to give our clients relevant and timely information about matters pertaining to our financial services. Browse through our current and archived articles to learn more.

Category: Group Health Benefits

Group Health Benefits: Communicating Changes to Your Plan

Overview

The Employee Retirement Income Security Act (ERISA) generally allows a group health plan to modify its benefit plan so long as the procedure followed is consistent with the plan terms and ERISA. The plan administrator must inform participants of material modifications to the plan or changes to the information contained in the summary plan description (SPD) by providing them a summary of material modifications (SMM) or a revised SPD. Additional notices are required under Health Care Reform in connection with the summary of benefits and coverage (SBC).

ERISA Notice Requirements
The following are key notice requirements that apply to group health plans under ERISA.

Summary Plan Description (SPD)
The summary plan description is the primary document that provides participants of ERISA-covered plans with information about the plan, what benefits are available under the plan, the rights of participants and beneficiaries under the plan, and how the plan works. The SPD must accurately reflect the contents of the plan  as of the date not earlier than 120 days prior to the date the summary plan description is provided.

Participants are entitled to receive a copy of the SPD automatically when becoming covered under the plan. An updated SPD must be furnished every 5 years if changes are made to SPD information or the plan is amended. Otherwise, an SPD must be furnished every 10 years. Additionally, if a plan is changed, participants must be informed, either through a revised SPD, or in a separate document, called a summary of material modifications, which also must be provided free of charge.

 

Notice of Plan Changes:
Summary of Material Modifications (SMM)

The summary of material modifications describes material modifications to the plan and changes to information required to be included in the SPD. Material changes that do not result in a reduction in covered services or benefits must be disclosed through an SMM not later than 210 days after the end of the plan year in which the change was adopted (note that timely distribution of an updated SPD may satisfy this requirement).

For purposes of this notice requirement, a material modification includes any modification to the coverage offered under a plan that, independently, or in conjunction with other contemporaneous modifications or changes, would be considered by an average plan participant to be an important change in covered benefits or other terms of coverage under the plan or policy. A material modification could be an enhancement of covered benefits or services or other more generous plan or policy terms. It includes, for example, coverage of previously excluded benefits or reduced cost-sharing.

Material Reduction in Covered Services or Benefits—
Provide Notice Within 60 Days

The administrator of a group health plan is required to provide each participant covered under the plan with a summary of any modification to the plan or change in the information required to be included in the SPD that is a material reduction in covered services or benefits not later than 60 days after the date of adoption of the modification or change (note that this summary may be provided instead with information about the plan that is furnished at regular intervals of not more than 90 days, if certain requirements are satisfied).

A “material reduction in covered services or benefits” means any modification to the plan or change in the information required to be included in the SPD that, independently or in conjunction with other contemporaneous modifications or changes, would be considered by the average plan participant to be an important reduction in covered services or benefits under the plan. A reduction in covered services or benefits generally would include any plan modification or change that:

• Eliminates benefits payable under the plan;

• Reduces benefits payable under the plan, including a reduction that occurs as a result of a change in formulas, methodologies or schedules that serve as the basis for making benefit determinations;

• Increases premiums, deductibles, coinsurance, copayments, or other amounts to be paid by a participant or beneficiary;

• Reduces the service area covered by a health maintenance organization; or

• Establishes new conditions or requirements (e.g., preauthorization requirements) to obtaining services or benefits under the plan.

 

Fulfilling ERISA Notice Obligations

Where information is required to be provided under ERISA, the plan administrator must use measures “reasonably calculated to ensure actual receipt of the material by plan participants, beneficiaries and other specified individuals.” Material which is required to be furnished to all participants covered under the plan must be sent by a method or methods of delivery likely to result in full distribution. Acceptable methods of delivery include:

• In-hand delivery to an employee at his or her worksite;

• First-class mail; and

• Second or third-class mail, but only if return and forwarding postage is guaranteed and address correction is requested (note that any material sent by second or third-class mail which is returned with an address correction must be sent again by first-class mail or personally delivered to the participant at his or her worksite).

Electronic delivery may also be acceptable provided that certain requirements are satisfied. For more information on acceptable delivery methods, please click here.

 

Summary of Benefits and Coverage (SBC) Notice Requirements

Under Health Care Reform, effective for plan years and open enrollment periods beginning on or after Sept. 23, 2012, group health plans and health insurance issuers offering group coverage are required to provide participants and beneficiaries, without charge, a summary of benefits and coverage (SBC)  containing specific information about the plan and coverage, at several points during the enrollment process and upon request. The SBC must comply with certain appearance and format requirements and must utilize terminology understandable by the average plan enrollee.

Notice of Modification—
Provide No Later Than 60 Days Prior to Effective Date of Material Change

If a group health plan or health insurance issuer offering group health insurance coverage makes any material modification in any of the terms of the plan or coverage that would affect the content of the SBC, that is not reflected in the most recently provided SBC, and that occurs other than in connection with a renewal or reissuance of coverage, the plan or issuer must provide notice of the modification to enrollees not later than 60 days prior to the date on which such modification will become effective. Notice provided in a complete and timely manner may also satisfy the requirement that a group health plan provide a summary of material modifications (SMM) under ERISA.

A material modification for this purpose includes any modification to the coverage offered under a plan that, independently, or in conjunction with other contemporaneous modifications or changes, would be considered by an average plan participant to be an important change in covered benefits or other terms of coverage under the plan or policy. A material modification could be an enhancement of covered benefits or services or other more generous plan or policy terms. A material modification could also be a material reduction in covered services or benefits or more stringent requirements for receipt of benefits.

For more information regarding this requirement, including requirements with respect to the form of the notice, please click here

Click to Contact us to discuss your Group Healthcare Insurance Needs.

 

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Notice of Employee Rights to Paid Sick Leave

Under New York City’s Earned Sick Time Act (“Sick Leave Law”), employees of [COMPANY] are entitled to paid sick leave under the following terms and conditions.

Accrual of Paid Sick Leave
Employees accrue sick leave at the rate of one hour for every 30 hours worked, up to a maximum of 40 hours of paid sick leave per calendar year. [COMPANY]’s calendar year begins on [January 1] and ends on [December 31].
Employees who were employed prior to April 1, 2014 began to accrue paid sick leave on April 1, 2014. Employees who began their employment with [COMPANY] after April 1, 2014 begin to accrue paid sick leave on their first day of employment.

Use of Paid Sick Leave
Employees who were employed prior to April 1, 2014 may begin to use paid sick leave on July 30, 2014. Employees who began their employment with [COMPANY] after April 1, 2014 may not begin using paid sick leave until after they have completed 90 days of employment. No more than 40 hours of paid sick leave may be used in a calendar year. Paid sick leave must be used in increments of at least four hours. Once accrued, employees may use paid sick leave if:

  • The employee has a mental or physical illness, injury, or health condition; the employee needs to get a medical diagnosis, care, or treatment for the employee’s mental or physical illness, injury, or condition; or, if the employee needs to get preventive medical care.
  • The employee must care for a family member who needs medical diagnosis, care, or treatment for a mental or physical illness, injury, or health condition, or who needs preventive medical care.
  • [COMPANY] closes due to a public health emergency or the employee needs to care for a child whose school or child care provider closes due to a public health emergency.

For purposes of the Sick Leave Law, the following are considered “family members”: child, grandchild, spouse, domestic partner, parent, grandparent and child or parent of an employee’s spouse or domestic partner and sibling (including a half, adopted, or step sibling).

If the need for the use of paid sick leave is foreseeable, an employee must provide his or her supervisor with seven days advance notice of the intention to use paid sick leave. If the need is unforeseeable, an employee must provide his or her supervisor with notice as soon as practicable (reasonable).

In order to use paid sick leave, an employee must provide written verification that the leave was used for the one of the purposes listed above. If an employee uses paid sick leave for more than three full consecutive work days, the employee must provide [COMPANY] with documentation from a licensed health care provider indicating the need for the amount of paid sick leave used. (Please note that [COMPANY] may request additional documentation in certain circumstances in which other laws are at issue, such as the Americans with Disabilities Act and the Family and Medical Leave Act).

Unused Paid Sick Leave
Unused paid sick leave is carried over to the following calendar year and is not paid out at termination.

Department of Consumer Affairs (“DCA”)
Employees who believe their Sick Leave Law rights have been violated may file a complaint with the DCA.

No Retaliation
[COMPANY] will not retaliate against employees for requesting or using paid sick leave, filing a complaint with the DCA in good faith, communicating with anyone about a violation of the Sick Leave Law, participating in an administrative or judicial action regarding an alleged violation of the Sick Leave Law or informing anyone about their rights under the Sick Leave Law.

Union Employees
Employees who are covered by a collective bargaining agreement (“CBA”) in effect on April 1, 2014 are not entitled to paid sick leave under the Sick Leave Law until the CBA expires and only if a subsequent CBA does not (1) waive employees’ rights under the Sick Leave Law and (2) provide for comparable benefits.

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Healthcare & Benefit Services :: Employer Penalty Final Regulations Full-time Employees, Affordability and Offer of Coverage

On February 10, 2014, the IRS released final regulations implementing the employer penalty under the Affordable Care Act (“ACA”). The final regulations are complex and address numerous aspects of the employer penalty. We previously released an article dealing with the transition rules under the final regulations and we will be issuing an article in the near future regarding seasonal and variable hour employees. Below, you will find information on the following from the final regulations:

• Changes regarding how to determine full-time employee status;
• Clarifications regarding how to determine affordability; and
• Further explanation of what constitutes an “offer of coverage.”

Full-Time Employee Status
Under the ACA and the proposed regulations, a full-time employee (“FTE”) is, with respect to a calendar month, an employee who is employed an average of at least 30 hours of service per week with an employer. 130 hours of service in a calendar month is treated as the monthly equivalent of at least 30 hours of service per week. These methods are referred to as the “monthly measurement method.” Look back measurement methods are also available and are not discussed herein.

New Weekly Rule
Under the monthly measurement method, employers have the option of determining FTE status by using a weekly rule. Under the weekly rule, FTE status for certain calendar months is based on hours of service over 4 weekly periods and for certain other calendar months is based on hours of service over 5 weekly periods as follows:

• with respect to a month with 4 weekly periods, an employee with at least 120 hours of service is an FTE; and
• with respect to a month with 5 weekly periods, an employee with at least 150 hours of services is an FTE. For purposes of this rule, the 7 continuous calendar days that constitute a week (for example Sunday through Saturday) must be consistently applied for all calendar months of the calendar year.

Rehired Employees and Employees Returning from a Short Leave of Absence
To avoid characterizing former employees as rehired employees after a short period of absence, the final regulations clarify that under the monthly measurement method, an employee must be treated as a continuing employee, rather than a new hire, unless:

• the employee has had a period of at least 13 weeks during which no hours of service were credited (26 weeks for an employee of an employer that is an educational organization); or

• the employee is not credited with any hours of service during a period that is both at least 4 consecutive weeks’ duration and longer than the employee’s immediately preceding period of employment.

Aggregation of Hours of Service
Hours of service must be counted across all large employer members of a controlled group where an employee accrues hours of service in a calendar month for various large employer members. For example, an employee who for a calendar month averaged 25 hours of service per week with large employer member A and 15 hours of service per week with large employer member B, the employee would be an FTE for that calendar month.

Exclusions from Definition of Hour of Service
On-Call Hours “On-call” hours are hours for which an employee has been directed by the employer to remain available to work, but where s/he is not performing services. In some cases, employees are paid a reduced hourly wage for on-call hours. In other cases, employees are not paid additional compensation for on-call hours but are required to remain on call periodically as a condition of employment. Until further guidance is issued, employers of employees who have on-call hours are required to use a reasonable method for crediting hours of service that is consistent with the employer penalty provisions. The regulations indicate that it is not reasonable for an employer to fail to credit an employee This document is designed to highlight various employee benefit matters of general interest to our readers. It is not intended to interpret laws or regulations, or to address specific client situations. You should not act or rely on any information contained herein without seeking the advice of an attorney or tax professional. with an hour of service for any on-call hour for which (a) payment is made or due by the employer; (b) the employee is required to remain on-call on the employer’s premises or (c) the employee’s activities while remaining on-call are subject to substantial restrictions that prevent the employee from using the time effectively for the employee’s own purposes. Volunteer Employees An hour of service is generally defined as an hour for which an employee is paid or entitled to payment. Hours worked by a volunteer who does not receive, and is not entitled to receive, compensation in exchange for the performance of services are not treated as hours of service for purposes of the employer penalty. However, to address volunteers who receive compensation in the form of expense reimbursements, stipends, contributions to employee benefit plans, or nominal wages, the final regulations provide that hours of service do not include hours worked as a “bona fide volunteer.” A “bona fide volunteer” is any volunteer who is an employee of a government entity or an organization described in Code Section 501(c) that is exempt from taxation under Code Section 501(a) whose only compensation from that entity or organization is in the form of (i) reimbursement for (or reasonable allowance for) reasonable expenses incurred in the performance of services by volunteers, or (ii) reasonable benefits (including length of service awards), and nominal fees, customarily paid by similar entities in connection with the performance of services by volunteers. Student Employees The final regulations do not include a general exception for student employees; however, they do provide that hours of service do not include hours of service performed by students in positions subsidized through the federal work study program or a substantially similar program of a state or political subdivision thereof.

Members of Religious Orders
Until further guidance is issued, a religious order is permitted, for purposes of determining whether an employee is an FTE, to not count as an hour of service any work performed by an individual who is subject to a vow of poverty as a member of that order when the work is in the performance of tasks usually required (and to the extent usually required) of an active member of the order. Adjunct Faculty, etc. Until further guidance is issued, employers of adjunct faculty (and of employees in other positions that raise similar issues with respect to the crediting of hours of service) are required to use a reasonable method for crediting hours of service with respect to those employees that is consistent with the employer penalty provisions. With respect to adjunct faculty members of an educational organization who are compensated on the basis of the number of courses or credit hours assigned, it is noted a wide variation of work patterns, duties, and circumstances apply in different institutions, academic disciplines, and departments, and apply to different courses and individuals, and that this might factor into the reasonableness of a particular method of crediting hours of service in particular circumstances. Until further guidance is issued, one (but not the only) method that is reasonable for this purpose would credit an adjunct faculty member of an institution of higher education with (a) 2¼ hours of service (representing a combination of teaching or classroom time and time performing related tasks such as class preparation and grading of examinations or papers) per week for each hour of teaching or classroom time (in other words, in addition to crediting an hour of service for each hour teaching in the classroom, this method would credit an additional 1¼ hours for activities such as class preparation and grading) and, separately, (b) an hour of service per week for each additional hour outside of the classroom the faculty member spends performing duties s/he is required to perform (such as required office hours or required attendance at faculty meetings). Although further guidance may be issued regarding these matters, the method described above may be relied upon at least through the end of 2015. To the extent any future guidance modifies an employer’s ability to rely on that method, the period of reliance will not end earlier than January 1 of the calendar year beginning at least 6 months after the date of issuance of the guidance (but in no event earlier than January 1, 2016). Of course, employers may credit more hours of service than would result under the method described above and also may offer coverage to additional employees beyond those identified as FTEs under that method.

Layover Hours for Airline Industry Employees and
Others
Until further guidance is issued, with respect to categories of employees whose hours of service are especially difficult to identify or track, or for whom the final regulations’ general rules for determining hours of service may present special challenges, employers are required to use a reasonable method for crediting hours of service that is consistent with the employer penalty provisions. With respect to layover hours, it is not unreasonable for an employer to not credit a layover hour as an hour of service if the employee receives compensation for the layover hour
beyond any compensation that the employee would have received without regard to the layover hour or if the layover hour is counted by the employer towards the required hours of service for the employee to earn his or her regular compensation. For example, if an employer requires that an employee perform services for 40 hours and credits layover hours towards the 40 hours, then it would not be reasonable for the employer to fail to credit the layover hours as hours of service. For layover hours for which an employee does not receive additional compensation and that are not counted by the employer towards required hours of service, it would be reasonable for an employer to credit an employee in the airline industry with 8 hours of service for each day on
which an employee is required, as a practical matter, to stay away from home overnight for business purposes (that is, 8 hours each day (or 16 hours total) for the two days encompassing the overnight stay). The employee must be credited with the employee’s actual hours of service for a day if crediting 8 hours of service substantially understates the employee’s actual hours of service for the day (including layover hours for which an employee receives compensation or that are counted by the employer towards required hours of service). Other methods of counting hours of service may also be reasonable, depending on the relevant facts and circumstances.

Affordability
There are three safe harbors for determining affordability: (1) the Form W-2 wages safe harbor, (2) the rate of pay safe harbor, and (3) the federal poverty line safe harbor. If an employer meets the requirements of the safe harbor, the This document is designed to highlight various employee benefit matters of general interest to our readers. It is not intended to interpret laws or regulations, or to address specific client situations. You should not act or rely on any information contained herein without seeking the advice of an attorney or tax professional. offer of coverage is deemed affordable for purposes of the Offer Coverage Penalty regardless of whether it is affordable
to the employee for subsidy purposes which take into account household income and number of tax dependents.

Use of Multiple Methods
An employer may choose to use one or more of the safe harbors for all of its employees or for any reasonable category of employees, provided it does so on a uniform and consistent basis for all employees in a category. Reasonable categories generally include specified job categories, nature of compensation (e.g., salaried or hourly), geographic location, and similar bona fide business criteria. An enumeration of employees by name would not be considered a reasonable category.

Rate of Pay Safe Harbor
The final regulations allow an employer to apply the rate of pay safe harbor to an hourly employee even if the employee’s rate of pay is reduced during the year. In this situation, the rate of pay is applied separately to each calendar month, rather than to the entire year and the employee’s required contribution may be treated as affordable if it is affordable based on the lowest rate of pay for the calendar month multiplied by 130 hours. The rate of pay safe harbor cannot
be used, as a practical matter, for tipped employees or for employees who are compensated solely on the basis of commissions. In this case, employers can use the two other
affordability safe harbors.

Federal Poverty Line Safe Harbor
The proposed regulations provided that, in the interest of administrative convenience, employers may use the most recently published poverty guidelines as of the first day of the plan year of the large employer’s health plan. The final regulations specify that employers are permitted to use the
guidelines in effect 6 months prior to the beginning of the plan year, to provide employers with adequate time to establish premium amounts in advance of the plan’s open enrollment
period.

Multiemployer Arrangements
For purposes of determining whether coverage under the multiemployer plan is affordable, employers participating in the plan may use any of the affordability safe harbors set forth in the final regulations. Coverage under a multiemployer plan will also be considered affordable with respect to an FTE if the employee’s required contribution, if any, toward self-only health coverage under the plan does not exceed 9.5% of the wages reported to the multiemployer plan, which may
be determined based on actual wages or an hourly wage rate under the applicable collective bargaining agreement or participation agreement. If any assessable payment were due under the employer penalty, it would be payable by a participating large employer member and that member
would be responsible for identifying its FTEs for this purpose (which would be based on hours of service for that employer).If the large employer member contributes to one or more multiemployer plans and also maintains a single employer plan, the interim guidance applies to each multiemployer plan but not to the single employer plan.

Dependents
To ensure avoidance of the employer penalty, large employers must, in part, offer coverage to their FTEs and their dependent children. For employer penalty purposes only, the final regulations exclude both foster children and stepchildren from the definition of dependent – the final definition now only includes any biological or adopted child. However, foster children and stepchildren may have to be eligible for purposes of the requirement of a plan to cover children to age 26. The final regulations exclude a child who is not a U.S. citizen or national from the definition of dependent, unless that child is a resident of a country contiguous to the United States or that child is adopted where (a) for the taxable year of the taxpayer, the child has the same principal place of abode as the taxpayer and is a member of the taxpayer’s household and (b) the taxpayer is a citizen or national of the United States. To avoid penalty, large employers must extend coverage through the end of the month in which the dependents attain age 26.

Offer of Coverage
Staffing Firms
An offer of coverage to an employee performing services for an employer that is a client of a professional employer organization (“PEO”) or other staffing firm (in the typical case in which the PEO or staffing firm is not the common law employer of the individual) (referred to here as a “staffing firm”) made by the staffing firm on behalf of the client This document is designed to highlight various employee benefit matters of general interest to our readers. It is not intended to interpret laws or regulations, or to address specific client situations. You should not act or rely on any information contained herein without seeking the advice of an attorney or tax professional. employer under a plan established or maintained by the staffing firm, is treated as an offer of coverage made by the client employer if the fee the client employer would pay to the staffing firm for an employee enrolled in health coverage under the plan is higher than the fee the client employer would pay to the staffing firm for the same employees if the employee did not enroll in health coverage under the plan.

Home Care Workers
The final regulations clarify that the recipient of service by a home care worker may be the common law employer of the home care worker, rather than the home care agency. Therefore, the home care agency would not be required to make an offer of coverage to the home care worker in such case. For example, if the service recipient has the right to direct and control the home care provider as to how they perform services, including choosing the provider, electing the services to be performed, and setting hours of service, the service recipient is the common law employer and the home care agency would not be subject to the employer penalty for that particular provider.

Application to Multiemployer and Single Employer
Taft-Hartley Plans, MEWAs and Other Similar
Arrangements
The final regulations clarify that for purposes of the employer penalty, an offer of coverage includes an offer of coverage made on behalf of an employer, and that this would include
an offer made by a multiemployer or single employer Taft- Hartley plan or a MEWA to an employee on behalf of a contributing employer of that employee.

Method of Offer

The offer can be made electronically. An employee’s election of coverage from a prior year that continues for every succeeding plan year unless the employee affirmatively elects to opt out of the plan constitutes an offer of coverage for purposes of the employer penalty provisions.

Recordkeeping
The final regulations do not apply any specific rules for demonstrating that an offer of coverage was made. The otherwise generally applicable substantiation and recordkeeping requirements apply.

 

This document is designed to highlight various employee benefit matters of general interest to our readers. It is not intended to interpret laws or regulations, or to address specific client situations. You should not act or rely on any information contained herein without seeking the advice of an attorney or tax professional.

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Healthcare & Benefit Services :: Regulations Issued on Waiting Period

RegonWaitingImage

For plan years beginning on or after January 1, 2014, a group health plan and an insurance carrier offering group health insurance coverage may not apply any waiting period that exceeds 90 days. This rule applies to both grandfathered and non-grandfathered plans. It should be noted that nothing in the Affordable Care Act requires a group health plan or carrier to have a waiting period. Further, state insurance law may be more restrictive than what the federal law requires (state insurance requirements are generally not applicable to ERISA self-insured plans).

On February 20, 2014, final and additional proposed rules on the waiting period provision were issued. Below you will find notable changes from the previously issued proposed regulations. Effective Date The final regulations apply to plan years beginning on or after January 1, 2015. For plan years beginning in 2014, employers may comply with either the previously-issued proposed regulations or the final regulations.

Bona Fide Employment-Based Orientation Period
A waiting period is the period that must pass before coverage for an employee or dependent who is otherwise eligible to enroll under the terms of a group health plan can become effective. To be otherwise eligible to enroll in a plan means that an individual has met the plan’s substantive eligibility conditions (such as being in an eligible job classification or achieving job-related licensure requirements specified in the plan’s terms). So, the maximum 90-day waiting period does not have to begin until the first day after the substantive eligibility conditions are met. The final regulations indicate that a reasonable and bona fide employment-based orientation period can be a substantive eligibility condition and the proposed rule offers a one-month orientation period. The idea is that, during an orientation period, an employer and employee could evaluate whether the employment situation was satisfactory for each party, and standard orientation and training processes would begin. One month would be determined by adding one calendar month and subtracting one calendar day, measured from an employee’s start date in a position that is otherwise eligible for coverage.

For example, if an employee’s start date in an otherwise eligible position is May 3, the last permitted day of the orientation period is June 2. Similarly, if an employee’s start date in an otherwise eligible position is October 1, the last permitted day of the orientation period is October 31. If there is not a corresponding date in the next calendar month upon adding a calendar month, the last permitted day of the orientation period is the last day of the next calendar month. For example, if the employee’s start date is January 30, the last permitted day of the orientation period is February 28 (or February 29 in a leap year). Similarly, if the employee’s start date is August 31, the last permitted day of the orientation period is September 30.

Rehired Employees/Employees Changing to and from Eligible Job Classifications
The final regulations provide that a former employee who is rehired may be treated as newly eligible for coverage upon rehire and, therefore, a plan may require that individual to meet the plan’s eligibility criteria and to satisfy the plan’s waiting period anew, if reasonable under the circumstances. For example, the termination and rehire cannot be a subterfuge to avoid compliance with the 90-day waiting period limitation. The same analysis would apply to an individual who moves to a job classification that is ineligible for coverage under the plan but then later moves back to an eligible job classification.

Multiemployer Plans
Multiemployer plans maintained pursuant to collective bargaining agreements have unique operating structures and may include different eligibility conditions based on the participating employer’s industry or the employee’s occupation. On September 4, 2013, the Departments issued a set of frequently asked questions (FAQs) stating that if a multiemployer plan operating pursuant to an arms-length collective bargaining agreement has an eligibility provision that allows employees to become eligible for coverage by working hours of covered employment across multiple contributing employers (which often aggregates hours by calendar quarter and then permits coverage to extend for the next full calendar quarter, regardless of whether an employee has terminated employment), the Departments would consider that provision designed to accommodate a unique operating structure, (and, therefore, not designed to avoid compliance with the 90-day waiting period limitation).

Employer Action
Eligibility rules should carefully be reviewed for compliance with the 90-day waiting period rules as well as the employer penalty provisions and nondiscrimination rules. While it is permissible under the 90-day waiting period rules for a plan to use substantive eligibility conditions (e.g., job classification) to deny coverage to certain employees, have a waiting period of an additional month during a “bona fide employmentbased orientation period,” and impose a new waiting period for rehired employees and/or employees changing to and from eligible job classifications, this raises issues for large employers subject to the employer penalty beginning in 2015. These employees may be viewed as continuing employees for purposes of the employer mandate and the imposition of another 90-day waiting period may result in a penalty exposure for the employer as continuing employees generally need to be offered by the first of the month following return to work. In addition, having less generous eligibility rules for lower paid employees or protected classes can also violate various nondiscrimination rules.

 

This document is designed to highlight various employee benefit matters of general interest to our readers. It is not intended to interpret laws or regulations, or to address specific client situations. You should not act or rely on any information contained herein without seeking the advice of an attorney or tax professional.

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Healthcare & Benefits :: Final Regulations Issued on Employer Penalty

GRR Health Image

On February 10, 2014, the IRS released final regulations implementing the Employer Shared Responsibility provision under the Affordable Care Act (ACA) for 2015 (the “employer penalty”). This guidance is lengthy and provides helpful clarification in many areas.

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We are in the process of reviewing the guidance, but you will find some key aspects of this rule below:

  • The employer penalty will apply to employers with 100 or more full-time equivalent employees starting in 2015. For employers with 50-99 full-time equivalent employees, there is a one-year delay and the employer penalty provision will start in 2016.
  • Most of the transition relief offered under the proposed regulations is extended to 2015, including some relief afforded to non-calendar year plans that may delay the application of a penalty until the first day of the 2015 plan year.
  • For 2015 only, applicable large employers will avoid the penalty that applies for failing to offer health insurance coverage if coverage is offered to at least 70% of full-time employees. Beginning in 2016, coverage must be provided to at least 95% of full-time employees to avoid this penalty.
  • The final rule provides clarification around certain occupations and whether these employees are viewed as full-time, including specific rules on seasonal employees, volunteers, and adjunct faculty.

 

We are in the process of reviewing the regulations in detail and will provide further details soon.

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Healthcare & Benefit Service :: Healthcare Insurance Marketplace Deadline by October 1, 2013

The President announced on July 2nd of 2013, that certain key provision of the Healthcare Reform Law would be delayed until 2015. Businesses with 50 or more employees will not be penalized for declining to offer health insurance to their employees in 2014. This postponement provided a level of relief for many employers regarding Health Care.

 

However, other key provisions of the Law are still in effect with deadlines fast approaching. One such provision with an October 1, 2013 deadline includes Section 1512 of the Affordable Care Act, which creates a new Fair Labor Standards Act (FLSA) section requiring notifying employees of coverage options available through the new Healthcare Insurance Marketplace (http://www.dol.gov/ebsa/newsroom/tr13-02.html).

It doesn’t matter if an employer sponsors a health plan or not, the employer must still let employees know about their options that are available on January 1, 2014.

 
By October 1st 2013, employers must provide employees information related to:

 

1. The existence of the Marketplace (referred to in the statute as the Exchange) including a description of the services provided by the Marketplace, and the manner in which the employee may contact the Marketplace to request assistance;

 

2. If the employer plan’s share of the total allowed costs of benefits provided under the plan is less than 60 percent of such costs, the employee may be eligible for a premium tax credit if the employee purchases a qualified health plan through the Marketplace; and

 

3. If the employee purchases a qualified health plan through the Marketplace, the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for Federal income tax purposes.

Model notices can be downloaded from the DOL at http://www.dol.gov/ebsa/healthreform/. There are two separate notices; one for those who currently offer health coverage and one for those who do not. The Department of Labor is recommending employers provide the forms either electronically or by certified mail to ensure receipt.

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Healthcare Benefit Services :: Questions about Medicare Benefits and The Choices Available

Do you or someone you know have Questions about Medicare Benefits and the choices available?

 

At G.R.Reid Healthcare & Benefit Services LLC, we are here to help you make a personalized decision about your healthcare without calling an 800 number. Julie Seiden, Managing Director of Healthcare and Benefit services is available to help you sort through your Medicare options. We understand that one size does not fit all and we can provide valuable information to make sure you have selected the Medicare option that suits your needs without calling each insurance carrier.

 

Your Annual Election Period begins on October 15th and runs through December 7th. This is the one time annually that you are allowed to change your Medicare Health Plan and prescription drug Part D plan. A few of the Medicare health options we work with are Empire Blue Cross Blue Shield, AARP, Aetna and more.

 

To take advantage of this service,

please contact Julie Seiden  at 516-342-1314 or email Julie.

 

 

G.R. Reid Healthcare & Benefit Services LLC is an independent insurance agency not affiliated with the federal government.**

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HealthCare & Benefit Services :: Pharmacy Benefit Vendor Change for Oxford Members effective October 1, 2013

Beginning October 1, 2013, your pharmacy benefit services will be administered by OptumRxTM—UnitedHealth Group’s in-house pharmacy benefit manager (PBM).  All members will receive a new ID card with the new pharmacy information included on the card. Please use this card beginning October 1, 2013.  Members will need to update their ID card information with their pharmacy. Remaining refills that are not expired will transfer to Optum Rx. 

 

MAIL SERVICE

Most existing mail service prescriptions will transfer to OptumRx. Prescriptions for certain medications, such as painkillers, will not transfer. In this case, Oxford will send members a letter with further instructions. Payment information through the mail order service will need to be updated by the member.

If you do not have pharmacy benefits with Oxford, please disregard this notice.

 
If you have questions, please contact:
Julie Seiden

Managing Director
GR Reid Health & Benefit Services

(631) 923-1595 ext. 310 or email Julie.

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Healthcare & Benefit Services :: Healthcare Reform: Final Wellness Regulations Issued

Wellness-Regulations

The Departments of Treasury, Labor and Health and Human Services issued final regulations on July 2 regarding nondiscriminatory wellness programs in group health coverage under the Affordable Care Act. The final regulations generally apply to group health plans and carriers for plan years beginning on or after January 1, 2014.  

Click below to see and download the complete bulletin.

Final Wellness Regulations – 070213U (1)

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Healthcare & Benefit Services :: Employer Penalties Delayed

 Health-Reform

The Treasury Department announced on early in July that the Obama Administration will provide an additional year before the mandatory employer and insurer reporting requirements under the Affordable Care Act begin. This delay is intended to allow the Administration to look into ways to simplify the new reporting requirements and to provide time to adapt health coverage and reporting systems while employers move towards making health coverage affordable and accessible for their employees.

The Administration has promised formal guidance on this transition in the very near future. We also expect proposed rules this summer implementing information reporting. Once those rules are published, the Administration will encourage employers, insurers and other reporting entities to voluntarily implement this information reporting in 2014. Since this transition relief will make it difficult to determine which employers owe employer penalties, the Administration is extending this transition relief to the employer penalties – the penalties will not apply until 2015. The transition relief does not affect the opening of the Exchange, scheduled for October 1, nor the individual mandate.

We will continue to keep you apprised of any new developments.

Contact G.R. Reid Healthcare & Benefit Services for more information. 

 

 

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