Employers, Do You Know The Rules??

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 As an ERISA Plan Administrator (most private sector employers fall under ERISA law), you have the responsibility to comply with Federal Laws that govern your plan.  No matter who else you may hire to administer your plan, your Company is solely responsible to make sure things are done correctly.  As an employer offering benefits to your employees, there are many rules that you must comply with regarding the administration of employee benefit plans.  Below are some of the rules you must be careful to comply with in under law:

  •  Make sure you define – in writing in an employee handbook- the definitions of eligible employees and dependents.  For example, do you only offer benefits to full time employees over 40 hours per week?  However you define eligibles, make sure you are consistent in benefits that you offer and monitor to make sure you remain consistent.   Make sure you also define leave policies and waiting periods as well.
  • Make sure your plan complies with benefits mandate by state law and health care reforms.
  • Benefit and eligibility information must be provided to eligible participants or be made available at their request.
  • Make sure you file all necessary plan documents, such as 5500 reports.

Please remember that failure to follow the rules can be costly.  For example, the fine for failure to file the 5500 report is $1,000 PER DAY.

If we may be of any assistance to you or can help you organize a compliance process, please contact Gary Whiddon at (888)474-6627.


IRS Issues Updated Guidance on W-2 Reporting

On January 3, 2012, the IRS issued additional interim guidance on the W-2 reporting requirement that is part of health care reform. In this guidance, the IRS confirms that employers filing fewer than 250 W-2s are not required to report the value of health benefits. This guidance extends that relief until further guidance is issued.

Additionally, the release indicates that specialty coverage, if included with medical benefits, must be reported.

The guidance reaffirms that this is a reporting requirement only and does not impact employees’ taxable wages. займ получить на карту не выходя из дома

IRS Guidelines for W-2 Health Coverage Reporting

 The Patient Protection and Affordable Care Act requires employers to report the aggregate cost of employer-sponsored health coverage on the W-2 forms for their employees.  The IRS issued notice 2012-9, which includes some of the information below:

 Exemption for small employers. Employers filing fewer than 250 Forms W-2 for the preceding calendar year are not required to report the aggregate cost of coverage.

Stand-alone dental and vision plan reporting. The Notice clarifies that the standard for determining whether the cost of coverage under a dental plan or vision plan is included in the aggregate cost is the same standard for determining whether such coverage is an excepted benefit under HIPAA. Thus, certain stand-alone dental and vision plans may be exempt from the reporting requirement.

Excess reimbursement for highly compensated individuals. The reporting requirement does not apply to the cost of coverage includible in income under Section 105(h) of the Internal Revenue Code, or payments or reimbursements of health insurance premiums for a 2% shareholder-employee of an S corporation that is required to include the premium payments in gross income.

Coverage under employee assistance program or similar program. An employer that does not charge a premium for an EAP, wellness program or on-site medical clinic to COBRA-qualifying beneficiaries is not required to include the cost of such coverage in the aggregate reportable cost. For arrangements that are not subject to any federal continuation coverage requirements (such as church plans), the employer is not required to include the cost of such coverage on the Form W-2.

Optional reporting of exempted benefits. Employers may, for convenience, include in the aggregate reportable cost the cost of coverage that is not required to be included (e.g., cost of coverage under a Health Reimbursement Account, provided that certain conditions are satisfied.

Reporting non-applicable employer-sponsored coverage. Employers may use any reasonable method to determine the relative allocation of cost for benefit programs that make available both applicable employer-sponsored coverage (e.g., group health plans) and other coverage (e.g., long‐term disability programs).

Employee election changes after year-end. The aggregate reportable cost for a calendar year reported on a Form W-2 may be based on the information available to the employer as of December 31 of the calendar year, without regard to any election or notification made or provided in a subsequent calendar year that has a retroactive effect on a previous year’s coverage.

Payroll periods crossing two taxable years. The Notice provides employers with various options for reporting the aggregate reportable cost for a payroll period that spans two taxable years.

Hospital indemnity/specified disease insurance. Employers are required to include the cost of coverage in the aggregate reportable cost on Form W-2 if the employer makes any contribution to the cost of coverage that is excluded from the employee’s income, or if the employee purchases a policy on a pre-tax basis under a cafeteria plan. However, if the employer provides the opportunity for employees to purchase an independent, non-coordinated fixed indemnity policy and the employee pays the full amount of the premium with after-tax dollars, the cost of coverage provided under that policy is not required to be reported on Form W-2.

Third-party sick pay. The aggregate reportable cost is not required to be reported on a Form W-2 furnished by a third-party sick pay provider. However, a Form W-2 furnished by the employer to an employee must include the aggregate reportable cost, regardless of whether that Form W-2 includes sick pay, or whether a third-party sick pay provider isfurnishing a separate Form W-2 to report sick pay. займ ночью срочно

2013 FSA Limits Announced

  Health care reform legislation imposed a new, $2,500 limit on annual contributions to health care flexible spending accounts (FSAs). This limit applies to all FSA plans in taxable years beginning after Dec. 31, 2012 — even plans grandfathered under other provisions of health care reform.

Plans that currently allow a health care FSA election of more than $2,500, must amend plan documents before Jan. 1, 2013, and change employee communications.

To simplify administration of this change, sponsors of non-calendar year plans may want to adopt the new limit as of the first day of the plan year rather than waiting until Jan. 1, 2013. For example, if the current plan year begins May 1 and ends April 30, the plan sponsor may:

  • Communicate the change to employees.
  • Amend their plan documents to implement the new $2,500 maximum election.
  • Initiate  the changes to the contribution effective May 1, 2012, rather than wait until the mid-plan year in Jan. 1, 2013

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Medical Loss Ratio Regulations Updated

On December 2, 2011, the Department of Health and Human Services (HHS) issued revised regulations on the Medical Loss Ratio (MLR) provision of the Patient Protection and Affordable Care Act. быстрый займ на карту под 0

Beginning in 2011, insurers and HMOs must annually calculate their MLR and provide rebates to policyholders if their MLR (percent of premium revenue spent on claims/medical care) is less than 85 percent for large groups and 80 percent for small groups or individuals. The revised rules make important changes to the MLR calculation and rebate distribution requirements.

Rebate Distribution

To simplify the rebate distribution process for group insurance, the revised rules call for rebates to be paid to the group policyholder in the case of group plans sponsored by governmental entities and private employer-sponsored plans subject to ERISA.

At the same time HHS issued the revised regulations, the Department of Labor issued a Technical Release that describes how ERISA’s fiduciary rules respecting plan assets govern the distribution of rebates for employer-sponsored ERISA plans. Generally, employers are required to apply the proportion of the rebate attributable to employee contributions to the benefit of current plan participants either in the form of a cash payment or a reduction in future contributions toward the cost of coverage. Rebates can be paid to group policyholders of non-ERISA plans if the policyholder provides written assurance that the rebates will be used to benefit enrollees.

The revised regulations also clarified that consumers will not pay taxes on any rebates they receive.


Insurers are required to provide individual policyholders and subscribers under group plans information about their MLR regardless of whether there is a rebate.

Mini-Med Plans

Special adjustments for limited medical (“mini-med”) plans with total annual benefit limits of $250,000 or less have been extended through 2014. The numerator will be multiplied by 2.0 in 2011, 1.75 in 2012, 1.5 in 2013 and 1.25 in 2014. Previously, this adjustment was available only for 2011.

Currently, experience for mini-med plans must be reported quarterly. For 2012, 2013 and 2014, mini-med experience will be reported annually.

Expatriate Plans

The final rule keeps the expatriate plan multiplier adjustment at 2.0 indefinitely in recognition of the higher administrative costs and special circumstances of international plans. The rule also changes the reporting period from quarterly to annually.

Quality Improvement Activities

For purposes of the MLR calculation, ICD-10 conversion costs related to improvements in coding of medical conditions of up to 0.3 percent of an insurer’s earned premium can be considered quality improvement activities in 2012 and 2013.

Community Benefit Expenditures

An issuer may deduct from earned premiums the higher of either the amount paid in state premium tax or actual community benefit expenditures up to the highest premium tax rate in the state.

HHS has solicited comments on the revised rules, particularly those regarding rebate distribution and quality improvement activities.


Preventative Care Coverage Under Health Reform

Under Health reform, the following preventive care services are covered with no copays, deductibles or co-insurance percentages for group and individual plans in effect after Septmber 23, 2010  (Non-Grandfathered Plans) and must apply to all group and individual plans by 2014: : новые займы без проверки ки

All members

  • Yearly preventive medicine visits (Wellness visits)
  • All standard immunizations recommended by the American Committee on Immunization Practices

All members at an appropriate age or risk status

  • Screening for colorectal cancer, elevated cholesterol and lipids
  • Screening for certain sexually transmitted diseases and HIV
  • Screening and counseling in a primary care setting for alcohol or substance abuse, tobacco use, obesity, diet and nutrition
  • Screening for high blood pressure, diabetes and depression

Women’s health

Recently, the Department of Health and Human Services released new health plan coverage guidelines that will require health insurance plans to cover women?s preventive services without charging a copayment, coinsurance or a deductible effective for plans beginning or renewing Aug. 1, 2012, to now include:

  • Well-woman visits
  • Screening for gestational diabetes for all pregnant women
  • Human papilloma virus DNA testing for all women 30 years and older
  • Annual sexually transmitted infection counseling for all sexually active women
  • Annual counseling and screening for HIV for all sexually active women
  • FDA-approved contraception methods, sterilization procedures and contraceptive counseling
  • Breastfeeding support, supplies, and counseling, including costs for renting breastfeeding equipment
  • Domestic violence screening and counseling

The following guidelines were effective for plan years beginning on or after Sept. 23, 2010:

  • Screening mammography and evaluation for genetic testing for BRCA breast cancer gene
  • Screening for cervical cancer including Pap smears
  • Screening for gonorrhea, Chlamydia, syphilis
  • Screening pregnant women for anemia, iron deficiency, bacteriuria, hepatitis B virus, Rh incompatibility
  • Promotion of and counseling for breast-feeding
  • Osteoporosis screening (age 60 and older)
  • Counseling women at high risk of breast cancer for chemoprevention

Men’s health

  • Screening for prostate cancer for men (age 40 and older)
  • Screening for abdominal aortic aneurysm in men (age 65-75)


  • Screening newborns for hearing, thyroid disease, phenylketonuria and sickle cell anemia
  • Standard metabolic screening panel for inherited enzyme deficiency diseases
  • Counseling for fluoride treatment
  • Screening for major depressive disorders
  • Vision screening
  • Screening for developmental/autism screening
  • Screening for lead and tuberculosis
  • Counseling for obesity

In addition to these services, under the Preventive Benefit, UnitedHealthcare also provides screening using CT colonography, Prostate-Specific Antigen (PSA), and screening mammography without age limits.