Welfare Benefit Plan Compliance

Transcription

1 AAHU Welfare Benefit Plan Compliance October 21, 2011 Presented by: Tiffany D. Downs Ford & Harrison, LLP Background Employee Retirement Income Security Act (ERISA) Internal Revenue Code Consolidated Omnibus Budget and Reconciliation Act (COBRA) Health Insurance Portability and Accountability Act (HIPAA) Family and Medical Leave Act (FMLA) 1

2 Which h Plans Are Subject to ERISA? ERISA Plans Health Dental Vision Long Term Disability Life (including supplemental life) Health Flexible Spending Accounts Health Reimbursements Arrangements 2

3 Plans Which May or May Not Be Subject to ERISA Employee Assistance Programs Nurse Practitioner Programs On-site Medical Clinics Short Term Disability Voluntary Plans Severance Pay Policies Plans Not Subject to ERISA Premium Only Plans Health Savings Accounts Dependent Care Accounts Most paid time off benefits 3

4 What are ERISA s Reporting and Disclosure Requirements? Common Disclosures (All Plans) Summary Plan Description Summary of Material Modifications Summary Annual Report Plan Documents Form 5500 (certain participant i t levels) l 4

5 Common Disclosures (Health Plans) COBRA Notices HIPAA Notice of Privacy Practices Notice of Special Enrollment Rights Wellness Program Disclosures CHIP Notices Medicare Part D Notice Which Plans Are Which Plans Are Subject to Form 5500 Filing Requirements? 5

6 Form 5500 Must file for any welfare benefit plan with 100 or more participants at the beginning of a plan year Must be filed within seven months after the close of a plan year, unless an extension of time has been granted Summary Annual Report Must be distributed automatically to participants within nine months after the end of the plan year or two months after due date for filing Form 5500 with approved extension The Summary Annual Report requirement applies only if an employer is required to file a Form

7 Wrap Plan Document One Form 5500 can be filed for all welfare benefit plans if they are maintained under one plan All welfare benefits can be wrapped together th into one plan by a written plan document Penalties Statutory penalty of up to $1,100 per day for failure to file Form 5500 Reduced penalty available under the Delinquent Filer Voluntary Compliance Program (DFVC) Criminal penalties for willful failure to file form

8 Plan Documents and Summary Plan Descriptions (SPD) Plan Document ERISA requires that employee benefit plans be maintained in writing Copies must be provided to participants and beneficiaries no later than 30 days after written request or subject to penalty of $100 a day Plan Document should be consistent with terms of SPD 8

9 Summary Plan Description (SPD) ERISA requires that an SPD be automatically distributed to participants within 90 days of becoming covered by the plan An SPD is a written summary of the provisions of an employee benefit plan It must be written to be understood by the average plan participant Summary Plan Description (SPD) ERISA regulations specify the information which must be included in the SPD 9

10 Wraparound SPDs Insurance certificates and policies are not SPDs. They typically do not have all of the information required by ERISA or the information is too generic The employer can issue a wraparound SPD A wraparound SPD incorporates the certificate but adds required information Summary of Material Modification (SMM) A material modification is a change in the terms of the plan or any other information required to be included in an SPD Must be distributed automatically to participants not later than 210 days after the end of plan year for which the change is adopted unless a new SPD containing the modification is distributed 10

11 Summary of Material Reduction A material reduction is a reduction in covered services or benefits Must be distributed automatically to participants i t within 60 days of adoption of a material reduction in group health plan services or benefits Summary of Benefits Coverage Four page document (double sided) d) Twelve point font Model template of SBC available Applies to all insured and self-funded plans, regardless of grandfather status t Effective March 23,

12 When SBC is Distributed? Open Enrollment Period Within 7 days of request or request for special enrollment rights Advanced distribution required for automatic renewals during enrollment periods (30 days) and mid-year modifications (60 days) Distribution Methods Paper (by hand, payroll insert, or mail) Electronic Media Compliance with DOL electronic disclosure safe harbor regulations 12

13 Employee Leaves of Absence ERISA When an employee ceases to work the number of hours specified by the plan, as is the case when an employee is on a leave of absence, the employee loses his coverage under the plan Note: There is an important difference Note: There is an important difference between termination (loss) of coverage and termination of employment 13

14 Health Care Reform Health care reform prohibits a plan from rescinding coverage as of the first plan year following September 23, 2010 Rescission Rescission is a cancellation or discontinuance of coverage with a retroactive effect Can only rescind coverage in cases of fraud or intentional misrepresentation or for failure to timely pay required premiums Must give 30-day advance notice of a rescission 14

15 COBRA COBRA applies only to health plans. COBRA applies only to employers with 20 or more employees on a typical day during the preceding calendar year. Employers with fewer than 20 employees may still be subject to state continuation coverage laws. COBRA Initial Notice Must be distributed automatically to covered employees and spouses within 90 days of enrollment in covered dhealth lhplans. 15

16 COBRA Election Notice Must be provided automatically to all qualified beneficiaries within 44 days of a qualifying event. (The employer must provide notice of a qualifying event to the COBRA Administrator within 30 days of the qualifying event and the Administrator must provide qualified beneficiaries with the COBRA election notice within 14 days after being notified by the employer.) COBRA The reduction of the covered employee s hours to a level of hours that would result in loss of coverage under the plan is a COBRA qualifying event 16

17 COBRA Notice of Unavailability ailabilit of COBRA Coverage Must be distributed automatically within 44 days of the an individual s request for COBRA coverage if not eligible for such coverage. COBRA Notice of Termination of COBRA Coverage Must be furnished to qualified beneficiaries whose COBRA benefits are to be terminated prior to the maximum applicable period of COBRA as soon as possible upon the Administrator s determination that continuation coverage will terminate. 17

18 HIPAA Certificate of Creditable Coverage Must be distributed automatically to participants and beneficiaries upon losing group health plan coverage, becoming eligible for COBRA coverage, and when COBRA coverage ceases. HIPAA Notice of Privacy Practices Must be distributed automatically to group health plan participants no later than the compliance date for the health plan; thereafter, at the time of enrollment to individuals who are new enrollees; within 60 days of material revision to the notice; upon an individual s request; and no less frequently than once every three years. 18

19 Wellness Programs Wellness Programs Wellness programs that are connected to the employer s health plan must meet various requirements under HIPAA, the ADA and GINA 19

20 HIPAA Any incentive for standards under a wellness program that are connected to cost-sharing mechanisms (premiums, co-pays, deductibles) must be limited to 20% of the total cost of coverage Must be offered at least every 12 months A reasonable alternative standard must be provided ADA and GINA The EEOC s position is that t conditioning i health plan coverage upon an employee s completion of a health risk assessment is a per se violation of the ADA Under GINA employers cannot request family medical history. An employer can have a bifurcated health risk assessment in which family medical history is a voluntary part of the assessment 20

21 Wellness Programs Wellness programs that are employment-based and not connected to the employer s health plan still must meet certain requirements under the ADA and GINA P li i P d Policies, Procedures & Notices 21

22 Policies, Procedures & Notices A variety of laws require employers to have documents, policies, procedures or issue notices for welfare benefit plans See Welfare Benefit Compliance Chart for a list of notices and distribution requirements Any documents or notices that the employer wishes to provide in electronic format (by posting on an intranet, extranet or distributing by ) must comply with ERISA s electronic distribution regulations QUESTIONS? 22

23 Thank You! Tiffany Downs (404)