EMPLOYEE BENEFIT COMPLIANCE 101

Transcription

1 EMPLOYEE BENEFIT COMPLIANCE 101 The Benefit Compliance Program Sept 19, 2018

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3 3 Benefit Compliance Program Disclaimer and Copyright This program is operated and conducted by Mark J. Becker & Associates (MJBA). The material in this presentation is for informational purposes and should not be construed as legal or accounting advice. This material is proprietary and any use without the written consent of the Benefit Compliance Program is prohibited. Sharing this presentation without permission is both an ethical and copyright violation.

4 Employee Benefit Compliance 4 As an employer sponsoring an employee benefit plan, you are obligated to meet the terms of over 50 different federal & state laws, in addition to ACA. At last count. 55+ disclosures Provided by combination of employer & insurance carriers Employer Responsibilities Which laws affect your benefit program, Administration responsibilities, Which disclosures to provide, Method of providing disclosures, and Remain up to date when change occurs

5 Variables/Layers of Complexity 5 Public Entity Federal Laws State Laws Insurance Carrier guidelines Disclosures (notices) Proper Method of Delivery Proper Timing of Delivery Type of Plan Fringe Benefit Medical, Dental, Vision, FSA, HRA, HSA, EAP, Cancer Private Entity Welfare Plan EMPLOYER Group Health Plan EBSA Regulatory Authority Exemptions HHS IRS DOL Qualified Beneficiaries CMS Health Care Reform # of employees & # enrolled # of participants Beneficiaries Penalties for Non-compliance Funding

6 Simplify & Organize 6 Which laws affect your group plans Which benefits are affected by each law EMPLOYER Administration and Disclosure Requirements

7 Why Comply? 7 Employer s failure to comply can be costly in the form of government penalties and/or employee lawsuits Examples: Hansen v. Harper Excavating, Inc., an employer was ordered to pay over $57,000 in medical expenses plus over $102,000 in attorney s fees and costs for providing inaccurate enrollment information and failure to inform the employee coverage was not in effect Middleton v. The Russell Group, Ltd., an employer was fined the maximum perday COBRA penalty - in this case, totaling $74,000 Since April HIPAA Privacy cases settled in a total dollar amount of $67,210, Baske v. Public Services Electric & Gas, FMLA interference claim, Federal District Court (not Iowa). Employer had insufficient documentation for employee termination.

8 Compliance 101 Training Focus 8 Employee benefit laws (non-pension) Employee benefit laws overlap with employment laws New feature of BCP HR Hotline (watch for announcement) Training Objective Focus on laws requiring disclosures Framework to build upon Resources for additional information thru BCP

9 Compliance Steps 9 Initial Training (101) BCP Website (training modules, etc.) 2018 series: recorded to date: FMLA, COBRA/IA Ext/IA Early Retiree, ERISA Online Resource Library (whitepapers, numerous resources) Updates as change occurs (compliance updates, webinars, seminars) Action Item system ( with step-by-step process) One-on-one consulting/research

10 10 Which Laws Affect Your Plans

11 Which Laws affect your plans 11 Three main Federal laws ERISA Regulates private-sector PHSA (Public Health Service Act) Regulates public-sector (non federal govt., such as states and local government, school districts) Note many parts of ERISA have a parallel law affecting public sector PPACA/ACA/Health Care Reform Regulates both private and public-sector In addition Federal Mandates (example: MHPA), Federal Employment Laws (example: FMLA), Federal Nondiscrimination Laws (example: ADEA), Other Federal Laws (example: Medicare Part D), Internal Revenue Code (example Section 125), State Laws (example: Mandated Benefits)

12 Which Laws Affect Your Plans 12 Obligations vary Employer Type Public or Private-Sector Number of employees - Enrolled vs. eligible/full-time vs. part-time Each law affects certain benefits (plan types) A plan type includes specific benefits, medical, dental, life, etc. Benefits included within a group health plan vary by law See handouts

13 Handouts 13 LAW EMPLOYERS THAT MUST COMPLY EMPLOYER PLAN TYPES AFFECTED * TYPE SIZE COBRA Public & Private 20+ full & part-time (count p-t as fraction of f-t) on 50% or more of prior calendar yr (see counting detail) Group Health Plan ERISA Private All size Employee Welfare Benefit Plan FMLA Public & Private Public all size Private full & part-time each working day in 20 or more workweeks in prior or current calendar yr (see counting detail) Group Health Plan HIPAA PORTABILITY Public & Private All size Group Health Plan HIPAA PRIVACY Public & Private All size unless < 50 eligible employees & self-administered/self-insured Group Health Plan INTERNAL REVENUE CODE (CAFETERIA PLAN - SECTION 125) Public & Private All size Cafeteria Plan IOWA EXTENSION OF COVERAGE Public & Private All size; but if complying w/cobra, Iowa Ext requirements satisfied (see counting detail) Group Health Plan** IOWA CODE BENEFIT CERTIFICATE Public & Private All size Group Health, Disability, Life Plans** IOWA CODE 509A.13 EARLY RETIREE Public All size Group Health Plan** IOWA CODE 509A.15 SELF-INSURED CERT Public All size Group Health, Disability, Vision, Dental Plans** MEDICARE PART D Public & Private All size Group Health Plan MSP Public & Private All size Group Health Plan MICHELLE S LAW Public & Private All size Group Health Plan PPACA/ACA Public & Private All size application of provisions within law vary by employer size Varies by provision within law QMCSO AND NMSN Public & Private All size Group Health Plan WHCRA Public & Private All size Group Health Plan FEDERAL LAWS REQUIRING POSTED NOTICE*** Public & Private All size Varies FEDERAL AND STATE LAWS REQUIRING MANDATES WITH INCLUSION IN BENEFIT CERTIFICATES/SPD Public & Private Generally all size Varies *See Plan Type Chart for specific benefits the law applies to. **Iowa Code uses the term accident, health, hospital insurance and then defines that term as hospital, surgical, or major medical insurance or combination.

14 14 Laws Requiring Disclosures

15 Laws Requiring Disclosures 15 (The following laws require one or more disclosure) COBRA, STATE MINI-COBRA, IOWA CODE 509A.13 ERISA FMLA HIPAA PORTABILITY HIPAA- PRIVACY IRC SECTION 125 CAFETERIA PLAN MEDICARE PART D MSP MICHELLE S LAW PPACA/ACA QMCSO & NMSM WHCRA IOWA CODE BENEFIT CERTIFICATE IOWA CODE 509a.15 SELF-INSURE CERTIFICATE

16 Handouts Documentation (Checklist) 16 BENEFIT COMPLIANCE CHECKLIST GROUP HEALTH PLANS EMPLOYER NAME: Date: This checklist serves as a re-cap of Federal & State of Iowa legislation that requires disclosures for group health plans. Keep in mind each law may affect all or only some of the benefits you offer employees. Abbreviated explanations of the various disclosures and processes are provided throughout this document it is the employer s responsibility to assure a thorough understanding of each regulation and responsibilities required of the employer. Once completed, retain this checklist for documentation and future reference. If distribution of a particular notice is required prior to enrollment this indicates any enrollment period: timely, special, or annual enrollment. If there are a significant number of employees who do not speak English the employer is responsible for providing certain materials in a language that can be understood. This checklist is separated into the following sections with A I in alphabetical order. A. COBRA/Iowa Extension/Iowa Code 509A.13 B. ERISA C. FMLA D. HIPAA Portability E. HIPAA Privacy F. IRS Section 125 (Cafeteria Plans) G. Medicare Part D H. PPACA (ACA) I. Other Legislation Distribution of Benefit Materials Training & Documentation

17 Handouts Documentation (Checklist) 17 A. COBRA Outsource Administrator (vendor) Name Employer Self-Administered Responsible Employee Your benefits affected by this law 1. Initial (General) Notice Notice to all current employees (documentation of date(s) provided) Notice to additions Timely, Special, Late Employee and Spouse separate notice to Spouse if added to existing employee contract or if different address Separate Child notice if different address Procedure - Outsourced Enter data on administrator s website Print & file confirmation Procedure Employer Self-Administered Complete Notice Address Notice and envelope to employee and spouse (if spouse covered) Mail 1 st Class with Proof of Mail Certificate Timing within 90 days after commencement of coverage Notice must be provided to individual within 90 days, thus employer must notify administrator timely to allow adequate processing time Reminder System used BRI Forms Processing Form Other 2. Election (Qualifying Event) Notice Notice to all Qualified Beneficiaries (QB) who have a loss of group health plan coverage due to a Qualifying Event (QE) Procedure - Outsourced Enter data on administrator s website Print & file confirmation Procedure Employer Self-Administered Complete Notice (Use BRI provided COBRA Aid resource) Address Notice and envelope to employee, spouse, & children (all who are covered) Mail 1 st Class with Proof of Mail Certificate Timing within 14 days of QE or date administrator is notified QE occurred Employee must notify administrator (or employer) within 60 days after later of QE or date coverage lost (if employer notified, provide information to administrator) Divorce, Legal Separation, Child ceasing eligibility Employer must notify administrator within 30 days from date of QE All QE not listed above Reminder System used

18 18 Consolidated Omnibus Reconciliation Act (COBRA) State Mini-COBRA Iowa Code 509A.13 (Early Retiree Law)

19 Who Must Comply - Employers 19 COBRA IOWA EXTENSION OF COVERAGE IOWA EARLY RETIREE Type of Employer Public & Private Public & Private Public (Church plans are exempt) Employer Size (number of employees) employees on at least 50% of typical business days in prior calendar year, counting PT as fraction of FT All If complying with COBRA employer is deemed to be in compliance with Iowa Extension All

20 COBRA/State Mini-COBRA/Iowa Code 509A How many attendees are in the COBRA vs. Iowa Extension of Coverage category? How many are public sector vs. private vs. church?

21 COBRA/State Mini-COBRA/Iowa Code 509A Overview (all three laws) A temporary continuation of group health coverage, at group rates, with premium paid by individual continuing coverage Guidelines and disclosures vary by each of the three laws

22 Initial Steps to Determine Eligibility 22 Event occurs Causes loss of health coverage For eligible individual(s)

23 Basic Guidelines for: Events, Eligible Individuals, and Length of Continuation 23 EVENTS COBRA IOWA EXTENSION OF COVERAGE Termination of Employment* Early Retirement (pre-65)* Yes 1 18 months Yes 9 months Lay-off* Yes 18 months Yes 9 months No Leave of Absence* Yes 18 months Yes 9 months No Reduction of Hours* Yes 2 18 months Law is silent No Divorce or Legal Separation** Yes 36 months Yes 9 months No Death of Employee** Yes 36 months Yes 9 months No Medicare Entitlement of Employee** Yes 3 36 months No No Dependent becomes Ineligible*** Yes 36 months No No Chapter 11 Bankruptcy (private sector for retiree/sp/deps) Yes - varies No No IOWA EARLY RETIREE No Yes To age 65 *Employee/Retiree, Spouse and Dependents **Spouse and Dependents ***Dependents 1 Not if gross misconduct 2 ACA look-back measurement; event is at stability period 3 Medicare entitlement must cause loss of coverage

24 24 Events, Eligible Individuals, and Length of Continuation COBRA Eligible individual Individual Continuation Rights and spouse and children eligibility once former employee is no longer eligible Medicare Entitlement or Other Group Policy Individual covered by group health plan on the day before a qualifying event (employee, spouse, child, with definition of employee going beyond common law employee) Qualified Beneficiary generally includes those covered the day before qualifying event. Individuals are sometimes eligible for coverage but are not qualified beneficiaries. Examples: Domestic partner is not a qualified beneficiary but may be covered under partner s COBRA policy. A child born or placed for adoption after COBRA begins is a qualified beneficiary but a spouse added to plan after COBRA begins is not a qualified beneficiary. Each qualified beneficiary has individual rights, i.e., spouse and/or children can continue on their own. If a second qualifying event occurs continuation may be extended. If Medicare or other group policy effective before COBRA event, offer COBRA. (If after COBRA begins no longer eligible for COBRA.) Social Security Disability May allow extension of COBRA continuation period.

25 Events, Eligible Individuals, and Length of Continuation 25 Iowa Extension of Coverage Eligible individual Individual Continuation Rights and spouse and children eligibility once former employee is no longer eligible Individual continuously insured by the group coverage during the 3 month period immediately preceding the event. Law states: continue.for themselves and their eligible dependents. Insurance carrier s interpretation has been spouse and/or children may continue if employee is not eligible. Medicare Entitlement or Other Group Policy Events of divorce or death of employee allow individual continuation for spouse and/or children. No second events, thus spouse and children lose eligibility when former employee is no longer eligible (for events based on former employee s eligibility). Cannot be covered by or eligible for Medicare. Cannot be covered by or eligible for other group policy unless other policy was in effect immediately prior to event.

26 26 Events, Eligible Individuals, and Length of Continuation Iowa Early Retiree Eligible individual Individual Continuation Rights and spouse and children eligibility once former employee is no longer eligible* *Law silent. Attorney General Opinion and IID Bulletins available. Medicare Entitlement or Other Group Policy Early retiree is not defined in the Code. Each public entity must determine their own eligibility criteria. Using IPERS definition is one method of maintaining consistency. Allow continuation for spouse and children who were covered with active employee. Spouse and children lose eligibility when retiree attains age 65. Employer may, but is not required to allow spouse and/or children to continue, once retiree is no longer on the plan. If allowed to continue establish written policy on guidelines, i.e., maximum continuation time period and assure insurance carrier/stop loss approves the policy. Also see dual eligibility ; COBRA event may occur during retiree continuation period. Law states continuation to age 65. (Medicare Entitlement age) Law silent about other group policy; do not deny continuation for this reason. Not required to allow continuation for retirees age 65 or over. May offer if employer has a formal retirement plan and insurance carrier/stop loss, etc. has approved*.

27 27 Benefits Eligible for Continuation

28 Type of Health Plan 28 COBRA Group Health Plan General definition: provides health care and is maintained by the employer Iowa Extension of Coverage Group Accident or Health Insurance Accident or health insurance means hospital, surgical, or major medical insurance, or a combination of these. Continuation may exclude dental care, vision care, or prescription drug benefits or other benefits provided under the group policy which benefits are in addition to accident or health benefits. Iowa Early Retiree Accident, heath or hospitalization insurance, or a medical service plan

29 Benefits Eligible for Continuation 29 Type of Health Plan COBRA IOWA EXTENSION OF COVERAGE Group Health Plan (major medical) Yes Yes Yes Partial Self-Funding (PSF) Yes Yes Yes Health Reimbursement Arrangement (HRA) (integrated with major medical) Health Flexible Spending Account (FSA) Yes Yes Yes If not overspent. To next Plan Year only Law silent Dental Yes Typically Vision Yes offered but not required IOWA EARLY RETIREE Law silent Law silent; typically not offered Employee Assistance Program (EAP) Yes Law silent Law silent Voluntary Benefits: Varies. If meeting definition of health plan/insurance and can t be continued on it s own. Long Term Care varies. Eligibility based on coverage in effect at time of event

30 30 While Continuing Coverage..

31 While Continuing Coverage.. 31 COBRA IOWA EXTENSION OF COVERAGE IOWA EARLY RETIREE Continuation Same health plan benefits as offered to active employees Same risk level (premium) as offered to active employees; however contribution may vary (full premium can be required of continuing individual) HIPAA special enrollment events Exception for early retiree: not for loss of other coverage, not for termination of Medicaid coverage, not for eligibility for state assistance Annual Enrollment Period Right to make changes the same as active employees, relating to currently enrolled benefits For example, may change deductible options the same as active employees, but may not enroll for additional benefits, dental, vision, etc. (if not already enrolled) Provide notices related to plan If coverage cancelled cannot re-add at later date

32 Premium Payment 32 COBRA IOWA EXTENSION OF COVERAGE IOWA EARLY RETIREE Cost of continued coverage Full premium* Full premium* Full premium* Administration fees +2% No No Initial payment due Subsequent payments (grace period) Short payment Termination for non-payment 45 days from election 30 days from due date If insignificant must provide notice and time to correct Following grace period and/or time to correct *If partial self-funded or self-funded use actuarial rate calculations. 31 days from coverage termination date Law is silent Law is silent Yes Law is silent Yes

33 Termination of Coverage 33 COBRA IOWA EXTENSION OF COVERAGE IOWA EARLY RETIREE Maximum Continuation Period 18/29/36 months 9 months To age 65 Non-Payment of Premium Yes Yes Yes Other Group Health Plan (after continuation begins) Medicare Entitlement (after continuation begins) Loss of Social Security Disability Status (if on SS extension) Termination of Group Health Plan for all employees (and not replaced) Yes (covered under other policy w/out pre-x) Yes (eligible under other policy) No Yes Yes (To age 65) Yes N/A N/A Yes Yes Law is silent Former Spouse Remarries No Yes No

34 34 Notices, Disclosures, and Timing

35 Notices, Disclosures, and Timing 35 COBRA Disclosure Type Summary of Disclosure When Provided and To Whom Method of Delivery Who Provides COBRA Communicates general COBRA Administrator INITIAL (GENERAL) NOTICE rights and obligations. To each covered employee and each covered spouse of an employee within 90-days after commencement of coverage. (Also, when employer is first required to comply with COBRA.) COBRA experts recommend first class mail with Post Office Proof of Mailing COBRA ELECTION NOTICE COBRA NOTICE OF UNAVAILABILITY COBRA EARLY TERMINATION NOTICE COBRA INSIGNIFICANT PAYMENT NOTICE COBRA ANNUAL ENROLLMENT/ PREMIUM CHANGE NOTICE Communicates the right to elect COBRA coverage upon the occurrence of a qualifying event. Notice that individual is not entitled to COBRA coverage. Notice that a qualifying beneficiary s coverage will terminate earlier than the maximum time period. Notice that payment for COBRA was less than the correct amount (unless accepted as paid in full). Notice to COBRA participants of annual enrollment options and/or change in premium. To each qualified beneficiary* who loses coverage due to a qualifying event, 14-days after date of qualifying event or after date notified a qualifying event has occurred.** To an individual who is denied COBRA coverage, 14 days after date notice of qualifying event or other request for COBRA coverage received. To a qualified beneficiary* whose COBRA coverage is terminated early, as soon as practical from date of determination. To a qualified beneficiary* immediately upon receipt of a short payment that will not be accepted as a full payment. (There is a specific definition of insufficient payment.) To a qualified beneficiary*. At least 30-days is recommended. A specific time frame is not found in the regulations. 1. First class, certified, or express mail. 2. Second or third class mail, if return/forwarding postage is guaranteed and address correction is requested. 3. Hand-delivery at the worksite is not recommended, as proof of providing notice would be difficult, especially to spouse. 4. Electronically if specific guidelines are met, but not recommended (see additional information if considering electronic delivery). Administrator Administrator Administrator Administrator Administrator *Employee, spouse, former spouse, child or any other individual meeting definition of qualified beneficiary. **Termination, lay off, leave of absence, reduction of hours, death, Medicare, bankruptcy: If not employer-administered employer provides COBRA administrator a notice within 30 days after date of event, and administrator provides notice to qualified beneficiary w/in 14 days of employer notice. **Divorce, legal separation or child ceasing to be an eligible dependent: Qualified beneficiary must notify administrator within 60 days after the later of date of event or date coverage is lost, and election notice must then be provided within 14 days after date notice of event received. Notice must identify each qualified beneficiary covered by the notice by name or status (such as employee, spouse, former spouse, or dependent child ceasing to be a dependent. A single notice can be furnished to a covered employee and covered spouse, if coverage commences or ends for both at the same time, if addressed to both, i.e., John & Mary Smith, and if on the basis of the most recent information available to the plan, the covered employee s spouse resides at the same location as the covered employee. Children can be notified by furnishing a single notice to covered employee and or spouse. If children or spouse are not living with employee a separate notice should be addressed and mailed to them.

36 COBRA Providing (furnishing) Disclosures 36 Single notice can be furnished to a covered employee and covered spouse, if they have same coverage effective date, or qualifying event date, and addressed to both (on notice & envelope), and on the basis of the most recent information available to the plan, the covered employee s spouse resides at the same location as the covered employee. Children can be notified by furnishing a single notice to covered employee and or spouse If children or spouse are not living with employee a separate notice should be provided On notices, identify each QB covered by the notice by name or status (such as employee, spouse, former spouse, or dependent child ceasing to be a dependent)

37 COBRA Providing (furnishing) Disclosures 37 Electronic distribution allowed, but not recommended DOL states First Class Mail shows good faith Preamble to DOL Regulations state consider to be furnished.as of the date of mailing, if mailed by First Class Mail,.. COBRA specialists recommend sending via First Class Mail to last known address with Post Office Certificate of Mailing Certified Mail vs. Certificate of Mailing Certified = signature required (case law rules against this method) Certificate of Mailing = receipt from post office to prove mailed/date

38 38 Summary of Notices, Disclosures, and Timing COBRA Provide Initial Notice to covered employees and spouses as they become covered under the plan (within 90-days of effective date) with separate notice to spouse if different effective date. If not provided to current employees and spouses, do so now Provide Election Notice to all qualified beneficiaries when event occurs (14- days of date notice furnished or coverage term date) Remove from insurance carrier s system (invoice) Once Election Notice furnished qualified beneficiary has 60-days to elect continuation, after later of: Date election notice furnished, or Date coverage ended No follow-up necessary; no waiver required Must be able to prove notices were furnished

39 Summary of Notices, Disclosures, 39 and Timing COBRA - continued If not approved for COBRA provide Notice of Unavailability within 14 days of request for COBRA or notice of event received, to individual denied COBRA If COBRA is elected first payment due 45-days after election is made Subsequent payments have 30-day grace period If insignificant payment not accepted provide Insignificant Payment Notice immediately upon receipt of payment (give 30 days to pay shortfall) If termination for non-payment (or any other early termination reason) provide Early Termination Notice to all covered individuals as soon as practical from date of determination Provide Annual Enrollment materials (when provided to active employees) Document all communications, written and verbal Monitor for maximum continuation period

40 Notices, Disclosures, and Timing 40 IOWA EXTENSION OF COVERAGE LAW (509B) IOWA EARLY RETIREE (509A.13) Disclosure Type Summary of Disclosure When Provided and To Whom Method of Delivery Who Provides IOWA EXTENSION Communicates general rights To employees upon enrollment. INITIAL NOTICE and obligations. IOWA EXTENSION NOTICE OF CONTINUATION RIGHTS IOWA EXTENSION ANNUAL ENROLLMENT/PREMIUM CHANGE NOTICE IOWA EXTENSION TERMINATION OR MODIFICATION NOTICE IOWA CODE 509A.13 Communicates the right to elect coverage upon the occurrence of event. Notice of annual enrollment options and/or change in premium. Notice that plan will be modified or terminated, including for non-payment. To employees within 10 days of event. To individuals continuing. A specific time frame is not found in the regulations. To individuals continuing, at least 10 days prior to modification or termination. In the benefit certificate (booklet). In person or mail to last known address. In person or mail to last known address. In person or mail to last known address. In person or mail to last known address. No required notices, however it is recommended that a notice be provided to employee upon enrollment &/or at retirement, in the employee handbook, or with the COBRA/Iowa Extension notices. Insurance Carrier or Administrator furnishes booklet varies. Administrator Administrator Administrator Administrator Method of delivery used for COBRA can be utilized, as this will provide the best means of documentation.

41 41 Summary of Notices, Disclosures, and Timing IOWA EXTENSION OF COVERAGE LAW Provide Initial Notice to covered employees as they become covered under the plan (included in benefit certificate/book) Provide Notice of Continuation Rights to terminated employee (or spouse and/or children if applicable) when event occurs (within 10- days of event) Remove from insurance carrier s system (invoice) Once election notice furnished individual has 10-days after later of: Termination (event), or Date notice is given No follow-up necessary; no waiver required Must be able to prove notices were furnished

42 42 Summary of Notices, Disclosures, and Timing IOWA EXTENSION OF COVERAGE LAW - continued If not approved for continuation communicate with individual If Iowa Extension is elected first payment due within 31-days from coverage termination date Subsequent payments should allow 30-day grace period If termination for non-payment (or any other early termination reason) communicate to all covered individuals Provide Annual Enrollment materials (when provided to active employees) Notice that plan will be modified or terminated, to individuals continuing, at least 10 days prior to modification or termination Document all communications, written and verbal Monitor for maximum continuation period

43 Notices, Disclosures, and Timing 43 IOWA RETIREE CONTINUATION Law is silent regarding notices, disclosures, and timing Suggested Practices: Create policy and apply consistently, i.e., definition of early retiree Communicate to employees Include policy in handbook, poster, etc. Provide election form with (or separate if outsourced) COBRA or Iowa Extension Election Notice Allow 30-days for election and premium payments Provide Annual Enrollment materials (when provided to active employees) Document all communications, written and verbal Monitor for maximum continuation period

44 Iowa Code 509A The Iowa code reads as follows: If a governing body, a county board of supervisors, or a city council has procured for its employees accident, health, or hospitalization insurance, or a medical service plan, or has contracted with a health maintenance organization authorized to do business in this state, the governing body, county board of supervisors, or city council shall allow its employees who retired before attaining sixty-five years of age to continue participation in the group plan or under the group contract at the employee s own expense until the employee attains sixty-five years of age. This section applies to employees who retired on or after January 1, 1981.

45 45 Dual Eligibility under Iowa Early Retiree and COBRA (or Iowa Extension)

46 Dual Eligibility 46 Two different Laws: Early Retiree and COBRA Event occurs under both laws Early Retirement Termination of Employment Offer both retiree continuation and COBRA Offer retiree coverage as an alternative to COBRA If retiree continuation is elected COBRA rights expire at end of 60-day election period No further COBRA rights based on the original event

47 Dual Eligibility 47 Early Retiree and COBRA Retiree attains age 65 and becomes entitled to Medicare No COBRA event for retiree Only events for retiree ( employee) are termination of employment, leave of absence, lay-off, reduction of hours COBRA event for spouse and/or children On a separate plan now (Retiree rather than COBRA) Event = divorce, death of retiree; Medicare entitlement for retiree ( employee ) Loss of coverage due to event for spouse and/or children = 36 months COBRA continuation from event date (not a second event)

48 Dual Eligibility 48 Iowa Extension of Coverage and Early Retiree Continuation No guidance Offer retiree coverage as alternative Two other methods of integrating COBRA and Early Retiree Continuation law, only if circumstances allow Retiree coverage and deferred loss of coverage Only if identical terms & conditions; no COBRA event upon retirement Simultaneous COBRA/Retiree coverage Retiree continuation for medical and COBRA for dental, vision, etc. if not offered under retiree plan

49 49 Administration Tips

50 Administration Tips 50 Reminder system Notices Initial Election Other Create a written process Maintain consistency Train staff Documentation

51 Outsourcing 51 At a minimum, employer must notify administrator of new enrollments and occurrence of events Administration responsibility may vary by vendor Some administrators require employers to provide Initial and Election Notices Employer may need to administer Early Retiree Law

52 COBRA 52 List of Disclosures Initial/General Notice Election Notice Annual Enrollment/Premium Change Notice Notice of Unavailability Insufficient Payment Notice Early Termination Notice

53 Iowa Extension of Coverage 53 List of Disclosures Initial Notice* Notice of Continuation Rights Notice of Termination or Substantial Modification Notice Annual Enrollment/Premium Change Notice *In Benefit Booklet

54 Iowa Code 509A List of Disclosures The Iowa Code does not specify disclosures Suggest inclusion in any of the following: Employee handbook Poster Notice w/cobra or Iowa Extension Election Notice

55 55 Employee Retirement Income Security Act (ERISA)

56 ERISA private all size (governmental and church plans exempt) 56 Key Terms and Overview ERISA Title I protects the rights of individuals who are covered by or eligible to be covered by pension or employee welfare benefit plans, and ensures that plans are sound and stable Employee Welfare Benefit Plans also referred to as a employee benefit plan, such as health, dental, life, etc. (see handout) Plan Administrator and Plan Sponsor generally the employer sponsoring the plan Participant employee or other individual (COBRA, retiree, etc.) who is or may become eligible for the plan Beneficiary a person designated by a participant, or by terms of the plan who is or may become entitled to benefits, e.g., spouse, dependent children

57 Overview of ERISA s Requirements 57 ERISA does not require an employer to provide employee benefits but its requirements attach when benefits are provided Plan document must exist for each plan Plan terms must be followed Reporting and disclosure requirements Strict fiduciary duties for those who sponsor and administer ERISA plans

58 ERISA 58 Plan Document Every ERISA plan must have a written plan document describing the benefits provided It is a written legal statement listing the master description of plan provisions Insurance carrier may issue plan document Benefit booklet/policies/contracts rarely contain all provisions required for a complete ERISA plan may need a wrap document to provide missing terms Detailed content requirements but no specific format No disclosures required unless requested should be retained by employer

59 ERISA 59 Summary Plan Description (SPD) Written description of benefits, rights, & obligations Provided to plan participants within 90 days of effective date Updates provided every 5 years if changes have occurred; otherwise every 10 years Style and content requirements, but no specific format Can be a combination of benefit booklet and Wrap SPD Wrap SPD fills in specific employer ERISA information that is often missing in the insurance carrier s materials to make the SPD ERISA compliant Depending on group size & carrier, information may be printed in booklet If not included in booklet, employer must provide

60 ERISA 60 Wrap and Mega Wrap Wrap Wraps around one single benefit Mega Wrap Wraps around multiple benefits, thus creating one plan for ERISA purposes (including Form 5500 filing)

61 ERISA 61 Summary of Material Modification (SMM) & Summary of Material Reduction (SMR) Plan Amendments are provided to plan participants within 210 days of end of plan year (SMM) within 60 days of change (SMR) Generally provided by insurance carrier or TPA Either directly to participant or through employer

62 ERISA 62 Summary of Benefits & Coverage (SBC) Added to ERISA via Affordable Care Act (ACA) Covered in ACA section of Compliance 101 training Required of governmental and church plans as well as private sector employers

63 ERISA 63 Form 5500 Reporting Filed by last day of 7 th calendar month after end of plan year, must be filed electronically Required for welfare benefit plans, medical, FSA, life, etc., with 100 or more covered participants at beginning of plan year Not required for a premium only plan or dependent care flex Small welfare plans (less than 100 covered participants at beginning of plan year) that are considered unfunded are exempt General definition of unfunded No plan assets Benefits/premium paid from employer s general assets no trust or separate accounts Employee contributions transferred to insurance carriers according to IRS Technical Release (within 90 days) Narrow exception for large welfare plans must still file Form 5500 but may omit schedule H and accountant s opinion Must be unfunded, insured, or a combination Delinquent Filer Program available prior to any DOL involvement

64 ERISA 64 Summary Annual Report (SAR) Plans that must file Form 5500 must also provide plan participants annual 5500 summary Within 9 months of close of plan year Or 2 months after 5500 filed, if filing period was extended Model SAR outlines all required content

65 ERISA 65 Copies & Inspection of Documents upon Request ERISA documents must be provided to plan participants or beneficiaries (e.g. spouse/dependents) upon written request Proper requests include inspection or copies of Plan Document, Summary Plan Description, Form 5500, etc. Must provide: Within 30 days of written request Immediately upon inspection request at office of plan administrator Within 10 days upon inspection request at other locations

66 ERISA 66 Claims Procedures and Notice of Benefit Determination ERISA requires plans to establish and maintain claims procedures Allows participants and beneficiaries to request promised benefits, and Provides process for disputes about benefit entitlements Claims procedures include processes for: Filing claims Notice of determination (EOB) Appeals Process contained in the benefit book/spd ACA added further requirements, including enhanced internal and external appeals guidelines for health plans

67 ERISA 67 Bonding and Trust for Funded Plans Plans that have plan assets may have additional responsibilities, such as establishment of a trust and bonding requirements In general, plan assets means employee money is held to fund the plan or plan funds are held in a separate account If you believe your plan may have plan assets, please contact BCP staff for more information

68 ERISA - Fiduciary 68 Definition of Fiduciary according to Webster: noun, plural fi du ci ar ies. Law. a person to whom property or power is entrusted for the benefit of another An ERISA fiduciary is a person or entity responsible for managing a pension or welfare benefit plan in accordance with ERISA In a broader sense, a fiduciary is a person or entity responsible for acting in the best financial interests of others

69 ERISA - Fiduciary Cont d. 69 Every ERISA plan must: provide for one or more named fiduciaries, named in the written plan document, or through a process described in the plan, as having authority and control over the plan s operation, who, shall have joint and several authority to control and manage the operation and administration of the plan Named ERISA fiduciaries absorb full responsibility and liability in regards to the fiduciary duties of the plan

70 ERISA - Fiduciary Cont d. 70 Settlor Functions (Business Decisions) Fiduciary duties do not apply Include business decisions such as creating plan design, amending and terminating plans Fiduciary Functions Exercising discretionary authority or control regarding management or administration of an ERISA plan Delegating Fiduciary Duties Duties can be delegated to others if permitted by the plan (by terms of plan document) Plan sponsor retains ultimate responsibility Fiduciary Breaches Personal liability for damages or profits Special fiduciary penalties assessed by DOL Removal Criminal penalties

71 ERISA 71 Recap Plan must: Have a Plan Document and Summary Plan Description (SPD) Be administered according to Plan Document and SPD Comply with reporting and disclosure requirements Have documents on file and available for individuals to inspect and/or obtain copies Maintain an established grievance and appeals process Fiduciary responsibilities: Fully-insured/ unfunded Must not retain employee contributions longer than 90 days and must pay from general assets only If plan is funded, establish trust, bonding, etc. Understand fiduciary duties may be held personally liable Fiduciary must be named in Plan Document Gives the right to sue for benefits and breach of duties

72 ERISA 72 List of Disclosures Plan Document (and Wrap or Mega-Wrap if used) Summary Plan Description (SPD) (and Wrap or Mega-Wrap if used) Summary of Benefits & Coverage (SBC) Notice of Benefit Determination* Summary of Material Modification (SMM) Summary of Material Reduction in Covered Services or Benefits Form 5500 Summary Annual Report (SAR) Copies & Inspection of Documents upon Request *Provided by insurance carrier or TPA First class mail, hand delivery, or electronic distribution allowed

73 73 Family Medical Leave Act (FMLA)

74 FMLA public all size, and private 50+/see counting detail 74 Key Terms Designed to protect employees from having to choose between job and family when certain situations arise. FMLA provides up to 12 workweeks of unpaid job protected leave within a 12 month leave year for certain family and medical reasons if both an eligible employee who works for a covered employer. Group health plan must be continued on same terms & conditions as if employee had continued to work, including premium contributions. Family & Medical Reasons recorded webinar on BCP website and DOL poster, in general for birth or placement of a child, serious health condition, or military leave Eligible Employee worked for employer for at least 12 months (need not be consecutive), and worked 1,250 hours over previous 12 months, & work at a location with at least 50 employees within 75 miles Covered Employer private sector employer with 50 or more employees; both public agencies and public/private elementary and secondary schools are considered covered employers regardless of how many employees they have Group Health Plan see handout

75 FMLA public all size, and private 50+/see counting detail 75 Even though public agencies and public and private elementary and secondary schools are FMLA-covered employers regardless of how many employees they employ, each independent employee must still meet the eligibility requirements: Employed by covered employer Employed at least 12 months for the employer Have worked at least 1,250 hours of service during the 12 months immediately before leave begins Must be employed at a work site with at least 50 employees within 75 mile radius Must still post notice even if no eligible employees Special considerations for schools BCP website recorded webinar

76 FMLA 76 General Notice Covers general guidelines & procedure to request leave Provided to employees upon hire via copy of poster or in handbook (if not already provided do so now); A poster placed in a permanent conspicuous location for current and prospective employees; and Available upon request of the employee Must be translated if a significant portion of employees do not speak English Penalties for willful violation of posting rules DOL released an updated version of the poster in 2016

77 FMLA 77 Eligibility Notice Covers if employee is or is not eligible for the requested leave and gives reason if not eligible; may be oral or in writing Does not approve leave Provided to employee requesting leave within 5 business days of leave request or date employer realizes leave may qualify as FMLA (even if employee does not mention FMLA in leave request) Rights & Responsibilities Notice Covers expectations and obligations of employee, including: Premium payments, whether medical certification is required, paid vs. unpaid leave and consequences of not meeting obligations etc. Must be in writing, can be provided to employee at same time as, or as part of Eligibility Notice

78 FMLA 78 Designation Notice Specifies if leave is designated as FMLA Designation is determined on first instance of leave within 12 month leave year Provided in writing to employee within 5 business days from time employer has adequate information to make determination Amount of leave, substitution of paid leave, and fitness for duty requirements must also be included

79 FMLA 79 Medical certification Employer can only request certification for the employee s own serious health condition, or that of a family member Certification must be requested as part of Rights & Responsibilities Notice and employee must fulfill within 15 calendar days (good faith effort extension) See BCP webinar/dol website for required certification contents No additional information may be requested and in no circumstance may an employee s direct supervisor speak with employee s doctor (must be HR or management official) Second/third opinions are possible, but cost goes to employer

80 FMLA 80 FMLA leave may run concurrently Such as workers compensation, sick leave, other paid leave etc. Substitution of paid leave for unpaid leave Employee can request Employer can require Employee must comply with terms of paid leave policies E.g. if the employer s normal sick leave rules only allow time off for the employee s own illness, and employee seeks FMLA to care for their sick child, employer cannot require that paid leave be used first Paid leave runs concurrently with FMLA leave Employee remains entitled to unpaid FMLA leave even if they do not comply with paid leave policies Leave can be taken intermittently or on reduced schedule (but not for bonding with a newborn or placement for adoption, unless employer agrees) Full 12 weeks need not be taken in one block

81 FMLA 81 Continuation of Group Health Plan Continue group health benefits on same terms as for active employees Employer s premium contribution continues including flex credits under a cafeteria plan that are allocated to group health plan coverage Continue non-health benefits, e.g. life insurance, that are not subject to FMLA continuation, according to employer s policy and insurance carrier s guidelines for providing such benefits to employees on other forms of leave

82 FMLA 82 Premium Payments Premium payment method and consequences of non-payment must be disclosed in Rights & Responsibilities Notice For unpaid leave, the employer may require employees to pay the premium at the same time it would be made by payroll deduction or under same schedule as payments under COBRA For paid leave, employee share of premiums must be paid by method normally used during any other paid leave Cannot be more restrictive for FMLA leave payments than for an active employee Termination for non-payment requires 15 day advance notice Premium payment grace period of 30 days If termination is to be effective at end of grace period, provide notice 15 days prior to end of grace period

83 FMLA 83 Return to Work Use of FMLA cannot result in loss of any employment benefits accrued prior to start of leave Benefits not continued must be restored without re-qualification, upon return from leave E.g. medical, life, disability, and other employee benefits or sick leave May require fitness for duty certification for restoration of employment Must have a policy or practice of requiring fitness for duty certification for all similar situations Employee must have been notified of this requirement in Designation Notice Reinstatement to position upon return to work employees must be restored to original or equivalent position (exception for certain highly paid key employees)

84 FMLA 84 Failure to Return to Work Failure to return to work is a COBRA qualifying event: offer COBRA/Iowa Extension Employer may recover employer share of premiums for employee who fails to return to work Recovery not available if failure to return is due to serious health condition of employee/family member or military

85 FMLA 85 Administrative Recap Provide Notices General FMLA information must be provided to employees upon hire and posted at all times Once leave is requested, or employer believes leave may be FMLA, start formal notice process Determination is made and employee is notified whether leave will be designated and counted as FMLA Subject to guidelines, employers may require medical certifications and fitness for duty certification to restore employment Premium collection (group health plan) Employer must pay same portion of premium as paid for active employees Individual remains on group billing and pays employer, who in turn pays insurance carrier Offer COBRA/Iowa Extension if employee does not return to work

86 FMLA 86 List of Disclosures and Recap General Notice Eligibility Notice/Rights & Responsibility Notice Designation Notice Termination for Non-Payment Notice Hand delivery or certified mail (proof of receipt) Posted notice placed in view of employees and applicants for employment, regardless of whether there are any currently eligible employees

87 FMLA 87 This training provides only the employer s basic FMLA obligations. The BCP can also provide additional information regarding FMLA including two 2018 webinars posted on the BCP website. The DOL website also has a wealth of information regarding FMLA, as well as their current notices and forms. Additional information can be obtained via the DOL for both Public & Private Entities:

88 88 Health Insurance Portability and Accountability Act (HIPAA)

89 HIPAA public & private all size 89 Overview HIPAA was created for many purposes and affects several different industries. As it relates to health insurance HIPAA includes (but is not limited to) protection of private health information, security, portability of coverage, non-discrimination, and standardized exchange of health plan data. Portability & Privacy/Security - includes employer administration & disclosure requirements, thus these parts of HIPAA are covered in this training

90 90 HIPAA Portability

91 HIPAA Portability 91 Key Terms HIPAA portability provides a number of rights and protections for individuals, including improved transition of group health plan coverage for people who are changing jobs or adding family members, by creating special enrollment rights, limits on pre-existing condition exclusions, and non-discrimination rules. Group Health Plan See handout Special Enrollment Rights see following slides Pre-Existing Condition Exclusions N/A due to ACA prohibition of pre-existing exclusions at a health plan s 2014 plan year Non-Discrimination HIPAA prevents discrimination against employees and dependents based on health status. This provision is generally administered by the insurance company or TPA

92 HIPAA Portability 92 Special Enrollments Rights Enrollment in a group health plan is either timely, special, or late Timely enrollment for employee, spouse, dependents when first eligible Special - enrollment must be allowed throughout the year upon occurrence of a HIPAA qualifying event ( special enrollee treated as timely and not considered late enrollee) Late if not added timely or special, enrollment is late and may be subject to limited enrollment times Late entrants only at annual enrollment

93 HIPAA Portability 93 HIPAA Events Allowing Special Enrollment 1. Acquisition of New Dependent 2. Loss of Other Coverage (involuntary) 3. Eligibility for State Premium Assistance NOTE: HIPAA Exempted Benefits Limited Scope Dental & Vision Insurance carrier generally recognizes HIPAA events, allowing additions Dependent Life Insurance carrier generally allows addition upon acquisition of dependent

94 HIPAA Portability 94 HIPAA Events Allowing Special Enrollment Acquisition of New Dependent Marriage, birth, adoption or placement for adoption Loss of Other Coverage When timely enrollment is waived due to other coverage, and loss of eligibility for that other coverage occurs Loss of eligibility: Including but not limited to divorce, legal separation, death, employment termination, reduction of hours, cessation of dependent status, loss of Medicaid or CHIP, reaching lifetime limit on all benefits, no longer lives/works in network area, coverage no longer offered to a group of individuals-part-time, non-union, etc.. In 2016 regulatory agencies confirmed an involuntary loss of coverage in the individual health insurance market is a Special Enrollment Event. Exhaustion of COBRA Termination of employer premium contribution Note: Dependent resuming full time student status is not a HIPAA event but is recognized by most insurance carriers. Eligibility for State Premium Assistance Medicaid or CHIP

95 HIPAA Portability 95 Special Enrollment Rights Notice Explains the special enrollment rules Provide to individuals eligible for the plan at or before the time of enrollment Rights & Responsibilities notice, part of application, or separate notice Provide to anyone whom you provide an application 95

96 HIPAA Portability 96 Employer CHIP Notice Explains that a potential state subsidy may be available Provide to individuals eligible for the plan at or before the time of enrollment Provide annually with annual enrollment materials State may request information in regard to your health plan, to determine if individual is eligible for subsidy This is different than the subsidy available via the Exchange/Marketplace 96

97 HIPAA Portability 97 Administration Recap Notices must be provided to individuals Prior to enrollment Special Enrollment Rights Notice CHIP Notice Prior to annual enrollment CHIP Notice Special enrollments must be allowed during the year Respond to state inquiries regarding CHIP payment for group plan

98 HIPAA Portability 98 List of Disclosures Special Enrollment Rights State Premium Assistance Notice/CHIP Disclosure to State (only upon request) Discontinue providing the Pre-Existing Limitation Notices and Certificate of Creditable Coverage notice when no longer applicable to your health insurance plan. All plans should have discontinued by end of First class mail, hand delivery, or electronic distribution allowed

99 99 HIPAA Privacy

100 HIPAA Privacy 100 Overview Controls the use and disclosure of an individual s health information. HIPAA allows: Certain entities or individuals are allowed access to an individual s health information To perform specific functions ( treatment, payment, and health care operations ) Without individual authorization Entity or Individual is then obligated to protect the health information & provide certain rights to individuals.

101 HIPAA Privacy 101 Key Terms Applies to covered entities and business associates of a covered entity who create or receive Protected Health Information (PHI) Covered Entity health care providers, payers, clearinghouses, group health plans Business Associate individual or entity providing services for a covered entity (examples: broker or TPA) PHI -individually identifiable health information (includes coverage enrollment and premium payment information as well as relating to health condition and treatment) Group Health Plan See handout

102 HIPAA Privacy 102 Determining Employer s Obligations Privacy affects most group health plans. Look at each health plan separately when determining if you must comply (medical, dental, FSA, etc.) Obligations depend on: Does plan have access to PHI? Is plan self or fully-insured? Is TPA used for administration?

103 HIPAA Privacy 103 Determining Employer s Obligations Plans with Limited Obligations Fully-insured plans that do not create or receive PHI except Summary plan information Used to obtain premium bids or modify, amend, or terminate the plan and/or Enrollment & disenrollment information Plans that must Fully Comply Fully-insured who create or receive PHI All plans that use a TPA Self-insured includes partial self-insured, FSA, HRA, Exception: self-insured, self-administered plans with less than 50 eligible are exempt from full compliance but must still protect individual s information

104 104 HIPAA Privacy All Plans (limited or full compliance obligations) Group health plan & employer/plan sponsor are separate components Group Health Plan is a covered entity: includes individuals requiring access to other employees PHI to perform their job functions Employer/Plan Sponsor is not a covered entity: legal entity offering group health plan to employees and does not require access to PHI to perform job functions Separate the two components

105 105 HIPAA Privacy All Plans (limited or full compliance obligations) The employer MUST take steps to protect employee s personal information The employer must NOT Take retaliatory action against an individual Example: Cannot discriminate against employee who files a complaint Require an individual to waive privacy rights, for example prevent individual from accessing his/her health records

106 106 HIPAA Privacy Plans that must fully comply Appoint a Privacy Official Designate a contact person or privacy office Identify workforce who needs access (name or classification) Identify required uses & disclosures of PHI & limit to minimum necessary Train Workforce Certification to group health plan (certifies plan sponsor will protect PHI) Business Associate Agreements if applicable Provide disclosures (see subsequent slides) Establish 1. Administrative, technical & physical safeguards* 2. A process for complaints, sanctions, & mitigations* 3. Written compliance policies & procedures* * see subsequent slides Documentation (checklist, policies & procedures, etc.)

107 107 HIPAA Privacy Plans that must fully comply 1. Establish administrative, technical & physical safeguards Safeguards will vary by employer examples: Locked file cabinets No PHI in sight of non-authorized individuals, off of desk, computer screen, fax machine in open area, mail room Shred PHI when no longer needed (unless required to retain) No publishing of individual claim dollar amounts or other data tied to specific employee name Keep personnel files separate from files with medical information Ensure adequate separation of records & employees between group health plan and plan sponsor

108 108 HIPAA Privacy Plans that must fully comply 2. Establish a process for complaints, sanctions, & mitigations Let employees know how/to whom to make complaints (privacy notice) Keep record of complaints & resolution of complaints Establish disciplinary policies for violation Mitigate harmful effects Retain log of use & disclosures inconsistent with privacy regulations Privacy Breach Notice

109 109 HIPAA Privacy Plans that must fully comply 3. Develop written compliance policies & procedures Establish policies & procedures to document the manner in which PHI is received, used, stored, and disclosed

110 110 HIPAA Privacy Plans that must fully comply Disclosures Privacy Notice (updated in 2013) Describes individual s privacy rights & legal duties of covered entity Provide to plan participants upon enrollment in plan Availability of Privacy Notice Notifies individual that privacy notice is available upon request Provide to plan participants every 3 years, or provide the actual notice annually Privacy or Security Breach Notice Furnished to individual whose privacy has been breached Furnished to HHS Furnished to local media in certain instances

111 HIPAA Privacy Plans that must fully comply 111 Disclosures Business Associate Agreement (Updated in 2013) Provide to any entity that is not in itself a covered entity, who has access to your employees PHI Amendment to Plan Document Notifies individuals that document includes privacy provisions Provide to plan participants upon enrollment in plan Certification to Group Health Plan Certifies that plan sponsor will safeguard PHI Provide in a letter from plan sponsor to group health plan

112 HIPAA Privacy 112 NOTE: Security is a part of HIPAA that affects the same PHI that HIPAA privacy affects. Privacy regulations affect PHI in any format and security applies to PHI that is transmitted by, or maintained in, electronic media. Most fully-insured plans do not electronically maintain & transmit PHI but if your plan does, you will need to comply with the security rules (not covered in this training). At a minimum all employers need to be aware of transmitting data via or other electronic means and obtain encryption measures.

113 HIPAA Privacy 113 NOTE: An entity may be required to comply with HIPAA Privacy for reasons other than the health plan; for example a municipality that owns an ambulance service may have obligations in addition to what is identified in this training. Only HIPAA s application to a health plan is covered in this training

114 HIPAA Privacy 114 Administration Recap Separation of group health plan and employer No discrimination and no retaliation Establish processes and procedures to assure protection of PHI Be alert for circumstances that may need to be treated as PHI Notices/Disclosures KEEP PRIVATE INFORMATION PRIVATE!

115 HIPAA Privacy 115 List of Disclosures Privacy Notice Notice of Availability of Privacy Notice Plan Amendment* Certification to Group Health Plan Privacy or Security Breach Notice (only upon breach of privacy) *Benefit booklet First class mail, hand delivery, or electronic distribution allowed Breach notice contact applicable government agency for instructions

116 116 IRS Section 125 Cafeteria Plan

117 117 IRS Section 125 Cafeteria Plan public & private all size Overview Tax reduction tool for employees and employers. Employees are allowed to elect pre-tax payroll deductions for certain qualifying benefits. Gross payroll is reduced, saving taxes for both the employee and employer. POP premium for qualified benefits are payroll deducted pre-tax. FSA (health FSA and DCAP) qualified un-reimbursed medical expenses & qualified dependent care expenses are payroll deducted pre-tax Flex Credit Plan employer provides a set amount of money for each eligible employee to purchase qualified benefits pre-tax. Includes a POP, health FSA, DCAP, and other qualified benefits. See Plan Type handout for qualified benefits

118 IRS Section 125 Cafeteria Plan 118 Provide to individuals newly eligible for plan and prior to beginning of each plan year: Enrollment materials Explains details of plan & enrollment guidelines Cafeteria Plan Summary, Health FSA Description, DCAP Notice of Availability & Terms Election/Salary Reduction form Used for individuals to enroll or waive participation in the plan Automatic premium pre-tax or roll-over pre-tax notice Explains pre-tax will be automatic or rolled-over unless opt-out This provision must be in plan document

119 IRS Section 125 Cafeteria Plan 119 Once Individuals complete the election/salary reduction form Elections are payroll deducted pre-tax and dispersed to vendors Elections cannot be changed mid-year unless there is a qualifying event Each year new enrollment materials & forms provided to individuals to re-enroll Summary Plan Description (SPD) (& other ERISA requirements) Explains benefits, rights, & obligations for FSA Provided to plan participants within 90-days of effective date

120 IRS Section 125 Cafeteria Plan 120 Section 125 Events (quick reference list) Change must be on account of & consistent with the event Events that allow change in Pre-Tax Premium/FSA/DCAP Change in status: marital status, number of dependents, employment status, dependent satisfies or ceases to satisfy eligibility, change in residence affecting eligibility, commencement or termination of adoption proceeding FMLA Leave of Absence Events that do NOT allow change in ALL categories (check guidelines for each) Auto increase/decrease for insignificant cost change Significant cost change Significant coverage curtailment Addition or significant improvement in benefit package option Change in coverage under other employer plan (election lock) HIPAA special enrollments COBRA qualifying events Judgments, decrees, or orders Medicare or Medicaid entitlement (gain or lose eligibility) Change in HSA pre-tax contributions Change in 401(k) contributions Loss of governmental or educational institution coverage Note: Even if insurance carrier allows mid-year change, there must be a Section 125 event to change pretax premium.

121 IRS Section 125 Cafeteria Plan 121 Health care reform New Events (if Plan Document amended) Non calendar year plans Enrollment in Exchange/Marketplace can allow a change in coverage. This was optional per employer and only available 1/1/14, then later IRS announced a permanent change. Reduction of hours within stability period

122 IRS Section 125 Cafeteria Plan 122 Flex Credits or Opt-Out Payments ACA affordability concerns Attestation Form for Conditional Opt-Out (transitional relief for certain plans) 403(B) contributions (not a qualified benefit) IPERS Certification

123 IRS Section 125 Cafeteria Plan 123 Health FSA Must be an excepted benefit Availability Must be eligible for group health plan to be eligible for health FSA Maximum benefit (see next slide) Limitations if employer money available for health FSA How to determine employer versus employee money with flex credits?

124 IRS Section 125 Cafeteria Plan 124 Health FSA Maximum Benefit Requirement: If no employer money is contributed to the health FSA the maximum benefit requirement is automatically satisfied If employer money is contributed to the health FSA If cash out of employer money is allowed employer money converts to employee money If 100% cash out maximum contribution to health FSA is $2,600/year If less than 100% cash out review guidelines If no cash out must limit employer money in a health FSA to the greater of: $500 or 2 x employee s salary reduction amount ($1 for $1 match of employer to employee money) Employer money is in addition to employee salary deferral $2,600/year maximum

125 IRS Section 125 Cafeteria Plan 125 Health FSA - Misc Qualified medical expenses (IRS 509 & administrators abbreviated list) Uniform Coverage Rule (employer must pre-fund full election) Use it or lose it rule $500 carry over feature (OR grace period not both must be in plan document) Grace Period 2 ½ months (must be in plan document) Statutory maximum for employee contribution to health FSA may increase annually Plan Document must reflect change Maximum contribution set by employer up to $2650 (increase 2018) Code 105 definition of dependent is end of year age 26 No OTC medicine or drugs w/out prescription

126 IRS Section 125 Cafeteria Plan 126 Dependent Care (DCAP) - Misc To allow employee/spouse to work Child under 13 or spouse/dependent incapable of self-care Maximum set by IRS, $5,000 ($2,500 if filing separate returns) Cannot also take dependent care tax credit report DCAP on W-2 Grace Period 2 ½ months (must be in Plan Document)

127 IRS Section 125 Cafeteria Plan 127 Health Care Reform No payment or reimbursement of individual health insurance premium allowed (non group premium) - limited exception for small employers effective at the 2017 plan year This guideline applies whether pre-or post-tax Up to $100/day excise tax ($36,500/year) for noncompliance

128 IRS Section 125 Cafeteria Plan 128 Administration Recap Written plan document containing plan provisions (updated as law or plan changes), with adoption of the plan by Board of Directors or other authorized entity Annual discrimination testing Above requirements are generally provided by entity hired for administration services. If self-administered, employer is responsible No requirement to disclose above items to any individual or entity, unless requested Provide enrollment materials & Notices New hires enrolled as they become eligible Re-enrollment held each plan year Monitor off plan year enrollment/disenrollment/change requests for events (no changes mid-year without an event) FSA/DCAP reimbursement administration TPA or employer

129 IRS Section 125 Cafeteria Plan 129 List of Disclosures Enrollment Materials Cafeteria Plan Summary Description of Health FSA DCAP Notice of Availability & Terms Employee Election/Salary Reduction Form Automatic or Roll-Over Premium Pre-Tax ERISA Requirements for Health FSA (SPD, etc.) First class mail, hand delivery, or electronic distribution allowed

130 OTHER LAWS REQUIRING DISCLOSURES 130 MEDICARE PART D MSP MICHELLE S LAW QMCSO & NMSM WHCRA IOWA CODE BENEFIT CERTIFICATE IOWA CODE 509A.15 SELF-INSURE CERTIFICATE PPACA/ACA

131 Medicare Part D public & private all size 131 Overview A voluntary prescription drug benefit available to individuals who have coverage under Medicare Part A or Part B, which may include active employees, disabled employees, COBRA participants, retirees, and their covered spouses and dependents. Individuals who waive Part D coverage when first eligible may have special enrollment rights when enrolling for Part D later, if they had creditable prescription drug coverage through another source, including their employer. Employers must notify individuals whether their group health plan is creditable or not.

132 Medicare Part D 132 Creditable/Non-Creditable Coverage Notice To advise if the group prescription coverage is creditable or non creditable Creditable = coverage that is equal to or greater than the standard Medicare Part D coverage, or non-creditable = not as good as the standard Part D coverage Notice is provided Prior to effective date of individual s group coverage Prior to annual Part D enrollment period each year (within 12 months prior)* Prior to individual s initial enrollment period for Part D* If creditable coverage status changes or upon request *Satisfied w/one annual notice within 12 months prior to each year Provide to all individuals on the health plan upon eligibility and at annual enrollment First class mail, hand delivery, or electronic distribution allowed If provided with other materials must be prominent & conspicuous

133 Medicare Part D 133 Disclosure to CMS On-line disclosure to CMS advising if coverage is creditable Required annually within 60 days from plan year (or renewal)

134 MSP public & private all size 134 MSP determines whether Medicare is the primary or secondary payer when other coverage exists Varies by employer size and other criteria Prohibits providing incentives for individuals not to enroll in a group health plan and prohibits certain actions that take into account an individual s Medicare entitlement Notify insurance carrier if employee, spouse, or dependent who is on your health plan enrolls in Medicare CMS and insurance carrier will make periodic requests to employer regarding an individual s entitlement to Medicare or their enrollment in a group health plan. Employer provides information upon request

135 MSP 135 Effective MSP requires mandatory reporting of items such as employee and/or spouse s social security number. Insurance carrier requests from employer if needed, and reports to CMS. Self-funded plans must assure this requirement is satisfied. This reporting is required for Health Reimbursement Arrangements (HRA) effective

136 Michelle s Law public & private all size 136 Effective for plan year s on or after Group health plans are required to continue coverage for seriously ill or injured college students, who are covered dependents, while on a medically necessary leave of absence, for the earlier of one year from date of leave or to the date on which such coverage would otherwise terminate under the terms of the plan Disclosures Michelle s Law Notice If full-time student status is requested, information about Michelle s Law must be included with the request. Insurance carrier provides for fully-insured plans

137 QMCSO & NMSN public & private all size 137 A QMCSO is a judgment, decree, or court order requiring a group health plan to provide coverage to a participant s child A NMSN is a child support order used by state child support enforcement agencies to obtain group health coverage for children Disclosures Upon receipt of request employers are required to provide notification to certain individuals regarding QMCSO or NMSN. Specific instructions for completing forms and providing notifications are received with the QMCSO or NMSN

138 WHCRA public & private all size 138 WHCRA requires group health plans to provide certain benefits in connection with a mastectomy WHCRA Notice must be provided to plan participants upon enrollment and annually thereafter Notice is included in benefit booklet for new enrollments Annual notice provided at renewal If new booklets issued - is included If new booklets not issued employer must provide separate notice

139 Laws Requiring Inclusion in the Benefit public & private all size 139 Booklet/SPD There are laws, generally mandating coverage for certain individuals or benefits, that do not require a separate disclosure but generally require inclusion in the benefit booklet/spd

140 Iowa Code Benefit Certificate public & private all size 140 A benefit certificate (booklet) must be provided to individuals covered under a group life, accident, or health plan Booklet is provided by insurance carrier or TPA Direct to individual or To employer for distribution by first class mail or hand delivery

141 141 Iowa Code 509A.15-Self-Insure Certificate public all size Iowa code requires a self-insured plan to file a certificate of compliance, actuarial opinion, and annual financial report within 90 of the end of the fiscal year (to assure adequacy of reserves, financial condition of plan, etc.). Plans that insure employees for all or part of a deductible, coinsurance payments, drug costs, short-term disability, vision benefits, or dental benefits (Partial Self-Funded Plans) with yearly claims that do not exceed 2% of the entity s general fund budget shall be exempt from this requirement. Claim calculations (to determine 2%) performed annually at renewal date If public entity does not qualify for the exemption there are other requirements refer to Code 509A.15 on State of Iowa Web site

142 Laws Requiring Posted Notice public & private all size 142 There are laws that require a notice to be posted at the workplace, but do not require individual notifications to employees Notices must be placed where employee notices are customarily placed Contact the Iowa Workforce Development office at (Note: there are other employment laws requiring a posted notice that are not listed as they do not affect employee benefits).

143 143 PPACA/ACA (HEALTH CARE REFORM)