In an Information Letter dated February 27, 2019, the Department of Labor (DOL) clarified that an ERISA plan must include any procedures for designating authorized representatives in the plan’s claims procedure and summary plan description (SPD) or in a separate document that accompanies the SPD. In response to a request by a patient advocate and health care claim recovery expert for plan participants and beneficiaries, the DOL reiterated that the claims procedure regulations permit authorized representatives to receive notifications in connections with an ERISA plan’s claim and appeal determinations, and noted that a plan’s claims procedure cannot prevent claimants from choosing who will act as their representative for purposes of a claim and/or appeal. ERISA plan sponsors should review plan documents to ensure that the applicable documents clearly outline any steps a participant or beneficiary must take to validly designate an authorized representative under the plan.
Megan Mardy advises companies on a wide variety of health and welfare and retirement benefits issues. She has extensive experience with the Affordable Care Act, the Health Insurance Portability and Accountability Act (HIPAA), Consolidated Omnibus Budget Reconciliation Act (COBRA), the Internal Revenue Code and other federal laws affecting group health and retirement plans. Read Megan Mardy's full bio.
On January 14, 2019, US District Judge Wendy Beetlestone in the US District Court for the Eastern District of Pennsylvania issued a nationwide preliminary injunction blocking the Trump administration’s carveouts to the Affordable Care Act’s (ACA) contraceptive coverage mandate. One day prior, US District Judge Haywood Gilliam in the US District Court for the Northern District of California issued a more limited injunction blocking the same carve outs from taking effect in 13 states plus the District of Columbia.
On October 6, 2017, the Trump administration issued rules that are the subject of these two decisions. The rules would have allowed employers to raise religious and moral objections to avoid the ACA’s requirement that contraceptive coverage be provided without cost sharing under their group health plans. Under the ACA, certain contraceptive products and services are included in the list of preventive services that must be covered by most group health plans without cost sharing. The available exemptions to this rule were limited.
Judge Beetlestone reasoned that the loss of contraceptive coverage would have resulted in “significant” and “proprietary harm” to the states by causing increased use of state-funded contraceptive services, along with increased costs associated with unintended pregnancies. Without the preliminary injunction, the Trump administration’s rules would have gone into effect on January 14, 2019. The preliminary injunction does not permanently block the rules, but rather it stops the rules from going into effect while legal challenges are being pursued. Judge Beetlestone indicated that she is likely to invalidate the rules, stating that the US Departments of Health and Human Services, Labor and Treasury exceeded the scope of their authority under the ACA by issuing the carve outs.
Charnae Supplee, a law clerk in the Firm’s Washington, DC office, also contributed to this post.
Late in the afternoon on Friday, December 14, Federal US District Judge Reed O’Connor struck down the Affordable Care Act (ACA) in its entirety, a feat that was, for the past few years, unsuccessfully attempted by the Republican-led Congress. O’Connor reasoned that if the individual mandate is no longer valid, the entire ACA must also be scrapped, because the rest of the ACA is “inseverable” from the individual mandate. The opinion is likely to be appealed, and the final decision may ultimately lay with the US Supreme Court. Despite the ruling, Centers for Medicare & Medicaid (CMS) has stated that the exchanges remain open and 2018 and 2019 coverage will not be impacted.
One of the busiest times of year for an employee benefits professional is open enrollment. It is a crucial and yet stressful time of year that typically results in numerous employee questions and complaints and is a time of year with high potential for both employer and employee mistakes. Despite the stress and potential for problems, open enrollment provides an opportunity for a company to set itself up for success for the following year.
The Employee Retirement Income Security Act (ERISA) does not require an annual opportunity for employees to change benefit plan elections. However, because of compliance issues that can spring from not offering a regular enrollment period, most companies choose to offer an “open enrollment” period, usually taking place in mid- to late fall for calendar-year health and welfare benefit plans.
Employee attention to employer communications during this period is often high, and attention to detail in participant communications behooves an employer during this period. Well-written and timely notices may be relied upon to satisfy many compliance obligations. Inaccurate or incomplete open enrollment materials, however, can create employee confusion and result in legal liability under the complex network of federal laws governing employer-sponsored benefit programs.
Read the full article here for a sampling of key issues to consider to help you avoid compliance missteps during this year’s open enrollment period.
Originally published in BenefitsPRO.com, October 2018.
President Trump signed an executive order last year directing the Secretaries of Labor, Treasury and Health and Human Services to consider proposing regulations to “increase the usability of HRAs.” This month, the collective departments issued proposed regulations containing changes to the prohibition on pairing HRAs with individual health policies, as well as other changes to the current HRA rules.
Proposed effective date January 1, 2020; comments due December 28, 2018.
The Medicare Modernization Act of 2003 requires employers who offer prescription drug coverage to provide an annual notice to all Medicare Part D eligible individuals who are participants in, or eligible for, the employer’s prescription drug coverage indicating whether such coverage is creditable before October 15th of each year. “Creditable coverage” means that the prescription drug coverage offered by an employer plan is expected to pay, on average for all plan participants, as much as the standard Medicare prescription drug coverage pays. Prescription drug coverage is “non-creditable” when it is not expected to pay, on average for all plan participants, as much as the standard Medicare prescription drug coverage pays.
The notice must be furnished regardless of whether the employer plan pays primary or secondary to Medicare, and must be sent to all Part D eligible individuals including retirees, actives, COBRA beneficiaries and dependents of such individuals. The Centers for Medicare and Medicaid Services (CMS) provides Model Disclosure Notices for creditable and non-creditable coverage.
If you would like additional information about this requirement, or if you have any questions, please contact your McDermott lawyer or one of our Benefits attorneys.
Charnae Supplee, a law clerk in the Firm’s Washington, DC office, also contributed to this article.
The US Department of Labor published a final rule that makes it easier for a group or association of employers to act as a single “employer” sponsor of an Association Health Plan under ERISA. By creating an opportunity for small employers and self-employed individuals to take advantage of the economies of scale that are usually enjoyed by large employers, the final rule is intended to expand access to affordable health care.
On May 10, 2018, the IRS announced cost-of-living adjustments to the applicable dollar limits for health savings accounts and high-deductible health plans for 2019. Many of the limits will change for 2019.
On April 26, 2018, the Internal Revenue Service (IRS) increased the 2018 maximum deductible Health Savings Account (HSA) contribution for taxpayers with family coverage under a High Deductible Health Plan (HDHP) to $6,900.
The $6,900 contribution limit for 2018 was originally published in Revenue Procedure 2017-37, but was reduced earlier this year by $50 to $6,850 in Revenue Procedure 2018-18 due to changes in the inflation indexing measure under the Tax Cuts and Jobs Act. The IRS later increased the limit back to the originally announced amount of $6,900. This relief is published in Revenue Procedure 2018-27 and appears to be the result of pushback from employers, many of whom would face significant administrative costs due to implementing the mid-year change, and governing law requiring the annual HSA limits to be published by no later than June 1 of the preceding calendar year.
Under the guidance, an individual who received a distribution from an HSA in 2018 of an excess contribution based on the previous $50 reduction may repay the distribution to the HSA by April 15, 2019. The repaid amount would not be included in the individual’s gross income or subject to additional taxation. Alternatively, such individual may take no action and treat the $50 HSA distribution as an excess contribution that was timely returned and thus not subject to income inclusion or additional taxation.
Employers who previously lowered their plan’s contribution limit for HSAs to $6,850 should consider how to address the increased limit and whether any changes or employee communications are necessary.
Beginning April 1, 2018, new disability claim regulations may apply to some executive compensation arrangements. Given this pending regulatory deadline, employers need to analyze which of their executive compensation arrangements may be subject to the enhanced requirements for disability claims review.