Potential $2.4 Billion and Countless Trees Saved – Department of Labor’s Proposed Rule on Electronic Disclosure for Retirement Plans

The Department of Labor recently issued a proposed rule that allows certain retirement plan disclosures to be posted online, rather than requiring such disclosures to be printed and mailed. The Department of Labor anticipates this rule, if finalized, would save plan sponsors $2.4 billion over the next ten years. The rule is currently in proposed form and will not become effective until 60 days after the final rule is published. As such, plan sponsors may not rely on this proposed rule now.

Current Electronic Disclosure Requirements

In 2002, the Department of Labor issued a safe harbor for the use of electronic media. Read More ›

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California Cares . . . About Employees Losing Flexible Spending Account (“FSA”) Funds

California recently approved Assembly Bill 1554, adding a flexible spending account notice requirement to § 2810.7 of the California Labor Code.  The new law, which takes effect January 1, 2020, states:

(a) An employer shall notify an employee who participates in a flexible spending account, including, but not limited to, a dependent care flexible spending account, a health flexible spending account, or adoption assistance flexible spending account, of any deadline to withdraw funds before the end of the plan year. Notice shall be by two different forms, one of which may be electronic.

(b) Notices made pursuant to subdivision (a) may include, but are not limited to the following: (1) Electronic mail communication. Read More ›

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Must Drug Manufacturer Coupons Count Toward Annual Maximum Out-Of-Pocket Limits? Stay Tuned …

What is the Annual Maximum Out-Of-Pocket Limit (“MOOP”)?

MOOP is the most a participant must pay for covered services under a group health plan in a plan year. After a participant spends this amount on deductibles, copayments, and coinsurance, the health plan must pay 100% of the costs of covered benefits.

What are Drug Manufacturers’ Coupons (“Coupons”)?

Many drug manufacturers offer coupons to patients to reduce out-of-pocket costs. Drug manufacturers may offer these coupons for various reasons including: (1) to compete with another brand name drug in the same therapeutic class; (2) to compete with a generic equivalent when released; or (3) to assist consumers whose drug costs would otherwise be extremely high due to a rare or costly condition. Read More ›

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Seeing the Big Picture – How Proposed Health Reimbursement Arrangements Might Harmonize with Existing Law

On October 29, 2018, proposed regulations were published in the Federal Register that would permit employers to offer two new types of health reimbursement arrangements (“HRAs”) that align with the requirements of the Affordable Care Act (the “ACA”). The proposed HRAs are designed to expand the availability of account-based group health plans. A summary of the proposed regulations – and the HRAs that they would permit if finalized – can be found in our November 7, 2018, blog, “Zombie Benefits – Are Health Reimbursement Arrangements Back from the Dead?

As an addendum to the proposed regulations, the IRS published Notice 2018-88, which considers the interaction of the new HRAs with the employer shared responsibility mandate set out in Code Section 4980H and the non-discrimination rules contained in Code Section 105(h). Read More ›

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EEOC Removes 30% Incentive Safe Harbor from Wellness Program Regulations

The Equal Employment Opportunity Commission (the “EEOC”) issued final rules, published in the Federal Register on December 20, 2018, that remove the 30% incentive provisions from the EEOC’s wellness program regulations governing the Americans with Disabilities Act (“ADA”) and the Genetic Information Nondiscrimination Act (“GINA”).  The final rules are effective January 1, 2019.  As a reminder, the ADA rules previously provided that a wellness program that asks questions about employees’ health or includes medical examinations is not voluntary if the incentive to encourage employee participation in the program exceeds 30% of the total cost of self-only coverage.  The GINA rules previously provided that an employer may not offer an incentive that exceeds 30% of the total cost of self-only coverage to an employee to encourage a spouse’s participation in a health risk assessment under a wellness program. Read More ›

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IRS Issues Updated Tax Notice for Qualified Retirement Plan Distributions

The Internal Revenue Service (“IRS”) recently released guidance that contains two updated safe harbor notices that retirement plans may use to satisfy the requirements of the Internal Revenue Code (the “Code”) to provide an advance notice to a participant prior to the date on which the participant receives a distribution that meets the requirements for an eligible rollover distribution.  This notice is commonly referred to as the “402(f) Notice” after the relevant section of the Code that requires the notice to be provided.

The IRS guidance contains two model notices, one that may be used when distributions are not from a Roth account and a second model notice that may be used for distributions that are from a Roth account. Read More ›

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A Deeper Dive: Employers Receiving Federal Funding May Be Subject to ACA’s Nondiscrimination Rule and Need to Cover Transgender Benefits

In recent months, we have written a fair amount about providing transgender benefits in light of the nondiscrimination provisions of the Affordable Care Act. Our blogs of March 30, 2016 and June 22, 2016 highlight the key contours of the nondiscrimination rule.  In our June 22 post, we mention in passing that the final nondiscrimination rule applies to any health program or activity, any part of which receives funding from the Department of Health and Human Services (“HHS”).  This blog provides additional clarity on what it means for a group health plan or an employer to receive federal financial assistance (“FFA”) and, by consequence, become subject to the nondiscrimination provisions of the Affordable Care Act. Read More ›

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You Received a Health Insurance Marketplace Notice from HHS – Now What?

Take a deep breath.  The HHS Health Insurance Marketplace Notice (the “Notice”) may seem to be a nuisance, but it does not necessarily mean that you will be subject to employer shared responsibility penalties.

First, the IRS, not HHS, assesses employer shared responsibility penalties, and the IRS does so only after it provides employers with:  (1) a “certification” that one or more employees received a premium tax credit; and (2) an opportunity to respond to the certification.

Second, an individual may have incorrectly reported on his application that he was eligible for a premium tax credit (or cost-sharing reductions) because:  (1) he did not receive an offer of health coverage from you; (2) he did receive an offer of health coverage from you, but it was unaffordable or it failed to provide minimum value, or (3) he was in a waiting period and was unable to enroll in health care coverage.  Read More ›

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