Category: Abentras Blog

IRS Proposes New Safe Harbors for Individual Coverage HRAs

On September 30, 2019, the IRS proposed regulations regarding the application of the ACA’s employer shared responsibility provisions (also known as the employer mandate) to HRAs integrated with individual health insurance coverage or Medicare, known as individual coverage HRAs (ICHRAs). The guidance also addressed the application of the self-insured plan (Section 105(h)) non-discrimination rules to ICHRAs. The proposed rules supplement the June 2019 final regulations, which permitted the use of ICHRAs effective January 1, 2020, and subsequent related guidance under IRS Notice 2018-88.

As background, an HRA is an employer-funded, account-based group health plan that allows for payment of employee medical expenses on a tax-advantaged basis (the HRA reimbursements are not included in the employee’s gross income). In order to comply with the ACA mandates applicable to group health plans, such as the prohibition against annual or lifetime limits for essential health benefits and the provision of preventive care without cost sharing, HRAs previously needed to be integrated with an ACA compliant group health plan. This meant that stand-alone HRAs were generally prohibited. However, the June 2019 final rules introduced the ICHRA, which allowed for the integration of HRAs with individual health insurance coverage, provided certain conditions are satisfied.

Applicable large employers (those with 50 or more full-time employees, including full time equivalents) during the preceding calendar year) that sponsor ICHRAs must still satisfy the ACA employer shared responsibility mandates to avoid tax penalties. The penalties can arise if an employee receives a premium tax credit through the ACA marketplace because he or she was not offered employer-sponsored MEC that is of MV and is affordable. To avoid penalties, the employers must offer such coverage to at least 95% of full-time employees and their children until age 26. The IRS has indicated that an employer’s offer of an ICHRA is an offer of MEC. Satisfying the affordability condition is more challenging.

Prior IRS guidance provided that an ICHRA is deemed affordable if the benefit makes the lowest cost individual silver policy in an ACA exchange rating area affordable to an employee who resides there. By definition, the silver plan would cover at least 60% of required costs and thus also meet the minimum value standard. ICHRA coverage is considered affordable if the employee’s required monthly contribution (that is, premium cost-HRA benefit) does not exceed 9.78% (for 2020) of the employee’s household income. When determining affordability for employer mandate purposes, an employer can use any of the previously established safe harbors (specifically, Form W-2 wages, rate of pay, and federal poverty line), provided that the application is uniform and consistent for any acceptable classification of employees.

However, the previous guidance failed to adequately address the inherent complexities of applying the affordability requirement to a diverse employee group, whose members would be purchasing individual coverage. For example, employees could reside in different rating areas, so premiums for the lowest cost silver plan could vary dramatically. Costs could also differ based upon ages of the employees themselves. Additionally, the premiums for the lowest cost silver plan on the exchange are typically not known until October, which makes it difficult for employers to plan and fund for ICHRAs prior to the start of the plan year.

In an effort to address these concerns, the new proposed regulations provide optional safe harbors and clarification regarding the affordability determination. First, the guidance provides a location safe harbor for ascertaining the lowest cost silver plan. This safe harbor allows an employer to use the ACA rating area for an employee’s primary site of employment instead of the employee’s residence. The primary site of employment is the location where the employer reasonably expects the employee to perform services as of the first day of the ICHRA plan year (or coverage date, if later). For remote workers, the location would be the site from which they actually work, unless they are required to periodically report to the employer’s work site, which would then be considered the employee’s primary site. A permanent change in employee work sites must be taken into account for affordability purposes by the first day of the second month following the employee’s relocation.

Second, the IRS declined to provide an age-based safe harbor. The IRS was concerned that employees older than a set safe harbor age may not find their cost of coverage affordable and receive tax credits on the exchange, although the employer would be deemed to have satisfied the affordability mandate. However, for a particular rating area, an employer is permitted to use the lowest cost silver plan for employees in the lowest age bracket as the base plan for determining affordability. For older employees, the employer could then use the price of that plan for the applicable age bracket to determine affordability (regardless of whether a less expensive silver plan was available for the age group). The guidance also clarifies that for affordability purposes, an employer should use the employee’s age on the first day of the plan year (or his or her date of coverage, if later).

Third, the proposed rules introduce a look-back month safe harbor that allow employers with calendar year ICHRAs to base the monthly cost of the cheapest silver policy for a year on the cost of that policy as of the first day of the previous year. So, an employer offering an ICHRA with a plan year beginning January 1, 2020, could use the exchange rates as of January 1, 2019. Non-calendar year plans could use the rates as of January 1 of the current year.

Fourth, the IRS emphasizes that an employer electing to use any of the optional safe harbors must apply the chosen method uniformly and consistently for all employees in a class. The permitted classes are as specified in the June 2019 final ICHRA rules, which include salaried vs. hourly; full time vs. part time; bargaining unit vs. non-bargaining unit; seasonal vs. regular; and employees in one rating area, state, or region vs. another. The guidance also confirms that employers can report employee required contributions (for Forms 1094-C and 1095-C) based upon the safe harbors and that premiums for affordability purposes do not need to reflect tobacco surcharges or wellness incentives, unless the wellness program incentive relates exclusively to tobacco use, in which case the incentive is treated as earned. Additionally, the proposed rules allow employers to rely upon the accuracy of the premium information made available by the government marketplace.

Finally, the IRS provides clarification regarding the application of the Section 105(h) nondiscrimination rules to ICHRAs. These rules generally apply to self-insured health plans and prohibit discrimination in favor of highly compensated individuals (HCIs), which include the five highest paid officers, more-than-10% shareholders/owners and the highest-paid 25% of all employees. However, if an ICHRA only reimburses insurance premiums (and not other medical expenses), it is treated as an insured plan and not subject to the Section 105(h) rules. The rules propose two nondiscrimination safe harbors. First, the maximum ICHRA contribution can vary within a class of employees if the variation applies under the same terms to all within the class, and between classes if each class is a permitted class under the ICHRA rules. Second, ICHRA designs can vary contributions based upon family size and age (provided the maximum contribution for the oldest participant does not exceed three times the amount for the youngest participant), without the plan automatically being deemed as discriminatory. However, the guidance notes that an ICHRA that is not discriminatory in design could still fail the Section 105(h) test, if HCIs actually benefit disproportionately to non-HCIs.

Employers who are considering adopting ICHRAs should review the new guidance and speak with their benefit consultants. Organizations planning to offer ICHRAs effective January 1, 2020, can use the 2019 exchange rates – as outlined above – for purposes of setting contribution and funding levels.

Some large employers may find the new safe harbors helpful in satisfying the ACA shared responsibility provisions. In particular, the rules provide some simplifications for determining affordability for employees that reside in diverse geographic locations. However, it is unclear if the proposed regulations adequately address the administrative concerns of potential ICHRA plan sponsors.

The IRS has requested comments on the proposed rules by late December. However, employers can generally rely on the guidance in designing ICHRA options for 2020. The proposed rules will remain effective for any plan year that begins at least six months prior to the publication of final rules. Please stay tuned to Compliance Corner for further updates on this topic.

ICHRA Proposed Rules »

Source: NFP BenefitsPartners

Filed under: Abentras Blog

IRS Releases Publication 5164, Test Package for 2019 Electronic ACA Filers

The IRS recently released an updated version of Publication 5164, entitled “Test Package for Electronic Filers of Affordable Care Act (ACA) Information Returns (AIR),” for tax year 2019 (processing year 2020). The publication describes the testing procedures that must be completed by those filing electronic ACA returns with the IRS, specifically Forms 1094-B, 1095-B, 1094-C, and 1095-C. As a reminder, those who are filing 250 or more forms are required to file electronically with the IRS.

Importantly, the testing procedures apply to the entity that will be transmitting the electronic files to the IRS. Thus, only employers who are filing electronically with the IRS on their own would need to complete the testing. If an employer has contracted with a software vendor who’s filing on behalf of the employer, then the testing and this publication would not apply to the employer, but would apply to the software vendor instead.

Similar to prior years, the IRS provides two options (see pages 12-13) for submitting test scenarios for reporting year 2019: predefined scenarios and criteria-based scenarios. Predefined scenarios provide specific test data within the submission narrative for each form line that needs to be completed. Criteria-based scenarios give more flexibility to test and create data that may be unique to their organization when completing the necessary test scenarios. Correction scenarios are also provided (see page 17), but those are not required in order to pass testing.

As a reminder, electronic filing of 2019 returns will be due March 31, 2020. Most large employers that are required to file the forms work with third-party vendors in performing electronic filing, so the testing outlined in Publication 5164 wouldn’t apply to the employer. But if the employer is filing on their own, they’ll want to review the updated testing requirements in Publication 5164. Large employers that are required to file electronically, and would like information on third-party vendors who can assist, can contact their advisor for more information.

IRS Publication 5164 »
AIR Program »

Source: NFP BenefitsPartners

Filed under: Abentras Blog

Agencies Issue Final MHPAEA FAQ, Disclosure Form, and 2018 Enforcement Report

On September 5, 2019, the DOL, IRS, and HHS (the Departments) released a number of documents concerning mental health parity compliance, including a finalized FAQ. As background, the Mental Health Parity and Addiction Equity Act (MHPAEA) requires that the financial requirements and treatment limitations imposed on mental health and substance use disorder (MH/SUD) benefits be no more restrictive than the predominant financial requirements and treatment limitations that apply to substantially all medical and surgical benefits. MHPAEA also imposes several disclosure requirements on group health plans and health insurance issuers.

In addition to finalizing FAQs About Mental Health and Substance Use Disorder Parity Implementation and the 21st Century Cures Act Part 39, the Departments also released a claims form that individuals can use to request documentation about their plan’s mental health treatment limitations, and three documents highlighting the DOL’s 2018 enforcement of MHPAEA. See below for a recap on each of those resources.

FAQs About Mental Health and Substance Use Disorder Parity Implementation and the 21st Century Cures Act Part 39
This document provides additional guidance to employers and individuals about the application of the law. The finalized rules make slight changes to the proposed version by providing certain clarifications and adding additional examples. Here is an overview of the 11 questions addressed in this document:

* Questions 1-8 address different nonquantitative treatment limitation issues, including experimental or investigative treatment limitations, prescription drug dosage limitations, step therapy and fail first policies, reimbursement rates for physicians and non-physicians, network adequacy, and medical appropriateness. One question also clarifies that plans can choose to exclude coverage for certain specific mental health conditions, as long as other federal or state laws don’t prohibit the exclusion.

* Questions 9-11 discuss MHPAEA’s disclosure requirements. Specifically, the Departments discuss the model form that individuals can use to request plan information about their MH/SUD benefits. They also remind employers that they can provide a hyperlink or URL address where participants can access their provider directory, but that directory must be up-to-date and accurate so that participants can access correct information pertaining to MH/SUD providers.

FAQs Part 39 »

Source: NFP BenefitsPartners

Filed under: Abentras Blog

DOL Opinion Letter: Employer HSA Contributions Are Not Earnings for Wage Garnishment Purposes

On September 10, 2019, the DOL’s Wage and Hour Division (WHD) issued opinion letter CCPA2019-1 to address whether employer contributions to HSAs are considered earnings for wage garnishment purposes under the Consumer Credit Protection Act (CCPA). The letter was in response to an inquiry submitted by a firm providing human resources and payroll services to employers.

An HSA is a type of trust established to pay the qualified medical expenses of the account holder. Specifically, HSAs allow employees enrolled in HDHPs to set aside funds pre-tax to pay for future medical expenses. Employers can also contribute to employees’ HSAs and are allowed a tax deduction for these amounts. Contributed amounts are generally considered non-forfeitable.

The CCPA limits the amount of an employee’s earnings (after required withholding) that may be garnished to satisfy a debt. Earnings for this purpose are defined as “compensation paid or payable for personal services” and include wages, salary, commission, bonuses, and certain periodic retirement payments. The concern raised here is whether some employers were erroneously classifying their HSA contributions as earnings, and thus incorrectly inflating the amounts subject to wage garnishment.

Upon review of the facts provided, WHD determined that employer contributions to HSAs are not earnings under the CCPA. In reaching this opinion, the agency focused upon several factors. First, contributions already received by an HSA were viewed as similar to earnings deposited in an employee’s bank account, which are not subject to CCPA garnishment limitations. Second, WHD did not view the employer contributions as amounts paid for employees’ services because the amounts were not calculated or varied by the value of each individual’s service. Rather, the typical employer contribution was a fixed annual amount or based upon a match formula. The agency also recognized that unlike other types of earnings, HSA employer contributions did not require protection for garnishment purposes because the employee could not access the amounts other than for qualified medical expenses without being subject to income taxes and penalties.

As a result, the WHD concluded that employers should not include HSA contributions when determining an employee’s earnings subject to wage garnishment. However, this opinion may not be applicable if the employer bases the individual contribution amounts on the value of each employee’s services or offers an option for employees to receive the contributions in cash.

The letter provides a reasoned opinion regarding the classification of employer HSA contributions under the CCPA. As with any opinion letter, the response is an application of the law to the specific circumstances presented by the requester. However, the content can be insightful in terms of how the agency may view other employers’ HSA contributions under similar circumstances. Employers who contribute to their employees’ HSAs may want to consult counsel and review their payroll practices following this opinion.

CCPA2019-l »

Source: NFP BenefitsPartners

Filed under: Abentras Blog

Agencies Issue Final MHPAEA FAQ, Disclosure Form, and 2018 Enforcement Report

On September 5, 2019, the DOL, IRS, and HHS (the Departments) released a number of documents concerning mental health parity compliance, including a finalized FAQ. As background, the Mental Health Parity and Addiction Equity Act (MHPAEA) requires that the financial requirements and treatment limitations imposed on mental health and substance use disorder (MH/SUD) benefits be no more restrictive than the predominant financial requirements and treatment limitations that apply to substantially all medical and surgical benefits. MHPAEA also imposes several disclosure requirements on group health plans and health insurance issuers.

In addition to finalizing FAQs About Mental Health and Substance Use Disorder Parity Implementation and the 21st Century Cures Act Part 39, the Departments also released a claims form that individuals can use to request documentation about their plan’s mental health treatment limitations, and three documents highlighting the DOL’s 2018 enforcement of MHPAEA. See below for a recap on each of those resources.

FAQs About Mental Health and Substance Use Disorder Parity Implementation and the 21st Century Cures Act Part 39

This document provides additional guidance to employers and individuals about the application of the law. The finalized rules make slight changes to the proposed version by providing certain clarifications and adding additional examples. Here is an overview of the 11 questions addressed in this document:

Questions 1-8 address different nonquantitative treatment limitation issues, including experimental or investigative treatment limitations, prescription drug dosage limitations, step therapy and fail first policies, reimbursement rates for physicians and non-physicians, network adequacy, and medical appropriateness. One question also clarifies that plans can choose to exclude coverage for certain specific mental health conditions, as long as other federal or state laws don’t prohibit the exclusion.

Questions 9-11 discuss MHPAEA’s disclosure requirements. Specifically, the Departments discuss the model form that individuals can use to request plan information about their MH/SUD benefits. They also remind employers that they can provide a hyperlink or URL address where participants can access their provider directory, but that directory must be up-to-date and accurate so that participants can access correct information pertaining to MH/SUD providers.

FAQs Part 39 »

Model Mental Health and Substance Use Disorder Parity Disclosure Request Form

The Departments provided this form as an example of a MHPAEA disclosure request form. Participants can use this form to request information from their employer-sponsored health plan or insurer regarding MH/SUD limitations or denials in benefits.

Disclosure request form »

2018 MHPAEA Enforcement Fact Sheet

This fact sheet highlights the MHPAEA enforcement results pursued by the DOL. It specifically breaks down the number of cases concerning MHPAEA violations and discusses some of the results achieved through the DOL’s voluntary compliance program. This year, they included an introduction to the fact sheet and a compendium of guidance pertaining to the violations they found.

Notably, the DOL closed 115 cases involving a review of MHPAEA compliance, and 21 MHPAEA violations were cited in those cases. Additionally, the DOL’s benefits advisors addressed 127 public inquiries related to mental health parity.

2018 Fact Sheet »
2018 Fact Sheet Introduction »
Appendix: MHPAEA Violation Guidance Compendium »

Source: NFP BenefitsPartners

Filed under: Abentras Blog

Plans May Exclude Drug Coupons from Annual Cost Sharing Limits

On August 26, 2019, the DOL, HHS, and Treasury (the “agencies”) jointly issued an FAQ to address group health plan concerns regarding the application of drug coupons towards annual cost-sharing limits under the ACA. The FAQ recognized potential conflicts in prior agency guidance and provided temporary enforcement relief to plans and issuers pending further clarifying regulations.

Under the ACA, cost sharing by enrollees in non-grandfathered group health plans cannot exceed specified annual limits. The agencies have reached different conclusions as to whether coupons issued by drug manufacturers to offset the cost of patient prescriptions can be applied towards the applicable annual limits.

The HHS final Notice of Benefit and Payment Parameters for 2020 (2020 NBPP Final Rule) states that plans can exclude the value of manufacturer’s drug coupons from satisfaction of the cost sharing limits, provided that a generic equivalent is available for the prescribed drug. This rule was intended to encourage the use of generic drugs and promote cost savings. However, plans were left unclear as to whether drug coupons should be counted towards the annual limits if the prescribed drug did not have a generic equivalent.

The 2020 NBPP Final Rule also appeared to conflict with previous IRS guidance regarding the application of drug coupons by HDHPs designed for compatibility with HSAs. HDHPs must meet specific federal requirements with respect to annual deductibles and out of pocket expenses. With the exception of preventive care, HDHPs generally cannot provide coverage below the annual deductible amount. In Notice 2004-50, the IRS specified that an HDHP must disregard drug discounts and only apply the amount actually paid by the employee in determining if the annual deductible has been satisfied. So, although the 2020 NBPP Final Rule could be interpreted to allow the coupon amount to be applied towards the deductible when a generic equivalent is not available, the IRS notice requires the exclusion of the amount in order for an individual to maintain HSA eligibility.

The agencies plan to address these inconsistencies in upcoming regulations in 2021. In the interim, the agencies will not take any enforcement actions against plans or insurers for excluding the drug coupon amounts from the cost sharing limits.

For group health plan sponsors, the FAQ is an acknowledgement of the ambiguous and potentially conflicting agency guidance previously provided. Until the 2021 regulations are released, group health plans can continue to exclude drug coupon amounts from the annual cost-sharing limits, regardless of whether a generic equivalent is available. Once the new guidance is issued, employers and issuers will need to review their plan designs and policies with respect to drug coupons and make any necessary updates.

FAQs About Affordable Care Act Implementation Part 40 »

Source: NFP BenefitsPartners

Filed under: Abentras Blog

Fourth Circuit Reinstates Widow’s Fiduciary Breach Claims

On July 24, 2019, in Dawson-Murdock v. National Counseling Group, the US Court of Appeals for the Fourth Circuit set aside a district court’s dismissal of a spouse’s fiduciary breach claims against her deceased husband’s employer. The case was remanded back to the lower court for further proceedings.

As background, there are generally two types of fiduciaries under ERISA. The first are those fiduciaries specified in the plan document, such as the “Plan Administrator” and “named fiduciary.” These individuals or entities are fiduciaries by definition. The second type are functional fiduciaries, i.e., those not necessarily named in the plan documents, but who assume fiduciary roles by their actions. Such actions (or omissions) typically involve the exercise of discretionary authority (e.g., interpreting ambiguous plan terms or making final determinations regarding benefits eligibility), as opposed to performing purely ministerial duties. The two fiduciary types are not mutually exclusive, and either can be subject to fiduciary breach claims.

In this case, a widow asserted that her husband’s employer breached fiduciary duties in relation to its group life insurance plan. The insurance company had denied the spouse’s claim for benefits on the basis of ineligibility due to her husband’s transition to part-time employment status. However, the employer, which was responsible for eligibility determinations, had never informed the employee of the effect of his reduction in hours or the options to maintain coverage, and continued to collect premium payments from the employee. Furthermore, the employer’s VP of Human Resources instructed the widow not to file an appeal of the claim denial because the company would pay the claim and work the issue out with the insurer. Notwithstanding, the VP eventually informed the spouse that the employer would not pay the claim. By the time she received such notice, the ninety-day timeframe for filing an appeal had passed. The spouse then sued the employer for breach of fiduciary duties.

The trial court held that the employer had not acted in a fiduciary capacity with respect to its actions regarding the group life insurance coverage and claim. The fiduciary breach claims were dismissed, despite the employer being specified in the plan documents as both the “Plan Administrator” and “named fiduciary.”

The Fourth Circuit clearly disagreed, reinforcing the ERISA principle that the individual(s) or entity identified as “Plan Administrator” and “named fiduciary” in the plan document are “automatic” fiduciaries. In other words, these parties cannot disclaim fiduciary status on the basis of a lack of discretionary actions. Furthermore, the court held that the employer’s actions and omissions were sufficient to support a functional fiduciary claim. Specifically, the VP had acted as a fiduciary in failing to notify the employee of his ineligibility and provide other options for coverage continuation. The VP had also assumed a discretionary role when advising the spouse not to appeal the claim denial. In finding a sufficient basis for the breach of fiduciary claims, the Fourth Circuit rejected the dismissal and sent the case back to the trial level for further proceedings.

This case serves as a reminder that the parties named in the plan document as “Plan Administrator” and “named fiduciary” are automatic ERISA fiduciaries against whom breach claims can be asserted. Accordingly, these individuals or entities should be selected with careful consideration and educated regarding their fiduciary duties and possible liabilities. Additionally, those parties not designated in the document, but who may perform discretionary plan responsibilities, should be aware of their potential functional fiduciary status.

Dawson-Murdock v. National Counseling Group »

Source: NFP BenefitsPartners

Filed under: Abentras Blog

IRS Affirms Employer Mandate Enforcement Efforts

On June 28, 2019, the IRS sent a letter (number 2019-0008) to Senator Susan Collins, reaffirming that they will continue enforcing the employer mandate. Senator Collins, on behalf of several of her constituents, had written to the IRS asking whether the IRS might waive or reduce employer mandate penalties based on hardship or other factors. Senator Collins had also asked whether the IRS might be willing to extend transition relief for employers with fewer than 100 employees.

In the letter, the IRS, via Associate Chief Counsel Victoria Judson, responded by saying that the employer mandate does not provide for a waiver of penalties. The IRS also stated in the letter that no transition relief is available for 2017 and future years.

The letter also addresses a January 20, 2017 White House executive order directing federal agencies to exercise authority and discretion permitted to them to waive, defer, grant exemptions from, or delay regulatory burden imposed by the ACA. The IRS states that the legislative provisions of the ACA are still in force until Congress changes them, and therefore taxpayers (employers, when it comes to the ACA’s employer mandate) must follow the law and pay what they may owe.

The letter contains no new employer obligations, but does serve as a reminder that the IRS continues to enforce the ACA’s employer mandate. Recently, employers have been receiving letters from the IRS for failure to comply with the employer mandate and for late-filing the related forms (Forms 1094/95-C). Employers should continue to diligently comply with the employer mandate and reporting.

IRS Letter 2019-0008 https://www.irs.gov/pub/irs-wd/19-0008.pdf »

Source: NFP BenefitsPartners

Filed under: Abentras Blog

IRS Expands List of Preventive Care Services Under HSA Rules

On July 17, 2019, the IRS published Notice 2019-45, which expands the preventive care benefits that can be provided by a HDHP without affecting the HDHP participants’ HSA eligibility. As background, to be eligible to establish and contribute to an HSA, an individual must have qualifying HDHP coverage and no impermissible coverage. A qualified HDHP is one that does not provide benefits for any year until the minimum deductible for that year is satisfied. However, there is a safe harbor for the absence of a deductible for preventive care — so an HDHP can provide preventive care without causing an individual to lose HSA eligibility.

Previously, preventive care generally was not defined as including services or benefits aimed at treating existing illnesses, injuries, or conditions. However, a June 2019 executive order called for the IRS to amend those rules and allow for a change to that definition to include such existing illnesses, injuries, and conditions. One reason for this expansion is that failure to address these types of chronic conditions has been demonstrated to lead to consequences, such as amputation, blindness, heart attacks, and strokes, that require considerably more extensive medical intervention.

As a result of the executive order, the IRS published the new notice, which states that certain services and items that are used for chronic conditions are considered preventive care for purposes of HSA eligibility, when they are prescribed to prevent exacerbation of the diagnosed condition or the development of a secondary condition. The notice includes an appendix that lists 14 medical services or items for individuals with 11 specific chronic conditions (asthma, congestive heart failure, diabetes, coronary artery disease, osteoporosis and/or osteopenia, liver disease, depression, hypertension, bleeding disorders, and heart disease).

For example, insulin and other glucose lowering agents, retinopathy screening, glucometer and Hemoglobin A1c testing are now considered preventive care for individuals diagnosed with diabetes. Similarly, inhaled corticosteroids and peak flow meters are considered preventive care for individuals diagnosed with asthma.

The notice is clear that the listed services/items are considered preventive care only to the extent that they are used to treat the chronic conditions specified; if they are used to treat other conditions, then they are not considered preventive care. Also, the notice does not impact or change the definition of preventive care for purposes of the ACA’s preventive care mandate (the requirement to cover preventive care without cost-sharing).

The notice is effective immediately. The notice does not require HDHPs to cover all the conditions and treatments listed; but if they do, those services will be considered preventive care (and therefore wouldn’t adversely impact HSA eligibility). Employers will want to review any HDHP/HSA offerings to determine if changes are necessary.

Employers can wait until the next plan year to implement any changes (since it would require an amendment to the plan documents and employee communications). Employers should consider whether they want to cover all the conditions and treatments listed in the guidance, and whether they want to cover them at 100% (or add in cost-sharing, such as copayments or coinsurance). With those considerations in mind, employers should work with their advisor in determining next steps.

Notice 2019-45 »

News Release »

Source: NFP BenefitsPartners

Filed under: Abentras Blog

DOL Offers Temporary Relief to Multiple Employer Plans with Annual Reporting Failures

On July 24, 2019, the DOL issued Field Assistance Bulletin No. 2019-01, which provides temporary penalty relief from certain Form 5500 filing requirements for multiple employer plans (MEPs) subject to Title 1 of ERISA. Generally, MEPs file one Form 5500 that aggregates the data of the underlying participating employers.

However, in 2014, Congress added Section 103(g) to ERISA, which requires MEPS to include a list of names and EINs of participating employers and a good faith estimate of the percentage of total contributions made by each employer for the plan year. Unfunded or insured welfare plans must also specify the participating employers, but do not need to include the contribution information.

The DOL initiated enforcement action in 2019, upon recognition that a significant number of MEP filings in recent years had failed to fully comply with the ERISA Section 103(g) requirements. Following a dialogue with MEP plan sponsors, some of whom objected to the release of the employer-specific data, the DOL reiterated its position that such data is public information and must be open for public inspection.

Before proceeding with further civil penalty enforcement actions, the DOL is offering transition relief to MEPs who voluntarily comply with ERISA Section 103(g) by providing complete and accurate employer information for the 2017 plan year or any prior plan year. Specifically, the DOL will not reject such filings or assess civil penalties solely for the failure to include the ERISA Section 103(g) employer details, provided the plan’s 2018 Form 5500 complies with the requirements.

Additionally, for 2018 calendar year plans, which have a July 31, 2019 Form 5500 filing deadline, the DOL granted a special two and a half month extension to comply with ERISA Section 103(g). The special extension requires only the selection of a designated box on the Form 5500; however, the filer can also complete the standard Form 5558 to request an extension. The relief is also available to MEPs that already filed the 2018 Form 5500, provided the filing is amended by October 15, 2019.

Affected MEP sponsors should review previous Form 5500 filings (beginning with the 2014 plan year) to determine if the ERISA Section 103(g) required information was provided. Sponsors who failed to specify the necessary employer details on past filings can voluntarily provide such information and take advantage of the available penalty relief.

For the 2018 plan year, MEPs on extension (either through the special extension option or the Form 5558) should ensure the required employer data is attached. If the 2018 Form 5500 was already filed without the complete ERISA Section 103(g) data, relief under this guidance is still available to sponsors who amend the form to include the missing employer specifics prior to October 15, 2019.

FAB No. 2019-01 »

Source: NFP BenefitsPartners

Filed under: Abentras Blog