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October 8, 2009
HSA Comparability Rules Clarified
Final regulations were issued relating to employer comparable contributions to health savings accounts (HSAs). These rules basically follow the proposed regulations issued in 2008.
September 10, 2009
Breach Notification Rules Issued
On August 24th and 25th, 2009, respectively, the Department of Health and Human Services (HHS) and the Federal Trade Commission (FTC) (“Agencies”) issued interim and final regulations relating to breach notification of personal health information. These regulations become effective on September 23rd and 24th, 2009; however, both Agencies have indicated that they will honor a “non-enforcement policy” for six months from the date of issuance. In effect, this non-enforcement policy will be in place until February 24th and 25th, 2010; thereafter, affected entities must be fully in compliance. While these two sets of rules are similar, they are not identical.
DOL COBRA Subsidy Reminders
The IRS has provided new guidance on its website relating to the COBRA subsidy, and particularly the obligation of a COBRA-subsidy eligible individual to notify the plan if he/she becomes ineligible for the subsidy. An individual becomes ineligible for the COBRA subsidy when, among other things, he/she becomes eligible for other group health plan coverage or Medicare. Notably, this guidance states that anyone who suspects that an individual may be receiving the COBRA subsidy but is eligible for other group health coverage or Medicare, to report this information to the IRS on the Form 3949-A, Information Referral.
Massachusetts Proposes Changes to Fair Share Contribution Requirements
A few weeks ago, the Massachusetts Division of Health Care Finance and Policy (DHCFP) issued proposed regulations relating to the Employer Fair Share Contribution (FSC) rules. The proposed rules make several technical changes to the rules that became effective January 1, 2009 (see Massachusetts Fair Share Requirement Relaxed and Massachusetts Fair Share Filing – Streamlined). In summary, the FSC rules impose an annual financial fee assessment ($295 per employee) upon employers who do not provide, or contribute toward, health coverage for their employees.
August 7, 2009
Red Flags Rules: Delayed in Part, Explained in Part
In 2007, Congress enacted the Fair and Accurate Credit Transactions Act of 2003 (FACTA), a part of which is a component known as the Federal “Red Flags Rule”. These Rules apply to financial institutions and creditors, and requires such entities to establish a written identity theft prevention program. This law is intended to reduce identity theft, and the damage caused thereby, by having affected institutions keep a close eye on such matters. The identity theft program is intended to detect the warning signs of identity theft, and thereby, to prevent or reduce identity theft.
403(b) Filing Relief
On July 20, 2009, the Department of Labor issuedField Assistance Bulletin (FAB) 2009-02, providing some welcome relief to 403(b) plans. Many 403(b) plans are now subject to the Form 5500 annual filing requirement. One of the outstanding questions has been, How will the plan sponsor gather information relating to contracts over which the employer has no authority or discretion?
CMS Clarifies Medicare Mandatory Reporting Requirement for HRAs
CMS has clarified, by way of theirUser Guide, that they consider health reimbursement arrangements (HRAs) to be a group health plan, for purposes of the Medicare Secondary Payor rules; and thus, subject to the Medicare Mandatory Reporting Requirement. Responsible reporting entities (“RREs”) of HRAs do not need to register with CMS at this time. HRA data will not be collected for reporting until after October 1, 2010. HRA-only RREs must register with CMS by May 1, 2010 to allow enough time for testing to be completed before production files are due.
July 8, 2009
Qualified Plan Compliance Tools Available
If an effort to assist qualified plan sponsors in their compliance efforts, the IRS’s Employee Plan Team Audit (EPTA) division has several new tools on its website:
ARRA’s COBRA Subsidy: Further Guidance
On June 3, 2009, the IRS issued additional Q&As relating to the COBRA subsidy. Following are hi-lights of these Q&As:
401(k) Safe Harbor Plans: Limited Relief
Generally, 401(k) safe harbor plans that include a nonelective contribution provision cannot reduce or suspend the nonelective contributions mid-plan year. In May, 2009, the IRS issued proposed regulations to allow nonelective contributions to be reduced or suspended mid-year, if certain conditions are met. These regulations are in response the economic times in which we find ourselves.