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June 5, 2007
Massachusetts Employers: A New Cafeteria Plan Requirement
As part of the Commonwealth of Massachusetts’ effort to provide universal health coverage to all residents, the State is requiring employers to offer its employees an IRC Section 125 (cafeteria) plan, effective July 1, 2007. This rule applies to all employers employing 11 or more full-time equivalent employees in the Commonwealth. It applies to employers whether they offer insured health plans, self-funded health plans, or no health insurance plan at all. Failure to comply with the cafeteria plan requirement may cause the employer to be subject to the Free Rider Surcharge.
HSA Guidance Again: Comparability Rules Re-Visited
On June 1, 2007, the IRS and Treasury issued proposed regulations on two very narrow aspects of the health savings account (HSA) comparability rules. These proposed regulations address the situation in which an individual has either not established, or has not advised the employer about the establishment of, an HSA prior to the end of the calendar year. The proposed regulations also address a situation of accelerating contributions to individuals who incur medical expenses. The regulations provide guidance about how to ensure compliance with the HSA comparability rules in these situations.
Electronic Form 5500 Filing Requirement Delayed
An EBSA official has stated that the required electronic filing of the Form 5500 has been delayed from January 1, 2008 to January 1, 2009. For calendar year plans, this means the first electronic filing will be due in 2010.
May 3, 2007
Rash of Regulations Issued
Last month, three sets of regulations relating to retirement and deferred compensation were issued.
Medicare Part D – 2008 Benefit Limits
The Centers for Medicare and Medicaid Services have released the 2008 cost of living adjustments for Medicare Part D prescription drug benefits. Following are select modified limits relating to the standard drug benefit and the retiree drug subsidy.
May 2, 2007
Employers Beware: Comply with Plan Terms
A recent court decision boldly underscores the importance of accurate plan administration, specifically as it relates to eligibility. In Carolina Care Plan, Inc. v. Auddie Brown Auto Sales of Florence, Inc., 2007 U.S.Dist. LEXIS 24962 (D.N.C. 2007)], the HMO sued the employer for over $650,000 worth of claims reimbursed to an individual who was no longer eligible for the plan.
April 2, 2007
The National Provider Identifier
One of the components of the HIPAA Administrative simplification law is the establishment of a national provider identification number (NPI). The intent of this law is to simplify health plan processes, by ensuring that health care providers who engage in electronic transactions will use one identifying number for all of the various health plans with which they engage. The NPI is similar to a Social Security Number that is used to identify the provider for all purposes.
New Medicare Part D Disclosure Notices
The Centers for Medicare and Medicaid Services (CMS) have issued new model notices of creditable and non-creditable coverage, as well as a personalized disclosure notice, to be used beginning on or after February 15, 2007. Although the substance of these notices is similar to prior versions, the language in the new notices should be used. In addition, all three forms are now available in both English and Spanish.
March 1, 2007
Investment Advice Guidance
The Department of Labor (DOL) has issued Field Assistance Bulletin (FAB) 2007-1 relating to the new investment advice provisions of the Pension Protection Act of 2006 (“PPA”). A FAB provides guidance to the DOL’s field offices about how to administer provisions of the law.
Qualified HSA Rollovers
The first piece of guidance relating to qualified distributions from a flexible medical spending account (FSA) or a health reimbursement arrangement (HRA) to a health savings account (HSA) has been issued, in the Form of IRS Notice 2007-22. The Tax Relief and Health Care Act of 2006 (TRHCA), signed into law in December, 2006, authorized a one-time rollover from an FSA or an HRA, to an HSA.