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July 5, 2007
Retiree Health Coordination on the Move Again?
For the last several years, there has been an unresolved issue relating to retiree health coverage and the Age Discrimination in Employment Act (ADEA). A few years ago, a Third Circuit Court decided that it would be a violation of the ADEA for an employer to coordinate retiree health benefits with Medicare. In other words, employers would be prohibited from providing greater benefits for pre-Medicare eligible retirees, than for post-Medicare eligible retirees.
Note to Employers Seeking Medicare Retiree Drug Subsidy: Reconciliation
For employers who offered retiree drug benefits in 2006, and who have made application to receive the subsidy, reconciliation of the 2006 plan year is due 15 months following the close of the plan year. For a calendar year plan, the first reconciliation will be due by March 15, 2008. For plans whose reconciliation would be due prior to that date, an automatic extension is given until November 30, 2007.
June 5, 2007
2008 HSA Cost-of-Living Adjustments
In Rev Proc 2007-36, the IRS released 2008 cost of living adjustments for health savings accounts. Following are annual deductible amounts for a high deductible health plan (HDHP) used in conjunction with a health savings account (HSA), and limits for out-of-pocket expenses and contributions for both 2007 and 2008.
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.
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.
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.
May 3, 2007
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.
Rash of Regulations Issued
Last month, three sets of regulations relating to retirement and deferred compensation were issued.
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
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.