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  • Employee Benefits
  • November9th

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  • October24th

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    The IRS recently announced the 2012 cost of living adjustments applicable to dollar limitations for qualified plans (and other retirement plans) for 2012. Of particular interest, the IRS increased the amount that 401(k) plan participants can defer a portion of their salary from $16,500 to $17,000. For such participants aged 50 and over, these participant are allowed to make an additional catch-up contribution to the 401(k) plan of $5,500 (for a total elective deferral of $22,500).

    Internal Revenue Code (IRC) Section 415 provides for dollar limitations on benefits and contributions under qualified retirement plans. In addition, Section 415 requires the IRS to adjust these limits for cost-of-living increases. Other limitations applicable to qualified plans are also affected by these adjustments. The following is a chart to use for your convenience:

    Code Section 2012 2011 2010
    401(a)(17)/404(l) Annual Compensation $250,000 $245,000 $245,000
    402(g)(1) Elective Deferrals $17,000 $16,500 $16,500
    414(q)(1)(B) Highly Compensated Employee $115,000 $110,000 $110,000
    414(v)(2)(B)(i) Catch Up Contributions (non IRA) $5,500 $5,500 $5,000
    414(v)(2)(B)(ii) Catch Up Contributions (IRA) $2,500 $2,500 $2,500
    415(b)(1)(A) Defined Benefit Limitation $200,000 $195,000 $195,000
    415(c)(1)(A) Defined Contribution Limitations $50,000 $49,000 $49,000
    416(i)(1)(A)(i) Key Employee $165,000 $160,000 $160,000
    457(e) Deferral Limits $17,000 $16,500 $16,500
  • October13th

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    The Deadline for providing the Medicare Part D Notices is fast approaching.

    Medicare Part D prescription drug coverage is critically important for more and more Americans every year. According to the Centers for Medicare and Medicaid Services (CMS), millions upon millions of Americans are eligible for Medicare Part D prescription drug coverage. With an aging U.S. population and Medicare reform as an issue in the health care reform spotlight, Medicare Part D compliance is an issue that no employer with a group health plan can ignore. Millions of Medicare-eligible Americans receive their drug coverage through an employer-sponsored group health plan. Medicare Part D imposes two annual notice requirements on all employers that offer group health plan coverage with a prescription drug benefit:

    * Employers are required to send participants either a Notice of Creditable Coverage or a Notice of Non-Creditable Coverage, whichever is applicable, by October 15 of each year and at other times.

    * Employers must also notify CMS about their plan’s creditable coverage status no later than the 60th day after the start of each plan year.

  • July13th

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    In a notice on its website, the U.S. DOL announced the extension of the applicability date of the fiduciary-level fee disclosure regulation issued under ERISA section 408(b)(2) until April 1, 2012. The Department had previously proposed to extend the applicability date only under January 1, 2012.

    In addition, the DOL also announced an amendment to the applicability date of the participant-level fee disclosure regulation. Initial participant-level disclosures must now be made no later than 60 days after the first day of the plan year beginning after 11/1/11, or if later, 60 days after the effective date of the fiduciary-level fee disclosure regulation. Previously, the DOL had proposed a 120-day transition period to provide these disclosures.

    This was reprinted from ASPPA.

  • September20th

    1 Comment

    Health care reform compliance deadlines are closing in on us.  Grandfathered and non-grandfathered plans must be compliant by the first plan year beginning on or after September 23, 2010.  The following are some  required notices that will have to be provided to plan participants.

    • Grandfathered Plan Status Notice. If maintaining grandfathered status, then participants are entitled to a notice of intent to maintain that status.
    • Special Enrollment Notices for Lifetime Limits. Individuals who have reached their lifetime limits under a plan are entitled to a special notice enrollment telling them that they are available for coverage. Since the lifetime limit is going away, these individuals will be able to have claims paid even though they may not be coming back on the plan.
    • Patient Protection Notice for Physician Choice.  This notice lets participants know that they are able to choose primary care physicians and that they can obtain OB/GYN care without previous approval.
    • Notice of Age 26 Coverage Extension.  Since coverage has expanded to individuals up to the age of 26, participants must be notified of this option along with being provided with enrollment instructions and rights.
    • Appeal Rights.  Since there is a possibility of adding outside appeals to non-grandfathered plans, participants must be informed about the new appeals rights. Also, participants should be reminded of the existing appeal rights under the plan.

    Even though the carrier might send these notices out to plan participants, it is solely the accountability of the company to make certain that notices are being sent out correctly.  You should contact your carrier and/or broker to make sure that your company is up to date with these new notice requirements.  In addition, given that these provisions are all are incorporated into ERISA, it is likely permissible that the normal ERISA notice rules apply (vis-a-vis form of notice), including any method the Department of Labor has previously approved for electronic delivery.

  • September20th

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    On July 19, 2010, the U.S. Government issued interim final regulations that require all non-grandfathered health plans to cover preventative services without any cost-sharing for the plan participant when delivered by in-network providers.  The plan does not apply to grandfathered plans.  Cost-sharing refers to any co-pays, deductibles or coinsurance paid by the plan participant when receiving medical services.

    Although the proposed regulations do not specify the exact services that are to be covered at 100%, the regulations do provide for certain classifications that must be covered at 100%.  These include:

    • Evidence-based services that have an A or B rating in the current United States Preventative Services Task Force recommendations;
    • Routine immunizations for children, adolescents and adults as set forth by the Centers for Disease Control and Prevention, as applicable;
    • Screenings and preventive care for infants, children and adolescents; and
    • Screenings and preventive care for women.

    Although subject to change when the final regulations are issued, plan sponsors should know which services they will need to provide without cost sharing.  The rules are effective for all non-grandfathered plans for the first plan year beginning on or after September 23, 2010.  The United States Preventative Services Task Force website has more information on services with A and B ratings, immunizations, and screenings (http://www.healthcare.gov/center/regulations/prevention/recommendations.html).

    Based on most current health plan specifications, changing medical plan coverage to cover these services without cost sharing will not significantly increase the cost of providing health insurance.  For this reason, it is not a particularly compelling reason to maintain grandfathered status for your health plan unless there are other reasons to do so.  You should contact your insurance provider or broker to find out more information.

  • August24th

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    Employers must revise their cafeteria plans for changes taking effect during and after 2011.  Effective for expenses incurred on or after Jan. 1, 2011, health flexible spending accounts (FSAs), health reimbursement arrangements (HRAs) and health savings accounts (HSAs) in cafeteria plans may no longer reimburse for over-the-counter (OTC) drugs unless they are prescribed.   Plan sponsors may also want to take the opportunity to amend cafeteria plans at the same time to adopt the new $2,500 limit on health FSAs, which takes effect Jan. 1, 2013 (but are not required to do so).  Therefore, any cafeteria plan that has been reimbursing OTC drugs will have to be amended by Dec. 31, prospectively, to eliminate reimbursement unless the OTC drug is prescribed for an individual.

  • August1st

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    The Supreme Court has agreed to hear the case, CIGNA Corp. v Amara, to resolve a dispute among the circuits as to whether a participant must show reliance on a deficient summary plan description or merely “likely harm” when the summary plan description is inconsistent with the plan’s terms. Obviously, a decision by the Supremes for the latter standard will make it more likely that a participant can sue a company over language in the plan’s SPD. We will give you notice of what the Court decides when the decision is rendered.

  • July22nd

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    For non-grandfathered plans, one of the requirements under the Health Care Reform Act of 2010 is to implement new claims procedures with respect to its health and welfare plans. The Employee Benefit Security Administration of the U.S. Department of Labor released intermittent final regulations today about how the new claims procedures will work. Here are a few quick tidbits:

    * Consumers in new health plans in every State are given the right to appeal decisions, including claims denials and rescissions, made by their health plans, which include internal appeals through the group health plan as well as external appeals (outside the plan).

    * A $30 million grant program to establish and strengthen consumer assistance offices in States and Territories.

  • July19th

    No Comments

    The Supreme Court has agreed to review the decision in Amara v. CIGNA Corp, in which the Second Circuit affirmed the district court’s opinion that CIGNA’s cash balance plan conversion violated ERISA § 204(h)’s requirement that plan participants receive advance notice of plan amendments that provide for a significant reduction in the rate of plan participants’ future benefit accrual.