Welfare Benefit Plan ERISA News
November 2014

 
Travelers Offers ACA Compliance Coverage
Travelers has announced new endorsements as a way to help protect against risks related to the Patient Protection and Affordable Care Act (PPACA). Specifically, the Healthcare Exchange endorsement provides coverage to policyholders for the advice they offer their employees about insurance plans sold on a healthcare exchange. The PPACA Civil Money Penalties endorsement offers protection to businesses against certain PPACA penalties that may be imposed on employers who do not meet specific compliance and reporting obligations. Press Release
When is the COBRA Qualifying Event Under FMLA?
The IRS has special rules for the interaction of COBRA and FMLA. The beginning of an FMLA leave is not a COBRA qualifying event. However, a qualifying event generally occurs if (1) a qualified beneficiary (employee, spouse or child) is covered on the day before the first day of the FMLA leave (or becomes covered during the leave); (2) the employee does not return to work at the end of the FMLA leave; and (3) the COBRA qualified beneficiary would, in the absence of COBRA, lose coverage under the plan before the end of the maximum coverage period. If an employee drops his or her group coverage during the leave, the qualifying event (and the beginning of the COBRA maximum coverage period) is generally not considered to have occurred until the end of the FMLA leave. For details see 26 CFR 54.4980B-10 - Interaction of FMLA and COBRA.
Only One Health Plan ID Required for Wrap Plans
Plan sponsors often design their group health plans so that multiple types of benefits are included in one umbrella plan document, often referred to as a "wrap" plan. Plan sponsors that are subject to ERISA generally consider these wrap plans to be a single plan for reporting (and other) purposes under ERISA. A plan sponsor may choose to obtain just one HPID for each ERISA plan. CMS Faqs.
A Narrow Exception to the ACA
Transitional Reinsurance Fee
All health plans must pay a transitional fee "...in order to help insurers pay for the high-cost individuals that they must cover because of health care reform's guaranteed-issue and no-rescission rules. All health insurers and third-party administrators on behalf of self-insured group health plans must pay into the fund."
"An exception exists to the onerous $63 per-member-per-year fee: Self-insured plans that virtually completely self-administer claims payments and plan operations are exempt from paying it." However, "...self-insured plans will lose the exemption if the plan uses a TPA for even one of four core claim-paying and adjudication functions. These include: (1) repricing claims; (2) sending out explanations of benefits; (3) cutting checks for providers; and (4) negotiating provider discounts." Read the full article by Todd Leeuwenburgh.
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© 2017 ERISAPros, LLC, All rights reserved. Information on ERISAPros' website, its newsletter, “News & Views,” and its blog, “ERISA Wonk,” is published as a general informational source. Information and articles are general in nature and are not intended to constitute legal or tax advice in any particular matter. Blog posts and comments reflect the personal views of their respective authors - not those of ERISAPros. Transmission of this information does not create an attorney-client relationship. ERISAPros, LLC is not a law firm and is not giving legal or tax advice. It does not warrant and is not responsible for errors or omissions in the content on its website or in its newsletters. ERISA is a complicated and confusing law. Summary Plan Descriptions (SPDs), Wrap Plan Documents, and Form 5500s require review and updating by qualified ERISA compliance professionals.

 

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