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Fall 2018 Compliance Update. Road Map. General ERISA Welfare Plan Compliance 2018 Open Enrollment Considerations Other Current/Future HR Issues: Overtime Rules Paid Leave Laws New Form I9 Fiduciary Rule Employee Classification Issues Future of Health Care Reform.
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Road Map • General ERISA Welfare Plan Compliance • 2018 Open Enrollment Considerations • Other Current/Future HR Issues: • Overtime Rules • Paid Leave Laws • New Form I9 • Fiduciary Rule • Employee Classification Issues • Future of Health Care Reform
Required Documents/ Disclosures • Plan document. • Summary Plan Description (SPD), including any changes in Plan benefits and entitlement to benefits, Plan Amendments, etc. • WRAP Plan? • Electronic Disclosure Safe Harbor Rules • Scope and Duties • Written Consent
Scare Tactics 2,300,000 Plans / 400 Investigators = 5,750 Plans per Investigator 5,750 Investigations X 2 Days per Investigation = 11,500 Days 11,500 Days / 365 Days per Year = 31.5 Years!
Required Documents/Disclosures • Summary of Benefits and Coverage (SBC), Notices of Material Modifications, and Uniform Glossary • 60 Day SMM Notice • New Form in effect after 4/1/17 • Written procedures that provide special enrollment rights to individuals who lose other coverage and to individuals who acquire a new dependent, if they request enrollment within 30 days of the loss of coverage, marriage, birth, adoption, or placement for adoption, including any lists or logs an administrator may keep of issued notices • If applicable, Section 125 Qualifying Event Rules • Written appeal procedures established by the Plan
Required Documents/Disclosures • MHPA/MHPAEADisclosures • The Plan’s Newborns’ Act notice (this should appear in the plan’s SPD), including lists or logs of notices an administrator may keep of issued notices • The Plan’s rules regarding pre-authorization for a hospital length of stay in connection with childbirth. • A sample of the written description of benefits mandated by WHCRA required to be provided to participants and beneficiaries upon enrollment. • If a Participant resides in a state with a Children's Health Insurance Program ("CHIP") offering premium assistance, provide the notice informing Participants of possible eligibility for premium assistance;
Required Documents/Disclosures • Materials describing any wellness programs or disease management programs offered by the plan. If the program offers a reward based on an individual’s ability to meet a standard related to a health factor, the plan should also include its wellness program disclosure statement regarding the availability of a reasonable alternative. • Big point of emphasis! • Regulations now under ACA, HIPAA, GINA, ADA (DoL and EEOC) • Two kinds of wellness programs: • Participatory wellness programs • Health-contingent wellness programs (outcomes-based) • Regulations have increased the maximum reward under a health-contingent wellness program from 20% to 30% of the cost of coverage and further increased the maximum reward to 50% for wellness programs designed to prevent or reduce tobacco use – but other EEOC limits may apply if genetic information is asked/obtained.
Required Documents/Disclosures • COBRA Policies/Procedures • Notices (Initial and Qualifying Event) – updated post-ACA • Method for premium determinations • Annual OE rights • One of the main sources for Participant complaints!
Required Documents/Disclosures • If the Plan is claiming or has claimed grandfathered health plan status within the meaning of section 1251 of the Affordable Care Act: • A copy of the grandfathered health plan status disclosure statement • Records documenting the terms of the Plan in effect on March 23, 2010 and any other documents necessary to verify, explain or clarify status as a grandfathered health plan. • If the Plan is NOT claiming grandfathered health plan status under section 1251 of the Affordable Care Act: • A copy of the choice of provider notice informing participants of the right to designate any participating primary care provider, physician specializing in pediatrics in the case of a child, or health care professional specializing in obstetric or gynecology in the case of women, and a list of participants who received the disclosure notice. • If the Plan provides any benefits with respect to emergency services in an emergency department of a hospital • Copies of documents relating to the provision of preventive services • Copy of the Plan’s Internal Claim and Appeals and External Review Processes. • Copies of a notice of adverse benefit determination, notice of final internal adverse determination notice, and notice of final external review decision. • If applicable, any contract or agreement with any independent review organization or third party administrator providing external review.
Required Documents/Disclosures • Forms 5500 • Summary Annual Reports • Fiduciary liability insurance policy and Fidelity (fraud and dishonesty) bond, if applicable
What Should You be Doing? • Proper Reporting and Disclosure • Proper Fiduciary Duty: • Fiduciary must • Act “solely in interest” of Participants/Beneficiaries • Discharge his / her / its duties prudently • Follow terms of governing documents (to the extent consistent with ERISA) • Fiduciary must not: • act in his / her / its own self interest • act on behalf of a party with adverse interests • accept “gratuity” from those doing business w/ the Plan (kickback) • cause the Plan to engage in a “prohibited transaction” • Watch out for Participant Contributions!
Self-Auditing • The best way to avoid a DoL Investigation is to stay off of their radar! • Do what you are supposed to be doing, and do it all the time! • Self‐audit in advance - most of the checklists the DoL use are available on the EBSA website. Build the correct foundation and it is easy to move up from there. • Don’t rely 100% on vendors to get it right – it’s still YOUR responsibility to make sure they do everything correctly and they you are choosing vendors correctly.
If Audited? • If you are chosen: • Gather all documents ahead of time • Know what to give, when to give it – but have everything ready to go • Be professional – most Investigators want to get in/out as quickly as possible • Be patient – Investigations aren’t closed overnight • Be prepared – they will probably find something
Self-Correcting Issues • Voluntary Fiduciary Correction Program (VFCP) • Allows Plan Officials to correct certain violations before DoLinvestigates and, if done properly, receive a “No‐Action” letter from the Department. • Designed to be a voluntary program • No need to consult with EBSA • Apply after correction • Neither plan nor applicant “Under Investigation” • Advantages: • “No Action” letter (upon completion) • Avoid DOL investigations • Avoid potential litigation
Self-Correcting Issues • Delinquent Filer Voluntary Compliance Program (DFVCP) • Designed to be a voluntary program • For failure to timely file 5500s • Due by end of 7th month after plan year ends • Any size pension plan, any welfare plan with more than 100 participants on the first day of the plan year, or self-funded plans of any size if funded from a trust • Proposed regulations to take welfare filings down to 2 common-law employees. • Caps total potential penalties at $4000 per plan (vs.$2,063 per day)
2018 OE Considerations • ACA Affordability decreased to 9.56% • Max OOP is $7,350/$14,700 • Watch for HSA Coordination
2018 OE Considerations • Watch for FSA contribution limits – usually released in October • PCORI Fee TBD • Medicare Creditable Coverage Notices/CMS Disclosures
Miscellaneous ACA • ACA Reporting • “Affordability” for 2018 decreased to • PCORI Fee Payments (2019/2020) • W-2 Reporting • DoL “Marketplace” Notice to Employees (not from HHS)
What did we learn? Source: Ernst & Young
“Cadillac” Tax • 40% non-deductible excise tax on high-cost health plans starting in 2026 • Based on actual value of employer-provided health coverage over certain limits • $10,200 for single coverage • $27,500 for family coverage • Higher amounts allowed for retirees or those in “high-risk” professions • Possible “age and gender” adjustments • Example: If plan value is $11,200 for single coverage, then the employer would be responsible for $400 per participant in excise taxes Future guidance expected
Future of HCR: • Still talk of “repeal” • Bipartisan effort to shore up Marketplaces • IRS confirmed ACA penalties are still effective
Misc. HR Items • Always beware of FMLA issues (New Unpaid Leave Laws) • FLSA Issues (watch out for your employee handbook & “concerted” activities) • New Form I9 Required 9/18/17 • Unpaid OT Lawsuits/Wage & Hour Issues (OT Rule Struck Down) • EEOC/ADA Complaints • OSHA Complaints • New Fiduciary Rule
For Current and Prospective Higginbotham Clients Only. No Reproduction Without Prior Authorization.
