Nelson Mullins Weblog

HIPAA Audit Lottery Begins This Month

David Pilson — Mon, 14 Nov 2011 21:54:38 +0000

HHS’s HIPAA enforcement arm, OCR (Office for Civil Rights), will begin HIPAA privacy and security audits this month, November 2011. Every “covered entity” is eligible, including covered entities that are health plans provided by employers. 150 covered entities will be chosen for what is described as a “pilot phase” that will conclude by December 2012.

For the full article, see http://www.nelsonmullins.com/newsletters/brief-11-14-2011

Some Plan Limits Increase for 2012 – But Not All

David Pilson — Thu, 03 Nov 2011 16:10:09 +0000

The IRS has released the 2012 cost-of-living adjustments for limits on pension and other retirement plans as well as for tax rates and other benefit limits. For the first time in several years, some of the key 401(k) and retirement plan limits will go up in 2012.

See the full article here - http://nelsonmullins.com/newsletters/brief-10-24-2011

Health Care Reform’s 4-Page Summary of Benefits – Not Quite

David Pilson — Fri, 26 Aug 2011 17:49:46 +0000

The Affordable Care Act introduced a requirement for a 4-page summary of benefits and coverage to be distributed by group health plans and health insurers to let individuals compare health coverage options. On August 17, 2011, three federal agencies jointly issued proposed regulations under which the 4-page summary has grown to 6 (or up to 8 ) pages and is referred to as the SBC (summary of benefits and coverage), with a separate 4-page glossary and 34 pages of instructions for completing the summary. Comments on the regulations are due on or before October 21, 2011.

Read the Comp & Benefits Brief by following this link: http://www.nelsonmullins.com/newsletters/comp-and-benefits-brief-health-care-reforms-4-page-summary-of-benefits-not-quite

Read Plan Terms Carefully - Implications on Stop-Loss Coverage

David Pilson — Mon, 01 Aug 2011 20:15:01 +0000

In the case of Clarcor, Inc. v. Madison Nat’l Life Ins. Co., the court held that stop-loss coverage was not available to cover the medical expenses of an employee that was not eligible under the terms of the plan. In order to be eligible for benefits under the Clarcor plan, the plan document required that employees (not on FMLA leave or on COBRA) must be regularly scheduled to work on at least 40 hours per week. When Clarcor attempted to receive reimbursement for medical expenses incurred by an employee while the employee was on short term disability (and thus not scheduled to work 40 hours per week), the stop-loss carrier refused to pay. Clarcor then sued the stop-loss carrier.

In ruling in favor of the stop-loss carrier, the court ruled that the plain terms of the document controlled and the employee was not eligible for benefits under the Clarcor plan. Thus, the stop-loss carrier was not obligated to reimburse Clarcor.

Lifting the Veil: Fee Disclosures Are Coming - Final Deadlines Set

David Pilson — Thu, 14 Jul 2011 19:07:07 +0000

The Employee Benefits Security Administration (EBSA) issued an extension of the dates that both the service provider/fiduciary level and participant level fee disclosure rules will be applicable. The following are the key dates for calendar year plans to mark:

January 1, 2012: participant-level rules apply

April 1, 2012: fiduciary-level rules are effective

May 31, 2012: initial participant disclosures due

August 14, 2012: first quarterly participant disclosures due

Read the Comp & Benefits Brief by following this link:

http://www.nelsonmullins.com/newsletters/comp-and-benefits-brief-lifting-the-veil-fee-disclosures-are-coming-final-deadlines-set

Claims Procedure - External Review Process

David Pilson — Tue, 05 Jul 2011 21:39:02 +0000

The Health Reform legislation added a requirement that group health plans, other than “grandfathered” group health plans, provide for an external review of claims after application of the internal claims review procedures. The requirements vary, with one set for insured plans and one set for self-insured plans. Effective dates have varied with most applying to plan years on or after July 1, 2011 and with many applying to plan years on or after January 1, 2012. It is important to start now understanding the new system for external review and where your group health plan fits. Be ready to explain the new process in this fall’s open enrollment materials. Read the Comp & Benefits Brief by following this link:
http://www.nelsonmullins.com/newsletters/comp-and-benefits-brief-external-review-of-health-plan-claims-will-you-be-prepared

The Supreme Court’s New View of Plan Documents & SPDs

David Pilson — Tue, 21 Jun 2011 14:28:11 +0000

In May, the U.S. Supreme Court’s decision, CIGNA Corp v. Amara, refused to read terms in a summary plan description (”SPD”) as the correct plan terms, saying that the SPD disclosures are about the plan and not a part of the plan. When the SPD differs from the plan, an ERISA lawsuit to recover plan benefits cannot claim benefits based on the SPD terms rather than the terms of the plan document.

Read the Comp and Benefits Brief by following this link:

http://www.nelsonmullins.com/newsletters/comp-and-benefits-brief_6-14-11

June 30th Deadline to Amend Cafeteria Plan to Exclude OTC Drugs

David Pilson — Tue, 21 Jun 2011 14:15:05 +0000

As you may recall, the Patient Protection and Affordable Care Act (”PPACA”) added a new Section 106(f) to the Internal Revenue Code (”Code”) which provides that, effective January 1, 2011, expenses incurred for medicines or drugs may be paid or reimbursed by an employer-provided plan, including a health flexible spending account (”FSA”), health reimbursement arrangement (”HRA”), or a health savings account (”HSA) only if the medicine:
a) is a prescription drug; or
b) is available without a prescription (i.e., “over-the-counter” drug) but the individual, nevertheless, obtains a prescription; or
c) is insulin.

In other words, expenses incurred for over-the-counter drugs without a prescription cannot be reimbursed under FSAs, HRAs, or HSAs. See Notice 2010-59.

Plan sponsors should amend their plans by June 30, 2011 to incorporate this change.

Repeal of PPACA’s “Free Choice” Voucher Requirement

David Pilson — Fri, 22 Apr 2011 20:03:05 +0000

While a complete repeal of the Patient Protection and Affordable Care Act (”PPACA”) appears to be unlikely, Republicans have chipped away at several provisions. The final appropriations bill, signed by President Obama on April 15th, funds the government through September 30, 2011 and also contains a provision which repeals the “Free Choice Voucher” rule in PPACA.

PPACA’s Free Choice Voucher rule would have required employers to provide vouchers (equal to the employer-paid portion of health costs) to certain employees who are exempt from PPACA’s individual mandate because of their income level.

The Cost of Ignoring the IRS

David Pilson — Wed, 23 Mar 2011 13:46:53 +0000

In May 2010, the IRS sent a detailed 401(k) plan questionnaire to 1,200 plan sponsors as part of their information gathering process. As the IRS now evaluates the responses to the questionnaire and prepares an interim report by the end of September, it also warns the non-responding plan sponsors that they should expect a full-scope examination of their plans.

Non-responders should use the questionnaire as a preliminary self-audit to prepare for the expected IRS examination and should take corrective action before receiving the IRS notice, if possible. Generally, penalties for corrections made while “under examination” (e.g. during an IRS audit) are significantly more expensive than corrections made before an audit.