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April 12, 2011
In This Compliance Corner Issue:
- REMINDER: HSA Contribution Deadline for 2010 is April 18, 2011
- ANNOUNCEMENT: Delinquent Filer Voluntary Compliance Program Address Change
- Obama Expected to Sign Repeal of PPACA 1099 Requirement
- IRS Provides Transition Guidance and Relief for W-2 Reporting
- DOL Releases Another Set of PPACA FAQs
- Health Reform Legal Challenge Update
- DOL Releases PPACA Study on Self-insured Plans
- CMS to Stop Accepting Applications for ERRP Due to Unavailability of Funds
- Archived Webcast: “Getting it Right- Know Your Fiduciary Responsibilities Webcast Series- Part I and Part II”
- IRS Releases Spring Edition of Employee Plans News
- Employer Provided Sufficient Proof that COBRA Notice was Mailed
- Ninth Circuit Upholds Criminal Convictions for Chairman and CEO Who Misappropriated 401(k) Contributions
- Retroactive Plan Revocation Upheld by U.S. Tax Court for Failure to Amend
- State Updates: AR, CA, DC, IL, KY, MI, MT, NE, NJ, NY, NV, SD, UT, WA
REMINDERS AND ANNOUNCEMENTS
REMINDER: HSA CONTRIBUTION DEADLINE FOR 2010 IS APRIL 18, 2011
Due to a holiday occurring on April 15, 2011, the deadline to make contributions to a Health Savings Account (HSA) for 2010 is April 18, 2011. Internal Revenue Service (IRS) guidance indicates that HSA contributions for a taxable year may be made at the individual taxpayer’s convenience in one or more payments, as long as the contributions are made after the tax year begins and after the HSA is established, but before the tax return filing date, without extensions.
As a reminder, HSA contributions made by employers are aggregated with other HSA contributions made by the employee to determine the total allowable contribution. For 2010, the maximum contribution allowed for individuals with single High Deductible Health Plan coverage is $3,050, and $6,150 for family coverage. These limits remain the same for 2011.
IRS Publication 969: Health Savings Accounts and Other Tax-Favored Health Plans
ANNOUNCEMENT: DELINQUENT FILER VOLUNTARY COMPLIANCE PROGRAM ADDRESS CHANGE
Effective March 29, 2011, the address for late Form 5500 submissions filed under the Delinquent Filer Voluntary Compliance Program (DFVCP) lockbox has changed to: DFVC DOL, PO Box 71361, Philadelphia, PA 19176-1361. There is no overnight delivery address. Note that submissions to the DFVCP also can be done electronically. To do so, follow the DFVCP penalty calculator instructions for online payment.
HEALTH REFORM UPDATES
OBAMA EXPECTED TO SIGN REPEAL OF PPACA 1099 REQUIREMENT
On April 4, 2011, the U.S. Senate passed HR 4, which repeals the provision in the Patient Protection and Affordable Care Act (PPACA) that would have required businesses to file Form 1099 tax forms beginning in 2012 for all purchases of $600 or more. The 1099 provision would have required businesses to send a Form 1099 to vendors, retailers, utility companies, and any other entity that a business contracts with in an amount greater than $600, and the businesses would also have had to file a copy of the Form 1099 with the IRS. The repeal of the 1099 requirement is welcome news for businesses that would have been burdened with such additional reporting requirements. HR 4 is now headed to President Obama, who is expected to sign the bill.
IRS PROVIDES TRANSITION GUIDANCE AND RELIEF FOR W-2 REPORTING
On March 29, 2011, the IRS issued interim employer guidance on reporting the cost of health insurance coverage on employees’ W-2s, which is required. While the IRS previously made such reporting optional for tax year 2011 for all employers, it went one step further in Notice 2011-28 and provided additional relief for smaller employers – those filing fewer than 250 Forms W-2 – by making the requirement optional for those employers for the 2012 tax year as well (2012 W-2 forms would generally be furnished to employees in January 2013). Through a Question and Answer format, the guidance generally includes information on how to report the information required on a W-2, what coverage must be included, and how to determine the aggregate cost of such coverage. The IRS emphasized that the reporting to employees is for informational purposes only and will not cause excludable employer-provided health care coverage to become taxable. The IRS also made clear that employers will not have to issue W-2s to retirees who receive health care coverage but no longer receive wages or salary. The IRS has solicited comments on all aspects of the interim guidance, and particularly requested comments on, among other things, challenges employers may face in implementing the reporting requirements and how further guidance could address those challenges.
News Release
IRS Notice 2011-28
FAQ’s
Source: Littler Mendelson
DOL RELEASES ANOTHER SET OF PPACA FAQS
In what has become a regular occurrence, the Department of Labor (DOL) has released yet another set of Frequently Asked Questions (FAQs) relating to PPACA. This set of questions makes up Part VI, and provides even further additional insight into the Departments of Health and Human Services, Labor, and the Treasury, with the goal of helping people to understand PPACA.
With a total of six questions, Part VI of the FAQs is relatively short, but includes several important clarifications. For example, Q/A-1 provides five examples of what would constitute a “bona fide employment-based reason” for employees enrolled in a benefit package that is being eliminated to be transferred into another benefit package. This clarification is important for employers who wish to retain grandfathered status but are eliminating a benefit package and are concerned about the anti-abuse rule contained in the law. Q/A-4 and Q/A-5 are similar to each other, but make the distinction concerning when a plan will actually lose its grandfathered status if an amendment is effective at the beginning or in the middle of the plan year. Finally, there are other FAQs concerning the movement of prescription drugs from one tier to another, the interaction of value-based design and the no cost-sharing preventive care services requirement, and plans that use formulas for determining an employer’s contribution rate.
Click here to view the FAQs
HEALTH REFORM LEGAL CHALLENGE UPDATE
The U.S. Court of Appeals for the Eleventh Circuit issued a court document stating that it will hear oral argument on June 8, 2011, in front of a randomly selected three-judge panel in the lawsuit challenging the constitutionality of the federal health reform legislation filed by the State of Florida (and joined by 25 other states, the National Federation of Independent Business, and two individuals). The government is appealing a January decision issued by a Florida district court judge striking down the entire legislation after finding the individual mandate, requiring that certain Americans over the age of 18 obtain health insurance or pay a monetary penalty, unconstitutional.
On March 21, 2011, in a separate, but related legal challenge of a federal district court ruling in Virginia that declared the individual mandate unconstitutional, the State of Virginia renewed its argument to the U.S. Supreme Court that the case should be heard on an expedited basis without waiting for the lower appellate court, the U.S. Court of Appeals for the Fourth Circuit, to issue an opinion. The federal government, on the other hand, has filed documents asking the court to reject the request. The Supreme Court is expected to meet on April 15, 2011, to consider whether to hear the case on an expedited basis. Stay tuned for additional developments.
DOL RELEASES PPACA STUDY ON SELF-INSURED PLANS
As required under Section 1253 of PPACA, the DOL has released a study on self-insured plans that performs an analysis of the plans and the financial information on employers that sponsor them, using data from 2008, the latest year for which complete data is available. The analysis looked at characteristics such as plan type, number of participants, costs, funding mechanisms, and financial health, based on plans’ annual Form 5500 filings and financial data on sponsoring firms. The analysis resulted in findings of incomplete and inconsistent Form 5500 data, which resulted in further discussion with subject matter specialists. These individuals reported that there are several areas of confusion for plan sponsors on the Form 5500 for self-insured plans and health plans in general. The main area of confusion is whether sponsors of health and welfare plans are even required to file. There is also confusion as to what makes up a “plan” for Form 5500 purposes, a “wrap” document, or even a “participant” for purposes of determining the filing requirement. Finally, the report provides quantitative data in the form of several tables and charts reflecting data gathered from the Form 5500 filings. Information such as the number of participants, number of health plans, collective bargaining status, selected income and expenses and premiums paid are all reflected in the study and attached appendixes.
2011 Report
Appendix A
Appendix B
Press Release
CMS TO STOP ACCEPTING APPLICATIONS FOR ERRP DUE TO UNAVAILABILITY OF FUNDS
On April 5, 2011, the Center for Medicare and Medicaid Services (CMS) issued a notice stating that after May 5, 2011, it CMS will no longer accept applications for the Early Retiree Reinsurance Program (ERRP) due to unavailability of funds. As background, the ERRP was established under PPACA and provides reimbursement to eligible sponsors of employment-based plans for a portion of the costs of providing health coverage to early retirees (and their eligible spouse, surviving spouses, and dependents). To participate in the plan, employment-based plans must submit an application to CMS. PPACA also grants CMS the authority to stop accepting applications for participation in the program based on the unavailability of funding. CMS has determined that based on the rate at which appropriated funds are currently being used to reimburse plan sponsors, CMS has approved a sufficient number of applications to exhaust the program funding. As a result of the determination, CMS issued the notice stating that applications received after May 5, 2011 will not be accepted for processing. A copy of the application, as well as instructions for completing and submitting the application, can be found on the ERRP website.
FEDERAL UPDATES
The DOL recently hosted a two-part webcast series, emphasizing fiduciary responsibilities for ERISA retirement plans. The webcasts featured discussion of: Section 404(c) of ERISA; guidance on locating missing participants as outlined in FAB 2004-02; direction on understanding the plan and a fiduciary’s responsibilities; discussion on fees, expenses, and investment disclosures; dialogue about timely deposits of employer and participant contributions; prohibited transactions; and information on the reporting and disclosure provisions of ERISA and the DOL’s voluntary correction program. Parts I and II of the archived webcasts will be available for archived viewing until March 22 and 23, 2012, respectively.
Part I Archived Webcast
Part I Archived Slides
Part II Archived Webcast
Part II Archived Slides
Part I and Part II Speaker Biographies
IRS RELEASES SPRING EDITION OF Employee Plans News
On March 23, 2011, the IRS released the Spring 2011 edition of Employee Plans News. The newsletter contains a number of articles, citations and links related to retirement plans including:
- Preparer Tax Identification Number – who needs a PTIN?
- ESOPs – Definition of Readily Tradable Employer Securities
- New 6-Year Cycle for Pre-Approved Defined Contribution Plans
- Review Your Client’s Retirement Plan
- Employee Plans Compliance Unit’s Funding Deficiency Project
- 403(b) Plans — Ineligible submissions for the Voluntary Correction Program, new guidance on 403(b) plan terminations, and updated FAQs
- Compliance Checks – I Received a Letter, Now What?
- Latest 401(k) Questionnaire Developments — Next steps in the project, including consequences for those who declined to complete the Questionnaire
- Multiple phone forum and webinar opportunities, as well as updated publications and recurring columns are also included in this edition
Click here to view the newsletter
EMPLOYER PROVIDED SUFFICIENT PROOF THAT COBRA NOTICE WAS MAILED
In the case of Brooks v. AAA Cooper Transp., 2011 WL 999567 (S.D. Tex. 2011), decided March 18, 2011, a multitude of issues were litigated, including accusations of wrongful termination, insufficient COBRA notice documentation, a slander claim, as well as violations of both the Privacy Act of 1974 and the Department of Transportation’s Drug Testing Program. Of specific interest to benefit administrators is the allegation that an employer failed to provide a COBRA election notice after an employee was terminated. The court ruled for the employer, basing its decision on the statement of the company’s benefits specialist, who said that she placed the employee’s COBRA election notice in the outgoing first-class mail 14 days after his termination date and it had not been returned as undeliverable. A copy of the actual notice that was sent to the employee was made available, and the former employee acknowledged that it reflected his correct mailing address. The court concluded that the employer’s processes for furnishing COBRA election notices were reasonably calculated to ensure receipt, as required by COBRA, and that the employer need not prove actual receipt.
This case is another example of the importance of maintaining adequate documentation of the method used to furnish COBRA election notices, and maintaining accurate records, including copies, of notices that have been sent.
NINTH CIRCUIT UPHOLDS CRIMINAL CONVICTIONS FOR CHAIRMAN AND CEO WHO MISAPPROPRIATED 401(K) CONTRIBUTIONS
In U.S. v. Eriksen, 2011 WL 801816 (9th Cir. 2011), a chairman and CEO of a company, who also served as the trustees of the company’s 401(k) plan, used employees’ 401(k) deferrals to pay company operating expenses for more than two years. At the trial court level, the two were convicted of embezzling ERISA plan funds and for making false or misleading statements in an ERISA document, both in violation of federal criminal law, and were sentenced to two years of probation, a $20,000 fine, and 240 hours of community service.
On appeal, the U.S. Court of Appeals for the Ninth Circuit upheld the criminal convictions, rejecting the chairman and CEO’s argument that the two lacked criminal intent because they had used the embezzled plan funds to keep the struggling company in business and had deposited the money into the trust account before the initial jury trial began. The court reasoned that the executives, as plan fiduciaries were authorized only to deposit employees’ 401(k) deferrals in the plan’s trust account, and that any other use of the deferrals was unauthorized and therefore illegal. The court also mentioned that evidence at trial indicated that the executives had been warned repeatedly against such unauthorized use of plan assets by the company’s outside advisers. In addition, since certain annual valuation reports distributed to plan participants depicted the contributions of 401(k) deferrals that had not actually been contributed and since the valuation reports were used to complete the plan’s Form 5500 (which also contained false information), the court reasoned that the valuation reports constituted a false statement in an ERISA document.
The case serves as a reminder to employers and plan sponsors about ERISA fiduciary obligations, the correct use of plan assets, and the importance of making straightforward statements in ERISA documents.
RETROACTIVE PLAN REVOCATION UPHELD BY U.S. TAX COURT FOR FAILURE TO AMEND
In Christy & Swan Profit Sharing Plan v. Commissioner, T.C. Memo. 2011-62 (2011), the U.S. Tax Court upheld the IRS’s retroactive revocation of a business’s profit-sharing plan. In this unique case, the plan had only one participant (the business’s owner and the plan’s trustee) and had previously received a favorable IRS determination letter in 1986. In 2005, an IRS audit revealed that the plan sponsor had not amended the plan to comply with certain statutory requirements enacted in 2000 and 2001. The plan sponsor provided the IRS with a signed declaration stating that the plan was “amended by general reference to include all statutory and regulatory amendments necessary” to retain its qualified status. The IRS did not find this acceptable, and twice thereafter formally notified the sponsor that the plan had not been properly amended and that the plan could retain its qualified status by participating in the IRS’s audit closing agreement program (ACAP). After the sponsor declined to participate in ACAP (asserting that the plan had ceased to exist on Jan. 1, 2001), the IRS revoked the plan’s qualified status retroactively to its 2001 plan year. The plan sought a court order that the plan had not lost its qualified status.
The Tax Court upheld the IRS’s retroactive revocation, finding that the general three-year statute of limitations on assessing taxes did not apply to retirement plan qualification. In addition, the court found that the plan sponsor did not provide evidential support for its assertions that the plan was terminated before the required amendments were required. The court also rejected the plan sponsor’s argument that the plan was so simple and small that plan amendments were not required, and instead stated that qualified plan requirements must be strictly met.
The outcome of this case is important for employers and plan sponsors as a reminder that the IRS may use disqualification in the rare circumstance where no other resolution is available. It is also an important lesson for plan sponsors of plans of any size to update and maintain plan documents.
Christy & Swan Sharing Plan v. Commissioner
STATE UPDATES
ARKANSAS
The Arkansas Legislature passed an emergency bill, SB 364, to conform a number of state tax provisions with the federal Internal Revenue Code (IRC) as amended through Jan. 1, 2011. This change should be of particular interest to employers and payroll providers since passage of this provision means that Arkansas conforms to the exclusion from gross income of employer-paid health insurance coverage for dependents under the age of 27 after March 30, 2010. Additionally, because SB 364 brings Arkansas tax law into conformance with the IRC in effect on Jan. 1, 2011,contributions to health flexible spending accounts through a cafeteria plan, contributions to HSAs, and expenses relating to adoption continue to be excluded from gross income SB 364 is effective March 30, 2011.
On March 22, 2011, HB1425 was signed into law, and is now referred to as Act 566. The legislation’s purpose is to remove insurance restrictions on non-covered dental services, meaning that unless certain dental services are considered covered under the contract, plan or policy of insurance, the dentist cannot be required to provide non-covered services at a set fee. The Act includes an emergency clause, which stated that by removing the limitations on fees charged for non-covered services, dentists will have additional treatment options for patients. The Act is effective as of March 22, 2011.
CALIFORNIA
On March 24, 2011, the California Senate passed AB 36, which brings California state taxation laws into conformity with the federal Internal Revenue Code with respect to the taxation of benefits. Importantly, AB 36 provides that the fair market value of employer-provided health coverage for adult dependents up to age 26 is not includible in an employee’s income. In addition, according to related guidance issued by the California Employment Development Department (EDD), for 2010, employers who calculated a fair market value benefit amount as imputed income for California personal income tax (PIT) wages for their employees and subsequently withheld PIT on this value should issue Form W-2C to impacted employees that reflect the correct PIT amount. In addition, if employers have withheld applicable PIT in the first quarter and have already filed their quarterly reports, then the employers must file an amended quarterly report. More information on employer reporting, please see the EDD guidance. The bill is effective immediately.
The San Diego City Council approved an Equal Benefits Ordinance (EBO), San Diego Municipal Code sections 22.4301-4308, which requires employers that contract with the city to provide domestic partners of employees the same benefits that the employer currently provides to spouses of employees. The EBO applies to contractors’ employees anywhere in San Diego or on city-owned property and to any employees elsewhere in the United States doing work on San Diego contracts. The EBO applies on all city contracts entered into, awarded, amended, renewed or extended on or after Jan 1, 2011.
EBO
EBO Program Information
Rule Implementing the EBO
EBO FAQs
DISTRICT OF COLUMBIA
In 2010, the District of Columbia enacted an expansive and detailed list of regulations relating to the D.C. Family and Medical Leave Act (DCFMLA), completely replacing previous regulations relating to DCFMLA. The new regulations apply to employers that employ 20 or more persons on the payroll in D.C. during 20 or more calendar weeks in either the current or preceding year. The regulations include provisions relating to DCFMLA employee eligibility, benefits, complaint procedures, employee notice requirements, leave certification, and interaction with federal law. The regulations are codified at D.C. Municipal Code, Title 4, sections 1600-1699, and became effective in November 2010.
ILLINOIS
On March 30, 2011, the Illinois Department of Insurance (DOI) issued a memo to all companies writing policies subject to the “Autism Mandate” of the Illinois Insurance Code. The mandate requires all group health insurance policies and HMO contracts to provide autism diagnosis and treatment for children under age 21 to a maximum annual dollar amount. Each year, the maximum is adjusted using the Medical Care Component of the U.S. DOL Consumer Price Index for All Urban Consumers (“CPI-U”). The required annual benefit for 2010 was $37,260. Based on the 3.4% increase in 2010 for the CPI-U, the new maximum annual dollar amount for 2011 will be $38,527. The updated amount applies to insurance policies and HMO contracts that are issued, renewed, or modified on or after Jan. 1, 2011.
Illinois DOI Memo
Illinois Autism Mandate
The Illinois DOI adopted rules implementing Section 359b of the Illinois Insurance Code that provide new standardized health application forms to be used by carriers and their agents for the small group and individual markets. The new rules provide guidance for the use of the standard health applications and specifically establish criteria for the required content, filing, and use of such applications. In addition, the rules establish criteria for the electronic use of the standard health applications and for the translation of such applications into other languages. Appendix A is the Illinois Standard Health Employee Application for Small Employers and should be used by small employer carriers for underwriting and enrolling a new small employer group. The new rules are effective Jan. 21, 2011.
Notice of Adopted Rules, Standard Health Applications and Certification of Compliance
KENTUCKY
On March 16, 2011, Governor Beshear signed SB 112. Under the new law, an insurer cannot charge a greater copayment or coinsurance amount for services rendered for each date of service by a licensed occupational or physical therapist than would be charged for services provided by a licensed physician or an osteopath per office visit. Insurers must also clearly describe in the plan document the availability of occupational and physical therapy coverage and all related limitations, conditions and exclusions. SB 112 is effective June 8, 2011.
On March 16, 2011, Governor Beshear signed SB 114. Under the new law, insurers providing health benefit plans may offer incentives or rewards to members who participate in a voluntary wellness or health improvement program, if otherwise allowed by state or federal law. Examples of possible rewards include gift cards, premium discounts or rebates, and contributions toward a member’s HSA. Consistent with federal law, the state allows a physician’s statement to be provided if it is medically unadvisable for a member to participate and still be eligible for a reward. Of particular interest to brokers is that the law provides that these incentives or rewards may be offered through the insurer without violating the state’s rebating laws affecting broker commissions. SB 114 is effective June 8, 2011—90 days from the date the original legislative session concluded.
MICHIGAN
Bulletin 2010-21-INS applies to Michigan resident and non-resident insurance producers that are required, under Section 500.547 of the Michigan Insurance Code, to “adopt policies and procedures for administrative, technical, and physical safeguards for the protection of customer records and information. “As background, Michigan administrative rule R 500.553 requires producers to implement a comprehensive and written information security program for the protection of customer information The bulletin emphasizes the importance of protecting customers’ nonpublic personal financial information and the consequences for non-compliance. Failure to have an appropriate security program protecting customer information is “an unfair or deceptive act or practice in the business of insurance” that may subject a producer to disciplinary action. In addition, according to the bulletin a breach of the security of a database containing personal customer information may subject a producer to penalties under the Michigan Identity Theft Protection Act. The bulletin also provides recommendations on safeguarding customer information.
MONTANA
On March 16, 2011, the governor signed into law HB 84, which amends Montana wage payment statutes to specifically exclude a person who is an independent contractor from the definition of “employee”. Prior to HB 84, the definition of “employee” broadly included any individual who works for another individual for hire. HB 84 is codified at Mont. Code Ann. sec. 39-3-201, and is effective immediately.
NEBRASKA
The Nebraska Director of Insurance issued Notice 3-11-2011 in response to inquiries asking whether an insurer can collect fees on behalf of an insurance consultant from a new insured if the insurance business is placed by an insurance consultant. In this scenario, the insurer would generally hold the fees for eventual disbursement to the insurance consultant. The bulletin explains that this would not be permitted. This is because under existing Nebraska law, an insurance consultant is obligated to serve the interests of their client with objectivity and complete loyalty. Any fee for the insurance consultant’s services is between the insurance consultant and the client, and the fee must be specifically noted in the consultant contract or agreement. Therefore, if an insurer collects fees on behalf of the consultant, it would be construed as compensation paid by the insurer, which is unlawful.
NEW JERSEY
On March 21, 2011, the New Jersey Department of Banking and Insurance issued Bulletin No. 11-06. The bulletin is directed towards all insurers transacting business in New Jersey and relates to producer appointment renewal procedures outlined in New Jersey statutes, namely NJAC 11:17-2.9. According to the statute, producer appointment notifications must be renewed with the Department annually on May 1. Insurers must make such a renewal and pay a renewal appointment fee online through the National Insurance Producer Registry, and instructions on making such a renewal are contained in the bulletin. All active appointments on record with the Department as of April 1 of the same year in which renewal occurs are subject to renewal. The bulletin also provides further background information on renewals, procedures, and contact information.
On March 29, 2011, the governor signed into law A3359, which generally prohibits the practice of excluding unemployed individuals in advertisements for job vacancies. Specifically, the new law prohibits employers from posting print or online job advertisements stating or suggesting that only employed applicants will be considered, applicants must be currently employed to qualify for the position, or that unemployed applicants will not be considered. Employers may advertise that only applicants currently employed by the employer will be considered. Employers that violate the new law are subject to monetary penalties imposed by the state labor commission of up to $1,000 for a first violation, $5,000 for a second violation, and $10,000 for each subsequent violation. The new law will be effective June 1, 2011.
NEW YORK
Effective April 9, 2011, the New York State Wage Theft Prevention Act establishes additional notice and recordkeeping requirements for New York employers. Specifically, the Act requires NY employers to provide employees, both at the time of hiring and on or before Feb. 1 each year) a notice containing certain information relating to the employee’s regular and overtime rate of pay, the employee’s regular payday, the basis of the employee’s pay (i.e., hourly, daily, commission, etc.), allowances claimed as part of the minimum wage (i.e., tips, meals, or lodging), and the employer’s name, address and telephone number. The notice must be provided in English and the language identified by the employee as his or her primary language, and employers must obtain a signed and dated written acknowledgement from the employee confirming that the employee received and understands the notice.
In addition, every pay period New York employers must also provide a wage statement to employees. The wage statement must include information such as the name of the employee, the dates of the pay period, the rate and basis of pay, deductions and allowances, net wages, and certain information for nonexempt employees and employees paid on a piece rate.
Finally, the Act requires employers to maintain records relating to the above for a minimum of six years. Employers who violate the Act may be subject to hefty fines (up to $2,500 per employee) and legal action from the New York Labor Commissioner. The Act also provides enhanced retaliation provisions.
As a result of the Act, New York employers should review and update wage payment forms, obtain signed and dated acknowledgment forms from each employee, review and update company wage statements, review recordkeeping procedures and review employee handbooks to clarify that the company prohibits retaliation for the reporting of wage violations.
NY DOL FAQs
NY DOL Guidelines
Sample Notice Forms
NEVADA
Bulletin 11-001 lists requirements for health insurance carriers to provide information to the policyholder about claims paid on behalf of that policyholder. Nevada Revised Statute 687B.355 states such information must be provided within 30 working days of the request by the policyholder and that the health carrier may charge a reasonable fee for the information.
Of interest to employers will be the minimum reporting information that a carrier is required to provide upon request within 30 working days. This information differs depending on the size of the group–a small group of two to 100 lives versus a large group of 100 or more lives. The difference is outlined in the bulletin. This bulletin is effective on Feb. 1, 2011.
SOUTH DAKOTA
Governor Dennis Daugaard signed SB 43 into law on March 2, 2011. The Act revised certain health insurance standards for patient protection, in accordance with federal law under PPACA. The law clarifies that certain requirements relating to “low-dose mammography” and coverage for this screening only applies to plans considered grandfathered. Additionally, state law is amended to reflect the increased age limit of 26 years for an adult dependent to receive coverage under a parent’s plan, without a requirement to maintain full-time student status. The law also states that if the dependent remains a full-time student between ages 26 and29, the insurer, at the insurer’s option, may provide for continuation of coverage for the dependent. Other updates also made changes under the definition of rescissions of coverage due to fraudulent misstatements, rate filings required by health insurers, and updated certain definitions to exclude excepted benefits from the law. The law is effective July 1, 2011.
Click here to read more.
On March 28, 2011, the South Dakota state legislature overrode a governmental veto in order to enact HB 1146 into law. The Act limits the copayment or coinsurance amount that a health insurer may impose on an insured for services received from a chiropractor to be no more than the copayment or coinsurance amount that are imposed on the services of a primary care physician. The law is effective July 1, 2011.
Click here to read more.
UTAH
Under HB 19, along with a variety of other measures, the Insurance Code of Utah was updated with amended definitions and outdated language was removed. Of significant interest for group health plan sponsors is a revision to the requirement that employers must notify former employees, as well as their current, former, and surviving spouses, and former employees’ dependents of their right to convert from group to individual policy coverage. Effective May 10, 2011, such notification must be made by insurers, not employers.
Also changed is the requirement for former employees, as well as their current, former, and surviving spouses and employees’ dependents to apply for the converted coverage and make initial premium payments within 30 days after the group policy coverage terminates. The deadline for making premium payments previously was 60 days. This provision is also effective May 10, 2011.
WASHINGTON
Under HB 1649, signed by Governor Chris Gregoire on April 5, 2011, Washington will now recognize same-sex marriages performed in other states as legal domestic partnerships under state law. Previously, Washington recognized domestic partnerships from other states, but excluded recognition of same-sex marriages. Now, the law provides out-of-state same-sex marriages with all of the rights and protections given to registered domestic partnerships in Washington. The law is effective 90 days after adjournment of the regular session.