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S&W Newsletters

April 26, 2011

In This Compliance Corner Issue:

HEALTH REFORM UPDATE

HEALTH REFORM UPDATE: FREE CHOICE VOUCHER PROVISION REPEALED
The employee free choice voucher provision that was found in Section 10108 of the Patient Protection and Affordable Care Act (PPACA) was repealed in the “Department of Defense and Full-Year Continuing Appropriations Act, 2011,” HR 1473, which was signed by President Obama on April 15, 2011. This represents a major change in the employer provisions of health care reform.

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HEALTH REFORM LEGAL CHALLENGE UPDATE
The United States Supreme Court held a conference on April 15, 2011, to review the State of Virginia’s request that the Court consider the state’s challenge to the constitutionality of PPACA on an expedited basis. On April 25, 2011, the Supreme Court denied Virginia’s request to bypass the appeals court. This means that the Virginia case will next be heard at the U.S. Court of Appeals for the Fourth Circuit in Richmond, Virginia on May 10.
Petition
Order

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PRESIDENT OBAMA SIGNS LEGISLATION REPEALING PPACA 1099 REQUIREMENTS
On April 14, 2011, President Obama signed into law HR 4, which repealed the provision in PPACA that, in part, would have required businesses to file a Form 1099 beginning in 2012 for all payments of $600 or more. Because this provision was considered a revenue raiser in the original PPACA legislation, its repeal meant that Congress had to find a way to replace the lost revenue. As a result, HR 4 included a provision to offset the loss in revenue by significantly increasing the amount of premium assistance subsidies that must be repaid to the government. These subsidies will be available to certain families and individuals with household incomes under 400 percent of the federal poverty level to help them buy health coverage through a state health insurance exchange, beginning in 2014. Now, the law changes the repayment structure for lower income families who are later determined to be ineligible recipients of the premium assistance by capping the amount that must be repaid within certain poverty-level ranges, as noted in the following table:

If the household income (expressed as a percent of the poverty line) is: The new maximum amount under PPACA, as amended, that must be repaid is:
Less than 200% $600 ($300 if unmarried)
At least 200%, but less than 300% $1,500 ($750 if unmarried)
At least 300%, but less than 400% $2,500 ($1,250 if unmarried)
400% or more Unlimited

HR 4 is now Public Law No. 112-009.

Public Law No. 112-009

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HHS POSTS OPT-OUT ELECTION MATERIALS FOR SELF-FUNDED, NON-FEDERAL GOVERNMENTAL PLANS
In the past, self-funded, non-federal governmental plans have had the ability to opt out of certain HIPAA portability requirements as well as certain group health plan mandates. “Self-funded, non-federal government plans” generally include governmental plans such as counties, cities, community colleges and school districts that are self-funded. The definition may or may not also encompass entities that could be considered governmental but include both private and public funding, such as a private school. For these hybrid entities, further legal analysis is needed to make a determination as to whether this specific exemption would apply.

Due to the enactment of PPACA, while self-funded, non-federal governmental plans still have the ability to annually elect to take advantage of the opt-out provisions, the list of mandates which can be opted-out is now limited. Plan sponsors have been eagerly awaiting clarification on this provision of PPACA, and the U.S. Department of Health and Human Services (HHS) has now posted opt-out election materials for those plans that wish to take advantage of the annual opt-out. Materials available include procedures and requirements, a model election document, a model notice, and a fact sheet.

Going forward, a self-funded non-federal governmental plan will only be able to opt-out of group health plan mandates. These mandates include: relating to benefits for newborns and mothers; parity in mental health and substance use disorder benefits; coverage for reconstructive surgery following mastectomies; and coverage of dependent students on medically necessary leaves of absence.

However, opt-outs are no longer allowed for HIPAA portability requirements, which include: limitations on preexisting condition exclusions, special enrollment requirements, and prohibitions against health status discrimination other than on the basis of genetic information. Please note that opt-outs were never allowed for other aspects of HIPAA, including the requirement to provide certificates of creditable coverage, to protect genetic information, or to comply with administrative simplifications relating to privacy and security rules.

This change applies regardless of grandfathered status and is generally effective for plan years beginning on or after Sept. 23, 2010, with enforcement to occur for plan years on or after April 1, 2011.

Procedures and Requirements
Model Election Document
Model Notice
Fact Sheet

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FEDERAL UPDATES

Wellness Program Satisfies ADA, Despite Financial Penalty for Non-participation
In Seff v. Broward County, No. 10-cv-61537 (S.D. Fla. Apr. 11, 2011), current and former employees alleged that the county’s wellness program, which imposed a $20 per-pay-period penalty on employees who refused to complete a confidential health risk assessment and a blood test for glucose and cholesterol levels, violated the American with Disabilities Act (ADA) prohibition on employee medical examinations and inquiries that are not job-related. The court ruled that the wellness program was permissible under an ADA exception for “the terms of a bona fide benefit plan that are based on underwriting risks, clarifying risks, or administering such risks” when those terms are neither inconsistent with state law nor a subterfuge for evading the ADA.

Noting that the program was administered and paid for by the plan’s insurer and described in the plan handout, the U.S. District Court for the Southern District of Florida determined that the program was a term of the county’s group health plan. The court focused on whether the program was designed to develop and administer the county’s benefit plans in accordance with accepted principles of risk management, and concluded that the plan satisfied this benchmark since it used the de-identified data it received to classify and assess risks in order to develop economically sound benefit plans.

Importantly, the court did not address whether the county wellness program was “voluntary” under EEOC standards. Applicable regulations define a voluntary wellness program as one that neither requires employees to participate nor penalizes employees for non-participation. The EEOC has informally suggested that a wellness program may not be voluntary if the program includes a mandatory health risk assessment or a punitive trigger. Thus, whether such a wellness program constitutes a voluntary wellness program remains an undecided issue.

This case is significant because it has been unclear whether wellness programs and health risk assessments that otherwise comply with the HIPAA wellness rules would be permitted under the ADA. The EEOC, which administers the ADA, has not issued formal guidance, and this is the first judicial decision on the issue. Stay tuned for developments.

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STATE LAW PRIVACY CLAIMS NOT PREEMPTED BY ERISA
In Quintana v. Lightner, 2011 WL 976773 (N.D. Tex. 2011), an ERISA group health plan participant sued the plan in state court alleging that the plan’s vendor violated the participant’s privacy rights by sharing certain medical information. The participant alleged invasion of privacy and intentional infliction of emotional distress under state law, as well as an impermissible disclosure of protected health information in violation of HIPAA. The vendor moved the case to federal district court, arguing that because the terms of the plan governed the vendor’s actions, all of the participant’s state-law claims were preempted by ERISA.

The U.S. District Court for the Northern District of Texas granted the participant’s request to send the case back to state court, reasoning that although the claims may have some connection to the plan, the participant had claimed a violation of his separate and independent right to privacy. In addition, the claims did not seek ERISA remedies and were not so related to ERISA to be precluded entirely. The invasion of privacy and intentional infliction of emotional distress claims are not exclusively areas of federal concern, the court reasoned. Lastly, the court reasoned that because the allegedly improper conduct exceeded the scope of the vendor’s authority under the plan, the conduct was not protected by ERISA, and therefore the state-law claims were not preempted.

The case highlights the interplay between ERISA preemption and HIPAA privacy issues. Although HIPAA does not create a private cause of action (i.e., a reason to bring suit) for individuals, it does not preempt more protective state privacy laws. The case also highlights the importance of properly outlining the scope of a vendor’s authority in ERISA plan documents.

Quintana v. Lightner

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DOL SEEKS COMMENTS ON ELECTRONIC DISCLOSURE BY EMPLOYEE BENEFIT PLANS
It has been almost ten years since the U.S. Department of Labor (DOL) issued its electronic disclosure regulations. Considering the substantial changes in technology since then, both in the workplace and at home, the DOL is asking for feedback on how employee benefit plans use electronic media to furnish information to participants and beneficiaries in ERISA plans. Currently, the general standard regarding the delivery of ERISA-required information necessitates delivery methods that are reasonably calculated to ensure actual receipt of the information. The DOL Request for Information contains 30 specific questions to solicit suggestions from all interested parties including participants, employers, members of the health insurance and financial communities, and the general public. Topics being queried include participant access to and use of electronic media—including the Internet—and whether the DOL should revise its current electronic disclosure safe harbor. Comments must be submitted to the DOL by June 6, 2011.
Click here for more information and comment submission instructions.

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HHS ISSUES REVISED NATIONAL MEDICAL SUPPORT NOTICE – PART A
On March 29, 2011, HHS’s Office of Child Support Enforcement released an updated version of Part A of the National Medical Support Notice (NMSN). A NMSN is a standardized medical child support order, used by state child support enforcement agencies to obtain group health coverage for children. NMSNs consist of Part A, which is sent to and requires a response from employers, and Part B which must be forwarded by the employer to the plan administrator if the child is eligible for enrollment in a group health plan or will become eligible upon the expiration of a waiting period.

Many of the updates are minor wording changes made to standardize the data fields and to provide a uniform set of instructions to employers. However, the updated form also provides a space, previously absent, where employers can document if an employee is not currently eligible for coverage but will be eligible after completing a waiting period of more than 90 days or after working a specified number of hours.

HHS has stated that state agencies may continue to use the prior version of the NMSN until the necessary programming changes have been made to begin using the updated version, so employers may not see the new form immediately. It is important to note that a properly completed NMSN is deemed to be a qualified medical child support order (QMCSO) under ERISA.
Updated NMSN
HHS Action Transmittal to State Agencies

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DOL ISSUES FINAL AMENDMENTS TO REGULATIONS INTERPRETING FAIR LABOR STANDARDS ACT AND PORTAL-TO-PORTAL ACT
On April 5, 2011, the DOL’s Wage and Hour Division issued final amendments to regulations under the Fair Labor Standards Act (FLSA) and Portal-to-Portal Act. Most of the revisions, which are effective May 5, 2011, focus on conforming the regulations to statutory changes that have already been enacted. One of the key changes, though, is an update to the regulations regarding “tip credit”. Under the FLSA, employers may take a tip credit against the minimum wage paid to tipped employees. The revised regulations include additional requirements for employers who wish to take advantage of the tip credit provisions, clarifying that:

  • An employer is prohibited from using an employee’s tips for any reason other than as a tip credit to make up the difference between the minimum wage and required tip credit cash wage, or in furtherance of a legitimate tip pool.
  • An employer must notify employees of any required tip pool contribution amount, but there is no maximum contribution percentage on valid mandatory tip pools.
  • An employer must advise an employee in advance of its use of the tip credit pursuant to the provisions of section 3(m) of the FLSA (i.e., the amount of the cash wage that is to be paid to the tipped employee; the amount by which the wages of the tipped employee are increased on account of the tip credit; that all tips received by the employee must be retained by the employee except for tips contributed to a valid tip pool; and that the tip credit shall not apply to any employee who does not receive the notice).

Other changes included in the final amendments to the regulations include:

  • Incorporation of the language from the Employee Commuting Flexibility Act of 1996 into the regulations.
  • Revising regulations concerning the Youth Opportunity Wage (a temporary sub-minimum wage paid to workers under age 20) to cite provisions of the Small Business Job Protection Act of 1996.
  • Modifying regulations concerning agricultural workers on water storage/irrigation projects to be consistent with the 1997 Departments of Labor, Health and Human Services, Education, and Related Agencies Appropriations Act.
  • Revising regulations pertaining to volunteers at private non-profit food banks to include exemptions included in the Amy Somers Volunteers at Food Banks Act of 1998.
  • Changing the regulatory definition of an “employee . . . in fire protection activities” to be consistent with a 1999 amendment to the FLSA that defines the term.
  • Revising overtime regulations concerning calculations of the “regular rate” of pay to include provisions from the Worker Economic Opportunity Act of 2000 that exclude the value of stock options from the regular rate calculation.
  • Addition of language to regulations pertaining to the exempt status of salesmen, partsmen, or mechanics of automobiles, trucks, or farm implements that reflects a 1974 amendment to section 13(b)(10) of the FLSA.
  • Updating the regulations with “technical amendments” to reflect the increase in the amount of the minimum wage and other outdated threshold amounts, and eliminating outdated references in the regulations to former minimum wage rates.

    • The final amendments also reflect the DOL’s decision to abandon certain 2008 proposed changes. The DOL elected not to make proposed substantive changes to regulations regarding: compensatory time (continuing to allow public employees to use compensatory time on a date requested absent undue disruption to the employer); the fluctuating workweek (making only editorial revisions to these regulations); and meal credits (determining that further study concerning the impact of dietary or religious restrictions and whether employees had adequate time to eat was warranted before proposed changes were adopted).

Updated Regulations

Source: Littler Mendelson

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IRS ISSUES FINAL REGULATIONS ON USER FEES RELATING TO ENROLLED RETIREMENT PLAN AGENTS
On April 19, 2011, the Internal Revenue Service (IRS) announced it is restructuring the fees it imposes on individuals who complete the requirements to become enrolled retirement plan agents assisting with tax matters. As background, an enrolled agent is a tax specialist who has passed an enrollment examination and filed an application to be allowed to represent clients in IRS matters. Enrolled retirement plan agents have shown the IRS that they are qualified to help clients with retirement plan tax matters. In 76 Federal Register 21805, issued April 19, 2011, the IRS released Final Regulations reducing the initial enrollment fees and renewal fees from $125 to only $30. Additionally, a fee was added for both new and renewal preparer tax identification number applications. The regulations are effective immediately.
76 Federal Register 21805

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DESPITE LOSSES TO PARTICIPANTS, PROPERLY EXECUTED CHANGE IN DEFAULT INVESTMENT NOT A FIDUCIARY BREACH
In Bidwell v. Univ. Med. Ctr., Inc., 2011 WL 995944 (W.D. Ky. 2011), a retirement plan sponsor defeated fiduciary breach claims by showing that it followed proper procedures for implementing a qualified default investment alternative (QDIA). As background, IRS regulations released in 2007 establish certain investment options that plan fiduciaries may choose to limit their liability when establishing a default investment for participants who fail to give investment instructions. Before the regulations were issued, however, the plan’s default investment option was a stable value fund. Because the 2007 QDIA regulations did not include a stable value fund as a permissible default investment, the plan sponsor changed the default option to a QDIA-compliant fund by giving notice to the plan participants and then reinvesting the stable value account balances into the QDIA-compliant fund. The notice stated that unless participants made an election to keep their stable value fund investments, all account balances would be reinvested. Two participants, who did not make a new election and whose stable value funds were reinvested, suffered significant losses as a result of the reinvestment. Claiming they never received the notice, the two participants sued the plan sponsor for fiduciary breach.

The court agreed with the plan sponsor’s argument that it had the discretion to change the participant’s investments in the face of their silence and that its notice procedure compiled with the DOL’s requirements. The court rejected the participants’ argument that the reinvestment conflicted with the SPD, which stated that an affirmative investment election controls until a new election is made, reasoning that the plan granted the plan sponsor sufficient discretion to alter plan investments when the participants failed to respond to the QDIA notice. The court held that the plan sponsor made a reasonable interpretation of the plan’s documents in light of the QDIA regulations and acted only after first attempting to contact the participants by sending a notice in accordance with ERISA’s requirements.

For employer and plan sponsors, this case highlights the significance of following procedures in defending ERISA fiduciary breach claims. The court found that the plan’s procedures in providing a proper QDIA notice overcame the individual participants’ claims, despite the negative consequences for the participants.

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STATE UPDATES

CALIFORNIA
The San Francisco Health Care Security Ordinance (HCSO) requires the City and County of San Francisco Office of Labor Standards Enforcement (OLSE) to collect information on an annual basis from covered employers regarding their health care expenditures. The term “covered employers” includes private sector employers with employees in San Francisco, but does not include public sector employers, non-profit employers with fewer than 50 employees and employers with fewer than 20 employees. As a reminder, to avoid penalties and other corrective action, covered employers must submit the 2010 Annual Reporting Form (ARF) by April 30, 2011. Filing may be submitted electronically via the OLSE’s HCSO website, which also includes instructions and technical requirements for filing the ARF and FAQs on the HCSO, including the ARF requirement.
HCSO ARF

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IDAHO
SB 1115 was approved on April 1, 2011. The bill prohibits abortion coverage by a qualified health plan offered through an exchange created to comply with PPACA within the state of Idaho. The provisions of the bill will not apply if the abortion is performed due to a consulting doctor’s recommendation that an abortion is needed to save the mother’s life or if the pregnancy is a result of rape or incest. Funds from the Idaho Department of Health and Welfare will only be used to pay for abortions in the case of one of these exceptions. SB 1115 is effective July 1, 2011.
SB 1115

HB 131 was approved on March 22, 2011. This act amended the Idaho Health Carrier External Review Act, providing technical corrections to comply with PPACA. In addition, it revises provisions relating to: (1) the notice of the right to an external review; (2) the exhaustion of the internal grievance process; (3) a standard external review; and (4) an expedited external review. Finally, it provides additional disclosure requirements.
HB 131

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ILLINOIS
Public Act 96-1523 adds a new section to the Illinois Insurance Code which protects a patient from paying out-of-network rates when services are rendered within an in-network facility by a nonparticipating physician or provider. Only radiology, anesthesiology, pathology, emergency physician and neonatology services are subject to these new requirements. Thus, some out-of-network services will be excluded from these new requirements, including self-insured employer plans. The new section is effective June 1, 2011.
Public Act 96-1523

On Feb. 1, 2011, the Illinois Department of Insurance issued Company Bulletin 2011-02 addressing the premium reporting and review process for proposed rate increases that insurers across the country are now subject to as a result of PPACA. Although the bulletin is directed towards insurers, it may be of interest to both producers and employers to know that the Department will be reviewing the proposed rate increases submitted by insurers to determine whether an increase is considered excessive, unjustified, or unfairly discriminatory. The bulletin provides definitions for these three terms, as well as some insight into what the Department will be specifically looking for upon an applicable plan’s renewal.
Click here to view Company Bulletin 2011-02

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MARYLAND
On April 12, 2011, Governor O’Malley signed into law the Maryland Health Benefit Exchange Act of 2011, laying the foundation for the development of Maryland’s state exchange, as required under PPACA. Under the Act, effective June 1, 2011, the Maryland Health Benefit Exchange is established to assist small employers and individuals in purchasing qualified health plans. Employers that average 50 or fewer employees during the preceding calendar year may purchase qualified health plans on the exchange, enroll employees in plans, and claim federal tax credits that help employers provide health care coverage for employees.
Maryland Health Benefit Exchange Act of 2011
News Release

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MASSACHUSETTS
On April 4, 2011, the Massachusetts Division of Insurance (DOI) issued Bulletin B-2011-07, instructing insurance companies and producers offering policies in Massachusetts that certificates of insurance and evidence of coverage forms and binders are intended to summarize insurance policies, including liability limits, in lieu of providing the actual policies to insureds or third parties as proof of coverage. This bulletin advises insurers and their producers that certificates of insurance are not the proper method by which to amend a policy, that amending such certificates of insurance can create an errors and omissions exposure, and that this activity may violate the Massachusetts insurance laws.

An insurer or insurance producer who issues a certificate of insurance that attempts to amend, extend, or otherwise alter the insurance policy or otherwise intentionally misrepresents the terms of an actual or proposed insurance policy may be in violation of multiple insurance statutes. Therefore, insurers and producers may not execute or otherwise issue a certificate of insurance that includes any statements or language that purport to amend, extend, or alter coverage or indicate that a certificate holder has a right to notice of cancellation, nonrenewal, or any similar notice not specifically contained in the underlying policy. This prohibition also applies to all other documents such as a formal opinion or other document issued or signed by an insurer or an insurance producer.
Bulletin B-2011-07

Bulletin B-2010-15 was issued by the DOI to highlight new provisions related to coverage of Autism Spectrum Disorder (ASD). It requires fully insured health plans issued or renewed by health insurance carriers to provide benefits for the diagnosis and treatment of ASD on a nondiscriminatory basis to all residents of Massachusetts and to all insureds having a principal place of employment in Massachusetts. The bulletin defines ‘autism services providers’ and addresses the credentialing of those providers. This is effective for policies issued on or after Jan. 1, 2011.
Bulletin B-2010-15

On March 30, 2011, the DOI issued Bulletin B-2011-06 instructing insurers of the limit on increases to group premium rates for renewing small groups. While directed towards insurers, this bulletin may be of interest to producers and employers because an insurer cannot increase a group base premium rate by more than 15 percent. The bulletin provides instructions for performing this calculation, and clarifies that this provision does not apply to newly enrolling groups, only renewing groups. This provision is effective April 1, 2011.
Bulletin B-2011-06

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MICHIGAN
On Feb. 15, 2011, the Michigan Office of Financial and Insurance Regulation (OFIR) issued Bulletin 2011-09-INS.The bulletin requires each insurer offering health insurance policies to provide coverage for intermediate and outpatient care for substance abuse, upon issuance or renewal, in all contracts for group and individual policies other than limited classification policies. A health insurer will have a minimum required coverage, per individual per year of $1,500, adjusted annually by March 31st each year, in accordance with the US consumer price index. Therefore, the new minimum substance abuse benefit level is $3,969 and is effective April 1, 2011 through March 31, 2012.
Bulletin 2011-09-INS

On Jan. 20, 2011, the OFIR issued Bulletin 2011-01-INS, relating to the use of the word ‘insurance’ in the name of a corporate insurance agency. According to the bulletin, OFIR no longer requires a corporate insurance agency name using the word ‘insurance’ to also use the word ‘agency’, which had previously been required so as to not mislead the public into believing that the agency was an insurance company. OFIR will still review all agency insurance applications to ensure that the name is neither misleading nor implies that the agency is an insurance or surety company.
Bulletin 2011-01-INS

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NEW MEXICO
On April 2, 2011, the governor signed SB 89, which provides for the creation and registration of health insurance purchasing cooperatives among employers. According to the legislation, two or more large or small employers with an aggregate of fifty or more full-time-equivalent employees may form a cooperative in connection with the purchase of employer health benefit plans. The legislation provides operating rules, rights, and responsibilities for cooperative, which include arranging for group health benefit plan coverage with carriers, collecting premiums, and establishing administrative and accounting procedures, review procedures. In addition, the legislation states that the Superintendent of Insurance has authority to issue guidance on the cooperatives.
SB 89

On April 4, 2011, the governor signed SB 385, relating to coverage of orally administered anticancer medications. Under the new legislation, group health coverage, including any form of self insurance, offered issued or renewed under the Health Care Purchasing Act that provides coverage for cancer treatment must provide coverage for a prescribed, orally administered anticancer medication that is used to kill or slow the growth of cancerous cells on a basis no less favorable than intravenously administered or injected cancer medications that are covered as medical benefits by the plan. Further, group health plans may not increase patient cost-sharing for anticancer medications in order to comply with the new provisions.
SB 385

On April 8, 2011, the New Mexico Insurance Division issued Bulletin No. 2011-006. The bulletin advises all health insurers and insurance professionals of New Mexico’s medical loss ratio (MLR) requirements and of the Superintendent of Insurance’s immediate adoption of federal preliminary justification filing requirements. As background, New Mexico passed its own MLR law, effective May 19, 2010, that requires the Superintendent to hold an informal hearing to establish MLRs at certain levels for group health care products. According to the bulletin, the Superintendent has adopted an 85 percent MLR for small and large groups. In addition, all filings that contain a 10 percent or greater rate increase for a policy, plan or contract must contain a preliminary justification, which can be found in through a link in the bulletin. The bulletin does not affect any accident-only or limited or specified disease policies.
Bulletin No. 2011-006

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NORTH CAROLINA
On Jan. 3, 2011, the North Carolina Department of Insurance (DOI) issued a memorandum relating to email addresses for licensees. According to the memorandum, by statute the Department requires an email address for resident and non-resident applicants and for all active licensees. The requirement was effective Jan. 1, 2010, but there are still several thousand licensees that have not submitted email addresses to the Department. The Department plans to impose a $50 administrative fee on those licensees who fail to provide an email address in 2011. The bulletin provides background information on the email requirement and procedures to submit and verify email addresses.
Click here for the link

On Feb. 24, 2011, the DOI issued a memorandum relating to NC-FAST TRACK resident licensing procedures. The Department has implemented an internal business process called “FAST TRACK” which is used to process resident insurance producer and agent licenses in North Carolina. However, because the FAST TRACK process is delayed or fails when applicants do not follow the proper steps, the Department has issued a Quick Reference Checklist for applicants to follow. The bulletin includes a copy of the checklist, as well as contact information should problems arise during the use of FAST TRACK.
Click here for the link

On Feb. 24, 2011, the DOI issued a memorandum relating to insurance producer training in connection with policies issued under qualified state long-term care insurance partnership program. As background, North Carolina recently established the qualified partnership program, which prohibits individuals from selling, soliciting, or negotiating long-term care insurance in connection with the program unless the individuals is authorized as an insurance producer for accident and health or sickness and Medicare supplement or long-term care and has completed a one-time training course by March 7, 2012 and ongoing training every 24 months thereafter. The bulletin provides information on the type of training that is required and includes links to FAQs on the topic.
Click here for the link

On April 11, 2011, the DOI issued a memorandum relating to continuing education exemptions for insurance producers and agents. As background, effective Oct. 1, 2010, the Department adopted the continuing education (CE) exemptions provided under the Producer Licensing Model Act, which allows exemptions from CE only for military and medical reasons. In addition, the Department grandfathered all agents who had qualified and received a CE exemption for age or years in the business or insurance designation (AGE exemption). In the bulletin, the Department announced that it will allow agents who qualify for the AGE exemption on or before Dec. 31, 2011, to apply and obtain such an exemption. The bulletin provides more information on the application procedures.
Click here for the link

On June 30, 2010, the North Carolina state legislature passed SB 897, which amended state law to conform to the federal Internal Revenue Code (IRC) in effect on May 1, 2010. Then, on March 17, 2011, the legislature passed HB 124, which further updated state law to conform to the federal IRC in effect on Jan. 1, 2011. As a result of these two bills, the value of health coverage provided to a dependent child through the end of the year in which the adult child turns age 26 is now excluded for North Carolina state income tax purposes.
SB 897
HB 124

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TEXAS
The Texas Commissioner of Insurance has adopted amendments to Subchapter P, sections 21.2401 through 21.2407 of the Texas Administrative Code. This action has been taken to implement the federal Mental Health Parity and Addition Equity Act of 2008, and to allow the Texas Department of Insurance to maintain regulatory authority over health plan issuers that issue coverage to group health plans in Texas. The amendments set forth rules for health plan issuers that provide coverage to group health plans affected by the Mental Health Parity and Addiction Equity Act of 2008, to assure that the coverage will be in compliance with federal law.

The subchapter applies to group health plans delivered, issued for delivery, or renewed on or after March 1, 2011. With respect to coverage for group health plans that was delivered, issued for delivery, or renewed prior to March 1, 2011, the amendments provide that such coverage is subject to the provisions of the subchapter in effect at the time such plans were delivered, issued for delivery, or renewed.
Click here for more information

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SOUTH CAROLINA
On April 12, 2011, Governor Nikki Haley signed R16 into law, which now creates Act 5. The law is relevant for employers in South Carolina because it amends the laws of South Carolina to update the reference to the IRC to Dec. 31, 2010. This change should be of particular interest to employers and payroll providers since passage of this provision means that South Carolina state income tax now conforms to the federal exclusion from gross income of employer-paid health insurance coverage for dependents under the age of 27 after March 30, 2010.
Act 5

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UTAH
On March 30, 2011, the Utah governor signed HB 128, amending provisions related to state health system reform in the Health Code and the Insurance Code. Among the more notable provisions of interest are related to the operation of the Utah Health Insurance Exchange. Notably, the bill shifts oversight from the Department of Health to the Department of Insurance, amends provisions related to the appointment of brokers to the Exchange, removes the large group market from the Health Insurance Exchange, clarifies the authority of the Office of Consumer Health Services to contract with private entities for the purpose of administering functions of the Exchange, and allows a fee to be charged for certain functions of the Exchange. The legislation also establishes state authority to regulate certain practices of health insurers, requires group health benefit plans to have reasonable plan premium rates and to comply with standards established by the Insurance Department, and prohibits an insurance customer representative from practicing independent of a producer or consultant employer. The legislation is effective. The legislation is effective 60 days following adjournment.
HB 128

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