Friday, January 22, 2010

Benefits and HR Law Update

Federal Laws pertaining to employers

Mental Health Parity Act

For plan years beginning after October 3, 2009, a group health plan that provides mental health and substance abuse benefits cannot impose special caps or limits on benefits related to mental health treatment or substance use disorders. Treatment limits and cost sharing, including deductibles, co-pays, co-insurance and out-of-pocket expenses, cannot be more restrictive than other medical and surgical benefits provided under the plan. If a plan offers out of network benefits for medical and surgical coverage, out of network benefits must also be offered for mental health and substance disorders. All fully insured plans adhere to this requirement in the plan designs offered to employers.
Michelle’s Law

In plan years beginning after October 9, 2009 (January 1, 2010 for calendar year plans), a group health plan cannot terminate coverage for a dependent college student on account of loss of full-time student status due to a medically necessary leave of absence for up to one year. The plan must furnish information about Michelle’s Law in any notice regarding certification of student status required for continued coverage under the plan. This requirement is taken care of by the health plans.
CHIP Reauthorization Act

Employees and dependents who become eligible or cease to be eligible for premium assistance for Medicaid or a state’s Children’s Health Insurance Program (“CHIP”) have special enrollment rights under group health plans subject to the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), effective April 1, 2009. Employees must request coverage within 60 days of becoming eligible for the premium assistance. The plan document, summary plan description (“SPD”) and enrollment materials should be amended to reflect these rules. Employers are required to provide annual notice to employees regarding the assistance available and how to apply for it.
GINA

The Genetic Information Nondiscrimination Act of 2008 (“GINA”) prohibits employee group health plans and insurance companies in the group market from discriminating on the basis of genetic information. Genetic information includes information about manifestation of a disease or disorder in a family in addition to information about genetic tests. For plan years beginning after May 21, 2009, genetic information cannot be requested, required or purchased for underwriting purposes or before enrollment, participants and covered dependents cannot be required to undergo a genetic test, and genetic information cannot be used to adjust premiums or contributions for the group.
HEART Act

Pursuant to the Heroes Earnings Assistance and Relief Tax Act of 2008 (“HEART”), a cafeteria plan or health flexible spending arrangement may now permit a reservist called to active military duty for at least 180 days or an indefinite term to receive distribution of the balance to the credit of the reservist’s account.
HITECH Act

The Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”) contains new rules for protection of personal health information held by providers, plans and other covered entities. These changes include requirements when protected health information is disclosed, procedures for transferring data electronically, and enforcement by the Department of Health & Human Services. As a service provider, Ipswich Bay Advisors is required to have a Business Associates Agreement in place with all of our clients. We had sent these out in the fall of 2009 to all of our clients.
COBRA Subsidy / American Recovery and Reinvestment Act of 2009

The American Recovery and Reinvestment Act of 2009 (“ARRA”) provided a subsidy for COBRA premiums to “assistance eligible individuals” who are involuntarily terminated and lose group health coverage. President Obama provided and extension for the subsidy which amends ARRA by extending the COBRA subsidy period from 9 to 15 months and extending the cut-off for commencement of the subsidy period from December 31, 2009 to February 28, 2010. Employers or their COBRA administrators must now update their COBRA eligibility and election notices to include the extended subsidy information. In addition, within 60 days of enactment of the Act, special notice must be given to any COBRA assistance eligible individual who was either already on COBRA on or after October 31, 2009 or was involuntarily terminated on or after October 31, 2009 who already received a COBRA rights notice that did not include the subsidy extension information.
Medicare’s Mandatory Insurer Reporting Law
The Medicare, Medicaid, and SCHIP Extension Act of 2007 added new mandatory reporting requirements (the “Mandatory Insurer Reporting Law”) for group health plans. For full insured health plans, the insurance carriers are complying with the reporting requirements.
Massachusetts laws pertaining to employers
2009 1099-HC forms
Massachusetts health care reform law requires most residents age 18 and older to have health coverage that meets minimum creditable coverage (MCC) standards set by the Commonwealth Health Insurance Connector Authority. By January 31, 2010, all insurance carriers will issue 2009 1099-HC forms to qualifying subscribers residing in Massachusetts who were enrolled in a health insurance plan at any time during the 2009 calendar year. This form provides proof that individuals were enrolled in a health plan during 2009. Individuals will need to provide the 1099-HC information to their tax preparer for filing with their tax returns.

Massachusetts Data Security Law

In August 2009, the Massachusetts Office of Consumer Affairs and Business Regulation (OCABR) revised, for the second time, the Massachusetts data security law, implementing regulations and extended the compliance deadline, for the third time, to March 1, 2010. The law requires a company that owns or licenses personal information about a Massachusetts resident to notify the attorney general, the director of consumer affairs and business regulation, and the affected resident if it knows or has reason to know of (1) a breach of security, or (2) that the personal information of a resident was acquired or used by an unauthorized person or used for an unauthorized purpose. Personal information (PI) is defined as a resident’s first name and last name or first initial and last name in combination with any one or more of the following: (1) Social Security number; (2) driver’s license number or state-issued identification card number; or (3) financial account number, or credit or debit card number, with or without any required security code, access code, personal identification number, or password, that would permit access to a resident’s financial account.
As currently written, the data security regulations require companies that own or license PI to (1) maintain a comprehensive information security program that complies with the regulations; and (2) take all reasonable steps to verify that any third-party vendors with access to such PI are capable of maintaining appropriate security measures to protect the data, consistent with the regulations and applicable federal regulations. The regulations do not require a specific certification or separate agreement to address the Massachusetts data security law, provided that the parties have an agreement prior to March 1, 2010, which addresses protective data security measures.
As a service provider, Ipswich Bay Advisors is required to have a Business Associates Agreement in place with all of our clients. We had sent these out in the fall of 2009 to all of our clients.
Health Insurance Responsibility Disclosure Amendments

The Massachusetts Executive Office of Health and Human Services (EOHHS) has made several changes to the Health Insurance Responsibility Disclosure (HIRD) form, effective April 1, 2009. The HIRD form has been updated to eliminate information that the Division of Health Care Finance and Policy deemed unnecessary and added new questions regarding employer disclosures. Below is a brief summary of the changes to the HIRD requirements:

Employer HIRD forms are now due at the same time as the Fair Share Contribution filings. For some employers this means that they are limited to submitting one employer HIRD report per year. In designating whether an employer has 11 or more full-time employees, the determination is now based on quarterly payroll hours rather than annual payroll hours. Employers are required to report new information, including details about the employer’s full-time criteria and whether the employer collects employee HIRD forms from employees who decline to participate in the group health plan or Section 125 plan. Employers are required to collect signed employee HIRD forms if they have either 5,500 payroll hours in any quarter or 22,000 payroll hours in a year. If you have any questions about administration of the HIRD forms or need a copy of the revised form, please contact our office.