Welfare Plan Notices: Managing the Tsunami Chase Cannon Vice - - PowerPoint PPT Presentation

Welfare Plan Notices: Managing the Tsunami

Chase Cannon Vice President, Deputy CCO 512 697 6860 ccannon@nfp.com

This presentation is for informational purposes only. Any statements provided in the presentation or by the speaker cannot be relied upon as tax or legal advice. The information is current as of April/ May 2017.

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Ride the Wave…

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…or Get Tossed By It!

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Myriad of Notices

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Summary White Papers

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Summary White Papers

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Agenda

• Notices to Employees

– New Hires/Upon Eligibility for Health Plan – Upon Enrollment in Plan – Ongoing – Upon Coverage Termination

• Poster Requirements
• Filings to Government
• Miscellaneous Notice Thoughts

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4/24/2017

Notices To Employees: New Hires/Upon Eligibility for Health Plan

New Hires/Upon Plan Eligibility

• Include these in an enrollment packet
• That means—upon eligibility!
• Since many new hires are eligible upon hire, some

employers will include in new hire packet.

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New Hires/Upon Plan Eligibility

• Employer CHIP Notice
• HIPAA Notice of Special Enrollment Rights
• Medicare Part D Creditable/Non-Creditable Notice to

Individuals

• Notice of Exchange
• SBC
• Wellness Program: Notice of Availability of Reasonable

Alternative Standard

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Employer CHIP Notice

• Applies to employers providing health coverage to

employees residing in states that offer Medicaid or CHIP assistance

• The current states are: AL, AR, AK, CO, FL, GA, IN, IA, KS,

KY, LA, ME, MA, MN, MO, MT, NE, NV, NH, NJ, NY, NC, ND, OK, OR, PA, RI, SC, SD, TX, UT, VT, VA, WA, WV, WI, WY

• Employer required to distribute based on residence of

employee

• Model Notice: https://www.dol.gov/ebsa/pdf/chipmodelnotice.pdf

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Employer CHIP Notice

Just a 3-pager!

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HIPAA Notice of Special Enrollment Rights

• Purpose: avoid claims for benefits by employees and

dependents who may assert they were not informed of special enrollment rights/enrollment deadlines

• Required to provide “at or before the time an employee is initially
• ffered the opportunity to enroll in a group health plan.” aka-

include with enrollment materials.

• Model Notice: https://www.dol.gov/ebsa/pdf/chipmodelnotice.pdf

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HIPAA Notice of Special Enrollment Rights

Reminder on HIPAA SER Events:

• A loss of eligibility under other coverage;
• A loss of eligibility under Medicaid/CHIP;
• Birth of a child;
• Marriage of an employee;
• Adoption (or placement for adoption) of a child with the

employee; and

• Gain of eligibility for Medicaid/CHIP premium assistance

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HIPAA Notice of Special Enrollment Rights

• Simple 1-pager!

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Medicare Part D: Notice to Individuals

• Meant to assist Part D-eligible employees in determining whether

they want to enroll in Part D during CMS open enrollment period (Oct. 15 – Dec. 7)

• Must be distributed:
• Upon eligibility for the plan
• Upon a change in the plan’s creditable status
• On an annual basis prior to Oct. 15
• Prior to an individual’s initial enrollment for Part D
• Upon request
• Applies to Medicare Part D eligible employees; but recommend

distributing to all employees who are eligible

• Also applies to COBRA and retiree participants

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Medicare Part D: Notice to Individuals

• Model Notices: https://www.cms.gov/Medicare/Prescription-Drug-

Coverage/CreditableCoverage/Model-Notice-Letters.html

• Simple 4-pager (fillable)

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Exchange Notice

• Meant to educate individuals on the availability of the state

heath insurance exchanges

• Distribute to:
• All employees: By Oct. 1, 2013
• New Hires: Within 14 days of hire date
• No penalties!
• Model Notices:
• ERs w/ plan: http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf
• ERs w/o plan: http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf

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Exchange Notice

• Simple One-Pager!

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Summary of Benefits & Coverage (SBC)

• Plans must provide SBC with enrollment materials annually
• SBC is a 4-page double-sided document that summarizes plan benefits
• Template provided by the DOL (new final form, to be used in 2017)
• Common Issue: Receiving SBC from the insurer, but not distributing it

to employees

• SBC Template: http://www.dol.gov/ebsa/pdf/correctedsbctemplate2.pdf
• New final form: http://www.dol.gov/ebsa/pdf/sbc-template-final.pdf

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Summary of Benefits & Coverage (SBC)

• Five-pager!

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Wellness Program: Notice of Availability of Reasonable Alternative Standard

• The health plan must disclose, in all plan materials describing the

standard-based wellness program, that reasonable alternative standards are available

• Sample language:
• “If it is unreasonably difficult due to a medical condition for you to achieve the

standards for the reward under this program, or if it is medically inadvisable for you to attempt to achieve the standards for the reward under this program, call us at [insert telephone number] and we will work with you to develop another way to qualify for the reward.”

• “Your health plan is committed to helping you achieve your best health.

Rewards for participating in a wellness program are available to all employees. If you think you might be unable to meet a standard for a reward under this wellness program, you might qualify for an opportunity to earn the same reward by different means. Contact us at [insert contact information] and we will work with you (and, if you wish, your doctor) to find a wellness program with the same reward that is right for you in light of your health status.”

• Common Issue: Just giving employees info with different premiums for

smokers or those who don’t meet certain metrics

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4/24/2017

Notices To Employees: Upon Enrollment in Health Plan

Summary Plan Description (SPD)

• Plans must distribute to covered participants upon the following:
• Within 90 days of plan enrollment
• Within 120 days after plan first becomes subject to ERISA
• Automatically every 5 years (even if no amendments have been made)
• In Practice: Attach SMM to SPD (or provide an updated SPD) at open

enrollment (that captures the changes to the plan)

• Interaction with SBC requirement:
• If changes made @ open enrollment, no need to send updated SBC
• If changes made outside OE, may need to send 60-day advance notice SBC
• Common Issue: Distribute the insurance policy or contract (which is

missing certain required ERISA language)

• No Template or Model Notice (SPD is too specialized)

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Grandfathered Health Plan Notice

• For GF plans only
• To maintain GF status, the plan must (among other things) provide an

annual notice to employees stating that plan has GF status

• Can go in SPD
• Common Issue: Just forget this notice requirement altogether!

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Grandfathered Health Plan Notice

• Model Notice (two paragraphs!): https://dol.gov/ebsa/grandfatherregmodelnotice.doc

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Newborns’ and Mothers’ Health Protection Act

• Applies to plans that offer maternity coverage for at least a 48-hour

hospital stay following childbirth (96-hour stay for C-section)—can go in SPD

• Common Issue: Just forget this notice requirement altogether!
• Model Notice (one paragraph!): http://www.dol.gov/ebsa/faqs/faq_consumer_newborns.html

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Patient Protections Notice

• Meant to notify covered individuals about certain patient

protections guaranteed under PPACA

– Can designate any PCP, including pediatrician for children – Obtain OB/GYN care w/o prior authorization

• Most likely complying, just need to double check SPD
• Model Notice (two paragraphs):

www.dol.gov/ebsa/patientprotectionmodelnotice.doc

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Women's Health and Cancer Rights Act (WHCRA) Enrollment Notice

• Meant to notify individuals that they have certain mastectomy

benefits relating to breast reconstruction; can go in SPD

• Model Notice:

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Internal Appeals and External Review Procedures

• PPACA expands requirements for internal/external appeals/reviews
• Fully insured: Insurer primarily responsible
• Self-insured: Plan administrator is primarily responsible
• Employers should review SPDs to ensure compliance
• Model Notices exist for:
• Adverse Benefit Determination
• Final Internal Adverse Benefit Determination
• Final External Review Decision

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HIPAA Notice of Privacy Practices

• For self-insured plans; for fully insured plans that are “hands on”
• Must describe uses/disclosure of PHI, the individual’s rights, covered

entity’s legal duties for PHI, and contact info for privacy official

• Must be sent to covered participant (not spouses/dependents); and if entity

maintains website—must be posted on the website

• Exception for heath plans (including FSAs) that are self-administered and

have fewer than 50 participants

• Most self-insured plans outsource administration to TPA or other third party
• Common Issue: Self-insured plans may not realize they are subject to

HIPAA and/or notice requirements.

• Model Notice: http://www.hhs.gov/sites/default/files/ocr/privacy/hipaa/npp_booklet_hc_provider.pdf

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HIPAA Notice of Privacy Practices

• 8-page Model Notice (in color!):

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Initial COBRA Notice

• Provide to covered employee and covered spouse (within 90 days)
• Meant to inform them of COBRA rights/responsibilities
• Common Issue: Forget to distribute means that employee has no
• bligation to notify plan administrator of COBRA event (can

potentially extend COBRA rights/max coverage period indefinitely)

• Model Notice: www.dol.gov/ebsa/modelgeneralnotice.doc

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Initial COBRA Notice

• Four-Pager (fillable):

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4/24/2017

Notices To Employees: Ongoing Notices

Ongoing to Employees—Already Discussed: Put in Open Enrollment Packet

• Employer CHIP Notice
• SBC
• WHCRA Notice
• Wellness Program: Notice of Availability of Alternative Standard
• Medicare Part D Notice of Creditable Coverage (prior to Oct 15)

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Form W-2 Reporting

• If ER filed 250+ Forms W-2 in previous year, then must report the

aggregate cost of employer-sponsored health coverage on Form W-2

• Aggregate cost = ER + EE contribution (COBRA rates)
• Includes dental/vision/Rx if combined with major medical
• Includes ER contributions to health FSA
• Does not include HRA, EE contributions to health FSA, HSA, cancer coverage, etc.
• Report on Line 12 using Code DD
• W-2 due by Jan. 31 each year
• No Model Notice

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PPACA Employer Reporting: Forms 1095-B/C

• Form 1095-B:
• Small (<50 FTEs), self-insured employer
• Distribute to all covered individuals by March 2, 2017
• Going forward, this will be Jan. 31
• Form 1095-C:
• Large employers (50 or more FTEs)—both fully and self-insured

(complete Part III—lists covered individuals)

• Distribute to all full-time employees by March 2, 2017
• Going forward, this will be Jan. 31

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PPACA Employer Reporting: Forms 1095-B/C

• Caution Here: Even with Republican ACA

repeal/replace, reporting may hang around

• Reason = PTCs are still in play for a few years

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PPACA Employer Reporting: Forms 1095-B/C

• Form 1095-B

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PPACA Employer Reporting: Forms 1095-B/C

• Form 1095-C

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Summary Annual Report (SAR)

• Applies to plans that are required to file a Form 5500
• SAR, in narrative form, summarizes the Form 5500 for plan participants
• Generally due by last day of the ninth month following end of the plan

year

• Model Notice (fillable):

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HSA Notice to Employees

• Applies if ER makes HSA contribution to employees post-tax (i.e.,
• utside of a cafeteria plan)
• Meant to notify HSA-eligible participants of the availability of HSA

contributions (so that employees can establish an HSA account to which ER can contribute)

• Must be sent to all HSA-eligible participants (or those that have not

timely established an HSA) no later than Jan. 15 of the following calendar year

• Model Notice available:

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4/24/2017

Notices To Employees: Upon Coverage Termination

COBRA Election Notice

• If COBRA triggering event has occurred, must be sent within 44 days
• Termination of employment
• Death of employee
• Reduction of hours
• Divorce
• Child aging off the plan
• Meant to inform employee/spouse/dependent of their right to COBRA

(and processes to elect)

• Common Issue: Failure to timely send extends COBRA election and

max coverage period; special issues with severance

• Model Notice available: www.dol.gov/ebsa/modelelectionnotice.doc

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COBRA Election Notice

• Model Notice is a

7-pager (fillable):

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Notice of Rescission

• No rescission of coverage allowed absent fraud or misrepresentation
• “Rescission” defined as a retroactive cancellation of coverage
• If coverage is rescinded, individual must be given at least 30 days

advance written notice that coverage is being retroactively terminated

• No model notice, but notice should include:
• Name of the affected individuals
• Name of the plan
• Date that coverage will be rescinded
• Date that coverage will be retroactively terminated
• Reason for the rescission
• An explanation of the plan’s appeal procedures

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FMLA Notice of Nonpayment of Premiums

• If FMLA leave and employee not timely paying premiums, employer

may terminate coverage, but must provide a notice 15 days in advance

• f cancellation of coverage
• Remember that even if coverage lapses due to employee non-payment
• f premium, employer must still restore the employee to coverage

he/she had prior to the FMLA leave (when he/she returns from the FMLA leave)

• No model notice

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4/24/2017

Notices To Employees: Delivery Methods

How to Deliver These Notices?

General Guideline

Delivery Method Should Result in Actual Receipt of Notice

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How to Deliver These Notices?

• First Class Mail = Always Okay!
• Email = Okay if certain conditions are met
• Posting on Intranet = Not prohibited, but not recommended
• Hand Delivery = Okay, but rarely recommended

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First Class Mail

• Send to Last Known Address
• Show processes
• Don’t have to show actual receipt

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E-Mail

• If email a big (integral) part of the job, you can send notices via email
• Should still note importance of document and availability of paper copy
• May want to use ‘read receipts’ (to show proof at some point)

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E-Mail

• If email not a big (integral) part of the job, you can send email if you get

authorization from the employee (from that email)

• Should still note importance of document and availability of paper copy
• May want to use ‘read receipts’

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Intranet or other Website Posting

• Generally allowed, but not recommended
• Still need to send a notice saying where it’s located
• Can email the notice, but then it’s just the same as sending the notice

via email (and harder to prove actual receipt)

• Should still note importance of document and availability of paper copy
• May want to use ‘read receipts’ on email

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Built into Online Enrollment Process

• Generally allowed, but only good for those notices that need to be

distributed upon enrollment in the plan and annual notices

• Assumes employees MUST go online to enroll or renew at open

enrollment

• Generally not recommended for new hire or plan termination notices

(since they wouldn’t be distributed timely)

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Hand Delivery

• Generally allowed, but not recommended
• Very difficult to show actual receipt
• Very difficult to show processes (like mailing or emailing)
• If you do it, get a signature of receipt from employee

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4/24/2017

Notices To Employees: Poster Requirements

List of Poster Notice Requirements

• Some of these requirements are simple:
• Just post a pre-printed poster in the break room!

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List of Poster Notice Requirements

• FMLA Poster: http://www.dol.gov/whd/regs/compliance/posters/fmlaen.pdf
• GINA Poster: http://www.dol.gov/ofccp/regs/compliance/posters/pdf/eeopost.pdf
• USERRA Poster: http://www.dol.gov/vets/programs/userra/USERRA_Private.pdf

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4/24/2017

Notices & Filing to Government

Forms 1094 and 1095

• Forms 1094-B and 1094-B
• Small, self-insured employers
• Report on covered individuals
• Must be filed with the IRS by Feb. 28, 2017 (March 31, 2017, if e-filing)
• Going forward, by Feb 28
• Forms 1094-C and 1094-C
• Large employers (50 or more FTEs), fully and self-insured
• Report on full-time employees (and covered individuals, if self-insured)
• Must be filed with the IRS by Feb. 28, 2017 (March 31, 2017, if e-filing)
• Those filing more than 250 forms must e-file!
• Going forward, by Feb 27 (March 31, if filing electronically)

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Form 5500 & Schedules

• Annual report to DOL containing specific plan information
• Exception for plans with fewer than 100 participants which are

unfunded, insured, or a combination of the two

• Must file Form 5500 and related schedules
• Generally due by last day of seventh month following end of plan year
• Calendar year plan = July 31
• DOL Form 5500 Main Web Page:

http://www.dol.gov/ebsa/5500main.html

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Medicare Part D—Disclosure to CMS

• Applies to plans that provide prescription drug benefits to any Part D

eligible individuals

• Must be filed with CMS annually within 60 days after the beginning of

the plan year (or within 30 days of change in creditable status)

• For calendar year plans, must do by March 1 (Feb. 29 for leap years)
• Disclosure to CMS Form: https://www.cms.gov/Medicare/Prescription-Drug-

Coverage/CreditableCoverage/CCDisclosureForm.html

• CMS Instructions: https://www.cms.gov/Medicare/Prescription-Drug-

Coverage/CreditableCoverage/CCDisclosure.html

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4/24/2017

Miscellaneous Notice Thoughts

Plan Documents

• ERISA and Section 125 have written plan document

requirement

• Do not need to distribute to employees/participants or file

with the government, but may need to provide to an individual upon request

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HIPAA—Other Thoughts

• HIPAA Privacy Policies and Procedures & HIPAA Security

Policies and Procedures

• Should be developed in conjunction with an attorney
• Are specific to an employer’s needs and circumstances
• May be requested by an individual/employee
• Review Business Associate Agreements
• Should probably be done annually
• Consider MA (and other) state laws
• Breach Notices: Be prepared in case of PHI breach

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FMLA and Other Leaves of Absence

• FMLA
• Other notice requirements apply (beyond poster requirement)
• Processes should be in place to meet required timeframes
• Leaves of Absence Generally
• May implicate FMLA, COBRA, ERISA, IRC and USERRA
• Work with outside counsel in developing leave policy
• Understand that more notice requirements may apply, depending
• n leave policy strategy

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You Survived the Wave!!

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Questions?