Health and Welfare Plans Archives - Page 48 of 126

7 Tips to Avoid Compliance Missteps During Open Enrollment

by Jacob Mattinson and Megan Mardy | Nov 6, 2018 | Employee Benefits, Health and Welfare Plans, Privacy and Data Security

One of the busiest times of year for an employee benefits professional is open enrollment. It is a crucial and yet stressful time of year that typically results in numerous employee questions and complaints and is a time of year with high potential for both employer and employee mistakes. Despite the stress and potential for problems, open enrollment provides an opportunity for a company to set itself up for success for the following year.

The Employee Retirement Income Security Act (ERISA) does not require an annual opportunity for employees to change benefit plan elections. However, because of compliance issues that can spring from not offering a regular enrollment period, most companies choose to offer an “open enrollment” period, usually taking place in mid- to late fall for calendar-year health and welfare benefit plans.

Employee attention to employer communications during this period is often high, and attention to detail in participant communications behooves an employer during this period. Well-written and timely notices may be relied upon to satisfy many compliance obligations. Inaccurate or incomplete open enrollment materials, however, can create employee confusion and result in legal liability under the complex network of federal laws governing employer-sponsored benefit programs.

Read the full article here for a sampling of key issues to consider to help you avoid compliance missteps during this year’s open enrollment period.

Originally published in BenefitsPRO.com, October 2018.

IRS Announces 2019 Employee Benefit Plan Limits

by Brian Tiemann, Jeffrey Holdvogt and Jacob Mattinson | Nov 2, 2018 | Employee Benefits, Health and Welfare Plans, Retirement Plans

Recently the Internal Revenue Service (IRS) and the Social Security Administration announced the cost-of-living adjustments to the applicable dollar limits on various employer-sponsored retirement and welfare plans and the Social Security wage base for 2019. The table below compares the applicable dollar limits for certain employee benefit programs and the Social Security wage base for 2018 and 2019.*

UPDATE: On Thursday, November 11, 2018, the Internal Revenue Service announced that, for calendar year 2019, the annual maximum salary reduction limit for contributions to a health flexible spending account was increased by $50 to $2,700.

RETIREMENT PLAN LIMITS 2018 2019 Annual compensation limit $275,000 $280,000 401(k), 403(b) & 457(b) before-tax contributions $18,500 $19,000 Catch-up contributions (if age 50 or older) $6,000 $6,000 Highly compensated employee threshold $120,000 $125,000 Key employee officer compensation threshold $175,000 $180,000 Defined benefit plan annual benefit and accrual limit $220,000 $225,000 Defined contribution plan annual contribution limit $55,000 $56,000 Employee stock ownership plan (ESOP) limit for determining the lengthening of the general five-year distribution period $220,000 $225,000 ESOP limit for determining the maximum account balance subject to the general five-year distribution period $1,105,000 $1,130,000 HEALTH AND WELFARE PLAN LIMITS Health Flexible Spending Accounts Maximum salary reduction limit $2,650 $2,700 High Deductible Health Plans (HDHP) and Health Savings Accounts (HSA) HDHP – Maximum annual out-of-pocket limit (excluding premiums): Self-only coverage $6,650 $6,750 Family coverage $13,300 $13,500 HDHP – Minimum annual deductible: Self-only coverage $1,350 $1,350 Family coverage $2,700 $2,700 HSA – Annual contribution limit: Self-only coverage $3,450 $3,500 Family coverage $6,900 $7,000 Catch-up contributions (age 55 or older) $1,000 $1,000 SOCIAL SECURITY WAGE BASE Social Security Maximum Taxable Earnings (dollars) $128,400 $132,900

Plan sponsors should update payroll and plan administration systems for the 2019 cost-of-living adjustments and should incorporate the new limits in relevant participant communications, like open enrollment materials and summary plan descriptions.

For further information about applying the new employee benefit plan limits for 2019, contact your regular McDermott lawyer.

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*The dollar limits are generally applied on a calendar year basis; however, certain dollar limits are applied on a plan-year, tax-year, or limitation-year basis.

Paving the Way for More HRAs

by Jacob Mattinson and Megan Mardy | Nov 1, 2018 | Employee Benefits, Health and Welfare Plans

President Trump signed an executive order last year directing the Secretaries of Labor, Treasury and Health and Human Services to consider proposing regulations to “increase the usability of HRAs.” This month, the collective departments issued proposed regulations containing changes to the prohibition on pairing HRAs with individual health policies, as well as other changes to the current HRA rules.

Proposed effective date January 1, 2020; comments due December 28, 2018.

Access the full article.

Get Your Game On – How To Handle IRS and DOL Audits

by Allison Wilkerson and McDermott Will & Emery | Oct 25, 2018 | Employee Benefits, Health and Welfare Plans, Retirement Plans

During the Tax in the City event held in Dallas, Erin Turley and Allison Wilkerson gave an overview of benefit plan audits and the IRS examination process. They discussed various areas of focus, including, required minimum distributions, investment issues, benefit calculations and appropriate tax reporting. They provided attendees with best practices before an audit, as well as helpful resources from the IRS and DOL.

View the full presentation.

Bills Ban Gag Clauses in Pharmacy Contracts

by Karen Owen Gibbs | Oct 18, 2018 | Employee Benefits, Health and Welfare Plans

On October 10, 2018 President Trump signed two bills that ban “gag clauses” in pharmacy contracts. Congress passed the two bills—one for Medicare prescription drug plans (“Know the Lowest Price Act”) that will go into effect in January 2020, and another for commercial employer-based and individual policies (“Patient Right to Know Drug Prices Act”) effective immediately—by almost unanimous vote in September 2018.

While many states have already prohibited the use of these clauses, this is the first such action on a federal level.

Gag clauses are sometimes found in contracts between pharmacies and insurance companies, pharmacy benefit managers or group health plans and bar pharmacists from telling customers that they could save money by paying cash for their prescriptions rather than using their health insurance. If pharmacists violate the gag rule, they risk penalties and/or contract termination. Under the new legislation, pharmacists are not required to tell patients about the lower cost option, but they also cannot be contractually prohibited from engaging in the cost conversation.

The legislation is consistent with the position of the Centers for Medicare & Medicaid Services (CMS), which, in May of this year, issued guidance stating that “gag clauses” are unacceptable in the Medicare Part D program.

Originally published in the Health & Life Sciences News blog.

Internal Revenue Service Outlines Critical Cybersecurity Safeguards to Protect Sensitive Data

by Alan D. Nesburg, PC and Stephen Pavlick | Oct 16, 2018 | Employee Benefits, Health and Welfare Plans, Privacy and Data Security, Retirement Plans

The Internal Revenue Service and the Security Summit partners recently issued a news release outlining the “Security Six,” a list of essential steps to protect stored employee information on networks and computers. Employee benefits professionals, including those who administer welfare and retirement plans for employees and beneficiaries, should review and implement the “Security Six” in order to protect sensitive data from cyberattacks.

Access the full article.

We would also like to thank law clerk Charnae Supplee for contributing to this article.

Hidden Costs in Benefit Contracts: What You Don’t Know May Cost You

by McDermott Will & Emery | Oct 9, 2018 | Employee Benefits, Health and Welfare Plans, Retirement Plans

During our Tax in the City roundtable event in Dallas, Erin Turley and Judith Wethall presented on the hidden costs in benefit contracts. They provided attendees with a checklist of what to look out for in contracts, including services, protection and pricing terms. When negotiating contracts, Erin and Judith recommended establishing a list of needs and objectives, as well as seeking referrals from other similarly situated employers.

View the full presentation.

Medicare Part D Creditable Coverage Notices due before October 15, 2018

by Megan Mardy | Oct 4, 2018 | Employee Benefits, Health and Welfare Plans

The Medicare Modernization Act of 2003 requires employers who offer prescription drug coverage to provide an annual notice to all Medicare Part D eligible individuals who are participants in, or eligible for, the employer’s prescription drug coverage indicating whether such coverage is creditable before October 15th of each year. “Creditable coverage” means that the prescription drug coverage offered by an employer plan is expected to pay, on average for all plan participants, as much as the standard Medicare prescription drug coverage pays. Prescription drug coverage is “non-creditable” when it is not expected to pay, on average for all plan participants, as much as the standard Medicare prescription drug coverage pays.

The notice must be furnished regardless of whether the employer plan pays primary or secondary to Medicare, and must be sent to all Part D eligible individuals including retirees, actives, COBRA beneficiaries and dependents of such individuals. The Centers for Medicare and Medicaid Services (CMS) provides Model Disclosure Notices for creditable and non-creditable coverage.

If you would like additional information about this requirement, or if you have any questions, please contact your McDermott lawyer or one of our Benefits attorneys.

Charnae Supplee, a law clerk in the Firm’s Washington, DC office, also contributed to this article.

Wellness Initiatives and Designing Consumer Driven Health Plans

by McDermott Will & Emery | Sep 20, 2018 | Employee Benefits, Health and Welfare Plans

During the most recent Tax in the City event in Dallas, Partners Erin Turley and Judith Wethall, presented on the rise of consumer driven health care. Some popular programs they discussed include wellness, smoking cessation, high deductible health plans and HSAs, telemedicine, direct contracting and affordable care organizations. They also discussed the compliance complexities associated with these programs, including ERISA, FLSA and HIPAA privacy concerns.

View the full presentation.

What’s Next After the Affordable Care Act?

by Gary Scott Davis | Aug 30, 2018 | Employee Benefits, Health and Welfare Plans

When passed in 2010, the Affordable Care Act (ACA), often called “Obamacare,” had three basic goals: increase access to health insurance, reduce costs and spending, and offer patients stability with respect to their insurance coverage. By offering a subsidy for low- and middle-income Americans to purchase private insurance plans, the ACA was successful in expanding coverage for about 14 million previously uninsured individuals, including those with pre-existing medical conditions.

Gary Scott Davis authored this bylined article about the future of the ACA. “We need to learn from both the strengths and weaknesses of the ACA to build a long-term sustainable approach that promotes access to care, brings insurance coverage within the reach of the many, contains costs, and aligns economic incentives among payors, providers and patients, while improving the nation’s overall level of health,” he wrote.

Access the full article.

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