EBSA posts new FAQs - Summary of Benefits and Coverage effective date posptoned

The first question will be of special interest to many. Click here for the FAQs

Summary of Benefits and Coverage

Q1: On August 22, 2011, the Departments issued proposed regulations and proposed templates in connection with implementation of the Summary of Benefits and Coverage and Uniform Glossary requirements of PHS Act § 2715. An applicability date “beginning March 23, 2012” was proposed. At the same time, the Departments invited comments generally, as well as on a range of discrete issues, including the timing of the application of the SBC requirement.

My plan anticipates that preparation of the summary of benefits and coverage will take several months and require significant resources. In light of the March 23, 2012 proposed applicability date, we are considering moving forward with implementation of the Summary of Benefits and Coverage requirements, using the proposed rules and templates, but are concerned that the final rules and templates will differ from the proposed rules and templates, which would prompt additional implementation costs. What is the timeline for the issuance of future guidance on the summary of benefits and coverage? What actions should my plan be taking now, if any?

The Departments received many comments on the proposed regulations and templates and intend to issue, as soon as possible, final regulations that take into account these comments and other stakeholder feedback.

PHS Act section 2715 provides that group health plans and health insurance issuers shall provide the Summary of Benefits and Coverage and Uniform Glossary pursuant to standards developed by the Departments. Accordingly, until final regulations are issued and applicable, plans and issuers are not required to comply with PHS Act section 2715.

It is anticipated that the Departments’ final regulations, once issued, will include an applicability date that gives group health plans and health insurance issuers sufficient time to comply.

IRS announces only three plans on a Form 5558 - no attachments allowed

The Internal Revenue Service will not process lists of plans attached to a Form 5558, Application for Extension of Time To File Certain Employee Plan Returns, by filers requesting an extension of time to file Form 5500 series return/reports or Form 8955-SSA returns.

If the employer maintains more than one single employer plan and the plan years end on the same date, you may file a single Form 5558 to apply for extensions to file Forms 5500 series and/or Forms 8955-SSA for up to three of these plans. Do not list more than three plans on a single Form 5558. Do not attach lists of plans to a Form 5558, they will not be processed.

Lists attached to the Form 5558 received through July 31, 2012, will be returned to the filer to submit a completed Form 5558 for all plans on the list requiring an extension. Lists received after July 31, 2012 will not be returned and will not be processed.

OCR announces HIPAA Pilot Audit Program

The American Recovery and Reinvestment Act of 2009, in Section 13411 of the HITECH Act, requires HHS to provide for periodic audits to ensure covered entities and business associates are complying with the HIPAA Privacy and Security Rules and Breach Notification standards.  To implement this mandate, OCR is piloting a program to perform up to 150 audits of covered entities to assess privacy and security compliance.   Audits conducted during the pilot phase will begin in November 2011 and conclude by December 2012.

More information regarding OCR’s Pilot Audit Program is available on the OCR website at http://www.hhs.gov/ocr/privacy/hipaa/enforcement/audit/index.html

Revisiting W-2 Reporting of the Cost of Health Care Coverage

On October 31^st, the IRS conducted an informative webinar which should be available shortly on their website.  In addition, the IRS has a Questions and Answers page on their website. 

Here are some highlights:

Who must report the aggregate cost of employer sponsored health plan coverage?

Generally, employers who issue 250 or more W-2s in 2011. The IRS noted that the current guidance (Notice 2011-28) is interim guidance.  Any changes will be prospective and only upon issuance of further IRS guidance providing at least 6 months advance notice.

Are both employee and employer contributions reported?

Yes, the amount reported includes both employee and employer contributions even if employee contributions are pre-tax.  There is a special rule for health care FSAs.

Where is the cost information reported?

The cost is reported in Box 12 of the W-2 with code DD but is not reported on the W-3.

To read more refer to our ErisaALERT 2011-14  and ErisaALERT 2011-5