DOL posts two self-compliance tools

The DOL posted two self compliance tools, one for HIPAA and the other for ACA.

EBSA helping plan sponsors who do not receive fee disclosures

Covered service providers were required to provide fee disclosures to plan sponsors effective July 1, 2012.  But what should a plan sponsor do if they didn't receive the disclosures?  The plan sponsor should request the information from the covered service provider in writing. If the covered service provider does not provide the information, the plan sponsor must notify the DOL either by paper or electronically.

The DOL has changed the mailing address, provided a sample notice and announced a new website which will enable the plan sponsor to notify the DOL electronically.

Why is this so important? Per the DOL website "If a service provider fails to provide the required information, the contract or arrangement between the plan and the service provider is prohibited by ERISA, and the plan fiduciary will have engaged in a prohibited transaction."  However, there is an exemption if the plan sponsors requests the missing information and if not received notifies EBSA.

EBSA adds Mental Health Parity Part II Compliance Tool

EBSA adds Mental Health Parity Part II Compliance Tool and offers two webinars.

The Department of Labor's Employee Benefits Security Administration has updated its website with the following:

• Updated Mental Health Parity Part II of the Self Compliance Tool, available at www.dol.gov/ebsa/pdf/cagappa.pdf
• Upcoming Webcasts:
• Mental Health Parity and Addiction Equity Act Compliance Assistance Webcast, registration and information available at   http://mp163422.cdn.mediaplatform.com/163422/wc/mp/4000/15208/15213/16284/Lobby/default.htm?ref=ProductionTeamEmail
• Apprenticeship Plans and Fiduciary Responsibilities Webcast, registration and information available at http://mp163422.cdn.mediaplatform.com/163422/wc/mp/4000/15208/15213/16705/Lobby/default.htm?ref=ProductionTeamEmail

Two informative government publications

The DOL published Understanding Retirement Plan Fees and Expenses; a very useful tool as plan sponsors begin to receive their 408(b)(2) disclosures.

The IRS published (on their website) Audit Techniques and Tax Law to Examine COBRA cases.

Both are worth a read.

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DOL issues Technical Release 2012-01 with Health Care Reform FAQ

The DOL issued Technical Release 2012-01 containing 7 FAQs regarding various topics including automatic enrollment (not effective until 2014); intent to issue guidance regarding the coordination of the 90 day waiting period rules of the IRC and the PHS; anticipated "look back" period for determining whether an employee is a full time employee and a discussion regarding whether a newly hired employee is a full time employee.

EBSA Issues final 408(b)(2)regulations

EBSA issued final 408(b)(2) regulations and postponed the effective date until July 1, 2012 (see ErisaALERT 2010-11 for a discussion of the proposed rules). The final regulation is effective for both new and existing contracts or arrangements. 

As a result of the extension, the deadline for participant disclosures (see ErisaALERT 2010-12) is extended to August 30, 2012. In addition, the first quarterly participant statement which must reflect fees and expenses deducted from the participant's account is due November 14, 2012 for the quarter ending September 30, 2012.

The EBSA website provides a list of the major changes.

New Year - time to focus on compliance

Employee benefit compliance is often viewed as a necessary evil; it is tedious, boring and complicated but if your plans are selected for audit, the process can be a nightmare if you are not prepared.

A recent Towers Watson Retirement Plan Governance Survey revealed that 73% of respondents indicated regulatory complexity will be among the top governance risks over the next two years.  The survey also revealed that only 26% of plan sponsors conduct regular compliance reviews driven by anticipated new risks and a pending government audit.

We have a number of tools to get you started.  Download our ErisaALERT 2012-01 to learn more.

Informational Copies of the 2011 Form 5500 Released

Advance informational copies of the 2011 Form 5500 annual return/report and related instructions were released yesterday. Information copies of the forms, schedules and instructions are available online at www.efast.dol.gov. These advance copies of the 2011 Form 5500 are for informational purposes only and cannot be used to file a 2011 Form 5500 annual return/report. Filers should monitor the EFAST website for the availability of the official electronic versions for filing using EFAST-approved software or directly through the EFAST website.

Modifications to the Form 5500 and Form 5500-SF for plan year 2011 are described under "Changes to Note" in the 2011 instructions, including:

• The actuarial schedules (Schedule MB and Schedule SB) have been updated to reflect provisions of the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (“PRA 2010”).
• The instructions are updated to include the information in the EFAST2 Frequently Asked Questions explaining when a service provider who manages the filing process for the plan can get EFAST2 signing credentials and submit the electronic Form 5500 for the plan.
• The Schedule C instructions are updated to advise that for a multiemployer or multiple-employer plan, where the “plan sponsor” is the joint board of trustees for the plan, payments by contributing employers, directly or through an employer association, or by participating employee organizations, should be treated the same as payments by a plan sponsor.
• The Schedule I and Form 5500-SF instructions are updated to advise that for plans with fewer than 100 participants at the beginning of the plan year, any amount deposited with or repaid to such plan not later than the 7th business day following the day on which such amount is received by the employer or on which such amount would otherwise have been payable to the participant in cash, shall be deemed to be contributed or repaid to such plan on the earliest date on which such contributions or participant loan repayments can reasonably be segregated from the employer’s general assets.

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DOL Issues Final Rule on Providing Investment Advice

On October 25, 2011 the DOL issued a final rule relating to the provision of investment advice to participants and beneficiaries in individual account plans and beneficiaries of individual retirement accounts (and certain similar plans).

Key takeaways for plan sponsors:

·         The selection of an investment advice arrangement is a fiduciary act.

·         The investment advice arrangement must be authorized by a plan fiduciary.

·       The computer model must be certified by an eligible investment expert. The fiduciary adviser is responsible for selecting the eligible investment expert.

·        Both the level fee and computer based investment arrangement must be audited annually by an auditor who is independent from the investment adviser. The fiduciary adviser is responsible for selecting the independent auditor.

·       The plan fiduciary must receive a copy of the independent auditor's report within 60 days of completion of the audit.

·         The fiduciary adviser must provide certain required disclosures to participants.

Read our latest ALERT for more details.

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

IRS announces 2012 limits

IR-2011-103

• The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $16,500 to $17,000.
  
• The catch-up contribution limit for those aged 50 and over remains unchanged at $5,500.

Click on the link above for all the details.

EBSA to re-propose rule on definition of fiduciary

On September 19, 2011 EBSA announced that it will repropose its rule on the definition of a fiduciary.

The proposed regulations issued in October 2010 elicited over 260 comment letters.  The press release indicated that "additional time ensures strongest possible protection for retirement savers, business owners".

The new proposed rule is expected to be issued early in 2012.

The press release can be found on EBSA's website.

IRS Retirement News for Employers

The IRS issued their Summer edition of Retirement News for Employers.  It is a free service offered by the IRS and generally presents a section on compliance errors, recent guidance as well as a DOL section.  It is a worth the read.  This issue includes topics such as 20% withholding, compensation errors and information on the LESE project (learn, educate, self-correct, enforce.

IRS releases summer issue of Retirement News for Employers

The IRS newsletter is always worth a read. This edition features articles covering

• avoiding compensation errors in retirement plans
• 20% withholding from retirement plan distributions
• a chat with Monika Templeman, Director of EP examinations
• DOL news and
• more

OCR gearing up for HIPAA audits

As posted recently on Healthcareinfosecurity.com, Susan McAndrew of the Department of Health and Human Services' Office for Civil Rights (OCR) indicated that OCR is working with KPMG on the creation of protocols for conducting HIPAA audits.  After about 20 test audits are conducted, OCR is planning on as many as 150 on-site audits which will continue through 2012.  In the interview McAndrew indicated that OCR is working with a separate contractor to gather information about covered entities.  McAndrew further indicated that they want to make sure they have a broad base of entities across a variety of entity types.

McAndrew notes that covered entities should take the opportunity to review their current policies and procedures to make sure they are complete and up to date.