A.- No.  Your employer will likely not be subject to the Federal COBRA rules for 2012.  COBRA applies to individuals who lose their group health plan coverage as a result of a qualifying event.  Employers with 20 or more employees on a typical business day in the PRIOR plan year are subject to COBRA.  Since your employer did not exist in the prior plan year, it should not be subject to Federal COBRA until 2013.

The new guidance released last week provides that SBCs may be distributed electronically to participants and beneficiaries in connection with their online enrollment or online renewal of coverage under the plan. SBCs also may be provided electronically to participants and beneficiaries who request an SBC online. In either case, the individual must have the option to receive a paper copy upon request.

The rules require that an SBC be distributed “upon application” and on the “first day of coverage.”  New guidance provides that for this purpose, a plan must provide the SBC as soon as practicable, but no later than 7 business days after receiving a substantially complete application for health insurance.  If a plan sponsor is negotiating coverage terms after an application has been filed and the information in the SBC changes as a result, an updated SBC is not required to be distributed, unless requested, until the first day of coverage.

The SBC must include certain examples of coverage under the plan.  New guidance confirms that the government is developing a calculator that plans and issuers can use as a safe harbor for the first year to complete the coverage examples in a streamlined fashion.

Comments to the SBC rules questioned how an SBC would be produced when an employer’s plan included multiple coverages across multiple providers.  Specifically, issuers wanted to know their obligations to provide an SBC with respect to benefits they do not insure.  The guidance states that unless it contracts otherwise, an issuer has no obligation to provide coverage information for benefits that it does not insure.  However, health plan administrators are responsible for providing complete SBCs for their plans.  The administrator has the option of combining information from various insurers into one SBC.  During the first year of applicability, multiple SBCs will be permitted.  The plan administrator should take steps to indicate that the plan provides coverage using multiple different insurers and provide contact information.

Revised SBC examples were also released to correct errors in previously issued documents.

BAS can provide assistance coordinating SBCs from multiple insurers and distributing SBCs electronically.  For more information, please contact sales@BASusa.com.

An HSA is a tax-exempt trust or custodial account set up with a qualified HSA trustee to pay or reimburse certain qualified medical expenses.  An HSA can only be established for the benefit of an eligible individual who is covered under a high deductible health plan and has no other health coverage.  An employee with an HSA may not be enrolled in Medicare and may not be claimed as a dependent on anyone else’s tax return.

Contributions made to an HSA are not taxable income to the participant.  Contributions remain in the HSA account from year to year until they are used, and earnings on the HSA amounts accumulate tax free.  Distributions from the HSA may also be tax free if they are used to pay qualified medical expenses.  An HSA is portable and is not tied to a single employer.

An HDHP, which is required for HSA participation, has a higher annual deductible than other plans, but does limit the maximum out of pocket amount that the participant must pay for covered expenses.

The new limits for HDHPs and HSAs, effective January 1, 2013, are as follows:

• The maximum annual contribution to a self-only HSA for HDHP coverage increases from $3,100 to $3,250.
• The maximum annual contribution to a family HSA for HDHP coverage increases from $6,250 to $6,450.
• The age 55 and over annual catch up contribution remains at a $1,000.
• The minimum self-only HDHP deductible increases from $1,200 to $1,250.
• The minimum family HDHP deductible increase from $2,400 to $2,500.
• The maximum self-only HDHP out-of-pocket expense amount increases from $6,050 to $6,250.
• The maximum family HDHP out-of-pocket expense amount increases from $12,100 to $12,500.

An employer that offers an HSA and HDHP should make sure that plans and systems account for the new limits.  Employers with HSAs should be mindful that if a health flexible spending account plan is offered, an employee who has an account balance remaining at the end of the plan year that goes into a grace period, the remaining FSA balance may preclude participation in an HDHP/HSA arrangement as it will be considered “other coverage” thereby removing the participant from HDHP/HSA eligibility.

The Centers for Medicare and Medicaid Services (CMS) provides guidelines on the standard Medicare Part D benefit.  CMS recently updated those parameters for 2013.  Employers with prescription drug plans will have to review those plans to determine if their coverage remains creditable.  Notice must be provided to Medicare Part D individuals by October 15, 2012.

For 2013 the following parameters will be used to determine actuarial value.  Each value is increased from the 2012 values.

• Deductible: $325;

• Initial coverage limit: $2,970;

• Out-of-pocket threshold: $4,750;

• Total covered Part D spending at the out-of-pocket expense for beneficiaries not eligible for the coverage gap discount: $6,733.75;

• Estimated total covered Part D spending at the out-of-pocket expense for beneficiaries are eligible for the coverage gap discount: $6,954.52; and

• Minimum co-pays under the catastrophic coverage benefit: $2.65 for generic/preferred multi-source drugs, and $6.60 for all other drugs.

HHS issued a proposed rule under health care reform that, if finalized, would require health plans to maintain a unique health plan identifier number (HPID).  The HPID is intended to reduce plan administrative issues by making it easier to identify the parties involved in electronic health plan transactions.

HHS determined that presently, health plans are identified in standard transactions using multiple identifiers that differ in length and format.  Health care providers often are frustrated by problems associated with the lack of a standard identification system.  Multiple coding leads to rejected transactions based on insurance identification errors and difficulty determining patient eligibility.  Health plan providers expect to experience increased efficiencies through the use of standard plan identification numbers.

BAS already works with plans and providers and is equipped to conduct electronic transactions using the required HIPAA formats.  This new health plan identifier will further increase electronic transaction efficiencies, and BAS will be prepared to recognize and assist with the HPID implementation.

A.- Since a massage may have both a medical and non-medical purpose, you may not be reimbursed from your health FSA unless your doctor attests that the massage is medically necessary to treat a specific medical condition.  You will have to produce a letter of medical necessity from your doctor including your name, the date, your medical diagnosis and a statement or support of why the massage is required to treat your specific medical condition.

A- Probably yes.  The “wrap” part of the EGWP may be subject to COBRA continuation coverage requirements. The “wrap” is an employer-provided group health plan supplementing Medicare.  COBRA requires employer group health plans with at least 20 employees to offer continuation coverage to individuals who experience a COBRA qualifying event. 

According to recent statistics, there has been a significant increase in the number of Americans who have had contact with the criminal justice system over the last 20 years and, therefore, an increase in the number of people with criminal records in the working-age population.  Statistics also show that arrest and incarceration rates are higher for for African American and Hispanic men compared to the general population.

The EEOC is concerned that an employer’s use of an individual’s criminal history in making employment decisions may, in some cases, violate the prohibition against employment discrimination under Title VII of the Civil Rights Act of 1964.  The EEOC is specifically focused on employment discrimination based on race and national origin, creating a disparate impact result.  An employer’s hiring policy that is neutral on its face (for example, excluding applicants from employment based on certain criminal conduct) may disproportionately impact some individuals protected under Title VII, and may violate the law if not job-related and consistent with business necessity.
 
The guidance suggests that if a criminal background is discovered during a pre-employment check, the employer should consider the nature of the crime, the time since the conviction or release from incarceration, and the nature of the job, along with an opportunity for an individualized assessment for people excluded by the background check to determine if the background check policy is job related and consistent with business necessity.

The guidance also addresses the difference between arrest and conviction.  An arrest, without subsequent conviction, may not necessarily establish that prior criminal conduct occurred.  

The EEOC recommends that employers refrain from asking about convictions on job applications and if an employer does ask about convictions, the questions be limited to convictions that would be related to the job, consistent with business necessity.  The EEOC guidance is considered a recommendation, and not a requirement.  Employers may wish to review their Employment Screening Policies to see if they remain in line with the new EEOC guidance.

Health care reform provides that a plan does not provide minimum value if “the plan’s share of the total allowed costs of benefits provided under the plan is less than 60% of such costs.”

The IRS and Department of Treasury will be issuing proposed regulations on the exact process for determining minimum value of an employer’s group health plan, but set forth some proposed approaches in the newly released notice.  It is expected that an employer will be able to use one of several approaches to determine minimum value.  The notice provides three possible approaches for the calculation:

• An actuarial value calculator or a minimum value calculator to be made available by the government.  The calculator would permit an employer plan to enter information about the plan’s benefits, coverage, and cost-sharing to determine if it provides minimum value.  The data running the calculator would be claims data reflecting typical self-insured employer plans.

• Designed-based safe harbors evidenced by checklists to be used to determine if an employer plan provides minimum value (without the need to perform calculations or obtain an actuary).

• For non-standard plans, an appropriate certification by an actuary, in accordance with recognized actuarial standards.

The recent notice, in addition to explaining the proposed approaches, asks the public to provide comments on the proposal before the possible approaches are finalized.

A.- No.  Medicare supplement policies are specifically excepted from the definition of group health plan for PA mini-COBRA purposes.  No COBRA election under PA mini-COBRA has to be given for an individual who experiences a qualifying event when covered by a Medicare supplement policy, only.