Q.- An employee is covered in family coverage under our health plan. His son is turning 26 and is aging out of the plan. Do we have to offer him the right to continue coverage under COBRA now that he is older than 26?
The U.S. Department of Labor issued a final rule that raises the minimum wage for workers on federal service and construction contracts. The minimum wage has been raised to $10.10 per hour beginning January 1, 2015 for new federal contracts.
The Congressional Research Service released a report on health care reform resources. The CRS is a legislative branch agency of the Library of Congress that provides non-partisan information to members of Congress for help in legislation drafting.
Q.- We have an employee who is participating in our dependent day care flexible spending account plan. His son is in day care, but his mother is now available to watch the child. Can he stop participating in the FSA?
Last year, the IRS modified the health flexible spending account (FSA) rules so that plans could allow participants to carry over up to $500 of unused contributions into the next plan year. This change to the “use-it-or-lose-it” rule could be implemented only if the FSA did not have a grace period. A grace period is a period of time after the end of the plan year during which participants can continue to incur eligible health care expenses to be reimbursed from the prior year’s FSA.
Some employers prefer the carry over and some prefer the grace period. The grace period allows participants to use any amount of unused contributions but only for 2-1/2 months after the end of the plan year, while the carryover limits to $500 the amount that can be used in the next plan year, but it can be used for the entire year.
Health care reform requires applicable large employers to offer minimum essential coverage to their full time employees or pay a penalty. Employers with 100 or more employees will be subject to the penalty beginning in 2015, and the penalty may be applied to employers with 50 or more employees beginning in 2016.
Q.- We implemented the $500 carryover provision for our calendar year FSA plan. We have an employee who will not have used his full FSA amount by the end of the year. He does not want to make a contribution to the FSA in 2015. Does he forfeit his unused amount, or does it carryover to 2015 even if he does not elect to participate in the FSA in 2015?
Many states, counties and cities have enacted laws limiting an employer’s right to ask a job applicant about his or her criminal record. These so-called “ban the box” laws are aimed at removing barriers to employment for people with criminal records. Employers in locations with ban the box rules should remove questions about criminal history from job applications and postpone such questions until later in the hiring process.
While the rules vary from location to location, most laws require a legitimate business reason to ask about criminal history, and then the questions may be asked only after a conditional job offer is made to the applicant. A legitimate reason will be found if the criminal history has a direct relation to the employee’s fitness or ability to perform his job.Employers should be familiar with the ban the box rules of their state. In locations with such rules, employers should not ask about criminal past unless it can be clearly shown that criminal record directly relates to the position for which the individual wishes to be hired.
Individuals can enroll in Marketplace (“Exchange”) coverage at only limited times during the year. A Marketplace plan can be purchased at the expiration of group health coverage (due to termination of employment or the end of the COBRA period) or during an annual open enrollment period. The annual open enrollment period for the Exchange is approaching.
- November 15, 2014. Open Enrollment for the Marketplace begins. Individuals may apply for, keep, or change coverage.
- December 15, 2014. For Marketplace coverage to be in place on January 1, 2015, individuals must enroll by December 15.
- December 31, 2014. Coverage ends for 2014 plans.
- February 15, 2015. This is the last day of the open enrollment period. If coverage is not purchased by this date, coverage may be purchased only if the individual experiences a special enrollment event.
While the open enrollment period for the Marketplace does not generally impact employers, some employees may be interested in the timeframes to purchase for Exchange coverage.
Q.- We have a cafeteria plan and employees pay for health insurance with pre-tax dollars. One employee asked if he could use after-tax dollars to pay for his health coverage. Do we have to let him?
The Department of Labor issued guidance on what steps must be taken to find missing plan participants upon a retirement plan termination.
The government has committed to revamping the application for coverage on www.healthcare.gov to make sure that enrollment in the Exchange runs more smoothly than last year.
Q. Our Health FSA has a 2-1/2 month grace period for incurring claims after the end of the plan year. We have an employee who is participating in the Health FSA in 2014, but does not want to participate in 2015. Will the grace period still be available to him to incur claims for reimbursement?
The fall is a good time for employers to review the annual notices that must be distributed to employees. Some notices are distributed at open enrollment, and others are distributed at set times during the year. While each employer may have different notice distribution requirements depending on several factors, including size of organization and types of plans offered, a summary of employee notices and timing follows:
The IRS issued draft instructions for the forms that employers and insurers must use to report health care reform compliance under Internal Revenue Code section 6055 and 6056. The forms and instructions will be finalized later this year. The IRS also issued a set of frequently asked questions to provide guidance on the reporting requirements.