Under health care reform, large employers must offer health coverage to full time employees and their dependents. Employers that do not offer proper coverage might be subject to a penalty.
A recent 11th Circuit court case highlights the importance of good COBRA practices. In DeBene v. BayCare Health System, Inc., Mr. DeBene sued his former employer for, among other things, failing to provide a qualifying event notice under COBRA. The district court granted summary judgment to BayCare Health System finding that the Health System’s third party COBRA vendor had processes in place that were able to document proof of notice mailing. The appeals court upheld the summary judgment ruling in favor of the employer.
Q.- We want to implement a Health Reimbursement Account and Health Savings Account with a health plan. Can we structure our Health Reimbursement Account so that employees can get reimbursements only after they satisfy the deductible under the health plan?
Earlier today, the United States Senate released its version of changes to the Affordable Care Act. Last month, the U.S. House of Representatives narrowly passed the American Health Care Act and sent the bill to the Senate for consideration. See our article on the AHCA by clicking here.
Q.- Is a prescription and a letter of medical necessity the same thing for reimbursing a dual-purpose expense?
Health flexible spending accounts are operated through an employer's cafeteria plan under section 125 of the Internal Revenue Code. They allow employees to put money aside, pre-tax, to be reimbursed for eligible health care expenses. In order to receive tax-favored treatment, the FSA must meet certain requirements. One of these requirements is that the FSA may only reimburse expenses incurred for medical care. Another requirement is that the medical care expense must be substantiated with appropriate supporting documentation.
Q.- An employee is terminating employment and receiving a severance payment. Do we deduct FSA contributions from the payment?
The Mental Health Parity and Addiction Equity Act is a federal law that prevents group health plans that offer mental health or substance addiction benefits from imposing less favorable limits on those benefits than on medical/surgical benefits. This means that the financial requirements (copays, deductibles, etc.) and treatment limits in a health plan must be comparable for physical and mental health/substance addiction benefits. More information for employers about the MHPAEA is available by clicking here.
The Affordable Care Act requires employers to provide all newly hired employees with a written notice about health coverage options available through the Health Care Marketplace (the Exchange). All employers subject to the Fair Labor Standards Act (which are most employers) must provide the Exchange Notice. The requirement is not just limited to employers with 50 or more employees.
Q.- We are a small employer with a health plan. Do we have to file a Form 5500 for our health plan like we do for our retirement plan?
The Affordable Care Act created the Patient-Centered Outcomes Research Institute (PCORI), an organization that supports health plan clinical effectiveness research. ACA requires insurers and self-funded plans to pay a yearly fee to support the organization and its mission.
The treatment of flexible spending account (FSA) participation/contributions while a person is on leave depends on the company’s leave policies and the type of leave. Employers should review their leave policies to understand their approach to FSA participation during different types of leave and administer benefits consistently. For example, if the leave is protected under the Family and Medical Leave Act, USERRA or is an ADA accommodation leave, different rules may apply than if the leave is just a discretionary unpaid leave of absence.
Q.- Can an employee be reimbursed for the cost of a general day camp through his dependent day care FSA?
The U.S. Department of Labor requires federal contractors to maintain certain minimum sick leave policies for employees. The requirements apply to employers with contracts renewed or awarded after January 1, 2017.
While the Affordable Care Act remains the law, an applicable large employer (ALE) must make sure it is offering health coverage to its full-time employees. An ALE must offer minimum essential coverage providing minimum value to its full-time employees and their dependents or pay a tax penalty. A full-time employee is an employee who works 30 or more hours per week (130 or more hours per month).