You made it through another plan renewal and open enrollment season, likely following months of planning and decisions about potential changes to plan design, benefit offerings, carriers, funding, and cost sharing. Employees made their new selections, and you have worked through the process of making sure carriers and TPAs have the correct information, employees have their proper coverage, and payroll deductions are accurate. There is another important step that many employers miss. Have you determined whether the decisions you made changed your compliance obligations as the employer plan sponsor? Let’s examine a few common issues:
It may be that the obligation itself hasn’t changed, but rather the party who will need to take action. In most cases, the obligations associated with offering a group health plan are ultimately your responsibility as the plan sponsor. You may have relied on a third party, such as your carrier or third-party administrator (TPA), to act on your behalf to meet certain obligations, such as the annual requirement to provide the Medicare Part D Creditable Coverage Notice. But if you have changed your carrier or TPA or switched from fully insured to self-funded, assuming you can continue to rely on a third party to meet those requirements may leave you noncompliant. When you change carriers and/or funding, you need to examine any obligations that a third party has been handling to make sure you understand who is now responsible under the new arrangement.
A Summary Plan Description (SPD) is required for all Employee Retirement Income Security Act (ERISA) plans, but what that document looks like will vary based on the funding of the plan. In most cases, the TPA for your self-funded plan will create a SPD that contains the federally required language, typically within the Certificate of Coverage. If you move from a self-funded plan to a fully insured plan, however, you won’t be able to rely on the Certificate of Coverage document that the carrier provides for participants in the same way. The Certificate of Coverage is designed to provide state required language, but not the federally required ERISA language. To meet the ERISA requirement, you will generally need to produce a supplemental document, often referred to as a wrap document. This wrap document contains the missing ERISA language, essentially “wrapping” itself around the Certificate of Coverage to ensure full compliance. Without this supplemental document, you are not meeting your obligation to provide a SPD under ERISA.
In other cases, the decisions you make are accompanied by entirely new obligations. For example, if you add a wellness plan that has an activity-based or outcome-based component, there are limits on the size of the reward that can be offered. If your wellness plan has either of those components or includes disability-related inquiries like a Health Risk Assessment, or a medical examination such as a cheek swab to determine tobacco use, there are specific notice requirements that must be met. The type and timing of the notice requirement vary based on the components your wellness plan includes.
A regular review to make sure that you continue to maintain this hands-off approach regarding PHI will help keep your obligations to a minimum.
When you sponsor a self-funded group health plan, however, you have additional HIPAA Privacy compliance obligations on behalf of the Plan. Those include:
If your group health plan has electronic PHI (ePHI), your plan is also subject to the HIPAA Security Rule. As it is common to receive information electronically through email and/or store information on a computer or network hard drive, most self-funded group health plans will have ePHI. If your Plan is covered by the Security Rule, there are three major steps to comply which include dozens of security standards covering basic security practices, security failures, risk management and personnel issues.
If you are an Applicable Large Employer (ALE) under the Affordable Care Act (ACA), you also have an additional reporting obligation if you move from fully insured to a self-funded group medical plan. As a self-funded ALE, you need to complete Part III of the 1095C, to indicate which individuals had coverage under your self-funded plan for each month of the year. Non-ALEs that move from fully insured to a self-funded group medical plan also have to provide this coverage information, but using 1094B/1095B instead. While the IRS is studying whether the requirement to report coverage in this way should change in future years, as of now, that requirement remains (see our previous article on 1094C/1095C reporting).
This may appear ominous, but don’t be discouraged. Including a regular review of your compliance obligations, especially when you have made changes in your benefit offerings, will help prevent unpleasant surprises later, and the benefits these programs can provide are worth the compliance effort.
For more information about employee benefits compliance, please contact us.
LouAnne's specialty is managing special projects designed to assist clients with their benefit-related compliance responsibilities. LouAnne monitors the legislative and legal environments and the state and federal mandates that impact our clients.
LouAnne's specialty is managing special projects designed to assist clients with their benefit-related compliance responsibilities. LouAnne monitors the legislative and legal environments and the state and federal mandates that impact our clients. She is the former chairwoman of the Compliance Committee for Benefit Advisors Network, where she frequently served as a panelist on issues involving healthcare reform. LouAnne is also a frequently sought-after panelist (for the MN State Bar Association, Business Journal and other organizations) to lend her expertise on healthcare reform and the HR perspective. LouAnne has a Bachelor’s of Arts degree from the University of Minnesota, Minneapolis and a Masters in Human Resources from the University of St. Thomas, St. Paul.
Like Wrightstown Community School District Superintendent Carla Buboltz, many civic leaders — as well as business owners and executives — are seeing their job descriptions evolve. Healthcare reform, along with escalating health insurance costs, are demanding more of their attention than ever before. A survey by the U.S. Chamber of Commerce says the effects of the Affordable Care Act (ACA) are now the top concern for organizations, edging out general uncertainty about the U.S. economy.
When the public exchanges opened in October 2013, the technical glitches and low enrollment were well publicized. Since then, both public and private exchanges have evolved significantly. The private alternatives that have entered the scene often have more advantages than their public counterparts.
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