by admin | Sep 19, 2024 | Blog
When companies contribute to the cost of health club memberships or provide on-site fitness centers, questions often arise about whether these benefits fall under the Employee Retirement Income Security Act (ERISA). Understanding the nuances of ERISA and how it applies to health-related benefits is crucial for employers.
What is ERISA?
ERISA is a federal law that sets standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans. For a benefit program to qualify as an ERISA plan, it must provide one or more of the benefits listed in the ERISA definition, such as medical, sickness, or disability benefits.
Health Club Memberships and ERISA
Generally, paying for employees’ health club memberships does not constitute an ERISA plan. Health and fitness clubs promote general good health but are typically made available without regard to sickness or disability. They do not diagnose or treat specific medical conditions, so they usually do not provide medical care or any other ERISA benefit. Therefore, a policy or program of paying for health club memberships would not be considered an ERISA plan.
On-Site Fitness Centers and ERISA
Similarly, providing an on-site fitness center for employees does not typically make the program subject to ERISA. On-site fitness centers, like health clubs, promote general wellness but do not provide medical care or benefits in the event of sickness. Thus, they do not meet the criteria for an ERISA plan.
Exceptions: Disease-Management Programs
In rare cases, health club memberships or access to on-site fitness centers may be part of a disease-management program that includes diagnostic, therapeutic, or preventive care. These programs might offer “coaching” for specific health conditions or risks. Such arrangements could be viewed as providing a medical benefit, potentially making them subject to ERISA and applicable group health plan rules. The complexity and fact-specific nature of these programs mean that legal counsel should be consulted to determine ERISA applicability.
Tax Considerations
Whether a benefit is subject to ERISA does not affect whether it produces taxable income for participants or beneficiaries. However, an employer’s payment or reimbursement of health club dues or provision of an on-site fitness center may raise tax issues, which should also be reviewed with legal counsel.
Conclusion
While health club memberships and on-site fitness centers generally do not fall under ERISA, exceptions exist, particularly when these benefits are part of a broader health management program. Employers should carefully evaluate their programs and consult with legal counsel to ensure compliance with ERISA and tax regulations.
Source: Thomson Reuters
by admin | Sep 5, 2024 | Blog
When considering design changes to a self-insured group health plan, it’s crucial to understand the regulations surrounding annual dollar limits on benefits. Specifically, group health plans and insurers are prohibited from establishing annual limits on the dollar amount of essential health benefits for any individual. This means that your plan cannot be amended to impose a $1.5 million annual dollar limit on benefits.
Key Points to Consider
- Prohibition of Annual Limits:
- Since January 1, 2014, group health plans cannot impose annual dollar limits on essential health benefits.
- Essential health benefits include categories such as emergency services, hospitalization, and prescription drugs.
- Permissible Limits:
- While annual dollar limits on essential health benefits are prohibited, limits can be imposed on specific covered benefits that are not considered essential health benefits.
- These limits must comply with other federal and state laws.
- Definition of Essential Health Benefits:
- Essential health benefits encompass a range of categories and services within those categories.
- Self-insured health plans and insured plans in the large group market are not required to cover all essential health benefits but cannot impose annual dollar limits on those they do cover.
- Flexibility in Defining Essential Health Benefits:
- Group health plans not required to cover all essential health benefits have the discretion to define these benefits for the purpose of the dollar-limit prohibition.
- This definition is generally based on any state benchmark plan.
Understanding these regulations is vital for ensuring compliance and making informed decisions about your self-insured group health plan. While you cannot impose an annual dollar limit on essential health benefits, there is flexibility in defining these benefits and imposing limits on non-essential benefits within the bounds of federal and state laws.
Source: Thomson Reuters
by admin | Aug 23, 2024 | Blog
Health plans must communicate effectively with all members, regardless of their language. The Affordable Care Act (ACA) mandates that claims and appeals notices be provided in a culturally and linguistically appropriate manner. Here’s how health plans can meet these requirements.
Key Requirements
1. Population Threshold: If 10% or more of a county’s population speaks a non-English language, notices must include a statement in that language explaining how to get help. This is based on U.S. Census data and updated on government websites.
2. Oral Language Services: Health plans must offer phone assistance in the non-English language to answer questions and help with claims and appeals.
3. Written Notices: All English notices must have a clear statement in the non-English language about how to access language services.
4. Translation Upon Request: Full notices must be provided in the non-English language if requested.
Implementation Tips
- Stay Updated: Regularly check the Department of Labor (DOL) and Health and Human Services (HHS) websites for the latest information.
- Use Provided Language: Utilize the sample statements provided by the agencies to ensure compliance.
- Train Staff: Ensure customer service representatives are trained to assist in multiple languages.
Conclusion
Providing notices in different languages is crucial for fair access to healthcare information. By following these guidelines, health plans can better serve their diverse members and comply with the ACA.
Source: Thomson Reuters
by admin | Aug 15, 2024 | Blog
Navigating the complexities of federal laws like HIPAA and FMLA can be challenging for employers. One common question is whether HIPAA requires an individual’s authorization before an employer can receive their Protected Health Information (PHI) for Family and Medical Leave Act (FMLA) compliance purposes. This blog post aims to clarify this issue and provide guidance on how to handle PHI in compliance with both HIPAA and FMLA.
What is HIPAA?
The Health Insurance Portability and Accountability Act (HIPAA) is a federal law designed to protect sensitive patient health information from being disclosed without the patient’s consent or knowledge. It sets the standard for protecting PHI and applies to healthcare providers, health plans, and healthcare clearinghouses.
What is FMLA?
The Family and Medical Leave Act (FMLA) allows eligible employees to take unpaid, job-protected leave for specified family and medical reasons. Employers may require medical certification to support the need for leave due to a serious health condition.
When is Authorization Required?
Whether an employer needs an individual’s authorization to receive PHI under HIPAA depends on the source of the information and the relationship to the individual.
- Employee Provides Information:
- If an employee seeking FMLA leave obtains the necessary medical information from their healthcare provider and then forwards it to the employer, no HIPAA authorization is required. The employee has the right to share their own PHI.
- Direct Communication Between Employer and Provider:
- If the employer communicates directly with the healthcare provider, HIPAA requires the employee’s authorization for the provider to disclose PHI. This authorization must meet HIPAA’s technical requirements.
- Family Member’s Health Information:
- If the FMLA leave is for a family member’s serious health condition, the family member’s authorization is required for the provider to release their PHI to the employee or employer.
FMLA Regulations on Employer-Provider Contact
FMLA regulations limit the contact an employer can have with an employee’s healthcare provider. If the employee submits a sufficient medical certification, the employer cannot request additional information from the provider. However, the employer may contact the provider for clarification and authentication through a designated representative, not the employee’s direct supervisor. If this involves disclosing PHI, the employee’s HIPAA authorization is necessary.
Conclusion
Employers must navigate both HIPAA and FMLA regulations when handling PHI. Understanding when authorization is required can help ensure compliance and protect the privacy of employees and their family members. Always consult with legal counsel to address specific situations and ensure adherence to all applicable laws.
Source: Thomson Reuters
by admin | Aug 15, 2024 | Blog
Navigating the complexities of Dependent Care Assistance Programs (DCAP) can be challenging, especially when dealing with midyear election changes and nondiscrimination rules. This blog post will explore whether an employee can begin contributing to a DCAP midyear if their spouse’s contributions are cut off to avoid a nondiscrimination failure, and whether an employer can cut off an employee’s salary reductions midyear for the same reason.
Midyear DCAP Election Changes
One common scenario involves an employee who initially elected not to make DCAP salary reductions because their spouse, employed elsewhere, made a $5,000 DCAP election. If the spouse’s contributions are discontinued midyear to avoid a nondiscrimination test failure, the employee may wish to start making DCAP salary reductions. According to IRS officials, a cafeteria plan may permit this midyear election change if it allows changes due to a “change in coverage under another employer plan.”
Key Points to Consider:
- Plan Provisions: Ensure your cafeteria plan includes provisions for election changes due to changes in coverage under another employer plan.
- Employee Certification: The employee must certify that the change in coverage event occurred.
- Contribution Limits: The maximum annual DCAP exclusion for a married couple filing jointly is $5,000. Employees should not exceed this limit, considering the spouse’s contributions already made for the year.
Cutting Off Salary Reductions Midyear
Employers may also need to cut off an employee’s salary reductions midyear to comply with nondiscrimination rules. While not explicitly mentioned in IRS regulations, IRS officials have informally commented that such provisions do not violate the irrevocable election requirement.
Steps for Employers:
- Plan Provisions: Include provisions in your plan that allow the plan administrator to reduce or discontinue salary reductions to comply with nondiscrimination rules.
- Monitoring Compliance: Regularly monitor compliance with nondiscrimination rules throughout the plan year to make necessary adjustments before year-end.
Understanding and implementing midyear DCAP election changes and managing nondiscrimination compliance are crucial for both employers and employees. By ensuring your cafeteria plan includes the necessary provisions and monitoring compliance, you can navigate these challenges effectively.
Source: Thomson Reuters
by admin | Aug 8, 2024 | Blog
COBRA, the Consolidated Omnibus Budget Reconciliation Act, provides employees with the option to continue their health insurance coverage after leaving their job. However, certain circumstances can lead to the early termination of this coverage. One such circumstance is the submission of fraudulent claims.
Terminating COBRA Coverage for Fraudulent Claims
A qualified beneficiary’s COBRA coverage can be terminated for submission of fraudulent claims if three key requirements are met:
- The health plan must allow the termination of active employees’ coverage for the same reason.
- The plan must permit the termination of COBRA coverage for cause.
- The plan’s COBRA notices and communications must disclose the plan’s right to terminate coverage for cause.
Regulatory Guidelines
COBRA regulations specify that a qualified beneficiary’s coverage may be terminated for cause on the same basis that would apply to similarly situated active employees under the terms of the plan. This includes the submission of fraudulent claims. Thus, if an active employee’s coverage can be terminated for submission of fraudulent claims, COBRA coverage can be terminated early for the same reason, provided it is allowed by the plan and disclosed in COBRA notices and the plan’s summary plan description.
Proceeding with Caution
Terminating coverage early is a decision that should be made with caution. Employers wishing to terminate COBRA coverage early for other types of misconduct would need to analyze the circumstances to determine whether the plan would allow termination of an active employee’s coverage for that type of misconduct. It is advisable to consult with legal counsel and the plan’s insurer or stop-loss insurer if applicable.
Final Steps
If you decide to terminate the qualified beneficiary’s coverage based on fraudulent submission, remember to send the required notice of termination of COBRA coverage to any qualified beneficiary whose COBRA coverage terminates before the expiration of the maximum coverage period.
In conclusion, while it is possible to terminate COBRA coverage early due to fraudulent claims, it is a decision that should be made carefully, following the guidelines set forth by your health plan and COBRA regulations.
Source: Thomson Reuters
