Legislative Update - August 2012

Important Information Regarding the PPACA Summary of Benefits and Coverage Requirement Group health plans which include HRAs, MERPs and non-excepted FSAs must provide a Summary of Benefits and Coverage (SBC) for all eligible plans to all eligible individuals, participants and beneficiaries. The SBC requirement goes in effect for plans re-enrolling after September 23, 2012. When must the SBC be provided? During individual enrollment with any written enrollment materials, or if no written enrollment materials, then the first day the individual is eligible to enroll During open enrollment for the coverage option in which a participant is currently enrolled Upon request, within 7 days At least 60 days prior to a mid-year benefit change How must the SBC be provided? In written or electronic form What is the penalty for non-compliance? Up to $1,000 per failure An excise tax of $100 per day per failure eBenefits Administrators, Inc. is currently reviewing the requirements to determine if some or all of the required content can be pulled from the plan details, what the best delivery methods are and if this requirement can be incorporated from our operational platform, DataPath. We are currently awaiting further guidance before we can fully determine if and how we could systemize the production of this document. ECFC is requesting relief from the Department of Labor for HRA and MERP reporting by a delay or a modification of the SBC. We will keep you informed. Click here to view a sample of the SBC in Microsoft Word format. As you will see, this document is designed specifically for a fully-insured or self-funded health plan, not for an HRA plan. Click here for more information on the requirement. Back to Top

Company News - May 2012

Online Claim Submission is Now Available! Participants now have the ability to attach and upload receipts online when submitting a claim through myRSC®, eliminating the need to print and fax forms! Acceptable file formats for receipts include .pdf, .bmp, .gif, .png and .jpg. Click here to view our simple online claim submission instructions. Back to Top

Legislative Update - May 2012

IRS Releases Guidance Concerning the 2013 FSA Contribution Limit The IRS has released Notice 2012-40 which provides guidance on the effective date of the $2,500 contribution limit to health flexible spending accounts (FSAs) under IRS Code Section 125(i) and on the deadline for amending plans to comply with the limit. The notice also provides relief for contributions that mistakenly exceed the $2,500 limit provided they are corrected in a timely manner. Specifically, Notice 2012-40 states: The $2,500 limit does not apply to plan years that begin before 2013 In the case of a short plan year, the $2,500 limit must be prorated based on the number of months in the short plan year The term "taxable year" in Section 125(i) refers to the plan year of the cafeteria plan The $2,500 limit is applied on an employee by employee basis and is applied separately for each unrelated employer that an individual may be working for during the year Plans may adopt the required amendments for each unrelated employer that an individual may be working for during the year Plans may adopt the required amendments to reflect the $2,500 limit at any time through the end of the calendar year 2014 In the case of a plan with a grace period, unused salary reduction contributions to the FSA for plan years beginning in 2012 or later that are carried into the grace period for that plan year will not count against the $2,500 limit for the subsequent plan year Relief is provided for certain salary reduction contributions exceeding the $2,500 limit that are due to a reasonable mistake and not willful neglect and that are corrected by the employer The IRS is also calling for comments related to the use of the use-it-or-lose-it rule. All of this is great news for administrators of FSAs. We will keep you informed of any further information as it becomes available. Click here to read Notice 2012-40 in its entirety. 2013 Health Savings Account Limits Released The HSA contribution limits and high deductible health plan out-of-pocket maximums have increased slightly over 2012. For individuals with self-only coverage under a high deductible health plan, the contribution limit will be $3,250 - up from $3,100 in 2012. For those with family coverage, the limit will be $6,450 - up from $6,250 in 2012. For the first time in three years, the HDHP minimum required deductibles increased. In 2013, the HDHP minimum required deductible must be $1,250 for self-only coverage or $2,500 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts but not premiums) must not exceed $6,250 for self-only coverage or $12,500 for family coverage. Click here to read Revenue Procedure 2012-26 in PDF format. Additional PPACA FAQs Clarify Summary of Benefits and Coverage Provision This month, the Departments of Labor, HHS and Treasury jointly issued 14 new "Frequently Asked Questions" (FAQs Part IX), clarifying implementation of the Summary of Benefits and Coverage (SBC) provision of PPACA. These FAQs largely address questions that had been raised in response to the February 14 final regulations on SBCs. Click here to read the FAQs. Back to Top

Legislative Update - March 2012

Health Care Reform: Opening Day for Supreme Court Hearing The U.S. Supreme Court opened hearings today to decide on the constitutionality of the signature health care reform law. The root of the case is PPACA's "mandate" which deducts a penalty from the tax refund of a person without health insurance. Those challenging the act argue the mandate exceeds Congress' power to regulate commerce because it wrongly forces people who opt out of the insurance market to spend money for a policy. That's not all that is at stake here. The three days of oral arguments will review four questions originally raised in the various lower court PPACA challenges, including the individual mandate, the severability of the insurance mandate from the other provisions of the law, the Anti-Injunction Act and the Medicaid expansion. Today's argument focuses on the Anti-Injunction Act which says an individual cannot bring a lawsuit against the government to stop a tax from being collected; the individual must pay the tax in question and then sue after-the-fact for a refund. The court assigned an attorney to argue the penalty for such noncompliance with the individual mandate is a tax. Tuesday's argument looks at the core issue - the constitutionality of the individual insurance requirement. The states argue Congress lacks authority under the Constitution in forcing Americans to buy insurance whether they want it or not. On Wednesday, the "severability" of the mandate will be argued as well as the constitutionality of the law's massive expansion of Medicaid. If the Court decides to accept the arguments against the mandate, then it must decide whether the mandate is "severable" - if it can nullify the provision while still upholding the rest of the law. As always, we will keep you abreast as the final decision in the health care overhaul unfolds. Back to Top

Legislative Update - January 2012

New Guidance on Group Health Insurance Coverage Informational Reporting The IRS has issued new guidance to clarify how employers and benefit plan administrators will need to meet Form W2 health benefit cost reporting requirements, including the treatment of FSAs, HRAs, EAPs and wellness programs as well as supplemental coverage. The W2 reporting requirements were created under PPACA and for informational purposes only so that employees are provided with comparable consumer information on the cost of their health care coverage. Notice 2012-9 restates and amends the interim guidance initially provided in Notice 2011-28 and includes the following changes: States that the reporting requirement does not apply to coverage under a health FSA if contributions occur only through employee salary reduction elections (Q&A-19). Clarifies that employers may include the cost of coverage under programs not required to be included under applicable interim relief, such as the cost of coverage under an HRA (Q&A-33). Employers are not required to include the cost of coverage under an employee assistance program, wellness program or on-site medical clinic in the reportable amount if the employer does not charge a premium with respect to that type of coverage provided under COBRA to a qualifying beneficiary (Q&A-32). Employers do have to include the cost of any supplemental health benefits, such as cancer insurance they pay for, but they do not have to include the cost of supplemental health benefits that the employees pay for with after-tax dollars (Q&A-38). The guidance is applicable beginning with 2012 Forms W2 (forms required for the 2012 calendar year that employers are required to give employees by the end of January 2013). In addition, employers may rely on the guidance provided in this notice if they voluntarily choose to report the cost of coverage on 2011 Forms W2, even though this reporting is not required for 2011. Click here to read Notice 2012-9 in PDF format. Back to Top

Legislative Update - December 2011

HHS to Give States More Flexibility to Implement Health Reform States now have more freedom and flexibility to implement PPACA and design comprehensive coverage options known as essential health benefits for consumers. The Department of Health and Human Services (HHS) announced this month a proposal to define essential health plan benefits and give states the flexibility to select an existing health plan to set the benchmark for items and services included in the essential health benefits package. States can choose one of the following health insurance plans as a benchmark: One of the three largest small group plans in the state One of the three largest state employee health plans One of the three largest federal employee health plan options The largest HMO plan offered in the state's commercial market The benefits and services included in the health insurance plan selected by the state would be considered the essential health benefits package. Plans can modify coverage with a benefit category provided they do not reduce the value of coverage. States must ensure the package covers items and services in at least 10 categories of care, including preventive care, emergency services, maternity care, hospital and physician services and prescription drugs. Click here to read the HHS bulletin. Standard Mileage Rates for 2012 The IRS has issued optional standard mileage rates for operating an automobile for business, medical or moving expenses. Effective Jan. 1, 2012, the new rates will be 55.5 cents per mile for business expenses and 23 cents for medical or moving purposes. Charitable contribution related mileage remains fixed at 14 cents. The rate for business mileage is unchanged from the mid-year adjustment that became effective on July 1, 2011 resulting from the increase in gas prices. The medical and moving rate has been reduced by 0.5 cents per mile from 2011. Click here to read Announcement 2012-01 in PDF format. Mass Transit Limits Decrease Beginning January 1, 2012 As you know, Congress temporarily amended the commuter benefit in 2009 to allow employees to pay up to $230 per month in transit fares with pre-tax dollars - the same amount allowed for parking expenses. Before 2009, the transit benefit was limited to just $120 per month. Unless Congress acts to extend the $230 benefit level or make it permanent, the transit benefit will decrease to $125 per month effective January 1, 2012. Workers will still be able to contribute up to $240 per month for parking, an increase of $10 for 2012. Last year, lawmakers extended the higher cap level for transit benefits in 2011, but it's unclear if Congress will take action before the end of the year. 2012 HSA Changes 2012 brings with it changes for contribution and plan limits. For the past two years, HSA contribution limits have remained static with the single contribution set at $3,050/$6,150 for families and an additional $1,000 catch-up contribution for those 55 and older. However, contribution limits will once again change for 2012, as dictated by the results on an annual calculation for inflation factors. For the 2012 calendar year, the annual limitation on deductions for an individual with self-only coverage under a high-deductible health plan will be $3,100. The annual limitation on deductions for an individual with family coverage under a high-deductible health plan will be $6,250. The catch-up contribution for those 55 and older will remain at $1,000. This should be great news for people who want to maximize their pre-tax savings and invest more for their future health care needs. Also be aware that the contributions for the 2011 tax year can be made up until April 15, 2012. Just be sure the HSA trustee is notified that contributions are for 2011. Click here to view the IRS document with additional information on 2012 contribution limits. Back to Top