United States: Upcoming Health And Welfare Plan Requirements Checklist For Employers

As the mid-way point of 2014 approaches, employers should actively turn their attention to several upcoming compliance obligations for the health and welfare benefit plans they sponsor.  Below is a checklist of upcoming health and welfare compliance initiatives which require action by employers, including preparation for upcoming fees and penalties under the Affordable Care Act (ACA), the filing of required forms and distribution of relevant notices.

July 2014

July 31 – Deadline to pay PCORI fee for 2013 plan year

The Patient-Centered Outcomes Research Institute (PCORI) fee is assessed on self-insured and fully-insured health plans in the amount of $2 per participant to fund research regarding patient-centered outcomes for medical treatment.  The PCORI fee is due the July 31 following the end of the plan year for which the fee is collected.  For 2013, the fee is due July 31, 2104.  Plan sponsors of self-insured health plans pay the fee by filing Internal Revenue Service (IRS) Form 720.

September 2014

September 22 – Deadline to execute updated business associate agreements for the final HIPAA regulations (generally applicable to agreements in effect on January 25, 2013)

The final Health Insurance Portability and Accountability Act of 1996 (HIPAA) regulations issued in 2013 gave HIPAA-compliant business associate agreements in effect on January 25, 2013, (that were not renewed or modified between March 26, 2013, and September 23, 2013) until the earlier of (i) the date the agreement is renewed or modified after September 23, 2013, and (ii) September 22, 2014, to be updated and executed in compliance with the final regulations.  Plan sponsors should review all existing business associate agreements and ensure that they have been updated for the final regulations.  It is especially important to comply with this and all other HIPAA requirements in light of increasingly aggressive enforcement activity by the U.S. Department of Health and Human Services (HHS) regarding HIPAA compliance.

September 30 – Deadline to provide Summary Annual Report (if no Form 5500 extension granted)

Calendar year health and welfare plans that were not granted an extension to file the Form 5500 have until September 30 to furnish the related Summary Annual Report to plan participants.

Prepare for the employer shared responsibility requirements

Employers should prepare for the employer shared responsibility requirements under Internal Revenue Code Section 4980H by completing the following tasks (it is recommended these tasks be completed during September and October to ensure compliance by January 2015):

  • Establish a system for identifying full-time employees (those working 30 or more hours per week
  • Adopt an hours-counting methodology for variable, part-time, temporary and seasonal employees
  • Adopt a monthly measurement or look-back measurement method
  • Document plan eligibility rules
  • Test plans for affordability and minimum value
  • Examine the design of any health reimbursement account/health flexible spending account plans to ensure compliance with the ACA, including agency guidance addressing stand-alone and integrated arrangements and how to count health reimbursement accounts for purposes of affordability requirements under Code Section 4980H

October 2014

October 14 – Deadline to provide Medicare Part D Notice of Creditable Coverage

Employer sponsors of group health plans that offer prescription drug coverage to active and retired employees who are Medicare-eligible individuals must provide notice to Medicare Part D eligible individuals stating whether the expected amount of paid claims is at least as much as the expected amount of paid claims if the individual enrolled under Medicare Part D.

Open Enrollment – Deadline to provide SBC

Group health plans must distribute a summary of benefits and coverage (SBC) that accurately describes benefits and coverage under the plan to all plan participants and beneficiaries beginning on the first day of the first open enrollment period.  For those participants and beneficiaries who do not enroll in coverage through an open enrollment period, including individuals who are newly eligible for coverage or who are eligible for special enrollment under the Internal Revenue Code, the SBC must be distributed upon eligibility for plan coverage.  If a group health plan makes any material modification to the terms of the plan or coverage and the modification is not reflected in the most recently provided SBC, the plan must provide notice of the modification not later than 60 days prior to the date the modification becomes effective.

November 2014

November 5 – Deadline to obtain HPID

Group health plans that meet the definition of a controlling health plan (CHP) are required to obtain a health plan identifier number (HPID) no later than November 5, 2014.  This requirement is delayed until November 5, 2015, for small health plans.

November 15 – Deadline to submit enrollment information for the Transitional Reinsurance Fee to HHS

For 2014, the transitional reinsurance fee is set at $63 per covered life.  The fee is a per capita fee per covered life under the plan.  Self-insured, self-administered plans are exempt from the fee in 2015 and 2016, but must pay the fee in 2014.  For 2014, enrollment counts are due to HHS by November 15.

December 2014

December 15 – Deadline to provide Summary Annual Report (if Form 5500 extension granted)

Calendar year health and welfare plans that were granted an extension to file the Form 5500 have until December 15 to furnish the related Summary Annual Report to plan participants.

December 31 – Deadline to execute the (i) required amendment limiting the maximum annual health flexible spending account salary reduction to $2,500 and (ii) optional amendment adopting a carry-over feature for a health flexible spending account

Under the ACA,, the maximum annual contribution limit permissible under a health flexible spending account, effective for plan years on or after January 1, 2013, is $2,500.  Plan sponsors must adopt a plan amendment on or before December 31, 2014, to reflect this maximum contribution amount.  In addition, while not required, a health flexible spending account can be amended to provide for a carryover of up to $500 in unused flexible spending account contributions to subsequent plan years.  This carryover feature is optional and cannot be implemented if the plan also contains a grace period feature.

Annual Notices

Plan sponsors should ensure all required annual notices have been provided.  Examples of required annual notices include the Children's Health Insurance Program (CHIP) notice and the Women's Health and Cancer Rights Act Notice.  The CHIP notice has been recently updated.

Exchange Notice and COBRA Notices

Plan sponsors should develop a strategy for providing notice to employees of the existence of the Health Marketplace Exchanges that the employee may be eligible for a subsidy under the Exchange if the employer's share of the total cost of benefits is less than 60 percent and that, if the employee purchases a policy through the Exchange, he or she will lose the employer contribution to any health benefits offered by the employer.  In addition, plan sponsors should update the plan's Consolidated Omnibus Budget Reconciliation Act (COBRA) notice to reflect changes made in the most recent model notices related to the Health Marketplace Exchange.  The sample Notification of Exchange can be found here.

January 2015

January 31 – Deadline to provide Form W-2 with required ACA information

Employers are required to report the cost of group health plan coverage on an employee's Form W-2, Wage and Tax Statement, in Box 12, using Code DD.

January – Payment of First Installment of Transitional Reinsurance Fee

The first installment of the transitional reinsurance fee for 2014 will be invoiced in December of the calendar year for which coverage is provided.  Payment will be due within 30 days after the invoice date.

Access the checklist as printable PDF here.

Upcoming Health And Welfare Plan Requirements Checklist For Employers

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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