J&D Benefits Perspective

Latest CMS Guidance on Mandatory MSP Reporting

David Y. Stevens, Associate, Spencer Fane Britt & Browne LLP

As of January 1, 2009, most group health plans became subject to the Mandatory Medicare Secondary Payer Reporting Program.  On March 16, 2009, the Centers for Medicare and Medicaid Services (“CMS”) issued the latest version (“Version 2.2”) of the Group Health Plan User Guide for use by responsible reporting entities (“RREs”) under this Program.

The recent updates are generally clarifications, but they could be significant for certain RREs.  While FSAs and HSAs are not reportable, HRAs are considered to be reportable group health plans.  CMS has now clarified, however, that RREs need not report HRA coverage information until October 2010.  The reason for this delay is to allow RREs time to gather the information needed to report on HRA coverage. CMS has indicated that it will provide further guidance on reporting HRA coverage at a later date. 

The new User Guide also points out that CMS prefers RREs to use the Medicare “health insurance claim number” of a Medicare enrollee, if available, rather than the individual’s social security number.

RREs should download the latest User Guide from the CMS web page and review any other updates that may be applicable. 

From United Benefit Advisors Benefits and Employment Briefing, Second Quarter 2009

Johnson & Dugan comment: Although MSP Reporting requirements are the responsibility of "an entity serving as an insurer or third party administrator for a group health plan...", employers should be aware of the requirements and be prepared to respond to insurance carrier requests for information.

Preparing for Travel Abroad

Kathleen A. Dugan, Chief Operating Officer, Johnson & Dugan

In light of recent concern over the Swine Flu virus and traveling abroad in general, below are two websites that are very good for all travelers to review before leaving the country. The sites will also direct visitors to the CDC, as well as travel alerts for all countries. Additionally we have been getting many requests for travelers who need to purchase travel insurance for themselves or family members. Between the two websites there is a wealth of information that may be useful for your employees.

Travel Health Online: Register at https://www.tripprep.com

This site is for travelers who wish to find out about everything from what immunizations are needed for the Countries being visited, which Countries have possible quarantine restrictions, travel alerts, Visa requirements, Centers for Disease Control (CDC), and links to government websites of importance.

Swine Flu – Resources for Employers

This featured article was originally published on April 30, 2009.

A new concern for employers is the recent news of a swine flu outbreak that started in Mexico and is now spreading in the United States and other countries. Confirmed cases of swine flu have been reported in California and 10 other states, and the US government is warning that a pandemic (global flu outbreak) is imminent. The U.S. Department of Health and Human Services (HHS) defines a pandemic on their Pandemic Flu website: Click Here

Employers should be taking action now to assess risk and implement an action plan. An abundance of information is available on several government websites. First, the HHS Pandemic Flu Website is “One-stop access to U.S. Government swine, avian and pandemic flu information.”: Click Here. Within the site, you will find State and Local Government Planning & Response Activities and Workplace Planning, including checklists, letters and guidance for employers and employees.

The Centers for Disease Control (CDC) Swine Flu Website is also an excellent resource, starting with their Swine Flu Q&A. Also on the site are confirmed cases tracked by state which are updated regularly. Companies should be aware of areas where outbreaks have occurred, and adjust work travel as necessary.

Both the HHS Pandemic Flu Website and the CDC Swine Flu Website allow you to sign up for e-mail alerts so that you can be advised as new information is available.

Finally, The U.S. Department of Labor Occupational Safety & Health Administration (OSHA) offers an online handbook (also available in PDF format): “Guidance on Preparing Workplaces for an Influenza Pandemic”.

Please contact your Johnson & Dugan team if you have any questions.

IRS Releases COBRA Subsidy Guidance

Jody Lee, Compliance Manager, Johnson & Dugan

The IRS released Notice 2009-27, which provides guidance in the form of 58 Questions and Answers with corresponding examples. Topics covered in the Notice include:

• The definition of "involuntary termination"
• Directions for calculating the premium reduction, including severance pay scenarios
• Explanation of what coverage is eligible for the subsidy
  
• Determination of the coverage periods.

The Notice provides welcome guidance in a number of areas. Employers should review the information to ensure that their COBRA Subsidy procedures are in compliance. Contact your Johnson & Dugan team for more information or assistance.

COBRA Subsidy - What Employers Can Do Now

Jody Lee, Compliance Manager, Johnson & Dugan

Employers are anxious to comply with the March 1, 2009 effective date of the COBRA Subsidy that was included in the American Recovery and Reinvestment Act signed by President Obama on February 17, 2009. The deadline for the Department of Labor (DOL) to publish the model notices is right around the corner, and employers as well as Assistance Eligible Individuals (AEI) patiently await the guidance these will notices offer. Although there are still many unanswered questions, some things are clear.

Specific deadlines have been set. Here is a timeline of important dates for employers and AEI's:

Date	Action
February 17, 2009	American Recovery and Reinvestment Act signed into law
March 1, 2009	COBRA Subsidy takes effect (pending model notice - subsidies may take effect retroactively)
March 19, 2009	Deadline for the DOL to publish model notices
April 18, 2009	Deadline for employers to provide notice to AEIs
Date of Notice + 60 days	Deadline for individuals to elect Second Chance COBRA per the special COBRA election period

Given the above dates, employers should prepare their compliance plan:

• Identify all terminations back to 9/1/08, including individuals involuntarily terminated. The Notice should go to all employees that lost coverage, although only those involuntarily terminated are eligible for the subsidy. Individuals will have the right to apply, and their request can be denied. A claim appeal process is included in the law.
• Once the model notices have been published, notifications must be distributed.
• Companies that outsource COBRA Administration should coordinate the identification and notification process with their vendor.
• Coordinate with payroll vendor to understand the mechanics of reporting and claiming the tax credit. (This will not apply to small employers subject to CalCOBRA rules.)

Johnson & Dugan will be providing clients with the model notices when they become available. We will also continue to distribute updates that clarify compliance rules when available. Contact your Johnson & Dugan team if you have any questions.

New Bills Will Greatly Affect Discrimination Claims, Health Benefits

President Barack Obama kicked off his first few weeks in office by signing a pair of bills that will significantly affect benefits compliance and discrimination lawsuits against employers.

Obama’s first significant bill, the Lilly Ledbetter Fair Pay Act of 2009, likely will make it easier for employees to sue employers for pay discrimination.

The bill overturns a 2007 Supreme Court ruling that stated that a worker, in order to meet the statute of limitations, had to file a discrimination claim within 180 days from the company’s initial decision to pay that worker less than another employee doing the same job.

The new law, however, removes any statute of limitations, meaning each paycheck can be a possible instance of discrimination.

Healthy San Francisco 2009

Jody Lee, Compliance Manager, Johnson & Dugan

San Francisco employers should be aware of the upcoming deadline to submit the Annual Reporting form for the Health Care Security Ordinance (Healthy San Francisco) to the Office of Labor Standards Enforcement (OLSE). For-profit employers with 20 or more employees and nonprofit organizations with 50 or more employees must submit the form by April 30, 2009 to report the minimum health care expenditures for covered employees.

2009 changes:
•    Employees are eligible when working only 8 hours per week, after completion of 90 calendar days of employment.
•    2009 expenditure rates are $1.23/hour for a Medium Business Size (20-99 employees) or $1.85/hour for a Large Business Size (100+ employees). These rates should be used to calculate the minimum expenditure for the first quarter of 2009.
•    The annual salary exemption limit has increased to $80,397 or $38.65/hour. A manager, supervisor or confidential employee earning above the limit will be exempt from coverage under the ordinance.

Michelle’s Law – Coverage for College Students on Medical Leave of Absence

Jody Lee, Compliance Manager, Johnson & Dugan

Both the federal government and the State of California have passed “Michelle’s Law”, allowing college students to continue coverage on a parent’s group health plan if they are required to take a medical leave of absence from school. The laws are similar, but each takes effect on a different date. California Legislation, SB1168, took effect on January 1, 2009 and the Federal law, HR2851, will take effect on the first day of the Play Year on or after October 9, 2009.

IRS Publications for 2008 Tax Filing

The IRS has released Publication 502 Medical and Dental Expenses and Publication 503 Child and Dependent Care Expenses for the 2008 tax filing year. These publications are specific to tax filing, but can be used as general guidelines for Healthcare and Dependent Care Flexible Spending Account plans. The Plan Administrator is the final source for determination of flex plan rules.

Contact your Johnson & Dugan team for additional information on Flexible Benefit Plans.

Mandatory Workplace Posters for 2009

Jody Lee, Compliance Manager, Johnson & Dugan

California employers are required to display posters in the workplace that explain workers’ rights to employees. Several changes will take effect in 2009 that will make current posters out of date. These changes include:

• Modifications to FMLA notice requirements as a result of final regulations taking effect on January 16, 2009
• California Employment Development Department (EDD) employee notice change in 2009
• Mandatory change to Equal Employment Opportunity (EEO) poster language

New posters can be ordered from various HR communication vendors, or from the California Chamber of Commerce (http://www.calbizcentral.com). In addition to the poster update, many required employee pamphlets will also be changing. Johnson & Dugan will be sending out an update to clients with these new employee materials. Johnson & Dugan clients should also be on the lookout for the annual Legislative Update, with details on new laws affecting employer benefit plans. The 2009 Legislative Update will include new California and Federal legislation, Qualified Retirement Plan limits, HSA and HDHP limits and employer notice requirements.

Please contact your Johnson & Dugan team if you have any questions.