USA: Alliant’s Employee Benefit Compliance Fast Facts & FAQ – October 21, 2016

November 9, 2016:

Asinta’s Partner in the United States, Alliant, has provided us with the following compliance content:

It’s that time again…
Open enrollment season brings long hours, hectic travel schedules, and frantic client questions. We want to remind you that compliance has your back, and that most urgent problems that come up this time of year are solvable, usually with minimal or no disruption to the open enrollment process. Here are some pointers to keep things clicking along seamlessly.

Does your client have plan changes (including coverage changes, adjustments in co-pays, deductibles, etc.)? These often require a Summary of Material Modification. Most groups simply label their open enrollment materials this way: “To the extent these provisions differ from the terms of the Summary Plan Description, they constitute a Summary of Material Modification.” This obviates the need for a separate notice. You can link to an SMM template and instructions here.

Questions about electronic distribution? In general, notices can be distributed electronically if participants have “workplace access” to a computer as part of their routine duties. If a participant does not have workplace access, electronic distribution is still possible but is more difficult and requires the consent of the participant.

Need a checklist of required notices? Check out the Campaign Builder page.

What about coverage waivers by full-time employees? Recent exchange subsidy appeals by employers have raised some concerns about what documentation will be required to verify that an adequate coverage offer was made. Encourage your clients to keep a written record of all offers of coverage, verification of receipt, and acknowledgement of coverage waivers by the employee. For clients who use an online enrollment platform, they may need to discuss this with the vendor to make sure online offers and waivers can be verified by the employer. (More discussion in last week’s FFF).

Thank you for all you do and hang in there!

Section 1557 and Tribal Entities
The final regulations provide that section 1557 does apply to programs administered by HHS, including Indian Health Services (IHS). Tribal entities are generally exempted from certain federal nondiscrimination laws, which allows tribal entities to limit services to IHS-eligible individuals. That exemption applies to section 1557 such that tribal entities aren’t now required to provide services to individuals who aren’t otherwise eligible for IHS, but section 1557 otherwise does apply to IHS programs and entities directly receiving IHS funding. Any IHS clinics would have to comply with the notice and posting provisions. The extent to which section 1557 applies to other tribal operations is an issue that should be referred to tribal or outside counsel.

Relief Extended for Student Health Coverage Arrangements
Many colleges and universities provide students (typically graduate students) with student health coverage at greatly reduced or no cost as part of their student package, which may include tuition assistance and a stipend for living expenses. For certain students, the school might reduce the cost of coverage through a credit, offset, reimbursement, stipend, or similar arrangement. Because the students receiving premium reduction arrangements may perform services for the school providing the premium reduction arrangement, stakeholders have asked whether such an arrangement is a group health plan that fails to meet the group market reforms under the ACA. Previously issued guidance provided that regulatory agencies would NOT assert that a premium reduction arrangement violates ACA rules if offered in connection with other student health coverage (insured or self-insured) for a plan year or policy year beginning before January 1, 2017. New Q/A guidance extends this relief indefinitely (pending the release of further guidance). You can link to the new Q/A here.

IRS Warns of Phishing Schemes
The IRS has received notices that individuals have been targeted in phishing schemes surrounding ACA penalties. The electronic notices are masked as a CP2000 form, which is typically issued to taxpayers who have underreported income on their tax returns. The authentic form gives taxpayers the option to state whether they agree or disagree with the determination of underreported income, as well as outlines procedures for paying the Treasury any additional tax.

The phishing scheme requests taxpayers mail a check made out to the “I.R.S.” addressed to the “Austin Processing Center,” which is a P.O. Box. Treasury officials are reminding taxpayers that any authentic CP2000 notice is sent via USPS and directs payments to the “United States Treasury.” The IRS does not initiate contact with taxpayers through email or social media platforms. For further information, the IRS news release can be found here.

Do you have questions regarding employee benefits or compliance in the United States? By using Alliant’s contact form, your questions will get forwarded to our Partner at Alliant in the United States, Sean Leary.