In This Issue:
- New Employer Notice Requirement Regarding CHIP
- Additional Guidance on Mental Health Parity
- EFAST2 User Guides Released
- Sex Reassignment Surgery Determined to be a Qualified Medical Expense
- COBRA Documents Now Available in Spanish
- State Updates: DC, MA, OR, SD and UT
New Employer Notice Requirement Regarding CHIP
Under the Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA), an employee or dependents who become eligible for a state premium assistance subsidy from their Medicaid or state CHIP program are eligible to enroll in the group health plan mid-year. Employers must provide notice of the premium assistance subsidy to employees who reside in a state that has such a program. On Feb. 4, 2010, the Employee Benefits Security Administration (EBSA) released a model notice for this purpose. The states that currently provide a state premium assistance subsidy program through Medicaid or CHIP are: AL, AK, AZ, AR, CA, CO, FL, GA, ID, IN, IA, KS, KY, LA, ME, MA, MN, MO, MT, NE, NV, NH, NJ, NM, NY, NC, ND, OK, OR, PA, RI, SC, TX, UT, VT, VA, WA, WV, WI, and WY.
For plan years beginning on or after Feb. 4, 2010 through Apr. 30, 2010, the notice must be distributed to eligible participants by May 1, 2010. For plan years beginning on or after May 1, 2010, the notice must be distributed by the first day of the next plan year. This means that calendar year plans would not have to distribute the notice until Jan. 1, 2011. The notice will be required on an annual basis going forward.
Click here for the model notice.
Click here for EBSA guidance.
Additional Guidance on Mental Health Parity
Ogletree Deakins has released a publication summarizing the recent guidance released on Feb. 2, 2010 regarding the Mental Health Parity and Addiction Equity Act of 2008. The summary highlights the cost exemption, which the regulations clarified is only allowed for alternating years. Additionally, the regulations state that there are six distinct and separate categories of coverage for parity, including:
- Inpatient/in-network
- Inpatient/out-of-network
- Outpatient/in-network
- Outpatient/out-of-network
- ER
- Prescription drugs
It is permissible to achieve parity through tiered prescription plans as long as tiers are based on efficacy, cost, generic/brand, and mail order. Also of importance, parity for financial requirements (including co-payments, co-insurance, deductibles and out of pocket maximums) and treatment limitations can be quantitative, such as the number of visits allowed, or non-quantitative, such as prescription drug formulary designs. The regulations reinforce that separate but equal annual limits and lifetime limits are permitted, but separate deductibles are not permitted. Finally, the regulations confirm that parity requirements still applies to carve out plans when in connection with a health plan with medical and surgical.
Click here to view the publication.
EFAST2 User Guides Released
The Department of Labor (DOL) has posted six new user guides to assist users of EFAST2, the new electronic filing system. Beginning with the 2009 plan year, health & welfare and pension plans subject to filing a Form 5500 are required to submit the filings electronically. The six user guides include the EFAST2 Guide for Filers and Service Providers. This first guide provides basic information for Form 5500 filers and their service providers, including how to become an EFAST2 user and how to use the system. It also provides basic information on troubleshooting and DOL support services. The five other guides include:
- EFAST2 Tutorial
- EFAST2 IFILE User Guide
- EFAST2 Filing Search Guide
- Most Common EFAST2 Filing Errors
- EFAST2 2009 and 2010 Third-Party Software Test Plan and Certification Procedures
The release of these user guides adds to information already released by the DOL, including visual aids, webcasts. and Frequently Asked Questions. This is all available on the DOL website.
Click here to access the user guides.
Sex Reassignment Surgery Determined to be a Qualified Medical Expense
In the case of O'Donnabhain v. the Internal Revenue Commissioner, the Tax Court ruled that hormone therapy and sex reassignment surgery were treatments for O'Donnabhain's gender identity disorder and thus, qualified medical expenses under Section 213(d) of the Internal Revenue Code. However, breast augmentation surgery was not a qualified medical expense under Section 213 because its purpose was more cosmetic than treatment. This is a noteworthy decision because reimbursements under health flexible spending arrangements (FSA), health savings accounts (HSA) and health reimbursement arrangements (HRA) are based on Section 213 qualified medical expenses. Thus, sex reassignment surgery would be reimbursable under such accounts with proper documentation that the surgery was treatment for a diagnosed medical condition.
Click here for more information.
COBRA Documents Now Available in Spanish
The Employee Benefits Security Administration (EBSA) has released several COBRA documents in Spanish including the Updated General Notice, the Premium Reduction Fact Sheet, and the Employer and Employee Guides to Health Benefits Under COBRA.
Click here to access the documents.
| District of Columbia |
The District of Columbia Department of Insurance, Securities and Banking released Bulletin 09-IB-02-05/11 in order to communicate that due to the extension of the COBRA subsidy under the Department of Defense Authorization Act of 2010, the District of Columbia has accordingly extended the period of time under which an employee is eligible for continuation of health coverage benefits to fifteen months. This will ensure that those receiving continuation of health coverage and premium assistance will be able to receive both continuation and premium assistance for fifteen months total.
Click here for more information.
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| Massachusetts |
Insurance Commissioner Murphy has issued Bulletin 2010-02 to remind insurance producers and insurers that effective Mar. 1, 2010, any person or entity that maintains, receives, stores, processes or has access to personal information of a Massachusetts resident must meet certain requirements in regards to that information. The entity must implement a written information security program and implement certain safeguards to protect the personal information including encryption of electronic information and firewall protection.
Click here to view Bulletin 2010-02.
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| Oregon |
The Oregon Department of Consumer and Business Services, Insurance Division has adopted temporary rules that amend the state's continuation coverage requirements. The maximum coverage period under the state continuation program has increased from 9 months to 15 months for those individuals who are assistance eligible individuals under ARRA.
Click here to view the Administrative Rule.
Click here to view the FAQ.
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| South Dakota |
The South Dakota Department of Revenue and Regulation has amended its insurance code to mirror federal requirements under Michelle's Law. For group health insurance policies issued or renewed after Dec. 31, 2009, coverage for dependent children on a medical leave of absence from an institution of higher learning must be continued for up to 12 months or until coverage would otherwise terminate.
Click here for more information.
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| Utah |
The Utah Health Exchange website launched in August 2009 for employers with 2-50 employees in order to comply with HB 133 (2008) and HB 188 (2009), which directed the Office of Consumer Health Services to create an internet portal that will facilitate the requirements specified in Utah's Health System Reform legislation. Under the Exchange, an employer contributes a certain amount toward employee coverage and employees choose among available options. If the employee's selected plan costs more than the employer's contribution, the employee must pay the difference. Employers must have an HRA or Section 125 plan in place in order to facilitate pre-tax premiums for the employees.
The opening of the website in August was a "limited launch", and at this time new employer groups are no longer being accepted until late spring/early summer 2010. Additionally, large employer groups with more than 50 employees will not be accepted until 2011 for a 2012 effective date.
Employers who are interested in utilizing the Utah Health Exchange for purchasing health insurance must work with an insurance agent to purchase insurance from the exchange and cannot go directly to the exchange to purchase coverage.
Click here for more information.
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This material was created by NFP, its subsidiaries, or affiliates for distribution by their Registered Representatives, Investment Advisor Representatives, and/or Agents. This material was created to provide accurate and reliable information on the subjects covered. It is not intended to provide specific legal, tax or other professional advice. The services of an appropriate professional should be sought regarding your individual situation. Neither NFP Securities, Inc. nor NFP Benefits Partners offer legal or tax services. The information contained in this edition is issued for informational purposes only and has been collected from regulations, statutes, laws, court decisions and administrative rulings and should not be viewed as interpretation or relied upon as legal or tax advice. This information is known to be current as of the initial date of distribution. Please note that changes to the legislation, regulations, statutes, policies, etc., may have occurred and are not reflected herein.
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