In This Issue:
- Health Care Reform Update
- New COBRA Model Notices Available
- IRS Clarifies Timing to Claim Payroll Tax Credit for COBRA Subsidy
- 5500 EFAST2 Website Now Available
- Winter 2010 Edition of Employee Plans News Available
- Safe Harbor Period of Seven Business Days Finalized by DOL
- State Updates: AZ, IL, IN, NJ, LA, SC, and WI
Health Care Reform Update
There are still many questions surrounding health care reform. As Congressional leaders currently negotiate to merge the House and Senate versions into a final proposal, there are questions as to what provisions will be included and how it will affect employers and employer sponsored benefit plans. Janet Trautwein, the Chief Executive of the National Association of Health Underwriters, will be conducting a special presentation. Ms. Trautwein will provide an update on the bill's status as well as discuss how employers are expected to be impacted. The webinar will be recorded and available in early February.
New COBRA Model Notices Available
The Department of Labor (DOL) released updated versions of the Model notices used to notify participants of the extended opportunity to receive the COBRA subsidy.
The Updated General Notice must be provided to all qualified beneficiaries who experienced a qualifying event at any time from Sept. 1, 2008 through Feb. 28, 2010. Qualified beneficiaries include the covered employee, a spouse and dependents covered under the plan. The extension to COBRA does not require that coverage under COBRA begins by any certain date. The only requirement is that the qualifying event occurs through Feb. 28, 2010.
The Premium Assistance Extension Notice must be provided to individuals who experienced a termination of employment qualifying event in December, 2009 but were not eligible for COBRA coverage until January, 2010. These individuals should receive both the Updated General Notice and the Premium Assistance Extension Notice and have 60 days from the date the Updated General Notice is provided to make a COBRA election.
Individuals who were "assistance eligible individuals" as of Oct. 31, 2009 and individuals who experienced a termination of employment on or after Oct. 31, 2009 and lost group health coverage must be provided the Premium Assistance Extension Notice by Feb. 17, 2010.
Individuals who had previously exhausted the nine months of subsidy, but would have been eligible to continue to receive the subsidy, are in a "transition period" and must be provided the Premium Assistance Extension Notice. This notice must be provided within 60 days of the first day of the transition period. These individuals are also provided a grace period until Feb. 17, 2010 to make any payments for December, 2009 and January, 2010 COBRA premiums.
Finally, insurance carriers must send the Updated Alternative Notice to persons who are eligible for state continuation coverage (sometimes referred to as "mini-COBRA"). This notice will need customization as continuation coverage requirements will vary among states.
Click here to view the updated DOL notice website.
IRS Clarifies Timing to Claim Payroll Tax Credit for COBRA Subsidy
The Internal Revenue Service (IRS) confirmed that employers receiving a 35 percent COBRA premium payment in 2010 for COBRA coverage that was subsidized and provided in 2009 should take the payroll tax credit in 2010, not 2009. The credit is claimed on Form 941, the quarterly payroll tax return, for the quarter in which the premium is received, or later in the same calendar year. However, in some cases the Form 941 will reflect the credit if an employer chooses to reduce its payroll tax deposits when the 35 percent COBRA premium is actually received.
Click here for more information.
5500 EFAST2 Website Now Available
The DOL's all-electronic filing system for Form 5500's, called "EFAST2," is now available on the DOL website. Electronic filing using EFAST2 is required for plan years beginning on or after Jan. 1, 2009. For calendar year plans, the Form 5500 due July 31, 2010 will be the first filing affected by the new electronic filing system. This change affects all health & welfare and retirement plans that are required to file an annual Form 5500 under Title I and Title IV of ERISA and the Internal Revenue Code.
The DOL has provided new guidance to assist those submitting delinquent or amended filings using the electronic process. Beginning Jan. 1, 2010, these filings must also be submitted electronically through EFAST2 and may no longer be submitted on paper. There is a limited exception for delinquent and amended 2008 plan year filings. Form 5500-EZ filers may still file a paper copy of Form 5500-EZ with the IRS, or certain filers may file the Form 5500-SF electronically with EFAST2. Retirement plans that need to file a Schedule SSA cannot submit this schedule through EFAST2. This schedule will be filed directly with the Internal Revenue Service. Finally, the Form 5500, Schedules, and Instructions for both the 2009 and 2010 years have been released.
Click here for more information.
Winter 2010 Edition of Employee Plans News Available
The IRS has released the Winter 2010 edition of Employee Plans News, a publication directed towards protecting retirement benefits offered though employee plans. A significant portion of the newsletter discusses the 2010 rules for Roth IRAs, with further information provided regarding upcoming enforcement priorities for the IRS.
Click here to view the Winter 2010 Edition of Employee Plans News.
Safe Harbor Period of Seven Business Days Finalized by DOL
The DOL has finalized a "safe harbor period," effective Jan. 14, 2010, which provides relief regarding the timely deposits of participant contributions in small plans. This highly anticipated rule provides a small plan, defined as fewer than 100 participants, with seven business days following receipt or withholding by employers, to deposit employee contributions into the plan. The safe harbor period provides clarification for health and welfare and retirement plans subject to the DOL's plan asset rule, which states that the contributions must be deposited as soon as the contributions could be "reasonably segregated from the employer's general assets." Participant contributions deposited within the seven business days under this rule are treated as contributed in a timely manner to employee benefit plans. The safe harbor did not provide relief for plans with 100 or more participants.
Click here to view the press release.
Click here to view the federal register.
| Arizona |
The state's Long-term Care Partnership Program is effective retroactively July 1, 2008. The Department of Insurance has issued Bulletin 2009-05 outlining the program's provisions including certain asset protection, partnership policies, and required notices.
Click here for more information.
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| Illinois |
The Illinois Department of Insurance has issued an updated Fact Sheet regarding the federal stimulus premium reduction for group continuation coverage. The fact sheet confirms that an assistance-eligible individual (as defined under Federal COBRA), is eligible for up to 15 months of mini-COBRA coverage while paying 35 percent of the premium. However, Illinois "mini-COBRA" is currently only available for 12 months. This means that individuals receiving mini-COBRA coverage are only available to receive the subsidy for the 12 months that they are covered under mini-COBRA.
Click here to view Fact Sheet
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| Indiana |
Insurance Bulletin 174 clarifies that all group health insurers must provide a loss history within 15 days of written request from the policyholder. The requirement does not apply to policies covering 50 or fewer employees. The history should include the total monthly premium, total number of employees, paid claims and a description of any catastrophic claims exceeding $50,000.
Click here for more information.
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| New Jersey |
Effective Jan. 1, 2010, the benefits under New Jersey Temporary Disability Insurance and Family Leave Insurance have increased. The weekly benefit payment has increased from $546 to $561.
Click here for more information.
The Department of Banking and Insurance has revised their website to include information on the premium assistance provisions included in the federal Department of Defense Appropriations Act (DoDAA) and how it applies to New Jersey state continuation. The Department has also issued revised model notices reflecting the changes made by DoDAA to be used to notify state continuation participants of the premium assistance extension from nine months to 15 months.
Click here for more information.
Click here to view Advisory Bulletin 10-SEH-01
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| Louisiana |
The state's Long-term Care Partnership Program is effective Oct. 1, 2009. The Department of Insurance has issued Bulletin 09-13 outlining the program's provisions including certain asset protection, partnership policies, and required notices.
Click here for more information.
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| South Carolina |
The Attorney General was asked to issue an opinion regarding statutory coverage requirements for autism spectrum disorders. The law does not clearly state whether group health insurance issued to employers outside of the state of South Carolina are required to cover residents of the state. The Attorney General has requested that either a declaratory action be brought to further interpret or the legislature should provide clarification.
Click here for more information.
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| Wisconsin |
Bulletin 1-8-2010 was issued to reinforce that the Commissioner of Insurance expects insurers to comply with the extended premium subsidy provisions for group health plans with fewer than 20 employees that are subject to the Wisconsin continuation and conversion law. Insurers have a responsibility to provide appropriate notices to individuals who have exhausted the 9 months of premium subsidy and allow additional time to pay the necessary premium. Insurers are required to provide the appropriate notices if the employer fails to do so.
Click here for more information.
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