Under new rules issued July 14, 2010, non-grandfathered group health plans and health insurance issuers offering group or individual health insurance coverage on or after September 23, 2010 must provide a range of preventive services and eliminate any cost-sharing requirements, such as co-payments, coinsurance, or deductibles, for such benefits when they are offered by a network provider. Plans may still impose cost-sharing arrangements for services provided out-of-network. In addition, those plans that are considered "grandfathered" are exempt from these coverage requirements.

In essence, the rules mandate that non-grandfathered plans cover preventive services that have strong scientific evidence of their health benefits, as rated by the U.S. Preventive Services Task Force, an independent panel of scientific experts. Such services include breast and colon cancer screenings, screening for vitamin deficiencies during pregnancy, screenings for diabetes, high cholesterol and high blood pressure, and tobacco cessation counseling. The recommended services for children include services for children up to age 21 such as regular pediatrician visits, vision and hearing screening, developmental assessments, immunizations, and screening and counseling to address obesity.

With respect to preventive care for women, recommendations and guidelines developed by the Task Force and other medical care experts are expected to be issued by August 1, 2011. It is estimated that these rules will increase non-grandfathered group health plan premiums by approximately 1.5 percent.

Click here to view the regulations.

Click here to view the listing of covered preventive services.

HHS has launched a new website that provides information for consumers about both public and private health coverage options available in their states. This website is the "web portal" required by the Patient Protection and Affordable Care Act. According to HHS, the website offers information from more than 1,000 private insurance plans and more than 500 pages of new content. The website has a locator feature that asks the user to select a state and to answer a few questions, such as age, health, and family status. The locator then provides information about public and private coverage options that may be available, including information about high risk pools and free or low-cost community services. In addition to helping consumers find coverage options, the website has information about prevention and staying healthy, understanding the new health care reform law, and a link to an HHS web tool called "Hospital Compare" that is intended to help users compare the quality of care that hospitals provide. Other resources include articles, webchat Q&A sessions, and videos on pertinent health care topics. HHS anticipates additional enhancements to the content over time.

Click here to view the web portal.

Plan sponsors must file Form 5500-series returns on the last day of the seventh month after their plan year ends. If the deadline falls on Saturday or Sunday, the deadline becomes the following Monday. Calendar-year plans typically must file by July 31. Because July 31, 2010 falls on a Saturday, the deadline will be Monday, August 2, 2010. Plans may request an extension to file by submitting Form 5558, Application for Extension of Time to File Certain Employee Plan Returns, by that plan's original due date.

New for the 2009 plan year is the electronic-filing requirement, which applies to plans beginning on or after January 1, 2009. Paper forms will no longer be accepted, with a few exceptions including plan sponsors eligible to file a Form 5500-EZ and delinquent and amended 2008 plan year filings. We can provide several resources to assist with the new electronic filing requirement, including a summary of the changes, with hyperlinks to available resources, and FAQ's.

The DOL has issued a set of 16 FAQs addressing the process for obtaining electronic credentials under EFAST2, the all-electronic filing system required for 2009 plan year filings of Form 5500. In addition, an existing set of EFAST2 FAQs has been expanded to address the submission of PDF files.

Q/A-1 addresses who must register for EFAST2 credentials, which includes: (1) anyone completing Form 5500 using IFILE; and (2) plan sponsors, plan administrators, and service providers having written authorization to file on a plan administrator's behalf under the EFAST2 e-signature option.

Q/A-2 outlines the registration process for EFAST2 credentials, which are generally required for most EFAST2 functions. This process involves: (1) reading and accepting a privacy statement; (2) providing contact information and selecting a user type (e.g., filing author, filing signer); (3) selecting a password challenge question and providing an answer; (4) receiving a credentials notification email and accessing a secure EFAST2 website; (5) accepting a PIN agreement and, for filing signers, a signature agreement; and (6) creating a password.

Q/A-13 clarifies that it is not possible or necessary under EFAST2 for an individual who works for multiple companies to add each of the companies to the individual's profile. Although users provide employment information when registering, EFAST2 credentials are personal and not linked to a company or plan. Q/A-13 notes that only one active registration is required and credentials can be used to identify a registrant for multiple years and for multiple filings.

The expanded set of EFAST2 FAQs now clarifies that a PDF file that has been encrypted or password-protected to restrict editing, printing, or viewing cannot be included as part of a Form 5500 filing (Q/A-27a). If this type of PDF is included as an attachment, EFAST2 may remove it, which could result in an error that the attachment is missing. According to Q/A-27a, PDFs that have been signed or certified with a digital ID can be successfully transmitted to EFAST2. Also, Q/A-28 notes that the size of PDF files can be minimized using the "optimize" or "compress" function of certain PDF software.

Click here to view FAQs on EFAST2 credentials.

Click here to view FAQs on EFAST2 attachments.

The Department of Health and Human Services (HHS) has issued proposed regulations to implement HIPAA privacy and security provisions from the HITECH Act within the Federal Register issued July 14, 2010. The requirements will not be effective until 180 days after the final regulations are effective. The regulations would require business associates to comply with certain security and privacy rule requirements as well as be subject to civil and criminal penalties. Additionally, a covered entity would be responsible for civil penalties when a business associate fails to comply with the regulations. Subcontractors of business associates will be required to comply with the privacy rules as if it were a business associate, such as the safeguarding and documentation rules.

Click here to view the Federal Register.

Click here to view the HHS privacy website.

The DOL's Employee Benefits Security Administration (EBSA) published interim final regulations in the July 16 Federal Register requiring companies providing services to employee retirement plans regulated by the department to disclose all fee information, including hidden fees, related to those services. According to the regulations' preamble, the new disclosure rules are intended to help employers that sponsor retirement plans and the plans' fiduciaries get the information they need for assessing the reasonableness of those fees, as required under the Employee Retirement Income Security Act (ERISA). The fee disclosure rules will thus require insurance companies and mutual fund providers to disclose true costs associated with recordkeeping services.

The department set an August 30 deadline for the public to submit comments on the interim final rules under Section 408(b)(2) of ERISA. The regulations will take effect July 16, 2011. The rules, which generally apply to defined contribution and defined benefit retirement plans, do not apply to simplified employee pensions described in tax code Section 408(k), SIMPLE retirement accounts, described in Section 408(p), individual retirement accounts described in Section 408(a), or individual retirement annuities described in Section 408(b).

The new rules apply to service providers that enter into contracts or arrangements with plans in exchange for $1,000 or more in direct or indirect compensation. The rules apply whether the services are performed or the compensation is received by the service provider, an affiliate, or a subcontractor.

Click here to learn more.

CMS has again updated its Medicare Secondary Payer (MSP) Mandatory Reporting User Guide for group health plans. As previously reported, effective for plan years beginning on or after October 1, 2010, the Centers for Medicare and Medicaid Services (CMS) requires certain entities to provide information concerning Health Reimbursement Arrangements (HRAs) using an online reporting system.

For the purpose of reporting, a Responsible Reporting Entity (RRE) who is required to report to CMS includes: the insurer for a fully-insured plan, the Third Party Administrator (TPA) for a self-funded plan, or the plan administrator for a self-funded plan that self-administers.

According to the user guide, an RRE that is an HRA only plan with no additional reporting for any other type of group health plan should have registered with CMS by June 30, 2010. Entities that are RREs are not required to register with CMS if they will have nothing to report. The plans that are reported do not include: Health Flexible Spending Accounts, Health Savings Accounts, stand-alone dental, stand-alone vision, or prescription drug plans.

The first report will be due October 1, 2010 and then the RRE must file on a quarterly basis. There are two exceptions. Small plans sponsored by employers with less 20 employees need only report those receiving a kidney transplant or kidney dialysis. Also, plans with less than $1,000 annual benefit maximum are exempt.

Previously, guidance issued by CMS stated that "integrated" plans that were imbedded or part of a comprehensive group health plan were also excepted from the reporting requirements. However, the most recent version of the guide eliminated that exception. HRA coverage of any kind, free-standing or integrated, must be reported in addition to other, non-HRA group health plan coverage.

One other change that was made in the new user guide stated that beginning July 17, 2010, instead of reporting an individual's Social Security number, an RRE may report the unique identification number used for the individual, such as a policy number.

Click here to view the user guide.

In the American Bar Association's Joint Committee on Employee Benefits meeting with IRS and Treasury Officials (May 6-8, 2010), 47 FAQs were issued as part of unofficial, nonbinding remarks about issues ranging from leave-sharing arrangements, HSAs, and 401(k) plans.

Leave-sharing Programs - In Q/A-1, officials were asked whether employees who donated paid time off (PTO) credits under an employer-sponsored leave-sharing program would be taxed on the value of the donated PTO if the donations were made by waiving PTO credits before they were earned. The IRS stated that donors could only avoid tax on their donations if the program conformed to current IRS guidance permitting donations for other employees' "medical emergencies."

Effect of Domestic Partner HDHP Coverage on HSA Contributions - Q/A-3 asked about the applicable HSA contribution limits when an employee has high-deductible health plan (HDHP) coverage that covers a domestic partner who is not a dependent. The IRS representative agreed that the HDHP coverage constitutes family coverage for purposes of the HSA contribution limits, and that the special limitation rule for married individuals does not apply because the domestic partner is not considered the employee's spouse (due to the federal Defense of Marriage Act). As a result, both the employee and the domestic partner should be able to make contributions to their own HSAs up to the higher contribution limit for family HDHP coverage.

Taxation of Rollovers from After-tax Accounts - Officials were asked a series of questions (Q/A-11, Q/A-12 and Q/A-13) regarding the tax treatment of amounts distributed from after-tax accounts in a retirement plan (such as a 401(k) plan). Each question focused on the latest version of the Code Section 402(f) rollover notice and how it interprets the rule that treats certain distributions as coming first from the taxable portion of a distribution that includes both pre-tax and after-tax components. In response to all three questions, the IRS representative indicated that the key to understanding the rollover notice's application of Code Section 402(c)(2) is to properly identify the distributions.

Click here to learn more.

The IRS has issued the July 2010 Special Edition of the Employee Plans News which includes articles on:

• New Form 8955-SSA
• Notice 2010-48
• Heads Up - User Fees to Increase February 1, 2011
• Help Wanted: TE/GE Seeks Candidates for Senior Tax Law Specialist Positions

Click here to view the special edition.