Form 5500 filing deadline is Oct. 15, 2010, for calendar year plans that previously filed an extension (Form 5558). As of this publication, the DOL has not provided an extension for filings, even as these plans prepare to file electronically for the first time. Electronic filing using the EFAST2 systems applies for plan years beginning on or after Jan. 1, 2009.

On October 12, 2010, the IRS published IRS Notice 2010-69, providing interim relief to employers by initiating a one-year delay of the new requirement that employers report the cost of coverage under an employer-sponsored group health plan on Form W-2.  The notice makes the new reporting requirement optional for employers in 2011.

Under the new reporting and disclosure requirements created by this year's health reform legislation, employers were previously required to include the value of employer-provided coverage on their forms.  The IRS indicated that the delay was prompted in an effort to give employers additional time to update payroll systems and administrative procedures in preparation for compliance with the new reporting requirement.  The IRS also emphasized that the W-2 reporting requirement is for informational purposes only, and that the amounts reported on the forms will not be taxable.

Although relieved from the reporting requirement in 2011, employers should be ready to report an employee's employer-sponsored coverage for 2012 on the W-2 statements issues in January 2013.

Simultaneous with the announcement, the IRS issued draft Form W-2 for 2011, which employers use to report wages and employee tax withholding.  The draft Form W-2 includes the codes that employers can use to report the cost of coverage under an employer-sponsored group health plan.

Additional guidance on the W-2 health cost coverage reporting requirement is anticipated to be published by the IRS later this year.

Click here to view the the notice.

In response to the recent IRS Notice 2010-59 issued pursuant to changes made by the Patient Protection and Affordable Care Act (PPACA), the Special Interest Group for IIAS Standards (SIGIS) is making significant changes to the list of over-the-counter (OTC) drugs and medicines considered eligible for reimbursement using a debit card at a point of sale merchant.

Based on the SIGIS press release (see link below), over 15,000 items will be removed from the Eligible Products List. Over 27,000 items will remain on the list for purchase without a prescription or the need for further substantiation. These include: insulin, medical devices (including crutches, blood sugar monitors, etc.), bandages, contact lens solution and denture bond. The updated Eligible Products List will be published on Dec. 15, 2010, and merchants will have until Jan. 15, 2011, to be compliant with the new guidance.

The Department of Labor's (DOL) Employee Benefits Security Administration (EBSA) updated its Affordable Care Act Web page on Oct. 8, 2010, to add PPACA FAQs, Part II. These nine questions further address grandfathered status scenarios, dental and vision benefits, rescissions and preventive health services, and provide clarification relating to policy year and effective date for individual health insurance policies.

Click here to view the PPACA FAQs, Part II.

Click here to view the original PPACA FAQs (Sept. 20, 2010).

The Internal Revenue Service (IRS) has released Notice 2010-66 providing guidance on the expanded adoption credit that is available for tax year 2010 as a result of the health care law, along with a draft version of the form that taxpayers will use to claim it. PPACA increased the maximum adoption credit to $13,170 per child, up from $12,150 in 2009. It also makes the credit refundable, meaning that eligible taxpayers can receive the credit even if they owe no tax for that year.

Click here to view IRS Notice 2010-66.

Click here to view IRS Draft Version of Form 8839: Qualified Adoption Expenses.

The EBSA has a website with health care reform information, including model notices. Links are available on the site for notices in English and Spanish.

PPACA has started to address Medicare's so-called "donut hole," which is a coverage gap in Medicare's prescription drug program that may cause serious financial challenges to Medicare participants who reach a certain amount of spending on their drugs. Currently, the government is issuing $250 rebate checks to Medicare participants affected by the coverage gap in 2010. Starting in 2011, Medicare participants will receive a 50 percent discount on covered brand-name drugs they need while in the "donut hole," and will start to pay less and less for generic drugs.

Click here to learn more.

On Sept. 30, 2010, the Department of Health and Human Services (HHS) awarded nearly $49 million to help 48 states and the District of Columbia plan for the establishment of health insurance exchanges. Although state exchanges are not required to be operational until 2014, these planning grants begin laying the groundwork for 2014.

On Oct. 4, 2010, HHS announced additional employers and unions accepted into the Early Retiree Reinsurance Program (ERRP). Nearly 1,000 large and small businesses, state and local governments, educational institutions, nonprofit organizations and unions have been accepted into the program and will begin to receive reimbursements for their early retirees' medical claims this fall. That brings the total number of approvals to nearly 3,000 organizations. HHS announced the first round of nearly 2,000 approvals in August.

On Sept. 28, 2010, HHS released guidance relating to the ERRP. The new guidance further clarifies ERRP reimbursement policy by describing the types of medical items or services that are generally excluded from Medicare coverage. Such medical items and services will generally not be credited for purposes of the program's cost threshold and will not be reimbursed.

Click here to learn more.

On Sept. 27, 2010, the Small Business Jobs Act of 2010 (SBJA) was signed into law, significantly expanding potential use of Roth IRAs within the retirement plan landscape. Specifically, beginning in 2010, the new law allows eligible employees to rollover amounts from their retirement plans - 401(k), 403(b) or governmental 457(b) - to a Roth IRA, and to defer to 2011 and 2012 any related tax. The new rules describe certain eligibility requirements and limitations relating to Roth IRA rollovers from the various types of retirement plans. SBJA also provides for certain small business tax credits and deductions relating to health insurance, as well as new rules in connection with cell phones and fringe benefits.

Click here to view Pub. L. No. 111-240.

Click here to view the Joint Committee on Taxation Technical explanation.

On Sept. 28, 2010, the U.S. Immigration and Customs Enforcement's (ICE) Office of Homeland Security Investigations announced a $1,047,110 fine settlement reached with the clothing retailer Abercrombie & Fitch for violations of the Immigration and Nationality Act related to an employer's obligation to verify the employment eligibility of its workers.

In 2009, ICE implemented a new, comprehensive strategy to reduce the demand for illegal employment and protect employment opportunities for the nation's lawful workforce. Under this strategy, ICE is focusing its resources on the auditing and investigation of employers suspected of cultivating illegal workplaces by knowingly employing illegal workers.

Click here to learn more.

Barlen Contracting Inc. and Barlen PG Inc., two landscaping and snow removal companies in Farmington Hills, MI, have been court-ordered to pay $173,000 in back wages to 16 employees following an investigation by the DOL's Wage and Hour Division (WHD). The investigation disclosed that the companies violated the Fair Labor Standards Act (FLSA) by requiring employees to register as independent contractors and then paying them straight time for hours worked beyond 40 in a week.

The WHD's investigation found that the two companies failed to pay the misclassified employees the minimum wage for all hours worked and overtime compensation for all hours worked over 40 in a week. In addition, the company failed to preserve adequate and accurate pay records as required by law.

Click here to learn more.

Click here to view FLSA requirements information.

Effective Aug.1, 2010, new Arkansas regulations clarify an Arkansas statute that prohibits an employer from charging an employee for a drug test (except in limited circumstances). The statute allows employers to make an agreement with employees who failed a drug test to pay for future drug tests. The regulations add certain requirements, including: 1) the employer provides the written agreement to the DOL upon request; 2) the employee may not be charged more than the actual cost of the test; and 3) if that charge is taken out as a payroll deduction, the employer must maintain records of the cost and all withholding documents. The regulations also allow an employer to charge an employee for any requested re-testing following a positive drug test.

Click here to learn more.

On Sept.7, 2010, Assembly Joint Resolution No. 19 was filed with the California secretary of state with instructions that it be distributed to the president of the United States, all members of Congress and the presiding officer of each house of each state legislature of the several states. The resolution urges the federal government to repeal the Defense of Marriage Act (DOMA). Among other concerns, the resolution states that, under the law, same-sex couples legally married in the state are prevented from accessing the federal rights and benefits afforded to opposite-sex spouses, including the right to sponsor a spouse for immigration, the right to Social Security survivors benefits, the right to health insurance from a spouse who is federally employed, and the right to jointly file income taxes. Additionally, the resolution raises the concern that California workers must pay federal income taxes on any health benefits provided to a same-sex spouse while benefits conferred to opposite-sex spouses are not taxed.

Click here to view Assembly Joint Resolution 19.

Source: Littler Mendelson

SB 1163 was approved by the governor on Sept. 30, 2010. It requires insurers to make information about premium increases public and requires notice of a change to the premium rate of coverage to be provided at least 60 days prior to the effective date of the change. This bill also requires certain providers to supply an applicant to whom it denied coverage or enrollment with the specific reason or reasons for that decision in writing.

Click here to learn more.

AB 2470 was approved by the governor on Sept. 30, 2010. It prohibits a plan or insurer from rescinding or limiting a policy's terms, unless the plan or insurer can demonstrate that the enrollee or insured has performed an act or practice constituting fraud or made an intentional misrepresentation of material fact as prohibited by the terms of the contract or policy. The bill also requires a plan or insurer to send a notice to the enrollee, subscriber, policyholder or insured at least 30 days prior to the effective date of the rescission containing specified information. The bill modifies the cancellation and nonrenewal appeal rights that apply to health care service plans and would make those appeal rights apply to health insurers and rescissions, as specified.

Click here to learn more.

AB 2244 was approved by the governor on Sept. 30, 2010. It implements the federal ban on denying coverage to children with pre-existing conditions. The bill further requires plans and insurers offering coverage in the individual market to offer coverage for a child subject to specified requirements. The bill prescribes limits on the rates that may be imposed for coverage of a child depending on, among other things, whether the child applies for coverage during an open enrollment period, as defined, or is a late enrollee, as defined, and would, effective Jan. 1, 2014, require plans and insurers to apply standard risk rates to child coverage, except as specified. The bill also prohibits a plan or carrier that does not or ceases to write new plan contracts or policies for children from offering new individual plan contracts or policies in California for five years. The bill authorizes the Department of Managed Health Care and the Department of Insurance to issue guidance for purposes of implementing these provisions.

Click here to learn more.

SB 1088 was approved by the governor on Sept. 30, 2010. It prohibits the limiting age for dependent children covered by health care service plan contracts and health insurance policies from being less than 26 years of age with respect to plan or policy years beginning on or after Sep. 23, 2010, except for certain group contracts and policies for plan or policy years beginning before Jan. 1, 2014, as specified. The bill requires plans and insurers to provide certain dependents who have lost or been denied coverage an opportunity to enroll, as specified.

Click here to learn more.

Assembly Bill 1602 (referred to as the California Patient Protection and Affordable Health Choices Act) creates the California Cooperative Health Insurance Purchasing Exchange (Cal-CHIPE), which will be governed by an executive board. Once established, the board will determine eligibility, enrollment, coverages and provider participation issues.

AB 2345 was approved by the governor on Sept. 30, 2010. It requires health care service plan contracts and health insurance policies issued, amended, renewed or delivered on or after Sept. 23, 2010, to comply with the provisions of PPACA regarding coverage of, and cost-sharing for, preventive services and any rules or regulations issued pursuant to those provisions to the extent required under federal law.

Under Connecticut law, the victim or witness of a crime is allowed to take time off from work to comply with a subpoena, police investigation or other court proceeding. A new Connecticut law, Public Act No. 10-144, requires employers to allow victims of family violence to take up to 12 days of leave in a calendar year in order to seek medical care or counseling, obtain services from a victim services organization, relocate, or participate in civil or criminal proceedings. Employees must provide at least seven days notice of the leave. Under the new law, employers are prohibited from terminating, penalizing, or threatening an employee because the employee requests leave in connection with the family violence, and employers are required to keep confidential all information regarding the leave. The employer may require employee documentation of the leave, and the leave may be unpaid.

Click here to learn more.

Act 912 (HB 244) extends health care options to the age of 26 the age for dependent health insurance coverage of children or grandchildren under their parent's or grandparent's health insurance policy or contract. The act also removes the requirement that they be unmarried or full-time students, and sets certain requirements and restrictions for health insurance issuers and health maintenance organizations. The act became effective Sept. 23, 2010, and the enrollment period ends on Oct. 23, 2010.

Click here to view the press release

Click here to learn more.

Insurance Bulletin 10-04 was issued on Sept. 23, 2010. It states, in part, "A health benefit plan or health carrier, as defined in Section 376.1350 of the Missouri Insurance Code, including but not limited to preferred provider organizations, independent physicians associations, third-party administrators, or any entity that contracts with licensed health care providers shall not impose any co-payment that exceeds fifty percent of the total cost of providing any single chiropractic service to its enrollees." The bulletin also provides appropriate methods of filing a complaint for any chiropractor who receives direction from a health carrier to collect a co-payment amount in excess of the limitations contained in Section 376.391.

On Oct. 1, 2010, legislation (A.8278-B, S.5000-B) was signed into law. The new legislation is intended to provide patients more affordable access to prescription drugs essential for the treatment of serious and life-threatening diseases and conditions such as cancer, multiple sclerosis, rheumatoid arthritis, hepatitis C, hemophilia and psoriasis. Some health insurance plans and policies establish unique categories or specialty tiers for these drugs (sometimes referred to as "Tier IV" or "Tier V"), and patients under such plans are required to pay a percentage of the cost of these high-priced drugs, rather than the traditional co-payment amounts for generic, preferred brand, and non-preferred brand prescription drugs (sometimes referred to as Tiers I, II and III, respectively). Under the new legislation, the price-sharing amount relating to Tier IV or Tier V drugs may not exceed the price-sharing amount relating to Tier III, non-preferred brand prescription drugs (or Tier III equivalent).

Click here to view the press release.

Click here to view the New York A.8278-B (same as S.5000-B) text.

Bulletin No. 10-21 was issued as information directed towards health insurers issuing policies in New Jersey as they comply with the requirements of PPACA. However, the bulletin is helpful to producers and employers in New Jersey as it clarifies several areas under state law that overlap with new federal requirements. Specifically, the bulletin describes the interaction between the PPACA extension to dependents to age 26 and continuation under New Jersey Dependent until 31 (DU31). The bulletin clarifies that an individual who meets the requirements of the PPACA is covered as a dependent rather than as a DU31 under New Jersey law. An individual who does not meet the requirements of the PPACA, but does meet the requirements of DU31, should be afforded DU31 continuation.

Click here to learn more.

On Nov.7, 2006, voters approved the Ohio Fair Minimum Wage Amendment to the state constitution. The amendment provides for an annual increase in the minimum wage, based on changes in the consumer price index (CPI). Due to an increase in the state's CPI, as announced by the U.S. Department of Commerce, on Jan. 1, 2011, the minimum wage rate will increase to $7.40 per hour for non-tipped employees. Ohio's minimum wage applies to employers that gross more than $267,000 per year.

Click here to learn more.