Compliance Corner with Norma

Creditable Coverage for Medicare-Eligible Employees

In all the fuss of preparing for the new healthcare reform requirements, employers should not lose sight of requirements imposed by other laws. For example, creditable coverage notices must be distributed by October 15th to Medicare-eligible employees.

Does your company have Medicare-eligible employees? Employees that are 65 years of age are eligible to participate in either (or both) Medicare or their employer's group health plan.

(Remember: If the employer has more than 20 employees, then Medicare coverage is secondary to the employer's group health plan. The employee may delay enrolling in Medicare because the employer's group plan pays first on any claims. If the employer has fewer than 20 employees, then Medicare is the primary coverage and would pay claims first; and so the employee should not delay enrolling in Medicare.)

Does your company's group health plan include participants who are Medicare eligible? Employers cannot push or encourage older employees to enroll in Medicare.   So if your company has employees that are 65 or older, chances are they are participating in the group health plan. In addition, if retirees are covered by your company's group health plan, these former employees would be part of the Medicare-eligible employee.

Does your company's group health plan provide prescription drug coverage? If your company's group health plan includes prescription drug coverage, then a creditable coverage letter must be given to the Medicare-eligible employees.

What is the creditable coverage notice? The creditable coverage notice informs Medicare-eligible employees that the employer's prescription drug plan meets (or does not meet) the coverage standards in Medicare Part D coverage. This matters to employees because they could be subject to a penalty when they first sign up for Part D coverage if they have not maintained creditable coverage.

When must the creditable coverage notice be given to Medicare-eligible employees? The notice must be given to Medicare-eligible employees before October 15th, to coincide with the Medicare annual open enrollment, October 15 - December 7.

Employers should use the model creditable coverage notice created by the U.S. Department of Health and Human Services (HHS).

Disclaimer: The information above is general in nature and does not constitute legal or tax advice on the issues discussed. Please consult a lawyer or tax professional to discuss your company's specific circumstances.   

Norma Shirk

Manager/Owner

Corporate Compliance Risk Advisor, LLC

norma.shirk@complianceriskadvisor.com

High Deductible Health Plans May Cover Preventive Services With No Deductible

Under Health Care Reform, non-grandfathered group health plans are required to cover certain preventive health services with no cost-sharing. New IRS guidance clarifies that a health plan will still qualify as a high deductible health plan (HDHP) even though it provides such preventive services without a deductible.

An HDHP is a health plan that satisfies certain requirements with respect to minimum deductibles and maximum out-of-pocket expenses. Generally, an HDHP may not provide benefits for any year until the minimum deductible for that year is satisfied. However, the law provides an exception for certain preventive care.

Among other requirements, an individual must be covered under an HDHP to be eligible for a health savings account (HSA). Seventeen percent (17%) of employers that provide health benefits offer an HSA-qualified HDHP, according to the 2013 Employer Health Benefits Survey conducted by the Kaiser Family Foundation and Health Research & Educational Trust.

You can read more about HSAs in our section on Health Savings Accounts.

Source:  HR360.com  

New Guidance on Health Care Reform Rules for HRAs & Other Arrangements

A new set of Q&As provides additional guidance regarding how the prohibition on annual dollar limits and the requirement to cover preventive services under Health Care Reform apply to health reimbursement arrangements (HRAs) and certain other employer healthcare arrangements. The following are key highlights that may be of interest to employers:

• A group health plan, including an HRA and an employer payment plan, cannot be integrated with individual market coverage.
• An HRA or employer payment plan used to purchase coverage on the individual market will therefore fail to comply with the annual dollar limit prohibition and the preventive services requirements.
• An HRA that is integrated with a group health plan will generally comply with the annual dollar limit and preventive services requirements if the group health plan with which the HRA is integrated complies with those requirements.
• An HRA will be integrated with a group health plan for purposes of the annual dollar limit prohibition and the preventive services requirements if it qualifies under either of two integration methods described in the Q&As.
• A health flexible spending arrangement (FSA) that does not qualify as excepted benefits is not integrated with a group health plan, and thus will fail to meet the preventive services requirement.
• Effective retroactively as of September 13, 2013, a health FSA that is not offered through a cafeteria plan (a plan which meets specific requirements to allow employees to receive certain benefits on a pre-tax basis) is subject to the annual dollar limit prohibition and will fail to comply with this requirement.
• Effective for taxable years beginning after December 31, 2013, an employer is prohibited from providing a qualified health plan offered through a Health Insurance Exchange as a benefit under the employer's cafeteria plan.

Planning for Workplace Emergencies

Source: HR360.com

Model HIPAA Notice of Privacy Practices Now Available