Question: We have over 50 employees. Is it true that we may face health care reform penalties even if we do offer health insurance coverage in 2014?

Answer: Yes, an organization with 50 or more employees may still face Health Care Reform penalties from the Federal Government if it does not offer “minimum essential coverage” at an “affordable rate”.

So what is “minimum essential coverage”? And what is an “affordable rate”? “Minimum essential coverage” refers exclusively to the health insurance plan design, not how much the employer contributes to the plan. In order to offer minimum essential coverage under the federal law, the health insurance carrier must pay for at least 60% of treatment costs, commonly referred to as a health plan with a 60% actuarial minimum value. In the coming months, you will probably hear this level of plan referred to as a “bronze level” plan. On the other hand, “affordable” coverage has everything to do with how much the employer contributes to the plan. It is a common misconception that a large company is required to contribute a specific percentage to each employee’s health insurance plan (such as 50%, 60% or 75%). Rather, the federal law requires that the organization contributes enough so that the employee’s portion of the premium for employee-only health insurance coverage for the “bronze level or richer” plan is no more 9.5% of the employee’s total household income. Since employers generally do not know an employee’s total household income, there is a safe harbor in place for 2014 stating that employees have access to “affordable coverage” as long as the employee’s portion of the premium for single coverage for the “bronze level or richer” plan is equal to or less than 9.5% of the employee’s reported W-2 wages.

If you have questions regarding penalty amounts and calculations, please reach out to your Human Resources Professional, Accounting Professional or Health Insurance Broker.

This information is provided courtesy of your HR Pros.  If you have questions about how to access your HR Support Center account, please contact your Client Account Manager.

Legal Disclaimer: This article is intended for informational purposes only and by no means should replace or substitute other legal documents (governmental or non-governmental) reflecting similar content or advice. If you have any questions concerning your situation or the information provided, please consult with an attorney, CPA or HR Professional.

Please take note of the following Federal Law Alert, courtesy of HR Support Center:

The U.S. Citizenship and Immigration Services (USCIS) published a revised Employment Eligibility Verification Form I-9 for use.  All employers are required to complete a Form I-9 for each employee hired in the United States.  Employers should not complete a new Form I-9 for current employees if a properly completed Form I-9 is already on file.

Effective 03/07/13:  Employers should begin using the newly revised Form I-9 (Rev. 03/08/13) for all new hires and re-verifications.  Employers may continue to use previously accepted revisions (Rev.02/02/09) and (Rev. 08/07/09) until May 7, 2013.  As of May 7, 2013, employers must only use Form I-9 (Rev. 03/08/13).  The Form I-9 Instructions and Form I-9 document are available in the HR Support Center, under the Essentials tab, or in the forms section on our website.

This information is provided courtesy of your HR Pros.  If you have questions about how to access your HR Support Center account, please contact your Client Account Manager.

Legal Disclaimer: This article is intended for informational purposes only and by no means should replace or substitute other legal documents (governmental or non-governmental) reflecting similar content or advice. If you have any questions concerning your situation or the information provided, please consult with an attorney, CPA or HR Professional.

Programming With Your Business Growth in Mind

Welcome to our CBIZ Employee Services (ES) webinars for 2013!

Experts representing many of our ES services – from benefits, wellness, human capital services, retirement plan services and property and casualty insurance – will share information and insights on timely and important topics during one or more of the programs listed here. Whether you’re in need a refresher or just an overview of a new topic, sign up today!

TO REGISTER for upcoming 2013 webinars, click here.

April

Emerging Trends in Onsite Health Clinics

Fri., April 12 – 10:30 to 11:30 a.m. Central Time

This webinar will look at the current trend of onsite health care as a potential total rewards strategy for employers, including new models for developing onsite clinics, patient-centered medical homes, options for reaching employees located in geographically remote areas and ancillary-clinic services that can optimize an employer’s return on investment. Larger employers especially may find this program of interest, but even smaller employers may benefit from several strategies discussed.

Presenter:  Polly Thomas, Director, CBIZ Onsite Clinic Consulting

Who Should Attend:  HR Executives, COOs, CFOs, and Occupational Health and Safety Directors – especially at companies with 400 or more employees (or two or more smaller companies interested in partnering to implement these solutions)

Credit:  This program has been approved for 1 General recertification credit hour toward PHR, SPHR and GPHR recertification through the HR Certification Institute.

State of the Property and Casualty Insurance Market

Tues., April 30 – 10:30 to 11:30 a.m. Central Time

While property and casualty clients are experiencing rate increases across many industries, this webinar will look at expectations for 2013 and beyond, what this means for all companies as they budget for upcoming renewals, alternatives to the commercial insurance market, and strategies that may mitigate risk.

Presenter:  Tony Consoli, President, CBIZ Insurance Services/Mid-Atlantic Region, Damian Caracciolo, VP, CBIZ Risk and Consulting Services, and Practice Leader, CBIZ Executive and Protection Practice

Who Should Attend:  Chief Financial Officers, General Counsels, Treasurers, Risk Managers, and anyone involved in budgeting for the risk management process or insurance procurement

Credit:  This program has been approved for 1 General recertification credit hour toward PHR, SPHR and GPHR recertification through the HR Certification Institute.

MAY

Health Care Reform Update: Shared Responsibility in Focus

Tues., May 21 – 10:30 a.m. to Noon Central Time

The so-called centerpiece of the Affordable Care Act – concerning exchanges and individual and employer shared responsibility – takes effect in about half a year. Are you ready?

Presenters:  Karen McLeese, Esq., VP of Regulatory Affairs, CBIZ Benefits & Insurance Services, Inc.; Bill Smith, Esq., Managing Director, CBIZ National Tax Office

Who Should Attend:  HR Execs, COOs and CFOs

Credit: This program has been approved for 1.5 General recertification credit hours toward PHR, SPHR and GPHR recertification through the HR Certification Institute.

JUNE

Wellness for Small and Medium-Sized Employers

Tues., June 18 – 10:30 to 11:30 a.m. Central Time

Small and mid-sized employers struggling with increasing health care expenses and productivity- related costs can benefit from this webinar, which focuses on turning wellness costs into an investment that enhances the value of an organization’s workforce. The session will include a look at affordable, cost-effective actions that small and mid-sized employers can implement.

Presenter:  Gina Payne, CBIZ National Director of Wellness

Who Should Attend:  HR Managers, Benefits Managers, Executive and Financial Officers of organizations with 500 or fewer employees

Credit: This program has been approved for 1 General recertification credit hour toward PHR, SPHR and GPHR recertification through the HR Certification Institute

JULY

Data Security and Privacy Liability

Tues., July 16 – 10:30 to 11:30 a.m. Central Time

This webinar will give you an overview of the risks associated with network security, as well as the privacy liability that companies face in the digital age – and what to do to protect your organization.

Presenter:  Damian Caracciolo, VP, CBIZ Risk and Consulting Services/Practice Leader, CBIZ Executive and Protection Practice

Who Should Attend:  Chief Technology, Chief Information and Chief Financial Officers; Risk Managers, HR Executives and other corporate leaders filling these roles

Credit: This program has been approved for 1 General recertification credit hour toward PHR, SPHR and GPHR recertification through the HR Certification Institute.

AUGUST

Closing the Fiduciary Gap

Tues., Aug. 20 – 10:30 to 11:30 a.m. Central Time

This webinar will focus on strategies to lower retirement plan liability and improve plan participant outcomes. We will identify six primary risk areas involving fiduciaries, look at best practices and discuss new fee-disclosure regulations.

Presenters:  Eric M. Endress, CFA, AIF®, CBIZ Senior Investment Analyst; Jennifer Kennedy Ontko, QKA, QPA, CBIZ Senior Retirement Plan Consultant; Kevin J. Kocsis, AIF®, CBIZ Investment Analyst; Alexandra LoPresti, CBIZ Investment  Analyst; Bradley J. Sieniawski, CBIZ Investment Analyst

Who Should Attend:  Finance and HR Executives; anyone else who makes decisions on behalf of an ERISA-regulated retirement plan

Credit: This program has been approved for 1 General recertification credit hour toward PHR, SPHR and GPHR recertification through the HR Certification Institute.

SEPTEMBER

Health Care Reform Update: The State of Shared Responsibility

Tues., Sept. 17 – 10:30 a.m. to Noon Central Time

As we approach the cusp of the Affordable Care Act’s shared responsibility requirement for individuals and employers, are you ready for new reporting Code Section 6056 and more?  Join us to explore the status of the law.

Presenters:  Karen McLeese, Esq., VP of Regulatory Affairs, CBIZ Benefits & Insurance Services, Inc. ; Bill Smith, Esq., Managing Director, CBIZ National Tax Office

Who Should Attend:  HR Execs, COOs and CFOs

Credit:  This program has been approved for 1.5 General recertification credit hours toward PHR, SPHR and GPHR recertification through the HR Certification Institute.

OCTOBER

Delivering Benefit Solutions, Not Renewals: A Look at Hybrid Funding, Self-Insured Plans and Captives

Tues., Oct . 15 – 10:30 to 11:30 a.m. Central Time

This webinar will take a look at several alternatives to traditional group health insurance plans. Learn about reducing the financial volatility of self-insured plans through captives, reducing benefit plan costs through hybrid funding, and more. Depending on the plan, groups both smaller (25 to 99 employees) and larger (100+ employees) may discover opportunities that can benefit their circumstance. Be sure to sign up to learn more.

Presenters:  Ed Belt, President, CBIZ Primarily Care; Courtney Claflin, CBIZ National Captive Insurance Practice Leader

Who Should Attend:  HR Executives and C-level Executives, especially CFOs

Credit:  This program has been approved for 1 General recertification credit hour toward PHR, SPHR and GPHR recertification through the HR Certification Institute.

NOVEMBER

Are Your Benefit Plan Ps and Qs in Order? Participant Notices and More…

Tues., Nov. 19 – 10:30 a.m. to Noon Central Time

This webinar reviews the myriad of calendar year, plan year, and other notices and disclosures applicable to welfare benefit plans. Join us for a look at the ever-changing world of welfare benefit compliance.

Presenter:  Karen McLeese, Esq., VP of Regulatory Affairs, CBIZ Benefits & Insurance Services, Inc.

Who Should Attend:  HR Directors or anyone responsible for HR compliance, COOs and CFOs

Credit:  This program has been approved for 1.5 General recertification credit hours toward PHR, SPHR and GPHR recertification through the HR Certification Institute.

TO REGISTER for upcoming 2013 webinars, click here.

Legal Disclaimer: This article is intended for informational purposes only and by no means should replace or substitute other legal documents (governmental or non-governmental) reflecting similar content or advice. If you have any questions concerning your situation or the information provided, please consult with an attorney, CPA or HR Professional.

All information listed on these pages, including dates, times, presenters and other webinar details, is subject to change without notice.

As anticipated, many of our competitors are attempting to capitalize on our merger with CBIZ by insinuating that there will be major upheaval, a loss of local service and a reduction in our service level.  We wanted to take a moment to provide you additional information about the transaction and the impact it will have both short and long term.

First and foremost, there are no planned changes to the service model, nor will there be any changes with regard to your PCS contacts.  Our staff is the core of a new CBIZ Midwest Service Center which will be enhanced by the national reach and backup capabilities offered by the existing CBIZ Service Centers in Roanoke, VA and Palm Desert, CA.

It is also important to note that PCS and CBIZ are already aligned with our product solutions so there will be no change with regard to your timekeeping, payroll or HRMS processing platforms.  However, the merging of our businesses will result in greater product integration between these platforms via proprietary CBIZ applications.  In addition, this will also bring additional integrated products and services to you which are proprietary to CBIZ and are not available via our competitors.  We look forward to introducing these to you in the near future.

Bottom line:

-        You will keep your current Client Account Manager
-        You will not need to learn a new system
-        Your price for our services will not change
-        Our commitment to service remains unchanged

Long term, we are excited about the opportunities this merger provides for our Customers.  With CBIZ’s resources, product mix and long-standing commitment to providing a quality Customer service experience, the results will be extraordinary.  So please, let us prove ourselves to you over the coming weeks and months, we’re looking forward to continuing our “Commitment to Service” for you and all of our Clients for years to come.

Bob Wessel | General Manager
CBIZ Payroll – Minneapolis
Direct: 763.746.1927 | Main: 763.513.5951 | Cell: 612-599-6150
Email Bob Wessel | www.cbiz.com/payroll

More Information:

• CBIZ Acquisition Press Release
• PCS Blog Article About Merger
• PCS Customer Communications Update 1
• PCS Customer Communications Update 2
• PCS CBIZ Talking Points

The ACA governing agencies are proposing a way to provide the full panoply of women’s health services without unduly burdening religiously affiliated organizations who object to providing contraceptive coverage, as imposed by the preventive services mandate. On February 6, 2013, the Agencies released proposed regulations and a Fact Sheet addressing these issues.

As background, the ACA requires non-grandfathered plans to cover women’s preventive health services without any cost-sharing (see Preventive Care Coverage Expanded to include Women’s Health Services, 8/3/2011). For plan years beginning on or after August 1, 2012 (January 1, 2013 for calendar year plans), plans are required to include coverage for these women’s health services, including contraceptive services.

Group health plans sponsored by certain religious employers are exempt from the requirement to cover contraceptive services. This exemption applies very narrowly to churches, temples and similar houses of worship. The regulations propose a clarification to the definition, as described below. The clarification is intended to provide protection to houses of worship that engage in such activities such as food pantries or other outreach programs.

The definition of a religious employer also left organizations with religious affiliations, such as hospitals, colleges and universities, private primary and secondary schools, and social service organizations who cannot meet the exception exposed to providing the women’s preventive services mandate. Temporary relief from this requirement was issued last year (see Preventive Health Services for Women: Regulations Final – Limited Exception for Certain Church Plans, 2/13/12). The Agencies are now issuing a proposal to offer a more long term solution.

Religious Employer Re-defined.
The proposed regulations re-define religious employer to primarily include churches, other houses of worship, and their affiliated organizations, as defined in IRC Section 6033(a)(3)(A)(i) and (iii).

Accommodation for Religious Organizations
The proposed regulations provide a waiver from the requirement to provide contraceptive services for religious organizations that don’t qualify for the full exemption. To obtain the waiver, the religious organization must:

1. Oppose providing coverage for some or all of any contraceptive services required by the women’s services mandate on account of religious objections;
2. Be organized and operate as a nonprofit entity;
3. Hold itself out as a religious organization; and
4. Maintain a self-certification form (see below), for each plan year to which the accommodation is to apply.

Organizations that meet this criteria would not be required to endorse, pay for, or otherwise facilitate coverage of the objectionable benefit; but such benefits would continue to be made available to women through a separate individual policy.

Self-Certification Form
HHS provides the form and instructions for obtaining the self-certification (CMS-10459 – Coverage of Certain Preventive Services Under the Affordable Care Act). The self-certification must be executed by an authorized individual of the organization, and specify the types of contraceptive services that the organization does not wish to administer or fund.

Insurer Obligations
An insurer receiving a copy of the self-certification form would be required to provide coverage for any contraceptive services identified in the form through a separate policy for each plan participant and beneficiary. The insurer is then obligated to include a separate written notice to participants of the availability of the contraceptive coverage in its application and enrollment materials. Below is the model language that can be used in the notice:

“The organization that establishes and maintains, or arranges, your health coverage has certified that your group health plan qualifies for an accommodation with respect to the federal requirement to cover all Food and Drug Administration-approved contraceptive services for women, as prescribed by a health care provider, without cost sharing. This means that your health coverage will not cover the following contraceptive services: [contraceptive services specified in self-certification]. Instead, these contraceptive services will be covered through a separate individual health insurance policy, which is not administered or funded by, or connected in any way to, your health coverage. You and any covered dependents will be enrolled in this separate individual health insurance policy at no additional cost to you. If you have any questions about this notice, contact [contact information for health insurance issuer].”

If plan is self-funded, the regulations propose that the third party administrator (TPA) would facilitate this process. The insurer providing the coverage would receive an additional adjustment in the user fees charged by the federal exchange in an amount that would offset the TPA’s charge for performing the service. The insurer would then pass the amount on to the TPA as a condition for receiving a user fee adjustment.

Student health insurance coverage sponsored by higher education institutions
Student health insurance coverage arranged by a group health plan sponsored by an exempt religious organization’s higher education institution would be handled in the same manner as above; except the model notice would change the reference “plan participants and beneficiaries” to “student enrollees and their covered dependents”.

Comment period.
The Agencies are seeking comments on these proposals through April 8, 2013.

Until these rules are finalized, organizations with a religious affiliation can continue to follow the relief described in this Health Reform Bulletin, Preventive Health Services for Women: Regulations Final – Limited Exception for Certain Church Plans.

Conclusion
While this proposal may provide relief to religiously affiliated organizations, it does not provide any relief to private sector entities with moral or religious objections to providing contraceptive services. Numerous lawsuits have been filed on this topic and are winding their way through the court system. It is certainly possible that this issue will reach the Supreme Court at some point.

About the Author: Karen R. McLeese is Vice President of Employee Benefit Regulatory Affairs for CBIZ Benefits & Insurance Services, Inc., a division of CBIZ, Inc. She serves as in-house counsel, with particular emphasis on monitoring and interpreting state and federal employee benefits law. Ms. McLeese is based in the CBIZ Leawood, Kansas office.

The information contained herein is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. The information contained herein is provided as general guidance and may be affected by changes in law or regulation. The information contained herein is not intended to replace or substitute for accounting or other professional advice. Attorneys or tax advisors must be consulted for assistance in specific situations. This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein. As required by U.S. Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained herein is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service.

The centerpiece of the ACA is health coverage expansion. One of the ways that this is to be achieved is through a mandate that virtually all people residing in this country maintain a minimum level of coverage or pay a tax. The Agencies have recently issued two sets of proposed regulations and one final regulation targeted at explaining how this coverage mandate will be accomplished.

INDIVIDUAL SHARED RESPONSIBILITY REQUIREMENT – MINIMUM ESSENTIAL COVERAGE
On January 30, 2013, the IRS issued proposed regulations and questions and answers relating to the Individual Shared Responsibility provision. Below is an overview of this guidance.

Who are the individuals required to maintain Minimum Essential Coverage?
As mentioned above, beginning in 2014, all individuals residing in the U.S. must maintain a minimum level of coverage, or risk a shared responsibility payment. A taxpayer would also be responsible for maintaining coverage for a child or other individual claimed as a dependent on the taxpayer’s federal tax return. Spouses who file their taxes jointly are likewise generally responsible for maintaining this minimum level of coverage.

Following are the potential penalties for failure to maintain a minimum essential coverage:

Who is exempt from maintaining minimum essential coverage?
The regulations provide for 9 categories of individuals exempt from the requirement to maintain minimum essential coverage; they are:

1. A member of a religious sect that is recognized as conscientiously opposed to accepting any insurance benefits.
2. A member of a recognized health care sharing ministry.
3. A member of a federally recognized Indian tribe.
4. An individual whose household income falls below the minimum threshold for filing a tax return.
5. An individual who experiences a short gap in coverage of less than three consecutive months during the year.
6. An individual who incurs a hardship, as certified by an Exchange, which makes him/her unable to obtain coverage.
7. An individual who cannot afford coverage because the premium cost exceeds 8% of the his/her household income.
8. An individual who is incarcerated (jail, prison, or similar penal institution or correctional facility)
9. An individual who is not a U.S. Citizen, a U. S. national, nor an alien lawfully present in the U.S.

For other individuals seeking an exemption, the HHS issued proposed regulations relating to the process to be used by Exchanges in conducting eligibility determinations and granting exemptions from the shared responsibility payment.
In an effort to facilitate the maintenance of minimum essential coverage, certain individuals whose income falls between 100 and 400% of the federal poverty level will be entitled to government assistance unless the individual is exempt.

What is Minimum Essential Coverage?
Minimum essential coverage generally includes coverage under:

Employer-sponsored group health plans, whether insured or self-funded, and grandfathered plans, as well as COBRA coverage (if actually elected) and retiree coverage. It also includes group health coverage sponsored by non-profit and for-profit entities, and governmental entities, including local governments.

It should be noted that HIPAA-excepted coverage alone will not qualify as minimum essential coverage; HIPAA-excepted coverage includes:

• Limited-scope dental benefits, vision benefits, or long term care benefits provided under a separate policy or contract, and are otherwise not an integral part of a group health plan.
• Other types of limited benefit plans, such as accident-only plans, disability income coverage, liability insurance, workers’ compensation, credit-only insurance, and coverage for on-site medical clinics.
• Non-coordinated benefits providing specified disease or illness coverage, hospital indemnity insurance, or fixed dollar indemnity insurance that meets certain criteria.
• Supplemental benefits, such as Medicare supplemental coverage (Medigap or MedSupp).

Government-sponsored plans such as Medicare, Medicaid, Children’s Health Insurance Program (CHIP), TRICARE, and various Veteran’s health programs.

Individual health policies, including a qualified health plan offered by an Exchange.

Other similar types of comprehensive health coverage recognized by HHS as minimum essential coverage.

When does the individual mandate become effective?
The individual shared responsibility provision becomes applicable on January 1, 2014.

EMPLOYER SHARED RESPONSIBILITY REQUIREMENT – DETERMINING AFFORDABLE COVERAGE
Beginning January 1, 2014, a large employer employing 50 or more employees must offer adequate coverage at an affordable rate to its employees, or risk being subject to an excise tax (see CBIZ Health Reform Bulletin, Shared Responsibility Guidance, 1/9/13).

On January 30, 2013, the IRS issued final regulations specifically relating to defining the “affordability” standard. These regulations affirm that affordability is based on the cost of single coverage in the employer’s least expensive plan. While large employers must offer coverage to their full-time employees (those working 30 or more hours per week) and their dependents (children under age 26), the affordability, according to these regulations, is based only on single coverage. This should come as welcome news to employers.

CONCLUSION
While much of this guidance relating to the obligation to maintain a minimum level of coverage would not unduly impact employers, employers will be interested to know the types of plans that qualify as minimum essential coverage. Employers will also likely be pleased to know, at least for now, affordability is based on the cost of single coverage.

About the Author: Karen R. McLeese is Vice President of Employee Benefit Regulatory Affairs for CBIZ Benefits & Insurance Services, Inc., a division of CBIZ, Inc. She serves as in-house counsel, with particular emphasis on monitoring and interpreting state and federal employee benefits law. Ms. McLeese is based in the CBIZ Leawood, Kansas office.

The information contained herein is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. The information contained herein is provided as general guidance and may be affected by changes in law or regulation. The information contained herein is not intended to replace or substitute for accounting or other professional advice. Attorneys or tax advisors must be consulted for assistance in specific situations. This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein. As required by U.S. Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained herein is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service.

As has been true since the enactment of the Affordable Care Act (ACA), the governing agencies are using their authority to issue sub-regulatory guidance, often in the form of questions and answers, to provide guidance on how the government believes regulations will be issued. To this end, FAQs About Affordable Act Implementation Part XI have just been issued. Of particular note are:

Notice of Exchange
The law requires employers to issue a Notice to employees explaining:

• The existence of the Exchange
• If the employer’s health plan provides less than minimum value, the individual may be entitled to government assistance for purchasing coverage through the Exchange
• If the employee chooses to purchase coverage through the Exchange, he/she may lose any employer contribution toward employee coverage.

This Notice was to be provided to employees by March 1, 2013. The Department of Labor has stated that the requirement to issue the Notice is delayed until future regulations are issued. It is expected that these regulations will be issued in late summer or early fall – closer to the time that Exchanges will be open for business.

Stand-Alone Health Reimbursement Arrangements
One of the provisions of the Affordable Care Act is that a health plan can impose no lifetime, and eventually, no annual limits on essential health benefits. A question has risen as to the applicability of the no limit requirement on Health Reimbursement Arrangements (HRAs) (see HRB 39 – Relief for Stand-Alone Health Reimbursement Arrangements). The Department of Labor has indicated that it expects to issue guidance clarifying the types of HRAs that will be considered integrated, and therefore not subject to the no-limit provision. Specifically, the Department expects to issue guidance stating that an HRA used to fund individual policies, including employer sponsored individual policies purchased with HRA dollars will not qualify as an integrated plan. What this means is that these types of HRAs would be subject to the no lifetime or annual limit requirement. Further, the Department states that it expects to issue guidance stating that, to be integrated, the HRA participant must be enrolled in the related comprehensive health plan in order for the HRA to be exempt from the no lifetime and annual limit requirement.

Finally the guidance clarifies that amounts credited in a standalone HRA prior to January 1, 2014, can continue to be used to reimburse medical expenses. In a nutshell, what this guidance suggests is that only integrated HRAs, i.e., an HRA that is used in conjunction with a comprehensive health plan and only covers participants enrolled in the comprehensive health plan will be viable in 2014 and beyond. Other types of HRAs would have to comply with the no annual or lifetime limit requirements applicable to other comprehensive health plans.

Patient-Centered Outcomes Research Fee
As a reminder, the Affordable Care Act imposes a per-covered-life Patient-Centered Outcomes Research fee (PCOR) to fund the Patient-Centered Outcomes Research Trust Fund. This fee commences for plan years ending after September 30, 2012 and continues through plan years ending before October 1, 2019 (see CBIZ Health Reform Bulletin 60, Patient-Centered Outcomes Research Fee) and CBIZ Health Reform Bulletin 49, Fees on Health Insurance Policies & Self-Insured Plans: Patient-Centered Outcome Research Trust Fund). Generally, the government has indicated that this fee cannot be paid from plan assets. The newly issued guidance addresses the specific issue of multi-employer and limited other circumstances in which the plan trustees have no existence other than for the specific purpose of providing benefits In these very limited circumstances, the Department of Labor has indicated that the PCOR fee can be paid from plan assets. But again, in all other instances, the PCOR cannot be paid from plan assets.

Fixed Indemnity Plans
The Department of Labor has issued several FAQs relating to fixed indemnity plans. Generally, a fixed indemnity plan in its purest sense is one that reimburses a fixed amount upon the occurrence of an event, such as a hospitalization, without regard and in no way tied to actual receipt of care. These types of plans generally are not subject to ACA nor are they subject to HIPAA. The Department of Labor indicates in these FAQS that the marketplace is attempting to circumvent this rule by calling plans fixed indemnity plans when in fact reimbursement is made or is otherwise tied to actual receipt of care. In effect, the Department has indicated that it will double down its efforts with state insurance departments to make certain that the intent of the Affordable Care Act is not thwarted through these types of arrangements. This is just another example of how the government is trying to stay ahead of creative methods of trying to circumvent the law.

About the Author: Karen R. McLeese is Vice President of Employee Benefit Regulatory Affairs for CBIZ Benefits & Insurance Services, Inc., a division of CBIZ, Inc. She serves as in-house counsel, with particular emphasis on monitoring and interpreting state and federal employee benefits law. Ms. McLeese is based in the CBIZ Leawood, Kansas office.

The information contained herein is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. The information contained herein is provided as general guidance and may be affected by changes in law or regulation.  The information contained herein is not intended to replace or substitute for accounting or other professional advice. Attorneys or tax advisors must be consulted for assistance in specific situations. This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.  As required by U.S. Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained herein is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service.

In recent years, the Family and Medical Leave Act (FMLA), enacted in 1993, has undergone several fairly narrow modifications, most recently relating to military leave and rules specific to airline personnel. Final regulations interpreting these rules were issued on February 6, 2013 by the Department of Labor’s Wage and Hour Division. While these regulations primarily address the narrow focus as described above, there are a couple notes important to all employers subject to FMLA.

As a reminder, FMLA applies to employers employing 50 or more employees on each working day in at least 20 or more calendar weeks in the current or preceding calendar year. Public agencies, as well as private and public primary and secondary schools, are considered to be covered employers without regard to the number of employees.

To be eligible for FMLA benefits, an employee must have at least 12 months of service with the covered employer at a worksite subject to the law, and must have accrued at least 1,250 hours of service during the 12 months immediately preceding the leave. Under FMLA, eligible employees are entitled to take job-protected, unpaid (or substituted paid leave) for up to 12 weeks in a 12-month period for the:

• Birth or adoption of a child, including the placement of a child for foster care.
• Care for a parent, child, or spouse with a serious health condition.
• Employee’s own serious health condition.

NEW FMLA GENERAL POSTER
One of the requirements of the FMLA is that the employer must post a general notice explaining the FMLA. A new General Poster has been prepared by the DOL that employers must begin using no later than March 8, 2013.

As a reminder, the General Poster must be posted in a conspicuous place in all of an employer’s locations where it can be readily seen by employees and applicants. The employer must also provide this General Poster to any eligible employee by including it in an employee handbook, or other written document that sets forth employee benefits or leave rights, as well as provide it to each new employee upon hiring. The General Poster can be posted and provided electronically, as long as the employee has access to employer’s electronic system.

Employers can duplicate the text of the General Poster, or use a different format than the DOL’s model notice, as long as all of the information contained in the alternate form is replicated, and the text is large enough to be easily read. If English is not the primary language of an employer’s workforce, the DOL makes the General Poster available in several languages to be provided to the appropriate employee population.

COORDINATION OF FMLA AND GINA
Another clarification of the final FMLA regulations relates to coordinating the FMLA with the Genetic Information Nondiscrimination Act of 2008 (“GINA”). For purposes of GINA, genetic information and family medical history cannot be used for enrollment, or in connection with enrollment, nor can it be used for underwriting purposes. Genetic information means:

• The genetic tests of an individual or his/her family member;
• The manifestation of a disease or disorder of the individual’s family member; or
• Any genetic services relating to participation in clinical research by the individual or his/her family member.

In addition, GINA requires that genetic information be kept confidential. The final FMLA regulations coordinate with GINA to protect the confidentiality of genetic information. This means that any genetic information or family medical history must be maintained in accordance with the requisite confidentiality rules and kept in a separate file.

DESIGNATING INCREMENTS OF LEAVE
These regulations attempt to clarify the issue of “increments of leave” used in the event of an intermittent or reduced scheduled leave. Generally, the regulations require that an individual can only be charged with FMLA for time that the individual is, in fact, not working; and, the increments must be the shortest increment used for other types of leave, not to exceed one hour.

CHANGES TO FMLA MILITARY LEAVE PROVISIONS
The National Defense Authorization Act for FY 2008 broadened the benefits available under FMLA specifically for employees who have family members called to active military service. The law allows up to 12 weeks of FMLA leave per 12-month measuring period for a qualifying exigency; and, up to 26 weeks of FMLA leave to caregivers of service members in a single 12-month period.

EXIGENCY LEAVE
Eligible employees may take up to 12 weeks of FMLA leave while the employee’s spouse, child or parent, is on active duty for one or more qualifying exigencies, defined as a short notice deployment, military events and related activities, childcare and school activities, financial and legal arrangements, counseling, rest and recuperation (R&R) or post-deployment activities.

The final regulations clarify that:

• Active duty requires deployment to a foreign country.
• Members of the National Guard and Reserves and the Regular Armed Forces are now eligible for exigency leave.
• The amount of time for R&R qualifying exigency leave is expanded to a maximum of 15 calendar days.

In addition, the final regulations add a new category of qualifying exigencies for parental care leave when a military member’s parent is incapable of self-care, for such events as providing immediate care, arranging for alternative care, or transferring the parent to a care facility.

CAREGIVER LEAVE FOR SERVICE MEMBERS EXPANDED FOR VETERANS
Up to 26 weeks of caregiver leave is available to otherwise FMLA-qualified individuals who have a family member (service member) experiencing a serious health condition or injury while on active duty, or one existing prior to active duty that is subsequently aggregated by service duty. The final FMLA regulations expand the definition of service member to include veterans who are undergoing medical treatment, recuperation, or therapy for a serious injury or illness. This provision only applies to veterans who have been discharged or released under honorable circumstances at any time during the five-year period prior to the first date the eligible employee takes FMLA leave to care for the covered veteran.

In addition, the serious health condition or injury of the veteran must meet one of the following criteria:

• A continuation of a serious injury or illness that was incurred or aggravated when the veteran was a member of the Armed Forces and rendered him/her unable to perform the duties of his/her office, grade, rank, or rating;
• A physical or mental condition for which the veteran has received a VA Service Related Disability Rating (VASRD) of 50% or greater, and such VASRD rating is based on the condition precipitating the need for caregiver leave;
• A physical or mental condition that substantially impairs the veteran’s ability for substantially gainful occupation by reason of a disability related to military service; or
• A physical or psychological injury, as determined by the Department of Veterans Affairs Program of Comprehensive Assistance for Family Caregivers.

Certification of Military Caregiver Leave for Veterans
An employer may require an employee to obtain certification from an authorized health care provider to support the need for FMLA leave to care for the service member veteran. An employee can use the model Certification for Serious Injury or Illness of a Veteran for Military Caregiver Leave (Form WH-385-V) for this purpose. In the alternative, an employee may submit documentation of enrollment in the Department of Veterans Affairs Program of Comprehensive Assistance for Family Caregivers as sufficient certification of the veteran’s serious injury or illness, even if the employee is not the named caregiver on the document. In this event, an employer may require the employee to provide additional information, such as confirmation of the familial relationship to the enrolled service member or documentation of the veteran’s discharge date and status.

COORDINATING FMLA LEAVE FOR AIRLINE PERSONNEL
Because the provisions of the FMLA are complicated when applying the law to the airline industry, the law was amended several years ago. The final FMLA regulations provide that an airline flight crew employee will meet the FMLA hours of service eligibility requirement (1,250 hours of service in prior 12 months) if he/she has worked or been paid at least 60% of the applicable total monthly guarantee for minimum of 504 hours (not including personal commute time, vacation, medical or sick leave) during the prior 12 months.

Airline flight crew employees are entitled to 72 days of leave during any 12-month period for FMLA-qualifying reasons other than military caregiver leave, and 156 days of leave during any single 12-month period for military caregiver leave. If an airline flight crew employee takes leave on an intermittent or reduced schedule, the employer would account for the leave using an increment no greater than one day.

EFFECTIVE DATE
The FMLA regulations relating to military caregiver leave for a veteran, qualifying exigency leave for parental care, and the special leave calculation method for flight crew employees become effective March 8, 2013.

Certain other provisions relating to the expansion of qualifying exigency leave to families of members of the Regular Armed Forces, and the special eligibility hours of service requirement for flight crew employees, were effective when those laws were enacted on February 15, 2012.

CONCLUSION
While these regulations, by and large, have implications for very unique situations, it is especially important that all employers post the new General Poster no later than March 8, 2013.

Employers should also be aware that three existing FMLA model forms have been revised to reflect the changes made by the final regulations, and a new form added for veteran’s leave:

• Revised Notice of Eligibility and Rights & Responsibilities (Form WH-381)
• Revised Certification of Qualifying Exigency For Military Family Leave (Form WH-384)
• Revised Certification for Serious Injury or Illness of Current Servicemember — for Military Family Leave (Form WH-385)
• New: Certification for Serious Injury or Illness of a Veteran for Military Caregiver Leave (WH-385V)

Additional FMLA information, forms, publications, fact sheets, employee guides for both military and non-military leave, FAQs, etc., can be found on the DOL’s designated FMLA website:

http://www.dol.gov/whd/fmla

About the Author: Karen R. McLeese is Vice President of Employee Benefit Regulatory Affairs for CBIZ Benefits & Insurance Services, Inc., a division of CBIZ, Inc. She serves as in-house counsel, with particular emphasis on monitoring and interpreting state and federal employee benefits law. Ms. McLeese is based in the CBIZ Leawood, Kansas office.

The information contained in this At Issue is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations.  The information contained in this At Issue is provided as general guidance and may be affected by changes in law or regulation. This information is not intended to replace or substitute for accounting or other professional advice. You must consult your own attorney or tax advisor for assistance in specific situations.  This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.  As required by U.S. Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained in this At Issue is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service.

In keeping with the on-going march toward Affordable Care Act compliance in 2014, the Department of Health and Human Services has issued several important pieces of guidance recently, including final Standards Related to Essential Health Benefits, Actuarial Value, and Accreditation.

Essential Health Benefits
Non-grandfathered plans in the individual and small group markets, issued both in – and outside of exchanges (“marketplace”) must cover essential health benefit packages (EHBs), beginning in 2014. Self-insured group health plans, health insurance coverage offered in the large group market, and grandfathered health plans are not required to cover the essential health benefits. However, to the extent that self-funded plans and large insured plans offered outside the marketplace offer EHBs, these essential benefits cannot be subject to annual and lifetime limits.

Coverage for the essential health benefits package must cover 10 specific categories of benefits. The 10 categories are:

1. Ambulatory patient services.
2. Emergency services.
3. Hospitalization.
4. Maternity and newborn care.
5. Mental health and substance use disorder services, including behavioral health treatment.
6. Prescription drugs.
7. Rehabilitative and habilitative services and devices.
8. Laboratory services.
9. Preventive and wellness services and chronic disease management.
10. Pediatric services, including oral and vision care.

Coverage for Mental Health and Substance Abuse Services
Though health plans offered by employers employing fewer than 50 employees are generally not subject to the federal mental health parity laws (Mental Health Parity Act of 1996 (MHPA) and the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), these plans will be required to provide mental health benefits, in accordance with the EHB standards.

Benchmark Plan Designs
States can utilize one of several plan design categories for defining essential benefits (click here for CBIZ Health Reform Bulletin). As of February 25, 2013, twenty-six states have chosen their base-benchmark plans. In states that do not select their own benchmark plan, the default base-benchmark plan will be based on the largest plan and product by enrollment in the State’s small group market.

Additional information on the specific benefits, limits, and prescription drug categories and classes covered by the EHB-benchmark plans, and state-required benefits, is available on the Center for Consumer Information and Insurance Oversight (CCIIO) website.

Cost-Sharing Requirements

DEDUCTIBLES. For plan years beginning on or after January 1, 2014, the final regulations clarify that the annual deductible imposed by plans cannot exceed $2,000 for self-only coverage, or $4,000 for coverage other than self-only. These deductible restrictions only apply to individual and small group health plans, and plans offered through the marketplace. These deductible limits do not apply to large group plans offered outside the marketplace or to self-funded plans.

These regulations, while they reserve the right to make modifications, provide that contributions to flexible medical spending arrangements (FSAs) cannot be used to buy down the deductible levels by the amount available under the FSA.

OUT-OF-POCKET LIMITS. The annual out of pocket limits must match those limits applicable to health savings accounts (HSA). While we do not know the HSA limits for 2014 yet (typically, these figures are available in May or early June), the high-deductible health plan annual out-of-pocket limit for self-only coverage in 2013 is $6,250; $12,500 for family coverage. The out of pocket limits apply to all sized plans; though, with the exception of emergency services, these restrictions only apply to in-network services.

For subsequent years, the deductible and out-of-pocket limits may be adjusted annually to reflect cost increases.

Actuarial Valuation Calculation for determining level of coverage
Non-grandfathered health plans offered to individuals and small employer group markets both in and outside an marketplace must meet the bronze, silver, gold, or platinum actuarial levels of benefits and coverage. A bronze plan is required to have an actuarial value (AV) of 60%; a silver plan, 70%; a gold plan, 80%; and a platinum plan, 90%. Actuarial value refers to a percentage measurement of expected health care costs covered by the plan and used to determine an overall measurement of the plan’s generosity.

The CCIIO has released an updated Actuarial Value Calculator, together with an Actuarial Value Calculator Methodology, for purposes of determining whether a plan’s actuarial value is based on a national standard population.

Determining Minimum Value
Under ACA, a plan fails to provide minimum value if the plan’s share of the total allowed costs of benefits provided under the plan is less than 60% of such costs. Determining minimum value is important to employers, particularly those employing 50 or more full-time equivalent employees, in that if the employer plan fails the minimum value test, or is unaffordable, a shared responsibility tax may be triggered (see CBIZ Health Reform Bulletin, Shared Responsibility Guidance, 1/9/13).
For the purposes of determining whether an employer’s group health plan provides a minimum value of benefits, the plan can utilize a minimum value calculator, a designed-based safe harbor checklist to be established by HHS/IRS, or the plan can seek an appropriate actuarial certification. The CCIIO has released Minimum Value Calculator, together with a Minimum Value Calculator Methodology for purposes of determining a plan’s minimum value.

The final regulations provide that employer contributions to health savings accounts (HSA) and first year contributions to health reimbursement arrangements (HRAs) can count toward meeting a plan’s minimum value.

The final regulations also provide for a plus or minus 2% margin, applicable to AV calculations and MV calculations, as well as to deductibles in the small group market, to allow plans a bit of wiggle room for compliance.

About the Author: Karen R. McLeese is Vice President of Employee Benefit Regulatory Affairs for CBIZ Benefits & Insurance Services, Inc., a division of CBIZ, Inc. She serves as in-house counsel, with particular emphasis on monitoring and interpreting state and federal employee benefits law. Ms. McLeese is based in the CBIZ Leawood, Kansas office.

The information contained herein is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. The information contained herein is provided as general guidance and may be affected by changes in law or regulation.  The information contained herein is not intended to replace or substitute for accounting or other professional advice. Attorneys or tax advisors must be consulted for assistance in specific situations. This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.  As required by U.S. Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained herein is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service.

Most states require employers to attempt to contact employees with unclaimed checks to make efforts to prevent these wages from becoming abandoned property.  Many states also require reports of abandoned property to be filed annually and some require the records of the abandoned property to be retained for a specific number of years.  Some states also have penalties for employers who fail to remit unclaimed wages, fail to remit them by the deadline and/or fail to file the required reports.

Here are the steps to take when you have outstanding paychecks for your employee(s) that have expired or have been outstanding for an extended period of time:

First, attempt to contact the employee(s) and resend the owed wages to them.

• If the employee can be located: Issue a new check to the employee and send it to him/her as a replacement payment and inform them that the prior check is invalid.
  1. No record is needed in the payroll system since this is a reissue of a prior check that is already in the pay history.
  2. If you have the OBC service, submit the OBC Refund Request form to PCS.
• If the employee cannot be located: Follow the employee’s State law on unclaimed property.
  1. No record is needed in the payroll system since this is a reissue of a prior check that is already in the pay history.
  2. If you have the OBC service, submit the OBC Refund Request form to PCS.
  3. If the employee contacts you after the wages have been sent to the state, instruct them to contact the state agency for the unclaimed property.

The National Association of Unclaimed Property Administrators (NAUPA) provides links of the laws for each state, click here to visit their website.

Article Provided By the Minneapolis CBIZ Payroll Services Team

Legal Disclaimer: This article is intended for informational purposes only and by no means should replace or substitute other legal documents (governmental or non-governmental) reflecting similar content or advice. If you have any questions concerning your situation or the information provided, please consult with an attorney, CPA or HR Professional.