Compliance Corner Archives

No, an increase in marketplace premiums, including a loss of a subsidy, will not create an allowable election change event for an employee to enroll in the employer plan midyear.   As a refresher, once the plan year begins, the only way to change a pre-tax election is if the employee or dependent experiences an allowable midyear election change event (often called qualifying life events or QLEs). A key component of these rules is that a change in eligibility needs to occur. Since individua

Employers should consider all the facts and circumstances surrounding the enrollment change request before taking any action. The timing of the request related to the plan year will influence what the employer may allow. Requested Change Before the Plan Year Begins Employers can allow election changes after open enrollment ends and before the coverage effective date (e.g., the new plan year). Employers should have a policy in place for how they will handle these requests. Allowing changes after

Yes! Generally, it is not advisable for an employer to offer group health coverage to independent contractors. However, before addressing the details of why health coverage should not be offered to independent contractors, it is important for an employer to ensure they have properly classified their workers as employees or independent contractors. Employers who utilize independent contractors should work closely with their employment counsel to ensure proper worker classification. At a high lev

As a refresher, age-banded rates are set by the carrier to cover a specific premium for each age group. These rates are applicable to the small group market, where size may vary based on state rating rules. In contrast, composite rates are set by the carrier based on demographics and will be consistent across enrollees, meaning rates will vary by enrollment tier but not age. We do not recommend that employers create composite rates where the carrier is billing on an age-banded basis. This is be

Spousal surcharges and carve-outs are becoming more popular as employers try to implement cost-saving methods in the face of rising renewal costs. Some employers implement a spousal surcharge, which sets out to deter enrollment of spouses by imposing higher spousal premiums, while others implement a spousal carve-out that renders spouses ineligible to enroll if certain conditions are met. Both of these strategies come with compliance concerns, and employers should work closely with their own le

In general, when maintaining group health plan records, an employer must consider ERISA, HIPAA, and ACA guidelines. Included below is a high-level overview of retention requirements related to these applicable federal laws. ERISA The recommendation is to maintain ERISA-related documents for eight years. Records required to be maintained under ERISA include documents such as vouchers, worksheets, receipts, applicable resolutions, claims records, plan documents, summary plan descriptions, copies

No, posting required notices on a shared computer or kiosk is not sufficient to meet the DOL’s Electronic Disclosure rules. The preamble to the final 2002 regulations specifically states that merely posting documents to a shared computer kiosk in a common area at a workplace is not an appropriate means by which to deliver documents required to be furnished to participants. As many employers head into open enrollment season, it is important to remember best practices on notice distribution requi

The answer will depend on the reason the employee took leave and whether the leave is for a medical reason or not. HIPAA prohibits discrimination based on a health factor. Before HIPAA was implemented, many plans had provisions stating that employees had to be actively-at-work on the day their coverage would otherwise begin. However, one of the implications of HIPAA is that any plan that has an actively-at-work clause must treat an employee who is absent because of a health issue as being at wo

A MERP is a medical expense reimbursement plan. Interestingly, MERPs lack a well-defined meaning under the Code, ERISA, and other laws, which often causes confusion. However, as the term is commonly used in the industry, a MERP is understood to be an HRA. As such, A MERP is a 100% employer-funded account that reimburses employees (and their spouses/dependents, if applicable) for incurred medical expenses on a tax-advantaged basis. Accordingly, compliance issues posed by MERPs are considered to

Yes. The recently signed OBBBA (President Trump Signs One Big Beautiful Bill Act | NFP) allows employers who sponsor qualified HDHPs to offer first-dollar telehealth services to participants without impacting HSA eligibility. This legislation makes this exception permanent, effectively retroactive as of January 1, 2025. As background, for a participant to be eligible to make or receive tax-favored contributions to an HSA, the participant must be covered under a qualified HDHP and have no imperm

Forty-four states currently have laws that require the continuation of group health insurance coverage that would otherwise be lost because of the termination of employment, reduction of hours, or other reasons. Many of these laws mirror some or most of the provisions of the federal COBRA law and are, for this reason, often called "mini-COBRA" laws for short. The key to understanding mini-COBRA laws is the general principle that where a state law and a federal law conflict, the federal law take

As a refresher, "point solution" programs are specific services that add value to an employer's major medical plan or benefits program. Point solution programs are generally provided through third-party vendors. They often target benefit plan enhancements that range from specific condition management to digital solutions and apps to overall benefit program simplification. Some common examples of services provided through point solution programs include fertility, musculoskeletal, developmental