Compliance Corner Archives

Possibly. First, if an employer discovers a failure to offer COBRA in a timely manner, they should consult with their own legal counsel. This is important because qualified beneficiaries interested in maintaining health coverage are typically more likely to file complaints with the DOL to enforce their COBRA rights. A failure to meet COBRA requirements can potentially result in an employer facing significant penalties, participant lawsuits, and even the self-funding of participant claims. For t

Lifestyle spending accounts (LSAs) are reimbursement accounts in which employers deposit a set amount of money for employees to spend on certain benefits that are determined by the employer. These accounts generally allow for the reimbursement of various wellness activities such as fitness classes, gym memberships, nutritional coaching, and workout equipment, or other items or activities that will promote health and wellness amongst their employees. Some employers even include other non-wellnes

The maximum amount an eligible individual can contribute to an HSA each year depends on the tier in which the individual is enrolled. The IRS uses two tiers: single and family (which includes any other than self-only coverage). Although the contribution maximum is an annual amount, HSA eligibility is determined on a monthly basis and thus the contribution limit is prorated if an individual experiences a change in tiers during the year. The maximum amount is based on the enrollment tier as of th

Maybe. Under the ACA’s employer mandate, which applies to employers with 50 or more employees in the prior calendar year, there is no general exception for interns for medical coverage. All hours of service for which an intern is paid are required to be counted as hours of service. Therefore, interns’ hours of service must be counted when determining if the employer is responsible for offering coverage to the interns, or the employer risks paying a penalty under the employer mandate.   In

Health and welfare plans subject to ERISA's Form 5500 reporting requirements (generally, plans with 100 or more participants) must report certain information to the DOL. For plans with fully insured coverage, this reporting obligation includes specific information about each insurance policy using the form's Schedule A (Insurance Information). Insurers are statutorily required to provide Schedule A information to plans. Although most insurers generally do so, issues arise that sometimes result

In short, yes. Self-insured plans have compliance obligations in addition to what is required for fully insured plans. As a reminder, a level-funded plan is considered a self-insured plan for benefits compliance purposes. Therefore, a plan transitioning from a fully insured plan to a self-insured or level-funded plan should be aware of the additional compliance obligations, including (but not limited to) requirements under the ACA, HIPAA, ERISA, Section 105 nondiscrimination rules, and federal

To be clear, maternity leave is provided only to birth parents to attend prenatal care, for pregnancy-related disability and to recover from childbirth (e.g., severe morning sickness or complications requiring bed rest). If an employer sponsors short-term disability (STD) benefits, the STD policy generally covers pregnancy-related disability, though coverage and eligibility vary based on the specific policy. In contrast, parental leave (aka bonding leave) is for any parent to take time off to b

The short answer is no. An offer of COBRA is required if both of the following are true: one of the seven allowable COBRA triggering events occurs and a loss of coverage results. Sometimes an individual will experience a triggering event, but if it does not result in a loss of coverage, it is not considered a COBRA-qualifying event. Entitlement to Medicare (i.e., enrollment) is listed as a triggering event. However, it rarely leads to a loss of coverage due to the reasons discussed below. For e

The answer depends upon whether the employees lost eligibility for the medical, dental, vision, health FSA, and other benefits when they were furloughed, and how long the furlough lasts. Employers should review the terms of the SPD/plan document and cafeteria plan document to ensure that the furloughed employees are actually eligible under the plan terms to continue participating. First, an employer needs to review the plan’s eligibility terms in the plan document/SPD (aka the wrap document). I

Yes, individual coverage health reimbursement arrangements (ICHRAs) are considered self-insured group health plans and thus are subject to ACA reporting rules, the same as other group health plans. It can be confusing to employers since many assume that the reporting obligations would be on the insurance carrier that actually delivers the individual coverage; but, in fact, the employer also has a reporting obligation. As a refresher, there are two facets of ACA reporting: 1) reporting offers of

The answer is generally no. Although carriers will sometimes tell employers they can make changes within 30 or 31 days of the plan year beginning, that doesn’t give employees carte blanche to change their minds and choose new elections. Under IRC Section 125, the employee's election must occur prior to the coverage effective date, and the related deduction should come out of a future paycheck. Section 125 also states that employees should not have the ability to change their elections after the

This will depend on whether the FSA participant has a balance at the end of the plan year. As background, an FSA grace period is a designated period after the end of the plan year during which participants can incur services and be reimbursed with funds remaining from the prior plan year election. The grace period cannot be longer than 2-1/2 months, but it can be shorter. For FSA plans with a grace period, an employee who has an undistributed cash balance in the FSA plan on the last day of the