2012

From the November 08, 2012 EBIA Weekly
[Evans v. Books-A-Million, 2012 WL 5379351 (N.D. Ala. 2012)]

The terminated employee in this case sued her former employer for, among other things, not providing her a COBRA election notice for its group dental plan.

What premium tax credits and cost-sharing subsidies are available to individuals in 2014 and who is eligible for them?

To assist individuals and families who do not qualify for Medicare or Medicaid and are not offered affordable health coverage by their employers, a refundable tax credit (the “premium tax credit”) and a cost sharing subsidy will be available beginning in 2014 to help pay for insurance purchased through an Exchange.

The IRS has released Notice 2012-40 which provides guidance on the effective date of the $2,500 contribution limit to health flexible spending arrangements (FSAs) under IRS Code Section 125(i) and on the deadline for amending plans to comply with the limit. The notice also provides relief for contributions that mistakenly exceed the $2,500 limit provided they are corrected in a timely manner.

IRS has just issued Revenue Procedure 2012-26, which provides the 2013 cost-of-living contribution and coverage adjustments for HSAs, as required under Code Section 223(g). Most contribution limits and the out-of-pocket amounts have been increased for 2013.

Voluntary benefits that are sold directly to employees may be subject to ERISA as employer-sponsored plans, or may be exempt under the voluntary plan safe harbor, which allows for only minimal involvement by the employer. The plaintiff in this case purchased a short-term disability policy after seeing a presentation by the insurer at his workplace.

The HHS has just issued their draft bulletin on defining the “actuarial value” methodology that will be used to calculate AV for health plans, and it is good news for HSAs and HRAs! The rules DO include the employer contributions to accounts in the calculations, which is tremendously beneficial to the attractiveness of the plans.

Do you think you’re saving money by administering your health reimbursement arrangement (HRA)?  In our experience, many employers that self-administer an HRA often overlook important compliance obligations that put them at financial risk.  Failure to comply with the following requirements is common and can be costly.