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Check it Out and Check it Off: 2015 Group Health Plan Checklist

October 14, 2014

Authors

benefitsbclp

Check it Out and Check it Off: 2015 Group Health Plan Checklist

October 14, 2014

by: benefitsbclp

460326385With 2015 just around the corner, certain mandates under the Patient Protection and Affordable Care Act, as amended (“ACA”) are about to become effective. Health plans also have several existing enrollment and annual notice requirements. Below is a checklist of upcoming ACA mandates that employers must implement in preparation for or in 2015 and a summary of existing enrollment and annual notice requirements.

For a refresher on the ACA mandates which became effective this year, please see our 2014 group health plan checklist here.

I. ACA Requirements That Apply to All Group Health Plans (Whether Grandfathered or Not)

On or beginning with the dates specified below, a group health plan must comply with the following requirements, regardless of its status as a “grandfathered health plan”:

Obtain a Health Plan Identifier Number (HPID).

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IRS Expands Permissible Mid-Year Election Changes for Health Coverage Under Cafeteria Plans

September 23, 2014

Authors

benefitsbclp

IRS Expands Permissible Mid-Year Election Changes for Health Coverage Under Cafeteria Plans

September 23, 2014

by: benefitsbclp

Last Thursday, the IRS issued Notice 2014-55 (“Notice”), which expands the scope of permissible mid-year election changes under the cafeteria plan rules to allow an employee to revoke an election of employer-sponsored health coverage in the event of the employee’s reduction in hours of service (even if there is no loss of eligibility for coverage) or to avoid duplicative coverage (or a gap in coverage) under a non-calendar year group health plan due to the purchase of coverage through a Marketplace.

The guidance under the Notice is effective as of September 18, 2014 and may be relied on immediately even though the IRS has yet to amend the cafeteria plan regulations to reflect the new guidance.

Background

153773052Elections under a cafeteria plan have generally been irrevocable during a period

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More Post-DOMA Guidance from the IRS – Cafeteria Plans, FSAs and HSAs

December 27, 2013

Authors

benefitsbclp

More Post-DOMA Guidance from the IRS – Cafeteria Plans, FSAs and HSAs

December 27, 2013

by: benefitsbclp

Since the Supreme Court ruled section 3 of DOMA unconstitutional in United States v. Windsor, benefits practitioners have been eagerly awaiting IRS guidance as to how the decision impacts employee benefits. On December 16, 2013, the IRS released Notice 2014-1, to provide some information as to how Federal tax recognition of same-sex spouses affects cafeteria plans, including health and dependent care flexible spending accounts (“FSAs”) and health savings accounts (“HSAs”). Though there were no surprises in the Notice, it may give comfort to employers who allowed employees with same-sex spouses to change elections mid-2013 as a result of Windsor. However, requirements as to the timing of some cafeteria plan amendments is still left unsettled.

Election Changes

Under the Code Section 125 rules, an employee may change cafeteria plan elections mid-year and make new elections only under certain circumstances and as permitted by

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Top 5 Unanswered Questions with the $500 FSA Carryover

November 13, 2013

Authors

Chris Rylands

Top 5 Unanswered Questions with the $500 FSA Carryover

November 13, 2013

by: Chris Rylands

After having some time to consider the recent IRS guidance on the $500 carryover (sometimes called the “rollover”) for FSAs that we previously wrote about, additional issues keep coming to light.  Here’s a quick list of just some of the issues that we have encountered that remain unanswered:

  • As noted in our previous post, additional guidance is needed on the effect of this carryover on the status of a health FSA as an excepted benefit.
  • How does the addition of the carryover impact the limited FSA COBRA obligation?  Ordinarily, if a health FSA meets the conditions of being an excepted benefit as described in our earlier post, it is also eligible for a limited COBRA obligation.  If a participant has an underspent account in such an FSA, then he or she only needs to be offered COBRA through the end of the year of
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  • Trick and Treat: IRS Modifies FSA Use-it-or-Lose-it Rule to Allow $500 Carryover

    November 1, 2013

    Authors

    Chris Rylands

    Trick and Treat: IRS Modifies FSA Use-it-or-Lose-it Rule to Allow $500 Carryover

    November 1, 2013

    by: Chris Rylands

    Just before rushing out the door to hand out candy to trick-or-treaters, the IRS gave the benefits world a treat and released Notice 2013-71 which modified the use-it-or-lose-it rule for health FSAs.  The notice generally provides that a cafeteria plan may be amended to provide a carryover of up to $500 of unused amounts into a subsequent plan year.  The $500 amounts may come from employer or employee contributions.  The carryover may only be applied in the immediately following plan year, so if it is not used then, it will be forfeited.

    Any remaining amounts at the end of the plan year can still be reduced during the plan’s run-out period before the carryover is applied.  For example, if a plan has a run-out period ending March 31 and a participant submits an expense incurred in the prior year before March 31, that would reduce the prior year’s

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    IRS Adopts State of Celebration Rule – If Valid Where Performed, You are Married for Federal Tax Purposes

    September 10, 2013

    Authors

    benefitsbclp

    IRS Adopts State of Celebration Rule – If Valid Where Performed, You are Married for Federal Tax Purposes

    September 10, 2013

    by: benefitsbclp

    In Revenue Ruling 2013-17, the Internal Revenue Service provided clear guidance to define “spouse” for all purposes under the Internal Revenue Code. A “spouse” includes a same-sex spouse whose marriage is recognized by the state in which the marriage occurred. Use of this “state of celebration” rule will greatly simplify employee benefit plan administration for employers. However, the IRS indicated in this guidance that it will provide more direction on the impact of this definition on employee benefit plans.

    How Did the IRS Define the State of Celebration Rule?

    These are the bottom line holdings from the IRS guidance, which apply for all purposes under the Internal Revenue Code:

    • The terms “spouse,” “husband and wife,” “husband,” and “wife” include an individual married to a person of the same sex if the individuals are lawfully married under state law, and the term
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