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A Few “Highlights” of the HIPAA/HITECH Final Rule

We’ve already explored the changes from the new HIPAA/HITECH omnibus final rule in detail in our client alert.  However, we wanted to highlight a few important provisions (and one perhaps not as important) of the rule and provide some additional commentary.

First, as noted in the alert, business associate agreements generally do not need to be amended for the final rules until September 23, 2014.  However, if the agreement is renewed or extended (other than as part of an evergreen renewing contract), it must be amended at that time.  The key condition, however, is that the agreement must have been in place by January 25, 2013 (the date the regulations were published in the Federal Register).  If it was not, then the deadline is a full year earlier, or September 23, 2013.  HHS recently posted some sample business associate contract language on its website here.

Additionally,

FAQs Part XI – Exchanges, Medicare Part D, Guns, and More!

On January 24, the Departments overseeing health care reform implementation issued additional FAQs.  (Despite this being the 11th installment of FAQs, the Departments still has yet to address the most frequently asked question we receive from clients about the Affordable Care Act, which is, “Are you kidding me?”  A.: “No.”).

The Departments addressed the following issues in the FAQs:

  • Under health reform, employers were supposed to provide a notice of the availability of coverage through health insurance exchanges by March 1.  That deadline has been pushed back until after regulations can be issued.
  • The FAQs also talk about HRAs.  Essentially, unless the health reimbursement arrangement is truly and completely integrated with a group health plan (meaning the participant only gets the HRA if he or she is also enrolled in major medical coverage from the employer that complies with PPACA), it

Qualified Plans at Risk When Jumbled with True Tax Expenditures, Part II

GAO

In the first post of this series, we discussed the approach described by the Government Accountability Office (GAO) in evaluating tax expenditures and laid out the issues that impact treating the deduction, exclusion and deferral mechanisms for tax-qualified retirement plans the same as the “spending” tax expenditures.  In this second article, we will focus on two of the critical questions posited by the GAO in the GAO Report that are intended to assist Congress with its upcoming effort to revise the Code.

What is the Tax Expenditure’s Intended Purpose?

Examples used in the GAO Report include the following:

  • To encourage taxpayers to engage in particular activities.
  • To adjust for differences in individuals’ ability to pay taxes.
  • To adjust for other provisions of the tax code.
  • To simplify

Newtown & Mental Health Parity

January 25, 2013

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Newtown & Mental Health Parity

January 25, 2013

Authored by: Chris Rylands

Last week, the White House released its plan for legal actions it will recommend to try and ensure that a tragedy like the one in Newtown does not recur (although the video from President Obama’s weekly address on this issue does not mention mental health services).  Much of the debate since that announcement has predictably been focused on the Second Amendment issues, but there was one benefits-related point buried near the end of the White House’s plan: finalizing the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) regulations.  The plan says the regulations will be issued next month and the administration has already taken the step of advising Medicaid directors of the applicable ability of MHPAEA to their programs.

The interim final MHPAEA rules were issued in 2010 and since then, the DoL has issued some FAQs (here, here, here, and

Qualified Plans at Risk When Jumbled with True Tax Expenditures

Qualified Plans at Risk When Jumbled with True Tax Expenditures

January 24, 2013

Authored by: benefitsbclp

This is the first post in a three part series where we’ll focus on the impact that upcoming “tax reform” and the “second fiscal cliff” negotiations might have on qualified retirement plans, particularly on 401(k) plans.  The impetus for writing this series is not the political rhetoric emanating from Washington nor is it something already proposed like the report of the Simpson-Bowles Commission.  Rather, the impetus is the recent paper issued by the United States Government Accountability Office (the “GAO”) entitled Tax Expenditures: Background and Evaluation Criteria and Questions (the “GAO Paper”).

The GAO does not identify any particular “tax expenditure” in the GAO Paper.  Rather, the GAO paper is intended to assist Congress in understanding the effectiveness of tax expenditures as it embarks on its effort to revise the Internal Revenue Code (the “Code”).

The GAO describes tax expenditures as “reductions in a

Fiduciary Fitness Requires Training, or At Least the DoL Thinks So

This recent post on the Plan Sponsor Council of America’s website states that the Department of Labor has recently requested evidence of fiduciary training as part of its audits. While there is no express ERISA requirement that fiduciaries be trained, the DoL seems to take the view that training is evidence of a fiduciary properly exercising his or her duty of prudence.  (It also happens to be one of our New Year’s Resolutions for fiduciaries too.)

The first step is deciding whom to include.  Basically, a fiduciary is (1) anyone with discretionary authority over the management or administration of an ERISA plan, (2) anyone with discretionary authority over the management or disposition of its assets, or (3) anyone who provides investment advice for a fee.  (Individuals in category (3) should have their own training already.)  Fiduciaries of the plan include the trustee, the plan

The NHL Goes Back to the Past (Pension-wise)

After a long lockout, the NHL will begin its season this weekend thanks, in part, to a pension plan.  Among the sticking points for the players, as noted in this article, was the desire to return to a defined benefit pension plan.  The NHL was somewhat ahead of its time in 1986 when it switched to a DC-only style retirement plan.  However, the players in this recent round of bargaining pushed hard for a pension plan, and succeeded.  While the NHL has not released very many details about the pension plan, and some of the information we’ve found is conflicting, this report from CSN Washington suggests that players can be eligible for the maximum benefits permitted by law.

While it is interesting to see an institution as prominent as the NHL buck a clear trend in the retirement space, it goes without saying that this is

HIPAA v. the iPhone

HIPAA v. the iPhone

January 16, 2013

Authored by: Chris Rylands and Steven Schaffer

HHS recently included on its website some helpful information regarding security of mobile devices in video format.  While primarily directed at health care providers, the videos are still useful for health plan sponsors/administrators (and their business associates).  (The way the HIPAA rules are written suggest that the plan itself should view the videos, but we doubt the actual physical document would learn much.)  Interestingly, the videos are emblazoned with disclaimers that following the videos does not guarantee compliance with HIPAA or any other law.

It is a particularly good idea for plan sponsors/administrators to review the videos given that HHS’s Office of Civil Rights (“OCR”) recently announced a “resolution agreement” with Hospice of North Idaho (“HONI”) in which HONI agreed to pay $50,000 and made certain future compliance commitments.  The OCR investigation started due to HONI’s voluntary report

IRS Updates Retirement Plan Correction Program

IRS Updates Retirement Plan Correction Program

January 14, 2013

Authored by: benefitsbclp

After a long wait, an updated Revenue Procedure for the Employee Plans Compliance Resolution System (EPCRS) was released in the form of Rev. Proc. 2013-12.  The new Revenue Procedure makes some important changes to the EPCRS.

As many plan sponsors know, the EPCRS includes the self-correction program (SCP), which requires prescribed corrections but does not require submission to the IRS; the voluntary correction program (VCP), which requires both prescribed corrections and submission to and approval by the IRS; and correction of problems discovered on audit (Audit CAP).

The purpose of the updated Revenue Procedure is to improve some features of the EPCRS and clarify others, based in large part on comments from the employee benefits community.  The IRS expects to make more changes of this type in the future, also based on comments from the employee benefits community.  Generally speaking, the IRS was responsive to many of the

The Top 6 Facts You Need to Know About the IRS’s Proposed Play or Pay Regulations

Frequent readers of this blog will recall that the IRS previously issued some initial guidance on the employer “shared responsibility” (aka play or pay) rules under health reform.  (A summary of the shared responsibility provisions and the taxes is described in our post on the prior guidance.)

Well, the New Year’s resolution of the federal agencies overseeing health reform implementation is (or should be, if it isn’t) to provide more guidance on health reform. In keeping with that resolution, the IRS recently issued proposed regulations and a set of Q&As on play or pay.  The guidance covers several points and an exhaustive explanation is too long for a single post, so we will cover more details in future posts.   However, there were some key features to note from the proposed guidance:

  • The controlled group rules apply for purposes of
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