The sheer complexity of changing federal regs as well as the impact of recent landmark court rulings on benefits plans make assessing health-plan compliance a critical task that HR pros need to put at the top of their to-do list.
In fact, ERISA attorney Daniel N. Kuperstein is warning employers everywhere that most health plans aren’t fully compliant with the host of regs they’re subject to.
Almighty plan document
A proper assessment of your health plan starts with the plan document, Kuperstein says. Simply put: If your plan doc doesn’t gibe with how your benefits are actually provided to employees, you’re out of compliance.
Well-meaning employers will often get themselves into trouble by offering benefits and perks that aren’t detailed in the company’s plan document.
On top of an up-to-date plan document, employers have to make sure none of the language in their summary plan descriptions, benefits-related policies and benefits communications contradicts what’s written in the official plan document.
Some specific documents employers will want to review include: Employee notices, COBRA offerings and documents, FMLA info and health plan non-discrimination testing.
1. The ever-changing ACA regs
In this year alone, the feds clarified and changed several key aspects related to health reform reporting (e.g., COBRA coverage). Not being up to speed on even minor changes to the reporting rules can lead to costly mistakes (a $250 per return penalty up to a $3 million max).
Of course, the ACA compliance challenges go well beyond the reporting retirements. One example: ACA’s cost-sharing rules. In 2016, the maximum out-of-pocket limits for self-only coverage are $6,850 and $13,700 for family coverage. Plan documents must be updated to account for these new limits.
Plus, there are a number of expected ACA changes firms need to be on the lookout for, such as the final nondiscrimination rules (expected sometime in 2016).
2. EEOC’s new wellness rules
Following a string of lawsuits by the EEOC, the agency finally released rules on how to design wellness plans without violating the ADA. The EEOC also proposed regs that would allow employers to offer financial incentives to employees’ spouses in exchanges for information about the spouses’ current or past health status as part of a wellness plan.
So if your firm offers any type of wellness plan, you’ll need to make sure all plan-related documents take these – as well as the ACA’s wellness plan rules – into account.
3. Plan notices
There’s a slew of notices firms must distribute to clearly explain all applicable federal and state reg requirements.
Example: If you have wellness plan combined with a health plan that includes medical exams, you’ll need to provide a notice letting employees know exactly what info’s being obtained, who’s receiving it, how it will be used, as well as the restrictions placed on disclosing the info and the protections the company has in place.
Here’s a sample of 2016’s major notice requirements.
4. Key rulings
Finally, employers will also want to keep a close eye on court rulings that could impact benefits policies. In Marin v. Dave & Buster’s Inc., Dave & Buster’s is facing a lawsuit claiming it violated ERISA by cutting workers’ hours to below 30 to avoid offering health coverage under Obamacare.