Fiduciary Responsibility |

Self-Dealing Or Other Mishandling of Employee Benefit Plan Funds Risky For Fiduciaries & Those Appointing Them

July 31, 2013

New litigation against the former trustee and former investment service provider of four pension plans reminds employer or other employee benefit plan sponsors, business owners or management, investment advisors and others serving as fiduciaries or advisors of employee benefit plans of the need to ensure that employee benefit plans are only used for the benefit of participants and beneficiaries, and prudently and properly invested and administered. Businesses sponsoring plans and their leaders, as well as others serving as fiduciaries or investment advisors are cautioned that mishandling of plan assets or investments can create significant liability both for those who improperly handle plan responsibilities and the employer or other plan sponsor, business owner or management, and others who are involved in their selection, oversight and retention. Consequently, parties should ensure act prudently to ensure plan assets are only invested prudently and for the sole benefit of the plan and its members, as well as to appropriately monitor the actions of other plan fiduciaries or personnel, investment managers, advisors, and others handing investments or other plan transactions, and be prepared to prove it.

The U.S. District Court for the Eastern District of Kentucky on July 26 granted in part the U.S. Department of Labor’s motion for a preliminary injunction against George S. Hofmeister and Bernard Tew, former fiduciaries of four Lexington-based pension plans: the Hillsdale Salaried, Hillsdale Hourly, Revstone Casting Fairfield GMP Local 359, and Fourslides Inc. The injunctions stem from ongoing litigation against the defendants filed by the Labor Department under the Employee Retirement Income Security Act of 1974 (ERISA). See Perez v. George Hofmeister, et al. Civil Action File Number 5:12-cv-00250-KKC, Perez v. George Hofmeister, et al. Civil Action File Number 5:13-cv-00156-KKC and Perez v. Robert La Courciere, et al. Civil Action File Number 5:13-cv-00158-KKC.

The Labor Department previously filed lawsuits in the same court that named Hofmeister and Tew, among others. Hofmeister was the trustee of the four pension plans, and Tew was managing director of their investment service provider, Bluegrass Investment Management LLC. The court’s order removes Hofmeister as a fiduciary of the plans and prohibits him from taking any actions with respect to the pensions plans or their assets. Tew resigned as fiduciary of the plans a few days before a hearing regarding the Labor Department’s motion. The lawsuits alleged that the defendants engaged in a series of prohibited transactions resulting in the misuse of approximately $12.1 million from the Hillsdale Salaried pension plan, approximately $22.5 million from the Hillsdale Hourly pension plan, approximately $4.4 million from the Revstone Casting Fairfield GMP Local 359 pension plan, and approximately $500,000 from the Fourslides Inc. pension plan. The four plan sponsors are closely affiliated with Lexington-based Revstone Industries LLC and Spara LLC.

The suits follow an EBSA investigation that found violations of the Employee Retirement Income Security Act, including prohibited loans to related companies, prohibited use of plan assets for the purchase and lease of employer property, prohibited purchase of customer notes from affiliated companies, prohibited transfer of assets in favor of parties-in-interest, payment of excessive fees to services providers, and payment of fees on behalf of the companies.

ERISA’s fiduciary responsibility rules compel individuals named as employee benefit plan fiduciaries, or who functionally exercise or have discretion or control over plan assets or their investments, or certain other plan actions to act prudently and for the exclusive benefit of participants and beneficiaries. Plan fiduciaries must act “solely in the interest” of the plan and its members. ERISA also expressly prohibits fiduciaries from dealing with the plan or its assets for the benefit of themselves or any third party. Meanwhile, ERISA’s prohibited transaction rules identify a list of parties and transactions that are per se prohibited and violate ERISA’s fiduciary responsibility rules unless the fiduciary demonstrates that an applicable exception applies. These transactions commonly are referred to as “prohibited transactions.”

According to the Labor Department brief Hofmeister, Tew and Bluegrass have repeatedly violated ERISA, using nearly $40 million in pension plan assets to benefit themselves or related parties. The department’s investigation of these pension plans revealed a pattern of prohibited transactions involving the use of these plans’ assets by Hofmeister, Tew and investment adviser firms. Alleged improper use of the plans’ assets began within days or months of Hofmeister assuming control of the pension plans. The department contends that Hofmeister has placed millions of dollars in pension plan assets at risk and has consistently failed to act to protect these assets when required.

Under ERISA, fiduciaries that commit prohibited transactions or breach other fiduciary duties rules of ERISA generally are liable personally to the employee benefit plan for the greater of damages resulting from the breach or profits realized, plus attorneys’ fees and other costs of recovery. In addition, the Labor Department also can impose penalties of up to 20 percent of the amount of the fiduciary breach, seek to enjoin the breaching fiduciaries from serving in a fiduciary capacity, and refer them to the Department of Justice for criminal prosecution. Bankruptcy often does not provide any protection against the obligation to repay.

Employers, members of management, and others with discretion or control over plan assets or the selection, appointment, oversight or retention for those providing fiduciary or other plan services should be careful to act prudently when performing these duties to avoid becoming exposed to liability for bad actors. Beyond avoiding committing its own breach of fiduciary duties, a plan sponsor, member of management or other party who is a named fiduciary or possesses fiduciary power or authority over the plan also sometimes can be liable for the prohibited transactions or other fiduciary breaches of another fiduciary under ERISA’s co-fiduciary responsibility rules. These rules generally allow co-fiduciary liability to attach when an otherwise innocent fiduciary either enabled the breach by failing to appropriately fulfill its own fiduciary responsibilities, knew or should have have known of the breach but failed to properly act to prudently intervene to protect the plan and its assets, or later discovers the breach and fails to prudently act to intervene to protect the plan and its assets.

In addition to prudently overseeing those handling investments or other plan assets or performing other fiduciary functions, parties engaging these individuals should ensure that all fiduciaries, investment advisors and service providers of the plan handing plan matters are carefully credentialed. A documented background check should be conducted to confirm that the individuals or their organizations are not disqualified from serving as fiduciaries and have appropriate credentials and reputations to perform those duties. This analysis should be periodically rechecked and that documentation and its review also carefully preserved.

Furthermore, employers and plan fiduciaries also should confirm and retain documentation that the parties serving as fiduciaries, involved in the handling of plan assets or funds, or acting in certain other capacities are bonded as required by ERISA. ERISA’s fiduciary responsibility rules require appropriate bonding. In addition to overlooking the necessity of bonding, many plan sponsors and vendors underestimate the amount and required terms of the bonding and the scope of individuals required to be bonded.

Failing to meet this requirement can broaden the scope of fiduciary liability to a plan sponsor or member of management who selected or appointed the fiduciary or service provider that engages in the prohibited transaction or other inappropriate conduct. Consequently, in the event of a plan loss, Labor Department investigators typically request documentation of this credentialing and bonding early in the investigation.

Employee benefit plan vendor selection and compensation arrangements made by association and other employee benefit plan sponsors, fiduciaries and service providers are coming under increasing scrutiny by the EBSA. While ERISA technically grants plan sponsors and fiduciaries wide latitude to make these choices, the exercise of these powers comes with great responsibility. See e.g., Plan Sponsors. Their Owners & Management & Others Risk Personal Liability If Others Defraud Plans or Mismanage Employee Benefit Plan Responsibilities; New Rules Give Employee Benefit Plan Fiduciaries & Investment Advisors New Investment Advice Options; DOL Proposes To Expand Investment Related Services Giving Rise to ERISA Fiduciary Status As Investment Fiduciary.

Associations, employer and other plan sponsors, and other entities and individuals who in name or in function have or exercise discretionary responsibility or authority over the selection of plan fiduciaries, administrative or investment service providers or other services to the plan or the establishment of their compensation generally must make those decisions in accordance with the fiduciary responsibility and prohibited transaction rules of ERISA.

Since the earliest days of ERISA, the EBSA as well as private plaintiffs have aggressively enforced these and other fiduciary responsibility rules. In recent years, EBSA has taken further steps to tighten and enforce these protections such as the new fee disclosure rules recently implemented by the EBSA and other fiduciary guidance. See, e.g., Western Mixers & Officers Ordered To Pay $1.2M+ For Improperly Using Benefit Plan Funds For Company Operations, Other ERISA Violations; Plan Administrator Faces Civil & Criminal Prosecution For Allegedly Making Prohibited $3.2 Million Real Estate Investment; Tough times are no excuse for ERISA shortcuts.

Despite these well-document fiduciary exposures and a well-established pattern of enforcement by the Labor Department and private plaintiffs, many companies and their business leaders fail to appreciate the responsibilities and liabilities associated with the establishment and administration of employee benefit plans. Frequently, employer and other employee benefit plan sponsors fail adequately to follow or document their administration of appropriate procedures to be in a position to prove their fulfillment of these requirements when selecting plan fiduciaries and service providers, determining the compensation paid for their services, overseeing the performance of these parties, or engaging in other dealings with respect to plan design or administration. In other instances, businesses and their leaders do not realize that the functional definition that ERISA uses to determine fiduciary status means that individuals participating in discretionary decisions about the employee benefit plan, as well as the plan sponsor, may bear liability under many commonly occurring situations if appropriate care is not exercised to protect participants or beneficiaries in these plans. For this reason, businesses and associations providing employee benefits to employees or dependents, as well as members of management participating in, or having responsibility to oversee or influence decisions about the establishment, maintenance, funding, and administration of their organization’s employee benefit programs need a clear understanding of their responsibilities with respect to such programs, the steps that they should take to prove their fulfillment of these responsibilities, and their other options for preventing or mitigating their otherwise applicable fiduciary risks.

In light of the significant liability risks, employer, association and other employee benefit plan sponsors and their management, plan fiduciaries, service providers and consultants should exercise care when selecting plan fiduciaries and service providers, establishing their compensation and making other related arrangements. To minimize fiduciary exposures, parties participating in these activities should seek the advice of competent legal counsel on their potential fiduciary status and responsibilities on these activities and take appropriate steps to minimize potential exposures.

For Help or More Information

If you need help reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices or with other employee benefits, human resources, health care or insurance matters, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on leading health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals. A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials about regulatory, investigatory or enforcement concerns.

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations. She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications. You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer here.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

About Solutions Law Press

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS. ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

1 Comment | Bankruptcy, Corporate Compliance, Employee Benefits, Employers, ERISA, Fiduciary Responsibility, Health Plans, Mental Health, Mental Health Parity, Professional Liability, Retirement Plans, Risk Management, Tax | Tagged: ERISA, fee disclosure, Fiduciary, participant fee disclosuyrenvestment-advisor, plan investiments, prohibited traansaction, Prudence | Permalink
Posted by Cynthia Marcotte Stamer

Employers & Insurers Reminded Of July 31 Deadline To Pay New ACA-Required PCORI Fees

July 26, 2013

Employers sponsoring self-insured group health plans and insurers are reminded that the deadline to report and pay the fee new fees required by the Patient Protection and Affordable Care Act (ACA) to help fund the Patient-Centered Outcomes Research Institute (PCORI) is July 31, 2013.

The PCORI fee, required to be reported annually on the second quarter Form 720 and paid by its due date, July 31, is based on the average number of lives covered under the policy or plan. The annually required PCORI fee applies to policy or plan years ending on or after October 1, 2012, and before October. 1, 2019.

The PCORI fee is just one of a number of new fees and costs that ACA imposes upon employers and individuals as part of the health care reforms enacted under ACA.

Employers of more than 50 full-time employees recently received a temporary retrieve from another of these looming potential fees, the employer “shared responsibility” payment that ACA added to the Internal Revenue Code (Code) under new Code Section 4980H.

Earlier this month, the Internal Revenue Service (IRS) announced that it will delay until 2015 enforcement of the employer shared responsibility or “pay-or-play” rules of Code Section 4980H. See July 2 Blog and Notice 2013-45. Slated prior to the delayed enforcement announcement to take effect January 1, 2014, the employer shared responsibility rules generally will require employers which individually or collectively with other commonly controlled or affiliated employers employee 50 or more full-time employees that do not offer group health coverage that meets the minimum essential coverage, minimum value and affordability standards of the Affordable Care Act to pay an “assessment” that the Supreme Court ruled last year to be a tax, as well as to comply with certain reporting requirements.

While Notice 2013-45 gives large more time to prepare to comply with Code Section 4980H, it provides no relief from the obligation to pay the PCORI fee or from other group health plan mandates imposed by ACA or other applicable federal laws. Consequently, as businesses continue to prepare for the delayed implementation of Code Section 4980H in 2015, they also need to ensure that they timely pay any required PCORI fees and meet other applicable federal group health plan mandates as they continue to diligently prepare to deal with Code Section 4980H.

While businesses work to meet current and impending federal health plan responsibilities, most business leaders also will want to continue to closely monitor and provide regular input to members of Congress and regulators on proposed regulatory and enforcement guidance and potential Congressional amendments to the Affordable Care Act or other health care or tax policy reforms.

For Help or More Information

If you need help with preparing these or other ACA compliance or with reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 25 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters including extensive experience on HIPAA and other privacy and data security issues.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

For important information about this communication click here. THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS. ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

Comments Off on Employers & Insurers Reminded Of July 31 Deadline To Pay New ACA-Required PCORI Fees | ADA, Affordable Care Act, Claims Administration, Corporate Compliance, Data Security, Disability, EEOC, Employee Benefits, Employers, ERISA, Excise Tax, Fiduciary Responsibility, GINA, Health Care Reform, Health Plans, HIPAA, Human Resources, Insurance, MEWA, Patient Protection and Affordable Care Act, Reporting & Disclosure, Tax, Uncategorized, Wellness Programs | Tagged: 4980H, ACA, Afffordable Care Act, Health Care Reform, health reform, Pay or Play | Permalink
Posted by Cynthia Marcotte Stamer

“Pay Or Play” Reprieve Still Leaves Employers Facing Challenging 2014 Health Care Reform Deadlines

July 11, 2013

The Internal Revenue Service (IRS) yesterday (July 10, 2013) shared its first “formal” guidance officially implementing the Obama Administration’s decision to delay until 2015 enforcement of certain of the employer shared responsibility or “pay-or-play” rules of new Internal Revenue Code (Code) Section 4980H first informally announced by Department of Treasury Assistant Secretary for Tax Policy Mark Mazar in this July 2 Blog.

Notice 2013-45 outlines the specific “transition relief” rules under which the IRS says it will forego during 2014 enforcement of the employer shared responsibility penalty tax rules and associated and information reporting requirements that are slated to take effect for single employers or groups of commonly controlled or affiliated employers that employ 50 or more full-time employees (Large Employers) beginning January 1, 2014 as part of the sweeping health care reforms enacted under the Patient Protection and Affordable Care Act (Affordable Care Act). Even with the extension of time allowed by Notice 2013-45 to prepare to comply with Code Section 4980H, however, employers and insurers have much to do to prepare.

The first priority for employers wishing to take advantage of added time to comply with Affordable Care Act’s pay or play penalty to maximize their planning opportunities and to minimize their potential Code Section 4980H consequences should be to clean up worker classifications, to track all hours worked for all employees and collect all other relevant employee data.

Notice 2013-45 Confirms IRS Won’t Enforce Code Section 4980H In 2014

The transitional relief in Notice 2013-45 comes as businesses have struggled to understand and come to grips with the requirements of new Internal Revenue Code Section 4980H that beginning January 1, 2014, a Large Employer calculate and pay the applicable “assessable payment” tax under Section 4980H for each month that it fails to offer each full-time employee group health plan coverage meeting Code Section 4980H’s “minimum essential coverage,” “minimum value” and “affordability standards” if any full-time employee receives a subsidy for enrolling in coverage through a health insurance exchange.

Specifically, Notice 2013-45 waives IRS enforcement only for 2014 and only of:

The information reporting requirements applicable to insurers, self-insuring employers, and certain other providers of minimum essential coverage (MEC) under Code Section 6055 (6055 Reporting);
The information reporting requirements applicable to applicable large employers under Code Section 6056 (6056 Reporting); and
The obligation to pay tax penalties under the employer shared responsibility provisions under Code Section 4980H (4980H Tax).

This relief is limited in both scope and duration. Notably, Notice 2013-58 states:

Its provisions have no effect on the effective date or application of the multitude of other new mandates that have or will kick in coming months in connection with the impending 2014 Affordable Care Act reforms; and
The IRS plans that the tax penalty provisions of Code Section 4980H and the information reporting requirements of Code Sections 6055 and 6056 “will be fully effective for 2015.”

While the IRS is promising in Notice 2013-45 that the IRS will not require any payments by any employer under Code Section 4980H for 2014, it also urges Large Employers other affected entities to prepare for 2015 by voluntarily complying with the information reporting provisions (once the information reporting rules have been issued) in 2014 including conducting “real-world testing of reporting systems and plan designs” and continuing employer-provided coverage.

Relief Leaves Large Employers & Other Employers With Much Work To Do

While Notice 2013-45 gives Large Employers more time to prepare to comply as well as to communicate with the IRS about the need and options for simplification, employers should continue to aggressively prepare for compliance. The IRS says it intends to fully enforce the rules against Large Employers beginning in 2015 and to implement other Affordable Care Act provisions. Consequently, employers that know or question if they may be Large Employers, their insurers, service providers and advisors should continue to diligently prepare to deal with Code Section 4980H, as well as other federal health plan rules. Accordingly, Large Employers, their insurers and advisors could continue to diligently prepare to prepare to manage their impending Code Section 4980H responsibilities and liabilities.

1. Start With Worker Classification, Time & Income Data Collection & Recordkeeping

Employers wishing to use this reprieve to their best advantage should start by ensuring that they clean up and tighten their worker classification and time tracking practices. This should start with auditing the classification of all workers providing services as employees, contractors or otherwise to be sure that they are properly classified. Code Section 4980H takes into account all workers who are under they facts and circumstances test applied by the Code “common law employees” for purposes of deciding what employers are covered by Code Section 4980H and calculating the penalties, if any owning. Many businesses mistakenly fail to recognize a wide range of workers considered by the business to work as contractors, leased employees or in other capacities are likely to be considered by the IRS to be common law employees for purposes of these rules. Ensuring that the business has properly accounted for all workers that the IRS is likely to view as common law employees is essential to any reliable planning or cost projection.

Beyond having an appropriate understanding of what individuals are considered common law employees, businesses also should seek to track accurately all hours worked, regardless of whether the employees are non-exempt workers that the Fair Labor Standards Act (FLSA) requires the employer pay hourly, or exempt employees under the FLSA that the employer pays on a salaried, commission or other non-hourly basis. Under existing Code Section 4980H rules, employers that don’t have accurate time records for employees must rely upon safe-harbor rules for identifying workers that are considered full-time. These safe harbor rules credit hours in such a way that tends to overstate the number of full-time employees and full-time equivalent employees.

In workforces where many employees many receive significant additional family income from the earnings of a spouse, another job or other sources, employers also may want to add processes to verify actual household adjusted gross income (HAGI) for purposes of identifying which of its full-time employees, whose HAGI actually is below the 400 percent of the poverty level required to qualify to receive subsidies when enrolling in coverage through a Health Insurance Exchange.

2. Other To Dos

Other helpful preparations also generally will include:

Seeking and monitoring developing guidance about the meaning of minimum essential coverage and other associated rules;
Providing meaningful input to the IRS, the Department of Health & Human Services, Congress and others on the need for and options to simplify time and other data and reporting requirements, employer interactions and data requests for verification of exchange subsidy eligibility and other purposes;
Evaluating and adjusting workforce and benefit practices, time and other record keeping systems, and plan designs;
Evaluating workflow and staffing practices to determine the potential advantages of using certain measurement, stability or administrative periods, safe harbors and other options for purposes of applying Code Section 4980H, making changes in workforce or staffing practices, redesigning benefits or other adjustments; and
Working with management, vendors and others to identify and change plan designs; and
Completing other preparations to cope with the rules.

While continuing these preparations to comply with Code Section 4980H in 2015, Large Employers as well as other businesses also need to get busy finalizing preparations for the upcoming 2014 plan year, particularly in the face of fast approaching notice deadlines. Employers are under the gun to finalize and implement plan design, vendor and other decisions and complete other preparations to prepare and deliver these and other materials on time, updated in time to meet new or revised federal health plan requirements under the Affordable Care Act and other laws. The impending Affordable Care Act-imposed deadlines to deliver newly mandated exchange notices by October 1 and updated “Summaries of Benefits and Coverage” or “SBCs” by the beginning of their next enrollment period significantly shortens the time for employers to finalize their plan designs. Under existing SBC rules, employers that amend their plans after the beginning of an annual enrollment period must update and resend SBCs to plan members. Furthermore, Federal rules also now generally require health plan administrators provide 60 days advance notice to plan members of plan amendments that materially reduce coverage or benefits. Therefore all employers regardless of size will want to ensure that their plans and associated contracts are finalized quickly to adequately meet these requirements without incurring the added expense of updating and redistributing their SBCs.

As part of these efforts, all businesses generally should act quickly and diligently to:

Carefully credential and contract with insurers, administrators, consultants and other plan service providers and advisors to document expectations and commitments about compliance, quality assurance, fiduciary and other responsibility and status, indemnification and other accountability and other matters including updated business associate commitments where required to comply with recently changes in the privacy rules of the Health Insurance Portability & Accountability Act generally required no later than September 24, 2013 for all existing plan business associates);
Audit within the scope of attorney-client privilege all existing employee and alternative workforce arrangements and patterns to confirm that all common law employees properly are identified and classified and that appropriate arrangements are in place to track and document time and other relevant information to position the business reliably its responsibilities and defend its action for Code Section 4980H and other federal health plan, Fair Labor Standards Act and other compliance purposes;
Consult with legal counsel within the scope of attorney-client privilege about any legally required or otherwise desired adjustments to worker classification or other workforce practices to minimize Affordable Care Act or other liabilities;
Finalize decisions about what health benefits, if any that their business will offer to what employees in the upcoming plan years and carefully contract with vendors, update plan documents, the SBCs, summary plan descriptions and other materials for the upcoming plan year before the first day of the next enrollment period;
Carefully amend and update plan documents, summary plan descriptions, SBCs, privacy practices notices and other required notices, communications and forms to the extent possible, before the upcoming enrollment period to minimize inconsistencies, and to be able to package required notices, summary plan descriptions and other communication and enrollment materials to take advantage of the opportunity to minimize distribution expenses;
Complete the necessary decisions and arrangements to prepare and send the exchange notice that the Affordable Care Act requires be delivered for the first time by October 1, 2013; and
Finalize other preparations for the upcoming plan year.

Monitor & Provide Input On Proposed Tax & Health Care Reform

While businesses work to meet current and impending federal health plan responsibilities, most business leaders also will want to continue to closely monitor and provide regular input to members of Congress and regulators on proposed amendments to the Affordable Care Act or other health care or tax policy reforms.

Despite a projected $ 5 billion reduction in federal budget revenue from non-enforcement of Code Section 4980H in 2014, the Administration is moving ahead aggressively to implement other Affordable Care Act reforms as scheduled. Notice 2013-45 states that the Administration plans to continue to provide subsidies pursuant to the Affordable Care Act for individuals earning less than 400% of the Federal poverty level who enroll in health coverage through a Health Insurance Exchange, which the Administration has rebranded and now refers to as “Marketplaces.” Furthermore, the Administration separately announced on July 5, 2013 that individuals will be allowed to apply for and claim these subsidies based on an “honor system” in 2014; the Administration will not require verification of eligibility.

Even before the IRS announced the relief now formalized by Notice 2013-45, the rising federal budget costs of the Affordable Care Act was fueling concern. In March, the General Accounting Office (GAO) reported that after having already spent more than $394 million on exchange efforts, the Obama administration needs Congress to approve an extra $1.5 billion added to the budget to cover the additional $2 billion that the GAO projects the Administration will need over the next fiscal year to create and run the federal exchanges. See GAO Report and GAO Report. Foregoing enforcement of Code Section 4980H, verification of subsidy eligibility and other unexpected costs resulting from glitches in the preparation and rollout of the Affordable Care Act reforms for 2014 are adding to the growing costs and projected budgetary impact of the Affordable Care Acts on the federal budget. With existing budget shortfalls already fueling pressure for increased tax revenues, businesses and individuals concerned about tax liability will want to carefully monitor and provide input to Congressional leaders on health care and tax reform.

For Help or More Information

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 25 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters including extensive experience on HIPAA and other privacy and data security issues.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

1 Comment | ADA, Affordable Care Act, Claims Administration, Corporate Compliance, Data Security, Disability, EEOC, Employee Benefits, Employers, ERISA, Excise Tax, Fiduciary Responsibility, GINA, Health Care Reform, Health Plans, HIPAA, Human Resources, Insurance, MEWA, Patient Protection and Affordable Care Act, Reporting & Disclosure, Tax, Uncategorized, Wellness Programs | Tagged: 4980H, ACA, Afffordable Care Act, Health Care Reform, health reform, Pay or Play | Permalink
Posted by Cynthia Marcotte Stamer

HHS Continues Preparations For New Health Insurance Marketplace By Awarding Grants To Promote Kids Enrollment

July 2, 2013

As part of its continuing efforts to promote enrollment in the Health Insurance Marketplace slated to take effect January 1, 2014, the Department of Health and Human Services (HHS) today (July 2, 2013) announced the award of nearly $32 million in grants for efforts to identify and enroll children eligible for Medicaid and the Children’s Health Insurance Program (CHIP). The Connecting Kids to Coverage Outreach and Enrollment Grants were awarded to 41 state agencies, community health centers, school-based organizations and non-profit groups in 22 states; two grantees are multistate organizations. The announcement comes as employers and others continue to express concern about the sufficiency of preparations and HHS’ recent rollout of online tools to aid consumers enroll in the new Health Care Marketplace scheduled to launch January 1, 2014 as part of the continuing implementation of reforms enacted as part of the Patient Protection & Affordable Care Act (Affordable Care Act).

Announced Grants Target Increased CHIP & Medicaid Enrollment In Preparation For Health Care Marketplace

In amounts ranging from $190,000 to $1 million out of the $140 million included in the Affordable Care Act and the Children’s Health Insurance Program Reauthorization Act (CHIPRA) of 2009 for enrollment and renewal outreach, HHS Reports the grants awarded to the grantees listed here focus on 5 areas:

Engaging schools in outreach, enrollment and retention activities (9 awards);
Reducing health coverage disparities by reaching out to subgroups of children that are less likely to have health coverage (8 awards);
Streamlining enrollment for individuals participating in other public benefit programs such as nutritional or other assistance programs (3 awards);
Improving application assistance resources to provide high quality, reliable Medicaid and CHIP enrollment and renewal services in local communities (13 awards); and
Training communities to help families understand the new application and enrollment system and to deliver effective assistance to families with children eligible for Medicaid or CHIP (8 awards).

According to HHS, the grants will build on the Secretary’s Connecting Kids to Coverage Challenge to find and enroll all eligible children and support outreach strategies that have been shown to be successful.

According to HHS, Connecting Kids to Coverage Outreach and Enrollment Grant Awards (Cycle III) Efforts to streamline Medicaid and CHIP enrollment and renewal practices, combined with robust outreach activities, have helped reduce the number of uninsured children. Since 2008, HHS claims 1.7 million children have gained coverage and the rate of uninsured children has dropped to 6.6 percent in 2012

“Today’s grants will ensure that more children across the nation have access to the quality health care they need,” said Secretary Sebelius. “We are drawing from successful children’s health coverage outreach and enrollment efforts to help promote enrollment this fall in Medicaid and the new Health Insurance Marketplace.”

Continuing Preparations For New Health Care Marketplace

The grant awards are part of a much broader effort by HHS to prepare Americans to enroll in the newly reformed Health Insurance Marketplace that the Obama Administration is working to implement as part of the sweeping reforms enacted by the Affordable Care Act.

Enrollment is the Health Insurance Exchanges also to be included in the new federal health care marketplace is scheduled to begin October 1, 2013. In anticipation of this deadline, HHS recently also announced its rollout of new consumer health care education and decision-making tools on its newly designed www.healthcare.gov website.

In announcing its launch of its Health Insurance Marketplace educational tools here on June 24, 2013, the Department of Health & Human Services (HHS) repeated recent claims that HHS and the states are on target to begin enrollment on October 1, 2013 in the federal and state health care exchanges now retitled “Health Insurance Marketplace” by the Administration, to meet other key milestones and to the beginning coverage under the newly created Health Insurance Marketplaces beginning January 1, 2014.

As part of these preparations, HHS kicked off an aggressive Health Insurance Marketplace education effort by announcing the deploying of with newly designed “consumer-focused” HealthCare.gov website and the 24-hours-a-day consumer call center that HHS claims provide all the necessary tools to prepare Americans for open enrollment and ultimately sign up for private health insurance.

While HHS says its tools and other preparations will get the Health Care Marketplaces and Americans ready for the conversion of the U.S. health care system slated to begin January 1, 2014, others are less confident. For instance, GAO officials recently found that major work that federal and state officials must complete to timely begin enrollment by October 1 remains unfinished, making it unclear if they will meet the impending October 1, 2013 enrollment kickoff deadline. See GAO Report and GAO Report.

Meanwhile, employers of 50 or more full-time employees and others also have complained that delayed and incomplete guidance has prevented them from understanding their obligations and moving to complete preparations to comply with the new employer mandates by delaying private market reforms and employer preparations. These problems have been further complicated by recent media coverage and public debate about the access to sensitive personal health care, financial information and the role of the Internal Revenue Service and other government agencies under the Affordable Care Act following recent charges that certain Internal Revenue Service officials improperly targeted certain charitable organization and their organizers as part of application approval and audits.

Despite these concerns, HHS is marching ahead on its efforts to implement the law by launching these and other enrollment and educational outreach.

For Help or More Information

If you need help with preparing these or other Affordable Care Act compliance or with reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 25 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters including extensive experience on HIPAA and other privacy and data security issues.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

Comments Off on HHS Continues Preparations For New Health Insurance Marketplace By Awarding Grants To Promote Kids Enrollment | ADA, Affordable Care Act, Claims Administration, Corporate Compliance, Data Security, Disability, EEOC, Employee Benefits, Employers, ERISA, Excise Tax, Fiduciary Responsibility, GINA, Health Care Reform, Health Plans, HIPAA, Human Resources, Insurance, MEWA, Patient Protection and Affordable Care Act, Reporting & Disclosure, Tax, Uncategorized, Wellness Programs | Tagged: ADA, Affordable Care Act, GINA, Group Health plans, Health Care Marketplace, Health Care Reform, Health Insurance Exchange, Health Plans, HIPAA, Privacy, Wellness, Wellness Programs | Permalink
Posted by Cynthia Marcotte Stamer

HHS Touts Enrollment Tools, Says Exchange Enrollment Ready Despite GAO Concerns

June 26, 2013

Despite growing concerns expressed by the General Accounting Office (GAO) and others about arrangements and the need for added funding to prepare for the massive conversion in the U.S. health care system slated to take effect January 1, 2014 under the Patient Protection & Affordable Care Act (“ACA), Obama Administration officials are continuing to claim readiness to begin enrollment of Americans In federal health care marketplace on schedule on October 1, 2013 and to meet other crucial deadlines necessary to effectively implement the next wave of ACA’s health care reforms in the Department of Health & Human Service’s rollout of new consumer health care education and decision-making tools on its newly designed healthcare.gov website.

According to HHS, “The new tools will help Americans understand their choices and select the coverage that best suits their needs when open enrollment in the new Health Insurance Marketplace begins October 1.”

According to Centers for Medicare & Medicaid Services Administrator Marilyn Tavenner, “In October, HealthCare.gov will be the online destination for consumers to compare and enroll in affordable, qualified health plans.”

Between now and the start of open enrollment, HHS says the Marketplace call center will provide educational information and, beginning Oct. 1, 2013, will help consumers with application completion and plan choice. In addition to English and Spanish, the call center provides assistance in more than 150 languages through an interpretation and translation service. Customer service representatives are available for assistance via a toll-free number at 1-800-318-2596 and hearing impaired callers using TTY/TDD technology can dial 1-855-889-4325 for assistance.

17 states committed to run their own exchanges have missed March 2013 deadlines on 44% of key activities;
Officials creating the small business exchanges still must review plans and train and certify the “navigators” that are supposed to help companies and individuals enroll in plans and complete other key arrangements;
A federal the “data hub” designed to help individuals determine their eligibility and enroll in plans offered through the exchanges has only undergone initial testing; and
The current planned process for coordination of data between employer and insurer plans and the health care exchanges to evaluate eligibility of the millions of Americans expected to apply for subsidies for enrolling in coverage through the exchange presently is for HHS to contact employers by telephone employers to ask if that employer asked that employee enrollee minimum essential coverage providing minimum essential value at an affordable cost that would disqualify the applicant for the subsidy.

Meanwhile, the GAO Reports also provide a glimpse at what the federal government has spent so far on preparing the federal exchanges and the data hub. They indicate that hat the Obama Administration had approximately $394 million on exchange efforts as of March 2013 including:

$84 million to CGI Federal, which is building the federal exchange computer infrastructure;
$55 million to Quality Software Services, which is building the data hub; and
$38 million to Booz Allen Hamilton to provide technical assistance for enrollment and eligibility.

Contractor Booz Allen Hamilton recently has drawn attention as the National Security Association contractor through which the notorious fugitive Edward Snowden allegedly accessed information he disclosed to the public about NSA surveillance of “big data” on Americans and others through the internet.

The GAO also estimated the Obama administration needs Congress to approve an extra $1.5 billion from the budget to provide the Administration with the additional $2 billion that the GAO projects the Administration will need over the next fiscal year to create and operate the federal exchanges. Existing budget concerns make it unlikely that Congress will approve these extra funds.

For Help or More Information

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 25 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters including extensive experience on HIPAA and other privacy and data security issues.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

Comments Off on HHS Touts Enrollment Tools, Says Exchange Enrollment Ready Despite GAO Concerns | ADA, Affordable Care Act, Claims Administration, Corporate Compliance, Data Security, Disability, EEOC, Employee Benefits, Employers, ERISA, Excise Tax, Fiduciary Responsibility, GINA, Health Care Reform, Health Plans, HIPAA, Human Resources, Insurance, MEWA, Patient Protection and Affordable Care Act, Reporting & Disclosure, Tax, Uncategorized, Wellness Programs | Tagged: ADA, Affordable Care Act, GINA, Group Health plans, Health Care Reform, Health Plans, HIPAA, Privacy, Wellness, Wellness Programs | Permalink
Posted by Cynthia Marcotte Stamer

Id & Manage Hidden Employee Benefit Exposures In Business Insolvency Or Other Transactions

June 5, 2013

The June 4, 2013 announcement of the Employee Benefit Security Administration (EBSA) provides a timely reminder to businesses sponsoring employee benefit plans, their owners and management, plan fiduciaries, banks, administrative service providers and other plan vendors, employee benefit plan and bankruptcy trustees, corporate receivers, creditors, and others looking to expedite the windup of abandoned 401(k), profit-sharing and other individual account pension plans of the challenges that can result when employee benefit plan responsibilities are mishandled when companies fail or experience other significant events, as well as the availability of tools to help mitigate or prevent these challenges through responsible proactive action.

Hidden Employee Benefit Exposures For Unwary Abound For Parties In Business Insolvency Or Other Transactions

A complex maze of ERISA, tax and other rules make, administration and termination of employee benefit plans a complicated matter. When the company sponsoring a plan experiences a significant workforce or other restructuring, becomes distressed, goes bankrupt or liquidates, merges, sells assets or engages in other significant business transaction impacting the plans or its workforce, the rules, as well as the circumstances, can create a liability and operational quagmire for everyone from the sponsoring business, its management, buyers, vendors, plan fiduciaries, plan participants and beneficiaries, related entities, asset purchasers and others. While tough economic times may tempt business leaders to cut corners, more than 3o years of litigation and enforcement precedent make clear that cutting corners on the assessment and handling of employee benefit and other workforce responsibilities amid business distress or in other business transactions or events presents risks for all parties involved. See e.g., Tough Times Are No Excuse For ERISA Shortcuts; Mishandling Employee Benefit Obligations Creates Big Liabilities For Distressed Businesses & Their Business Leaders. While many business leaders and plan fiduciaries lack a strong understanding of these rules and their implications in times of business or benefit plan distress or other significant business transactions, even those experienced with these concerns need to use caution to understand and respond to the series of ongoing changes in these rules, regulations and precedent that impact on the handling of plan related responsibilities in these and other special situations.

The Internal Revenue Code (Code) requires contains a maze of requirements that companies sponsoring pension, profit-sharing, health and other employee benefit plans, their plans, and plan administrators must follow when maintaining, administering, or terminating these plans including in many instances, special rules on the termination of the plans, distribution of assets, and the liabilities that attach to affiliated companies, successors, and assets resulting from transactions involving employee benefit plans or their sponsors.

In addition to the Code’s rules, companies and other individuals that in name or in function have or exercise discretionary responsibility or authority over the maintenance, administration or funding of employee benefit plans regulated by ERISA also generally must meet ERISA’s high standards for carrying out these duties based on their functional ability to exercise discretion over these matters, whether or not they have been named as fiduciaries formally. Under many circumstances these rules, or the handling of transactions can broaden the scope of responsibility or create exposures for a surprising range of parties dealing with the plan sponsor, related corporations or their stock, assets, benefit plans or workforce in corporate bankruptcies, mergers, asset or stock acquisitions, liquidations or other transactions.

Beyond these basic tax and fiduciary obligations, ERISA and the Internal Revenue Code (Code) create additional responsibilities and liabilities for when dealing with defined benefit or other pension plans subject to ERISA’s minimum funding and plan termination rules that when violated trigger a plethora of funding and notification obligations, penalties, liens on assets, and other obligations that can create significant traps for unwary plan fiduciaries and administrators, the sponsoring corporation, its management, affiliates and successors, as well as creditors or purchasers of stock or assets and others dealing with them.

Despite these well-documented responsibilities and a well-established pattern of enforcement by the Department of Labor, Pension Benefit Guarantee Corporation, Internal Revenue Service and private plaintiffs, many businesses and business leaders fail to appropriately understand these and other basic responsibilities and liabilities associated with the establishment, administration, termination and windup of employee benefit plans and other details about how their or others mishandling of employee benefit plan related responsibilities can undermine business goals and create unanticipated liability exposures.

Frequently, companies sponsoring their employee benefit plans and their executives mistakenly assume that they can rely upon vendors and advisors to ensure that their programs are appropriately established. The establishment and maintenance of these arrangements with limited review or oversight by the sponsoring company or its management team can be risky.

In other instances, businesses and their leaders do not realize that ERISA’s functional definition to determine fiduciary status means that individuals participating in discretionary decisions about the employee benefit plan, as well as the plan sponsor, may bear liability under many commonly occurring situations if appropriate care is not exercised to protect participants or beneficiaries in these plans.

In yet other instances, purchasers, related entities, bankruptcy trustees and creditors or others don’t appreciate the way their own or others mishandling of employee benefit plan obligations or exposures can impact their transactions and associated risks.

Proactive Action Can Mitigate Exposures & Costs

For this reason, companies providing employee benefits and their management, service providers, and related entities and the businesses dealing with them need a clear understanding of the rules and responsibilities Federal law imposes on the funding, administration and termination of these programs, how these rules can impact their responsibilities and goals, and the steps necessary to avoid or mitigate exposures likely to result if they or others mishandle employee benefit plan related responsibilities or assets and how to avoid or mitigate these concerns.

The challenges of winding up an abandoned plan discussed in the EBSA news release yesterday highlights just one of these complications, the problem of dealing with abandoned plans.

When companies and their management abandon plans, they leave their plans, participants and beneficiaries, service providers and others in limbo, without the authority or funds to wind up the plans. When employers abandon their individual account pension plans, custodians such as banks, insurers and mutual fund companies are left holding the assets of these abandoned plans but without the authority to terminate such plans and make benefit distributions even in response to participant demands. Service providers often find themselves in the legally awkward situation of having continuing plan responsibilities without necessary direction or compensation for performance. Meanwhile, participants and beneficiaries can’t manage, access or often even get information about their funds until the situation resolves. Dealing with these issues usually requires cumbersome, time-consuming and costly processes often requiring complex, lengthy, highly formalistic and expensive judicial and administrative procedures to resolve while fiduciary, tax and other liabilities mount. Meanwhile, participants and beneficiaries often lose access to their accounts or benefits or even see plan value decline as plan assets that could go to benefits are diverted to cover administrative costs of winding up the plan.

The EBSAs abandoned plan program is just one of many examples of tools that parties struggling with these issues can use to mitigate these challenges and exposures. EBSA uses its abandoned plan program to facilitate a voluntary efficient process for winding up the affairs of abandoned individual account plans so that benefit distributions are made to participants and beneficiaries when this occurs.

The EBSA Abandoned Plan News Release and the EBSA’s related response Response to ADP/JP Morgan published June 4, 2013 show an example of how EBSA used its abandoned plan program to give critical relief to JP Morgan Chase Bank NA and ADP Inc. to use to wind up certain abandoned plans without exhausting the 90-day waiting period that ordinarily applies before the termination of a retirement plan based on the best interest of participants pursuant to 29 CFR §2578.1. By exercising its discretion to waive the 90-day notice period, the EBSA allowed JP Morgan Chase Bank NA and ADP Inc. to terminate immediately and wind up approximately 180 defined contribution pension plans abandoned due to corporate crises or neglect.

Requesting relief from the EBSA like that granted to JP Morgan Chase Bank NA and ADP Inc. in the announcement made yesterday is just one of various types of relief that legal counsel experienced with dealing with workforce and employee benefit plan challenges that can arise when companies or their plans become inadequately funded, bankrupt, or experience other significant transactions or events, can use to help debtors, and other plan sponsors, their management, affiliates, successors, buyers, plan fiduciaries, vendors, bankruptcy creditors and trustees.

Experienced counsel can help companies understand and negotiate the complex rules of the EBSA, the Pension Benefit Guarantee Corporation and the Internal Revenue Service governing dealings with these plans and where appropriate and available by taking advantage of relief or other options to mitigate these challenges. Involving experienced counsel to explore and use these options early can help all parties get participants and beneficiaries their benefits while minimizing legal risks, time and expenses associated with the wind up of these troubled or abandoned plans. Even where special dispensation is not available, the early involvement of experienced legal counsel as early as possible after the possibility that a business or its plans or assets will be impacted by underfunding, insolvency, a bankruptcy or liquidation, workforce reduction, sale, merger or other significant event can help plan and administer the steps necessary to handle cost effectively employee benefit related responsibilities and impacts.

For Help or More Information

If you need help with assessing or handing employee benefit or workforce challenges arising from business or employee benefit plan insolvency, stock or asset sales, mergers, bankruptcy or liquidation, reductions or other workforce changes or other significant business transactions or events, or other employee benefit, human resources, insurance, health care matters or related documents or practices, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 25 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters including extensive experience handling workforce and employee benefit challenges arising from plan underfunding, company restructurings, workforce change, insolvencies, bankruptcies, mergers, stock or asset acquisitions, or other significant business or plan transactions.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, and insurers, bankruptcy trustees and receivers, asset purchasers, creditors and others dealing with plans and their sponsors, and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals. A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials about regulatory, investigatory or enforcement concerns. Her experience includes involvement in the planning, execution and resolution of workforce and employee benefit related details of a multitude of high and low profile restructurings, bankruptcies and other significant transactions throughout her more than 25 year career.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

1 Comment | Affordable Care Act, Bankruptcy, Claims Administration, Corporate Compliance, Defined Benefit Plans, Defined Contribution Plans, Employee Benefits, Employers, Employment Agreement, ERISA, Excise Tax, Executive Compensation, Fiduciary Responsibility, Health Care Reform, Health Plans, HIPAA, Human Resources, Income Tax, Insurance, MEWA, Patient Protection and Affordable Care Act, Professional Liability, Reporting & Disclosure, Restructuring, Retirement Plans, Risk Management, Tax | Tagged: abandoned plans, bankkruptcy, employee benefit plans, ERISA, fiduciary responsibiltiies, illiquid, insolvancy, reductions in force, Reengineering | Permalink
Posted by Cynthia Marcotte Stamer

Final Regulations Update HIPAA Health Plan Wellness Program Rules

May 30, 2013

Register Now For 6/4 Solutions Law Press, Inc. Virtual Briefing

Employer, union and sponsors of employment-based group health plans that include health risk assessment (HRA) or other wellness plan features that reward participants for engaging in certain assessments or other activities designed to promote wellness or disease management, and fiduciaries insurers, and administrators of these health plans should review and update their programs in light of final wellness program rules jointly published by the Department of Health and Human Services (HHS), Department of Labor Employee Benefit Security Administration (EBSA) and the Department of Treasury (collectively the “Agencies”) today (May 29, 2013) here (Wellness Regulations).

While these final Wellness Regulations implementation of changes to the “bona fide wellness program exception” to nondiscrimination rules contained in the Portability Rules of the Health Insurance Portability & Accountability Act (HIPAA) as amended by the Patient Protection and Affordable Care Act (ACA) allow group health plans to provide bigger rewards to members for cooperating in wellness activities required under a “bona wellness program” within the meaning of the Wellness Regulations, the Wellness Regulations and other federal rules still need care to design and administer these health plan features meet all applicable Wellness Regulations for qualification as a “bona fide wellness program while also safeguarding the use of “personal health information” and “genetic health information in accordance with the privacy rules of HIPAA as amended by the Genetic Information Nondiscrimination Act (GINA) managing potential employment disability discrimination exposures under the Equal Employment Opportunity Commission’s (EEOC’s) current interpretation of the employment discrimination rules of Americans With Disabilities Act (ADA) and GINA.

Wellness Rules Implement ACA Changes To HIPAA “Bona Fide Wellness Program Rules

The nondiscrimination prohibitions of the Health Insurance Portability & Accountability Act (HIPAA), as amended by the Genetic Information Nondiscrimination Act (GINA) and the Patient Protection and Affordable Care Act (ACA) generally prohibit health plans from discriminating against an individual based on eligibility or premium based on a health factor. Wellness or disease management programs that vary premiums or contributions, cost-sharing or other benefit mechanisms, or provide other rewards or inducements can run afoul of this HIPAA nondiscrimination prohibition if not properly designed and administered to fall within the “bona fide wellness program” exception.

The Wellness Regulations as finalized continue to interpret HIPAA’s general prohibition against group health plan provisions that discriminate based on a health factor to prohibit group health plans to vary benefits (including cost-sharing mechanisms) or the premium or contribution for similarly situated individuals when wellness program that satisfies the requirements of the Wellness Regulations for a “bona fide wellness program

The Affordable Care Act generally increased the maximum permissible reward under a health-contingent wellness program from 20 percent to 30 percent of the cost of health coverage for qualifying bona fide wellness programs and to as much as 50 percent of the cost of health coverage for bona fide wellness programs designed to prevent or reduce tobacco use. In keeping with these ACA amendments to HIPAA, the Wellness Regulations allow group health plans and insurers to offer these greater rewards as long as the wellness program otherwise meets the conditions that the Wellness Regulations set for qualification as a bona fide wellness program.

In order to offer these incentives, however, the Wellness Regulations make clear that group health plans, their insurers and fiduciaries still need to tread carefully to properly design and administer these arrangements to ensure that their wellness program meet the applicable conditions of the Wellness Regulations for qualification as a bona fide wellness program.

In keeping with the approach announced in proposed regulations the Agencies previously published here last Fall, the Wellness Regulations have different requirements for “participatory wellness programs” versus “health contingent wellness programs.”

“Participatory wellness programs” generally are programs that reward plan members for participating in wellness activities based on participation in specified activities without regard to an individual’s health status. These include programs that reimburse for the cost of membership in a fitness center; that provide a reward to employees for attending a monthly, no-cost health education seminar; or that reward employees who complete a health risk assessment, without requiring them to take further action
“Health-contingent wellness programs” generally are programs where individuals must meet a specific standard related to their health to qualify for the specified reward or avoid a specified penalty. Examples of health-contingent wellness programs include programs that provide a reward to those who do not use, or decrease their use of, tobacco, or programs that reward those who achieve a specified health-related goal, such as a specified cholesterol level, weight, or body mass index, as well as those who fail to meet such goals but take certain other healthy actions.

Group health plan sponsors, fiduciaries, insurers and administrators should use care to properly understand which type of program or programs their group health plans contain and ensure that their programs are properly designed and administered to meet these conditions. While fulfillment of these requirements can allow the arrangement to avoid violation of HIPAA’s nondiscrimination rules, however, it is important also to ensure that other applicable federal requirements for the use of these arrangements also are fulfilled along with these HIPAA nondiscrimination requirements.

Meeting Other Federal Rules For Wellness Programs Also Important

In addition to fulfilling the Wellness Regulations, health plans, their sponsors, fiduciaries, insurers and administrators also need to ensure that any wellness program included in a group health plan also meets other federal rules about the protection of sensitive personal health information and genetic health information and do not violate the employment discrimination rules of the ADA and GINA

Update Privacy Compliance

.Since wellness programs generally inherently involve some collection, use, access or disclosure of “protected health information” within the meaning of the Privacy Rules of HIPAA, it is particularly important to review and tighten plan provisions and other documentation, processes, procedures, and training to reduce the risk of violating HIPAA. A review of the adequacy of these arrangements is made particularly important in light of recent changes to in the implementing regulations of these HIPAA Privacy Rules adopted earlier this year to implement changes enacted by the HITECH Act. Among other things, these changes may require updates to the health plan’s definition of personal health care information to clarify that it includes family health information and other “genetic information” that wellness programs often collect. Other updates to plan provisions, privacy policies, vendor agreements or other practices also may be needed to comply with modifications to the HIPAA Privacy Rules on business associates, marketing, breach notification, training or other rules.

Manage Disability Discrimination Risks

In addition to ensuring compliance with current requirements about privacy, group health plans, their sponsors, fiduciaries, insurers and vendors also should take steps to minimize potential employment discrimination challenges under the ADA and GINA.

Despite ACA’ amendments to HIPAA’s bona fide wellness program rules and the 11^th Circuit’s rejection of an EEOC challenge in Broward County v. Seff, EEOC officials continue to take the position that testing and inquiries about medical conditions made in connection with wellness programs presumptively violate the Americans With Disabilities Act physical testing and other disability discrimination rules as raising concerns about wellness and disease management programs.. See, e.g., EBSA Issues Guidance on Health Plan Wellness & Disease Management Programs Subject to HIPAA Nondiscrimination Rules; ADAAA Amendment Broader “Disability Definition Not Retroactive, Employer Action Needed To Manage Post 1/1/2009 Risks; Businesses Face Rising Disability Discrimination Enforcement Risks; EEOC Finalizes Updates To Disability Regulations In Response to ADA Amendments Act.

The ADA is not the only employment discrimination risk to manage, however. In addition to the amendments to the group health plan nondiscrimination and Privacy Rules of HIPAA, GINA’s employment discrimination rules generally prohibit employment discrimination based on “genetic health information.” For instance, GINA’s genetic information nondiscrimination rules:

Prohibit employers and employment agencies from discriminating based on genetic information in hiring, termination or referral decisions or in other decisions regarding compensation, terms, conditions or privileges of employment;
Prohibit employers and employment agencies from limiting, segregating or classifying employees so as to deny employment opportunities to an employee based on genetic information;
Bar labor organizations from excluding, expelling or otherwise discriminating against individuals based on genetic information;
Prohibit employers, employment agencies and labor organizations from requesting, requiring or purchasing genetic information of an employee or an employee’s family member except as allowed by GINA to satisfy certification requirements of family and medical leave laws, to monitor the biological effects of toxic substances in the workplace or other conditions specifically allowed by GINA;
Prohibit employers, labor organizations and joint labor-management committees from discriminating in any decisions related to admission or employment in training or retraining programs, including apprenticeships based on genetic information;
Mandate that in the narrow situations where limited cases where genetic information is obtained by a covered entity, it maintain the information on separate forms in separate medical files, treat the information as a confidential medical record, and not disclosure the genetic information except in those situations specifically allowed by GINA;
Prohibit any person from retaliating against an individual for opposing an act or practice made unlawful by GINA; and

EEOC officials have stated publicly on certain occasions and reportedly have challenged health risk assessments or other wellness program features that request or collect family medical history or other genetic information as violating GINA’s employment discrimination rules.

Learn More At 6/4 Solutions Law Briefing

Solutions Law Press, Inc. invites employer and other employment-based group health plan sponsors, fiduciaries insurers, administrators, brokers, consultants and others to learn the key details of new Final Wellness Program regulations jointly published May 29, 2013 by the Departments of Health and Human Services, Labor and Treasury (collectively the “Agencies”) by participating in an informative and timely virtual briefing on “Making Wellness Programs Work Under New Final Tri-Agency Regulations” on June 4, 2013 beginning at Noon Central Time. To register or for additional details, see here.

For Help or More Information

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 25 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters including extensive experience on HIPAA and other privacy and data security issues.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

1 Comment | ADA, Affordable Care Act, Claims Administration, Corporate Compliance, Data Security, Disability, EEOC, Employee Benefits, Employers, ERISA, Excise Tax, Fiduciary Responsibility, GINA, Health Care Reform, Health Plans, HIPAA, Human Resources, Insurance, MEWA, Patient Protection and Affordable Care Act, Reporting & Disclosure, Tax, Uncategorized, Wellness Programs | Tagged: ADA, Affordable Care Act, GINA, Group Health plans, Health Care Reform, Health Plans, HIPAA, Privacy, Wellness, Wellness Programs | Permalink
Posted by Cynthia Marcotte Stamer

Register For 6/4 Virtual Briefing On DOL/IRS/HHS Final Group Health Plan Wellness Program Regulations

May 30, 2013

Solutions Law Press, Inc. Invites Employer & Other Group Health Plan Sponsors, Insurers, Administrators, Brokers, Advisors & Consultants to A Virtual Briefing On

Making Wellness Programs Work Under New Tri-Agency Final Wellness Regulations

Tuesday, June 4, 2013

1:00 P.M.-2:00 P.M. Eastern | 12:00 P.M.-1:00 P.M. Central | 11:00 A.M-12:00 P.M. Mountain | 10 A.M-11:00 A.M. Pacific

Register Now!

New final wellness program regulations jointly published May 29, 2013 by the Departments of Labor, Health & Human Services and Labor tell employers and insurers how to design health risk assessment and other wellness and disease management tools in their group health plans and policies to incentivize and reward employees and other plan members to better manage their health and help manage health plan costs without violating the HIPAA Portability Rules against group health plan discrimination in premiums or eligibility based on health status.

Participants in this briefing will learn key information about:

The final wellness program regulation’s requirements for designing HRA and other group health plan wellness and disease management programs that avoid violating HIPAA’s prohibition against discrimination based on health factors as “bona fide wellness programs;”
How group health plans can take advantage of the option allowed beginning in 2014 to offer greater incentives to plan members to participate in group health plan wellness programs by amendments made under the Patient Protection and Affordable Care Act;
How new Omnibus HIPAA Privacy Rules may require group health plans and insurers to update their marketing and other privacy policies, procedures, documentation, vendor agreements and other practices for collecting, using, disclosing and safeguarding “personal health information” and “genetic health information” when administering wellness programs and other group health plan provisions;
When the EEOC views wellness programs incentives as potentially violating the Americans With Disabilities Act discrimination exposures under the Equal Employment Opportunity Commission’s (EEOC’s) current interpretation of the employment discrimination rules of Americans With Disabilities Act (ADA) and GINA; and
Other tips for designing legally compliant, effective group health plan disease management and wellness programs.

Ms. Stamer also will take questions from virtual audience participants as time permits.

About The Speaker

A Fellow in the American College of Employee Benefits Counsel, recognized in International Who’s Who, and Board Certified in Labor & Employment Law, attorney and health benefit consultant Cynthia Marcotte Stamer has 25 years experience advising and representing private and public employers, employer and union plan sponsors, employee benefit plans, associations, their fiduciaries, administrators, and vendors, group health, Medicare and Medicaid Advantage, and other insurers, governmental leaders and others on health and other employee benefit. employment, insurance and related matters. A well-known and prolific author and popular speaker Board Certified in Labor & Employment Law, Ms. Stamer presently serves as Co-Chair of the ABA RPTE Section Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Committee, an ABA Joint Committee on Employee Benefits Representative, an Editorial Advisory Board Member of the Institute of Human Resources (IHR/HR.com), Insurance Thought Leadership,com and Employee Benefit News, and various other publications. With extensive domestic and international regulatory and public policy experience, Ms. Stamer also has worked extensively domestically and internationally on public policy and regulatory advocacy on health and other employee benefits, human resources, insurance, tax, compliance and other matters and representing clients in dealings with the US Congress, Departments of Labor, Treasury, Health & Human Services, as well as state legislatures, attorneys general, insurance and labor departments, and other agencies and regulators. A prolific author and popular speaker, Ms. Stamer regularly authors materials and conducts workshops and professional, management and other training and serves on the faculty and planning committees of a multitude of symposium and other educational programs. See http://www.CynthiaStamer.com. for more details.

Registration

Registration Fee is $95.00 per person Registration required for each virtual participant. Payment required via website registration in advance of the program.. Payment only accepted via website PayPal. No checks or cash accepted. Participation is limited and available on a first come, first serve basis. Persons not registered at least 24 hours in advance not guaranteed to receive access information or materials prior to commencement of the briefing.

Equipment Requirements For Virtual Briefing Participation

This briefing will be conducted via WebEx over the internet. Participants may have the opportunity to participate via telephone, provided that participants electing to participate may incur added charges for telephone connectivity. Solutions Law Press, Inc. is not responsible for any power or system failures. Solutions Law Press, Inc. also expects to offer the opportunity for individuals unable to participate in the live briefing to listen to a recording of the briefing beginning approximately one week after the program via the Internet by registering, paying the required registration fee and following listening instructions received in response to such registration.

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides business and management information, tools and solutions, training and education, services and support to help organizations and their leaders promote effective management of legal and operational performance, regulatory compliance and risk management, data and information protection and risk management and other key management objectives. Solutions Law Press, Inc.™ also conducts and assist businesses and associations to design, present and conduct customized programs and training targeted to their specific audiences and needs. For additional information about upcoming programs, to inquire about becoming a presenting sponsor for an upcoming event, e-mail your request to info@Solutionslawpress.com These programs, publications and other resources are provided only for general informational and educational purposes. Neither the distribution or presentation of these programs and materials to any party nor any statement or information provided in or in connection with this communication, the program or associated materials are intended to or shall be construed as establishing an attorney-client relationship, to constitute legal advice or provide any assurance or expectation from Solutions Law Press, Inc., the presenter or any related parties. If you or someone else you know would like to receive future Alerts or other information about developments, publications or programs or other updates, send your request to info@solutionslawpress.com. If you would prefer not to receive communications from Solutions Law Press, Inc. send an e-mail with “Solutions Law Press Unsubscribe” in the Subject to support@solutionslawyer.net. CIRCULAR 230 NOTICE: The following disclaimer is included to comply with and in response to U.S. Treasury Department Circular 230 Regulations. ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN. If you are an individual with a disability who requires accommodation to participate, please let us know at the time of your registration so that we may consider your request. ©2013 Solutions Law Press, Inc. All rights reserved.

Comments Off on Register For 6/4 Virtual Briefing On DOL/IRS/HHS Final Group Health Plan Wellness Program Regulations | ADA, Affordable Care Act, Claims Administration, Corporate Compliance, Disability, EEOC, EEOC, Employee Benefits, Employers, ERISA, Fiduciary Responsibility, GINA, Health Plans, HIPAA, Human Resources, MEWA, Tax, Wellness Programs | Tagged: ACA, ADA, Affordable Care Act, GINA, HIPAA, HIPAA Portability, HIPAA Privacy, Wellness, Wellness Programs | Permalink
Posted by Cynthia Marcotte Stamer

New IRS Guidance On ESOP Investment Diversification Reminder To Tighten Compliance, Risk Management

May 12, 2013

Fiduciaries, administrators, sponsors, advisors, trustees and others with involvement or responsibility for Employee Stock Option Plans (ESOPs) should review these rules and ensure that appropriate steps are taken to update their plan terms and practices to comply with new rules scheduled to be published in the Internal Revenue Bulletin on May 13, 2013 by the Internal Revenue Service on investment diversification.

Maintaining legally compliant and defensible arrangements for investing company stock in employee stock and other defined contribution employee benefit and deferred compensation plans continues to become increasingly complicated in the face of the expanding range of rules adopted by Congress and federal regulators looking to protect participants against stock drop and other actual or perceived abuse.

Among these tightening requirements are new rules announced in Notice 2013-17, which address the circumstances in which an ESOP that satisfied the diversification requirements of § 401(a)(28)(B)(i) by allowing distribution of a portion of a participant’s account has become subject to the diversification requirements of § 401(a)(35). Notice 2013-17 will be published in Internal Revenue Bulletin 2013-20 on May 13, 2013.

The new diversification rules are reflective of a host of new and proposed rules and enforcement positions that Congress and federal regulators have or are contemplating to address perceived abuses or risks arising from the investment or retention of company stock in employee benefit plans. Some of this new regulation arises from decline in retirement plan asset value that results from declines in stock value when the economy or a particular business suffers economic setbacks. Along with these economic concerns, other regulation seeks to safeguard participants and plans against Enron, Madoff or other activities by plan sponsors, investment advisors, executives or others that Congress or regulators perceive inappropriately put retirement and savings of workers at risk. Noncompliance with these requirements risks not only tax qualification concerns, but also may expose decision-makers to fiduciary or other liability under the Employee Retirement Income Security Act fiduciary responsibility and prohibited transaction rules, securities laws, and other laws.

In response to Notice 2013-17 and other new rules, fiduciaries, administrators, sponsors, advisors, trustees and others with involvement or responsibility for ESOP should review these rules and ensure that appropriate steps are taken to update their plan terms and practices to comply with this new guidance. In conjunction with this review, most also will find advisable to review the adequacy of their existing policies and plan terms about their program’s investments in company and other stock in light of evolving fiduciary responsibility and other investment rules and enforcement guidance of the Internal Revenue Service as well as the Department of Labor Employee Benefit Security Administration and the Securities and Exchange Commission.

If you have any questions or need help reviewing and updating your ESOP or other employee benefit plans, or with any other workforce management, employee benefits or compensation matters, please do not hesitate to contact the author of this update, Board Certified Labor and Employment Attorney and Management Consultant Cynthia Marcotte Stamer at 469.767.8872.

For Help or More Information

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 25 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters including extensive experience on HIPAA and other privacy and data security issues.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals. A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns.

Extensively published and a popular speaker on HIPAA and other data security matters, Ms. Stamer works extensively with health care providers, health plans, employers, insurance and financial services, technology and other clients on privacy, data seurity and other privacy and cybercrime concerns. She also serves as the Scribe for the ABA JCEB Agency Techical Sessions Meetings with the Office of Civil Rights which occur each May in Washington, D.C.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

Comments Off on New IRS Guidance On ESOP Investment Diversification Reminder To Tighten Compliance, Risk Management | 105(h), Bankruptcy, Consumer Protection, Corporate Compliance, Employee Benefits, Employers, ERISA, Excise Tax, Fiduciary Responsibility, Health Plans, Human Resources, Insurance, Reporting & Disclosure, Tax, Uncategorized | Tagged: Diversification, Esops, Fiduciary Responsibility | Permalink
Posted by Cynthia Marcotte Stamer

Insured “Expatriate Plans” Get Temporary Reprieve From Affordable Care Act Compliance Thru 2015 If Meet Other Health Plan Mandates

March 13, 2013

U.S. businesses with workers working oversees and foreign businesses sending employees to work in the U.S. often overlook the need to design their expatriate health benefit and certain other welfare plans and employment practices to properly comply with applicable U.S. mandates.

“Expatriate health plans” within the meaning of the “FAQS About Affordable Care Act Implementation (Part XIII)”(the “Expat FAQ”) are not required to comply the Affordable Care Act (ACA) requirements for pre-January 1, 2016 plan years, as long as they comply with the applicable federal health plan mandates of pre-Affordable Care Act version of Title XXVII of the Public Health Service (PHS) Act and other applicable law under ERISA and the Internal Revenue Code (Code) under temporary transitional relief announced in the Expat FAQ jointly announced by the Agencies of Labor, Health and Human Services (HHS), and the Treasury (collectively, the Agencies) on March 8, 2013.

ACA & Other Federal Health Plan Rules Generally Apply To Expat Coverage

The Expat FAQ makes clear that the Agencies generally view expatriate health plans and other health benefit coverage provided by businesses subject to U.S. law for employees working outside their home country generally are subject to the mandates of ACA, as well as other federal health plan mandates. However, ERISA section 4(b)(4) may exempt from ERISA coverage “plans maintained outside the United States primarily for the benefit of persons substantially all of whom are nonresident aliens.” Similar exemptions also may be available for certain provisions of the Code or ERISA for these extra-territorial plans for nonresident aliens. For instance, for purposes of the eligibility non-discrimination rule of Code section 105(h), the Code specifies that an employer can disregard employees who are nonresident aliens and who receive no earned income (within the meaning of section 911(d)92) from the employer which constitutes income from sources within the United States within the meaning of section 861(a)(3).

Businesses should design and administer their health plans in accordance with all relevant federal health benefit regulations unless qualification for their plan for exemption is specifically verified.

Temporary Transitional ACA Relief For “Expatriate Health Plans”

While the Agencies gather further information and analyze the potential challenges expatriate plans may face in complying with the Affordable Care Act, the Expat FAQ states that for plan years beginning on or before December 31, 2015, the Agencies will treat expatriate health plans as treating the requirements of subtitles A and C of Title I of the Affordable Care Act if the plan and issuer comply with the pre-Affordable Care Act version of Title XXVII of the PHS Act, section 715 of ERISA, and section 9815 of the Code and other applicable law under ERISA and the Code including, for example, the mental health parity provisions, the HIPAA nondiscrimination provisions, the ERISA section 503 requirements for claims procedures, and any reporting and disclosure obligations under ERISA Part 1.

The Expat FAQ also confirms that the Agencies will treat coverage provided under an expatriate group health plan as a form of minimum essential coverage under section 5000A of the Code. If an individual has minimum essential coverage, the individual will not be subject to the “Individual Mandate” tax. Additionally, an employee who is offered “minimum essential coverage” by his/her employer will not be eligible for a subsidy in the Exchange if the employer coverage is “affordable” and provides “minimum value.” This means the employer will not be subject to a potential penalty under the ACA “Employer Shared Responsibility” provisions of new Code section 4980H.

Definition of “Expatriate Health Plan” Limited To Certain Insured Health Plans

Sponsors and insurers providing or administering health benefits with respect to employees working or living outside the United States are cautioned of the need to confirm that their program falls under the Expat FAQ’s definition of “expatriate health plan.” For purposes of this temporary transitional relief, the Expat FAQ defines an “expatriate health plan” as “an insured group health plan with respect to which enrollment is limited to primary insureds who reside outside of their home country for at least six months of the plan year and any covered dependents, and its associated group health insurance coverage.” The Expat FAQ confirms its definition of “expatriate health coverage” also applies for purposes of the Health Insurer Issuer Standards Related to Transitional Reinsurance Program of 45 CFR 153.400(a)(1)(iii) for plans with plan years ending on or before December 31, 2015.

This definition of expatriate health plan will not extend to all health coverage provided for employees of U.S. companies working outside the United States. Employers and administrators of self-insured health plans providing coverage for expatriate employees take note, however. Because this definition presently is limited to “insured group health plans,” it self-insured health coverage provided for expatriate employees presently do not qualify as expatriate health plans covered by the relief contained in the Expat FAQ. Likewise, the definition also does not apply to health coverage provided for employees working abroad for periods of less than six months. Sponsors, insurers and administrators of health plans providing coverage for employees of U.S. employer working outside their home countries that fall outside the Expat FAQ definition of an “expatriate health plan” should ensure that their programs timely comply with all applicable federal health plan mandates including ACA.

Agencies Invite Public Input On ACA Application To Expatriate Health Plans

The Agencies request comments on and information about the unique challenges that expatriate health plans may face in complying with provisions of the Affordable Care Act, including information about which particular types of plans face these challenges and with respect to which particular provisions of the Affordable Care Act. In anticipation of further input and analysis, the Expat FAQ speculates that potential challenges that could complicate Affordable Care Act compliance for an expatriate health plan might include:

Reconciling and coordinating the multiple regulatory regimes that apply to expatriate health plans might make it impossible or impracticable to comply with all the relevant rules at least in the near term;

Independent review organizations may not exist abroad;

It may be difficult for certain preventive services to be provided, or even be identified as preventive, when services are provided outside the United States by clinical providers that use different code sets and medical terminology to identify services.

Expatriate issuers may face challenges and delays in communicating with enrollees living abroad.

Due to the complex nature of these plans, standardized benefits disclosures can be difficult for issuers to produce.

Expatriate health plans may require additional regulatory approvals from foreign governments.

In some circumstances, it is possible that domestic and foreign law requirements conflict.

The Expat FAQ invites employers, insurers and other interested persons to provide input to the Agencies by sending their comments by May 8, 2013 to e.ohpsca-expat.ebsa@dol.gov. Sponsors, insurers and administrators should share their concerns and insights in response to this invitation.

Review and Update Plans To Manage Risks & Improve Effectiveness

Businesses providing health coverage to workers working outside of the United States should review their policies for compliance with the applicable requirements of the Affordable Care Act, to the extent applicable taking into account the Expat FAQ, as well as otherwise applicable requirements of ERISA, the Code, the PHS Act and other relevant federal laws.  When conducting this review, sponsors, administrators and insurers also should consider opportunities to manage risks, improve plan value and cost effectiveness and mitigate other legal or operational concerns.

Health coverage provided to employees of U.S. businesses working outside the United States typically are provided under policies, plans and programs pursuant to products or other arrangements that may not be designed, documented or administered to adequately comply with relevant federal health plan mandates. Beyond minimizing legal exposures that may result from overlooked compliance obligations, employer or other sponsors, administrators and insurers of these programs generally should familiarize themselves about the health care delivery systems, private and public health benefit programs, regulations and other relevant requirements and circumstances that may impact their business’ obligations to provide or contribute toward the cost of health care coverage, access to quality care by their employees and their families while working outside the United States or their home country, and legal and operational issues that may arise when employees are working oversees, transitioning between countries, have family members residing in different countries or other special circumstances.

The Expat FAQ is only one of a deluge of new guidance recently finalized or proposed by the Agencies. With the effective date of the 2014 Affordable Care Act reforms rapidly approaching, more guidance is impending. Stay tuned for additional updates about Affordable Care Act and other federal health plan rules and guidance.

For More Information Or Assistance

If you need help labor and employment, health and other employee benefit, compensation, privacy and data  other internal controls and management concerns, please contact the author of this update, attorney Cynthia Marcotte Stamer.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experience with health matters, Ms. Stamer works extensively with employers, employee benefit plan sponsors, insurers, administrators, and fiduciaries, payroll and staffing companies, technology and other service providers and others to develop and run legally defensible programs, practices and policies that promote the client’s human resources, employee benefits or other management goals.  Ms. Stamer has more than 25 years experience advising these and other clients about these matters  and representing employer, employee benefit and other clients before the Internal Revenue Service, the Department of Labor, Immigration & Customs, Justice, and Health & Human Services, the Securities and Exchange Commission, Federal Trade Commission, state labor, insurance, tax and attorneys’ general, and other agencies, private plaintiffs and others on health and other employee benefit, labor, employment and other human resources, worker classification, tax, internal controls, risk management and other legal and operational management concerns.

A Fellow in the American College of Employee Benefits Council, the immediate past Chair and current Welfare Benefit Committee Co-Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, the Vice Chair of the ABA TIPS Employee Benefits Committee, the Gulf States Area TEGE Council Exempt Organizations Coordinator, past-Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, and the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, Ms. Stamer also is a widely published author and highly regarded speaker on these and other employee benefit and human resources matters who is active in many other employee benefits, human resources and other management focused organizations who is published and speaks extensively on worker classification and related matters. She is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications.

You can learn more about Ms. Stamer and her experience, find out about upcoming training or other events, review some of her past training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer at http://www.CynthiaStamer.com.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources available at http://www.solutionslawpress.com including:

Test Your Health Care Reform Knowledge On 3rd Anniversary of Reform Passage

Insured “Expatriate Plans” Get Temporary Reprieve From Affordable Care Act Compliance Thru 2015 If Meet Other Health Plan Mandates

Insured “Expatriate Plans” Get Temporary Reprieve From Affordable Care Act Compliance Thru 2015 If Meet Other Health Plan Mandates

OCR Plans To Survey Health Plans, Other Covered Entities Hit With HIPAA Audits in 2012

Businesses Urged To Strengthen Their Worker Classification Defenses As IRS, Other Agencies Step Up Audits & Enforcement

Alert Employees Claiming Qualified Adoption Expenses and Education Credits About Changed IRS Procedures

13 Employer Tips For Coping With Health Care Reform Now!

Sequester Will Cut ACA Small Businesses Health Care Tax Credits

Premier Insurance Services Pays $120,000 In Back Wages, Damages, Penalties Because Commission-Only Comp Violated Minimum Wage, Overtime Laws

OSHA Citation Of Michigan VA Reminder To Manage Workplace Safety

Labor Department Targeting Businesses Violating Overtime, Other Wage & Hour Laws

Wal-Mart Settlement Shows ADA Risks When Considering Employee Return To Work Accommodation Requests & Inquiries

HHS Releases Final Rule on Health Insurance Market, Rate Review, Pre-Existing Conditions & Other ACA Market Reform Rules

FTC, HIPAA Rules Require Health Plans & Employers Strengthen Data Security on Mobile Devices and Applications

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information concerning this communication click here.

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS. ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.   ©2013 Cynthia Marcotte Stamer, P.C. Non-exclusive license to republish granted to Solutions Law Press. All other rights reserved.

“Expatriate health plans” within the meaning of the “FAQS About Affordable Care Act Implementation (Part XIII)”(the “Expat FAQ”) are not required to comply the Affordable Care Act (ACA) requirements for pre-January 1, 2016 plan years, as long as they comply with the applicable federal health plan mandates of pre-Affordable Care Act version of Title XXVII of the Public Health Service (PHS) Act and other applicable law under ERISA and the Internal Revenue Code (Code) under temporary transitional relief announced in the Expat FAQ jointly announced by the Agencies of Labor, Health and Human Services (HHS), and the Treasury (collectively, the Agencies) on March 8, 2013.

ACA & Other Federal Health Plan Rules Generally Apply To Expat Coverage

The Expat FAQ makes clear that the Agencies generally view expatriate health plans and other health benefit coverage provided by businesses subject to U.S. law for employees working outside their home country generally…

View original post 2,596 more words

Comments Off on Insured “Expatriate Plans” Get Temporary Reprieve From Affordable Care Act Compliance Thru 2015 If Meet Other Health Plan Mandates | 105(h), Affordable Care Act, Claims Administration, COBRA, Corporate Compliance, Employee Benefits, Employers, ERISA, Fiduciary Responsibility, FMLA, Health Plans, HIPAA, Human Resources, I-9, Immigration, Insurance, Internal Controls, Medicare Part D, Mental Health, Mental Health Parity, Prescription Drugs, Uncategorized | Tagged: ACA, Employee Benefits, Employers, expatriate plans, Health Plans, International | Permalink
Posted by Cynthia Marcotte Stamer

Company President, Officer Can’t Use Bankruptcy To Avoid Liability For Using Plan Money For Company Operations

December 27, 2012

John Dombek III and John Dombek Jr. cannot use personal bankruptcy to avoid complying with a federal court order to restore $69,521 in health-care premiums and retirement plan contributions withheld from the paychecks of employees at several companies that are part of the JJD Industries in violation of the Employee Retirement Income Security Act (ERISA). The recent judgement against the two men in Solis v. John Dombek Jr., John Dombek III, Wisconsin Tool & Stamping Co. 401(k) Profit Sharing Plan & Trust, J.D. Acquisition 401(k) Profit Sharing Plan and Trust, and the JJD Industries Group Health Plan is a reminder to business owners, management and others with discretionary control over employee contributions or other plan assets of the importance of ensuring that all employee contributions withheld from pay and other plan assets are used only for appropriate plan expenses and timely deposited in trust or otherwise appropriately applied. Businesses owners and managers should treat these and other similar judgmentsas a wake-up call to meet employee benefit funding obligations, not to use plan monies for company operations and to take other required steps to make sure that retirement, health and other employee benefit plans moneys and other responsibilities are properly handled.

Company Leaders Ordered To Restore Misdirected Monies

A Chicago federal court ordered the two men to make restitution of $69,521 of employee contributions withheld from employee pay that the court ruled the Dombeks mismanaged by failing to ensure the timely deposit of these funds with the plans. See

Dombek III, who is president of the JJD Industries Group, and Dombek Jr. were co-fiduciaries of the Wisconsin Tool & Stamping Co. 401(k) plan and have been ordered to restore $22,164.45 in unremitted contributions and lost opportunity costs to the plan. Dombek III is also liable for an additional $2,222.78 in unremitted contributions and lost opportunity costs to the J.D. Acquisition 401(k) plan.

Dombek III must also restore $45,134.08 in unremitted contributions and lost opportunity costs to the JJD Industries sponsored group health plan. The company contracted with Blue Cross and Blue Shield of Illinois to provide health and dental benefits to the employees of its related companies, including Wisconsin Tool & Stamping Co., J.D. Acquisition Corp., Akorat Metal Fabricators Inc./Smithco Fabricators Inc. and Pavo Inc./Injection Plastics Corp. The companies paid their premiums separately, and premiums were partially funded through weekly employee payroll deductions.

The judgment also bars Dombek Jr. and Dombek III from serving as fiduciaries or service providers to any employee benefit plan subject to ERISA for a period of five years. An independent fiduciary will oversee the termination of the 401(k) plans of both Wisconsin Tool & Stamping and J.D. Acquisition, as well as the distribution of plan assets to eligible participants.

The Dombeks will not be able to claim bankruptcy protection to avoid liability for the judgments. Dombek Jr. and Dombek III both previously had filed for Chapter 7 bankruptcy protection. The Labor Department filed separate complaints to determine the dischargeability of these obligations and seek the enforcement of any monetary judgment against both individuals to restore the funds to the employee benefit programs. On October 5 and October 16, 2012, the U.S. Bankruptcy Court for the Northern District of Illinois granted the Labor Department’s motions for default judgment, finding that the debts Dombek Jr. and Dombek III owed to the plans were not dischargeable in bankruptcy.

Business Leaders Risk Personal Liability When Employee Contributions Used In Company Operations

The judgement is another reminder to business owners and leaders not to allow employee contributions or other plan assets to be used to pay company expenses or otherwise misdirected. The judgment is one many enforcement actions that the Department of Labor regularly takes against businesses and business leaders that allow plan assets to be used for company operations or other improper purposes.

“Failing to administer health insurance premiums properly demonstrates a total lack of concern for employees and their families,” said Steve Haugen, director of the Chicago Regional Office of the Labor Department’s Employee Benefit Security Administration. “Incorporating employees’ voluntary salary contributions into the general assets of a company and failing to forward them to the retirement plan are violations of both the law and the trust workers have placed in their employers.”

The judgement shows that owners, operators and managers of businesses that exercise discretion and control over the funding, investment or administration of employee benefit plans or their assets face significant liability for failing to properly fulfill their responsibilities with respect to their employee benefit plans. Businesses, their owners, board members, officers, and other members of management making decisions about the maintenance, funding, administration, termination, hiring or appointment of fiduciaries or service providers or other matters impacting the employee benefit plan should ensure that they understand the potential implications and responsibilities associated with these activities for themselves and their companies. Individuals who have authority or responsibility for employee benefit plans who also perform or take part in the performance of other company management functions also should pre-educate themselves about when ERISA may require that their plan responsibilities be put before otherwise applicable responsibilities to their company, appropriate processes for documenting decisions and activities, and other procedures to help position activities to mitigate exposures and promote defensibility.

For Help or More Information

If you need help reviewing and updating, administering or defending your employee benefit, human resources, insurance, health care matters or related documents or practices or with other employee benefits, human resources, health care or insurance matters, please contact the author of this update, Cynthia Marcotte Stamer.

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations. She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications. You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and registerto receive future updates about developments on these and other concerns from Ms. Stamer here.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

About Solutions Law Press

1 Comment | Employee Benefits, Employers, ERISA, Fiduciary Responsibility, Health Plans, Mental Health, Mental Health Parity, Retirement Plans, Tax | Tagged: Bankruptcy, ERISA, fee disclosure, Fiduciary, plan investiments, prohibited traansaction, Prudence | Permalink
Posted by Cynthia Marcotte Stamer

Catch Up On Health Reform & Other Key Employee Benefits & Insurance Issues Emerging Issues and Litigation Relating to Life, Health, Disability and ERISA Symposium In Ft. Lauderdale

December 7, 2012

Cynthia Marcotte Stamer will be one of the featured panelists discussing “Implications of PPACA” on January 18, 2013 at the American Bar Association Tort Trial & Insurance Practice Section’s (TIPS) 39th Annual TIPS Midwinter Symposium on Insurance and Employee Benefits “Emerging Issues and Litigation Relating to Life, Health, Disability and ERISA” in Fort Lauderdale.

The “Implications on PPACA” program scheduled at 3:30 p.m. on January 18, 2012 is one of many content-rich series of programs on employee benefit and insurance issues that leading practitioners will lead during the Symposium W Hotel Fort Lauderdale in Fort Lauderdale, FL on January 17-19, 2013. To register, review the full agenda or get additional information about the Symposium, see here.

About Ms. Stamer

Managing Editor of Solutions Law Press, Inc. and a noted Texas-based employee benefits and employment lawyer with extensive involvement in the leadership of the ABA and other professional organizations involved in employee benefits, health care and workforce matters, is nationally and internationally known for her knowledgeable and creative leadership and work as an attorney, consultant, policy advocate, speaker and author helping businesses, governments, and communities on health and other insurance and employee benefits, patient education and empowerment, wellness and disease management, and other programs, policies, and processes. For more than 24 years, Ms. Stamer’s legal practice has focused on advising and representing employers, insurers, health care providers, community leaders and governments about health care and employee benefits policy and process improvement, quality, performance management, education, compliance, communications, risk management, reimbursement and finance, and other related matters. In addition to her legal practice, Stamer also extensively consults and provides leadership to a broad range of clients, professional and civic organizations, and others on strategies for improving the health care system and the ability of health care providers, payers, employers, community organizations, government agencies to promote the ability of patients and their families to access cost-effective, quality, affordable health care and other resource needs. She also has worked extensively with a broad range of business and government clients on health care, pension, social security, workforce, insurance and many other related policy matters.

In addition to her service with TIPS, Ms. Stamer also is active in the leadership of a broad range of other professional and civil organizations. For instance, Ms. Stamer presently serves as Executive Director of Project COPE, the Coalition on Patient Empowerment and the Coalition for Responsible Healthcare Policy; Vice President of the North Texas Healthcare Compliance Professionals Association; Immediate Past Chair of the American Bar Association RPTE Employee Benefits & Other Compensation Committee and its representative to the ABA Joint Committee on Employee Benefits and Vice Chair of its Welfare Benefits Committee; Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and a current member of its Healthcare Coordinating Council; and as the Gulf Coast TEGE Council TE Committee Coordinator. She previously served as a founding Board Member and President of the Alliance for Healthcare Excellence, as a Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; the Board President of the early retirement intervention agency, The Richardson Development Center for Children; Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a member of the Board of Directors of the Southwest Benefits Association; on many seminar faculties and in many other professional and civic leadership and volunteer roles.

Author of the hundreds of publications and workshops these and other employment, employee benefits, health care, insurance, workforce and other management matters, Ms. Stamer’s insights on employee benefits, insurance, health care and workforce matters in Atlantic Information Services, The Bureau of National Affairs, HealthLeaders, Modern Healthcare, Business Insurance, Employee Benefits News, World At Work, Benefits Magazine, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, the Houston Business Journal, and many other publications. Nationally known for her work on health care reform and related matters, Ms. Stamer also regularly conducts training and speaks on these and other management, compliance and public policy concerns. For more information about Ms. Stamer, upcoming training, publications or other materials or events, see here or contact Ms. Stamer directly via email here or (469) 767-8872.

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information concerning this communication click here. If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject to here.

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Posted by Cynthia Marcotte Stamer

New OCR HIPAA De-Identification Guidance Among Developments Covered In 12/12 HIPAA Update Web Workshop

November 27, 2012

Get Up To Date On Details of New De-Identification Guidance & Other HIPAA Developments By Participating In 12/12 HIPAA Update Web Workshop

Health care providers, health plans, health care clearinghouses (covered entities) and their business associates and leadership should check and update their policies and practices for the de-identification of protected health information (PHI) in light of newly-released Guidance Regarding Methods for De-identification of Protected Health Information in Accordance With the Health Insurance Portability and Accountablity Act (HIPAA) Privacy Rule (Guidance) released by the Department of Health & Human Services (HHS) Office of Civil Rights yesterday (November 26, 2012).

Solutions Law Press, Inc. will host a one-hour, online HIPAA Update Workshop on the Guidance and other recent regulatory and enforcement developments under HIPAA for covered entities and their business associates on Wednesday, December 12 beginning at Noon Central Time. To register, see here.

PHI collected by health care providers, health plans, their management, sponsors, and vendors often includes a wealth of information valuable for use for functions unrelated to the HIPAA-covered functions and activities that leads covered entities or their business associates to collect or keep this data. While it might be tempting to repurpose this information for business planning and marketing purposes, covered entities and their business partners or associates frequently assume that covered entities and others that they deal with must take proper steps to that no PHI is used, accessed, disclosed or shared unless that action is allowed under the Privacy Rules, properly de-identified, or both.

When planning to rely upon the de-identification of PHI to engage in these activities, parties planning to rely upon HIPAA’s exception for de-identified PHI will want to consult new guidance just released by OCR about the de-identification requirements before moving forward. Existing Privacy Rules and the Guidance recognize two alternative methods that covered entities and their business can use to properly de-identify PHI for purposes of the HIPAA Privacy Rule.

OCR published the Guidance to help covered entities to understand what qualifies as de-identification, the general process by which de-identified information is created, and the options available for performing de-identification for purposes of the HIPAA Privacy Rule. The publication of this guidance was mandated as part of amendments to HIPAA enacted by Health Information Technology for Economic and Clinical Health (HITECH) Act included in the American Recovery and Reinvestment Act of 2009 (ARRA). Section 13424(c) of the HITECH Act requires the HHS to issue guidance on how best to implement the requirements for the de-identification of health information contained in the Privacy Rule.

De-identification & Its Rationale Under Privacy Rule

The Privacy Rule was designed to protect individually identifiable health information through permitting only certain uses and disclosures of PHI provided by the Rule, or as authorized by the individual subject of the information. However, in recognition of the potential utility of health information even when it is not individually identifiable, §164.502(d) of the Privacy Rule permits a covered entity or its business associate to create information that is not individually identifiable by following the de-identification standard and implementation specifications in Privacy Rule §164.514(a)-(b). These provisions allow the entity to use and disclose information that neither identifies nor provides a reasonable basis to identify an individual provided the Covered Entity can show that the PHI has been de-identified in accordance with either the Expert Determination Method or the Safe Harbor Method of the de-identification standard of the Privacy Rule and is not re-identified. Regardless of the method used to de-identify PHI, the Privacy Rule does not restrict the use or disclosure of de-identified health information, as it is no longer considered PHI and is not re-identified.

Privacy Rule De-Identification Implementation Standards Permit Alternative Methods of De-identification

Section 164.514(a) of the HIPAA Privacy Rule provides the standard for de-identification of protected health information. Under this standard, health information is not individually identifiable if it does not identify an individual and if the covered entity has no reasonable basis to believe it can be used to identify an individual. See Privacy Rule § 164.514.

Sections 164.514(b) and (c) of the Privacy Rule contain the implementation specifications that a covered entity must follow to meet the de-identification standard. As summarized in Figure 1, the Privacy Rule provides two methods by which health information can be designated as de-identified:

The formal determination by a qualified expert in accordance with the Privacy Rule (Expert Determination Method); or
The removal of specified individual identifiers as well as absence of actual knowledge by the covered entity that the remaining information could be used alone or in combination with other information to identify the individual (Safe Harbor Method).

In order for PHI to qualify as de-identified under the “Expert Determination Method, Privacy Rule § 164.514(b)(1) requires that a person with appropriate knowledge of and experience with generally accepted statistical and scientific principles and methods for rendering information not individually identifiable:

Applying such principles and methods, determines that the risk is very small that the information could be used, alone or in combination with other reasonably available information, by an anticipated recipient to identify an individual who is a subject of the information; and
Documents the methods and results of the analysis that justify such determination.

Alternatively, Privacy Rule § 164.514(b)(2) provides that PHI will qualify as de-identified under the Safe Harbor Method if:

All of an extensive list of identifiers of the individual or of relatives, employers, or household members of the individual, are removed from the data; and
The covered entity does not have actual knowledge that the information could be used alone or in combination with other information to identify an individual who is a subject of the information.

As long as the data is not re-identified, the Guidance indicates that a covered entity may prove fulfillment of the de-identification standard of Privacy Rule §164.514(a) by showing satisfaction of all applicable requirements of either method. Under the Privacy Rule, de-identified health information created following these methods is no longer protected by the Privacy Rule because it does not fall within the definition of PHI. Of course, de-identification leads to information loss which may limit the usefulness of the resulting health information in certain circumstances. Consequently, covered entities may wish to select de-identification strategies that minimize such loss.

Both alternatives for de-identification under the Privacy Rule require that covered entities and their business associates decide whether and how to keep the option for re-identification of PHI slated for de-identification and where applicable, appropriately manage the re-identification opportunity and data to avoid violation of the Privacy Rule.

According to the Privacy Rule, if a covered entity or business associate successfully undertook an effort to identify the subject of de-identified information it maintained, the health information now related to a specific individual would again be protected by the Privacy Rule, as it would meet the definition of PHI. Disclosure of a code or other means of record identification designed to enable coded or otherwise de-identified information to be re-identified is also considered a disclosure of PHI. In this regard, Privacy Rule §164.514(c) specifies that if the covered entity assigns a code or other means of record identification to allow information de-identified under this section to be re-identified by the covered entity, themeans of record identification is not derived from or related to information about the individual and is not otherwise capable of being translated so as to identify the individual; it can’t use elements of the protected PHI as the re-identification key,must safeguard the key, and can’t use or disclose the key or other re-identification tool for any other purpose.

Preparing For, Guiding & Documenting The De-identification Process For Defensibility

The Guidance stresses that importance of documentation for which values in health data correspond to PHI, as well as the systems that manage PHI and its risk of identification or re-identification in the de-identification process cannot be overstated.

The Guidance provides guidance to help guide covered entities and their business associates through the steps and analysis of using the Expert Determination versus Safe Harbor Method. A review of this Guidance makes clear that the design and administration of the de-identification process under either method requires careful and well-documented planning, analysis and implementation to fulfill and to keep the documentation that a covered entity or business associate might need to defend its decision to treat and use PHI as de-identified under the Privacy Rule against a potential audit or enforcement inquiry. The Guidance also seeks to further illuminate the requirements for effective de-identification through a series of questions and answers, supplemented by work flow and other charts, examples and other illustrations and tips on the proper use of each alternative Method and managing risks and the process associated with that Method. A Glossary of Terms also is shared. The discussion in the Guidance makes clear that covered entities and their businesses associates using either Method to de-identify PHI should be prepared to make a number of judgments about which Method to use, whether and how to make arrangements for re-identification, and how to properly manage the process to meet the requirements of the implementation standard and manage re-identification or other risks.

Register For 12/12 HIPAA Update Web Workshop To Catch Up On De-Identification Guidance & Other HIPAA & Texas HIPAA Regulatory & Enforcement Developments

Training and compliance mandates applicable to covered entities and their business associates under the newly strengthened Texas HIPAA law and HIPAA’s Privacy and Breach Notification Rules make it more important than ever that covered entities and their business associates get the timely training and other assistance needed to properly comply with requirements for the protection of PHI under the new Guidance and other HIPAA and Texas HIPAA mandates.

To aid in this process, Solutions Law Press, Inc. will host a 2012 HIPAA Update Web Workshop covering the new Guidance on de-identification and other regulatory and enforcement developments under HIPAA and the newly amended Texas HIPAA law on December 12, 2012 from 1:00 P.M.-2:00 P.M. Eastern | Noon – 1:00 P.M. Central | 11:00 A.M-Noon Mountain | 10:00A.M-11:00 A.M. Pacific Time.

Expanded health care privacy mandates of the Texas Medical Records Privacy Act that take effect September 1, 2012 and HIPAA regulations require covered entities and their business associates conduct training and take other steps to protect the privacy and security of PHI.

Complete HIPAA Training While You Catch Up On The Latest On HIPAA & Texas Medical Records Privacy Rules & Get Helpful Compliance And Risk Management Tips!

Health care providers, health plans, health care clearinghouses face new imperatives to strengthen their HIPAA and other procedures for handling protected health information and other sensitive information to manage expanding risks and responsibilities arising from evolving rules, expanding enforcement and oversight, and rising penalties and other liabilities.

The $4.3 million HIPAA Civil Monetary Penalty and growing list of $1 million plus resolution payments announced by the Office of Civil Rights coupled with its commitment to investigate all large breaches reported under the HITECH Act Breach Notification Rule and other stepped up enforcement and newly initiated audit activities send a clear signal that HIPAA-covered entities and their business associates face significant exposures for failing to appropriately manage their HIPAA and other responsibilities when handling protected health information. Meanwhile, Texas House Bill 300 has raised maximum state civil penalties for unlawful disclosures of Protected Health Information under the Texas Medical Records Privacy Act to from $5,000 to $1.5 million per year. Meanwhile HITECH Act amendments to HIPAA require covered entities provide notification of certain breaches while Texas House Bill 300 adds its own specific requirements to provide notice of certain breaches of computerized data containing sensitive personal information.

With Texas House Bill 300 expanding covered entities responsibilities and liabilities and OCR issuing new regulations and other guidance to implement amendments to the HIPAA Privacy & Security Standards and implement and enforce the HITECH Act Breach Notification Rule, health care providers, health plans and insurers, their brokers, third-party administrators, and other covered entities, as well as their business associates and employer and union clients must review and tighten their policies, practices, business associate and other contracts, and enforcement to manage HIPAA and other compliance and manage risks arising from the access, collection, use, protection and disclosure of PHI to meet expanding mandates and to guard against growing liability exposures under HIPAA and other federal and state laws.

Solutions Law Press, Inc. invites you to catch up on the latest on these and other key HIPAA requirements and enforcement and learn tips for managing risks and liabilities by participating in the “HIPAA Update Workshop” on Wednesday, December 12, 2012 via WebEx for a registration fee of $125.00.

Pre-approved for various types of continuing and professional education credit, the December 12, 2012 HIPAA Update Workshop will brief participants on the De-Identification Guidance as well as the latest on other regulatory and enforcement guidance under the HIPAA Privacy, Security and Breach Notification rules and guidance and share compliance and risk management lessons emerging from recent OCR enforcement and audit activities and other selected federal and state litigation and enforcement actions impacting the handling of protected health information. Among other things, the workshop will cover:

The De-Identification Guidance just released by OCR on November 26, 2012;
The latest HIPAA Privacy, Security & Breach Notification Guidance, Audits & Enforcement
Highlights Texas House Bill’s Amendments To Texas Medical Records Privacy Law That Took Effect September 1, 2012
Post HITECH Act Heightened Liability Risks: Audits, Civil Penalties, Criminal Penalties & State Lawsuits
Expansion of HIPAA Responsibilities & Liabilities To Business Associates & What Covered Entities & Business Associates Should Do In Response
HIPAA Data Breach Notification Requirements
Practical Challenges & Strategies For Managing These Responsibilities
Tips For Coordinating HIPAA & Other Federal & State Medical Privacy, Financial Information, Identity Theft & Date Security Compliance and Risk Management
Practical Strategies For Monitoring & Responding To New Requirements & Changing Rules
Participant Questions

About The Speaker

The workshop will be conducted by attorney Cynthia Marcotte Stamer. A Fellow in the American College of Employee Benefits Counsel, recognized in International Who’s Who, North Texas Health Care Compliance Professionals Association Vice-President and Board Certified in Labor & Employment Law, attorney Cynthia Marcotte Stamer has 25 years experience advising and representing private and public health care providers, employers, employer and union plan sponsors, employee benefit plans, associations, their fiduciaries, administrators, and vendors, group health, Medicare and Medicaid Advantage, and other insurers, governmental leaders and others on privacy and data security, health care, health and other employee benefit. employment, insurance and related matters. A well-known and prolific author and popular speaker, Ms. Stamer has worked extensively with heath care providers, health plans and other payers, health and insurance IT and data systems, and others on HIPAA and other privacy and data security concerns. She served as the scrivener for the ABA JCEB Agency Meetings with the Office of Civil Rights on HIPAA Privacy for the past two years. She presently serves as Co-Chair of the ABA RPTE Section Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Committee, an ABA Joint Committee on Employee Benefits Representative, an Editorial Advisory Board Member of the Institute of Human Resources (IHR/HR.com) and Employee Benefit News, and various other publications. A primary drafter of the Bolivian Social Security privatization law with extensive domestic and international regulatory and public policy experience, Ms. Stamer also has worked extensively domestically and internationally on public policy and regulatory advocacy on HIPAA and other privacy and data security risks and requirements as well as a broad range of other health, employee benefits, human resources, insurance, tax, compliance and other matters and representing clients in dealings with OCR and other HHS agencies, as well as the Departments of Labor, Treasury, Federal Trade Commission, HUD and Justice, Congress and state legislatures, and various state attorneys general, insurance, labor, worker’s compensation, medical licensure and disciplinary and other agencies and regulators. A prolific author and popular speaker, Ms. Stamer regularly authors materials and conducts workshops and professional, management and other training on HIPAA and other privacy, health care, employee benefits, human resources, insurance and related topics for the ABA, Aspen Publishers, the Bureau of National Affairs (BNA), SHRM, World At Work, Government Institutes, Inc., the Society of Professional Benefits Administrators and many other organizations. Her insights on privacy and other matters are quoted in Modern Healthcare, HealthLeaders, Benefits, Caring for the Elderly, The Wall Street Journal and many other publications. She also regularly serves on the faculty and planning committees of a multitude of symposium and other educational programs. For more details about Ms. Stamer’s services, experience, presentations, publications, and other credentials or to ask about arranging counseling, training or presentations or other services by Ms. Stamer, see www.CynthiaStamer.com.

Registration

The Registration Fee is $125.00 per person. Registration Fee Discounts available for groups of three or more. Pre-payment required via website registration required via website PayPal. No checks or cash accepted. Persons not registered at least 48 hours in advance will only participate subject to system and space availability.

Continuing Education Credit

The HIPAA Update Workshop is approved to be offered for general certification credit by the State Bar of Texas, Texas Department of Insurance, HRCI and WorldAtWork education credit for the time period offered subject to fulfillment all applicable accrediting agency requirements, completion of required procedures. Note that the applicable credentialing agency retain the final authority to determine whether an individual qualifies to receive requested continuing education credit. Neither Solutions Law Press, Inc., the speaker or any of their related parties guarantees the approval of credit for any individual or has any liability for any denial of credit. Special fees or other conditions may apply. CANCELLATION & REFUND POLICY: In order to receive credit, cancellation (either fax or mail) must be received at least 48 hours in advance of the meeting and are subject to a $10.00 refund processing fee. Refunds will be made within 60 days of receipt of written cancellation notice.

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides business and management information, tools and solutions, training and education, services and support to help organizations and their leaders promote effective management of legal and operational performance, regulatory compliance and risk management, data and information protection and risk management and other key management objectives. Solutions Law Press, Inc.™ also conducts and assist businesses and associations to design, present and conduct customized programs and training targeted to their specific audiences and needs. For additional information about upcoming programs, to explore becoming a presenting sponsor for an upcoming event, e-mail your request to info@Solutionslawpress.com These programs, publications and other resources are provided only for general informational and educational purposes. Neither the distribution or presentation of these programs and materials to any party nor any statement or information provided in or in connection with this communication, the program or associated materials are intended to or shall be construed as establishing an attorney-client relationship, to constitute legal advice or provide any assurance or expectation from Solutions Law Press, Inc., the presenter or any related parties. If you or someone else you know would like to receive future Alerts or other information about developments, publications or programs or other updates, send your request to info@solutionslawpress.com. If you would prefer not to receive communications from Solutions Law Press, Inc. send an e-mail with “Solutions Law Press Unsubscribe” in the Subject to support@solutionslawyer.net. CIRCULAR 230 NOTICE: The following disclaimer is included to comply with and in response to U.S. Treasury Department Circular 230 Regulations. ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN. If you are an individual with a disability who requires accommodation to participate, please let us know at the time of your registration so that we may consider your request.

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Posted by Cynthia Marcotte Stamer

Boost Employee Recognition of Value Of Employer & Other Retirement Savings Tools & Plans

October 22, 2012

Studies suggest that employees need to save an estimated 40% of current earnings to have sufficient savings to fund the anticipated cost to keep up their lifestyle post retirement for their expected post retirement life expectancy. Although times are tough, American workers need to understand the importance of taking advantage of employer sponsored and other retirement saving and funding tools. Here is a free Department of Labor resource that employers might want to include in their retirement education toolkit.

For More Information Or Assistance

If you need help reviewing or responding to the defined benefit plan funding or other employee benefit, compensation or employment regulations or other related matters please contact Cynthia Marcotte Stamer here or (469)767-8872.

About Ms. Stamer

Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization, an American College of Employee Benefits Counsel Fellow, past Chair and current Welfare Benefit Committee Co_Chair of the American Bar Association (ABA) RPTE Employee Benefit & Other Compensation Group, a Council Member of the ABA Joint Committee on Employee Benefits, current TIPS Employee Benefits Committee, Vice Chair, and Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, management attorney and consultant Cynthia Marcotte Stamer has more than 25 years experience advising and representing employers, health and other employee benefit plans, their sponsors, fiduciaries and plan administrators, consultants, vendors, outsourcers, insurers, governments and others about employment, employee benefit, compensation, and a wide range of other performance, legal and operational risk management practices and concerns. As a part of this work, Ms. Stamer has worked extensively with clients to manage risks and defend practices under a wide range of laws and circumstances. Her experience includes extensive work advising and representing employers, plans, plan fiduciaries, trustees, investors, and others about managing and resolving risks relating to distressed pension and other employee benefit plans, downsizing and other workforce re-engineering and other similar matters. A prolific author and popular speaker, Ms. Stamer also publishes, conducts client and other training, testifies, speaks and consults extensively on other employment and employee benefit risk management practices and concerns for the ABA, World At Work, SHRM, American Health Lawyers Association, Institute of Internal Auditors, Society for Professional Benefits Administrators, HCCA, Southwest Benefits Association and many other organizations. An Editorial Advisory Board member and contributing author of HR.com, Insurance Thought Leaders, Employee Benefit News and many other publications, her insights on these and related topics have appeared in Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, Managed Healthcare, Health Leaders, various ABA publications and a many other national and local publications. To learn more about Ms. Stamer, her experience, involvements, programs and publications, see here or contact Ms. Stamer.

Other Resources & Developments

If you found this information of interest, you also may be interested in reviewing other recent Solutions Law Press updates including:

If you or someone else you know would like to receive future updates and notices about upcoming programs and events, please be sure that we have your current contact information – including your preferred e-mail- by creating or updating your profile at here. For important information concerning this communication click here.

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Posted by Cynthia Marcotte Stamer

Stamer Speaks On “The Practical Nitty Gritty For Coping With Health Care Reform NOW” 9/25 At DFW Web Meeting

September 10, 2012

Please Join WEB Dallas on Tuesday, September 25, 2012 for:
The Practical Nitty Gritty For Coping With Health Care Reform NOW
To register, please click here .

HRCI (SHRM) and WorldatWork Recertification Credit PENDING

With the initial debate about the Constitutionality of the Patient Protection & Affordable Care Act (ACA) now decided, employer and other health plan sponsors, insurers, fiduciaries and administrators are rushing to finish updating plan documents, communications, processes and procedures to meet current and impending ACA and other federal plan mandates while keeping a close eye out for more changes on the horizon. To help health plan sponsors, fiduciaries, administrators and insurers deal with the tough business of implementation, attorney Cynthia Marcotte Stamer will:

Share Her Practical 12-Step Process For Helping Employers Dealing With Today Health Plan Compliance Challenges
Share Key Updates and Tips For Dealing With New Summary of Benefits & Communications (SBC), Claims and Appeals, & Other Mandates
Share What To Watch For And Options For Maintaining Flexibility To Respond To Evolving Rules
Answer Common Questions That Health Plan Sponsors and Administrators Are Struggling With Submitted By Audience Members

Registrants are encouraged to help shape the program to reflect their questions and concerns by e-mailing their proposed questions prior to the program to cstamer@solutionslawyer.net. The program’s educational* discussion will be tailored taking into account this input with significant time set aside to share practical information and possible approaches for addressing questions and concerns of shared concern identified from this audience input.

Her Solutions Law Press, Inc. HR & Benefits Update publication has been recognized as one of the Top 50 Human Resources Blogs To Watch in 2012. A primary drafter of the Bolivian Social Security privatization law with extensive domestic and international regulatory and public policy experience, Ms. Stamer also has worked extensively domestically and internationally on public policy and regulatory advocacy on health and other employee benefits, human resources, insurance, tax, compliance and other matters and representing clients in dealings with the US Congress, Departments of Labor, Treasury, Health & Human Services, Federal Trade Commission, HUD and Justice, as well as a state legislatures attorneys general, insurance, labor, worker’s compensation, and other agencies and regulators. A prolific author and popular speaker, Ms. Stamer regularly authors materials and conducts workshops and professional, management and other training on employee benefits, human resources and related topics for the ABA, Aspen Publishers, the Bureau of National Affairs (BNA), SHRM, World At Work, Government Institutes, Inc., the Society of Professional Benefits Administrators and many other organizations. She also regularly serves on the faculty and planning committees of a multitude of symposium and other educational programs. For more details about Ms. Stamer’s services, experience, presentations, publications, and other credentials or to inquire about arranging counseling, training or presentations or other services by Ms. Stamer, see http://www.CynthiaStamer.com.

* Registrants are reminded that this discussion is provided for general information and educational purposes. Accordingly, registrants are reminded that the discussion does not constitute legal advice, a substitute for legal advice or establish an attorney-client or other professional relationship.

LUNCHEON DATE & TIME: Tuesday, September 25, 2012
Registration: 11:30 to noon
Program: 12:00 to 1:15 PM
LOCATION: Doubletree Hotel, 4099 Valley View Lane, Dallas, Texas, 75244, 972-385-9000. Located on the NW Corner of Midway and LBJ Freeway (near Wal-Mart and Wendys). Parking is available in the front and back of the hotel.

COST TO ATTEND MEETING:
Member who registers in advance: $25 ($30 if a walk-in)
NonMember who registers in advance: $35 ($40 if a walk-in)
Walk-In Policy: Those without reservations are seated only if space permits. REGISTER BY: Tuesday morning, August 25, 2012. TO CANCEL: email tyneeta.morris@greyhound.com or call 214-849-7366 by noon, Friday, September 21, 2012.

Registration Procedures: . Please register online, whether or not you pay with a credit card. To register for the meeting, click the link at the top of this page. For those who do not want to pay online with a credit card, check the box at the bottom of the online registration form which reads “Check here if you do not wish to pay at this time”. Please do not hit “Reply” to this meeting notice.

If mailing a check, mail at least one week in advance of the meeting and include a copy of the registration form . Make payable to the Dallas Chapter of WEB, and send to: Dallas Chapter of WEB, c/o Carol Parker, Administration & Compliance Manager, Children’s Medical Center Dallas, 1935 Medical District Drive, Dallas, Texas 75235. WEB’s Tax ID# is 52-1360024. When paying at the door, we accept cash or checks, no credit cards are taken at the door.

QUESTION ABOUT THE MEETING? Contact Tyneeta Morris at 214-849-7366, tyneeta.morris@greyhound.com or Carol Parker at 214-456-6953, Carol.Parker@childrens.com.

Questions about membership? Contact Sherlynn at dallaswebmembership@tx.rr.com. To contact members of the Dallas WEB Board, please click here . Our next meeting will be October 30, 2012. Join us for: Benefits Jeopardy Please visit our website for more information on upcoming meetings.

If you are not already a WEB member, we hope you will join. Please visit our website and click Join WEB Now.

A special thanks to our current sponsors. Click their logos below to learn more about them!

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Posted by Cynthia Marcotte Stamer

USI Advisors Will Pay $1.27 Million To Settle Charges It Violated ERISA Fee Disclosure Requirements

August 23, 2012

USI Advisors Inc. (USI) will pay $1,265,608.70 to 13 pension plans to resolve charges it violated the Employee Retirement Income Security Act (ERISA) by failing to properly disclose 12b-1 fees it collected off of fund investments. The complaint behind the settlement reflects the commitment of the U.S Department of Labor Employee Benefit Security Administration (EBSA) to enforcing Employee Retirement Income Security Act (ERISA) fee disclosure and other requirements against service providers to employee benefit plans. With regulations tightening, the tough economy driving greater scrutiny of plan investments, expenditures and performance, and enforcement rising, plan vendors, and the employee benefit plan sponsors and fiduciaries responsible for their engagement, compensation and oversight need to ensure the adequacy of their processes for deciding and reporting compensation, as well as the qualification, selection and oversight of vendors and fiduciaries generally.

USI Settlement

An investigation by the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) USI, fiduciary investment adviser made investments in mutual funds on behalf of ERISA-covered defined benefit plan clients and received 12b-1 fees from those funds. A 12b-1 fee is paid by a mutual fund out of fund assets to cover certain expenses. USI Advisors failed to fully disclose the receipt of the 12b-1 fees, and to use those fees for the benefit of the plans either by directly crediting the amounts to the plans or by offsetting other fees the plans would be obligated to pay the company.

“If you, as an investment adviser, are a fiduciary under ERISA with respect to plan investments in mutual funds, you cannot use your fiduciary authority to receive an additional fee or to receive compensation from third parties for your own personal account in transactions involving plan assets. We are very pleased that this settlement addresses the problems we identified with USI’s practices and restores funds to the plans and their participants,” said Phyllis C. Borzi, assistant secretary of labor for employee benefits security. “We are also very pleased that recently finalized fee disclosure regulations issued by the Labor Department will require fiduciaries like USI to be more transparent about the fees they receive when dealing with their plan clients.”

Under the terms of the settlement, USI Advisors has agreed not to provide bundled investment advisory and actuarial services to any ERISA-covered defined benefit plan client without first entering into a written agreement, contract or letter of understanding that specifies the services provided and whether the company or its affiliates will act as a fiduciary to those plans. USI Advisors also will provide to clients a description of all compensation and fees received, in any form, from any source, involving any investment or transaction related to them.

The alleged violations in this case occurred between 2004 and 2010. USI Advisors is a wholly owned subsidiary of USI Consulting Group, a Goldman Sachs Capital Partners Co.

The investigation conducted by EBSA as part of the agency’s Consultant/Adviser Project, highlights the need for employee benefit plan fiduciaries and vendors alike to properly identify and report all vendor compensation received by employee benefit plan investment advisors and other service providers in compliance with ERISA’s fee disclosure and other requirements. The Consultant/Adviser Project targets vendors and advisors to employee benefit plans for review, and where applicable, enforcement action when service providers violate ERISA’s requirements. EBSA has made misconduct by consultants, advisors and other service providers a priority as part of its broader emphasis on enforcement of ERISA’s fiduciary responsibility and reporting requirements.

Tightening Rules, Enforcement & Tough Times Driving Risks

The EBSA’s announcement of the USI settlement comes as it continues to move forward to strengthen the transparency of vendor compensation and other fiduciary regulations and enforcement. Just shortly before today’s announcement, EBSA recently clarified its guidance about how its rules affect 401(k) plan brokerage window arrangements in response to public feedback. Field Assistance Bulletin No. 2012-02R published July 30, 2012, modifies and replaces Q&A 30 of Field Assistance Bulletin No. 2012-02 (issued May 7, 2012) with a new Q&A 39.

EBSA’s final fee disclosure regulation[i] published on requires plan administrators to make to disclose specified information about retirement plan fees and expenses to participants and beneficiaries. The regulation requires plan administrators to give participants and beneficiaries more informationm about administrative and investment fees and expenses in their 401(k) plans.

EBSA issued Field Assistance Bulletin No. 2012-02, which provided guidance to its field enforcement personnel in question and answer format on the obligations of plan administrators under the fee disclosure regulation on May 7, 2012. In response to questions and concerns about statements in Question 30 regarding brokerage windows and other arrangements that enable plan participants and beneficiaries to select investments beyond those designated by the plan, EBSA issued Field Assistance Bulletin No. 2012-02 which supersedes Field Assistance Bulletin 2012-02 by modifying its provisions about brokerage windows and inviting more public comments for EBSA to use to consider further clarification of this guidance.

As did its predecessor, Field Assistance Bulletin No. 2012-02R specifies that while the fee disclosure regulation covers “brokerage windows,” “self-directed brokerage accounts,” and other similar plan arrangements that enable participants and beneficiaries to select investments beyond those designated by the plan, its coverage of brokerage windows is limited to the disclosure requirements in paragraph (c) of the regulation relating to plan-related information. The disclosure requirements for investment-related information in paragraph (d) of the regulation do not apply to brokerage windows, self-directed brokerage accounts, and similar arrangements or to any investment selected by a participant or beneficiary that is not designated by the plan (i.e., any investments made through the window, account, or arrangement).

Beyond meeting the technicalities of the fee disclosure requirements, plan sponsors, fiduciaries and vendors should also ensure that their selection, oversight, determination of compensation and other dealings with plan vendors and consultants meet the general fiduciary responsibility, prohibited transaction, bonding and other requriements of ERISA, as well as any applicable securities and tax requirements.

Through its participant fee disclosure and other stepped up fiduciary regulations and enforcement, EBSA is sending clear signals that it stands ready to investigate and take action against service providers or others that charge excessive fees, failure to adequately justify or appropriately disclose fees or other compensation from plan transactions, or other fiduciary protections of ERISA. In the face of these requirements, plan fiduciaries, sponsors, advisors and vendors should carefully review the appropriateness of compensation received or promised to plan vendors, as well as the adequacy of practices for identifying and reporting that compensation and the selection and oversight of the vendors receiving that compensation.

For Help or More Information

If you need help reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices to respond to emerging regulations, monitoring or commenting on these rules, defending your health plan or its administration, or other health or employee benefit, human resources or risk management concerns, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals. A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns.

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations. She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications. You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and registerto receive future updates about developments on these and other concerns from Ms. Stamer here.

For important information concerning this communication click here. THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS. ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

[i]See 75 FR 64910 (Oct. 20, 2010).

1 Comment | Corporate Compliance, Defined Contribution Plans, Employers, ERISA, Excise Tax, Fiduciary Responsibility, Human Resources, Income Tax, Reporting & Disclosure, Retirement Plans | Tagged: 401(k) plans, brokerage accounts, compliance, Employee Benefits, Employer, ERISA, fee disclosure regulation, Fiduciary Responsibility, Finance, Health Care Reform. Employer, Management, Plan Sponosr, Retirement Plans, Risk Managment | Permalink
Posted by Cynthia Marcotte Stamer

Stamer Speaks On HIPAA Developments On 9/14 At ABA Joint Tax/RPTE Fall Meeting In Boston

August 14, 2012

Cynthia Marcotte Stamer will discuss recent HIPAA and other medical privacy developments impacting group health plans at a joint “Employee Benefits Welfare Benefits Design, EEOC and FMLA Update X “ session scheduled from 9:30 a.m. to 11:00 a.m. on September 14, 2012 at the American Bar Association jointly hosted by the Subcommittees on Welfare Plan Design, EEOC, FMLA and Leaves Issues (TX) and Cafeteria Plans and Reimbursement Accounts and Subcommittee on Welfare Plans at the American Bar Association Section of Taxation and Section of Real Property, Trust & Estate Law, Trust & Estate Division (RPTE) 2012 Joint Fall CLE Meeting In Boston.

Ms. Stamer will be among the a distinguished group of panelists scheduled to discuss regulatory and other developments under the Affordable Care Act and emerging issues related to stop-loss coverage, claims procedures, COBRA audits, DOL compliance initiatives, HIPAA/HITECH audits and enforcement (and regulations if released) and other concerns impacting health and welfare plan design and administration.

A noted Texas-based employee benefits and employment lawyer, policy consultant, author and speaker, Ms. Stamer has serves as the Scribe for the ABA JCEB Agency Meeting on the HIPAA Privacy Rules with the HHS Office of Civil Rights and has extensive experience on HIPAA and other health, financial, and other privacy and data security concerns as well as a broad range of other human resources, employee benefits and health care concerns.

A Fellow in the American College of Employee Benefits Counsel, the American Bar Association and the State Bar of Texas, Past Chair of the RPTE Employee Benefits and Other Compensation Group and current co-Chair of its Welfare Benefits Committee, Ms. Stamer is nationally and internationally known for her innovative leadership and work with businesses, governments, and communities on health and other insurance and employee benefits, patient education and empowerment, wellness and disease management, and other programs, policies, and processes. For more than 24 years, Ms. Stamer’s legal practice has focused on advising and representing employers, insurers, health care providers, community leaders and governments about health care and employee benefits policy and process improvement, quality, performance management, education, compliance, communications, risk management, reimbursement and finance, and other related matters. In addition to her legal practice, Stamer also extensively consults and provides leadership to a broad range of clients, professional and civic organizations, and others on strategies for improving the health care system and the ability of health care providers, payers, employers, community organizations, government agencies to promote the ability of patients and their families to access cost-effective, quality, affordable health care and other resource needs. She also has worked extensively with a broad range of business and government clients on health care, pension, social security, workforce, insurance and many other related policy matters.

Author of the hundreds of publications and workshops these and other employment, employee benefits, health care, insurance, workforce and other management matters, Ms. Stamer’s insights on employee benefits, insurance, health care and workforce matters in Atlantic Information Services, The Bureau of National Affairs, HealthLeaders, Modern Healthcare, Business Insurance, Employee Benefits News, World At Work, Benefits Magazine, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, the Houston Business Journal, and many other publications. She also regularly conducts training and speaks on these and other management, compliance and public policy concerns.

Ms. Stamer also is active in the leadership of a broad range of other professional and civil organizations. For instance, Ms. Stamer presently serves as Executive Director of Project COPE, the Coalition on Patient Empowerment and the Coalition for Responsible Healthcare Policy; Vice President of the North Texas Healthcare Compliance Professionals Association; Immediate Past Chair of the American Bar Association RPTE Employee Benefits & Other Compensation Committee and its current Welfare Benefit Plans Committee Co-Chair, a Substantive Groups & Committee Member and its representative to the ABA Joint Committee on Employee Benefits; Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and a current member of its Healthcare Coordinating Council; current Vice Chair of the ABA TIPS Employee Benefit Committee, and outgoing Coordinator of the Gulf Coast TEGE Council TE Division. She previously served as a founding Board Member and President of the Alliance for Healthcare Excellence, as a Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; the Board President of the early retirement intervention agency, The Richardson Development Center for Children; Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a member of the Board of Directors of the Southwest Benefits Association; on numerous seminar faculties and in many other professional and civic leadership and volunteer roles..

Ms. Stamer will speak along a distinguished group of governmental and private panelists. Other panelists include:

Kevin Knopf, Attorney-Adviser, Office of Benefits Tax Counsel, Department of Treasury, Washington, DC;
Stephen B. Tackney, Deputy Associate Chief Counsel, Employee Benefits, Office of Division Counsel/Associate Chief Counsel, TE/GE, IRS, Washington, DC;
Russ Weinheimer, Senior Counsel, Office of the Chief Counsel, Tax Exempt and Government Entities, IRS, Washington, DC;
Amy Turner, Senior Advisor, Department of Labor, Employee Benefits Security Administration, Washington, DC;
Andy R. Anderson, Morgan Lewis, Chicago, IL; Chad R. DeGroot, Laner Muchin, Chicago, IL;
William M. Freedman, Dinsmore & Shohl LLP, Cincinnati, OH;
Bernard Kearse, Kearse Law Firm, Atlanta, GA;
Elizabeth Leight, Society of Professional Benefit Administrators, Chevy Chase, MD;
Gabriel Marinaro, Dykema, Bloomfield Hills, MI;
Linda Mendel, Vorys Sater Seymour & Pease LLP, Columbus, OH; Carrie A. Simons, Ropes & Gray, Boston, MA; Mark Stember, Kilpatrick Townsend & Stockton LLP, Washington, DC

To register or learn more about the Joint Fall CLE Meeting, see here. For additional information about Ms. Stamer, see here or contact Ms. Stamer directly via email here or (469) 767-8872.

Comments Off on Stamer Speaks On HIPAA Developments On 9/14 At ABA Joint Tax/RPTE Fall Meeting In Boston | Employers, ERISA, Fiduciary Responsibility, Health Plans, HIPAA | Tagged: Employee Benefits, Health Care, Health Plans, HIPAA, Tax | Permalink
Posted by Cynthia Marcotte Stamer

Employers & Plan Fiduciaries Reminded To Confirm Credentials & Bonding For Internal Staff, Plan Fidiciaries & Vendors Dealing With Benefits

August 13, 2012

Businesses sponsoring employee benefit plans and officers, directors, employees and others acting as fiduciaries with respect to these employee benefit plans should take steps to confirm that all of the appropriate fiduciary bonds required by the Employee Retirement Income Security Act of 1974, as amended (ERISA) are in place, that all employee benefit plans sponsored are appropriately covered, and that all individuals serving in key positions requiring bonding are covered and appropriately qualified to serve in that capacity under ERISA and the terms of the bond. Adequate attention to these concerns not only is a required component of ERISA’s fiduciary compliance, it also may provide invaluable protection if a dishonesty or other fiduciary breach results in a loss or other exposure.

ERISA generally requires that every employee benefit plan fiduciary, as well as every other person who handles funds or other property of a plan (a “plan official”), be bonded if they have some discretionary control over a plan or the assets of a related trust. While some narrow exceptions are available to this bonding requirement, these exceptions are very narrow and apply only if certain narrow criteria are met. Plan sponsors and other plan fiduciaries should take steps to ensure that all of the bonding requirements applicable to their employee benefit plans are met at least annually. Monitoring these compliance obligations is important not only for the 401(k) and other retirement plans typically associated with these requirements, but also for self-insured medical and other ERISA-covered employee benefit plans. This process of credentialing persons involved with the plan and auditing bonding generally should begin with adopting a written policy requiring bonding and verification of credentials and that that appropriate bonds are in place for all internal personnel and outside service providers.

Steps should be taken to ensure that the required fiduciary bonds are secured in sufficient amounts and scope to meet ERISA’s requirements. In addition to confirming the existence and amount of the fiduciary bonds, plan sponsors and fiduciaries should confirm that each employee plan for which bonding is required is listed in the bond and that the bond covers all individuals or organizations that ERISA requires to be bonded. For this purpose, the review should verify the sufficiency and adequacy of bonding in effect for both internal personnel as well as outside service providers. In the case of internal personnel, the adequacy of the bonds should be reviewed annually to ensure that bond amounts are appropriate. Unless a service provider provides a legal opinion that adequately demonstrates that an ERISA bonding exemption applies, plan sponsors and fiduciaries also should require that third party service providers provide proof of appropriate bonding as well as to contract to be bonded in accordance with ERISA and other applicable laws, to provide proof of their bonded status or documentation of their exemption, and to provide notice of events that could impact on their bonded status. When verifying the bonding requirements, it also is a good idea to conduct a criminal background check and other prudent investigation to reconfirm the credentials and suitability of individuals and organizations serving in fiduciary positions or otherwise acting in a capacity covered by ERISA’s bonding requirements. ERISA generally prohibits individuals convicted of certain crimes from serving, and prohibits plan sponsors, fiduciaries or others from knowingly hiring, retaining, employing or otherwise allowing these convicted individuals during or for the 13-year period after the later of the conviction or the end of imprisonment, to serve as:

An administrator, fiduciary, officer, trustee, custodian, counsel, agent, employee, or

representative in any capacity of any employee benefit plan,

A consultant or adviser to an employee benefit plan, including but not limited to any entity whose activities are in whole or substantial part devoted to providing goods or services to any employee benefit plan, or
In any capacity that involves decision-making authority or custody or control of the moneys, funds, assets, or property of any employee benefit plan.

Because ERISA’s bonding and prudent selection of fiduciaries and service provider requirements, breach of its provisions carries all the usual exposures of a fiduciary breach.

Bonding exposures can arise in audit or as part of a broader fiduciary investigation.The likelihood of discovery in an audit or investigation by the Labor Department in the course of an audit is high, as review of bonding is a standard part of audits and investigations. The Employee Benefit Security Administration (EBSA) Enforcement Manual specifies in connection with the conduct of a fiduciary investigation or audit:

… the Investigator/Auditor will ordinarily determine whether a plan is in compliance with the bonding, reporting, and disclosure provisions of ERISA by completing an ERISA Bonding Checklist … These checklists will be filled out in fiduciary cases and retained in the RO workpaper case file unless violations are uncovered, developed, and reported in the ROI.

In the best case scenario, where the bonding noncompliance comes to light in the course of an EBSA audit where no plan loss resulted, the responsible fiduciary generally runs at least a risk that EBSA will assess the 20 percent fiduciary penalty under ERISA Section 502(l). If the bonding lapse comes to light in connection with a fiduciary breach that resulted in damages to the plan by a fiduciary or other party, the bonding insufficiency may be itself a breach of fiduciary duty resulting in injury to the plan and where this breach left the plan unprotected against an act of dishonesty or fiduciary breach by an individual who should have been bonded, may spread liability for the wrongful acts of the wrongdoer to a plan sponsor, member of management or other party serving in a fiduciary role who otherwise would not be liable but for definiciences in the bonding or other credentialing responsibilities.

Under ERISA Section 409, a fiduciary generally is personally liable for injuries to the plan arising from his own breach (such as failure to properly bond) or resulting from breaches of another co-fiduciary who he knew or should have known through prudent exercise of his responsibilities.

Of course, in the most serious cases, such as embezzlement or other criminal acts by a fiduciary of ERISA, the consequences can be quite dire. Knowing or intentional violation of ERISA’s fiduciary responsibilities exposes the guilty fiduciary to fines of up to $10,000, imprisonment for not more than five years, or both. Even where the violation is not knowing or willful, however, allowing disqualified persons to serve in fiduciary roles can have serious consequences such as exposure to Department of Labor penalties and personal liability for breach of fiduciary duty for damages resulting to the plan if it is established that the retention of services was an imprudent engagement of such an individual that caused the loss. When conducting such a background check, care should be taken to comply with the applicable notice and consent requirements for conducting third party conducted background checks under the Fair Credit Reporting Act (FCRA) and otherwise applicable law. As such background investigations generally would be conducted in such a manner as to qualify as a credit check for purposes of the FCRA, conducting background checks in a manner that violates the FCRA credit check requirements itself can be a source of significant liability.

1 Comment | Affordable Care Act, Claims Administration, Corporate Compliance, Employers, ERISA, Excise Tax, Fiduciary Responsibility, Health Plans, Human Resources, Income Tax, Patient Empowerment, Patient Protection and Affordable Care Act, Payroll Tax, Preemption, Privacy, Reporting & Disclosure, Tax, Wellness | Tagged: compliance, Employee Benefits, Employer, Finance, Health Benefits, Health Care Reform, Health Care Reform. Employer, Health Plans, Management, Plan Sponosr, Risk Managment | Permalink
Posted by Cynthia Marcotte Stamer

EBSA Updates Guidance On Fee Disclosure Requirements For 401(k) Plan Brokerage Window Arrangements

August 6, 2012

U.S. Department of Labor’s Employee Benefits Security Administration recently clarified its guidance about how its rules affect 401(k) plan brokerage window arrangements in response to public feedback. Field Assistance Bulletin No. 2012-02R published July 30, 2012, modifies and replaces Q&A 30 of Field Assistance Bulletin No. 2012-02 (issued May 7, 2012) with a new Q&A 39.

New Q-39 of Field Assistance Bulletin No. 2012-02R addresses when a plan offers an investment platform that includes a brokerage window, self-directed brokerage account, or similar plan arrangement but the fiduciary did not designate any of the funds on the platform or available through the brokerage window, self-directed brokerage account, or similar plan arrangement as “designated investment alternatives” under the plan, if the brokerage account platform or the brokerage window, self-directed brokerage account, or similar plan arrangement is a designated investment alternative for purposes of the regulation. According to Field Assistance Bulletin No. 2012-02R, it is not. According to the Field Assistance Bulletin, the regulation does not require that a plan have a particular number of “designated investment alternative” (DIA), and the Bulletin does not prohibit the use of a platform or a brokerage window, self-directed brokerage account, or similar plan arrangement in an individual account plan. Rather, whether an investment alternative is a DIA for purposes of the regulation depends on whether it is specifically identified as available under the plan.

However Question 39 also cautions plan administrators and fiduciaries about the need to ensure other applicable ERISA obligations are fulfilled. Field Assistance Bulletin 2012-02R notes it does not change the 404(c) regulation or the requirements for relief from fiduciary liability under section 404(c) of ERISA or address the application of ERISA’s general fiduciary requirements to SEPs or SIMPLE IRA plans. Also, fiduciaries of such plans with platforms or brokerage windows, self-directed brokerage accounts, or similar plan arrangements that enable participants and beneficiaries to select investments beyond those designated by the plan are still bound by ERISA section 404(a)’s statutory duties of prudence and loyalty to participants and beneficiaries who use the platform or the brokerage window, self-directed brokerage account, or similar plan arrangement, including taking into account the nature and quality of services provided in connection with the platform or the brokerage window, self-directed brokerage account, or similar plan arrangement. It also notes that that a 401(k) or other individual account plan fiduciary’s failure to designate investment alternatives to avoid investment disclosures under the regulation, raises questions under ERISA section 404(a)’s general statutory fiduciary duties of prudence and loyalty.

For Help or More Information

If you need help reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices to respond to emerging health plan regulations, monitoring or commenting on these rules, defending your health plan or its administration, or other health or employee benefit, human resources or risk management concerns, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals. A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns.

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations. She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications. You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and registerto receive future updates about developments on these and other concerns from Ms. Stamer here.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

[i]See 75 FR 64910 (Oct. 20, 2010).

Federal Mandate That Employer Health Plans Must Cover 100% Of Contraceptive, Other Women’s Health Services With No Cost Sharing Now Effective

August 6, 2012

August 1 Effective Date Of Obama Administration Addition of Contraception & Other Women’s Health Services To Already Lengthy List of Prevention Services Plans Must Cover

Effective August 1, 2012, federal regulators expanded the list of prevention-related services that the Patient Protection & Affordable Care Act (Affordable Care Act) requires that non-grandfathered group health plans cover in-network at no cost to covered persons to include eight more prevention-related health services for women including coverage for the mandate to cover certain contraceptive services that has engendered much debate and opposition from various religious organizations and others.

Employers and other sponsors and insurers of group health plans should review and update their health plan documents, contracts, communications and administration practices to ensure that their health plans and policies appropriately cover these and other prevention-related services that current federal regulations mandate that group health plans (other than grandfathered plans) must cover to comply with the Affordable Care Act.

Non-Grandfathered Health Plans Must Cover Expansive List of Prevention Services

As part of the sweeping reforms enacted by the Affordable Care Act, Congress has mandated that except for certain plans that qualify as “grandfathered,” group health plans and insurers generally must pay for 100% of the cost to cover hundreds of prevention-related health care services for individuals covered under their health plans without any co-payments or other cost-sharing.identified in the services without cost sharing.

Federal regulations have mandated since 2010 that group health plans and insurers provide in-network coverage in accordance with federal regulations implementing the Affordable Care Act’s prevention-related health services mandates for more than 800 prevention-related services listed in regulations originally published in 2009. See Agencies Release Regulations Implementing Affordable Care Act Preventive Care Mandates. The Affordable Care Act gives federal authorities the power to expand or modify this list. Following publication of the original list, the Obama Administration engaged in lengthy discussion considerations about the scope of contraceptive and other women’s health services that would qualify as prevention related services including lengthy discussions and negotiations about mandates to provide contraceptive services viewed as highly controversial by many religious organizations and several other employers. See Affordable Care Act To Require Health Plans Cover Contraception & Other Women’s Health Procedures.

Obama Administration Adds Contraceptive & Other Women’s Health Services To Required List Effective 8/1/2012

The Obama Administration moved forward on its promise to add contraceptive services and a broad list of other women’s health services to the list of prevention-related health services that employer-sponsored health plans must cover without cost to employees despite objections from religious organizations and others that the contraception mandate violates the Constitution’s freedom of religion protections.

The Obama Administration’s announcement earlier this year that it intended to move forward with plans to mandate that group health plans – including those of certain employers affiliated with religious organizations to cover contraceptive counseling and other services as prevention-related services has prompted outcry and legal challenges from a broad range of religious organizations and others. See e.g., University of Notre Dame v. Sebelius; Hercules Industries, Inc. v. Sebelius. On July 27, 2012, a Colorado District Court granted a temporary injunction barring enforcement of the contraceptive coverage mandate against a small, Catholic family-owned business challenging the mandate as a violation of the Constitutional religious freedoms of its owners. See Hercules Industries, Inc. v. Sebelius.

While these and other litigants continue to challenge the contraceptive mandates, Obama Administration officials continue to voice their commitment to standby and enforce the contraceptive and other prevention-related services mandates as implemented by current regulation. Employer and other health plan sponsors and fiduciaries that do not wish to risk exposure for violating these mandates should review and update their health plan documents, summary plan descriptions and other communications, and administrative and other procedures as necessary to comply with the applicable requirements of the regulations.

For Help or More Information

If you need help reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices to respond to emerging health plan regulations, monitoring or commenting on these rules, defending your health plan or its administration, or other health or employee benefit, human resources or risk management concerns, please contact the author of this update, Cynthia Marcotte Stamer.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals. A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

1 Comment | Affordable Care Act, Claims Administration, Corporate Compliance, Employers, ERISA, Excise Tax, Fiduciary Responsibility, Health Plans, Human Resources, Patient Empowerment, Patient Protection and Affordable Care Act, Preemption, Privacy, Reporting & Disclosure, Tax, Wellness | Tagged: compliance, Employee Benefits, Employer, Finance, Health Care Reform. Employer, Health Plans, Management, Mandated Benefits, Plan Sponosr, preventive care, Risk Managment, Women's Health | Permalink
Posted by Cynthia Marcotte Stamer

96% Employers of 50+ Employees, 36% Employers of Smaller Employers Provide Health Coverage

August 4, 2012

Kaisers State Health Facts.org reports that almost 96% of large private sector employers (50+ employees) offer health insurance to employees, compared to 36% of small employers. On average, private sector employers cover 74% of premiums for family coverage. As the pay-or-pay mandate of the Patient Protection & Affordable Care Act (Affordable Care Act) approaches, U.S. employers of all size will decide whether to continue to provide health care coverage under the significantly expanded federal mandates governing those plans or to pay the required assessment to the federal government for failing to provide that coverage.

For Help or More Information

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals. A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns.

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations. She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications. You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and registerto receive future updates about developments on these and other concerns from Ms. Stamer here.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

Comments Off on 96% Employers of 50+ Employees, 36% Employers of Smaller Employers Provide Health Coverage | Claims Administration, Employee Benefits, Employers, ERISA, Fiduciary Responsibility, Health Plans, Human Resources, Insurance, Mental Health | Tagged: Affordable Care Act, ERISA plans, Health Plans, Mandated Benefits, Mental Health, Mental Health Parity, MHPAEA | Permalink
Posted by Cynthia Marcotte Stamer

12 Steps Every Employer With A Health Plan Should Do Now To Manage 2012-14 Health Plan Risks & Liabilities

August 1, 2012

August 1 marked the effective date of yet another Affordable Care Act mandate: the controversial contraceptive coverage and other women’s health preventive coverage benefits mandates. Although many mandates have taken effect over the past two years, few employer plans are adequately updated. Here’s some suggestions about what employers and fiduciaries responsible for group health plan sponsorship or administration and their vendors should do now to manage exposures arising from current Affordable Care Act and other federal health plan rules. Following the Supreme Court’s June 28, 2012 National Federation of Independent Business v. Sebelius ruling, most employers and insurers of employment based group health plans now are bracing to cope with radical changes in their health plan related responsibilities scheduled to take effect in 2014.

While anticipating and preparing to cope with these future changes health plan sponsors, fiduciaries, administrators and advisors need to manage the substantial and growing health plan related costs and liabilities that the sponsorship or administration of an employee health plan between now and 2014 is likely to create for their company and its management. Consequently, while planning for 2014, employers sponsoring health plans and their management, insurers, administrators and vendors must act now to update and administer their group health plans timely to comply with the requirements of the Affordable Care Act and other federal rules that have, or in coming months will, take effect pending the law’s full rollout in 2014.

For most health plans, these steps should include the following:

Know The Cast Of Characters & What Hat(s) (Including You) They Wear & Prudently Select, Contract With & Monitor Them To Manage Risks

Employers and their management rely upon many vendors and advisors and assumptions when making plan design and risk management decisions. Many times, employer and members of their management unknowingly assume significant risk because of misperceptions about these allocations of duties and operational and legal accountability. An correct understanding of these roles and responsibilities is the foundation for knowing where the risks come from, who and to what extent a business or its management can rely upon a vendor or advisor to properly design and administer a health plan or carry out related obligations, what risks cannot be delegated, and how to manage these risks.

Under the Employee Retirement Income Security Act (ERISA), party or parties that exercise discretion or control over health plan administration, funds or certain other matters are generally called “fiduciaries.” Fiduciaries generally are personally liable for prudently and appropriately administering their health plan related responsibilities prudently in accordance with ERISA and other applicable laws and the plan terms. Knowing who is acting as a fiduciary and understanding those duties and liabilities and how to manage these risks significantly affects the exposure that an employer or member of its management risks as a result of an employer’s sponsorship in a group health plan or other employee benefit program. Also, knowing what duties come first and how to prove that the fiduciary did the right thing is critical to managing risks when an individual who has fiduciary responsibilities under ERISA also has other responsibilities in the management of the sponsoring employer, a vendor or elsewhere that carries duties or interests that conflict with his health plan related fiduciary duties.

The plan sponsor or members of its leadership, a service provider or members of their staff generally may be a fiduciary for purposes of ERISA if it either is named as the fiduciary, it functionally exercises the discretion to be considered a fiduciary, or it otherwise has discretionary power over plan administration or other fiduciary matters. Many plan sponsors and their management unwittingly take on liability that they assume rests with an insurer or service provider because the company or members of its management are named as the plan administrator or named fiduciary with regard to duties that the company has hired an insurer or service provider to provide or allowed that service provider to disclaim fiduciary or discretionary status with regard to those responsibilities. Also, by not knowing who the fiduciaries are, plans and their fiduciaries often fail to confirm the eligibility of all parties serving as fiduciaries, to arrange for bonding of service providers or fiduciaries as required to comply with Title I of ERISA. Failing to properly understand when the plan sponsor, member of its management or another party is or could be a fiduciary can create unnecessary and unexpected risks and lead to reliance upon vendors who provide advice but leave the employer holding the bag for resulting liability.

In addition to fiduciary status, employer and other plan sponsors also need to understand the additional responsibilities and exposures that the employer bears as a plan sponsor. Beyond contractual and fiduciary liabilities, federal law increasingly imposes excise tax or other liability for failing to maintain legally compliant plans, file required reports, provide required notifications or fulfill other requirements. The Affordable Care Act, the Internal Revenue Code, the Social Security Act, the Privacy, Security, and Administrative Simplification For instance, the Health Insurance Portability & Accountability Act (HIPAA) and various other federal laws also impose certain health plan related obligations and liabilities on employer or other health plan sponsors and other parties. The Internal Revenue Service interprets Internal Revenue Code § 6039D as obligating employers sponsoring health plans that violate these and certain other federal health plan rules to self-identify, self-report, and self-assess and pay excise and other taxes due under the Internal Revenue Code as a result of this non-compliance. Knowing what everyone’s roles and responsibilities are is a critical first step to properly understanding and managing health plan responsibilities and related risks.

An accurate understanding of the risks and who bears them is critical to understand the risks, opportunities to mitigate risk through effective contracting or other outsourcing, when outsourcing does not effectively transfer risks, where to invest resources for contract, plan or process review and changes or other risk management, and where to expect costs and risks and implement processes and procedures to deal with risks that cannot be outsourced or managed.

Know What Rules Apply To Your Plan, The Sponsoring Employer, The Plan Its Fiduciaries & Plan Related Vendors & How This Impacts You & Your Group Health Plan

The requirements and rules impacting health plans and their liabilities have undergone continuous changes. Amid these changing requirements, health plans, their sponsors, fiduciaries, insurers, and service providers often may not have kept their knowledge, much less their plan documents, summary plan descriptions and other communications, administrative forms and procedures and other materials and practices up to date. These requirements and their compliance and risk management significance may vary depending upon whether the reviewing or regulated party is the plan, its sponsor, fiduciary, insurer or services in some other rules; how the plans are arranged and documented, the risk and indemnification allocations negotiated among the parties, the risk tolerance of the party, and other factors. Proper understanding of these rules and their implications is critical to understand and manage the applicable risks and exposures.

Review & Update Health Plan Documents, SPDs & Other Communications, Administrative Forms & Procedures, Contracts & Processes To Meet Requirements & Manage Exposures

Timely updating written plan documents, communications and administration forms, administrative practices, contracts and other health plan related materials processes and procedures has never been more critical.

Federal law generally requires that health plan be established, maintained and administered in accordance with legally complaint, written plan documents and impose a growing list of standards and requirements governing the design and administration of these programs. In addition, ERISA, the Internal Revenue Code, the Social Security Act, federal eligibility and coverage continuation mandates of laws like the Consolidated Omnibus Budget Reconciliation Act (COBRA), the Health Insurance Portability & Accountability Act, the Family & Medical Leave Act, Michelle’s Law and others require that health plan administrators or sponsors communicate plan terms and other relevant information to participants and beneficiaries.

Failing to update documents, communications, administrative forms and processes and other materials and practices can unleash a host of exposures. Among other things, noncompliant plans, communications and practices can trigger unanticipated costs and liabilities by undermining the ability to administer plan terms and conditions. They also may expose the plan, plan fiduciaries and others to lawsuits, administrative enforcement and sanctions and other enforcement liabilities.

Beyond these exposures, employers who sponsor group health plans that violate certain federal group health plan mandates have a duty to self-report certain regulatory plan failures and pay excise taxes where such failures are not corrected in a timely fashion once discovered, or are due to willful neglect. Internal Revenue Code Section 6039D imposes excise taxes for failure to comply with health care continuation (COBRA) , health plan portability (HIPAA), genetic nondiscrimination (GINA), mental health parity (MHPAEA) , minimum hospital stays for newborns and mothers (Newborns’ and Mothers’ Health Protection Act), coverage of dependent students on medically necessary leaves of absence (Michelle’s Law), health savings account (HSA) and Archer medical savings account (Archer MSA) contribution comparability and various other federal requirements incorporated into the Internal Revenue Code. Since 2010, Internal Revenue Service regulations have required employers sponsoring group health plans not complying with mandates covered by Internal Revenue Code Section 6039D to self-report violations and pay related excise taxes. Under these regulations, the sponsoring employer (or in some cases, the insurer, HMO or third-party administrator) must report health plan compliance failures annually on IRS Form 8928 (“Return of Certain Excise Taxes Under Chapter 43 of the Internal Revenue Code”) and self-assess and pay resulting excise taxes. The potential excise tax liability that can result under these provisions can be significant. For example, COBRA, HIPAA, and GINA violations typically carry excise tax liability of $100 per day per individual affected. Compliance with applicable federal group health plan mandates is critical to avoid these excise taxes as well as other federal group health plan liabilities.

For this purpose of deciding what and how much to do, it is critical to keep in mind the devil is in the details. Not only must the documentation meet all technical mandates, the language, its clarity and specificity, and getting the plan document to match the actual processes that will be used to administer the plan and ensuring that the plan documents and processes match the summary plan description, summary of benefits and coverage, administrative forms and documentation and other plan communications and documentation in a legally compliant way significantly impacts the defensibility of the plan terms and the cost that the plan, its sponsor and fiduciaries can expect to incur to defend it.

Update & Tighten Claims and Appeals Plan & SPD Language, EOBs & Other Notifications, Processes, Contracts & Other Practices For Changing Compliance Requirements & Enhanced Defensibility

Proper health plan claims and appeals plan and summary plan description language, procedures, processing, notification and documentation is critical to maintain defensible claims and appeals decisions required to enforce plan terms and manage claims denial related liabilities and defense costs. Noncompliance with these requirements may prevent health plans from defending their claims or appeals denials, expose the plan administrator and plan fiduciaries involved or responsible for these activities to penalties, prompt unnecessary lawsuits, Labor Department enforcement or both; and drive up plan administration costs.

Unfortunately, most group health plans, their insurers and administrators need to substantially strengthen their plan documentation; handling; timeliness; notifications and other claims denials; and other claims and other appeals processes and documentation to meet existing regulations and otherwise strengthen their defensibility. Among other things, existing court decisions document that many plans existing plan documents, summary plan descriptions and explanations of benefits, claims and appeals investigations and documentation and notifications often need improvement to meet the basic plan document, summary plan description and reasonable claims rules of the plan document, summary plan description, fiduciary responsibility, reasonable claims and appeals procedures of ERISA and its implementing regulations. Court precedent shows that inadequate drafting of these provisions, as well as specific provisions coverage and benefit provisions frequently undermines the defensibility of claims and appeals determinations. In addition to requiring that claims be processed and paid prudently in accordance with the terms of written plan documents, ERISA also requirements that plan fiduciaries decide and administer claims and appeals in accordance with reasonable claims procedures. Although the Labor Department updated its regulations implementing this reasonable claims and appeals procedure requirement more than 10 years ago, the Department of Labor updated its ERISA claims and appeals regulations to include detailed health plan claims and appeals requirements, many group health plans, their administrators and insurers still have not updated their health plans, summary plan descriptions, claims and appeals notification, and claims and appeals procedures to comply with these requirements. The external review and other detailed additional requirements that the Affordable Care Act dictates that group health plans not grandfathered from its provisions and its provisions holding these non-grandfathered plans strictly liable for deficiencies in their claims and appeals procedures makes the need to address inadequacies even more imperative for those non-grandfathered group health plans. Inadequate attention to these concerns can force a plan to pay benefits for claims otherwise not covered as well as other defense costs and penalties.

Consistency Matters: Build Good Plan Design, Documentation & Processes, Then Follow Them.

Defensible health plan administration starts with the building and adopting strong, legally compliant plan terms and processes that are carefully documented and communicated in a prudent, legally compliant way. The next key is to actually use this investment by conducting plan administration and related operations consistent with the terms and allocated responsibilities to administer the plan in a documented, legally compliant and prudent manner. Good documentation and design on the front end should minimize ambiguities in the meaning of the plan and who is responsible for doing what when. With these tools in place, delays and other hiccups that result from confusion about plan terms, how they apply to a particular circumstance or who is responsible for doing what, when should be minimized and much more easily resolved by timely, appropriate action by the proper responsible party. This facilitation of administration and its consistency can do much to enhance the defensibility of the plan and minimize other plan related risks and costs.

Ensure Correct Party Carefully Communicates About Coverage and Claims in Compliant, Timely, Prudent, Provable Manner

Having the proper party respond to claims and inquiries in a compliant, timely, prudent manner is another key element to managing health plan risk and promoting enforceability. Ideally, the party appointed to act as the named fiduciary for purposes of carrying out a particular function also should conduct all plan communications regarding that function in terms that makes clear its role and negates responsibility or authority of others. When an employer or other plan sponsor goes to the trouble to appoint a committee, service provider or other party to serve as the named fiduciary then chooses to communicate about the plan anyway, the Supreme Court in FMC v. Halliday made clear it runs the risk that the plan related communications may be considered discretionary fiduciary conduct for which it may be liable as a functional fiduciary. Meanwhile, these communications by non-fiduciaries also may create binding obligations upon the plan and its named fiduciaries to the extent made by a plan sponsor or conducted by a staff member or service provider performing responsibilities delegated by the plan fiduciary. Beyond expanding the scope of potential fiduciaries, communications conducted by nonfiduciaries also tend to create defensibility for many other reasons. For instance, allowing unauthorized parties to perform plan functions may not comport with the plan terms, and are less likely to create and preserve required documentation and follow procedures necessary to promote enforceability. Also, the communications, decisions and other actions by these non-fiduciary actors also are unlikely to qualify for discretionary review by the courts because grants of discretionary authority, if any in the written plan document to qualify the decisions of the named fiduciary for deferential review by courts typically will not extend to actions by these non-fiduciary parties. Furthermore, the likelihood that the communication or other activity conducted will not comply with the fiduciary responsibility or other requirements governing the performance of the plan related functions is significantly increased when a plan sponsor, service provider, member of management, or other party not who has not been appointed or accepted the appointment act as a named fiduciary undertakes to speak or act because that party very likely does not accept or fully appreciate the potential nature of its actions, the fiduciary and other legal rules applicable to the conduct, and the potential implications for the non-fiduciary actor, the plan and its fiduciaries.

Design and Implement Updated, Properly Secured Payroll, Enrollment, Eligibility and Other Data Collection Features To Meet New Requirements and Prepare For Added Affordable Care Act Data Gathering and Reporting Requirements.

Existing and impending Affordable Care Act mandates require that group health plans, their sponsors collect, maintain and administer is exploding. Existing eligibility mandates, for example, already require that plans have access to a broad range of personal indentifying, personal health and a broad range of other sensitive information about employees and dependents who are or may be eligible for coverage under the plan. While employers and their health plans historically have collected and retained the names, place of residence, family relationships, social security number, and other similar information about employees and their dependents, these data collection, retention and reporting requirements have and will continued to expand dramatically in response to evolving legal requirements. Already, health plans also from time to time need employee earnings, company ownership, employment status, family income, family, medical, military, and school leave information, divorce and child custody, enrollment in Medicare, Medicaid and other coverage and a broad range of other additional information. Under the Affordable Care Act, these data needs will explode to include a whole new range of information about total family income, availability and enrollment in other coverage, cultural and language affiliations, and many other items. Collecting, retaining and deploying this information will be critical to meeting existing and new plan administration and reporting requirements. How this data collection is conducted, shared, safeguarded against misuse or other legally sensitive contact by the employer, service providers, the plan and others will be essential to mitigate exposures to federal employment and other nondiscrimination, HIPAA and other privacy, fiduciary responsibility and other legal risks and obligations. To the extent that payroll providers, third party administrators or other outside service providers will participate in the collection, retention, or use of this data, time also should be set aside both to conduct due diligence about their suitability, as well as to negotiate the necessary contractual arrangements and safeguards to make their involvement appropriate. Finally, given the highly sensitive nature of this data, employers, health plans and others that will collect and use this data will need to implement appropriate safeguards to prevent and monitor for improper use, access or disclosure and to conduct the necessary training to suitably protect this data.

Monitor, Assess Implications & Provide Relevant Input to Regulators About Emerging Requirements & Interpretive Guidance Implementing 2014 Affordable Care Act & Other Mandates.

While the Supreme Court’s decision upholds the constitutionality of the Affordable Care Act’s individual mandates, many opportunities to impact its mandates remain. Beyond the highly visible, continuing and often heated debates ranging in Congress and the court of public opinion concerning whether Congress should modify or repeal its provisions, a plethora of regulatory interpretations issued or impending release by the implementing agencies, the Internal Revenue Service, Department of Health & Human Services, Department of Labor and state insurance regulators will significantly impact what requirements and costs employers, insurers, individuals and governments will bear when the law takes effect. Businesses sponsoring health plans should carefully scrutinize this regulatory guidance and provide meaningful, timely input to Congress, the regulators or both as appropriate to help influence the direction of regulatory or Congressional actions that would materially impact these burdens.

Help Employees & Their Families Build Their Health Care Coping Skills With Training & Supportive Tools

Whether or not your company plans to continue to sponsor employee health coverage after 2014, providing training and tools to help employees and their families strengthen their ability to understand and manage their health, health care needs and benefits can pay big dividends. Beyond the financial costs to employees and employers of paying to care for a serious illness or injury, productivity also suffers while employees dealing with their own or a family member’s chronic or serious health care condition. Wellness programs that encourage and support the efforts of employees and their families to stay healthy may be one valuable part of these efforts. Beyond trying to prevent the need to cope with illness behind wellness programs, however, opportunities to realize big financial, productivity and benefit value recognition rewards also exist in the too often overlooked opportunity to provide training, education and tools that employees and their families need to better understand and self-manage care, benefits, finances and life challenges that commonly arise when dealing with their own or a family member’s illness. Providing education, tools and other resources that can help employees access, organize and effectively use health care and benefit information to manage care and the consequences of illness, their benefits and how to use them, to take part more effectively in care and care decisions, to recognize and self-manage financial, lost-time and other challenges associated with the illness not addressable or covered by health benefit programs, and other practical skills can help reduce lost time and other productivity impacts while helping employees and their families get the most out of the health care dollars spent.

Pack Your Parachute & Locate The Nearest Exit Doors

With the parade of expenses and liabilities associated with health plans, businesses sponsoring health plans and the management, service providers and others involved in their establishment, continuation, maintenance or administration are well advised to pack their survival kit and develop their exit strategies to position to soften the landing in case their health plan experiences a legal or operational disaster.

Employers and other health plan sponsors and fiduciaries typically hire and rely upon a host of vendors and advisors to design and administer their health plans. When selecting and hiring these service providers, health plan sponsors and fiduciaries are well-advised to investigate carefully their credentials as well as require the vendors to provide written commitments to stand behind their advice and services. Too often, while these service providers and advisors encourage plan sponsors and fiduciaries to allow the vendor to lead them or even handle on an ongoing basis plan administration services by touting their services, experience, expert systems and process and commitment to stand behind the customer when making the sale or encouraging reliance upon their advice when tough decisions are made, they rush to stand behind exculpatory and on-sided indemnification provisions in their service contracts to limit or avoid liability, demand indemnification from their customer or both when things go wrong. While ERISA may offer some relief from certain of these exculpatory provisions under some circumstances, plan sponsors and fiduciaries should work to credential service providers and require service providers to commit to being accountable for their services by requiring contracts acknowledge all promised services and standards of quality, require vendors to commit to provide legally compliant and prudently designed and administered services that meet or exceed applicable legal requirements, to provide liability-backed indemnification or other protection for damages and costs resulting from vendor imprudence or malfeasance, to allow for contract termination if the vendor becomes unsuitable for continued use due to changing law or other circumstances and requiring the vendor to return data and other documentation critical to defend past decisions and provide for ongoing administration. Keep documentation about advice, assurances and other relevant evidence received from vendors which could be useful in showing your company’s or plan’s efforts to make prudent efforts to provide for the proper administration of the plan. When concerns arise, use care to investigate and redress concerns in a timely, measured fashion which both shows the prudent response to the concern and reflects sensitivity to the fiduciary and other roles and responsibilities of the employer sponsor and other parties involved.

Get Moving Now On Your Compliance & Risk Management Issues.

Since many compliance deadlines already have past and the impending deadlines allow plan sponsors and fiduciaries limited time to finish arrangements, businesses, fiduciaries and their service providers need to get moving immediately to update their health plans to meet existing and impending compliance and risk management risks under the Affordable Care Act and other federal laws, decisions and regulations.

Monitor, Assess Implications & Provide Relevant Input to Regulators About Emerging Requirements & Interpretive Guidance Implementing 2014 Affordable Care Act & Other Mandates.

While the Supreme Court upheld the individual mandate, employer and other health plan sponsors, Congress continues to debate changes to the Affordable Care Act and other federal health plan rules. Meanwhile, significant opportunity still exists to provide input to federal and state regulators on many key aspects of the Affordable Care Act and its relationship to other applicable laws even as court challenges to contraceptive coverage and other specific requirements are emerging. Businesses and other health plan sponsors, plan fiduciaries, insurers and administrators, and other vendors must stay involved and alert. Zealously monitor new developments and share timely input with Congress and regulators about existing and emerging rules that present concerns and other opportunities for improvement even as you position to respond to these rules before they become fully implemented.

For Help or More Information

If you need help reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices to respond to emerging health plan regulations, monitoring or commenting on these rules, defending your health plan or its administration, or other health or employee benefit, human resources or risk management concerns, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals. A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns.

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations. She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications. You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and registerto receive future updates about developments on these and other concerns from Ms. Stamer here.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

Comments Off on 12 Steps Every Employer With A Health Plan Should Do Now To Manage 2012-14 Health Plan Risks & Liabilities | Affordable Care Act, Claims Administration, Corporate Compliance, Data Security, Employers, ERISA, Excise Tax, Fiduciary Responsibility, Health Plans, Human Resources, Income Tax, Patient Empowerment, Patient Protection and Affordable Care Act, Payroll Tax, Preemption, Privacy, Reporting & Disclosure, Tax, Wellness | Tagged: compliance, Employee Benefits, Employer, Finance, Health Benefits, Health Care Reform, Health Care Reform. Employer, Health Plans, Management, Plan Sponosr, Risk Managment | Permalink
Posted by Cynthia Marcotte Stamer

Congress Gives Defined Benefit Plan Sponsors Welcome Funding Relief, Raises PBGC Premiums & Makes Other Reforms

July 31, 2012

The Employee Retirement Income Security Act of 1974, as amended (ERISA) and the Internal Revenue Code generally require employers that sponsor defined benefit pension plans make sufficient contributions to their defined benefit pension plans to ensure that their plans meet minimum funding requirements.

Failure to meet minimum funding requirements triggers a series of complicated reporting and disclosure, funding and excise tax liabilities, liens and other obligations that are serious and require prompt redress through prompt payment of required contributions and penalties, request for funding waivers or termination under a series of complicated rules or both. Special controlled group, lien and successor liability rules incorporated into these funding requirements often spread the risk of funding deficiencies under these rules by extending liabilities to commonly controlled or affiliated employers, lenders, potential purchasers and others dealing with these plans or the businesses that sponsor them.

Because employer funding obligations under these rules depend heavily upon interest and other investment performance used to calculate funding levels, employer funding obligations tend to spike during economic depressions or slowdowns, resulting in sharp increases in funding obligations for employers at a time when the tight economy already makes finances tight. Congress has faced growing pressure to provide some sort of defined benefit pension plan funding relief as low investment returns and strained corporate budgets during the ongoing economic crisis have fueled an underfunding epidemic among employers sponsoring defined benefit pension plans and threatened the financial viability of many sponsoring employers and the federal insurance program responsible for providing backup insurance for private employer defined benefit commitments administered by the PBGC.

MAP-21 provides immediate defined benefit plan funding relief by changing how the interest rates that employers must use to calculate their current defined benefit plan funding obligations are calculated. MAP-21 defined benefit plan funding reforms effectively decrease current defined benefit plan funding costs by establishing a minimum and maximum for the interest segment rates defined benefit plans use to calculate currently required funding based on a historic 25-year average of those segment rates. It is important that employers and plan fiduciaries keep in mind that the MAP-21 interest rate change applies to the calculation of current funding obligations that employer. It does not apply for purposes of calculating lump sum distributions, limits on deductible contributions to single-employer plans, PBGC variable-rate premiums, fi

With many employers continuing to meet defined benefit plan funding requirements driven up by the continued excessively low investment performance of their benefit plan investment in the slow economic environment, defined benefit pension plan funding relief included in the “Moving Ahead for Progress in the 21st Century Act”(MAP–21”) signed into law by President Obama on July 6, 2012 provides welcome and much-needed pension funding relief. For many financially strapped businesses that sponsor defined benefit plans, the MAP-21 relief may allow the employer to avoid terminating its defined benefit plan, escape costly underfunding consequences that many defined benefit plan sponsors fear will financially cripple or bankrupt their companies, or both.

MAP-21 provides immediate funding relief for financially strapped defined benefit plan sponsors and makes various other reforms impacting defined benefit pension plans and the Pension Benefit Guarantee Corporation (PBGC) insurance program that helps to insure certain benefit commitments made under these defined benefit plans. The MAP-21 funding relief is intended to help employers struggling to meet heightened pension funding obligations brought about by the decline in investment performance resulting from the economic downturn.

nancial reporting under Section 4010 of ERISA, and qualified transfers of excess pension assets to retiree medical accounts.

In addition to changing the rules for calculating interest rates for purposes of determining defined benefit plan minimum funding obligations, MAP-21 also extends rules allowing transfers of excess pension assets to retiree health accounts to December 31, 2021 and expands those transfer rules also to allow transfers to fund retiree group term life insurance accounts.

Finally, in addition to these changes to defined benefit pension plan funding rules, MAP-21 also reorganizes the PBGC organizational structure and increases PBGC insurance premiums.

While the MAP-21 reforms will provide welcome relief, sponsoring businesses, their commonly controlled and affiliated employers, lenders, investors and successors still must exercise care to carefully monitor the funding status of defined benefit plans and the potential liabilities and responsibilities associated with these plans. Appropriate steps should be taken to maintain required funding levels or, at the first sign of trouble, to seek experienced legal and actuarial advice and help to identify and take prompt steps to pursue options to head off a potential crisis by freezing or terminating the plan, providing required notifications and disclosures to participants and beneficiaries, the PBGC, lenders, investors, and other concerned parties, and other actions to mitigate exposures.

For More Information Or Assistance

A Fellow in the the American College of Employee Benefits Council, Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization, Immediate Past Chair and current Welfare Plan Committee Co-Chair of the American Bar Association (ABA) RPTE Employee Benefit & Other Compensation Group, a Council Member of the ABA Joint Committee on Employee Benefits, Vice-Chair of the ABA TIPS Employee Benefits Commitee, Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, management attorney and consultant Cynthia Marcotte Stamer nearly 25 years experience advising and representing employers, employee benefit plans, their sponsors, bankruptcy creditors, debtors and trustees, plan fiduciaries and plan administrators, consultants, vendors, outsourcers, insurers, governments and others about employment, employee benefit, compensation, and a wide range of other performance, legal and operational risk management practices and concerns. As a part of this work, Ms. Stamer has worked extensively with clients to manage risks and defend practices under a wide range of laws and circumstances. Her experience includes extensive work advising and representing employers, plans, plan fiduciaries, trustees, investors, and others about managing and resolving risks relating to distressed pension and other employee benefit plans, downsizing and other workforce reengineering and other similar matters. A prolific author and popular speaker, Ms. Stamer also publishes, conducts client and other training, speaks and consults extensively on GINA and other employment and employee benefit risk management practices and concerns for the ABA, World At Work, SHRM, American Health Lawyers Association, Institute of Internal Auditors, Society for Professional Benefits Administrators, HCCA, Southwest Benefits Association and many other organizations. Her insights on these and related topics have appeared in Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, Managed Healthcare, Health Leaders, various ABA publications and a many other national and local publications. To learn more about Ms. Stamer, her experience, involvements, programs and publications, see here or contact Ms. Stamer.

Other Resources & Developments

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Posted by Cynthia Marcotte Stamer

New Health Plan Partnership, Data Sharing With Federal Health Care Fraud Enforcers Promises Greater Federal Oversight of Providers & Health Plans

July 30, 2012

Health care providers and payers should ensure that practices for billing private payers can withstand the scrutiny of federal and state health care fraud enforcers after the July 26, 2012 announcement of a ground-breaking new public-private antifraud initiative between federal and state health care fraud fighters and a private insurers under which private insurers will share an unprecedented amount of private health claims data, fraud detection practices, and other coöperation with federal and state official fraud prevention and prosecution efforts. While the partnership signals a new opportunity for health plans to secure federal support if their efforts to monitor and address suspected health care fraud impacting private health plans, private payers also should keep in mind that federal fraud prosecutors also are likely to use the data and information gleened from the partnership to identify and redress noncompliance by private health plans with federal Medicare and other federal program secondary payor, nondiscrimination and other coordination of benefits requirements; Affordable Care Act and other federal benefit, coverage and eligibility requirements and other applicable rules. Accordingly, even while anticipating greater support by federal agencies in the fight against fraud affecting private payers, health insurers and other private health plans also should tighten their practices to prepare for heightened scrutiny and enforcement by federal officials of federal health plan rules.

Government Health Care Fraud Fighters Partner With Private Insurers

The Federal health care fraud fighting departmental duo of the Departments of Health and Human Services (HHS) Justice (DOJ) last week expanded their network of fraud fighting resources by launching a “ground-breaking” partnership among the federal government, State officials, several leading private health insurance organizations, and other health care anti-fraud groups to prevent health care fraud. HHS and DOJ say the following organizations and government agencies are among the first to join this partnership:

America’s Health Insurance Plans
Amerigroup Corporation
Blue Cross and Blue Shield Association
Blue Cross and Blue Shield of Louisiana
Centers for Medicare & Medicaid Services
Coalition Against Insurance Fraud
Federal Bureau of Investigations
Health and Human Services Office of Inspector General
Humana Inc.
Independence Blue Cross
National Association of Insurance Commissioners
National Association of Medicaid Fraud Control Units
National Health Care Anti-Fraud Association
National Insurance Crime Bureau
New York Office of Medicaid Inspector General
Travelers
Tufts Health Plan
UnitedHealth Group
U.S. Department of Health and Human Services
U.S. Department of Justice
WellPoint, Inc.

HHS & DOJ Say Partnering With Private Insurers Will Give Ongoing Anti-Fraud Efforts Even More Punch

In announcing the new partnership on July 26, 2012, HHS Secretary Kathleen Sebelius and Attorney General Eric Holder touted this new voluntary, collaborative public-private arrangement as the “next step” in the Obama administration’s efforts to combat health care fraud.

“This partnership is a critical step forward in strengthening our nation’s fight against health care fraud,” said Attorney General Holder. “This Administration has established a record of success in combating devastating fraud crimes, but there is more we can and must do to protect patients, consumers, essential health care programs, and precious taxpayer dollars. Bringing additional health care industry leaders and experts into this work will allow us to act more quickly and effectively in identifying and stopping fraud schemes, seeking justice for victims, and safeguarding our health care system.”

“This partnership puts criminals on notice that we will find them and stop them before they steal health care dollars,” Secretary Sebelius said. “Thanks to this initiative today and the anti-fraud tools that were made available by the health care law, we are working to stamp out these crimes and abuse in our health care system.”

Partnership Allows Feds To Use Private Payer Claims Data, Knowledge & Other Fraud Detection Resources

According to HHS and DOJ, the new partnership is designed to share information and best practices in order to improve detection and prevent payment of fraudulent health care billings. Its goal is to reveal and halt scams that cut across a number of public and private payers. HHS and DOJ say the partnership will private insurers to share their anti-fraud insights more easily with investigators, prosecutors, policymakers and other stakeholders and law enforcement officials more effectively to identify and prevent suspicious activities, better protect patients’ confidential information and use the full range of tools and authorities provided by the Patient Protection & Affordable Care Act (Affordable Care Act) and other statutes to combat and prosecute illegal actions.

One unprecedented element of this partnership will involve the sharing of information on specific schemes, utilized billing codes and geographical fraud hotspots between the public and private partners. The partners say the planned sharing of claims data and other information will help partners prevent, detect and respond to potential health care billing fraud by:

Helping partners to take action, to prevent losses to both government and private health plans before they occur;
Improving their ability to spot and stop payments billed to different insurers for care delivered to the same patient on the same day in two different cities;
In the future to use sophisticated technology and analytics on industry-wide healthcare data to predict and detect health care fraud schemes.

Presumably, this will involve the extension of the use of state-of-the-art technology and data mining practices like those the Centers for Medicare & Medicaid Services (CMS) already uses to review claims, to track suspected fraud trends and flag suspected fraudulent activity.

Partnership Expands Use & Reach of New Affordable Care Act & Other Health Care Fraud Detection & Enforcement Tools & Collaboration

The partnership builds upon and extends the reach and use of expanded legal tools created by the Affordable Care Act and other laws that Federal and state officials are using in their highly publicized war against health care fraud, waste and abuse in Medicare, Medicaid, the Children’s Health Insurance Program (CHIP) and, increasingly, private insurance plans. Using these and other new tools, convictions under the Health Care Fraud and Abuse Control Program increased by over 27% (583 to 743) between 2009 and 2011, and the number of defendants facing criminal charges filed by federal prosecutors in 2011 increased by 74% compared with 2008 (1,430 vs. 821).

The Affordable Care Act and other legislative changes and related programs have significantly strengthened the powers of HHS, DOJ and other federal and state agencies to investigate and prosecute health care fraud. Among other things, these amendments and programs include:

Qui tam and other whistleblower incentives and programs that encourage employees, patients, competitors and others to report suspicious behavior;
Require providers, plans to self-identify, self-report and self-correct false claims and certain other non-compliance;
Increase the federal sentencing guidelines for health care fraud offenses by 20-50% for crimes that involve more than $1 million in losses;
Create penalties for obstructing a fraud investigation or audit;
Make it easier for the government to recapture any funds acquired through fraudulent practices;
Make it easier for the Department of Justice (DOJ) to investigate potential fraud or wrongdoing at facilities like nursing homes;
Under the risk-based provider enrollment rules, providers and suppliers wishing to take part in Medicare, Medicaid, and CHIP who federal officials view as posing a higher risk of fraud or abuse now must undergo licensure checks, site visits and other heightened scrutiny including ongoing monitoring as part of the new Automated Provider Screening (APS) system CMS implemented in December 2011. The APS uses existing information from public and private sources to automatically and continuously verify information submitted on a provider’s Medicare enrollment application including licensure status Secretary to impose a temporary moratorium on newly enrolling providers or suppliers of a particular type or in certain geographic areas if necessary to prevent or combat fraud, waste, and abuse.
Increased information sharing and coördination of investigations and enforcement among states, CMS, and its law enforcement partners at the Office of the Inspector General (OIG) and DOJ including the highly publicized activities of the Health Care Fraud Prevention and Enforcement Action Team (HEAT), a joint effort between HHS and DOJ to fight health care fraud.
The power of CMS, in consultation with OIG, to suspend Medicare payments and require States to suspend Medicaid and SCHIP payments to providers or suppliers during the investigation of a credible allegation of fraud;
The deployment and use of the sophisticated data collection and mining technologies of CMS’ new Fraud Prevention System, which since June 30, 2011 has used advanced predictive modeling technology to screen all Medicare fee-for-service claims before payment and target investigative resources on areas that this profile identifies as reflecting heightened risks of health care fraud vulnerability to allow regulators and prosecutors to more efficiently identify and respond to suspected fraudulent claims and emerging trends;
Focused fraud prevention, detection and enforcement activities on Home Health agencies, Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) suppliers and certain other categories of providers and suppliers that federal officials view as historically presenting heightened concerns;
Expansion of the overpayment detection and recovery activities ofthe Recovery Audit Contractor (RAC) program to Medicaid, Medicare Advantage, and Medicare Part D programs; and
Various other tools.

Health Plan Partnership Latest Wrinkle In Fed’s Efforts To Use Private Whistleblower & Other Resources To Find Fraud

The partnership with the health plans is the latest wrinkle in a growing network of private relationships and outreach that HHS and DOJ use to discover health care fraud. By partnering with health plans, HHS and DOJ have recruited the health plans to help federal officials find and redress potential fraud in public and private health plans.

HHS and DOJ already know the value of getting private citizens to watch for and report suspected illegal behavior. Indeed, extended qui tam and other whistleblower activities already are paying off big for federal officials. For example, a former executive’s qui tam claim helped bring about the settlement announced in June, 2012 under which Christus Spohn Health System Corporation recently paid more than $5 million to settle Justice Departmentclaims that it profited from violations of the False Claims Act by inappropriately admitted patients to inpatient status for outpatient procedures. The investigation leading to the settlement began in March 2008 after Christus – Shoreline’s former director of case management filed a lawsuit under seal under the qui tam provisions of the False Claims Act alleging the six hospitals were submitting false claims to the Medicare program by billing for services that should have been performed on an outpatient basis as if they were more expensive inpatient services. The allegations stated that these hospitals were routinely billing outpatient surgical procedures as if they required an inpatient level of care even though the patients often were discharged from the hospital in less than 24 hours. The federal False Claims Act empowers private citizens with knowledge of fraud against the United States to present those allegations to the United States by bringing a lawsuit on behalf of the United States under seal. If the government’s investigation substantiates those allegations, then the private citizen is entitled to share in any recovery. In this case, that person will receive 20% of the $5,100,481.74 recovery.

With qui tam and other reports of suspected fraud an increasingly frequent and valuable tool in the federal and state wars on health care fraud, officials have added a wide range of programs encouraging and in some cases financially rewarding individuals and businesses that report circumstances leading to fraud convictions. The partnership with health plans reflects the latest wrinkle in these efforts.

Health Plans Also Targeted For Federal Health Care Fraud & Other Enforcement

While welcoming federal efforts in their private war against health care fraud, private health insurers and other payers also need to prepare to defend their own practices against a separate but equally determined wave of federal enforcement of federal health plan laws against payers.

The debate leading up to and activities of the Obama Administration since the passage of the Affordable Care Act make clear that health plans also stand in the line of fire for enforcement by federal health care officials. With alleged excesses and abuses by health plans among the leading arguments used by administration officials and Congressional supporters to justify the passage of the Affordable Care Act’s insurance reforms, it should come as no surprise that federal regulators are aggressively moving to enforce federal health care regulations against health plans and insurers.

For instance, the Obama Administration has been very aggressive in its implementation of the “Medical Loss Ratio,” “Rate Review” and other features of the health care law it touts as holding insurers accountable and has widely publicized its efforts to use these provisions to force insurers to forego rate increases and make other changes. Recent audits of Medicare Advantage and other private health plans and payers by the HHS Office of Inspector General (OIG) have identified several areas of concern, according to OIG. OIG in February, 2012 issued a publication entitled Medicare Advantage Organizations’ Identification of Potential Fraud and Abuse that reports flawed performance by Medicare Advantage plans under both Part C and Part D with regard to the measurement, detection and implementation of corrective action and referral of potentially fraudulent or abusive practices. The report notes a “lack of common understanding of key fraud and abuse program terms and raise questions about whether all MA organizations are implementing their programs to detect and address potential fraud and abuse effectively.” See also e.g. Medicare Advantage Plans’ Fraud Oversight Weak, Says OIG.

Medicare Advantage Plans are not the only plans targeted for enforcement. For many years, CMS, the Department of Defense and other agencies have been stepping up oversight and enforcement of federal rules that prohibit discrimination by health plans against individuals also covered by Medicare, Medicaid, CHIP, PIP, Department of Defense TRICARE and other federal programs and requiring these plans to pay benefits primary to government program benefits. Sophisticated new electronic data reporting rules are enhancing the enforceability of these rules.

Meanwhile, private health plans also face increased exposures for noncompliance with other laws. As currently interpreted by the Internal Revenue Service, employer or other sponsors of group health plans that fail to comply with the portability rules of the Health Insurance Portability & Accountability Act (HIPAA), mental health parity, medical coverage continuation mandates of the Consolidated Omnibus Budget Reconciliation Act (COBRA) or Michelle’s Law, the genetic nondiscrimination requirements of the Genetic Information & Nondiscrimination Act (GINA) and a host of other laws have an obligation under Internal Revenue Code Section 5001 to self-det eect, self-report and self-assess and pay excise tax penalties even as these plans face federal civil liability from Employee Benefit Security Administration, HHS and private plaintiff actions. As the implementation of the Affordable Care Act, agency officials responsible for the enforcement of these laws are promising stepped up enforcement of these and other federal health plan regulations.

Health Care Providers & Health Plans Both Must Act To Manage Risks & Compliance

In response to the growing emphasis and effectiveness of Federal officials in investigating and taking action against health care providers and payers, both health plans and health care providers should take proper steps to help prevent, detect and timely redress health care fraud and other noncompliance exposures within their organization and to position their organization to respond and defend against potential investigations or charges. In light of the growing qui tam risks, these activities should include both comprehensive compliance review and oversight, as well as tightened internal investigation, exit interview and other human resources and business partner oversight, reporting and investigation policies and practices to help find and redress potential fraud or other qui tam, retaliation and similar exposures early and more effectively.

For Help or More Information

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals. A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns.

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations. She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications. You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and registerto receive future updates about developments on these and other concerns from Ms. Stamer here.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

Comments Off on New Health Plan Partnership, Data Sharing With Federal Health Care Fraud Enforcers Promises Greater Federal Oversight of Providers & Health Plans | Claims Administration, Employee Benefits, Employers, ERISA, Fiduciary Responsibility, Health Plans, Human Resources, Insurance, Mental Health | Tagged: Affordable Care Act, ERISA plans, Health Plans, Mandated Benefits, Mental Health, Mental Health Parity, MHPAEA | Permalink
Posted by Cynthia Marcotte Stamer

Update Health Plans For Expanded MHPAEA & Health Care Reform Mental Health Mandates

July 15, 2012

With attention heavily focused on the health care reform mandates of the Patient Protection & Affordable Care Act (ACA), many employer and union sponsored group health plans are underestimating plan costs and risking significant liability from outdated mental health and substance abuse coverage rules to comply with the mental health parity mandates of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA).

Although covered group health plans and issuers generally have been required to comply with the statutory provisions of the MHPAEA for all plan years beginning after October 2, 2009 and with the interim final regulations jointly issued by the Departments of Labor, Treasury and Health and Human Services for all plan years beginning after June 30, 2010, many employer or other plan sponsors have yet to properly update their health plan documents, claims and appeals processes, summary plan descriptions and other communications to comply with these MHPAEA mental health benefit mandates or a myriad of other changes to federal health plan rules that already are effective. Violations of these mandates can result Labor Department or private plaintiff lawsuits, requiring the health plan to pay benefits not budgeted for and in some cases, not covered by stop loss or other insurance, as well as Internal Revenue Service and other penalties, as well as attorneys’ fees and other costs of defense.

Solutions Law Press, Inc. invites you to catch up on what private employer and union health plans, their sponsors, fiduciaries and administrators need to do to update and administer their group health plans to comply with MHPAEA and other federal health plan mandates in addition to updating their health plans in response to the ACA requirements already effective or scheduled to take effect in upcoming months by participating in person or via WebEx in the “2012 Health Plan Update Workshop” on July 24, 2012.

Many Health Plans Need Update For MHPAEA & Other Federal Mental Health Mandates

The MHPAEA supplemented the previously enacted mental health parity requirements enacted under the Mental Health Parity Act of 1996 (MHPA).

For plans and policies subject to its provisions, the MHPAEA as implemented by the Departments’ interim final rules generally prohibit group health plans or group health insurance issuers from imposing financial or quantitative requirements (such as a copayment or coinsurance) or a quantitative treatment limitation (such as a limit on the number of outpatient visits or inpatient days covered) on mental health or substance use disorder benefits in any of 6 classifications that is more restrictive than those that apply to medical/surgical benefits in the same classification. Thus, if a plan generally applies a $25 copayment to at least 2/3 of outpatient, in-network, medical/surgical benefits, a higher copayment could not be imposed on outpatient, in-network mental health or substance use disorder benefits.

In addition to financial requirements and quantitative treatment limitations, plans and issuers often impose nonquantitative treatment limitations, such as:

Medical management standards limiting or excluding benefits based on medical necessity or medical appropriateness, or based on whether a treatment is experimental or investigative;
Formulary design for prescription drugs;
Standards for provider admission to participate in a network, including reimbursement rates;
Plan methods used to determine usual, customary, and reasonable fee charges;
Refusal to pay for higher-cost therapies until it can be shown that a lower-cost therapy is not effective (also known as fail-first policies or step therapy protocols); and
Exclusions based on failure to complete a course of treatment.

Since it released interim regulations, the Departments have published a series of FAQ guidance that answers various questions about interim final rules and taken other steps to promote awareness and understanding of the MHPAEA, as well as taken other steps to prepare for its enforcement.

Despite the availability of this guidance, many employer and other health plan sponsors, fiduciaries and administrators have not updated their health plans to comply with the MHPAEA guidance.

Attention focused on the political fights and regulatory demands of ACA and an often unwarranted assumption of the compliance adequacy of plan designs and documentation provided by insurers, administrators and other professional service providers have lead many employer and other health plan sponsors, their health plan fiduciaries and administrators to fail to make legally required or otherwise needed changes. These oversights are exposing many plans and their sponsors to unanticipated costs and potentially significant liability by failing to appropriately update their plans documentation, communications and procedures to comply with evolving mandates such as the mental health parity requirements of the MHPAEA as implemented by evolving guidance.

Following the release of updates to the MHPAEA portion of the Employer Self Compliance Tool here by the Department of Labor Employee Benefit Security Administration (EBSA) last week and with mental health benefits among those that ACA specifically identifies as an “essential benefit,” employer and union health plans, their sponsors, fiduciaries and administrators should expect greater scrutiny of their plans compliance with federal mental health parity mandates by updating their health plans’ mental health and substance abuse provisions in response to the MHPAEA and other federal mandates.

7/24 Workshop Provides Update on MHPAEA & Other Health Plan Mandates

Solutions Law Press, Inc. invites you to catch up on the latest MHPAEA and other federal requirements impacting employer and union sponsored group health plans under ACA and other federal health plan regulations by participating in “Coping With Health Care Reform: 2012 Health Plan Update Workshop on Tuesday, July 24, 2012. Participants may choose to attend the live briefing in Addison, Texas or participate via WebEx for a registration fee of $125.00. To register or for more information, see here.

For Help or More Information

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals. A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

Comments Off on Update Health Plans For Expanded MHPAEA & Health Care Reform Mental Health Mandates | Claims Administration, Employee Benefits, Employers, ERISA, Fiduciary Responsibility, Health Plans, Human Resources, Insurance, Mental Health | Tagged: Affordable Care Act, ERISA plans, Health Plans, Mandated Benefits, Mental Health, Mental Health Parity, MHPAEA | Permalink
Posted by Cynthia Marcotte Stamer

Stamer Speaks 11/15 About Things Plan Committees Must Do Differently In 2012 At SWBA Meeting

July 10, 2012

Stamer Speaks About Things Plan Committees Must Do Differently In 2012 At SWBA Meeting In November

Cynthia Marcotte Stamer will be among the featured panelists speaking about “The Flood of Things a Plan Committee Must Do Differently in 2012” at the Southwest Benefits Association (SWBA) 23rd Annual Employee Benefits Conference for Practitioners and Plan Sponsors scheduled for November 15-16, 2012 at the Doubletree Galleria Hotel in Dallas, Texas

During “The Flood of Things a Plan Committee Must Do Differently in 2012” program, scheduled to begin at 4:00 PM on November 15, Ms. Stamer and other panelists will discuss the grow emerging challenges and responsibilities that employee benefit plan committees and other fiduciaries must deal with in 2012 such as new provider disclosures and participant disclosures about internal retirement plan fees, to new processes for handling claims and appeals arising under health plans now (and other types of plans soon), to identifying and documenting who really are the other fiduciaries of its plan, to avoiding stock drop exposure (especially after Pfiel), excessive fees exposure, securities lending exposure and others.

The program is part of two days of educational programs that the SWBA will provide during the Conference. To register or for additional details, see here.

About Ms. Stamer

A well-known and prolific author and popular speaker Board Certified in Labor & Employment Law, Ms. Stamer presently serves as Co-Chair of the ABA RPTE Section Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Committee, an ABA Joint Committee on Employee Benefits Representative, an Editorial Advisory Board Member of the Institute of Human Resources (IHR/HR.com) and Employee Benefit News, and various other publications. A primary drafter of the Bolivian Social Security privatization law with extensive domestic and international regulatory and public policy experience, Ms. Stamer also has worked extensively domestically and internationally on public policy and regulatory advocacy on health and other employee benefits, human resources, insurance, tax, compliance and other matters and representing clients in dealings with the US Congress, Departments of Labor, Treasury, Health & Human Services, Federal Trade Commission, HUD and Justice, as well as a state legislatures attorneys general, insurance, labor, worker’s compensation, and other agencies and regulators. A prolific author and popular speaker, Ms. Stamer regularly authors materials and conducts workshops and professional, management and other training on employee benefits, human resources, health care, privacy and data security, technology and other compliance and management topics. Her publications and insights appear in the Health Care Compliance Association, American Bar Association, Atlantic Information Service, Bureau of National Affairs, World At Work, SHRM, The Wall Street Journal, Government Institutes, Inc.,Business Insurance, the Dallas Morning News, HR.Com, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications. An Editorial Advisory Board member and author for HR.com, Insurance Thought Leaders and many other publications, Ms. Stamer also regularly serves on the faculty and planning committees of a multitude of symposium and other educational programs. For more details about Ms. Stamer’s services, experience, presentations, publications, and other credentials or to inquire about arranging counseling, training or presentations or other services by Ms. Stamer, see www.CynthiaStamer.com or contact Ms. Stamer at (469) 767-8872 or via e-mail here

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

About Solutions Law Press

Comments Off on Stamer Speaks 11/15 About Things Plan Committees Must Do Differently In 2012 At SWBA Meeting | Employee Benefits, Employers, ERISA, Fiduciary Responsibility, Health Plans, Mental Health, Mental Health Parity, Retirement Plans, Tax | Tagged: ERISA, fee disclosure, Fiduciary, participant fee disclosuyrenvestment-advisor, plan investiments, prohibited traansaction, Prudence | Permalink
Posted by Cynthia Marcotte Stamer

$27M+ Settlement Highlights Fiduciary Risks Plan Sponsors & Fiduciaries Risk If Plan Vendors, Compensation Improperly Set

July 7, 2012

A $27 million settlement announced by the Department of Labor on July 7 shows the big liability that employer, union or association plan sponsors and their fiduciaries risk by failing to take appropriate steps when deciding who will serve as fiduciaries or other plan sponsors or setting the compensation paid by the plan for those services.

The National Rural Electric Cooperative Association (NRECA) will restore $27,272,727 to three association-sponsored employee benefit plans covered by the Employee Retirement Income Security Act (ERISA) to settle U.S. Department of Labor Employee Benefits Security Administration (EBSA) charges that the association violated ERISA by selecting itself as a service provider to the plans, determining its own compensation and making payments to itself that exceeded NRECA’s direct expenses in providing services to the employee benefit plans. EBSA announced the settlement on July 5, 2012.

Following an EBSA investigation, EBSA accused NRECA of violating NRECA by selecting itself to act as the administrator of various association employee benefit plans and arranging for the NRECA to receive unreasonable compensation for these services which NRECA set without the use of independent parties to prudently verify the appropriateness of the selection or compensation arrangements. EBSA said these arrangements violated the self-dealing and other fiduciary responsibility requirements of ERISA.

Headquartered in Arlington, NRECA is a nonprofit trade association for electric power cooperatives. The sponsored plans are open to members of the trade association as well as the association’s employees. As of 2010, the latest information available, the NRECA 401(k) Plan had 68,970 participants, the NRECA Retirement Security Plan had 64,286 participants and the NRECA Group Benefits Plan had 73,644 participants.

Under the terms of the agreement, NRECA will not provide administrative services to the NRECA Retirement Security Plan, the NRECA 401(k) Plan and the NRECA Group Benefits Plan without entering into a written contract or agreement with the plans that must be approved by an independent fiduciary. The independent fiduciary must determine whether the use of NRECA to provide administrative services to the plans is prudent and reasonable, determine the categories of direct expenses that NRECA may charge to the plans and the methods of calculating those expenses, and monitor NRECA’s compliance with certain terms of the agreement. The agreement also provides that during a 60-month period following the implementation date, NRECA shall discount the amount of permissible direct expenses for which it seeks reimbursement from all three plans in the amount of $22,727,272. The balance of the settlement payment, $4,545,455, already has been paid directly to the NRECA 401(k) Plan. In addition to the amounts returned to the plans, NRECA will pay $2,727,276 in civil penalties.

“This settlement sends a clear message to plan fiduciaries that they cannot profit from selecting themselves to provide services to plans,” said Phyllis Borzi, assistant secretary of labor for employee benefits security in announcing the settlement.

Employee benefit plan vendor selection and compensation arrangements made by association and other employee benefit plan sponsors, fiduciaries and service providers are coming under increasing scrutiny by the EBSA. While ERISA technically grants plan sponsors and fiduciaries wide latitude to make these choices, the exercise of these powers comes with great responsibility. See e.g., Plan Sponsors. Their Owners & Management & Others Risk Personal Liability If Others Defraud Plans or Mismanage Employee Benefit Plan Responsibilities; New Rules Give Employee Benefit Plan Fiduciaries & Investment Advisors New Investment Advice Options;DOL Proposes To Expand Investment Related Services Giving Rise to ERISA Fiduciary Status As Investment Fiduciary.

Associations, employer and other plan sponsors, and other entities and individuals who in name or in function possess or exercise discretionary responsibility or authority over the selection of plan fiduciaries, administrative or investment service providers or other services to the plan or the establishment of their compensation generally must make those decisions in accordance with the fiduciary responsibility and prohibited transaction rules of ERISA. Among other things, these rules generally require that fiduciaries exercising discretion over these and other plan matters:

ü Must act prudently for the exclusive benefit of plan participants and beneficiaries;

ü Must not involve the plan or its assets in any arrangement that is listed as a prohibited transaction under ERISA § 406; and

ü Must not act for the benefit of themselves or any third party.

Fiduciaries that violate these rules risk personal liability to the plans for the greater of profits realized or losses sustained by the plan, plus attorneys’ fees and costs, as well as exposure to an EBSA-assessed ERISA civil penalty equal to 20% of the amount of the fiduciary breach.

Despite these well-document fiduciary exposures and a well-established pattern of enforcement by the Labor Department and private plaintiffs, many companies and their business leaders fail to appreciate the responsibilities and liabilities associated with the establishment and administration of employee benefit plans. Frequently, employer and other employee benefit plan sponsors fail adequately to follow or document their administration of appropriate procedures to be in a position to demonstrate their fulfillment of these requirements when selecting plan fiduciaries and service providers, determining the compensation paid for their services, overseeing the performance of these parties, or engaging in other dealings with respect to plan design or administration. In other instances, businesses and their leaders do not realize that the functional definition that ERISA uses to determine fiduciary status means that individuals participating in discretionary decisions relating to the employee benefit plan, as well as the plan sponsor, may bear liability under many commonly occurring situations if appropriate care is not exercised to protect participants or beneficiaries in these plans. For this reason, businesses and associations providing employee benefits to employees or dependents, as well as members of management participating in, or having responsibility to oversee or influence decisions concerning the establishment, maintenance, funding, and administration of their organization’s employee benefit programs need a clear understanding of their responsibilities with respect to such programs, the steps that they should take to demonstrate their fulfillment of these responsibilities, and their other options for preventing or mitigating their otherwise applicable fiduciary risks.

In light of the significant liability risks, employer, association and other employee benefit plan sponsors and their management, plan fiduciaries, service providers and consultants should exercise care when selecting plan fiduciaries and service providers, establishing their compensation and making other related arrangements. To minimize fiduciary exposures, parties participating in these activities should seek the advice of competent legal counsel concerning their potential fiduciary status and responsibilities relating to these activities and take appropriate steps to minimize potential exposures.

For Help or More Information

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

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Posted by Cynthia Marcotte Stamer

7/24 “Health Plan Update” Workshop Kicks Off 2012 Health Plan-U Coping With Health Care Reform Workshop Series

July 6, 2012

2012 Health Plan-U Coping With Health Care Reform Series Provides Key Training & Information For Health Plans, Sponsoring Employers,

Fiduciaries, Administrators & Advisors On ACA & Other Responsibilities

Health plans, their employer and other plan sponsors, fiduciaries, administrators, brokers and consultants and other service providers are invited to geta 2012/2013 Health Plan Compliance Checkup by participating in the Health Plan Update Workshop Solutions Law Press, Inc. is hosting on July 24, 2012 as part of its 2012 Health Plan-U Coping with Health Care Reform Workshop Series beginning with the kickoff program, “2012 Health Plan Update” on July 24, 2012.

The Supreme Court’s June 28, 2012 National Federation of Independent Business v. Sebelius ruling upholding the health care reform law means health plans, their employer and other sponsors, fiduciaries and administrators, and insurers must quickly update their health plan documents, summary plan descriptions and other communications, administrative procedures, contracts, reporting and other arrangements to meet Affordable Care Act and other federal rules that have, or by plan year end will, take effect pending the full rollout of the law in 2014. Beginning with the Health Plan Update Workshop on July 24, 2012, Solutions Law Press, Inc. is working to help health plans and their leaders quickly and cost-effectively get up to speed with and respond to these requirements by hosting the following series of workshops as part of its 2o12 Health Plan-U Coping With Health Care Reform Worksop Series:

Coping With Health Care Reform: 2012 Health Plan Update Workshop*

July 24, 2012

12:30 P.M.-2:30 P.M. Eastern | 11:30 A.M.-1:30 P.M. Central | 10:30 A.M-12:30 P.M. Mountain | 9:30 A.M-11:30 A.M. Pacific

Claims & Appeals Bootcamp*

July 31, 2012

12:30 P.M.-2:00 P.M. Eastern | 11:30 A.M.-1:00 P.M. Central | 10:30 A.M-12:00 P.M. Mountain | 9:30 A.M-11:00 A.M. Pacific

HIPAA Bootcamp*

August 14, 2012

12:30 P.M.-2:30 P.M. Eastern | 11:30 A.M.-1:30 P.M. Central | 10:30 A.M-12:30 P.M. Mountain | 9:30 A.M-11:30 A.M. Pacific

Health Plan Communications Bootcamp: SBCs, SPDs & Beyond*

August 28, 2012

12:30 P.M.-2:00 P.M. Eastern | 11:30 A.M.-1:00 P.M. Central | 10:30 A.M-12:00 P.M. Mountain | 9:30 A.M-11:00 A.M. Pacific

The Workshops are designed to help health plans, their employer and other sponsors, fiduciaries, administrators, brokers and consultants and others with responsibilities for these plans quickly learn key steps that they may need to take to update and admininster their health plans to meet existng and emerging ACA, Employee Retirement Income Security Act (ERISA), Internal Revenue Code (Code) and other federal mandates.

7/24 Health Plan Update Workshop Kicks Off Series

Solutions Law Press, Inc. HR & Benefits Update will kick off its 2012 Health-U Coping With Health Care Reform Workshop Series by hosting the 2012 Health Plan Update Workshop on July 24, 2012 from 12:30 P.M.-2:30 P.M. Eastern, 11:30 A.M.-1:30 P.M. Central, 10:30 A.M-12:30 P.M. Mountain and 9:30 A.M-11:30 A.M. Pacific Time.

The June 28, 2012 Supreme Court National Federation of Independent Business v. Sebelius ruling rejecting constitutional challenges to the ACA health care reform law means most health plans, their employer and other sponsors, fiduciaries and administrators, and insurers must rush to update their health plan documents, summary plan descriptions and other communications, administrative procedures and contracts, reporting and other arrangements to meet the requirements of ACA that have, or by year end will, take effect pending the full rollout of the law in 2014.

Solutions Law Press, Inc. invites you to catch up on the latest requirements and guidelines impacting employer and union sponsored group health plans under ACA and other federal health plan regulations by participating in “Coping With Health Care Reform: 2012 Health Plan Update Workshop on Tuesday, July 24, 2012. Participants may choose to attend the live briefing in Addison, Texas or take part via WebEx for a registration fee of $125.00. Texas Department of Insurance Continuing Education Credit and other professional certification credit may be requested by qualifying participant for an added charge.

The Coping With Healthcare Reform: 2012 Health Plan Update Workshop will cover the latest guidance on Affordable Care Act and other federal health plan regulatory changes impacting employment-based group health plans and other key information employer and other group health plan sponsors, group health plans, insurers, plan administrators, fiduciaries, brokers and advisors and others working with these plans need to understand and cope with 2012-2013 ACA and other health plan requirements including:

√ ACA Summary of Benefits And Communications Mandates & Their Implications On Plan Documents, SPDs & Administration

√ ACA Culturally and Linguistically Appropriate Mandates

√ ACA External & Internal Review, ERISA Claims & Appeals, & Other Federal Claim Handling Requirements: What rules apply to which plans? What to do to minimize the impact of changing requirements?

√ ACA “Essential Health Benefit” Rules & Their Implications For Health Plans & Their Sponsors Now & After 2014

√ ACA, ADA & Other Federal Health Plan Nondiscrimination Rules

√ ACA W-2 & Other Federal Reporting, Notice & Disclosure Requirements

√ ACA grandfathered plan status: Do you have it? How do you lose it? What it does for your program?

√ ACA, COBRA, HIPAA, GINA, FMLA, Military Leave, Michelle’s Law & Other Federal Eligibility Mandates

√ Preventive care coverage & wellness program rules under Affordable Care Act, GINA, ADA & other federal regulations

√ Mental health & substance abuse, provider choice & other benefit mandates under ACA, Mental Health Parity & other federal rules

√ Federal Health Plan Notice & Communication Rules

√ ERISA Fiduciary Responsibility, Reporting & Disclosure & Other Rules

√ New HIPAA Privacy Rules & Audits & How Plans & Plan Sponsors Should Respond

√ Consumer Driven Health Plan Communication Strategies

√ Tips To Help Review & Update Plans, Communications, Vendor Agreements & Processes

√ Expected & Proposed ACA & Other Federal Health Plan Rules

√ Practical Strategies For Monitoring & Responding To New Requirements & Changing Rules

√ Participant Questions

√ More

Cynthia Marcotte Stamer Leads Workshops

The 2012 Health Plan Update and other Coping With Healthcare Reform Workshops will be lead by attorney Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefits Counsel, recognized in International Who’s Who, and Board Certified in Labor & Employment Law, Ms. Stamer has 25 years experience advising and representing private and public employers, employer and union plan sponsors, employee benefit plans, associations, their fiduciaries, administrators, and vendors, group health, Medicare and Medicaid Advantage, and other insurers, governmental leaders and others on health and other employee benefit. employment, insurance and related matters. A well-known and prolific author and popular speaker Board Certified in Labor & Employment Law, Ms. Stamer presently serves as Co-Chair of the ABA RPTE Section Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Committee, an ABA Joint Committee on Employee Benefits Representative, an Editorial Advisory Board Member of the Institute of Human Resources (IHR/HR.com) and Employee Benefit News, and various other publications. A primary drafter of the Bolivian Social Security privatization law with extensive domestic and international regulatory and public policy experience, Ms. Stamer also has worked extensively domestically and internationally on public policy and regulatory advocacy on health and other employee benefits, human resources, insurance, tax, compliance and other matters and representing clients in dealings with the US Congress, Departments of Labor, Treasury, Health & Human Services, Federal Trade Commission, HUD and Justice, as well as a state legislatures attorneys general, insurance, labor, worker’s compensation, and other agencies and regulators. A prolific author and popular speaker, Ms. Stamer regularly authors materials and conducts workshops and professional, management and other training on employee benefits, human resources and related topics for the ABA, Aspen Publishers, the Bureau of National Affairs (BNA), SHRM, World At Work, Government Institutes, Inc., the Society of Professional Benefits Administrators and many other organizations. She also regularly serves on the faculty and planning committees of a multitude of symposium and other educational programs. For more details about Ms. Stamer’s services, experience, presentations, publications, and other credentials or to inquire about arranging counseling, training or presentations or other services by Ms. Stamer, see www.CynthiaStamer.com.

Registration, Continuing Education & Other Details

Register Now! The Registration Fee per course is $125.00 per person (plus an additional $10 service fee for each individual seeking Texas Department of Insurance Continuing Education Credit). Registration Fee Discounts are available for groups of three or more. Payment required via website registration required 48 hours in advance of the program to complete registration. Payment only accepted via website PayPal. No checks or cash accepted. Persons not registered at least 48 hours in advance will only participate subject to system and space availability.

* Texas Department of Insurance and Other Continuing Education Credit

All Health Plan- U Coping With Health Care Reform programs are approved to be offered for general certification credit by the Texas Department of Insurance for the time period offered subject to fulfillment all applicable Texas Department of Insurance requirements, completion of required procedures and payment of the additional service processing fee of $10.00. An application for continuing education credit for other programs is pending. The HIPAA Bootcamp program is approved for 1.5 hours of General Credit and .5 Hours of Ethics Credit. The Texas Department of Insurance possesses the final authority to determine whether an individual qualifies to receive requested continuing education credit. Neither Solutions Law Press, Inc., the speaker or any of their related parties guarantees the approval of credit for any individual or has any liability for any denial of credit. HRCI and World At Work certification credit for the these programs has been requested but approval is currently pending. If you have special continuing education credit needs that you wish us to consider, please let us know. We are happy to visit with you about our ability to accommodate your request. Special fees or other conditions may apply.

Camcellation & Refund Policies

In order to receive refund credit, written cancellation (either fax or e-mail) must be received at least 48 hours in advance of the meeting and are subject to a $10.00 refund processing fee. Refunds will be made within 60 days of receipt of written cancellation notice.

About Solutions Law Press, Inc.™

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Posted by Cynthia Marcotte Stamer

Western Mixers & Officers Ordered To Pay $1.2M+ For Improperly Using Benefit Plan Funds For Company Operations, Other ERISA Violations

May 23, 2012

Businesses owners and managers should treat last week’s judgment against a California fruit and nut supplier Western Mixers Inc. and its officers as a wake-up call to meet employee benefit funding obligations, not to use plan monies for company operations and to take other required steps to make sure that retirement, health and other employee benefit plans moneys and other responsibilities are properly handled.

Under a judgment entered in Solis v. Frank L. Rudy et. al. and Western Mixers Inc. Money Purchase Pension Plan, Western Mixers Inc., its owners and officers will pay a total of $1,287,901 to the company’s pension plan, plus a 20 percent penalty to the Department of Labor.

Following an investigation by the Employee Benefits Security Administration (EBSA), the Department of Labor sued Western Mixers Inc. and two officers who served as trustees of the plan for failing to make approximately $952,511 in mandatory employer contributions for the benefit of participants and beneficiaries and improperly using plan monies in the company’s business operations. Investigators also found that the same two officers as well as the company’s chief financial officer made $565,000 in unauthorized withdrawals from the plan accounts, commingling those funds in the company’s general accounts and using them for the benefit of the business.

Labor Department officials sued the company, and the officers for violation of the fiduciary responsibility rules of the Employee Retirement Income Security Act (ERISA). ERISA generally requires that plan trustees and other plan fiduciaries carry out duties with respect to an employee benefit plan assets prudently for the exclusive benefit of participants.

Pursuant to the consent judgment, the company and its officers admitted to violation of ERISA. During the course of the investigation leading up to the lawsuit, the company previously repaid to the plan $485,000 of the total funds identified as missing by the Labor Department. According to an announcement of the U.S. Department of Labor on May 14, 2012, Midwest Mixers Inc.’s officers agreed to repay $802,901 to participants’ accounts within 10 day of the judgment.

In addition to repaying the missing funds with interest, defendants also must pay a penalty equal to 20 percent of the recovered amount. The court also has appointed an independent fiduciary to terminate the plan and to collect, marshal, pay out and administer plan assets. Frank L. Rudy and David H. Bolstad, owners of the company, are removed as plan trustees and fiduciaries. Together with Robert J. Fischer, Western Mixers, Inc.’s chief financial officer, they are permanently enjoined and restrained from violating ERISA and from serving as fiduciary or service providers to any ERISA-covered plan in the future.

The Western Mixer’s judgement demonstrates that owners, operators and managers of businesses that exercise discretion and control over the funding, investment or administration of employee benefit plans or their assets face significant liability for failing to properly fulfill their responsibilities with respect to their employee benefit plans. Businesses, their owners, board members, officers, and other members of management making decisions about the maintenance, funding, administration, termination, hiring or appointment of fiduciaries or service providers or other matters impacting the employee benefit plan should ensure that they understand the potential implications and responsibilities associated with these activities for themselves and their companies. individuals who have authority or responsibility for employee benefit plans who also perform or take part in the performance of other company management functions also should pre-educate themselves about when ERISA may require that their plan responsibilities be put before otherwise applicable responsibilities to their company, appropriate processes for documenting decisions and activities and other procedures that can help position activities to mitigate exposures and promote defensibility.

For Help or More Information

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

About Solutions Law Press

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Posted by Cynthia Marcotte Stamer

Plan Administrator Faces Civil & Criminal Prosecution For Allegedly Making Prohibited $3.2 Million Real Estate Investment

May 22, 2012

The U.S. Department of Labor has filed a complaint in the U.S. District Court for the District of Idaho against Matthew D. Hutcheson alleging that he violated the Employee Retirement Income Security Act (ERISA) by imprudently investing retirement plan assets in a now-failed real estate venture. Hutcheson also faces a separate criminal indictment, which was filed in the same court on April 10, in connection with the same transaction.

The Labor Department civil complaint alleges that, toward the end of 2010, Hutcheson used more than $3.2 million representing the retirement plan savings of workers from multiple employers for his own personal expenses and in an attempt to buy an interest in the Tamarack Resort – a failed ski and golf resort in Idaho.

Labor Department officials charge this imprudent prohibited transaction has left affected retirement plans without sufficient funds to pay participants all the benefits owed to them.

The Labor Department also has filed an application for a temporary restraining order seeks to remove Hutcheson and other named defendants as fiduciaries of the affected plans, and seeks to appoint an independent fiduciary to administer the plans. In addition to Hutcheson, defendants include Hutcheson Walker Advisors LLC; Green Valley Holdings LLC; and the Retirement Security Plan and Trust, formerly known as the Pension Liquidity Plan and Trust.

Appropriate management of retirement and other employee benefit plan assets is a key obiligation of employee benefit plan investment advisors and other fiduciaries that have authority over plan assets. Plan fiduciaries generally are required by ERISA 404 to invest prudently and for the exclusive benefit of plan participants and beneficiaries. Additionally, ERISA generally prohibits plan fiduciaries from investing in or involving the plan or its assets in certain prohibited transactions or dealing with plan assets for the benefit of themselves or other third parties.

Because violations of ERISA’s fiduciary responsibility rules can create personal liability, employer and other plan sponsors, plan fiduciaries and others participating in decisions or administration of a rebate exercise care in dealing with any rebate. Many plan sponsors also may want to consider reviewing and tightening as warranted existing plan, trust, insurance policy, plan communications and other documentation to lower risks and promote desired characterization of rebates and other amounts paid into or with respect to their plans.

For Help or More Information

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

About Solutions Law Press

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Posted by Cynthia Marcotte Stamer

Employee Plan Fee Disclosure Rules Clarified

May 22, 2012

The Department of Labor’s Employee Benefits Security Administration (EBSA) has made a technical correction to recently released participant-level fee disclosure regulation (29 CFR § 2550.404a-5) contained in Field Assistance Bulletin No. 2012-02 (Fab 2012-02) as initially released on May 7, 2012.

Fab 2012-02 contains frequently asked questions and answers about the Department’s participant-level fee disclosure regulation. As originally released a sentence in the answer to Question 19 concerning quarterly Web site updates to “average annual total return” information inadvertently referred to the most recently completed calendar “year” rather than the most recently completed calendar “quarter.”

In its technical correction of this provision on May 17, 2012, EBSA revised the Faq to track the regulation of the regulation amd re,pved the word “calendar”from the phrase “… 10-calendar year periods …” in the same sentence. See Q-19, n.2. The Fab as revised is available at: here.

For Help or More Information

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

About Solutions Law Press

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Posted by Cynthia Marcotte Stamer

OIG: “Extremely High” Prescription Drug Retail Pharmacy Billings Warrant Tighter Medicare Part D Oversight & Controls

May 18, 2012

The Office of Inspector General (OIG) of the Department of Health & Human Services (HHS) is recommending a “strong response” to improve Medicare Part D oversight of retail pharmacy prescriptions by the Centers for Medicare & Medicaid Services (CMS) based on findings of a recent study. See here. OIG says that “extremely high” prescription drug billings by many retail pharmacies merit scrutiny under medical necessity or other grounds. In anticipation of tighter controls, retail pharmacies, as well as the physician and other providers prescribing medications for Medicare Part D participants should review and tighten prescribing and billing practices to position their actions to withstand anticipated challenge in response to the OIG recommendations.

Under the Medicare Part D program, CMS contracts with private insurance companies, known as sponsors, to provide prescription drug coverage to beneficiaries who choose to enroll. According to OIG, OIG has issued several reports that OIG has found that Part D had limited safeguards in place in the 6 years since Part D began.

In response to these concerns, OIG recently conducted a study based on an analysis of prescription drug event records. Sponsors submit these records to CMS for each drug dispensed to beneficiaries enrolled in their plans. Each record contains information about the pharmacy, prescriber, beneficiary, and drug. OIG analyzed all of the records for drugs billed by retail pharmacies in 2009 and developed eight measures to describe Part D billing and to identify pharmacies with questionable billing.

Based on this study, OIG reports that retail pharmacies each billed Part D an average of nearly $1 million for prescriptions in 2009. According to OIG, the study revealed “questionable billing” by more than 2,600 of these pharmacies. OIG reports that these pharmacies had ‘extremely high billing” for at least one of the eight measures developed and applied by OIG For example, many pharmacies billed what OIG characterized as “extremely high” dollar amounts or numbers of prescriptions per beneficiary or per prescriber. The Miami, Los Angeles, and Detroit areas were the most likely to have pharmacies with questionable billing.

Although OIG concedes that some of this billing may be legitimate, OIG believes that pharmacies that bill for extremely high amounts warrant further scrutiny The OIG report expresses concern that these high dollar prescription drug billings could mean that a pharmacy is billing for drugs that are not medically necessary or were never provided to the beneficiary.

Accordingly, OIG is recommending that CMS: (1) strengthen the Medicare Drug Integrity Contractor’s monitoring of pharmacies and ability to find pharmacies for further review, (2) provide additional guidance to sponsors on monitoring pharmacy billing, (3) require sponsors to refer potential fraud and abuse incidents that may warrant further investigation, (4) develop risk scores for pharmacies, (5) further strengthen its compliance plan audits, and (6) follow up on the pharmacies identified as having questionable billing. CMS concurred with four of the recommendations and partially concurred with the other two.

Private health plans and other payers are likely to check the study to decide whether it provides justification for closer scrutiny of prescription drug claims made to private payers.

Whether or not private health plans follow suit, retail pharmacies and other providers should expect that CMS will increase scrutiny and challenges of prescription drug charges submitted to Medicare Part D. Accordingly, retail pharmacies and the physician and other providers prescribing medications likely to be billed should tighten documentation and other procedures to defend against possible medical necessity and other challenges.

For Help or More Information

If you need help these or other concerns, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals. A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns.

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations. She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern Health Care and many other national and local publications. You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer here.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

For important information concerning this communication click here. THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TOU.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS. ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

[*] See 26 CFR 54.9815-2715, 29 CFR 2590.715-2715, and 45 CFR 147.200, published February 14, 2012 at 77 FR 8668.

[†] See FAQS About Affordable Care Act

Implementation (Part VIII) at http://www.dol.gov/ebsa/pdf/faq-aca8.pdf.

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Posted by Cynthia Marcotte Stamer

HHS OIG Finds The New York Hotel Trades Council and Hotel Association of New York City, Inc., Health Benefits Fund Reported Unallowable Costs on 2009 Medicare Cost Report

May 18, 2012

Health Plans taking in Medicare funds beware. The Department of Health & Human Services Office of Inspector General (OIG) is watching.

OIG says its audit of the New York Hotel Trades Council and Hotel Association of New York City, Inc., Health Benefits Fund (the Fund) found that the Fund improperly reported $237,000 in Medicare Part B costs that were not reasonable and allowable. According to OIG, the Fund reported that the Fund paid a total of $8.2 million for services provided to 3,180 plan members on its final 2009 cost report. Of this amount, the Fund included Medicare Part B costs totaling $237,000 Specifically, the OIG says the Fund reported costs for services to plan members that were not Medicare-eligible, costs for services that were billed to both the Fund and Medicare by contracted providers, and costs for services not eligible for Medicare reimbursement.

While the disallowed costs made up a relatively small percentage of the total costs paid by the Fund, the audit report is notable in that it shows the need for health plans to be prepared to defend costs submitted to Medicare against potential challenge by OIG or other federal oversight officials.

In a separate compliance review, OIG also recently reported that Indiana University Health generally complied with Medicare billing requirements for selected inpatient and outpatient claims. According to OIG, of 198 sampled claims, 35 selected inpatient and outpatient claims had errors, resulting in overpayments totaling $280,000 from October 2008 through September 2010. See here.

Health plans and their fiduciaries and sponsors need to keep in mind that Federal health care oversight and enforcement is not just about detecting provider misconduct. Federal officials also are watching the health plans. While both audits found substantial compliance, the occurrence of the audits itself merits mention. While OIG and other federal health program fraud and integrity oversight and enforcement activities against health care providers receive widespread attention, the conduct and results of these activities with regard to health plan often goes largely unremarked. The OIG reports show that federal officials also are scrutinizing health plans to make sure that Medicare, Medicaid or other program funds are not being improperly expended to or accessed by health plans. Accordingly, health plans receiving early retiree or other program subsidies, participating as Medicare Advantage plans, receiving subsidies or other federal funds, or coordinating benefits with these and other federal programs should prepare for possible federal review and, if applicable enforcement.

For Help or More Information

If you need help preparing to comply with reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals. A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns.

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations. She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern Health Care and many other national and local publications. You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer here.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

For important information concerning this communication click here. THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TOU.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS. ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

[*] See 26 CFR 54.9815-2715, 29 CFR 2590.715-2715, and 45 CFR 147.200, published February 14, 2012 at 77 FR 8668.

[†] See FAQS About Affordable Care Act

Implementation (Part VIII) at http://www.dol.gov/ebsa/pdf/faq-aca8.pdf.

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Posted by Cynthia Marcotte Stamer

Brokerage Firm To Pay $630,000+ To Benefit Plans To Settle DOL Charges It Wrongfully Steered Clients To Investments

April 18, 2012

News that Memphis-based brokerage firm Morgan Keegan and Co., Inc. will pay more than $600,000 to settle charges it violated the Employee Retirement Income Security Act (ERISA) reminds employee benefit plan fiduciaries and brokerage or other providers of investment advice or services to employee benefit plans.

The Employee Benefit Security Administration (EBSA) announced April 16, 2012 that Morgan Keegan has agreed to pay $633,715.46 to 10 ERISA-covered pension plans to settle EBSA charges that it violated ERISA when it recommended certain hedge funds of funds as investments to its ERISA-covered employee benefit plan clients. These recommendations resulted in the hedge funds of funds paying Morgan Keegan revenue-sharing and other fees.

Following an investigation by EBSA’s Atlanta Regional Office as part of EBSA’s “Consultant/Adviser Project,” EBSA charged Morgan Keegan violated ERISA between April 2001 and November 2008 by accepting undisclosed compensation to steer employee benefit plan investments. The Consultant/Advisor Project focuses on the receipt of improper or undisclosed compensation by employee benefit plan consultants and other investment advisers.

Under the terms of the settlement, Morgan Keegan has agreed to disclose to its ERISA plans clients whether the company will act as a fiduciary to those plans. If the company is acting as a fiduciary, Morgan Keegan has agreed to specify the services that it is providing as a fiduciary and to provide the ERISA plan clients a description of all compensation and fees received, in any form, from any source, involving any investment or transaction related to them. Morgan Keegan also agrees not to collect commissions or, if it does collect them, to refund to its ERISA plans clients 100 percent of the amount collected from third parties.

Meanwhile, EBSA also increasingly has focused regulatory and enforcement attention on broker or other service provider arrangements involving compensation arrangements that might involve a brokerage or other fiduciary service provider in a conflict of interest in contravention of these ERISA duty of loyalty requirements.

ERISA Section 404 generally requires that plan fiduciaries act prudently and for the exclusive benefit of plan participants and beneficiaries when dealing with plan assets or conducting other plan related responsibilities.

As part of this general fiduciary duty, plan fiduciaries selecting service providers for the plan generally are required to conduct due diligence and prudently review the fees and other compensation received by a service provider. To help support the ability of plan fiduciaries to carry out these responsibilities, EBSA fee disclosure regulations also generally require plan consultants and investment advisors to disclose compensation they receive as a result of plan related transactions and activities.

Along side their fee disclosure obligations, where investment advisor and other service provider acts as employee benefit plan fiduciary, ERISA Section 404 also requires that service provider to conduct its duty prudently and “for the exclusive benefit” of the plans and their beneficiaries. Additionally, ERISA Section 406 generally prohibits plan fiduciaries and other parties in interest from acting for the benefit of a party other than the plan and from engaging in certain other enumerated “party-in-interest” transactions except in certain narrowly proscribed circumstances.

The Morgan Keegan investigation and settlement highlights the readiness of the EBSA to enforce these requirements against broker or other service providers who abuse these rules. “The law is very clear: If you accept a fee to give investment advice to a retirement plan, you are a fiduciary and must therefore act solely in the best interests of the participants in that plan,” said Phyllis C. Borzi, assistant secretary of labor for employee benefits security. “Third-party payments should never be the motivating factor behind which investments brokers and advisers steer retirement clients into.”

To mitigate liability risks arising from fee related violations like those charged against Morgan Keegan, employee benefit plan fiduciaries and brokerage other service providers to employee benefit plans should carefully review and update existing fee and other practices to ensure that the fee disclosure, fiduciary responsibility, prohibited transaction and other requirements of ERISA and other applicable federal law are met. Documented analysis should be conducted and retained to position the parties to demonstrate that the service provider and its fees were prudently determined and disclosed, and that the transaction is free from any prohibited conflicts of interests.

For Help or More Information

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

About Solutions Law Press

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Posted by Cynthia Marcotte Stamer

Small Employers Should Evaluate Eligibility For Small Business Health Care Tax Credit

March 14, 2012

Small employers that provide health insurance coverage to their employees should consider whether they qualify for and should claim the small business health care tax credit authorized by Congress as part of the Patient Protection and Affordable Care Act (Affordable Care Act).

The small business health care tax credit enacted two years ago may provide a tax credit for certain small employers that pay at least half of the premiums for employee health insurance coverage under a qualifying arrangement may be eligible for this credit. The credit is specifically targeted to help small businesses and tax-exempt organizations provide health insurance for their employees.

Depending upon how they are structured, eligible small employers are likely subject to one of the following three tax-filing deadlines, which fall in coming weeks:

March 15: Corporations that file on a calendar year basis can figure the credit on Form 8941 and claim it as part of the general business credit on Form 3800, both of which are attached to their corporate income tax return.
April 17: Individuals have until April 17 to complete and file their returns on Form 1040. This includes Sole proprietors, as well as people who have business income reported to them on Schedules K-1—partners in partnerships, S corporation shareholders and beneficiaries of estates and trusts. They also attach Forms 8941 and 3800 to their return. The resulting credit is entered on Form 1040 Line 53.
May 15: Tax-exempt organizations that file on a calendar year basis can use Form 8941 and then claim the credit on Form 990-T, Line 44f.

Taxpayers needing more time to determine eligibility might consider obtaining an automatic tax-filing extension, usually for six months. See Form 4868 for individuals, Form 7004 and its instructions for businesses and Form 8868 for tax-exempt organizations.

Businesses that have already filed and later find that they qualified in 2010 or 2011 can still claim the credit by filing an amended return for one or both years. Corporations use Form 1120X, individuals use Form 1040X and tax-exempt organizations use Form 990-T.

Some businesses and tax-exempt organizations that already locked into health insurance plan structures and contributions may not have had the opportunity to make any needed adjustments to qualify for the credit for 2010 or 2011. These employers can still make the necessary changes to their health insurance plans so they qualify to claim the credit on 2012 returns or in years beyond. Eligible small employers can claim the credit for 2010 through 2013 and for two additional years beginning in 2014.

The recently-revamped Small Business Health Care Tax Credit page on IRS.gov provides additional information and resources designed to help small employers see if they qualify for the credit and then figure the amount of the credit, if any, that the employer qualifies to claim. These include a step-by-step guide for determining eligibility, examples of typical tax savings under various scenarios, answers to frequently-asked questions, a YouTube video and a webinar.

For More Information Or Assistance

If you need help reviewing or updating your health benefit program for compliance with ACA or other laws or with any other employment, employee benefit, compensation or internal controls matter, please contact the author of this article, attorney Cynthia Marcotte Stamer.

A 2011 inductee to the American College of Employee Benefits Council, immediate past-Chair and current Welfare Benefit Committee Co-Chair of the American Bar Association (ABA) RPPT Employee Benefits & Other Compensation Arrangements, an ABA Joint Committee on Employee Benefits Council Representative, the ABA TIPS Employee Benefit Plan Committee Vice Chair, former ABA Health Law Section Managed Care & Insurance Interest Group Chair, past Southwest Benefits Association Board Member, Employee Benefit News Editorial Advisory Board Member, and a widely published speaker and author, Ms. Stamer has more than 24 years experience advising businesses, plans, fiduciaries, insurers. plan administrators and other services providers, and governments on health care, retirement, employment, insurance, and tax program design, administration, defense and policy. Nationally and internationally known for her creative and highly pragmatic knowledge and work on health benefit and insurance programs, Ms. Stamer’s experience includes extensive involvement in advising and representing these and other clients on ACA and other health care legislation, regulation, enforcement and administration.

Widely published on health benefit and other related matters, Ms. Stamer’s insights and articles have appeared in HealthLeaders, Modern Health Care, Managed Care Executive, the Bureau of National Affairs, Aspen Publishers, Business Insurance, Employee Benefit News, the Wall Street Journal, the American Bar Association, Aspen Publishers, World At Work, Spencer Publications, SHRM, the International Foundation, Solutions Law Press and many others.

For additional information about Ms. Stamer and her experience, see www.CynthiaStamer.com.

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Posted by Cynthia Marcotte Stamer

HHS Chides Trustmark Life Insurance Company For “Excessive” Health Premium Increases After Affordable Care Act Rate Audit

January 12, 2012

Trustmark Life Insurance Company is the latest health insurance issuer coming under fire from the Department of Health & Human Services (HHS) for making what HHS views as “unreasonable” health insurance premium increases under its new “rate review” powers created by the Patient Protection & Affordable Care Act (Affordable Care Act).

HHS Secretary Kathleen Sebelius announced today (January 12, 2012) HHS considers to be unreasonable premium rate increases proposed by Trustmark Life Insurance Company in five states—Alabama, Arizona, Pennsylvania, Virginia, and Wyoming. According to HHS, the allegedly excessive rate hikes would affect nearly 10,000 residents across these five states.

According to HHS, a review of the health insurance premium disclosures filed by Trustmark Life Insurance Company here found that Trustmark has raised rates by 13 percent in these five states. For small businesses in Alabama and Arizona, when combined with other rate hikes made over the last 12 months, HHS claims rates have increased by 27.2 percent and 18.1 percent, respectively. According to HHS, HHS says that an independent review engaged by HHS found that the rate increases were unreasonable because the insurer “would be spending a low percent of premium dollars on actual medical care and quality improvements, and because the justifications were based on unreasonable assumptions.” HHS is calling upon Trustmark Health Insurance Company to rescind the rates and issue rebates to consumers or publically explain its refusal to do so. The new rate review procedures allow Trustmark Health Insurance Company and other carriers accused by HHS of making unreasonable rate increases various options to dispute the charges

The rate review and reduction demand by HHS reflects its efforts to use its “rate review” authority from the Affordable Care Act to discourage health insurers from raising health insurance premiums by more than 10 percent. HHS requires health insurers to notify HHS of rate increases over 10 percent and justify these increases. HHS generally views health insurance premium increases of more than 10 percent as unreasonable. Under these new rate review powers,

Under the new rate review rules, HHS has the power to review proposed rate reviews and to report its findings but does not have the direct authority to force health insurers to limit premium increases to less than 10 percent or to impose legal or administrative sanctions directly against insurers for making what HHS views as unreasonable premium increases. However, as many as 37 states have the authority to regulate or reject unreasonable premium increases. In the absence of direct authority to regulate insurer rates, HHS uses its ability to publicize its rate review determinations to invite state regulators and the public to apply pressure to insurers to keep down rate increases.

In today’s announcement, HHS credits its new rate review powers with helping to prevent health insurance premium increases, According to HHS, states with the power to regulate insurer premiums increasingly are using this authority. Examples of how states have used this authority include:

In New Mexico, the state insurance division denied a request from Presbyterian Healthcare for a 9.7 percent rate hike, lowering it to 4.7 percent;
In Connecticut, the state stopped Anthem Blue Cross Blue Shield, the state’s largest insurer, from hiking rates by a proposed 12.9 percent, instead limiting it to a 3.9 percent increase;
In Oregon, the state denied a proposed 22.1 percent rate hike by Regence, limiting it to 12.8 percent.
In New York, the state denied rate increases from Emblem, Oxford, and Aetna that averaged 12.7 percent, instead holding them to an 8.2 percent increase.
In Rhode Island, the state denied rate hikes from United Healthcare of New England ranging from 18 to 20.1 percent, instead seeing them cut to 9.6 to 10.6 percent.
In Pennsylvania, the state held Highmark to rate hikes ranging from 4.9 to 8.3 percent, down from 9.9 percent.

Targeting health insurers proposing rate increases of 10 or more percent is likely to result in a significant number of reviews. A Kaiser Family Foundation Employer Health Benefits 2011 Annual Survey found average premiums increased 8% for single coverage and 9% for family coverage through May, 2011.

Companies that HHS finds have made excessive rate increases can either reduce their rate hikes or post a justification on their website within 10 days of the rate review determination.

For More Information Or Assistance

For additional information about Ms. Stamer and her experience, see www.CynthiaStamer.com.

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Posted by Cynthia Marcotte Stamer

Group Health Plans & Insurer To Get More Time To Meet Affordable Care Act Summary of Benefits and Coverage Requirements

December 7, 2011

Delayed Deadline Allows Much Needed Time To Continue Preparations

Group health plans and insurers, their sponsors, fiduciaries, administrators and other services providers are getting more time to comply with the Affordable Care Act’s new Summary of Benefits and Coverage (“SBC”) mandate beyond the March 23, 2012 deadline originally set forth in the Proposed Regulations jointly published by the U.S. Departments of Health and Human Services (HHS), Labor and the Treasury (the Departments). Plans, their insurers and administrators should make good use of this time to continue the time consuming planning and preparations expected to be required to comply with the final rules.

As amended by the Affordable Care Act, Public Health Service Act (“PHS Act”) § 2715 PHS requires group health plans and health insurance issuers to provide a “Summary of Benefits and Coverage” and “Uniform Glossary” meeting standards developed by the Departments.

In August, 2011, the Departments jointly published proposed regulations and accompanying templates detailing the content, format, supplements and other requirements that they proposed requiring health plans and health insurers to meet to satisfy the SBC requirements.

If implemented in final form as proposed, group health plans and insurers, their sponsors, administrators and fiduciaries can expect that significant work will be required to evaluate and prepare the SBC and associated adjustments to plan documents, summary plan descriptions and other materials and practices that are likely to be required in response to the new requirements. Since health plan documents and insurance contracts are unlikely to already use the same definitions as the SBC regulations require be used in the Glossary, group health insurers and self-insured group health plans, their sponsors, fiduciaries and other administrators generally will want to review and adjust definitions and other plan document and insurance cotnract provisions to eliminate inconsistencies and address other concerns. Likewise, adjustments to summary plan descriptions, certificates of benefits and other communication materials also likely will be needed. Furthermore, most health insurers and group health plan may want to reevaluate claims and other cost and reserve projections and consider other adjustments in response to potential implications of these adjustments.

As originally proposed by the Departments, health plans and issuers faced a March 23, 2012 deadline to begin complying with the SBC rules. Since August, 2011, we and various other attorneys from the American Bar Association RPTE and Tax leadership, as well as others have shared concerns with representatives of the Departments about the compliance deadlines and other aspects of the Proposed Rules. New guidance released by the Departments in November reflects that the Departments are taking this input to heart.

According to joint guidance issued by the Departments in November, the health plans and insurers will not be expected to comply by March 23. Frequently Asked Question (FAQ) guidance jointly issued by the Departments indicates that health plans and health insurers will not be required to comply with the SBC mandate until after the Departments issue finalize regulations.

According to the FAQ, the Departments’ final regulations, once issued, will include an applicability date that allows group health plans and health insurance issuers “sufficient time to comply.” The FAQ does not indicate when the Departments expect to publish final regulations or the length of the period following this publication that the Departments anticipate health plans and issuers will have to come into compliance.

This news provides welcome relief for group health plans and insurers, and the employers, administrators and others working to update and administer group health plans in response to the Affordable Care Act. Health plans, insurers, their sponsors, administrators and service providers are cautioned to make good use of this added time to begin preparing to respond quickly when regulations are finalized. While the Departments are expected to make various refinements when finalizing the regulations beyond adjusting the compliance deadline, plans and insurers are expected to be required to engage in significant planning and other preparations to meet the revised rules. In light of this, health insurers and group health plans, their sponsors, administrators and fiduciaries generally are advised to continue these preparations based upoln the guidance set forth in the proposed regulations so that they can be prepared to respond in a timely fashion to the final regulations.

For Help or More Information

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals. A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

About Solutions Law Press

Comments Off on Group Health Plans & Insurer To Get More Time To Meet Affordable Care Act Summary of Benefits and Coverage Requirements | 105(h), Affordable Care Act, CHIP, COBRA, Employee Benefits, Employers, Employment Tax, ERISA, Excise Tax, Fiduciary Responsibility, FMLA, Health Care Reform, Health Plans, HIPAA, Human Resources, Income Tax, Insurance, Malpractice, Medicare Part D, Mental Health, Mental Health Parity, Patient Empowerment, Patient Protection and Affordable Care Act, Payroll Tax, Preemption, Prescription Drugs, Protected Health Information, Reporting & Disclosure, Tax Credit, Wellness Programs | Tagged: Affordable Care Act, Employee Benefits, employee benefits policy, Employer, Health Care Reform, Health Insurance, health issuer, Health Plans, health premiums, instruction, Insurance, Insurer, speech, Speeches, Training, WEB | Permalink
Posted by Cynthia Marcotte Stamer

CMS Final Medicare Rule Imposes Many Conditions On Access To Medicare Claims Data To Evaluate Providers & Suppliers

December 6, 2011

Final Rules Make Direct Access To Data By All But Most Sophisticated Impossible

The Centers For Medicare & Medicaid Services (“CMS”) says disclosures of certain Medicare provider and supplier claims performance data scheduled to begin in January will empower employers, health plans and consumers to better evaluate the quality of these health care providers and suppliers.

CMS plans to begin sharing certain Medicare parts A, B and D provider claims data with “qualifying entities” that can demonstrate the necessary experience and qualifications for use in assisting employers, health plans and others to evaluate the performance of providers and suppliers. CMS also will generate public reports about this performance data for purposes of aiding employers, consumers and others in evaluating the quality for provider or suppliers.

The disclosures will be made in response to Section 10332 of the Patient Protection and Affordable Care Act as amended by the Health Care and Education Reconciliation Act of 2010 (collectively the “Affordable Care Act”). Section 10332 generally requires CMS make available this Medicare data to “qualifying entities” for use in conjunction with other claims data to evaluate provider performance effective January 1, 2012.

The new Final Rule on Availability of Medicare Data for Performance Measurement (“Final Rule”) available for review here establishes detailed requirements about who, when and under what conditions that Medicare will allow qualifying entities to obtain and use certain standardized extracts of Medicare Parts A, B, and D provider and supplier performance data in conjunction with other claims data to evaluate provider and supplier performance pursuant to Section 10332. The Final Rule also discusses privacy requirements that qualifying entities must meet when handling this data. scheduled for official publication in the December 7, 2011 Federal Register

The disclosure of provider performance data is intended to provide greater transparency to employers, health plans, consumers and other parties in evaluating health care provider and supplier quality. To access this information, however, entities will have to comply with detailed requirements. Complicated restrictions included in the Final Rules make it likely that only sophisticated health plans and service providers will be able to directly access and use the provider and supplier data intended to be made available under the Final Rule, however.

As implemented under the Final Rule, entities wishing to access the provider or supplier claims data will be required to meet detailed qualification and other requirements. For instance, among other things, the Final Rule generally only allows an entity to access and use the provider data if it is an entity or business contractor to an entity that:

CMS determines is an entity eligible to obtain the provider data under the eligibility criteria set forth in the Final Rule;
Apply to obtain the provider data under the Final Rule for an allowed purpose in accordance with a demonstrated plan as required by the Final Rules;
Meet a detailed list of requirements demonstrating that it has the experience, governance, policies, procedures and other required qualifications specified in the Final Rules to qualify to obtain and use the provider data;
Pays the required fee;
Comply with annual reporting and other reporting and monitoring requirements;
Comply with the specific requirements of the Final Rules concerning the protection of the privacy of accessed data;
Agree to meet the requirements described in the Final Rules; and
Otherwise comply with all other applicable requirements of the Final Rule.

Entities accessing the information also will be monitored and subject to sanction for failing to comply with the Final Rule in using or handling the provider performance data once it is received. Once an entity is allowed to access the provider claims data, the Final Rules specify that CMS will monitor and assess the performance of qualified entities and their contractors through audits, review of data source documentation and data as requested by CMS; site visits; review of data reported by the qualified entity as part of required annual reporting and other reporting requirements set forth in the Final Rule; analysis of complaints from beneficiaries and/or providers or suppliers. If CMS determines that a qualified entity has breached any of these requirements, it may warn; require a corrective action plan (“CAP”); place the qualified entity on a special monitoring plan; or terminate the qualified entity from participation in the program in accordance with the Final Rules.

Health plans, employers, and other entities desiring to access or use this information will need to exercise care when applying to obtain and handling the data to ensure that all requirements are met. To ensure that these requirements are met, parties interested in obtaining these rules should seek assistance from competent counsel and other qualified advisors concerning their proposed application and use of this data.

In light of these and other conditions for accessing and using this information, only a very limited of very sophisticated health plans, employers or other entities or their advisors are likely to apply to or qualify to access and use the provider and supplier claims data as contemplated by the rule. Individual consumers, and most employers generally will only benefit from the new access allowed to this data indirectly, by accessing the analysis of these entities.

For Help or More Information

If you need help responding to this new guidance or otherwise to deal with other health plan or insurance, employee benefit, human resources, compensation, health care matters or related matters, please contact the author of this update, Cynthia Marcotte Stamer.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with health and managed care, insurance and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend insured and self-insured medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals. She also has worked extensively with Medicare and Medicaid Advantage, association, employer and other group insurance arrangements, MEWAs, fraternal benefit and mutual aid programs, government programs, and a broad range of other specialized health and other programs and insurers to design and administer arrangements in response to their unique regulatory and operational needs. A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer here. For important information concerning this communication click here.

About Solutions Law Press

Comments Off on CMS Final Medicare Rule Imposes Many Conditions On Access To Medicare Claims Data To Evaluate Providers & Suppliers | 105(h), Affordable Care Act, CHIP, COBRA, Employee Benefits, Employers, Employment Tax, ERISA, Excise Tax, Fiduciary Responsibility, FMLA, Health Care Reform, Health Plans, HIPAA, Human Resources, Income Tax, Insurance, Malpractice, Medicare Part D, Mental Health, Mental Health Parity, Patient Empowerment, Patient Protection and Affordable Care Act, Payroll Tax, Preemption, Prescription Drugs, Protected Health Information, Reporting & Disclosure, Tax Credit, Wellness Programs | Tagged: benefits, Employee Benefits, employee benefits policy, Employer, Health Care Reform, Health Insurance, health issuer, Health Plans, health policy, instruction, Insurance, Insurer, speech, Speeches, Training, WEB | Permalink
Posted by Cynthia Marcotte Stamer

EBSA Releases Collection of New M-1 and Other Guidance Impacting Multiple Employer Welfare Plans

December 5, 2011

Multiple and multi-employer health and other welfare plans are subject to special Form M-1 and other reporting and disclosure and other requirements under Federal law as amended by the Patient Protection and Affordable Care Act (“Affordable Care Act”).

The Department of Labor’s Employee Benefits Security Administration (“EBSA”) updated its website with the following new guidance under the Affordable Care Act today:

Proposed Rule on Ex Parte Cease and Desist and Summary Seizure Orders: Multiple Employer Welfare Arrangements, available at http://www.dol.gov/ebsa/pdf/proposedm1revisionsreg1.pdf
Proposed Rule on Filings Required of Multiple Employer Welfare Arrangements and Certain Other Entities, available at http://www.dol.gov/ebsa/pdf/proposedm1revisionsreg2.pdf
Notice of Proposed Revision of Annual Information Return/Report, available at http://www.dol.gov/ebsa/pdf/proposedm1revisionsreg3.pdf
Notice of Proposed Revision of the Form M-1, available at http://www.dol.gov/ebsa/pdf/proposedm1revisionsreg4.pdf
Proposed Form M-1 Revisions, available at http://www.dol.gov/ebsa/proposedm1revisions.html
Fact Sheet, available at http://www.dol.gov/ebsa/newsroom/fsproposedm1revisions.html
Related News Release, available at http://www.dol.gov/ebsa/newsroom/2011/11-1677-NAT.html

For More Information Or Assistance

Widely published on health benefit and other related matters, Ms. Stamer’s insights and articles have been published by the HealthLeaders, Modern Health Care, Managed Care Executive, the Bureau of National Affairs, Aspen Publishers, Business Insurance, Employee Benefit News, the Wall Street Journal, the American Bar Association, Aspen Publishers, World At Work, Spencer Publications, SHRM, the International Foundation, Solutions Law Press and many others.

For additional information about Ms. Stamer and her experience, see www.CynthiaStamer.com.

Comments Off on EBSA Releases Collection of New M-1 and Other Guidance Impacting Multiple Employer Welfare Plans | 105(h), Affordable Care Act, CHIP, Claims Administration, COBRA, Disability, Disability, Employee Benefits, Employers, Employment Tax, ERISA, Excise Tax, Fiduciary Responsibility, FMLA, Health Care Reform, Health Plans, HIPAA, Human Resources, Income Tax, Insurance, Malpractice, Medicare Part D, Mental Health, Mental Health Parity, Patient Empowerment, Patient Protection and Affordable Care Act, Payroll Tax, Preemption, Prescription Drugs, Protected Health Information, Reporting & Disclosure, Tax Credit, Wellness Programs | Tagged: benefits, Employee Benefits, employee benefits policy, Employer, Health Care Reform, Health Insurance, health issuer, Health Plans, health policy, instruction, Insurance, Insurer, M-1, MEWA, multi-employer, multiple employer, multiple employer welfare plan, speech, Speeches, Training, WEB | Permalink
Posted by Cynthia Marcotte Stamer

Incentives To Get Employee Into Wellness Education Requires Legal Risk Management

December 3, 2011

Employers and health plans hoping to leverage the cost containment and other benefits of effective wellness programs may find helpful insights from a new Healthy Cal report about The Network for a Healthy California. When designing and administering these programs, however, employers and health plans need to use care to manage nondiscrimination and privacy risks.

Healthy Cal reports that the experience of the The Network for a Healthy California, a partnering program by federal, state, and local agencies, shows that educational programs can help low-income families make better health choices.

According to the Healthy Cal report, the 2009 Pediatric Nutrition Surveillance data from the California Department of Public Health found that roughly 21 percent of the population in Orange County’s between the ages of 5 and 20 years, and 17 percent of children between the ages of 2 and 5 years were obese.

Healthy Cal says the Network created a number of initiatives that have helped many of Santa Ana’s low-income population access healthy foods and conducted a broad range of other educational programs for the population. Noting that the outreach sought improve food choices, cultural and awareness barriers and other understandings and patient and family behaviors and circumstances. Healthy Cal reports that these efforts are paying off. Learn more at Healthy Cal.

Effective education programs are one element of successful wellness and disease management programs. The Network’s efforts show that success from these efforts requires persistence. Of course, making wellness education work starts with getting the employees and their families to the lesson. That often is where the challenge lies.

Employers and health plans often face challenges getting employees and their family to participate in these and other wellness programs. Many employers and health plans try to overcome participation barriers by offering financial or other rewards or penalities. However, legal concerns require that these arrangements be designed and used with great care to ensure that the savings sought from the wellness program are not overshadowed by defense and liability costs.

Financial or other incentive and reward programs of course must be designed to comply with the nondiscrimination rules of the Health Insurance Portability & Accountability Act (HIPAA), the Genetic Information Nondiscrimination Act (GINA) and, perhaps most significantly of late, the Equal Employment Opportunity Commission’s interpretation of the Americans With Disabilities Act physical testing and other disability discrimination rules. Privacy requirements also can be a challenge under these laws unless information collected from screening and other wellness and disease management activities is carefully collected, routed and handled to comply with HIPAA, GINA and other privacy rules. See, e.g, EBSA Issues Guidance on Health PLan Wellness & Disease Management Programs Subject to HIPAA Nondiscrimination Rules; ADAAA Amendment Broader “Disability Definition Not Retroactive, Employer Action Needed To Manage Post 1/1/2009 Risks; Businesses Face Rising Disability Discrimination Enforcement Risks; EEOC Finalizes Updates To Disability Regulations In Response to ADA Amendments Act. A recent Florida District Court decision upholding one employer’s wellness program on the facts and circumstances may provide helpful insights for employers and health plans planning to use these arrangements on steps and evidence to retain to position to claim certain potential defenses to ADA disability discrimination claims. Until more favorable guidance evolves, however, all employers and health plans using these arrangements need to consider the potential exposures and take steps to position against a potential discrimination claim by private plaintiffs, regulators or both.

Meanwhile, all employers and health plans also should review the existing preventive care coverage provided in their health plans to ensure compliance with expanded federal mandates enacted as part of the sweeping new federal health care reform law. See e.g., Affordable Care To Require Health Plans Cover Contraception & Other Women’s Health Procedures.

Vendors enthusiastic about marketing their wellness and disease management programs frequently do not

If you need assistance addressing the legal requirements of your wellness program or other workforce, employee benefit, compensation or risk management concern, contact the author of this update. We also encourage you and others to help develop real meaningful improvements by joining Project COPE: Coalition for Patient Empowerment here by sharing ideas, tools and other solutions and other resources. TheCoalition For Responsible Health Care Policy provides a resource that concerned Americans can use to share, monitor and discuss the Health Care Reform law and other health care, insurance and related laws, regulations, policies and practices and options for promoting access to quality, affordable healthcare through the design, administration and enforcement of these regulations.You also can access information about how you can arrange for training on “Building Your Family’s Health Care Toolkit,” using the “PlayForLife” resources to organize low cost wellness programs in your workplace, school, church or other communities, and other process improvement, compliance and other training and other resources for health care providers, employers, health plans, community leaders and others here.

About Author Cynthia Marcotte Stamer

For additional information about Ms. Stamer and her experience, see www.CynthiaStamer.com.

About Project COPE: The Coalition On Patient Empowerment & Its Coalition on Responsible Health Policy

Sharing and promoting the use of practical practices, tools, information and ideas that patients and their families, health care providers, employers, health plans, communities and policymakers can share and offer to help patients, their families and others in their care communities to understand and work together to better help the patients, their family and their professional and private care community plan for and manage these needs is the purpose of Project COPE.

The best opportunity to improve access to quality, affordable health care for all Americans is for every American, and every employer, insurer, and community organization to seize the opportunity to be good Samaritans. The government, health care providers, insurers and community organizations can help by providing education and resources to make understanding and dealing with the realities of illness, disability or aging easier for a patient and their family, the affected employers and others. At the end of the day, however, caring for people requires the human touch. Americans can best improve health care by not waiting for someone else to step up: Speak up, step up and help bridge the gap when you or your organization can do so by extending yourself a little bit. Speak up to help communicate and facilitate when you can. Building health care neighborhoods filled with good neighbors throughout the community is the key.

The outcome of this latest health care reform push is only a small part of a continuing process. Whether or not the Affordable Care Act makes financing care better or worse, the same challenges exist. The real meaning of the enacted reforms will be determined largely by the shaping and implementation of regulations and enforcement actions which generally are conducted outside the public eye. Americans individually and collectively clearly should monitor and continue to provide input through this critical time to help shape constructive rather than obstructive policy. Regardless of how the policy ultimately evolves, however, Americans, American businesses, and American communities still will need to roll up their sleeves and work to deal with the realities of dealing with ill, aging and disabled people and their families. While the reimbursement and coverage map will change and new government mandates will confine providers, payers and patients, the practical needs and challenges of patients and families will be the same and confusion about the new configuration will create new challenges as patients, providers and payers work through the changes.

For Added Information and Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

For Help Or More Information

If you need assistance in auditing or assessing, updating or defending your organization’s compliance, risk manage or other internal controls practices or actions, please contact the author of this update, attorney Cynthia Marcotte Stamer here or at (469)767-8872.

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer is nationally and internationally recognized for more than 24 years of work helping employers and other management; employee benefit plans and their sponsors, administrators, fiduciaries; employee leasing, recruiting, staffing and other professional employment organizations; and others design, administer and defend innovative workforce, compensation, employee benefit and management policies and practices. Her experience includes extensive work helping employers implement, audit, manage and defend union-management relations, wage and hour, discrimination and other labor and employment laws, privacy and data security, internal investigation and discipline and other workforce and internal controls policies, procedures and actions. The Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer works, publishes and speaks extensively on management, reengineering, investigations, human resources and workforce, employee benefits, compensation, internal controls and risk management, federal sentencing guideline and other enforcement resolution actions, and related matters. She also is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly.

About Solutions Law Press

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Posted by Cynthia Marcotte Stamer

HHS Chides Insurer For “Excessive” Premium Increases After Affordable Care Act Rate Audit

November 21, 2011

The U.S. Department of Health and Human Services (HHS) is seeking to publicly shame Everence Insurance of Pennsylvania for charging small businesses what HHS claims are “unreasonably high” premium increases.

According to HHS, its first federal rate review under the Affordable Care Act found that Everence’s 12 percent rate increase for small businesses in Pennsylvania. After reviewing the rate, HHS says independent experts determined the choice of assumptions the company based its rate increase on reflected national data rather than reliable and available state data. These assumptions resulted in what HHS characterizes as an “unreasonably high premium in relation to the benefits provided to small businesses by Everence Insurance of Pennsylvania.

While the Affordable Care Act gave HHS the ability to conduct and publish health insurer rate reviews but does not grant HHS the authority to actually force covered health insurers to change their rates. While some state laws may give state regulators this authority, HHS’ authority remains limited to drawing public attention to carrier rate increases that HHS perceives as excessive.

In an effort to use public opinion to chastise Everence Insurance of Pennsylvania, HHS is using its media might to publicize its findings. “We have called on this insurer to immediately rescind the rate, issue refunds to consumers or publicly explain their refusal to do so,” said Steve Larsen, director of the Center for Consumer Information and Insurance Oversight at the Centers for Medicare & Medicaid Services.

HHS’s announcement of its findings about Everence Insurance of Pennsylvania marks the first of many reviews that HHS will do in addition to insurance rate reviews already being done by states. HHS says it intends to review all health insurer proposals to raise rates by 10 percent or more this year.

Companies that HHS finds have made excessive rate increases can either reduce their rate hikes or post a justification on their website within 10 days of the rate review determination. As of publication, Everence Insurance of Pennsylvania had not published a public rebuttal to the HHS announcement on its website or indicated how it plans to respond to the announcement. See here.

For More Information Or Assistance

For additional information about Ms. Stamer and her experience, see www.CynthiaStamer.com.

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Posted by Cynthia Marcotte Stamer

OCR 1st HIPAA Privacy, Security & Breach Notification Compliance Audits Begin

November 9, 2011

The kickoff of a new compliance audit pilot program provides another reason for health care providers, health plans, healthcare clearinghouses and their business associates to get serious about compliance with the privacy, security and data breach requirements of the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

OCR Pilot Audit Program Begins

On November 8, 2011, the Office of Civil Rights (OCR) of the Department of Health & Human Services (HHS) announced that it will begin auditing HIPAA compliance this month under a new pilot program.

As amended by the American Recovery and Reinvestment Act of 2009 in Section 13411 of the HITECH Act, requires HHS to provide for periodic audits to make sure covered entities and business associates are complying with the HIPAA Privacy and Security Rules and Breach Notification standards. To carry out this mandate, OCR is piloting a program to perform up to 150 audits of covered entities to assess privacy and security compliance between November 2011 and December 2012.

The commencement of OCR HIPAA compliance audits is yet another sign that covered entities and their business associates should get serious about HIPAA compliance. The audit program serves as a new part of OCR’s health information privacy and security compliance program. While OCR says that it presently views the pilot audits as primarily a compliance improvement tool, this does not mean violators should expect a free walk.

Even before the impending audits, HIPAA Privacy exposures of covered entities for failing to comply with HIPAA already had risen significantly. Earlier this year, OCR imposed a $4.3 Million Civil Money Penalty (CMP) against Cignet Health of Prince George’s County (Cignet) for violating HIPAA. Meanwhile, the Department of Justice has secured several criminal convictions or pleas under HIPAA’s criminal provisions. Under amendments made by the HITECH Act, state attorneys general also now are empowered to bring civil lawsuits against covered entities and business associates that commit HIPAA violations that injure citizens in their state under certain circumstances. Eventually, individuals injured by HIPAA violations also will get the right to share in a portion of certain HIPAA recoveries.

These and other audit and enforcement activities send a strong message that covered entities and their business associates need to get serious about HIPAA compliance. As stated by OCR Director Georgina Verdugo when announcing the Mass General Resolution Agreement, “To avoid enforcement penalties, covered entities must ensure they are always in compliance with the HIPAA Privacy and Security Rules,” Verdugo added, “A robust compliance program includes employee training, vigilant implementation of policies and procedures, regular internal audits, and a prompt action plan to respond to incidents.” Learn more here.

For Help With Monitoring Developments, Compliance, Investigations Or Other Needs

If you need assistance monitoring federal health reform, policy or enforcement developments, or to review or respond to these or other health care or health IT related risk management, compliance, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer, can help.

Vice President of the North Texas Health Care Compliance Professionals Association, a member of the American College of Employee Benefit Counsel, Past Chair of the ABA RPTE Employee Benefits & Other Compensation Arrangements Group, Past Chair of the ABA Health Law Section Managed Care & Insurance Section and the former Board Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer has extensive experience advising and assisting health care providers, health plans, their business associates and other health industry clients to establish and administer medical privacy and other compliance and risk management policies. Ms. Stamer also regularly helps clients deal with OCR and other agencies, publishes and speaks extensively on medical and other privacy and data security, health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns. Her publications and insights appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications. Her insights on the required “culture of compliance” with HIPAA are frequently included in medical privacy related publications of the Atlantic Information Service, Modern Health Care, HealthLeaders and many others. Among others, she has conducted privacy training for the Association of State & Territorial Health Plans (ASTHO), the Los Angeles Health Department, the American Bar Association, the Health Care Compliance Association, a multitude of health industry, health plan, employee benefit and other clients, trade and professional associations and others. You can get more information about her HIPAA and other experience here or may contact her at (469) 767-8872 or via e-mail here.

You can review other selected publications and resources and additional information about the employment, employee benefits and other experience of Ms. Stamer here.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

About Solutions Law Press

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Posted by Cynthia Marcotte Stamer

EBSA Plans To Include Health Care Reform Compliance In Health Plan Audits Beginning In FY 2012; Disputes OIG Criticism Of ACA Enforcement Efforts

October 30, 2011

Insurance companies administering certain self-insurance arrangements for employers or certain other entities may qualify as exempt from the information reporting obligations imposed under Internal Revenue Code section 6050W.

Notice 2011-78 provides relief to insurance companies administering certain self-insurance arrangements on behalf of an employer or other entity from any information reporting obligations under section 6050W of the Internal Revenue Code. Insurance companies may rely on the notice until the regulations under section 6050W are amended. The IRS published Notice 2011-78 in the Internal Revenue Bulletin 2011-41 on October 11, 2011.

For More Information Or Assistance

If you need help reviewing, updating, administering or defending your health benefit or other benefit or insurance program for compliance with ACA or other federal or state employee benefit, insurance, health care or other laws or regulations, or with any other employment, employee benefit, compensation or internal controls matter, please contact the author of this article, attorney Cynthia Marcotte Stamer.

For additional information about Ms. Stamer and her experience, see www.CynthiaStamer.com.

Comments Off on EBSA Plans To Include Health Care Reform Compliance In Health Plan Audits Beginning In FY 2012; Disputes OIG Criticism Of ACA Enforcement Efforts | 105(h), Affordable Care Act, CHIP, COBRA, Employee Benefits, Employers, Employment Tax, ERISA, Excise Tax, Fiduciary Responsibility, FMLA, Health Care Reform, Health Plans, HIPAA, Human Resources, Income Tax, Insurance, Malpractice, Medicare Part D, Mental Health, Mental Health Parity, Patient Empowerment, Patient Protection and Affordable Care Act, Payroll Tax, Preemption, Prescription Drugs, Protected Health Information, Reporting & Disclosure, Tax Credit, Wellness Programs | Tagged: Affordable Care Act, benefits, Employee Benefits, employee benefits policy, Employer, Health Care, Health Care Reform, Health Insurance, health issuer, Health Plans, health policy, instruction, Insurance, Insurer, speech, Speeches, Tax, Training, WEB | Permalink
Posted by Cynthia Marcotte Stamer

EBSA Plans To Include Health Care Reform Compliance In Health Plan Audits Beginning In FY 2012; Disputes OIG Criticism Of ACA Enforcement Efforts

October 7, 2011

Look for the Department of Labor Employee Benefit Security Administration (EBSA) to begin looking at compliance with the group health plan reform mandates of the Patient Protection & Affordable Care Act (PPACA) and amended by the Health Care and Education Reconciliation Act (HCERA)(collectively “ACA”) requirements as part of health plan audits in its Fiscal Year 2012.

Assistant Secretary of Labor Phyllis Borzi announced EBSA’s plan to begin examining ACA compliance as part of broader health plan compliance audits that the EBSA intends to conduct in Fiscal Year 2012 in her response to a critique of EBSA’s ACA inplementation and enforcement efforts contained in a September 30, 2011 audit report issued by the Departmentof Labor’s Office of Inspector General. According to that response, EBSA has developed a comprehensive checklist for auditing ACA compliance by health plans that it plans to use as part of health plan audits and has conducted significant staff training as part of its ACA implementation activities. In light of EBSA plans to add ACA compliance to its health plan audits in 2012, employer and union health plans, their sponsors, insurers and administrators should take appropriate steps to ensure that their programs terms and practices are up to date with these requirements.

Ms. Borzi shared the plans for audit as part of a broader rebuttle on behalf of EBSA to criticisms contained in a September 30, 2011 report by the U.S. Department of Labor Office of Inspector (OIG) critical of the effectiveness and speed of EBSA’s efforts to implement certain health care reform provisions of ACA.

Enacted on March 23, 2010, ACA makes EBSA, along with the Internal Revenue Service and the Department of Health & Human Services, a key player in the implementation and enforcement of the health benefit targeted reforms enacted as part of its sweeping health care reforms. The September 30, 2011 OIG report identified various areas of improvement that OIG indicated EBSA should make to its implementation efforts based on OIG’s review of efforts by the EBSA to carry out its responsibilities to interpret, implement and enforce these reforms.

OIG Concerns

While its September 30, 2011 report titled “Further Action By EBSA Could Help Ensure PPACA Implementation And Compliance,” (OIG Report) acknowledged the significant actions taken by EBSA toward implementing ACA, the OIG Report still found that EBSA should take additional action to help ensure the timely and effective implementation and enforcement of ACA’s reforms.

The most significant criticism expressed in the OIG report related to the adequacy of work and data reported by EBSA to HHS for HHS to use to define the benefits to be considered “essential benefits” under ACA. Under ACA, EBSA was required to provide HHS with the results of a survey of benefits typically covered by employers that is sufficiently broad to enable HHS to determine benefits provided under a typical employer plan. The OIG Report expresses several concerns about the breadth and validity of the information that EBSA provided to HHS. According to the OIG, EBSA was unable to state that the report it provided HHS was broad enough to encompass all benefits EBSA considered to be typically covered by employers. Moreover, EBSA did not address all benefits HHS requested. As a result, OIG expressed concern that HHS may not be able to ensure that State Insurance Exchanges offer the appropriate essential health benefits required by ACA.

In addition to its critique of EBSA’s essential benefits survey, the OIG also concluded:

EBSA could work with Treasury and HHS to establish a public timeline for addressing the public comments received on interim-final PPACA regulations and issuing final regulations;
EBSA should have included the ACA requirements in its health plan investigations to better leverage its enforcement resources to assist plans in complying with the new regulations; and
EBSA should develop a regulation concerning MEWAs under PPACA Section 6604, regarding the applicability of State law as a means to combat fraud and abuse.

In light of these findings, the OIG recommended that EBSA take the following actions to strengthen its ACA implementation and enforcement actions:

Work with the Departments of HHS, Treasury, and the Office of Management and Budget to establish specific timetables to respond to public comments and issue final regulations;
Incorporate the ACA requirements immediately into the enforcement program to assist plans in complying with ACA;
Provide HHS with the results of a survey of benefits typically covered by employers that is sufficiently broad to enable HHS to determine benefits provided under a typical employer plan; and
Proceed with rulemaking relative to MEWAs under ACA section 6604.

EBSA Says Will Start Checking ACA Compliance in FY 2012 But Response Disputes Certain OIG Findings

While agreeing with the first and last recommendations, Ms. Borzi defended EBSA’s decision to delay auditing of health plan compliance with ACA and the adequacy of the survey data it reported to HHS for use in establishing essential benefits under ACA.

Concerning the auditing, Ms. Borzi said that EBSA has developed a comprehensive checklist to promote consistent investigations of ACA compliance, which EBSA plans to begin using when it conducts compliance assessments as part of its Fiscal Year 2012 Health Benefits Security Project as part of a broad range of implementation activities that EBSA has performed. Ms. Borzi’s response to the OIG recommendations indicated that EBSA disagrees with OIG’s assessment that EBSA should be auditing compliance with ACA as part of its current year audits. Rather, Ms. Borzi indicated that EBSA’s assessment and experience leads it to believe it more suitable for EBSA to use a phased implementation approach under which EBSA which delayed ACA compliance audits pending the development of regulations and after plans and insurers have had the opportunity to proccss the implementing regulations and related guidance and benefit from EBSA’s extensive outreach.

Ms. Borzi also took exception to the OIG’s criticism of EBSA’s survey. In her response, she states that the report EBSA made to HHS “fully satisfies” the requirements of ACA. She pointed out that ACA “clearly requires the Secretary of HHS, rather than the Secretary of Labor, to determine the scope of benefits offered by a typical employer plan. Thc stated purpose of the Secretary of Labor’s survey is to inform this determination.” According to Ms. Borzi, the survey is based on the National Compensation Survey conducted regularly by the Department’s Bureau of Labor Statistics uses a large, nationally representative sample of employers to collect detailed information on whether particular benefits are included in employer health plans. Ms. Borzi concluded that this survey “will al1ow the Secretary of HHS to determine which are offered by a typical employer plan.

Likewise, Ms. Borzi disagreed with the OIG’s criticism that the report provided to HHS does not expressly tate which benefits are “typical” as unfounded. According to Ms. Borzi, the statute docs not require the DOL to determine a specified threshold of incidence above which (and only above which) the benefit should be considered “typical.” As a result, Ms. Borzi concluded that the EBSA report, by providing detailed data on the incidence of different benefits, fulfills the statutory purpose and requirements without taking on the function of the Secretary of HHS.

Ms. Borzi’s response also reported the EBSA’s disagreement with the OIG’s assertion that EBSA’s approach to the report could impair the public comment process. She stated that the report and associated supporting materials are easily available to the public and that commcntcrs are free to provide their views on the survey and on what benefits arc offered by a typical employer plan. Furthermore,Ms. Borzi pointed to planned opportunities for public input announced by the Secretary of HHS as offering additional opportunities for public input.

For More Information Or Assistance

For additional information about Ms. Stamer and her experience, see www.CynthiaStamer.com.

Comments Off on EBSA Plans To Include Health Care Reform Compliance In Health Plan Audits Beginning In FY 2012; Disputes OIG Criticism Of ACA Enforcement Efforts | 105(h), Affordable Care Act, CHIP, COBRA, Employee Benefits, Employers, Employment Tax, ERISA, Excise Tax, Fiduciary Responsibility, FMLA, Health Care Reform, Health Plans, HIPAA, Human Resources, Income Tax, Insurance, Malpractice, Medicare Part D, Mental Health, Mental Health Parity, Patient Empowerment, Patient Protection and Affordable Care Act, Payroll Tax, Preemption, Prescription Drugs, Protected Health Information, Reporting & Disclosure, Tax Credit, Wellness Programs | Tagged: benefits, Employee Benefits, employee benefits policy, Employer, Health Care Reform, Health Insurance, health issuer, Health Plans, health policy, instruction, Insurance, Insurer, speech, Speeches, Training, WEB | Permalink
Posted by Cynthia Marcotte Stamer

ONC Hires APP Design, Inc. To Run Patient E-Consent Trial Project

October 3, 2011

ONC’s Office of the Chief Privacy Officer recently awarded a contract to APP Design, Inc. to find an efficient, effective, and creative way to help patients better understand their choices about whether and when their health care provider can share their health information electronically, including sharing it with a health information exchange organization. The project team will design, develop, and pilot innovative ways to electronically carry out existing patient choice policies, while improving business processes for health care providers. To learn more about the E-Consent Trial project, please see the Statement of Work. ONC’s formal launch of the E-Consent Trial Project will be in October.

For Assistance or Additional Information

Nationally and internationally known for her knowledge and work on health and other employee benefit matters and engaging and informative presentations, attorney, author and policy advocate Cynthia Marcotte Stamer will help you prepare your plan and organization to cope with these and other challenges of understanding and coping with health care reform.

Chair of the American Bar Association (ABA) RPPT Employee Benefits & Other Compensation Arrangements, an ABA Joint Committee on Employee Benefits Council Representative, incoming ABA TIPS Employee Benefit Plan Committee Vice Chair, former ABA Health Law Section Managed Care & Insurance Interest Group Chair, past Southwest Benefits Association Board Member, Employee Benefit News Editorial Advisory Board Member, Board Certified in Labor and Employment Law and a widely published speaker and author, Ms. Stamer has more than 24 years experience advising businesses, plans, fiduciaries, insurers and governments on health care, retirement, employment, insurance, :and tax program design, administration, defense and policy and related employment, insurance and health care matters. Her experience includes extensive experience advising insured and self-insured ERISA group medical and other plans, Medicare and Medicaid Advantage plans, mini-med, high-deductible and other consumer driven medical, long-term care, occupational injury, ex-pat, association, fraternal benefit and other managed care and medical benefit plans and insurers, their service providers, insurers, sponsors, fiduciaries, technology providers and others. A primary drafter of the Bolivian pension law, Ms. Stamer also has more than 30 years experience working on legislative and regulatory health care, pension, workforce, education and immigration reform matters including extensive work on the Pension Protection & Affordable Care Act, HIPAA, COBRA, state managed care and other insurance and other laws. In addition to her experience advising governments and others internationally about these matters, she regularly advises and represents employers, employee benefit plans, insurers, health care and managed care providers and others about evolving laws and regulations and assists them in dealing with Congress, the Internal Revenue Service, the Department of Labor, Immigration and Customs, OCR, OIG, CMS and other HHS agenices, the FTC, the Justice Department, state insruance and health departments, and others.

A widely published author and popular speaker, Ms. also regularly publishes and speaks for a broad range of organizations including American Bar Association, Aspen Publishers, World At Work, Benefits Magazine, Employee Benefit News, Spencer Publications, SHRM, the International Foundation, Solutions Law Press and many others. She currently or previously has served on the editorial advisory board of Employee Benefits News, BNA Employee Benefits CDRolm and a wide range of other highly regarded publications. Her insights on these and other matters have appeared in Managed Care Executive, Health Leaders, Private Payers News, the Wall Street Journal, various publications of the Bureau of National Affairs, Aspen, Atlantic Information Serices, the Wall Street Journal, and many other industry and news publications. In recognition of this extensive record of employee benefit experience and involvement, Ms. Stamer recently was selected to be inducted as a Fellow in the American College of Employee Benefits Counsel.

About Solutions Law Press

Comments Off on ONC Hires APP Design, Inc. To Run Patient E-Consent Trial Project | 105(h), Affordable Care Act, CHIP, COBRA, Employee Benefits, Employers, Employment Tax, ERISA, Excise Tax, Fiduciary Responsibility, FMLA, Health Care Reform, Health Plans, HIPAA, Human Resources, Income Tax, Insurance, Malpractice, Medicare Part D, Mental Health, Mental Health Parity, Patient Empowerment, Patient Protection and Affordable Care Act, Payroll Tax, Preemption, Prescription Drugs, Protected Health Information, Reporting & Disclosure, Tax Credit, Wellness Programs | Tagged: benefits, Electronic Consents, Employee Benefits, employee benefits policy, Employer, Health Care Reform, Health Insurance, health issuer, Health Plans, health policy, instruction, Insurance, Insurer, ONC, Patient Empowerment, speech, Speeches, Training, WEB | Permalink
Posted by Cynthia Marcotte Stamer

HHS Projects Medicare Advantage Enrollment Will Rise As Premiums Decline In 2012; Plans Face Increased Regulation & Enforcement

September 25, 2011

Medicare Advantage enrollment will rise and premiums will decline in 2012. While plans can expect increased enrollment, they also face increasing challenges in managing the demands of increased government regulation under Health Care Reform and other new regulations, as well as rising governmental scrutiny of premiums and compliance. Consequently, while more individuals than ever are expected to sign up for Medicare Advantage Plan coverage, the plans still face significant compliance and operational challenges.

According to the Department of Health & Human Services (HHS) , Medicare Advantage premiums on average will be 4% lower in 2012 than in 2011. Meanwhile HHS reports that Medicare Advantage plans project enrollment to increase by 10%. This follows an earlier HHS announcement that average prescription drug plan premiums will remain virtually unchanged in 2012.

Of people with Medicare, HHS reports 99.7% continue to enjoy access to a Medicare Advantage plan, and benefits will remain consistent with those offered in 2011. To offset declining premiums and other costs, however, many industry experts expect that plans will make greater use of technology in place of human staffing, cut back on broker compensation and utilization and implement other operational changes to help control operations costs.

While many Medicare Adtange and Medicaid Advantage Plans will benefit from increased enrollment, producing promised benefits and avoiding regulatory sanctions amid tightening budgets remains a challenge for many of these plans. Medicare and Medicaid Advantage plans are tightly regulated by federal and state law. Over the past few years, the compliance, premiums, profits and other activities of these and other health plans have been heavily scruitinzed by Congress and federal and state regulators. As part of the stepped up health care fraud and other cost containment efforts, federal regulators have stepped up audit and enforcement against these programs. Several plans have suffered administrative sanctions or other discipline under these laws. Most commentatorys anticipate this scrutiny to expand in 2012.

Learn more here.

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Posted by Cynthia Marcotte Stamer

4th Circuit Rejects Two Challenges To Affordable Care Act Constitutionality

September 8, 2011

The Fourth Circuit this morning (September 8, 2011) published decisions ruled rejecting two lawsuits challenging the constitutionality of the Patient Protection and Affordable Care Act on jurisdictional grounds in Liberty University v. Geithner and Commonwealth of Virgina v. Sebelius.

Cynthia Marcotte Stamer will discuss this new development and other health care reform issues when she speaks to the Houston Chapter of WEB at 11:30 a.m on September 14, 2011 on “Coping With Health Care Reform: What’s New, What Lies Ahead & What To Do.” The program will cover newly proposed rules that will require health plans and health plan issuers to provide a new summary of benefits and coverage beginning in 2012 and other emerging rules imposed under recently engaged health care reform laws. The program is approved for 1 hour of general continuing education credit by the Texas Department of Insurance. Get details and register online at www.webnetwork.org/houston.

As the debate over the validity and future of the sweeping health care reforms enacted under the Patient Protection and Affordable Care Act (ACA) rages in Congress and the federal courts, employer and other health plan sponsors, insurers, fiduciaries and administrators face the daunting challenge of keeping their health plans compliant, affordable and relevant in the face of the steady rollout of the deluge of new mandates imposed by the Affordable Care Act and other evolving health plan mandates and planning for changes yet to come.

A former national WEB member nationally and internationally known for her knowledge and work on health and other employee benefit matters and engaging and informative presentations, attorney, author and policy advocate Cynthia Marcotte Stamer will help you prepare your plan and organization to cope with these and other challenges of understanding and coping with health care reform.

Ms. Stamer’s presentation will focus on key health care reform information that can help employers and other plan sponsors, insurers, fiduciaries, insurers, administrators and advisors understand and cope with the effects and responsibilities of health care reform including:

Recently proposed and finalized regulations;
Updating you on the status of litigation challenging the ACA health care reforms in the courts;
Updating you on the key developments affecting health care regulatory reforms likely to impact your health plan;
Sharing an updated roadmap of the currently scheduled implementation of key future health benefit reforms enacted under ACA;
Sharing selected tips and strategies for managing compliance and other risks and deal with uncertainties arising as health care reform continues to evolve; and
Audience questions and discussion of questions and ideas.

For additional information about Ms. Stamer and her experience, see www.CynthiaStamer.com.

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Posted by Cynthia Marcotte Stamer

Stamer Speaks 9/14 On Coping With Health Care Reform: What’s New, What Lies Ahead & What To Do

September 3, 2011

Cynthia Marcotte Stamer will speak to the Houston Chapter of WEB at 11:30 a.m on September 14, 2011 on “Coping With Health Care Reform: What’s New, What Lies Ahead & What To Do.” The program will cover newly proposed rules that will require health plans and health plan issuers to provide a new summary of benefits and coverage beginning in 2012 and other emerging rules imposed under recently engaged health care reform laws. The program is approved for 1 hour of general continuing education credit by the Texas Department of Insurance. Get details and register online at www.webnetwork.org/houston.

Recently proposed and finalized regulations;
Updating you on the status of litigation challenging the ACA health care reforms in the courts;
Updating you on the key developments affecting health care regulatory reforms likely to impact your health plan;
Sharing an updated roadmap of the currently scheduled implementation of key future health benefit reforms enacted under ACA;
Sharing selected tips and strategies for managing compliance and other risks and deal with uncertainties arising as health care reform continues to evolve; and
Audience questions and discussion of questions and ideas.

For additional information about Ms. Stamer and her experience, see www.CynthiaStamer.com.

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Posted by Cynthia Marcotte Stamer

ABA TIPS Section Appoints Cynthia Marcotte Stamer Vice Chair of Employee Benefits General Committee

August 16, 2011

The American Bar Association Tort Trial & Insurance Practice Section recently appointed Solutions Law Press Managing Editor Cynthia Marcotte Stamer to serve as Vice-Chair Appointment of the Employee Benefits General Committee for the 2011-2012 fiscal year.

The TIPS Employee Benefits Committee concentrates on helping attorneys and others keep on top of and respond to developments in the constantly evolving practice area of employee benefits, with particular emphasis on litigation and regulatory compliance issues through programs, meetings, publications and other projects and activities. Additional information about involvement in the Employee Benefits Committee and its programs, publications and activities is available here.

A noted Texas-based employee benefits and employment lawyer with extensive involvement in the leadership of the ABA and other professional organizations involved in employee benefits, health care and workforce matters, is nationally and internationally known for her pioneering leadership and work as an attorney, consultant, policy advocate, speaker and author helping businesses, governments, and communities on health and other insurance and employee benefits, patient education and empowerment, wellness and disease management, and other programs, policies, and processes. For more than 24 years, Ms. Stamer’s legal practice has focused on advising and representing employers, insurers, health care providers, community leaders and governments about health care and employee benefits policy and process improvement, quality, performance management, education, compliance, communications, risk management, reimbursement and finance, and other related matters. In addition to her legal practice, Stamer also extensively consults and provides leadership to a broad range of clients, professional and civic organizations, and others on strategies for improving the health care system and the ability of health care providers, payers, employers, community organizations, government agencies to help patients and their families to access cost-effective, quality, affordable health care and other resource needs. She also has worked extensively with a broad range of business and government clients on health care, pension, social security, workforce, insurance and many other related policy matters.

Author of the hundreds of publications and workshops these and other employment, employee benefits, health care, insurance, workforce and other management matters, Ms. Stamer’s insights on employee benefits, insurance, health care and workforce matters in Atlantic Information Services, The Bureau of National Affairs, HealthLeaders, Modern Healthcare, Business Insurance, Employee Benefits News, World At Work, Benefits Magazine, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, the Houston Business Journal, and many other publications. She also regularly conducts training and speaks on these and other management, compliance and public policy concerns. Some recent publications and programs that may be of interest include:

Stamer Speaks 9/14 On Coping With Health Care Reform: What’s New, What Lies Ahead & What To Do
Labor Department 2011 Stats Show Employer Health Coverage & Other Benefit Statistics
Borzi Tells House Committee Current Fiduciary Regs Flawed; Must Fix Loopholes In Investment Advisor Definition To Protect Plans
Labor Department 2011 Stats Show Employer Health Coverage & Other Benefit Statistics
Conviction Highlights Risks Of Misleading Investors
DOL Considers Easing Rules For Electronic Benefit Communications
Improving The Effectiveness Of Compliance & Risk Management By Getting Hr On The Compliance Team
IRS Establishes Safe Harbor Election For Allocating Success-Based Fees Paid On Certain Business Transactions
IRS Changing Substantiation Rules For Business Travel Expenses
9/22/11 Cutoff To Apply For Affordable Care Act Annual Limit Temporary Waiver
Spectrum Healthcare NLRB Charge Settlement Highlights Need To Defend Against Possible Unfair Labor Practices & Other Union Exposures
IRS Releases Health Savings Account, High Deductible Health Plan 2012 Indexed Amounts
IRS Guidance On Affordable Care Act Requirement That Employers Report Cost Of Health Coverage On W-2 Released
Plan Sponsors. Their Owners & Management & Others Risk Personal Liability If Others Defraud Plans Or Mismanage Employee Benefit Plan Responsibilities
Health Plans, Insurers Get Limited & Imperfect Relief From Grace Period Extension For Some New Affordable Care Act Health Claims & Appeals Rules
EEOC Finalizes Updates To Disability Regulations In Response To ADA Amendments Act: Employers Should Manage Risks
Employer Charged With Misclassifying & Underpaying Workers To Pay $754,578 FLSA Back Pay Settlement
Avoiding Liability For Another’s Health Plan Fraud
Health Plans & Employers Beware! $4.3 Million Civil Penalty Shows OCR Serious About HIPAA Enforcement
IRS Expands When HFSAS & HRAs May Allow Over-The-Counter Drug Purchases With Drug Cards
DOL Announces Changes To H-2b Prevailing Wage Calculation Rules
$1 Million + FLSA Overtime Settlement Shows Employers Should Tighten On-Call, Other Wage & Hour Practices
Affordable Care Act Grandfathered Plan Rules Loosened To Allow Insured Plans Making Some Insurance Changes To Qualify
Update Employment Practices To Manage Genetic Info Discrimination Risks Under New EEOC Final Gina Regulations
EEOC Attacks Medical Leave Denials As Prohibited Disability Discrimination
DOL Proposes To Expand Investment Related Services Giving Rise To ERISA Fiduciary Status As Investment Fiduciary

For additional information about Ms. Stamer, upcoming training, publications or other materials or events, see here or contact Ms. Stamer directly via email here or (469) 767-8872.

IIf you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information concerning this communication click here. If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject to here.

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Posted by Cynthia Marcotte Stamer

New Affordable Care Act Guidance Helps Some Health Plans Stay Grandfathered

August 2, 2011

Affordable Care Act To Require Health Plans Cover Contraception & Other Women’s Health Procedures Beginning In 2012

Contraception Mandate Might Not Apply To Certain Religious Employer Plans

Starting with plan years beginning after July 31, 2011, most employer and union sponsored group health plans and group and individual health insurers generally must cover contraceptive and certain other preventive services for women (“Women’s Preventive Services”) at no cost to comply with federal rules that these programs cover preventive care for members with no cost sharing enacted as part of the Patient Protection and Affordable Care Act (“ACA”).

On Monday, August 1, 2011, the Department of Health & Human Services (“HHS”) on Monday, August 1, 2011 announced guidelines (Women’s Preventive Services Guidelines”) that add contraception and a list of women’s health procedures to the preventive care procedures that ACA requires covered health plans and health insurance policies covered by the Affordable Care Act to cover without cost to members. ACA’s general preventive coverage rules generally have required covered health plans and policies to cover without cost a broad list of other preventive care procedures since the first plan year beginning after September 22, 2009.

Interim Final Regulations implementing ACA’s new preventive care mandate published July 14, 2010 interpreted this ACA preventive care mandate broadly to dictate that ACA covered health plans and health insurers cover as preventive services at no member cost hundreds of procedures.

Concerning the Women’s Preventive Services, however, the Interim Final Regulations delayed implementation of requirements to cover Women’s Preventive Services until August 1, 2011 to give time to HRSA time to issue its recommendations about what procedures should qualify as Women’s Preventive Services. When HRSA failed to finalize its input by August 1, 2011, HHS finalized its list of required Women’s Preventive Services now rather than to continue waiting for HRSA’s final input.

Finalization of the list of required Women’s Preventive Services now means covered health plans and policies must add coverage for these listed procedures with no co-pay beginning with all post-July 31, 2012 plan years.

While the published list of required Women’s Preventive Services generally mandates that ACA-covered health plans and policies cover contraceptive services for women at no cost beginning in 2012, some plans sponsored by religious employers and group health policies covering these groups may be exempt from the duty to coverage contraception under a new regulation that HHS, along with the Department of Labor Employee Benefit Services Administration (“EBSA) and the Department of Treasury Internal Revenue Service (“IRS”)(collectively, the “Agencies”) will jointly publish in the Federal Register on August 3, 2011. See here for more detailed information.

Plans & Insurers Should Review & Update Preventive Care & Other Wellness Benefits

Non-grandfathered health plans and policies, their sponsors, insurers, fiduciaries and administrators should carefully review and update their health plans for compliance with the existing preventive care mandates and other evolving rules about disease management and wellness benefits and coverages, as well as to consider the impending requirement to comply with additional Women’s Preventive Services coverage requirements in 2012 as part of their plan design and cost projections.

Existing health plans and health insurance should be reviewed to ensure that the programs appropriately cover all preventive services currently required by the applicable ACA mandates or other laws and re-reviewed for compliance with any updated rules before each plan year to identify any additional costs, changes to plan documents, communications, administrative procedures and vendor contracts required to administer the health plan in accordance with existing rules. For 2012, this should specifically consider the need to comply with the new Women’s Preventive Services coverage requirements that take effect next plan year also should be considered.

In addition to specifically planning for compliance with ACA’s preventive services coverage mandates, all health plans and policies, their sponsors, insurers, fiduciaries and administrators should review the other wellness and disease management components of their plans. In addition to ACA compliance, these arrangements may need redesign to minimize emerging exposures to challenge by the Equal Employment Opportunity Commission (“EEOC”) or private plaintiffs under the Americans With Disabilities Act (“ADA”). Since the Obama Administration took office, the EEOC has taken the position that many common wellness and disease management programs violate the ADA. In addition to these exposures, amendments to the nondiscrimination requirements of the Health Insurance Portability & Accountability Act (“HIPAA”), new nondiscrimination rules added by the Genetic Information & Nondiscrimination Act (“GINA”), federal mental health parity rules, evolving Affordable Care Act claims, coverage and other rules and guidance about essential benefits and other statutory, regulatory and enforcement changes often require updates to common disease management and wellness programs as well as other health plan provisions. Appropriate steps should be taken to review and update these and other plan terms, procedures, communications and practices to maintain compliance and support the ability to enforce plan terms and rely on plan cost projections.

The author of this update, attorney Cynthia Marcotte Stamer frequently conducts training and publishes on these and other matters. She is scheduled to speak about these and other changing health plan requirements in light of health care reform at the September 14, 2011 Houston WEB Chapter lunch and will be conducting briefings on preventive care, wellness and disease management and other rules for several other organizations over the next few months. You can find out about upcoming training or other events and get updates at www.CynthiaStamer.com.

For Help With These Or Other Health Plan Or Employee Benefit Matter

If you would like help reviewing or defending your organizations health plan or other insurance or employee benefit and employment practices in light of these or other laws, please contact attorney Cynthia Marcotte Stamer.

Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 23 years of work, advocacy, education and publications on employee benefit and related matters.

A board certified labor and employment attorney Ms. Stamer continuously advises and assists employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources programs and practices. She works extensively with plan sponsors, insurers, administrators, technology and other service providers and others to develop and operate legally defensible programs, practices and policies that promote the client’s human resources, employee benefits or other management goals. Ms. Stamer also is a widely published author and highly regarded speaker on these and other employee benefit and human resources matters who is active in many other employee benefits, human resources and other management focused organizations.

Ms. Stamer is scheduled to conduct training on these and other health benefit requirements for a number of organizations over the upcoming month. For information about these and other training opportunities or for other resources and information, see here or contact Ms. Stamer directly.

For Help or More Information

If you have questions or need help understanding or responding to the Regulations, with other health benefit design, administration or operations concerns, or with other employee benefits, compensation, labor or employment or other workforce management concerns, please contact the author of this update, Board Certified Labor and Employment attorney and management consultant Cynthia Marcotte Stamer here or at (469)767-8872.

Past Chair of the American Bar Association (ABA) Health Law Section Managed Care & Insurance Interest Group, Chair of the ABA RPTE Employee Benefit and Other Compensation Committee, and a council member of the ABA Joint Committee on Employee Benefits, Ms. Stamer is nationally recognized for her more than 23 years pragmatic and innovative health program work.

Board certified in labor and employment law by the Texas Board of Legal Specialization with extensive leading edge health plan experience, Ms. Stamer has worked continuously throughout her career helping health plan sponsors, fiduciaries, administrators, insurers and others design, administer and defend health and other employee benefit and insurance programs domestically and internationally. She is widely recognized for her experience helping design and implement legally compliant self-insured and insured health reimbursement, mini-med, high-deductible health plans, limited benefit plans, 24-hour and occupational medicine, ex-pat and medical tourism, deductible reimbursement and other creative health benefit programs to solve a wide range of financial and other challenges while coping with changing regulatory and market realities. Her work includes both working with clients to design, document, implement and administer these and other arrangements, as well as the development of wellness and disease management, claims administration and appeals, eligibility, and other administrative services, processes and technologies. She also works with plan fiduciaries, plan sponsors, insurers, administrators, brokers and advisors, bankruptcy trustees, creditors, debtors, service providers and their officers and directors about the prevention, investigation, mitigation and resolutions of civil and criminal liability arising from suspected or known benefit administration claims, breaches of fiduciary duty, privacy and data security breach, vendor disputes and other disputes arising in relation to employee benefit and insurance arrangements. As a continuing part of this representation, Ms. Stamer regularly represents and defends plan sponsors, fiduciaries, third party administrators and other service providers and management officials in dealings with the Department of Labor, Department of Justice, Department of Health & Human Services, Department of Defense, Securities and Exchange Commission, state insurance regulators, state attorneys general and other federal and state regulators and prosecutors and private plaintiffs in connection with investigations, prosecutions, audits and other actions arising from employee benefit, insurance and related arrangements and products.

Recognized in the International Who’s Who of Professionals and bearing the Martindale Hubble Premier AV-Rating, Ms. Stamer also is a highly regarded author and speaker, who regularly conducts management and other training on a wide range of labor and employment, employee benefit, human resources, internal controls and other related risk management matters. Her writings frequently are published by the American Bar Association (ABA), Aspen Publishers, Bureau of National Affairs, the American Health Lawyers Association, SHRM, World At Work, Government Institutes, Inc., Atlantic Information Services, Employee Benefit News, and many others. For a listing of some of these publications and programs, see here. Her insights on human resources risk management matters also have been quoted in The Wall Street Journal, various publications of The Bureau of National Affairs and Aspen Publishing, the Dallas Morning News, Spencer Publications, Health Leaders, Business Insurance, the Dallas and Houston Business Journals and a host of other publications. In addition to her many ABA leadership involvements, she also serves in leadership positions in numerous human resources, corporate compliance, and other professional and civic organizations. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, World At Work, the ICEBS, SHRM and many other national and local publications. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly.

About Solutions Law Press

Stamer Speaks 9/14 On Coping With Health Care Reform: What’s New, What Lies Ahead & What To Do
Labor Department 2011 Stats Show Employer Health Coverage & Other Benefit Statistics
Borzi Tells House Committee Current Fiduciary Regs Flawed; Must Fix Loopholes In Investment Advisor Definition To Protect Plans
Labor Department 2011 Stats Show Employer Health Coverage & Other Benefit Statistics
Conviction Highlights Risks Of Misleading Investors
DOL Considers Easing Rules For Electronic Benefit Communications
Improving The Effectiveness Of Compliance & Risk Management By Getting Hr On The Compliance Team
IRS Establishes Safe Harbor Election For Allocating Success-Based Fees Paid On Certain Business Transactions
IRS Changing Substantiation Rules For Business Travel Expenses
9/22/11 Cutoff To Apply For Affordable Care Act Annual Limit Temporary Waiver
Spectrum Healthcare NLRB Charge Settlement Highlights Need To Defend Against Possible Unfair Labor Practices & Other Union Exposures
IRS Releases Health Savings Account, High Deductible Health Plan 2012 Indexed Amounts
IRS Guidance On Affordable Care Act Requirement That Employers Report Cost Of Health Coverage On W-2 Released
Plan Sponsors. Their Owners & Management & Others Risk Personal Liability If Others Defraud Plans Or Mismanage Employee Benefit Plan Responsibilities
Health Plans, Insurers Get Limited & Imperfect Relief From Grace Period Extension For Some New Affordable Care Act Health Claims & Appeals Rules
EEOC Finalizes Updates To Disability Regulations In Response To Ada Amendments Act: Employers Should Manage Risks
Employer Charged With Misclassifying & Underpaying Workers To Pay $754,578 FLSA Back Pay Settlement
Avoiding Liability For Another’s Health Plan Fraud
Health Plans & Employers Beware! $4.3 Million Civil Penalty Shows OCR Serious About HIPAA Enforcement
IRS Expands When HFSAS & HRAs May Allow Over-The-Counter Drug Purchases With Drug Cards
DOL Announces Changes To H-2b Prevailing Wage Calculation Rules
$1 Million + FLSA Overtime Settlement Shows Employers Should Tighten On-Call, Other Wage & Hour Practices
Affordable Care Act Grandfathered Plan Rules Loosened To Allow Insured Plans Making Some Insurance Changes To Qualify
Update Employment Practices To Manage Genetic Info Discrimination Risks Under New EEOC Final Gina Regulations
EEOC Attacks Medical Leave Denials As Prohibited Disability Discrimination
DOL Proposes To Expand Investment Related Services Giving Rise To Erisa Fiduciary Status As Investment Fiduciary

Comments Off on New Affordable Care Act Guidance Helps Some Health Plans Stay Grandfathered | 105(h), ADA, Affordable Care Act, Claims Administration, Corporate Compliance, Discrimination, Disease Management, Employee Benefits, Employers, ERISA, Fiduciary Responsibility, GINA, Health Care Reform, Health Plans, Human Resources, Insurance, Public Policy | Tagged: Affordable Care Act, Employee Benefits, grandfathered health plan, grandfathered plan, Health Care Reform, Health Insurance, Health Plans, Insurance, medical insurance | Permalink
Posted by Cynthia Marcotte Stamer

Stamer Speaks 9/14 On Coping With Health Care Reform: What’s New, What Lies Ahead & What To Do

July 29, 2011

Cynthia Marcotte Stamer will speak to the Houston Chapter of WEB at 11:30 a.m on September 14, 2011 on “Coping With Health Care Reform: What’s New, What Lies Ahead & What To Do.” Get details and register online at www.webnetwork.org/houston.

Updating you on the status of litigation challenging the ACA health care reforms in the courts;
Updating you on the key developments affecting health care regulatory reforms likely to impact your health plan;
Sharing an updated roadmap of the currently scheduled implementation of key future health benefit reforms enacted under ACA;
Sharing selected tips and strategies for managing compliance and other risks and deal with uncertainties arising as health care reform continues to evolve; and
Audience questions and discussion of questions and ideas.

For additional information about Ms. Stamer and her experience, see www.CynthiaStamer.com.

Comments Off on Stamer Speaks 9/14 On Coping With Health Care Reform: What’s New, What Lies Ahead & What To Do | 105(h), Affordable Care Act, CHIP, COBRA, Employee Benefits, Employers, Employment Tax, ERISA, Excise Tax, Fiduciary Responsibility, FMLA, Health Care Reform, Health Plans, HIPAA, Human Resources, Income Tax, Insurance, Malpractice, Medicare Part D, Mental Health, Mental Health Parity, Patient Empowerment, Patient Protection and Affordable Care Act, Payroll Tax, Preemption, Prescription Drugs, Protected Health Information, Reporting & Disclosure, Tax Credit, Wellness Programs | Tagged: benefits, Employee Benefits, employee benefits policy, Health Care Reform, Health Insurance, Health Plans, health policy, Insurance, Speeches, Training, WEB | Permalink
Posted by Cynthia Marcotte Stamer

Borzi Tells House Committee Current Fiduciary Regs Flawed; Must Fix Loopholes In Investment Advisor Definition To Protect Plans

July 28, 2011

Assistant Secretary of Labor, Employee Benefits Security Administration (EBSA) Phyllis C. Borzi testified Tuesday, July 26, 2011 to the House Committee on Education and the Workforce Subcommitte on Health, Employment, Labor, and Pensions that EBSA a proposed fiduciary regulation that would update EBSA regulations defining when a person is considered a “fiduciary” by reason of giving investment advice for a fee with respect to assets of an employee benefit plan or IRA will help protect employee benefit plan participants by correcting “loopholes” in a “flawed 35-year-old rule” that allow many parties providing advice about the investment of retirement plan assets to escape coverage by ERISA’s fiduciary responsibility rules. The proposed regulations and other stepped up regulations and enforcement of ERISA’s fiduciary protections by the EBSA means that plan sponsors, fiduciaries, investment advisors and other plan service providers and others involved in the sponsorship, design, and administration of an employee benefit plan need to act to manage expanding fiduciary responsibilities and exposures.

Borzi Says Loopholes & Other Flaws In Existing Regulations Hurt Plans & Their Participants

Borzi told the Committee that EBSA believes its rules about the types of advisory relationships that give rise to fiduciary status under the ERISA on the part of those providing investment advice services need to change because “technicalities” and “loopholes” in the current EBSA fiduciary regulations definition of “investment advisor” in effect since 1975 harms participants and beneficiaries by allowing many advisers to easily dodge fiduciary status.

Borzi testified that the five-part regulatory test used under the current regulations to determine when ERISA’s fiduciary requirements apply to “investment advice” and when the advisor is a “fiduciary” significantly narrowed the plain language of the ERISA statute so that much of what plainly is advice about plan investments is not treated as investment advice as fiduciary conduct under ERISA and the person paid to render that advice is not treated as an ERISA fiduciary.

Under current fiduciary regulation, an investment adviser is not treated as a fiduciary accountable for complying with ERISA’s prudence, exclusive benefit, prohibited transaction and other fiduciary responsibility safeguards if and when providing advice that meets each element of a five part test.

Under the current regulation, a person is a fiduciary under ERISA and/or the tax code with respect to their advice only if and when he or she:

Make recommendations on investing in, purchasing or selling securities or other property, or give advice as to their value;
On a regular basis;
Pursuant to a mutual understanding that the advice;
Will serve as a primary basis for investment decisions; and
Will be individualized to the particular needs of the plan.

Borzi told members of Congress this narrow definition of investment advisor exempts a wide range of parties receiving compensation for providing advice about the investment of employee benefit funds from coverage by ERISA’s fiduciary responsibility requirements. Borzi testified that the narrowness of the existing regulation opened the door to serious problems, and changes in the market since the regulation was issued in 1975 have allowed these problems to proliferate and intensify. Borzi says the narrowness of the regulation has harmed some plans, participants, and IRA holders. Research has linked adviser conflicts with underperformance. SEC reviews of certain financial sales practices may also reflect these influences. Finally, EBSA’s own enforcement experience has demonstrated specific negative effects of conflicted investment advice.

Borzi Says Proposed Regulation Would Strengthen Protections For Plans & Their Participants

Borzi said the proposed regulation published in the Federal Register on October 22, 2010 would change the rules defining a person is considered to be a “fiduciary” by reason of giving investment advice for a fee with respect to assets of an employee benefit plan or IRA by modifying the current regulation in effect since 1975 would replace the five-part test of “investment advisor” with a broader definition more in keeping with the statutory language while providing clear exceptions for conduct that should not result in fiduciary status.

According to Borzi, types of advice and recommendations that generally would trigger fiduciary status under the proposed regulations include: (1) appraisals or fairness opinions concerning the value of securities or other property; (2) recommendations as to the advisability of investing in, purchasing, holding or selling securities or other property; or (3) recommendations as to the management of securities or other property.

To be a fiduciary for performing these or other activities treated as fiduciary investment advice, Borzi explained that a person engaging in one of these activities must receive a fee and also meet at least one of the following four conditions:

Represent to a plan, participant or beneficiary that the individual is acting as an ERISA fiduciary;
Already be an ERISA fiduciary to the plan by virtue of having any control over the management or disposition of plan assets, or by having discretionary authority over the administration of the plan;
Be an investment adviser under the Investment Advisers Act of 1940; or
Provide the advice pursuant to an agreement or understanding that the advice may be considered in connection with investment or management decisions with respect to plan assets and will be individualized to the needs of the plan.

At the same time, Borzi testified that the proposed regulation recognizes that activities by certain persons should not result in fiduciary status. Specifically, these are:

Persons who do not represent themselves to be ERISA fiduciaries, and who make it clear to the plan that they are acting for a purchaser/seller on the opposite side of the transaction from the plan rather than providing impartial advice;
Persons who provide general financial/investment information, such as recommendations on asset allocation to 401(k) participants under existing Departmental guidance on investment education;
Persons who market investment option platforms to 401(k) plan fiduciaries on a non-individualized basis and disclose in writing that they are not providing impartial advice; and
Appraisers who provide investment values to plans to use only for reporting their assets to the DOL and IRS.
EBSA Still Working To Address Expressed Concerns

The proposed regulation has prompted a large volume of comments and a vigorous debate. Borzi testified that the EBSA is working hard to hear and consider every stakeholder concern and shared some examples of how EBSA is considering addressing certain of these concerns. Borzi said EBSA is taking multiple steps in its effort to respond to these and other concerns in its efforts to finalize the regulation including:

Borzi told the Committee EBSA is working to better understand how specific compensation arrangements would be affected by the proposed rule and whether clarifications of existing prohibited transactions exemptions would be appropriate. Borzi said EBSA has already begun to issue subregulatory guidance describing some of these clarifications and will continue to do so as necessary as it completes its analysis.

Borzi also said that as EBSA further develops its thinking in this rulemaking, EBSA is paying special attention to the two primary exceptions to fiduciary status under the proposed rule: (1) clarifying the difference between investment education that does not give rise to fiduciary status and fiduciary investment advice; and (2) clarifying the scope of the so-called “sellers’ exception” under which sales activity is not fiduciary advice. In both cases, Borzi said EBSA intends to analyze and address the comments and concerns that were raised during our extensive public comment period.

Finally, Borzi said EBSA is exploring a range of appropriate regulatory options for moving forward, taking into consideration public comments submitted for the record, EBSA’s economic analysis, and relevant academic research. In so doing, Borzi told the Committee EBSA is aiming to address conflicted investment advice while not unnecessarily disrupting existing compensation practices or business models.

Plan Sponsors, Fiduciaries, Service Providers Should Prepare For Tighter Rules While Continuing To Provide Input To EBSA

The proposed changes to the definition of investment advisor is one of many steps that EBSA is taking to tighten the regulations implementing ERISA’s fiduciary requirements and to enforce the protections of ERISA. The proposal to expand the conditions that providing investment advice regarding retirement plan assets will trigger the fiduciary protections of ERISA is designed to expand the reach of those regulations. Service providers involved in providing these or other related services generally will want to review and update their processes, documentation and training to manage new exposures likely to arise from these proposed regulations, while continuing to share feedback to EBSA and other rulemakers.

Service providers are not the only parties that need to update practices and provide input about these rules. Plan sponsors, fiduciaries, service providers, participants and beneficiaries also are impacted. Employers and other plan sponsors, fiduciaries and others need to anticipate and respond effectively to the inevitable efforts by providers of investment advice and other services to avoid or shift liability. Parties securing or relying on advice or services about investments or other responsibilities should:

Carefully, prudently conduct a documented investigation and critical analysis of existing and proposed advisors and other service providers credentials, analysis, performance, contract, recommendations and other conduct;
Carefully review contracts and other materials and secure appropriate constractual and other safeguards;
Require indemnification, insurance and other protections;
Ensure that appropriate action is taken to appoint parties intended to perform fiduciary advisory or other services to manage risks
Secure and maintain appropriate fiduciary and other liability insurance coverage;
Carefully conduct an appropriate, well-documented prudent review of performance, credentials and other relevant factors on a regular basis to preserve ongoing evidence of prudence; and
Other appropriate safeguards to manage risks and liabilities.

To help guard and position themselves to defend against fiduciary exposures plan sponsors, fiduciaries, service providers and others involved in the administration of health or other employee benefit plans should seek the advice of legal counsel with appropriate experience with employee benefit and other related matters to develop an understanding of ERISA and other laws and the duties and liabilities that these rules may create for their organizations and themselves personally. For additional tips and information about managing these risks, see here.

For Help With These Or Other Risk Management Matters

If you need assistance in auditing or assessing, updating or defending your wage and hour or with other labor and employment, employee benefit, compensation or internal controls practices, please contact the author of this update, attorney Cynthia Marcotte Stamer here or at (469)767-8872.

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer is nationally and internationally recognized for more than 23 years of work helping employers; employee benefit plans and their sponsors, administrators, fiduciaries; employee leasing, recruiting, staffing and other professional employment organizations; and others design, administer and defend innovative workforce, compensation, employee benefit and management policies and practices. Her experience includes extensive work helping employers implement, audit, manage and defend wage and hour and other workforce and internal controls policies, procedures and actions. The Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer works, publishes and speaks extensively on wage and hour, worker classification and other human resources and workforce, employee benefits, compensation, internal controls and related matters. She also is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly.

About Solutions Law Press

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Posted by Cynthia Marcotte Stamer

Spectrum Healthcare NLRB Charge Settlement Highlights Need To Defend Against Possible Unfair Labor Practices & Other Union Exposures

May 20, 2011

The National Labor Regulations Board (NLRB)’s announcement of a settlement against a Connecticut nursing home operator this week in conjunction with a series of other enforcement actions highlight the need for businesses to tighten defenses and exercise other caution to minimize their organization’s exposure to potential NLRB charges or investigation. As reflected by many of these enforcement acts, the exposures arise both from active efforts by businesses to suppress union organizing or contracting activities, as well as the failure to identify and manage hidden labor law exposures in the design and administration of more ordinary human resources, compliance, business operations and other policies and practices.

On May 17, 2011, the NLRB announced here that Connecticut nursing home operator Spectrum Healthcare has agreed to settle a NLRB case involving multiple allegations of unlawful suspensions, discharges and unilateral changes in violation of the National Labor Relations Act and other federal labor laws by offering reinstatement and back pay to all discharged and striking workers and signing a new three-year collective bargaining agreement with its employees’ union, New England Health Care Employees Union District 1199, SEIU.

Along with the contract and reinstatement of all employees, the company agreed to pay $545,000 in back pay and pension benefits to employees who were harmed by the unfair labor practices, and to expunge any disciplinary records related to the case. As a result, all NLRB charges against the company have been withdrawn. Spectrum admits to no wrongdoing in the settlement.

The settlement, reached midway through a hearing before an NLRB administrative law judge in Connecticut and approved by the judge yesterday, ends a long-running dispute which grew into a strike by almost 400 employees at four nursing homes in Connecticut operated by Spectrum Healthcare, LLC. Complaints issued by the NLRB Regional Office in Hartford alleged that, beginning in the fall of 2009, several months after the prior collective bargaining agreement expired, Spectrum discharged seven employees and suspended three others to retaliate against their union activities and to discourage other employees from supporting the union. In addition, one employee was discharged and seven others were suspended after the employer unilaterally changed its tardiness discipline policy without first bargaining with the union.

The complaints further alleged that in April 2010, employees at the four nursing homes — in Derby, Ansonia, Winsted, and Hartford — went on strike to protest the unfair labor practices. When the strikers offered unconditionally to return to work in late August, the employer refused to take them back. Under federal labor law, if a strike is called because of an unfair labor practice, employees are entitled to reinstatement after an unconditional offer to return to work.

The reinstated employees are due to return to the facilities this week.

The Spectrum Healthcare settlement is reflective of the growing number of NLRB enforcement orders against employers generally and health care providers specifically under the Obama Administration. The Obama Administration has close ties and has expressed its strong and open support for union and union organizing activities. The adoption of a series of union friendly labor law reforms was one of the key campaign promises of President Obama during his election campaign. While other legislative priorities and the change in the leadership of the House of Representatives appears to have slowed efforts to push through this agenda, it has not slowed the Administration’s efforts to support unions with strong enforcement activities. Empowered by a difficult economic and job situation and an awareness of the Obama Administration’s strong support for union organizing and other activities, unions are stepping up organizing efforts and more aggressively challenging employers actions.

Over the past few months, public awareness of the Obama Administration’s aggressive enforcement agenda on behalf of unions has drawn new attention as a result of the widespread media coverage of NLRB actions challenging Boeings planned relocation of certain manufacturing jobs intervention in a planned relocation of certain manufacturing operations. See, e.g., Acting General Counsel Lafe Solomon releases statement on Boeing complaint; National Labor Relations Board issues complaint against Boeing Company for unlawfully transferring work to a non-union facility. However, the Boeing and Spectrum Healthcare actions represent only the tip of the iceberg of the rising number of NLRB enforcement activities, most of which take place with little media or public attention.

Along side the Spectrum Healthcare and Boeing actions, in recent weeks, the NLRB also has been busy with several other enforcement activities. For instance:

On May 9 2011, the NLRB issued a complaint against Hispanics United of Buffalo (HUB), a nonprofit that provides social services to low-income clients, that alleges that HUB unlawfully discharged five employees after they took to Facebook to criticize working conditions, including work load and staffing issues. The case involves an employee who, in advance of a meeting with management about working conditions, posted to her Facebook ; and
On May 17, the NLRB secured a temporary injunction from a U.S. District Court in San Jose California against San Jose area waste hauling company OS Transport LLC, charged with engaging in unfair labor practices including the termination of a lead organizer and another Union supporter, retaliation against Union efforts in the form of unfavorable assignments, threats to Union supporters, and promises of improved treatment of employees who disavow the Union for the alleged purpose of defeating a union. o offer reinstatement to two drivers and restore full assignments to other drivers who had expressed support for a union during an organizing campaign. More Details here.,

In addition, in recent weeks, the NLRB also has:

Sued the state of Arizona on amendment limiting method for choosing union representation on May 5, 2011;
Secured an order requiring a Milwaukee job training center to pay back pay and reinstate workers fired for complaining about bounced paychecks on May 3, 2011;
Ordered a concrete supplier to rehire employees in Indianapolis on May 2, 2011;
Found a New York egg processing plant of unlawful interference and ordered a third election ohm April 27, 2011; and
Secured a settlement from Build.com of unlawful dischrage charges for firing employee based on Facebook comments on April 20

Amid this difficult enforcement environment, business leaders should exercise special care to prepare to defend their actions against both potential organizing efforts, to understand the types of actions and activities that may help fuel charges, and take steps to manage these and other union organization and other labor risks.

For Help With Labor & Employment, Employee Benefits Or Other Risk Management and Defense

If you need assistance in auditing or assessing, updating or defending your labor and employment, employee benefits, compliance, risk manage or other internal controls practices or actions, please contact the author of this update, attorney Cynthia Marcotte Stamer here or at (469)767-8872.

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer is nationally and internationally recognized for more than 23 years of work helping employers; employee benefit plans and their sponsors, administrators, fiduciaries; employee leasing, recruiting, staffing and other professional employment organizations; and others design, administer and defend innovative workforce, compensation, employee benefit and management policies and practices. Her experience includes extensive work helping employers implement, audit, manage and defend wage and hour and other workforce and internal controls policies, procedures and actions. The Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer works, publishes and speaks extensively on wage and hour, worker classification and other human resources and workforce, employee benefits, compensation, internal controls and related matters. She also is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly.

About Solutions Law Press

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Posted by Cynthia Marcotte Stamer

Health Plans & Sponsors Should Monitor, Begin Preparing To Meet New Health Care Reform Low-Income Member Voucher Requirements

April 14, 2011

The Affordable Care Act will require employer sponsored plans to honor vouchers to help pay the cost of coverage for certain lower income individuals and children.

Employers and their health plans will face new responsibilities to figure relevant family income, to provide information about their plans and costs of coverage, and to follow voucher handling requirements for employees and others whose coverage will be paid for in whole or in part with these low-income vouchers. While the rules are still evolving, employers and health plans nevertheless need to start preparing to meet these new responsibilities. Employers and heatlh plans need to keep an eye on the development of these rules at the Federal and state level and begin planning for how they will administer these responsibilities.

A Kaiser Family Foundation Issue Brief discusses some of the ways and implications of income determinations to be made for this purpose.

For Help With Investigations, Policy Updates Or Other Needs

If you have questions or need help responding to the RFI or have any questions or need help understanding or dealing with these or any other workforce management, employee benefits, compensation or other internal control concerns, please contact the author of this update, Board Certified Labor and Employment attorney and management consultant Cynthia Marcotte Stamer here or at (469)767-8872.

Ms. Stamer has advised, represented, trained, and defend a broad range of employer, employee benefit plan, insurance and other clients in relation to electronic and other communications and other employee benefit concerns and frequently publishes and is interviewed about electronic and other employee benefit plan communications and other employee benefit plan matters. Chair of the ABA RPTE Employee Benefit and Other Compensation Committee, a council member of the ABA Joint Committee on Employee Benefits, and the Legislative Chair of the Dallas Human Resources Management Association Government Affairs Committee, Ms. Stamer helps businesses, employee benefit plans and other organizations solve problems, develop and implement strategies to manage people, processes, and regulatory exposures to achieve their business and operational objectives and manage legal, operational and other risks. Board certified in labor and employment law by the Texas Board of Legal Specialization, with more than 23 years management-focused human resource and employee benefits experience, Ms. Stamer helps businesses manage their people-related risks and the performance of their internal and external workforce though appropriate human resources, employee benefit, worker’s compensation, insurance, outsourcing and risk management strategies domestically and internationally. Throughout her career, Ms. Stamer has continuously has advised and represented a broad range of fiduciaries, plan sponsors, bankruptcy trustees, creditors, debtors, service providers and their officers and directors about the prevention, investigation, mitigation and resolutions of civil and criminal liability arising from suspected or know breaches of fiduciary duty, fraud or other misconduct involving health, pension or other employee benefit and insurance arrangements. As a continuing part of this representation, Ms. Stamer regularly represents and defends plan sponsors, fiduciaries, third party administrators and other service providers and management officials in dealings with the Department of Labor, Department of Justice, Department of Health & Human Services, Department of Defense, Securities and Exchange Commission, state insurance regulators, state attorneys general and other federal and state regulators and prosecutors and private plaintiffs in connection with investigations, prosecutions, audits and other actions arising from employee benefit, insurance and related arrangements and products.

Other Helpful Resources & Information

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Posted by Cynthia Marcotte Stamer

Plan Sponsors. Their Owners & Management & Others Risk Personal Liability If Others Defraud Plans or Mismanage Employee Benefit Plan Responsibilities

April 4, 2011

Mitigate Risk With Appropriate Prevention, Monitoring & Response

Executives, board members, and other business leaders of companies providing health, 401(k) or other employee benefits under plans regulated by the Employee Retirement Income Security Act of 1974, as amended (ERISA) should heed a series of recent fiduciary liability settlement orders and lawsuits of the U.S. Department of Labor (Labor Department) as important reminders of the potential personal liability exposures executives can may face if their company’s benefit programs are not appropriately maintained and administered.

Recent Enforcement Actions, Changing Regulations Highlight Fiduciary Risks

On March 29, 2011, the Labor Department sued the owner of Eyeglass Factory, Inc. (EGF), Stephen Schaffer, for breach of fiduciary duties under ERISA by failing to ensure that EGF timely forwarded health plan contributions collected from employees to pay health plan contributions to the plan and failing to ensure that he and other plan fiduciaries and service providers were bonded in accordance with ERISA’s fidelity bond requirements.[i] The Labor Department suit charges that from July 1, 2000 to October 1, 2000, Schaffer and EGF withheld and failed to forward to the health plan contributions deducted from employee pay for health insurance coverage and contributions made to the flexible benefit plan sponsored by EGF from January 1, 2000 to December 4, 2000. The employees’ paycheck withholdings were commingled with the company’s general assets and used for its general operating expenses. The Labor Department is asking the court to order that Schaffer and other defendants make restitution to the plan for the misapplied contributions, including lost opportunity costs, to correct prohibited transactions and to appoint an independent fiduciary to oversee the plans once Schaffer is removed as the plan fiduciary.

The Schaffer suit follows the Labor Department’s successful prosecution of a breach of fiduciary duty action against Larry Lauterback, the president and former owner of a Minnesota Cement Company, for his role in allowing his construction company to commingle with company assets and divert to company use employee health and 401(k) contributions withheld from employee’s pay. In Solis v. Larry Lauterback, [ii] the District Court ordered Lauterback to restore $17,273.18 in unremitted employee contributions and lost opportunity costs to the company’s health and dental plan, and $747.20 in unremitted employee contributions to the company’s 401(k) plan and enjoins Lauterback from serving or acting as a fiduciary or service provider to any employee benefit plan for three years.. The order followed the entry of a consent judgment against Lauterback and the plan sponsor, Slate Cement, Inc., for failure to remit employee contributions, failure to forward employee contributions to medical and dental providers, co-mingling employee contributions of the general assets and using those assets for company operations.

The Schaffer and Lauterback actions taken in March, 2011 are only the most recent in a series of enforcement actions taken against business executives, board members, plan vendors and others for their role in committing or failing to take prudent steps to prevent or redress alleged misconduct relating to the maintenance, administration and funding of various employee benefit programs regulated by ERISA. In recent months and years, the Labor Department has filed several lawsuits against business executives and businesses for alleged breaches of fiduciary duties. While misuse of employee contributions by plan sponsors is a common focus of many of these actions, plan sponsors, plan service providers and members of their management with discretionary authority or responsibility over plan assets or administration or the election of those appointed to administer those responsibilities often arise out of the failure or these individuals to take prudent steps to prevent, monitor or address misconduct by other plan fiduciaries or service providers.[iii]

Plan sponsors, fiduciaries, service providers and their management should anticipate these risks and their attendant responsibilities will continue to rise as the Labor Department moves forward to adopt and implement revisions and enhancements to its fiduciary regulations such as those provided for in the new “Interim Final Regulation Relating to Improved Fee Disclosure for Pension Plans” scheduled to take effect in July, 2011 and the Proposed Regulation on the “Definition of the Term Fiduciary” published by the Labor Department in July and October, 2010 respectively.

Meanwhile, the Labor Department enforcement activities highlight the longstanding and ongoing policy of aggressive investigation and enforcement of alleged misconduct by companies, company officials, and service providers in connection with the maintenance, administration and funding of ERISA-regulated employee benefit plans. In its Fiscal Year 2010, the Labor Department closed 3,112 civil investigations, of which 2,301 (73.94%) resulted in monetary recoveries or other corrective action. The Labor Department referred 264 cases for civil litigation and filed 128 civil lawsuits. Meanwhile on the criminal side, the Labor Department closed 281 criminal investigations and obtained indictments against 96 people.

In addition to prosecutions brought by the Labor Department, companies and individuals that exercise discretion and control of the administration or funding of employee benefit plans regulated by ERISA also may be sued personally by participants and beneficiaries for breach of fiduciary under ERISA. A review of the Labor Department’s enforcement record and existing precedent makes clear that where the Labor Department perceives that a plan sponsor or its management fails to take appropriate steps to protect plan participants, the Labor Department will aggressively pursue enforcement regardless of the size of the plan sponsor or its plan, or the business hardships that the plan sponsor may be facing.

Plan Sponsors, Fiduciaries, Service Providers & Their Management Should Act To Manage Exposures

Given these exposures, businesses providing employee benefits to employees or dependents, as well as members of management participating in, or having responsibility to oversee or influence decisions concerning the establishment, maintenance, funding, and administration of their organization’s employee benefit programs need a clear understanding of their responsibilities with respect to such programs, the steps that they should take to demonstrate their fulfillment of these responsibilities, and their other options for preventing or mitigating their otherwise applicable fiduciary risks.

To help guard and position themselves to defend against these and other exposures, plan sponsors, fiduciaries, service providers and others involved in the administration of health or other employee benefit plans should seek the advice of legal counsel with appropriate experience with employee benefit and other related matters to develop an understanding of ERISA and other laws and the duties and liabilities that these rules may create for their organizations and themselves personally. For additional tips and information about managing these risks, see here.

For Help With These Or Other Risk Management Matters

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer is nationally and internationally recognized for more than 23 years of work helping employers; employee benefit plans and their sponsors, administrators, fiduciaries; employee leasing, recruiting, staffing and other professional employment organizations; and others design, administer and defend innovative workforce, compensation, employee benefit and management policies and practices. Her experience includes extensive work helping employers implement, audit, manage and defend wage and hour and other workforce and internal controls policies, procedures and actions. The Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer works, publishes and speaks extensively on wage and hour, worker classification and other human resources and workforce, employee benefits, compensation, internal controls and related matters. She also is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly.

About Solutions Law Press

[i] Chao v. Stephen Schaffer, the Eyeglass Factory, Inc., No O2-CV-60197, as announced in EBSA Release No. 11-341-CHI (March 29, 2011).

[ii] Solis v. Larry Lauterback, as announced in EBSA Release No 11-322-CHI (March 14, 2011).

[iii] See, e.g. Chao v. Associated Plan Administrators, as announced in EBSA Release No. 07-1265-BOS/BOS 2007-298 (October 16, 2007); Chao v. Starkey, as announced in EBSA Release No. 05-747-ATL (May 2, 2005); Chao v. Perry., as announced in EBSA Release BOS 2002-054 (March 21, 2002); Chao v. Mabry, as announced in EBSA Release No. 160 (March 20, 2002). See also, e.g., Baker v. Kingsley, 2006 WL 2027606 (N.D.Ill.2007); In Re Enron Corp Securities Derivative & “ERISA” Litigation, 284 F.Supp. 511 (S.D.Tex. 2003); Varity Corp. v. Howe, 516 U.S. 489 (1996); Brink v. DeLesio, 496 F. Supp. 1350 (D.Md. 1980).

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Posted by Cynthia Marcotte Stamer

Health Plans, Insurers Get Limited & Imperfect Relief From Grace Period Extension For Some New Affordable Care Act Health Claims & Appeals Rules

March 24, 2011

The Departments of Labor, Health & Human Services and Internal Revenue Service are extending a previously announced enforcement grace period under which the agencies will not take enforcement against health plans or health insurers that attempt to operate in good faith compliance with, but fail to meet certain new requirements for handing medical claims and appeals enacted as part of the Patient Protection and Affordable Care Act (Affordable Care Act). While health plans and insurers working in good faith to comply with the new requirements may find the enforcement relief helpful for dealing with some areas of uncertainty about the interpretation of certain requirements, it is important to keep in mind that the enforcement grace period provides only limited and somewhat imperfect relief. As a result, health plans, health insurers and those responsible for their design and administration are encouraged to continue to move forward on efforts to comply with the new requirement in thoughtful and well-documented manners despite the announced grace period extension.

New Claims & Appeals Requirements & Enforcement Grace Period

As signed into law on March 23, 2010, the Affordable Care Act generally requires that health plans and health insurance policies that are not “grandfathered” to begin complying with a series of new requirements by the first day of the first plan year that begins after September 22, 2010. These new requirements include a number of new requirements about the way that nongrandfathered health plans and health insurance policies handle medical claims and appeals. For instance, the Affordable Care Act as construed by the agencies in interim final regulations published by the agencies on July 23, 201 will require that non-grandfathered group health plans and insurers issuing non-grandfathered health insurance plans and policies:

Implement specified internal and external review procedures that among other things mandate independent external review of medical judgment based decisions in accordance with the regulations for reviews of appeals of medical judgment based denials;
Provide a broad range of new information in notices regarding claims and do so in a culturally and linguistically appropriate manner;
Provide continued coverage pending the outcome of an internal appeal; and
Comply with a laundry list of additional criteria for ensuring that a claimant receives a full and fair review in addition to complying with the requirements of existing Labor Department claims and appeals procedures.

After the agencies jointly published interim final regulations defining and implementing these requirements on July 23, 2010, last September the agencies announced that they would not enforce certain elements (but not all) of the new requirements set forth in the interim final regulations against covered health plans or health insurers seeking to comply in good faith with the new requirements through July 1, 2011. In the March 18, 2011 announcement, the Department of Labor said that the agencies now have agreed to extend this reprieve from agency enforcement of the requirements listed in the guidance against plans seeking to comply in good faith with the new requirements until plan years beginning on or after January 1, 2012.

While offering welcome relief, covered health plans and insurers, their sponsors and issuers should not over-estimate the reach and protection provided by this new guidance. For instance:

First, in order to qualify for the enforcement grace period, efforts must be made to administer the health plan or health insurance policy in good faith compliance with the new requirements during the enforcement grace period.
Second, the enforcement grace period provides only limited relief. The extension to 2012 only four of a series of new requirements set forth in the interim final regulations. Nongrandfathered plans and their administrators and insurers remain accountable for prudently administering claims and appeals in accordance with all other requirements of the Affordable Care Act as well as pre-existing claims and appeals regulations set forth in 2000 claims regulations issued by the Department of Labor pursuant to the Employee Retirement Income Security Act.

Third, the enforcement grace period guidance only means that the agencies will not exercise their power to take action against a non-compliant plan. It does not prevent plan members, health care providers with benefit assignments or other plan beneficiaries from bringing lawsuits against health plans, health insurers or their administrators for failing to comply with the new requirements during post- September 22, 2010 plan years even if the enforcement grace period otherwise protects the plan or insurer from agency enforcement action. This means that health insurers and health plans may still run the risk that plan members or beneficiaries will ask courts to reverse claims or appeals denials or impose other penalties and sanctions against plans or their fiduciaries for failing to meet the new requirements for post-September 22, 2010 plan years.

Finally, and perhaps most significantly, the grace period guidance requires nongrandfathered plans and insurers to make “good faith” efforts to comply with the requirements covered by the relief during the grace period in order to be eligible to claim the relief offered by the enforcement grace period guidance.

Consequently, despite the relief announced March 18, nongrandfathered health plans still have significant work to do to comply with the new Affordable Care Act claims and appeals requirements even during the announced enforcement grace period.

For Help With Affordable Care Act or Other Employee Benefits or HR Needs

If you have any questions or need help responding to the Affordable Care Act or other any other health plan or insurance employee benefit, compensation, workforce or internal control concerns, please contact the author of this update, Cynthia Marcotte Stamer here or at (469)767-8872.

About Solutions Law Press

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Posted by Cynthia Marcotte Stamer

Avoiding Liability For Another’s Health Plan Fraud

February 25, 2011

TPA’s Embezzlement Guilty Plea Reminds Plan Sponsors, Fiduciaries & Service Providers To Ensure Fiduciaries, Administrators & Staff Prudently Selected, Monitored & Bonded

The guilty plea of an Ohio-based third-party administrator to embezzlement of $1 million in plan assets reminds employers and other employee benefit plan sponsors and members of their management participating in plan related activities, plan administrators and other plan fiduciaries and plan service providers (“plan decision-makers”) of the importance of ensuring appropriate, well-documented credentialing and selection, oversight, auditing and bonding the individuals and companies acting as fiduciaries and others participating in administration of plans or their assets (“plan workforce members”) to minimize their potential exposure to potential personal liability as a result of the fraud under the Employee Retirement Income Security Act (ERISA).

Cox Prosecution Reflective DOL Readiness To Prosecute Parties For Misuse of Plan Monies & Other Plan Fraud

According to a February 23, 2011 U.S. Department of Labor (DOL) announcement, Rhonda Sue Irvin Cox, owner of Irvin Administrative Solutions LLC (IAS), pleaded guilty to the embezzlement of $1 million of retirement plan assets from client plans administered by IAS. The DOL reports that between January 2003 and April 2007, Cox plead guilty to using used her position with ISC to embezzle the funds from 12 of 59 plans for which IAS served as a third party administrator. Cox also pleaded guilty to one count of making false statements in documents required under ERISA to be kept and certified by the plans’ administrator. Scheduled to be sentenced on June 1, 2011, Cox faces a maximum of five years in prison on each criminal count, a $250,000 fine and a special assessment. Cox is scheduled to be sentenced on June 1, 2011.

The DOL and Justice Department have a long-standing record of aggressive investigation and prosecution of embezzlement or other fraud impacting health and other employee benefit plans. Their criminal and civil enforcement and prosecution record makes clear this commitment remains strong.

Plan Sponsors, Fiduciaries & Service Providers May Face Civil Liability From When Others Defraud Their Plans

While plan decision-makers generally are aware that individuals defrauding health or other employee benefit plans risk criminal and civil prosecution, many fail to recognize their own potential civil liability exposures that may arise out of the fraudulent acts or other misconduct of another plan workforce member.

Embezzlement of plan assets is one of many acts of misconduct that can create potential fiduciary liability exposure for plan decision-makers under ERISA. Until confronted with potential fraud, misconduct or other misfeasance by a plan fiduciary, service provider or other plan workforce member, many plan decision-makers lack an adequate appreciation of the personal liability they may incur if they cannot demonstrate appropriate steps were taken to protect their health plan from this misconduct.

Under ERISA’s fiduciary responsibility rules, embezzlement or other misuse of employee contributions or other plan assets as well as certain other misconduct or misfeasance by a plan fiduciary, service provider or other plan workforce member can create personal liability exposures for plan decision-makers with responsibility or discretionary authority over the selection, retention, or management of plan workforce members if the plan decision-maker cannot demonstrate appropriate steps were taken to select, monitor and bond the plan workforce and other prudent action was taken to prevent and redress the fraud. Accordingly, health plans, their sponsors, fiduciaries, service providers, their management, and others serving as, or selecting, managing or retaining companies or individuals that participate in the handling of health plan assets or administration should act to strengthen their health plans and themselves against these exposures.

Risk Management Strategies & Tips

When embezzlement or other concern affecting their health plan arises, plan decision-makers concerned about protecting their health plans and themselves must act promptly in a carefully documented, prudent manner to investigate and respond to the concern. They should be prepared to present well-documented evidence of the scope and limits of their responsibility, authority, awareness, and potential for the selection, monitoring and oversight of the plan workforce member or others responsible for the performance of those actions, the adequacy of the bonding arrangements for the plan, and other efforts to prudently protect the plan before, during and after the discovery of the concern. While these and other steps can help strengthen the ability of a plan decision-maker to liability exposures that can result from the other plan workforce member’s embezzlement of plan assets or other misconduct, plan sponsors and plan decision-makers also should acquire suitable fiduciary and other liability insurance coverage and make other arrangements to help provide for the potential financial costs and other demands that are likely to arise in the event that it becomes necessary to investigate or redress fraud or other misconduct. Learn more here.

For Help With Investigations, Policy Review & Updates Or Other Needs

If you need help investigating or responding to fraud or other misconduct affection a health or other employee benefit plan, dealing with an employee benefit plan investigation or enforcement action by the Labor Department, private plaintiffs or another public or private party, reviewing current or proposed health plan processes or procedures, or responding to other employee benefit, labor and employment or other related controls and practices, please contact the author of this update, attorney Cynthia Marcotte Stamer here or at (469)767-8872.

For more than 23 years, Ms. Stamer has counseled, represented and trained employers and other employee benefit plan sponsors, plan administrators and fiduciaries, insurers and financial services providers, third party administrators, human resources and employee benefit information technology vendors and others privacy and data security, fiduciary responsibility, plan design and administration and other compliance, risk management and operations matters. In connection with this work, Ms. Stamer regularly counsels and helps clients to defend a broad range of clients about employee benefit plan fraud and other fiduciary responsibility concerns. Throughout her career, she has represented and served as special counsel to health and other employee benefit plans, plan sponsors, plan service providers, officers, directors and other management officials, bankruptcy trustees, debtors and creditors, and others in connection with health and other employee benefit plan fraud and other fiduciary responsibility and related investigations, prosecutions and other actions involving the Labor Department, IRS, HHS, Justice Department, state insurance and attorneys general, bankruptcy actions, and participant, beneficiary and vendor disputes. She also is recognized for her publications, industry leadership, workshops and presentations on these and other employee benefits, insurance and human resources concerns and regularly speaks and conducts training on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on health care, human resources, employee benefits, data security and privacy, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources including:

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Posted by Cynthia Marcotte Stamer

Proposed New Defined Benefit Plan Annual Funding Notice Rule Reminder of Need to Carefully Manage Pension Plan Responsibilities

November 18, 2010

Plan sponsors and administrators of defined benefit plans must carefully monitor and comply with the funding, notification, insurance and other associated requirements of the minimum funding rules imposed under the Employee Retirement Income Security Act and the Internal Revenue Code. The Department of Labor’s Employee Benefits Security Administration today (November 18, 2010) its Pension Protection Act web page with the Annual Funding Notice for Defined Benefit Plans Proposed Rule, available at here, a fact sheet, available here, a model notice for single employer plans, available here, and a model notice for multiemployer plans, available here.

Pension plan funding, reporting and disclosure and termination requirements are complicated in non-distress situations. This complexity and the potential legal exposures of non-compliance can grow exponentially when a pension plan or one or more of its contributing employers becomes distress. Furthermore, special controlled group, lien and successor liability rules incorporated into these funding requirements often create hidden risks for affiliated employers, lenders, potential purchasers and others dealing with these plans or the businesses that sponsor them. As a consequence, all parties dealing with these plans should exercise care to understand and properly manage these exposures to avoid unintentionally triggering liability under these rules.

For More Information Or Assistance

About Ms. Stamer

Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization, Chair of the American Bar Association (ABA) RPTE Employee Benefit & Other Compensation Group, a Council Member of the ABA Joint Committee on Employee Benefits, Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, management attorney and consultant Cynthia Marcotte Stamer has more than 23 years experience advising and representing employers, health and other employee benefit plans, their sponsors, fiduciaries and plan administrators, consultants, vendors, outsourcers, insurers, governments and others about employment, employee benefit, compensation, and a wide range of other performance, legal and operational risk management practices and concerns. As a part of this work, Ms. Stamer has worked extensively with clients to manage risks and defend practices under a wide range of laws and circumstances. Her experience includes extensive work advising and representing employers, plans, plan fiduciaries, trustees, investors, and others about managing and resolving risks relating to distressed pension and other employee benefit plans, downsizing and other workforce reengineering and other similar matters. A prolific author and popular speaker, Ms. Stamer also publishes, conducts client and other training, speaks and consults extensively on GINA and other employment and employee benefit risk management practices and concerns for the ABA, World At Work, SHRM, American Health Lawyers Association, Institute of Internal Auditors, Society for Professional Benefits Administrators, HCCA, Southwest Benefits Association and many other organizations. Her insights on these and related topics have appeared in Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, Managed Healthcare, Health Leaders, various ABA publications and a many other national and local publications. To learn more about Ms. Stamer, her experience, involvements, programs and publications, see here or contact Ms. Stamer.

Other Resources & Developments

If you found this information of interest, you also may be interested in reviewing other recent Solutions Law Press updates including:

If you or someone else you know would like to receive future updates and notices about upcoming programs and events, please be sure that we have your current contact information – including your preferred e-mail- by creating or updating your profile at here. To unsubscribe, send an e-mail with “Unsubscribe” in the subject here. For important information concerning this communication click here.

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Posted by Cynthia Marcotte Stamer

Affordable Care Act Grandfathered Plan Rules Loosened To Allow Insured Plans Making Some Insurance Changes To Qualify

November 17, 2010

A change to regulations implementing the “grandfathered plan” rules of the Patient Protection and Affordable Care Act (Affordable Care Act) announced yesterday has opened up the possibility that some insured group health plans changing insurers may continue to qualify as “grandfathered health plans” exempted from certain health care reform mandates. Because policy or insurer changes can create challenges in meeting other conditions required to get grandfathered plan status, however, sponsors and administrators of insured group health plans should prepare to timely comply with all applicable Affordable Care Act mandates unless they have verified their ability to prove that their program meets all requirements to qualify for grandfathered plan status will need to confirm that with or without the insurance-related change.

The Affordable Care Act generally requires that insured and self-insured group health plans and group and individual health insurance policies comply with many new federal mandates beginning with the first day of the plan or contract year that begins after September 22, 2010. If a group health plan or health insurance policy existed on March 23, 2010 and otherwise qualifies as a “grandfathered health plan,” however, it may qualify as exempted or for a delayed effective date from some but not these new mandates. By shaping the mandates applicable to group health plans, the grandfather rules will impact both the cost and the design of affected group health plans.

Original Rule About Insurance Changes

Interim Final Regulations issued by jointly by the Departments of Labor, Health & Human Services and Treasury (Agencies) last June established a series of detailed requirements that a group health plan or health insurance policy must meet to qualify as a grandfathered health plan or policy beyond merely existing on March 23, 2010. As part of these requirements, the Interim Final Regulations identified a number of changes and other events that would disqualify a group health plan or insurance policy as a grandfathered plan.

In the case of insured group health plans, changing insurance policies or insurers was not an allowable change for a plan desiring to qualify as grandfathered. As originally interpreted by the Agencies in the Interim Final Regulations, self-insured group health plans were permitted to change third-party administrators without forfeiting grandfathered health plan status as long as the change did not otherwise change the plan terms or design in a way that would disqualify the plan for grandfathered status. In contrast, however, the Agencies original interpretation stated that entering into a new policy, certificate, or contract of insurance for an insured non-collectively bargained group health plan in and of itself would disqualify the group health plan as a grandfathered health plan. The modified rule published on November 16, 2010 (Amended Rule) eliminates this distinction in response to public comments received since its publication of the original guidance.

Amended Rule About Insurance Changes

Under the Amended Rule, the same standards now will determine the effect of a change in vendor or contract on the grandfathered health plan status of a group health plan whether the plan is insured or self-insured. Accordingly, with respect to changes in group health coverage contracts, the Interim Regulations, as modified by the Amended Rule, now provides where insured or self-insured, a group health plan (including a group health plan that was self-insured on March 23, 2010) or its sponsor that enters into a enters into a new policy, certificate, or contract of insurance after March 23, 2010 that is effective before November 15, 2010 generally will cease to be a grandfathered health plan unless the plan meets certain specified conditions. The group health plan must provide to the new health insurance issuer (and the new health insurance issuer must require) documentation of plan terms (including benefits, cost sharing, employer contributions, and annual limits) under the prior health coverage sufficient to demonstrate that except for the contract change, the group health plan otherwise has not been modified or experienced any other event that would otherwise result in its disqualification for grandfathered health plan status under the Interim Final Regulations as modified by the Amended Rule.

As currently drafted, the relief provided in the Amended Rule does not expressly apply to a change in insurer or insurance contract made by a non-collectively bargained group health plan after November 14, 2010 regardless of whether the change in made before deadline for the group health plan to begin complying with the Affordable Care Act (i.e., the first day of the first plan year beginning after March 22, 2010). Additionally, the relief set forth in the Amended Rule does not apply to individual health insurance policies. Where insured coverage is provided not through a group health plan but instead in the individual market, a change in issuer still remains a change in the health insurance coverage after March 22, 2010 that disqualifies the new individual policy, certificate, or contract of insurance for status as a grandfathered health plan for purposes of the Affordable Care Act.

For a more detailed discussion of the grandfathered plan rules and the changes made this week, see here.

For More Information Or Assistance

If you need help reviewing or responding to the grandfather regulations or other health benefit regulations or other related matters please contact Cynthia Marcotte Stamer here or (469) 767-8872.

About Ms. Stamer

Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization, Chair of the American Bar Association (ABA) RPTE Employee Benefit & Other Compensation Group, a Council Member of the ABA Joint Committee on Employee Benefits, Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, management attorney and consultant Cynthia Marcotte Stamer has more than 23 years experience advising and representing employers, health and other employee benefit plans, their sponsors, fiduciaries and plan administrators, consultants, vendors, outsourcers, insurers, governments and others about employment, employee benefit, compensation, and a wide range of other performance, legal and operational risk management practices and concerns. As a part of this work, Ms. Stamer has worked extensively with clients on health care reforms and regulations under the Affordable Care Act and other federal and state laws. A prolific author and popular speaker, Ms. Stamer also publishes, conducts client and other training, speaks and consults extensively on GINA and other employment and employee benefit risk management practices and concerns for the ABA, World At Work, SHRM, American Health Lawyers Association, Institute of Internal Auditors, Society for Professional Benefits Administrators, HCCA, Southwest Benefits Association and many other organizations. Her insights on these and related topics have appeared in Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, Managed Healthcare, Health Leaders, various ABA publications and a many other national and local publications. To learn more about Ms. Stamer, her experience, involvements, programs and publications, see here or contact Ms. Stamer.

Other Resources & Developments

If you found this information of interest, you also may be interested in reviewing other recent Solutions Law Press updates including:

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources available for review here. If you or someone else you know would like to receive future updates and notices about other upcoming Solutions Law Press events, please be sure that we have your current contact information – including your preferred e-mail- by creating or updating your profile at here. For important information concerning this communication click here.

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Posted by Cynthia Marcotte Stamer

DOL Proposes To Expand Investment Related Services Giving Rise to ERISA Fiduciary Status As Investment Fiduciary

October 21, 2010

The U.S. Department of Labor Employee Benefit Security Administration (EBSA) today published a Proposed Regulation that would expand the circumstances when individuals giving investment advice to an employee benefit or employee benefit plan or individual retirement account participant for purposes of the fiduciary definition of Employee Retirement Income Security Act (ERISA) § 3(21) and the prohibited transaction provisions of Internal Revenue Code (Code) § 4975(e)(3)(B).

If adopted as proposed, the Proposed Regulation would broaden the persons considered fiduciaries based on their provision of investment related advice or services to plans, participants or beneficiaries. Additionally, the restatement of these standards also likely will necessitate that both plan fiduciaries and providers of these services tighten agreements and other practices and procedures governing the engagement and delivery of services in order to maintain or protect desired allocations of fiduciary responsibility over these activities.

The deadline for individuals and organizations to comment on the proposed rule is January 19, 2011. Plan sponsors, fiduciaries, service providers and others concerned about the potential impact of the proposed changes should assess the potential implications of the rule and timely submit any comments or concern to the EBSA by this date.

To learn more about the Proposed Rule and its implications, see the more detailed article here.

If your organization needs assistance to evaluate or respond to the Proposed Regulation or reviewing, updating, administering or defending your employee benefit, human resources, compensation or internal control and risk management procedures, documentation, or policies or procedures, please contact the author of this update, Board Certified Labor & Employment attorney Cynthia Marcotte Stamer at (469) 767-8872 or via e-mail here.

Other Resources

If you found this information of interest, you also may be interested in reviewing other recent Solutions Law Press updates including:

About Ms. Stamer

Chair of the American Bar Association (ABA) RPTE Employee Benefit & Other Compensation Group, a Council Member of the ABA Joint Committee on Employee Benefits and Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Cynthia Marcotte Stamer is nationally recognized for her extensive work helping clients develop, implement and defend innovative, practical, legally defensible solutions to their particular health and other employee benefit, employment and insurance needs. Ms. Stamer has more than 23 years experience advising and representing employer, association and other plan sponsors, health and other employee benefit plans, their fiduciaries, plan administrators, consultants, vendors, outsourcers, insurers, governments and others about health plan and product design; administration, legal and operational risk management, vendor and fiduciary credentialing, managed care and vendor contracting, cost-containment, documentation, public policy, enforcement, privacy, technology, litigation and other concerns. Ms. Stamer also publishes, conducts client and other training, speaks and consults extensively on these and other health and managed care program concerns and practices for the ABA, American Health Lawyers Association, Institute of Internal Auditors, Society for Professional Benefits Administrators, HCCA, Southwest Benefits Association and many other organizations. Her insights on these and related topics have appeared in Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, Managed Healthcare, Health Leaders, various ABA publications and a many other national and local publications. To learn more about Ms. Stamer, her experience, involvements, programs and publications, see here or contact Ms. Stamer.

About Solutions Law Press

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Posted by Cynthia Marcotte Stamer

Annual Benefit Limitation Waiver Guidance Offers Fast Acting Employers, Insurers Expanded Options To Meet Affordable Care Act Health Plan Rule

October 3, 2010

Many employers and insurers that act quickly may qualify for a temporary reprieve from the obligation to redesign their group health plans and health insurance policies to comply with the annual benefit limitations on health plan benefits imposed under the Patient Protection and Affordable Care Act (Affordable Care Act) applicable to most health insurance plans and policies beginning with post-September 22, 2010 plan years.

On September 3, 2010, the U.S. Department of Health & Human Service published rules that enable qualifying employers and insurers to obtain a waiver of the application of ACA’s annual limits to their health plan for 2011 (Annual Limit Waiver). In addition to the Annual Limit Waiver relief, HHS on October 1, 2010 also announced plans in the near future to publish additional guidance to provide some relief for mini-meds and certain other plans from the medical loss ratio rules of ACA. Plan sponsors and insurers struggling to redesign their benefit programs to meet ACA’s annual limit and medical loss ration mandates for their 2011 plan year should act quickly to evaluate and where applicable take advantage of the added flexibility that this new guidance may afford regarding their 2011 plan design.

With compliance deadlines impending, however, plan sponsors and insurers must act quickly to leverage these opportunities and make other necessary arrangements to update their health programs to meet new federal requirements. When deciding how to respond to ACA and other new federal health plan rules, plan sponsors and insurers who maintain plans that can qualify as grandfathered plans under ACA should carefully consider all alternatives before deciding to forego this status. Many plan sponsors and insurers feel soaring health coverage costs require that they make cost-saving plan design changes that preclude them from maintaining a grandfathered plan. Creative use of the new Annual Benefit Limitation Waiver, grandfathered plan and other guidance may help mitigate the cost and other challenges of complying with these new federal rules. Read more details.

If your organization needs assistance to apply for an ACA Annual Limit Waiver, reviewing or updating your heath care program design, documentation, policies or procedures in response to ACA or other requirements or with other employee benefit, insurance or human resources matters, please contact the author of this update, Board Certified Labor & Employment attorney Cynthia Marcotte Stamer at (469) 767-8872 or via e-mail here.

Other Resources

If you found this information of interest, you also may be interested in reviewing other recent Solutions Law Press updates including:

About Ms. Stamer

About Solutions Law Press

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Posted by Cynthia Marcotte Stamer

Affordable Care Act’s Health Plan External & Internal Review Safe Harbor & Other Regulations Require Health Plan Updates

August 26, 2010

The Patient Protection & Affordable Care Act (Affordable Care Act) generally mandates that all group and individual health plans and policies comply with these mandates no later than the first plan or policy year beginning after September 22, 2010 unless the plan or policy qualifies as a “grandfathered plan” under the Affordable Care Act. Employer and other health plan sponsors, insurers, fiduciaries and administrators of all federally-regulated employment-based health plans should move quickly to update plan documents, administrative procedures and agreements, decisional criteria, investigation and decision-making documentation, and claims and appeals-related notification and other communications to comply with a series of new Federal guidance governing health plan claims and appeals published in the Federal Register on July 23, 2010 as further supplemented by additional “safe harbor” external review procedures published in the Federal Register today (August 26, 2010) (collectively the ACA Appeals Rules”).

Although the ACA Appeals Rules technically apply only to non-grandfathered plans, Agency commentary about existing Labor Department health plan claims and appeals procedures published along with the ACA Appeals rules sends a strong signal that the adequacy of all health plan claims and appeals procedures is warranted. As many health plan sponsors and health insurers are deciding that compliance with Affordable Care Act mandates is more cost effective than meeting the conditions that federal regulations require for a health plan to maintain grandfathered plan status, most group health plans and policies will need to be updated to comply with these new rules quickly. Even if a plan qualifies as a grandfathered plan, however, comments contained included the preamble to the July 23, 2010 guidance and recent court decisions send a strong signal that a review and update of existing claims and appeals procedures and practices is warranted. Read more.

For assistance to review and update your health or other employee benefit claims and appeals or other terms, processes, notices and communication or other processes and procedures, please contact the author of this update, attorney Cynthia Marcotte Stamer at (469) 767-8872 or cstamer@solutionslawyer.net.

Learn More About Affordable Care Act Mandates: Order Recording of August 24 “2010 Health Plan Update”

Details of recently released guidance about federal health plan rules applicable to employment-based health plans under the Affordable Care Act and other federal health plan regulations were among the topics covered in a “2010 Health Plan Update” internet broadcast briefing on Tuesday, August 24 2010. For more information about this briefing, see here. If you are interested in purchasing a recording of this briefing, e-mail here.

For Assistance or More Information

If your organization needs assistance updating your heath care program documentation, policies or procedures in response to these or other requirements or with other employee benefit, insurance or human resources matters, please contact the author of this update, Board Certified Labor & Employment attorney Cynthia Marcotte Stamer at (469) 767-8872 or via e-mail here.

Current Chair of the American Bar Association (ABA) RPTE Employee Benefit & Other Compensation Group, a Council Member of the ABA Joint Committee on Employee Benefits and Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer continuously advises employers, health and other employee benefit plans, plan sponsors, fiduciaries, plan administrators, plan vendors, insurers and others about health program related legal, operational, documentation, public policy, enforcement, privacy, technology, litigation and risk management and other concerns. Ms. Stamer also publishes, conducts client and other training, speaks and consults extensively on these and other health and managed care program concerns and practices. She regularly speaks and conducts training for the ABA, American Health Lawyers Association, Institute of Internal Auditors, Society for Professional Benefits Administrators, Southwest Benefits Association and many other organizations. Her insights on these and related topics have appeared in Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, Managed Healthcare, Health Leaders, various ABA publications and a many other national and local publications. To contact Ms. Stamer or for additional information about Ms. Stamer, her experience, involvements, programs or Publishers of her many highly regarded writings on health industry and human resources matters include the Bureau of National Affairs, Aspen Publishers, ABA, AHLA, Aspen Publishers, Schneider Publications, Spencer Publications, World At Work, SHRM, HCCA, State Bar of Texas, Business Insurance, James Publishing and many others. You can review other highlights of Ms. Stamer’s experience here.

Other Resources

If you found this information of interest, you also may be interested in reviewing other recent Solutions Law Press updates including:

About Solutions Law Press

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Posted by Cynthia Marcotte Stamer

Assess Your Health Plan Compliance 8/24: Register Now!

August 12, 2010

Get a Health Plan Compliance Checkup

Learn What You Must Do Now To Meet Key 2010/2011
Affordable Care Act & Other Health Plan Compliance Deadlines

2010 Health Plan Update

A Solutions Law Press Live Internet Broadcast Briefing

August 24, 2010

10:00 A.M.-12:30 P.M. Eastern | 11:00 A.M.-1:30 P.M. Central | 9:00 A.M-11:30 A.M. Pacific

Earn 2 Hours of Texas Insurance Continuing Education Credit, WorldAtWork or HRCI Credit!

Solutions Law Press invites you to catch up on the latest guidance on new group health plan mandates imposed under the Patient Protection and Affordable Care Act (Affordable Care Act) and other federal health plan regulations by participating in the “2010 Health Plan Update” briefing on Tuesday, August 24, 2010. The briefing will be held via a live internet broadcast from 11:00 to 1:30 P.M. Central Time. Registrants can elect to participate in person or watch via the Internet for a registration fee of $150.00. To register click here.

Affordable Care Act Requires Prompt Action By Group Health Plans, Employee Sponsors, Fiduciaries, Administrators, & Insurers

Health benefit costs and legal risks continue to grow for U.S. businesses. The Affordable Care Act and other impending federal health plan regulatory changes will require employment-based group health plans, their employer and other plan sponsors, insurers plan fiduciaries, plan administrators and other service providers and insurers to make quick decisions and to act quickly to meet impending federal compliance deadlines while preserving flexibility. All employer and other group health plan sponsors, fiduciaries, insurers and administrators must act quickly to update their health plan documents, communications, insurance and vendor agreements and practices to comply with new federal requirements that become effective under the Affordable Care Act on the first day of the next plan year beginning after September 22, 2010 and various other changes in federal health plan rules effective or scheduled to take effect during 2010 or 2011 plan years. Many plan sponsors also may need to act quickly to cancel or revise plan design or vendor changes planned or already implemented since March 23, 2010 to position their health plan to qualify for grandfather status. Quick action also may be needed to qualify for small employer tax credits, retiree medical subsidies or other benefits.

August 24 Briefing Provides Key Information

The August 24, 2010 “2010 Health Plan Update” briefing will cover the latest guidance on Affordable Care Act and other federal health plan regulatory changes impacting employment-based group health plans and their sponsors for plan years beginning between September 23, 2010 and September 22, 2011 and other key information to help employers, group health plans, insurers, plan administrators, fiduciaries, broker and others working with these plans to understand and respond to these new requirements including:

How to qualify your health plan as a grandfathered plan under the Affordable Care Act
How to decide if maintaining grandfathered plan status is worthwhile
Claims & appeals requirements for grandfathered & non-grandfathered plans
Preventive care coverage & wellness program rules under Affordable Care Act, GINA, ADA & other federal regulations
Updated dependent child eligibility, pre-existing condition & other dependent coverage rules for grandfathered & non-grandfathered plans
Special enrollment, preexisting condition & other eligibility mandates for grandfathered & non-grandfathered plans under new Affordable Care Act, FMLA, Michelle’s Law, HIPAA & other regulations
Mental health & substance abuse, provider choice & other benefit mandates under new Affordable Care Act, Mental Health Parity & other federal rules
New HIPAA Privacy Rules
Update on other recent & pending Affordable Care Act group health plan rule guidance
Cafeteria plan implications
Tips to review & update your plans, vendor agreements & processes to meet Affordable Care Act & other federal group health plan dictates
Expected future Affordable Care Act & other federal rule changes & tips for preparing
Practical strategies for responding to new requirements & changing rules
Participant questions

About The Presenter

The program will be conducted by attorney Cynthia Marcotte Stamer. Ms. Stamer is nationally known for her more than 23 years of work, publications and presentations on health plan and other employee benefit, health care and insurance matters. Current Chair of the American Bar Association (ABA) RPTE Employee Benefit & Other Compensation Group, a Council Member of the ABA Joint Committee on Employee Benefits and Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer continuously advises group health plans, insurers, employer and other plan sponsors, plan fiduciaries, plan administrators and vendors, and others about health plan design, administration, defense, contracting and related legal compliance, operational, documentation, public policy, enforcement, privacy, technology, litigation and risk management and other concerns. Ms. Stamer also publishes and speaks extensively on these and other health and managed care program concerns and practices. Her insights on these and related topics have appeared in Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, Managed Healthcare, Health Leaders, various ABA publications and a many other national and local publications. To contact Ms. Stamer or for additional information about Ms. Stamer, her experience, involvements, programs or publications, contact Ms. Stamer at (469) 767-8872 or via e-mail here or see here. Texas Insurance Department Continuing Education Provider Number 3544.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other updates, consultation, training and education, tools, and other resources for businesses on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press™ resources available for review here. If you or someone else you know would like to receive future updates and notices about other upcoming Solutions Law Press™ events, please be sure that we have your current contact information – including your preferred e-mail- by creating or updating your profile at here. For important information concerning this communication click here.

Solutions Law Press ™ Thanks Our Sponsors

Benefit HR Productions is a producer of enrollment and employee benefit and human resources orientation and on boarding enrollment and other human resources video communications for employers and their service providers. For more information, contact Bill at (972) 267-8410.

NFC offers supplemental insurance benefits to individuals and families that pay benefits directly to the insured and offers cafeteria plan administration services at no cost to employers including a Debit Card feature. To learn more about NFC cafeteria plan services or its supplemental insurance products contact Art Mueller at National Family Care Life Insurance Company, 13530 Inwood Rd, Dallas, Tx 75244. 800-527-0996. acmnfc@flash.net

A limited number of participants on a space available basis will have the opportunity to participate in the briefing as a member of the live studio audio audience in Plano, Texas. Interested persons should e-mail support@solutionslawyer.net.
Discounts available for groups registering three or more participants. E-mail support@solutionslawyer.net.

Comments Off on Assess Your Health Plan Compliance 8/24: Register Now! | CHIP, Claims Administration, COBRA, Employee Benefits, Employers, ERISA, Excise Tax, Fiduciary Responsibility, FMLA, Health Plans, Human Resources, Income Tax, Mental Health, Mental Health Parity, Prescription Drugs, Tax, Wellness, Wellness Programs | Tagged: ADA, Affordable Care Act, Appeals, Claims Regulations, COBRA, ERISA, FMLA, GINA, Health Plans, HIPAA, Mental Health Parity, self-insurance, Wellness Programs | Permalink
Posted by Cynthia Marcotte Stamer

New Regulations & Court Decisions Require Health Plan Claims & Appeal Updates & Strengthening

August 8, 2010

Register Now For 8/24 Health Plan Update Briefing

Employer and other health plan sponsors, insurers, fiduciaries and administrators should move quickly to review, update and tighten their plan documents, administrative procedures and agreements, decisional criteria, investigation and decision-making documentation, and claims and appeals-related notification and other communications in response to new requirements and guidance in recently proposed Labor Department Regulations and the increased willingness of Federal courts to scrutinize and overturn benefit denials.

New regulations (ACA Appeals Rules) implementing tighter health plan claims and appeals rules enacted under the Patient Protection & Affordable Care Act (Affordable Care Act) are the latest in a wave of new Affordable Care Act and other federal regulations that require quick updates to employment-based health plans.

The new ACA Appeals rules published July 23, 2010 primarily focus on additional claims and appeals standards that group health plans not “grandfathered” under the Affordable Care Act must meet by the first plan year beginning after September 22, 2010. However, clarifications of the Labor Department’s interpretation of existing claims and appeals rules for employment-based group health plans shared with the ACA Appeals Rules make clear grandfathered plans also have work to do. Therefore, group health plan sponsors, insurers, fiduciaries and administrators of all group health plans should review and tighten their claims and appeals procedures in response to the guidance recently published in connection with the ACA Appeals Rules.

Beyond responding to the Labor Department’s ACA Appeals Rules, employer and other health and employee benefit plan sponsors, insurers, fiduciaries and administrators also should consider tightening and strengthening their claims and appeals decision-making, documentation and notice processes and procedures to reduce the risk that the courts will overturn benefit denials to guard against the growing willingness of federal courts to overturn benefit denials based upon their findings of process, documentation, notification, conflict of interest or other deficiencies that make the decision “arbitrary or capricious” or otherwise unsustainable under ERISA. Read more.

Many Other Changing Federal Rules Require Other Plan Updates

Changing claims and appeals standards are only a small part of the sweeping range of developments that employer and other plan sponsors, administrators, and fiduciaries of group health plans must deal with as the struggle to design and administer legally defensible plans this year.

The new ACA Appeals Rules are the latest in a wave of new Affordable Care Act and other federal regulations that require quick action by employment based health plans, their employer and other sponsors, fiduciaries, administrators and insurers. Regulations issued in previous weeks define when health plans and health insurance policies qualify as “grandfathered” under the Affordable Care Act and interpret and implement many other federal health plan rule changes enacted by the Affordable Care Act.

All employer and other group health plan sponsors, fiduciaries, insurers and administrators should be prepared to act quickly to update their health plan documents, communications, insurance and vendor agreements and other practices to comply with new federal requirements that become effective under the Affordable Care Act on the first day of the plan year beginning after September 22, 2010 and various other changes in federal health plan rules effective or scheduled to take effect during 2010 or 2011 plan years. Many plan sponsors also may need to act quickly to cancel or revise certain design or vendor changes planned or already implemented since March 23, 2010 to position their health plan to qualify for grandfather status. Quick action also may be needed to preserve options to claim small employer tax credits, retiree medical subsidies or other opportunities.

In addition to responding to these Affordable Care Act changes, most group health plans also will require updates in response to other federal health plan rule changes beyond those enacted under the Affordable Care Act. These Affordable Care Act and other impending federal health plan changes will require employment-based group health plans, their employer and other plan sponsors, plan fiduciaries, plan administrators and other service providers and insurers to make quick decisions and to act quickly to meet impending federal compliance deadlines while preserving flexibility and managing costs.

August 24 “2010 Health Plan Update” Internet Workshop Provides Key Information

Solutions Law Press invites you to catch up on the latest guidance about the new group health plan Affordable Care Act and other federal health plan regulations by participating in a live “2010 Health Plan Update” internet broadcast briefing on Tuesday, August 24 2010. The briefing will be conducted via live video broadcast from 11:00 A.M.-1:30 P.M. Central Time. Register & Get More Details.

Learn the tests that will decide if your group health plan will qualify as “grandfathered” from key Affordable Care Act requirements and assess what updates you should consider making to meet critical 2010/2011 Affordable Care Act & other federal health plan compliance deadlines.

How to qualify your health plan as a grandfathered plan under Affordable Care act
How to decide if maintaining grandfathered plan status is worthwhile
Claims & appeals requirements for grandfathered & non-grandfathered plans
Preventive care coverage mandates & wellness program requirements & rules under Affordable Care Act & other federal regulations
Updated dependent child eligibility, pre-existing condition & other requirements for grandfathered & non-grandfathered plans
Special enrollment, preexisting condition & other eligibility mandates for grandfathered & non-grandfathered plans under new Affordable Care Act, new FMLA, COBRA, Michelle’s Law, HIPAA & other federal regulations
Mental health & substance abuse, provider choice & other benefit mandates under Affordable Care Act, Mental Health Parity & other federal rules
Update on other recent & pending Affordable Care Act group health plan rule guidance
Tips to review & update your plans, vendor agreements & processes to meet Affordable Care Act & other federal group health plan dictates
Expected future Affordable Care Act & other federal rule changes & tips for preparing
Practical strategies for responding to new requirements & changing rules
Participant questions

To register or get additional information, see here.

For Assistance or More Information

Other Resources

If you found this information of interest, you also may be interested in reviewing other recent Solutions Law Press updates including:

About Solutions Law Press

Comments Off on New Regulations & Court Decisions Require Health Plan Claims & Appeal Updates & Strengthening | Affordable Care Act, Claims Administration, Disability Plans, Employee Benefits, Employers, ERISA, Fiduciary Responsibility, Health Plans, Human Resources, Insurance, Preemption, Reporting & Disclosure | Tagged: Affordable Care Act, Appeals, Claims, ERISA, Health Plans | Permalink
Posted by Cynthia Marcotte Stamer

Free 8/13 ABA RPTE Study Group Call On Affordable Care Act Claims & Grandfathered Plan Regulations

August 8, 2010

On August 13, 2010, at 1 PM Eastern, Noon Central, 11 AM Mountain and 10 AM Pacific, the RPTE Employee Benefits Group will host a free one hour “Study Group” conference call led by the Welfare Plan Committee to discuss the interim regulations under the Patient Protection and Affordable Care Act (PPACA) regarding claims adjudication and grandfather plan status. This timely discussion has immediate impact on practitioners and their clients dealing with group health plans, since the new rules generally apply to plan years beginning on or after September 23, 2010.

Key topics will include:

Mandatory Claims Processing and Appeals Process Requirements
Impact on 2001 ERISA Claims Regulations
Impact on Plan Designs and Plan Administration
Determining Grandfather Status
Impact of Future Plan Actions on Grandfather Status

In addition, the topics for possible future calls in September and October regarding health care reform, as well as the current ABA projects to provide comments to the DOL, IRS and Department of HHS with respect to guidance under PPACA and opportunities for involvement also will be discussed.

The conference call will be moderated by:

Cynthia Marcotte Stamer, Cynthia Marcotte Stamer, PC, Dallas, TX;
Elizabeth Leight, Society of Professional Benefit Administrators, Washington, DC; and
Scott Douglas Marquardt, Total Plan Services, Inc., Dallas, TX

The phone number and passcode for the call are:

(866) 646-6488

Pass code: 5380700259

Given the scope of the changes wrought by PPACA, and the numerous interpretations being offered in the legal and insurance communities as well as the media, this promises to be a lively discussion. Multiple views and comments are encouraged.

Other Resources

If you found this information of interest, you also may be interested in reviewing other recent Solutions Law Press updates including:

ü Small Employers Sponsoring Health Coverage May Qualify For New Tax Credit, Must Act Quickly To Comply With Other New Federal Health Plan Mandates Under Affordable Care Act & Other Laws

ü Rite Aid Pays $1 Million HIPAA Privacy Settlement As OCR Tightens HIPAA Regulations

ü New Affordable Care Act Mandated High Risk Pre-Existing Condition Insurance Pool Program Regulations Prohibit Plan Dumping of High Risk Members, Set Other Rules

ü Register Now For 8/24 2010 Health Plan Update Briefing

ü Congress & Labor Department Considering Tightening of Retirement Plan Regulations

ü Testimony Highlights Growing Exposure of Businesses Misclassifying Workers; Businesses Should Act to Minimize Risks

ü Businesses Employing Children Should Review & Tighten Practices In Light of Tightened Rules & Increased Penalties

ü New Affordable Care Act Health Plan Appeals Regulations Require Health Plan Updates

ü Blockbuster & Health Delivery Disability Discrimination Settlements Highlight Need For Tightened Disability Discrimination Risk Management

ü Agencies Release Regulations Implementing Affordable Care Act Health Plan Preventative Care Mandates

ü New Retirement Plan Resource To Help Spanish-Speaking Participants With Retirement Planning

ü Office of Civil Rights Proposes Changes To HIPAA Privacy, Security & Civil Sanctions Rules

ü St. Louis Employer’s OSHA Violations Trigger Contempt Order and Penalties

ü Review & Strengthen Defensibility of Existing Worker Classification Practices In Light of Rising Congressional & Regulatory Scrutiny

ü Key Affordable Care Act Health Plan Coverage Mandates Guidance Issued June 28; Apply ASAP For Early Retirement Reinsurance Program

ü HHS, DOL & IRS Rules Define “Grandfathered” Group Health Plans & Health Insurance Coverage under the Patient Protection and Affordable Care Act

ü New Rule Requires Federal Government Contractors To Post New “Employee Rights Under The National Labor” Poster

ü Defined Contribution Plans Investing In Publically Traded Employer Securities Face New Requirements

ü CBO Raises Estimated Cost of Health Care Reforms As Employers, Health Plans Brace Costs Of Newly Effective & Impending Mandates

ü Certain Workforce Reductions Trigger Plant Closing Notice & Other Obligations

ü Mishandling Employee Benefit Obligations Creates Big Liabilities For Distressed Businesses & Their Business Leaders

ü DOL Plans To Tighten Employment Protections For Disabled Veterans & Other Disabled Employees Signals Need For Businesses To Tighten Defenses

ü COBRA, HIPAA, GINA, Mental Health Parity or Other Group Health Plan Rule Violations Trigger New Excise Tax Self-Assessment & Reporting Obligations

About Solutions Law Press

Comments Off on Free 8/13 ABA RPTE Study Group Call On Affordable Care Act Claims & Grandfathered Plan Regulations | Affordable Care Act, Claims Administration, Employee Benefits, ERISA, Fiduciary Responsibility, Health Plans, Human Resources, Insurance, Reporting & Disclosure | Tagged: Affordable Care Act, Benefit Denials, Claims Regulations, Grandfathered Plans, Health Plans | Permalink
Posted by Cynthia Marcotte Stamer

Stamer To Conduct“Health Plan Eligibility Update” Teleconference For NBI October 13, 2010

August 5, 2010

Register Now For 8/24 2010 Health Plan Update Briefing

Employer and other group health plan sponsors and insurers, fiduciaries and administrators of group health must update their health plans and practices to comply with new federal rules imposed by the Affordable Care Act and a host of other evolving federal health plan rules. In the meantime, health plan sponsors, fiduciaries, insurers and administrators looking to catch up on the most significant new requirements for employer and union sponsored health plans for the upcoming year also should consider registering to participate in the Solutions Law Press Health Plan Update Briefing scheduled for August 24, 2010.

October 13 NBI Teleconference Focuses On Eligibility Requirements

Catch up on the evolving federal health plan eligibility rules that employer and union sponsored group health plans must meet by listening in as attorney Cynthia Marcotte Stamer speaks about “Health Plan Eligibility Update”” on a live teleconference to be hosted by National Business Institutes on Wednesday, October 13, 2010 from 1:00 p.m.- 2:30 Central Time. To register or for additional information on the October 13 NBI Teleconference , visit http://www.nbi-sems.com.

During the October 13, 2010 Health Plan Eligibility Teleconference, Ms. Stamer will share:

ü Core Requirements Of Federal Group Health Plan Eligibility Rules Including Evolving Requirements of:

The Affordable Care Act
COBRA
HIPAA
GINA
Family Leave
Military Leave
Michelle’s Law & Other Dependent Coverage
Medicare Secondary Payer

ü Implications On Cafeteria Plan & Other Common Enrollment Strategies

ü Tips to Keep Health Plans Complaint

August 24 SLP Internet Briefing Overviews Latest Core Federal Rules For Group Health Plans Generally

Solutions Law Press invites you to catch up on the latest guidance about the new group health plan mandates imposed under the Patient Protection and Affordable Care Act (Affordable Care Act) and other federal health plan regulations by participating in a live “2010 Health Plan Update” internet[i] broadcast briefing on Tuesday, August 24 2010. The briefing will be conducted via live video broadcast from 11:00 A.M.-1:30 P.M. Central Time. The August 24, 2010 “2010 Health Plan Update” briefing will cover the latest guidance on Affordable Care Act and other federal health plan regulatory changes impacting employment-based group health plans and their sponsors for plan years beginning between September 23, 2010 and September 22, 2011 and other key information to help employers, group health plans, insurers, plan administrators, fiduciaries, broker and others working with these plans to understand and respond to these new requirements. Register/Get Details Here!

About The Presenter

Both programs will be conducted by attorney Cynthia Marcotte Stamer. With more than 23 years of experience advising employers, group health plans, plan fiduciaries, plan administrators and vendors, insurers and others about health plan and managed care matters, Ms. Stamer is nationally known for her work, publications and presentations on health plan and other employee benefit, health care and insurance matters.

Current Chair of the American Bar Association (ABA) RPTE Employee Benefit & Other Compensation Committee, a Council Member of the ABA Joint Committee on Employee Benefits and Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer continuously advises employers, health plans, plan sponsors, fiduciaries, plan administrators, plan vendors, insurers and others about health program related legal, operational, documentation, public policy, enforcement, privacy, technology, litigation and risk management and other concerns. Ms. Stamer also publishes and speaks extensively on these and other health and managed care program concerns and practices. Her insights on these and related topics have appeared in Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, Managed Healthcare, Health Leaders, various ABA publications and a many other national and local publications. To contact Ms. Stamer or for additional information about Ms. Stamer, her experience, involvements, programs or publications, contact Ms. Stamer at (469) 767-8872 or via e-mail here, or see here.

About Solutions Law Press

If you found this of interest, you also may be interested in the following recent Solutions Law Press publications by Ms. Stamer:

Comments Off on Stamer To Conduct“Health Plan Eligibility Update” Teleconference For NBI October 13, 2010 | ADA, CHIP, COBRA, Employee Benefits, Employers, ERISA, family leave, Fiduciary Responsibility, FMLA, GINA, Health Plans, HIPAA, Human Resources, Insurance, Leave, medical leave, Medicare Part D, Mental Health, Mental Health Parity, Patient Protection and Affordable Care Act | Tagged: Affordable Care Act, Emploeyrs, GINA, Group Health plans, Health Plans, HIPAA, Insurers | Permalink
Posted by Cynthia Marcotte Stamer

Rite Aid Pays $1 Million HIPAA Privacy Settlement As OCR Tightens HIPAA Regulations

August 3, 2010

Drug store chain Rite Aid Corporation and its 40 affiliated entities (Rite Aid) will pay $1 million to settle potential violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy Rule. Although targeting a health care provider, employers, health plan sponsors, administrators, and service providers should recognise the the Rite Aid settlement as a strong reminder of the importance of reviewing and tightening their own human resources, employee benefits, adn other policies and processes to better safeguard protected health information, personal financial information and other sensitve data.

The U.S. Department of Health and Human Services (HHS) Office of Civil Rights announcement of the HIPAA resolution agreement with Rite Aid and the concurrent negotiation of a separate consent order of potential FTC Act violations between Rite Aid and the Federal Trade Commission (FTC) follows HHS’ announcement of proposed changes to its HIPAA Privacy Rules and associated penalties in response to changes enacted under the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH Act). The Rite Aid settlement and the proposed Privacy Rule changes illustrate the growing penalty risks that health plans, health care providers, healthcare clearinghouses and their business associates (Covered Entities) face for violating the Privacy Rules. Read more details.

Additionally, the Rite Aid decision also serves as a reminder to employers, health plans and their administrators, insurers and finance and finance departments to tighten their controls over the use, access and disposal of sensitive information. A walk through of almost most employee benefit, human resources and finance department typically reveals that at any given time a wide range of personal health and other sensitve information is handled and disposed of in a manner that leaves it open to improper or unnecessary use or disclosure. Additionally, while situations like those in Rite Aid and CVS draw big press, Secret Service, FBI, DOL and other statistics show that most wrongful access and damage comes from the improper use of access of information gained through credentials as an employee, contractor or customer. Rite Aid, CVS, and other HIPAA, FTC and personal identity breach statistics, settlements and judgments are a reminder to all of the advisability of cleaning up their policies and controls to better protect this data.

For Assistance or More Information

If your organization needs assistance updating or defending your privacy, data security or other health plan design, documentation policies or procedures in response to these or other requirements or with other employee benefit, insurance or human resources matters, please contact the author of this update, Board Certified Labor & Employment attorney Cynthia Marcotte Stamer at (469) 767-8872 or via e-mail here.

Current Chair of the American Bar Association (ABA) RPTE Employee Benefit & Other Compensation Group, a Council Member of the ABA Joint Committee on Employee Benefits and Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Stamer continuously advises employers, health and other employee benefit plans, plan sponsors, fiduciaries, plan administrators, plan vendors, insurers and others about health program related legal, operational, documentation, public policy, enforcement, privacy, technology, litigation and risk management and other concerns. Ms. Stamer also publishes, conducts client and other training, speaks and consults extensively on these and other health and managed care program concerns and practices. She regularly speaks and conducts training for the ABA, American Health Lawyers Association, Institute of Internal Auditors, Society for Professional Benefits Administrators, Southwest Benefits Association and many other organizations. Her extensive publications include numerous highly regarding works on HIPAA and other health plan matters published by the Bureau of National Affairs, the ABA, and others. Her insights on these and related topics have appeared in Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, Managed Healthcare, Health Leaders, various ABA publications and a many other national and local publications. To contact Ms. Stamer or for additional information about Ms. Stamer, her experience, involvements, programs or Publishers of her many highly regarded writings on health industry and human resources matters include the Bureau of National Affairs, Aspen Publishers, ABA, AHLA, Aspen Publishers, Schneider Publications, Spencer Publications, World At Work, SHRM, HCCA, State Bar of Texas, Business Insurance, James Publishing and many others. You can review other highlights of Ms. Stamer’s experience here.

Other Resources

If you found this information of interest, you also may be interested in reviewing other recent Solutions Law Press updates including:

About Solutions Law Press

Comments Off on Rite Aid Pays $1 Million HIPAA Privacy Settlement As OCR Tightens HIPAA Regulations | Corporate Compliance, Data Security, Employee Benefits, Employers, ERISA, Fiduciary Responsibility, Health Plans, HIPAA, Human Resources, Insurance, Internal Controls, Internal Investigations, Medicare Part D, Risk Management | Tagged: Data Security, HIPAA, HITECH Act, Privacy, Privacy Rules, Rite Aid, Security Rules, Security Standards | Permalink
Posted by Cynthia Marcotte Stamer

New Affordable Care Act Mandated High Risk Pre-Existing Condition Insurance Pool Program Regulations Prohibit Plan Dumping of High Risk Members, Set Other Rules

August 1, 2010

Register Now For 8/24 Health Plan Update Briefing

Group health plans and insurers risk are prohibited from dumping or engaging in other actions designed to drive individuals with pre-existing high risk conditions to enroll in coverage under high risk pool plans established under the “Pre-Existing Condition Insurance Plan” (PCIP) program established by the Patient Protection and Affordable Care Act of 2010 (Affordable Care Act) in lieu of maintaining existing private coverage.

Section 1101 of the Affordable Care Act requires HHS to set up the PCIP program to ensure that a temporary high risk health insurance pool program exists to provide affordable health insurance coverage to uninsured individuals with pre-existing conditions until January 1, 2014, when Exchanges established under sections 1311 and 1321 of the Affordable Care Act take effect.

Interim final rules implementing the PCIP program (Regulations) issued by the Department of Human Services on Friday, July 30, 2010 prohibit group health plans and insurers from dumping individuals with high risk conditions from coverage. The Regulations also identify the individuals that will qualify for enrollment in PCIP plans and detail the rules governing the establishment, implementation and administration of the PCIP program.

Dumping High Risk Patients Prohibited

In addition to already-existing liability for any violation of existing prohibitions against discrimination based on health history under the Health Insurance Portability & Accountability Act, the Genetic Information Nondiscrimination Act, and the Affordable Care Act, the Regulations provide that a health insurance issuer or group health plan found to have illegally discouraged an individual from remaining enrolled in its coverage or engaging in other actions considered “dumping” based on the individual’s health status will be responsible for any medical expenses incurred by the PCIP to provide coverage for a dumped individual who subsequently enrolls in the PCIP plan. Additionally, HHS also may refer the insurer or the plan to Federal and State authorities for other enforcement actions that may be warranted based on the behavior at issue. In light of these exposures, group health plans and insurers should review and tighten their eligibility terms, processes and procedures to avoid prohibited conduct. In this respect, plans and insurer should pay particular attention to managing the conduct of individuals involved in communicating with members or prospective members. Insurers and plans should adopt policies clearly prohibiting eligibility discrimination in violation of these and other rules and back up these rules by clear operating policies and training that makes clear to individuals involved in enrollment and other enrollment activities what conduct is prohibited.

More OnThe PCIP Program & Regulations

The Regulations provide an individual will be eligible to enroll in a PCIP if he or she:

Is a citizen or national of the United States or lawfully present in the United States;
Has not been covered under creditable coverage for a continuous 6-month period of time prior to the date on which such individual is applying for PCIP;
Has a pre-existing condition within the meaning of the Affordable Care Act;
Is a current resident of one of the 50 States or the District of Columbia which constitutes or is within the service area of the PCIP; and
Meets other criteria established by the PCIP with HHS approval.
PCIP Plans will be required to cover eligible individuals without any pre-existing condition limitation or waiting period.

The Regulations outline the process that a State or nonprofit private entity to pursue and enter into a contract with HHS to set up and run a PCIP program. The PCIP program generally anticipates that each State will contract with HHS to maintain a qualifying PCIP program directly or by subcontracting with another party. If a State elects not to or fails to maintain a PCIP program, however, the Regulation states HHS will contract with a nonprofit private entity to offer a PCIP program in that State.

PCIP program operates must have enrollment and disenrollment rules and processes that meet the applicable standards in the Regulations. The Regulations dictate that as part of this process, a PCIP verify that an individual is a United States citizen or national or lawfully present in the United States in accordance with the Regulations. The Regulations also allow PCIPS to employ certain strategies to manage enrollment over the course of the program that may include enrollment capacity limits, phased-in (delayed) enrollment, and other measures, as defined by the PCIP and approved by HHS to manage the PCIP program’s compliance with funding and other allowable requirements.

The Regulations specify that each benefit plan offered by a PCIP cover at least the following categories and the items and services:

Hospital inpatient services
Hospital outpatient services
Mental health and substance abuse services
Professional services for the diagnosis or treatment of injury, illness, or condition
Non-custodial skilled nursing services
Home health services
Durable medical equipment and supplies
Diagnostic x-rays and laboratory tests
Physical therapy services (occupational therapy, physical therapy, speech therapy)
Hospice
Emergency services and ambulance services
Prescription drugs
Preventive care
Maternity care

The Regulations also prohibit PCIP Plans from offering certain benefits. Benefit plans offered by a PCIP cannot cover the following services:

Cosmetic surgery or other treatment for cosmetic purposes except to restore bodily function or correct deformity resulting from disease.
Custodial care except for hospice care associated with the palliation of terminal illness.
In vitro fertilization, artificial insemination or any other artificial means used to cause pregnancy.
Abortion services except when the life of the woman would be endangered or when the pregnancy is the result of an act of rape or incest.
Experimental care except as part of an FDA-approved clinical trial.

The Regulations regulate the premiums and cost sharing that PCIP programs can use. The Regulations limit the premium a PCIP may charge to 100 percent of the premium for the applicable standard risk rate that would apply to the coverage offered in the State determined in accordance with the Regulations using HHS-approved reasonable actuarial techniques. Premiums charged to enrollees in the PCIP may vary on the basis of age by a factor not greater than 4 to 1. Also, the PCIP program’s average share of the total allowed costs of the PCIP benefits must be at least 65 percent of such costs. Furthermore, the out-of-pocket limit of coverage for cost-sharing for covered services under the PCIP cannot exceed the Internal Revenue Code § 223(c)(2) limit. If the plan uses a network of providers, this limit may be applied only for in-network providers, consistent with the terms of PCIP benefit package.

The Regulations allow a PCIP program to require that covered persons use network providers for non-emergency services if that the PCIP has sufficient providers to ensure that all covered services are reasonably available and accessible to its enrollees. Out-of-network coverage for emergency services will be required under certain conditions. The Regulations also will require PCIPst o process and administer claims and appeals in compliance with the Regulations.

The Regulations also require PCIPs to develop and apply operating procedures to prevent, detect, report to HHS and law enforcement and recover (when applicable or allowable) incidences of waste, fraud, and abuse and to cooperate with Federal law enforcement and oversight authorities in cases involving waste, fraud and abuse.

Register For 8/24 Internet Briefing To Learn If Your Plan Will Be Grandfathered Plan & What Health Plan Updates Your Plan Will Require To Meet 2010/2011 Affordable Care Act & Other Federal Health Plan Compliance Deadlines

For Assistance or More Information

If you need help with human resources or other management, concerns, wish to ask about compliance, risk management or training, or need legal representation on other matters please contact Cynthia Marcotte Stamer here or (469)767-8872.

Other Resources

If you found this information of interest, you also may be interested in reviewing other recent Solutions Law Press updates including:

About Solutions Law Press

Comments Off on New Affordable Care Act Mandated High Risk Pre-Existing Condition Insurance Pool Program Regulations Prohibit Plan Dumping of High Risk Members, Set Other Rules | Affordable Care Act, Corporate Compliance, Employee Benefits, Employers, ERISA, Fiduciary Responsibility, GINA, Health Plans, Human Resources, Insurance | Permalink
Posted by Cynthia Marcotte Stamer

Register Now For 8/24 2010 Health Plan Update Briefing

July 30, 2010

Learn If Your Plan Will Be Grandfathered Plan & What You Must Do Now To Meet Key 2010/2011 Affordable Care Act & Other Federal Health Plan Compliance Deadlines

A Solutions Law Press Live Internet Broadcast Briefing

August 24, 2010

10:00 A.M.-12:30 P.M. Eastern

11:00 A.M.- 1:30 P.M. Central

9:00 A.M-11:30 A.M. Pacific

Affordable Care Act Requires Prompt Action By Group Health Plans, Sponsors, Fiduciaries & Administrators

The Affordable Care Act and other impending federal health plan changes will require employment-based group health plans, their employer and other plan sponsors, plan fiduciaries, plan administrators and other service providers and insurers to make quick decisions and to act quickly to meet impending federal compliance deadlines while preserving flexibility. All employer and other group health plan sponsors, fiduciaries, insurers and administrators must act quickly to update their health plan documents, communications, insurance and vendor agreements and other practices to comply with new federal requirements that become effective under the Affordable Care Act on the first day of the plan year beginning after September 22, 2010 and various other changes in federal health plan rules effective or scheduled to take effect during 2010 or 2011 plan years. Many plan sponsors also may need to act quickly to cancel or revise plan design or vendor changes planned or already implemented since March 23, 2010 to position their health plan to qualify for grandfather status. Quick action also may be needed to claim small employer tax credits, retiree medical subsidies or other benefits.

Register Now To Get Key Information In August 24 Internet Briefing

How to qualify your health plan as a grandfathered plan under Affordable Care act
How to decide if maintaining grandfathered plan status is worthwhile
Claims & appeals requirements for grandfathered & non-grandfathered plans
Preventive care coverage mandates & wellness program requirements & rules under Affordable Care Act & other federal regulations
Updated dependent child eligibility, pre-existing condition & other requirements for grandfathered & non-grandfathered plans
Special enrollment, preexisting condition & other eligibility mandates for grandfathered & non-grandfathered plans under new Affordable Care Act, new FMLA, COBRA, Michelle’s Law, HIPAA & other federal regulations
Mental health & substance abuse, provider choice & other benefit mandates under Affordable Care Act, Mental Health Parity & other federal rules
Update on other recent & pending Affordable Care Act group health plan rule guidance
Tips to review & update your plans, vendor agreements & processes to meet Affordable Care Act & other federal group health plan dictates
Expected future Affordable Care Act & other federal rule changes & tips for preparing
Practical strategies for responding to new requirements & changing rules
Participant questions

About The Presenter

The program will be conducted by attorney Cynthia Marcotte Stamer. With more than 23 years of experience advising employers, group health plans, plan fiduciaries, plan administrators and vendors, insurers and others about health plan and managed care matters, Ms. Stamer is nationally known for her work, publications and presentations on health plan and other employee benefit, health care and insurance matters.

About Solutions Law Press

[*] A limited number of participants on a space available basis will have the opportunity to participate in the briefing as a member of the live studio audio audience in Plano, Texas. Interested persons should e-mail support@solutionslawyer.net.

[†] Discounts available for groups registering three or more participants. Sponsorship opportunities also available. For information, E-mail support@solutionslawyer.net.

Comments Off on Register Now For 8/24 2010 Health Plan Update Briefing | ADA, Affordable Care Act, COBRA, Disease Management, Employee Benefits, Employers, ERISA, Excise Tax, family leave, Fiduciary Responsibility, FMLA, GINA, HIPAA, Human Resources, Insurance, Internal Controls, Leave, medical leave, Mental Health, Patient Protection and Affordable Care Act, Payroll Tax, Privacy, Protected Health Information, Risk Management, Tax, Wellness | Tagged: Affordable Care Act, COBRA, FLSA, GINA, grandfathered plan, Health Plan, HIPAA, Mental Health Parity, Michelle's Law | Permalink
Posted by Cynthia Marcotte Stamer

Congress & Labor Department Considering Tightening of Retirement Plan Regulations

July 28, 2010

With health care reformed passed, Congressional leaders are considering the need to change federal retirement plan rules under the Employee Retirement Income Security Act or other laws. Employer and other retirement plan sponsors, fiduciaries, administrators, advisors and vendors should keep a close eye out for legislation or regulation that would impose additional obligations on the administration of retirement plans in light of this new scrutiny.

In June 16, 2010 testimony before the Senate Special Committee on Aging, Assistant Secretary for the Employee Benefits Security Administration (EBSA) Phyllis Borzi discussed steps the Labor Department is taking to explore lifetime income options for participants and beneficiaries in private-sector retirement plans. Her June 16 testimony, Ms. Borzi told Congress members the IRS and Labor Department are “committed to exploring what can be done through interpretation, regulation and legislation” to address the shift of financial risks of retirement to employees arising from the shift from defined benefit to defined contribution plans.

Ms. Borzi indicated the Departments are looking at regulatory and other changes to provide better information and tools to require or encourage retirement plans to offer lifetime income options and communication and other tools to help workers better prepare to make their savings last throughout their retirement years. She also reported that more than 800 comments were received in response to a Request for Information on lifetime income option alternatives jointly issued by the Labor Department and Internal Revenue Service. Ms. Borzi indicated that the Request for Information is intended to start a national dialogue about the reforms needed in this area and how best to address those needs.

Public policy initiatives have primarily focused on the accumulation stage of retirement planning. Only recently has there been a greater focus on the decumulation stage of retirement, and what workers and retirees do upon receipt of their retirement savings. Given the potential utility of lifetime income to participants in efficiently constructing their personal retirement incomes, Ms. Borzi told Congress the Labor Department will be considering if additional information could assist participants in this regard, and what impediments exist to providing such information. Some policy makers believe that providing participants with both the lump sum value of their accounts and the value of an equivalent income stream would be very valuable to workers who have to figure out how to make their savings last throughout their retirement years.

While Ms. Borzi said the Labor Department is still evaluating options, her comments clearly reflect that the Labor Department’s emphasis will focus heavily on promoting greater security for a lifetime stream of income after retirement. Her statements also signal that retirement plan sponsors, fiduciaries and vendors should expect to see changes in communication, funding and other retirement plan rules. If you need assistance monitoring or responding to retirement plan or other employee benefits, employment or related regulations, or dealing with other employment or employee benefit concerns, please contact the author of this update, Board Certified Labor & Employment attorney Cynthia Marcotte Stamer at (469) 767-8872 or cstamer@solutionslawyer.net.

About the Author

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer has more than 23 years experience working with employers, professional employment organizations, employee benefit plan sponsors and administrators and others on a wide range of labor and employment, employee benefits, and other management matters. A featured speaker in the June 29 ABA JCEB Teleconference on Worker Classification, Ms. Stamer is The Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, the editor of Solutions Law Press HR & Benefits Update. Ms. Stamer also is recognized for her lengthy resume of publications, industry leadership, workshops and presentations on worker classification, and other employment, employee benefits, and related workforce and human resources concerns. She regularly speaks and conducts training for the ABA, Institute of Internal Auditors, Society for Professional Benefits Administrators, Southwest Benefits Association and many other organizations. Publishers of her many highly regarded writings on health industry and human resources matters include the Bureau of National Affairs, Aspen Publishers, ABA, AHLA, Aspen Publishers, Schneider Publications, Spencer Publications, World At Work, SHRM, HCCA, State Bar of Texas, Business Insurance, James Publishing and many others. You can review other highlights of Ms. Stamer’s experience here.

Other Resources

If you found this information of interest, you also may be interested in reviewing other recent Solutions Law Press updates including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here or e-mailing this information here or registering to receive our Solutions Law Press distributions here. For important information about this communication click here.

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Posted by Cynthia Marcotte Stamer

2010 Health Plan Update: Learn What You Must Do Now To Meet Key 2010/2011 Affordable Care Act & Other Federal Health Plan Deadlines

July 23, 2010

August 24, 2010

10:00 A.M.-12:30 P.M. Eastern ¨ 11:00 A.M.- 1:30 P.M. Central ¨ 9:00 A.M-11:30 A.M. Pacific

Affordable Care Act Requires Prompt Action By Group Health Plans, Sponsors, Fiduciaries & Administrators

August 24 Live Briefing Provides Key Information By Internet Broadcast

How to qualify your health plan as a grandfathered plan under Affordable Care Act
How to decide if maintaining grandfathered plan status is worthwhile
Claims & appeals requirements for grandfathered & non-grandfathered plans
Preventive care coverage mandates & wellness program requirements & rules under Affordable Care Act & other federal regulations
Updated dependent child eligibility, pre-existing condition & other requirements for grandfathered & non-grandfathered plans
Special enrollment, preexisting condition & other eligibility mandates for grandfathered & non-grandfathered plans under new Affordable Care Act, new FMLA, COBRA, Michelle’s Law, HIPAA & other federal regulations
Mental health & substance abuse, provider choice & other benefit mandates under Affordable Care Act, Mental Health Parity & other federal rules
Update on other recent & pending Affordable Care Act group health plan rule guidance
Tips to review & update your plans, vendor agreements & processes to meet Affordable Care Act & other federal group health plan dictates
Expected future Affordable Care Act & other federal rule changes & tips for preparing
Practical strategies for responding to new requirements & changing rules
Participant questions

About The Presenter

About Solutions Law Press

[†] Discounts available for groups registering three or more participants. E-mail support@solutionslawyer.net.

Comments Off on 2010 Health Plan Update: Learn What You Must Do Now To Meet Key 2010/2011 Affordable Care Act & Other Federal Health Plan Deadlines | ADA, Affordable Care Act, Disease Management, EEOC, Employee Benefits, Employers, ERISA, Excise Tax, family leave, Fiduciary Responsibility, FMLA, GINA, H.R. 4872, Health Care Reform, Health Plans, HIPAA, Human Resources, Insurance, Leave, medical leave, Medicare Part D, Mental Health, Mental Health Parity, Military Leave, Patient Protection and Affordable Care Act, Payroll Tax, Prescription Drugs, Public Policy, Reporting & Disclosure, Union, USERRA, Wellness, Wellness Programs | Tagged: Affordable Care Act, broker, Employers, grandfathered plan, Group Health plans, health coverage, Health Plans, Insurer, Mental Health Parity, Patient Protection and Affordable Care Act, plan sponsor, pre-existing conditions, preventive care | Permalink
Posted by Cynthia Marcotte Stamer

New Affordable Care Act Health Plan Appeals Regulations Require Health Plan Updates

July 23, 2010

Register For August 24^th 2010 Health Plan Update To Catch Up On Latest Federal Health Plan Regulations

Employer and other plan sponsors, administrators, and fiduciaries of non-grandfathered group health plans must move quickly to update their plan documents, administrative procedures and agreements, claims and other communications and other processes and procedures to comply with new regulations (Appeals Rules) implementing tightened health plan claims and appeals rules enacted under the Patient Protection & Affordable Care Act (Affordable Care Act) jointly published by the U.S. Departments of Health & Human Services (HHS), Labor (DOL) and Treasury yesterday (July 23, 2010). The new Appeals Rules are the latest in a wave of new Affordable Care Act and other federal regulations that require quick action by employment based health plans, their employer and other sponsors, fiduciaries, administrators and insurers. Regulations issued in previous weeks by the Departments define when health plans and health insurance policies qualify as “grandfathered” under the Affordable Care Act and interpret and implement many other federal health plan rule changes enacted by the Affordable Care Act. In addition to responding to these Affordable Care Act changes, most group health plans also will require updates in response to other federal health plan rule changes beyond those enacted under the Affordable Care Act. To assist concerned business leaders, plan fiduciaries and plan administrators to understand and cope with these new rules, Solutions Law Press invites you to participate in the live “2010 Health Plan Update,” internet workshop on August 24, 2010 from 11:00 a.m.-1:30 p.m. Central Time. To register or for other details, see here.

Affordable Care Act Appeals Rules & Other Federal Claims & Appeals Regulations Make Prompt Plan Review & Update Advisable

Currently, all group health plans covered by the Employee Retirement Income Security Act (ERISA) must prudently process and administer claims and appeals using reasonable claims and appeals procedures that comply with detailed Labor Department regulations. Recent Supreme Court and other decisions send a strong signal that many group health plans, their insurers, and administrators need to tighten their existing documentation and practices to promote the defensibility of claims and appeal decision making under the existing requirements of ERISA and the existing Labor Department regulations implementing these requirements. These existing claims and appeals requirements generally will continue to apply to all ERISA-covered group health plans without regard to whether the group health plan qualifies as grandfathered or non-grandfathered for purposes of the affordable care act.

The new requirements generally will apply to claims denials and coverage rescissions made by non-grandfathered health plans beginning with the first plan year beginning after September 22, 2010. Furthermore, non-grandfathered group and individual health policies subject to the Appeals Rules also may continue to be required to comply with state-mandated external and/or independent review and other state-imposed claims and appeals procedures.

In addition to complying with existing claims and appeals requirements, the new Appeals Rules also will require that non-grandfathered health plans modify existing claims and appeals procedures to comply with new federal appeals protections mandated under the Affordable Care Act. The Appeals Rules requirements for internal claims and appeals processes generally will apply to any denial, reduction, or termination of, or failure to provide or make a payment (in whole or in part) for a benefit, including any:

Rescission of coverage as defined in the regulations restricting rescissions
Determination of an individual’s eligibility to participate in a plan or health insurance coverage
Determination that a benefit is not a covered benefit
Imposition of a preexisting condition exclusion, source-of-injury exclusion, network exclusion, or other limitation on otherwise covered benefits
Determination that a benefit is experimental, investigational, or not medically necessary or appropriate
Other denial, reduction, or termination of, or a failure to provide or make a payment (in whole or in part) for a benefit can include both pre-service claims (for example, a claim resulting from the application of any utilization review), as well as post-service claims and
Any other instance where a plan pays less than the total amount of expenses submitted with regard to a claim, including a denial of part of the claim due to the terms of a plan or health insurance coverage regarding co-payments, deductibles, or other cost-sharing requirements.

When applicable, the new Appeals Rules among other things will require that non-grandfathered group health plans and insurers issuing non-grandfathered health insurance plans and policies:

Implement specified internal and external review procedures
Must continue to provide continued coverage pending the outcome of an internal appeal
Comply with the Appeals Rules’ additional criteria for ensuring that a claimant receives a full and fair review in addition to complying with the requirements of existing Labor Department claims and appeals procedures.

Highlights of some of these fair review requirements include:

Timely allowing a claimant to review the claim file and to present evidence and testimony as part of the internal claims and appeals process
Before issuing a final internal adverse benefit determination based on a new or additional rationale, timely proving the claimant free of charge, with the rationale
Complying with the Appeals Rules’ requirements for ensuring that all claims and appeals are adjudicated in a manner designed to ensure the independence and impartiality of the persons involved in making the decision
Providing certain notifications regarding appeals and other rights as required by the Appeals Rules

The Appeals Rules also state that if a plan or issuer that fails to strictly adhere to all of its requirements with respect to a claim, the claimant may initiate an external review and pursue any available remedies under applicable law, such as judicial review regardless of whether the plan or issuer asserts that it substantially complied with these requirements or that any error it committed was de minimis.

Both Grandfathered & Non-Grandfathered Plans Should Review Existing Claims & Appeals Procedures For Compliance With Existing Labor Department Regulations

Grandfathered health plans will not be required to comply with the new Appeals Rules. Like non-grandfathered plans, however, grandfathered plans will remain covered by the current claims and appeals requirements of ERISA and the existing Labor Department regulations. Along the Labor Department updated its existing claims and appeals regulations a decade ago, many plan fiduciaries, administrators and insurers have failed to fully update their plan documentation, processes and notifications to comply with these highly specific and detailed requirements. Furthermore, most grandfathered health plan sponsors and administrators also will want to consider whether any tightening of their health plan’s claims and appeals processes is warranted by language contained in the preamble to the Appeals Rules that that clarifies the Labor Department’s interpretation of existing claims and appeals procedures.

Other Affordable Care Act & Other Health Plan Rule Changes Require Prompt Action By Group Health Plans, Sponsors, Fiduciaries & Administrators

The Appeals Rules are the latest in a series of recently-issued guidance implementing various health coverage requirements of the Affordable Care Act. It follows closely the publication by the Agencies of regulations about when group health plans and insurance qualify as “grandfathered plans” for purposes of determining deadlines for complying with certain health care reform requirements imposed under the Affordable Care Act and a series of other regulations construing and implementing various other Affordable Care Act requirements. For additional information about these other Affordable Care Act requirements, see here.

These Affordable Care Act and other impending federal health plan changes will require employment-based group health plans, their employer and other plan sponsors, plan fiduciaries, plan administrators and other service providers and insurers to make quick decisions and to act quickly to meet impending federal compliance deadlines while preserving flexibility.

August 24 “2010 Health Plan Update” Internet Workshop Provides Key Information

How to qualify your health plan as a grandfathered plan under Affordable Care act
How to decide if maintaining grandfathered plan status is worthwhile
Claims & appeals requirements for grandfathered & non-grandfathered plans
Preventive care coverage mandates & wellness program requirements & rules under Affordable Care Act & other federal regulations
Updated dependent child eligibility, pre-existing condition & other requirements for grandfathered & non-grandfathered plans
Special enrollment, preexisting condition & other eligibility mandates for grandfathered & non-grandfathered plans under new Affordable Care Act, new FMLA, COBRA, Michelle’s Law, HIPAA & other federal regulations
Mental health & substance abuse, provider choice & other benefit mandates under Affordable Care Act, Mental Health Parity & other federal rules
Update on other recent & pending Affordable Care Act group health plan rule guidance
Tips to review & update your plans, vendor agreements & processes to meet Affordable Care Act & other federal group health plan dictates
Expected future Affordable Care Act & other federal rule changes & tips for preparing
Practical strategies for responding to new requirements & changing rules
Participant questions

To register or get additional information, see here.

About The Author

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer is nationally and internationally recognized for more than 23 years of work helping employer and other plan sponsors, insurers, administrators, fiduciaries, governments and others design, administer and defend innovative health and other employee benefit programs and other human resources, compensation and management policies and practices. Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer also is recognized for her publications, industry leadership, workshops and presentations on these and other health industry and human resources concerns. You can review other highlights of Ms. Stamer’s experience here. If you need help with human resources or other management, concerns, wish to ask about compliance, risk management or training, or need legal representation on other matters please contact Cynthia Marcotte Stamer here or (469)767-8872.

Solutions Law Press & Other Solutions Law Press Resources

If you found this information of interest, you also may be interested in reviewing other recent Solutions Law Press updates including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here or e-mailing this information here or registering to receive our Solutions Law Press distributions here. For important information about this communication click here. If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject to here.

Comments Off on New Affordable Care Act Health Plan Appeals Regulations Require Health Plan Updates | Affordable Care Act, COBRA, COBRA Subsidy, Employee Benefits, Employers, ERISA, family leave, Fiduciary Responsibility, FMLA, H.R. 4872, Health Care Reform, Health Plans, Human Resources, Insurance, Leave, medical leave, Mental Health, Mental Health Parity, Patient Protection and Affordable Care Act, Protected Health Information, Tax, Wellness, Wellness Programs | Tagged: Affordable Care Act, Appeals, Claims, Claims Procedures, ERISA, Health Care Reform. Health Plans, Health Insurance, Health Plans | Permalink
Posted by Cynthia Marcotte Stamer

New Retirement Plan Resource To Help Spanish-Speaking Participants With Retirement Planning

July 14, 2010

Employers, retirement plan fiduciaries, administrators, investment and financial advisors with Spanish speaking participants should check out a new resource from the U.S. Department of Labor Employee Benefits Security Administration, “Taking the Mystery Out of Retirement Planning in Spanish,” available at http://www.dol.gov/ebsa/publications/nearretirementsp.html.

About Ms. Stamer

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer has more than 23 years experience working with employer and other plan sponsors, insurers, Managing Editor of Solutions Law Press and a member of the editorial advisory board of many other industry publications and programs. The Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, and the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, Ms. Stamer also is recognized for her publications, industry leadership, workshops and presentations on these and other health industry and human resources concerns. She regularly speaks and conducts training for the ABA, Institute of Internal Auditors, Society for Professional Benefits Administrators, Southwest Benefits Association and many other organizations. Publishers of her many highly regarded writings on health industry and human resources matters include the Bureau of National Affairs, Aspen Publishers, ABA, AHLA, Aspen Publishers, Schneider Publications, Spencer Publications, World At Work, SHRM, HCCA, State Bar of Texas, Business Insurance, James Publishing and many others. You can review other highlights of Ms. Stamer’s experience here. Her insights on these and other matters appear in Managed Care Executive, Modern Health Care, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, MDNews, Kentucky Physician, and many other national and local publications.

Other Resources

If you found this information of interest, you also may be interested in reviewing other recent Solutions Law Press updates including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here or e-mailing this information here or registering to receive our Solutions Law Press distributions here. For important information about this communication click here. If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject to here.

Comments Off on New Retirement Plan Resource To Help Spanish-Speaking Participants With Retirement Planning | Employee Benefits, Employers, ERISA, Fiduciary Responsibility, Reporting & Disclosure, Retirement Plans | Permalink
Posted by Cynthia Marcotte Stamer

Office of Civil Rights Proposes Changes To HIPAA Privacy, Security & Civil Sanctions Rules

July 8, 2010

Stay Tuned To Solutions Law Press For More Details

Last Chance To Register for July 9 Virtual Briefing On Affordable Care Act Health Plan Guidance. Details here

Start tightening your health information privacy and security safeguards and practices and prepare for new scruitiny. The U.S. Department of Health & Human Services Office for Civil Rights (OCR) today (July 8, 2010) made public its plans to modify its Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy, Security, and Enforcement Rules in response to amendments enacted under the Health Information Technology for Economic and Clinical Health (HITECH) Act of 2009. Health plans, their sponsors, administrators, fiduciaries, insurers and service providers will need to respond to these rules, while also updating practices and procedures to comply with impending new health plan rules enacted in March as part of sweeping Health Care Reform legislation.

The more than 220 page Notice of Proposed Rulemaking (NPRM) proposes to revise the existing Standards for Privacy of Individually Identifiable Health Information (Privacy Rule); the Security Standards for the Protection of Electronic Protected Health Information (Security Rule); and the rules pertaining to Compliance and Investigations, Imposition of Civil Money Penalties, and Procedures for Hearings (Enforcement Rule) issued under HIPAA.

Stay tuned to Solutions Law Press for additional updates and a future briefing on these proposed changes and other developments affecting HIPAA and other health plan and human resources matters. In the meanwhile, you can find other updates and information about HITECH Act and other HIPAA Privacy & Security regulatory and enforcement developments in prior Solutions Law Press updates such as such as HIPAA Heats Up: HITECH Act Changes Take Effect & OCR Begins Posting Names, Other Details Of Unsecured PHI Breach Reports On Website.

Register Now For July 9, 2010 Virtual Briefing On Affordable Care Act Health Plan Guidance

In recent weeks, the U.S. Departments of Health and Human Services, Labor and Treasury (the “Agencies”) jointly released an advanced copy of interim final rules (the “Rules”) implementing several key new health coverage mandates enacted as part of the Patient Protection and Affordable Care Act (“Affordable Care Act”). The guidance implements impending requirements of the Affordable Care Act scheduled effective for most plans beginning with the first plan year after September 22, 2010.

To assist concerned business leaders, plan fiduciaries and plan administrators to understand and cope with these new rules, Solutions Law Press author Cynthia Marcotte Stamer will host a teleconference briefing on these new regulations and other Affordable Care Act health plan guidance on July 9, 2010 from Noon. to 1:30 p.m. Central Time. To register or for other details, see here.

About Ms. Stamer

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer is nationally and internationally recognized for more than 23 years of work helping employer and other plan sponsors, insurers, administrators, fiduciaries, governments and others design, administer and defend innovative health and other employee benefit programs and other human resources, compensation and management policies and practices.

The author of numerous highly regarding publications on HIPAA and other related matters, Ms. Stamer works extensively with employer and other health plan sponsors, fiduciaries, administrative and other service providers, insurers, and other clients on health benefit program and product design, documentation, administration, compliance, risk management, and public policy matters. The publisher of Solutions Law Press, Ms. Stamer also publishes, conducts training and speaks extensively on these and related concerns for the ABA, the Bureau of National Affairs and many other organizations. Please join us for what promises to be a most interesting discussion.

The Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, and the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, Ms. Stamer also is recognized for her publications, industry leadership, workshops and presentations on these and other health industry and human resources concerns. She regularly speaks and conducts training for the ABA, Institute of Internal Auditors, Society for Professional Benefits Administrators, Southwest Benefits Association and many other organizations. Publishers of her many highly regarded writings on health industry and human resources matters include the Bureau of National Affairs, Aspen Publishers, ABA, AHLA, Aspen Publishers, Schneider Publications, Spencer Publications, World At Work, SHRM, HCCA, State Bar of Texas, Business Insurance, James Publishing and many others. You can review other highlights of Ms. Stamer’s experience here. Her insights on these and other matters appear in Managed Care Executive, Modern Health Care, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, MDNews, Kentucky Physician, and many other national and local publications.

Other Resources

If you found this information of interest, you also may be interested in reviewing other recent Solutions Law Press updates including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here or e-mailing this information here or registering to receive our Solutions Law Press distributions here. For important information about this communication click here. If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject to here.

Comments Off on Office of Civil Rights Proposes Changes To HIPAA Privacy, Security & Civil Sanctions Rules | Affordable Care Act, Employee Benefits, Employers, ERISA, Fiduciary Responsibility, Health Plans, HIPAA | Permalink
Posted by Cynthia Marcotte Stamer

HHS, DOL & IRS Rules Define “Grandfathered” Group Health Plans & Health Insurance Coverage under Affordable Care Act

June 15, 2010

Affordable Care Act Health Plan Guidance Update Teleconference Briefing Planned July 9

The U.S. Departments of Health and Human Services, Labor and Treasury on Monday (June 14, 2001) published regulations on when group health plans and insurance qualify as “grandfathered plans” for purposes of determining certain deadlines for complying with certain health care reform requirements imposed under the Patient Protection & Affordable Care Act (Affordable Care Act).

The regulations are the latest in a series of emerging guidance that federal agencies have issued regarding the Affordable Care Act since its enactment in March, 2010. Solutions Law Press author Cynthia Marcotte Stamer will host a teleconference briefing on these new regulations and other Affordable Care Act health plan guidance on July 9, 2010 from 11:30 a.m. to 1:30 p.m. Central Time. E-mail here to request an invitation and registration information.

While the Affordable Care Act generally will require that all health plans provide new mandated benefits and other rights to covered persons beginning with plan years starting after September 22, 2010, health plans that existed on March 23, 2010 that qualify as “grandfathered” are exempt from some new requirements. The regulation published yesterday specifies what health plans must do to qualify for grandfathered status for purposes of these requirements.

As part of its first wave of health insurance reforms, the Affordable Care Act dictates that all health plans – whether or not they are grandfathered plans – provide certain benefits to their covered persons for plan years starting on or after September 23, 2010 including:

New restrictions on lifetime limits on essential benefit coverage;
No rescissions of coverage when people get sick and have previously made an unintentional mistake on their application; and
Extension of parents’ coverage to young adult children under 26 years old.

For post September 22, 2010 plan years, non-grandfathered plans also generally must meet certain other conditions including:

No coverage exclusions for children with pre-existing conditions;
No “restricted” annual limits set by regulations to be issued in the future;
Coverage of recommended prevention services with no cost sharing;
Patient protections such as access to OB-GYNs and pediatricians without a referral by a separate primary care provider;
Greater freedom for patients to obtain certain emergency treatment without certain plan restrictions; and
Other requirements.

Under the Affordable Care Act, grandfathered plans are exempt from certain of these mandates and may enjoy delayed compliance deadlines for certain other requirements.

The grandfather rule published June 14 provides certain “routine changes” will not cause a health plan that existed on March 23, 2010 to give up grandfathered status. Allowable changes include cost adjustments to keep pace with medical inflation, adding new benefits, making modest adjustments to existing benefits, voluntarily adopting new consumer protections under the new law, or making changes to follow State or other Federal laws. For this purpose, the regulation states that premium changes are not taken into account when determining whether or not a plan is grandfathered.

On the other hand, the regulation provides that a health plan that existed on March 23, 2010 will lose its eligibility for grandfathered status if the plan is amended to make significant changes that cut benefits or increase costs to covered persons.

Furthermore the regulation also addresses the effect of mergers and acquisitions and various other events and amendments on the eligibility of health plans for grandfathered status.

You can view the regulation here. Details about what routine changes insurers and employers can make without losing their grandfathered status, and the projected impact on large and small employer plans and the individual plan market can be found here. A fact sheet about the regulation can be found here. You can read the Questions and Answers on the Regulation here.

If you need help reviewing or responding to this or other health benefit regulations or other related matters please contact Cynthia Marcotte Stamer here or (469)767-8872.

About Ms. Stamer

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer is nationally and internationally recognized for more than 23 years of work helping employer and other plan sponsors, insurers, administrators, fiduciaries, governments and others design, administer and defend innovative health and other employee benefit programs and other human resources, compensation and management policies and practices.

As a core focus of her practice, Ms. Stamer works extensively with employer and other health plan sponsors, fiduciaries, administrative and other service providers, insurers, and other clients on health benefit program and product design, documentation, administration, compliance, risk management, and public policy matters. The publisher of Solutions Law Press, Ms. Stamer also publishes, conducts training and speaks extensively on these and related concerns for the ABA, the Bureau of National Affairs and many other organizations. Please join us for what promises to be a most interesting discussion.

Other Resources

If you found this information of interest, you also may be interested in reviewing other updates and publications by Ms. Stamer including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here or e-mailing this information here or registering to receive our Solutions Law Press distributions here. For important information about this communication click here. If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject to here.

Comments Off on HHS, DOL & IRS Rules Define “Grandfathered” Group Health Plans & Health Insurance Coverage under Affordable Care Act | Employee Benefits, Employers, ERISA, Fiduciary Responsibility, Health Plans, Human Resources, Insurance, Internal Controls, Patient Protection and Affordable Care Act, Wellness Programs | Tagged: Affordable Care Act, ERISA, Grandfathered Plans, Health Care Reform, Health Plans, Insurance | Permalink
Posted by Cynthia Marcotte Stamer

Stamer Speaks June 9 On “Health Care Reform’s Implications For Employers, Health Plans & Employee Benefits Practitioners” In Houston

May 19, 2010

Cynthia Marcotte Stamer will discuss “Health Care Reform’s Implications for Employers, Health Plans and Employee Benefits Practitioners” at the June 9, 2010 meeting of Houston WEB. The program is scheduled for Wednesday, June 9, 2010 at the DoubleTree Guest Suites, 5353 Westheimer, Houston, Texas from 11:30 a.m. to 1:30 pm.

Narrowly passed by Congress in March after a year of contentious debate, the comprehensive health care reform legislation imposes a complex array of reforms impacting employment based health plans, employers, and the insurers and other vendors and administrators of these programs. Ms. Stamer will explore key elements of these reforms impacting employers and employment based health coverage and their implications for employers, employment based health plans, and employee benefits and other attorneys providing advice about these arrangements.

To register or for more information about this event, see here. If you need assistance reviewing or responding to these or other employee benefit, compensation or labor and employment concerns, contact the author of this update, Cynthia Marcotte Stamer, for assistance at (469) 767-8872 or here.

About Ms. Stamer

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer is nationally and internationally recognized for more than 23 years of work helping businesses manage labor and employment, employee benefits, performance management and discipline, compliance and internal controls, risk management, and public policy matters including significant, cutting edge experience advising employer and other health plan sponsors, fiduciaries, insurers, administrators and others design, administer, and defend defensible, cost-effective health and other employee benefit programs.

Other Resources

If you found this information of interest, you also may be interested in reviewing other updates and publications by Ms. Stamer including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here or e-mailing this information here or registering to receive our Solutions Law Press distributions here. For important information about this communication click here. If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject to here.

Comments Off on Stamer Speaks June 9 On “Health Care Reform’s Implications For Employers, Health Plans & Employee Benefits Practitioners” In Houston | Affordable Care Act, CHIP, COBRA, COBRA Subsidy, Corporate Compliance, Employee Benefits, Employers, Employment Tax, ERISA, Fiduciary Responsibility, FMLA, HIPAA, Human Resources, Insurance, Internal Controls, Medicare Part D, Mental Health, Mental Health Parity, Payroll Tax, Prescription Drugs, Privacy, Protected Health Information, Public Policy, Risk Management, Tax, Uncategorized, Wellness, Wellness Programs | Tagged: Affordable Care Act, Employee Benefits, Employers, ERISA, Fiduciary, Health Care Reform, Health Insurance, Health Plan, Health Plans, Insurer | Permalink
Posted by Cynthia Marcotte Stamer

Defined Contribution Plans Investing In Publically Traded Employer Securities Face New Requirements

May 19, 2010

Employer and other sponsors, fiduciaries and administrators of 401(k) and other defined contribution pension plans that hold publically traded employer securities should review and update their plan documentation, communications and practices in response to new Internal Revenue Service (IRS) final regulations implementing new investment diversification requirements for these programs under Internal Revenue Code (Code) § 401(a)(35) and Employee Retirement Income Security Act (ERISA) § 204(j), as amended by the Pension Protection Act of 2006.

The new regulations for defined contribution plans investing in publically traded employer securities took effect immediately today (May 19, 2010) upon their publication here in the Federal Register.

Covered defined contribution plans generally will be required to comply with these new regulations beginning by the first plan year beginning after December 31, 2010 to maintain qualified status under Code § 401(a) and to comply with ERISA.

If you need help reviewing or responding to these new regulations or addressing other employee benefit, compensation or labor and employment concerns, contact the author of this update, Cynthia Marcotte Stamer at (469) 767-8872 or here

About Ms. Stamer

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer is nationally and internationally recognized for more than 23 years of work helping businesses manage labor and employment, employee benefits, performance management and discipline, compliance and internal controls, risk management, and public policy matters including significant, cutting edge experience advising employer and other health plan sponsors, fiduciaries, insurers, administrators and others design, administer, and defend defensible, cost-effective health and other employee benefit programs.

Other Recent Updates and Resources

If you found this information of interest, you also may be interested in reviewing other updates and publications by Ms. Stamer including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here or e-mailing this information here or registering to receive our Solutions Law Press distributions here. For important information about this communication click here. If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject to here.

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Posted by Cynthia Marcotte Stamer

CBO Raises Estimated Cost of Health Care Reforms As Employers, Health Plans Brace Costs Of Newly Effective & Impending Mandates

May 15, 2010

By Cynthia Marcotte Stamer

New analysis released Tuesday, May 11 by the non-partisan Congressional Budget Office shows H.R. 3590, the Patient Protection and Affordable Care Act, Public Law 111-148 (Health Care Reform Law) passed in March will cost $115 Billion more than originally estimated in the CBO’s March 15, 2010 discretionary spending analysis. News of the cost estimate increase comes as U.S. employer and other health plan sponsors, insurers and others are bracing for the first wave of new federal health plan mandates enacted as part of the Health Care Reform Law to take effect in September and a host of other federal mandates previously enacted that take effect in the 2009 and 2010 plan years.

Projected Cost of Health Care Reform Increased

According to CBO, additional information about the potential effects of the Health Care Reform Law on spending funded through the annual appropriation process (discretionary spending). By their nature all such potential effects on discretionary spending are subject to future appropriation actions, which could result in greater or smaller costs than the sums authorized by the legislation. While still limited in certain respects, the updated CBO analysis provides information on the major components of such costs in three general categories:

The costs that will be incurred by federal agencies to implement the new policies established by the Health Care Reform Law, such as administrative expenses for the Department of Health and Human Services and the Internal Revenue Service for carrying out key requirements of the legislation.
Explicit authorizations for future appropriations for a variety of grant and other program spending for which the act identifies the specific funding levels it envisions for one or more years. (Such cases include provisions where a specified funding level is authorized for an initial year along with the authorization of such sums as may be necessary for continued funding in subsequent years.)
Explicit authorizations for future appropriations for a variety of grant and other program spending for which no specific funding levels are identified in the legislation. That type of provision generally includes legislative language that authorizes the appropriation of “such sums as may be necessary,” often for a particular period of time.

According to the updated analysis, CBO estimates that total authorized costs in the first two categories probably exceed $115 billion over the 2010-2019 period. CBO still does not have an estimate of the potential costs of authorizations in the third category.

CBO previously issued an estimate of the Health Care Reform Law’s direct spending and revenue effects in combination with the Reconciliation Act of 2010 (Public Law 111-152), which amended it. (Direct spending effects are those that do not require subsequent appropriation action.) CBO estimated that those two laws, in combination, would produce a net reduction in federal deficits of $143 billion over the 2010-2019 period as a result of changes in direct spending and revenues.

Impending Federal Health Plan Mandate Changes Bring New Costs, Risks Now

CBO’s adjustment to its cost projections comes as U.S. employers and insurers already are bracing to cope with a host of new federally imposed health plan mandates and accompanying costs that already have or will in the next 12-months impact their existing health benefit programs. Examples of these new mandates include:

COBRA Stimulus Bill Premium Subsidy and Other Mandates
New FMLA and USERRA Coverage Continuation Mandates
Dependent Care Coverage Extension Mandates For Students Requiring Medical Leave Effective
Genetic and Other Disability Discrimination Mandates under GINA, ADA Amendments Act of 2008, HIPAA Portability and Other Federal Mandates
Expanded Mental Health Parity Mandates
HIPAA Data Breach and Other Protected Health Information Privacy and Data Security Mandates
New IRS Excise Tax Self-Assessment & Reporting Mandates For Plans Violating COBRA, Mental Health Parity and Wide Range of Other Federal Mandates
Changes To Retiree Medical Subsidy Rules
Early Retiree Medical Reinsurance Program For Employers Providing Qualifying Retiree Coverage
New Small Employer Tax Credit Rules
Mandated extension of dependent coverage to age 26
Prohibition of Pre-Existing Condition Limits on Dependent Coverage
New restrictions on annual and lifetime benefit limitations
Mandate to cover 100% of preventative care
Prohibition against coverage rescissions
Primary Care Physician choice mandates
Restrictions on coverage limitations for emergency and obstetrical care
Extension of Internal Revenue Code Section 105(h) nondiscrimination mandates to certain insured health plans
Many others

Employer and other health plan sponsors, their insurers, administrators and others responsible for updating and administering group and other health plans must move immediately to meet these evolving mandates while bracing for anticipated increased costs and other obligations expected to result as the Health Care Reform Law takes effect over the next few years. Employers, administrators and insurers needing additional information about these changes can review the resources and training materials available here and/or contact the author of this update, attorney and consultant Cynthia Marcotte Stamer, for assistance at (469) 767-8872 or here

Responsible & Prompt Action Needed

Employer and other health plan sponsors, administrators, fiduciaries and insurers both should act quickly to update their programs, plan documents, communications and practices to comply with federal mandates that have and are scheduled to take effect and stay involved with regulators and Congress as the regulatory rules and processes to implement the Health Care Reform Law are developing. Ultimately, the cost and other implications of the Health Care Reform Law will depend largely upon how its provisions are construed and implemented by federal and state regulators, along with any subsequent adjustments, if any that Congress may elect to enact. With federal officials hard at work preparing implementing regulations and other guidance and procedures, health industry leaders and other concerned Americans should stay informed and continue to share their input on these critical issues as these decisions are shaped. Join the discussion by participating in the Coalition For Responsible Health Care Policy linked in group and/or its subgroup, Project COPE: Coalition for Patient Empowerment and/or register to receive updates Coalition for Responsible Heath Care Policy by RSS Feed.Coalition for Responsible Health Care Policy Coalition for Responsible Health Care Policy Coalition for Responsible Health Care Policy

The author of this update, Cynthia Marcotte Stamer, recently has conducted briefings on the implications of the Affordable Care Act and other regulatory changes impacting health plans and their employer and other sponsors, insurers, administrators and others for the Society of Professional Benefits Administrators, the Dallas Bar Association and others. Several other presentations and update are scheduled in the upcoming months. For information about these programs or to register to receive information about these programs, see here.

About Ms. Stamer

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer is nationally and internationally recognized for more than 22 years of work helping businesses manage labor and employment, employee benefits, performance management and discipline, compliance and internal controls, risk management, and public policy matters including significant, cutting edge experience advising employer and other health plan sponsors, fiduciaries, insurers, administrators and others design, administer, and defend defensible, cost-effective health and other employee benefit programs.

The Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, Vice President of the North Texas Health Care Compliance Professionals Association, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, and the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications Ms. Stamer also is recognized for her publications, industry leadership, workshops and presentations on these and other health industry and human resources concerns. She regularly speaks and conducts training for the ABA, American Health Lawyers Association (AHLA), Health Care Compliance Association, Institute of Internal Auditors, Harris County Medical Society, the Medical Group Management Association, Society for Professional Benefits Administrators, Southwest Benefits Association, Harris County Medical Society, Medical Group Management Association, Society of Human Resources Management, and many other organizations. Publishers of her many highly regarded writings on health industry and human resources matters include the Bureau of National Affairs, Aspen Publishers, ABA, AHLA, Aspen Publishers, Schneider Publications, Spencer Publications, World At Work, SHRM, HCCA, State Bar of Texas, Business Insurance, James Publishing and many others. You can review other highlights of Ms. Stamer’s experience here. Her insights on these and other matters appear in Managed Care Executive, Modern Health Care, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, MDNews, Kentucky Physician, and many other national and local publications.

Other Resources

If you found this information of interest, you also may be interested in reviewing other updates and publications by Ms. Stamer including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here or e-mailing this information here or registering to receive our Solutions Law Press distributions here. For important information about this communication click here. If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject to here.

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Posted by Cynthia Marcotte Stamer

Stamer To Speak About TPA & Other Plan Services Agreement Contracting Strategies For Managing Risks & Improving Effectiveness At 2010 Great Lakes Benefits Conference

March 13, 2010

Curran Tomko Tarski LLP Labor & Employment Practice Chair and Solutions Law Press Publisher Cynthia Marcotte Stamer will discuss “TPA & Other Plan Services Agreements- Managing Risks & Improving Effectiveness” At 2010 Great Lakes Benefits Conference to be held at the Wyndham Chicago Hotel on June 16-17, 2010.

Growing regulatory, fiduciary and other compliance risks magnify the importance of the careful negotiation and documentation of third party administration and other plan-related service agreements for plans, plan sponsors, plan fiduciaries and service providers. Careful credentialing, negotiation and documentation of administrative and other services relationships plays an increasingly key role in the ability of plan sponsors, plans, fiduciaries and service providers to allocate and efficiently manage plan operations, meet compliance obligations, and allocate and manage fiduciary and other legal risks.

Ms. Stamer’s workshop will examine key concerns like how administrative services contract terms, plan terms, the parties of actions and other factors help determine which parties are exposed to fiduciary and other liabilities; who is responsible for fiduciary, administrative, reporting and disclosure, bonding, indemnification and other responsibilities; and terms and processes that may help parties manage their relationships and legal risks by exploring some of the common issues and concerns that need to be considered when entering into these contractual arrangements.

Co-hosted by the Internal Revenue Service and ASPPA, this two day Conference features presentations on regulatory, legislative, administrative and actuarial and other employee benefit issues lead by local, regional and national government representatives from the Internal Revenue Service and the Department of Labor and nationally recognized employee benefit leaders from private industry. To register for the Conference or for additional information, see here.

Chair of the American Bar Association RPTE Employee Benefits & Compensation Committee, an ABA Joint Committee on Employee Benefits Council member, Chair of the Curran Tomko Tarski Labor, Employment & Employee Benefits Practice and former Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is nationally recognized for more than 22 years domestic work with employer and other plan sponsors, fiduciaries, administrative and other service providers, insurers, and other clients on employee benefit program and product design, documentation, administration, compliance, risk management, and public policy matters. The publisher of Solutions Law Press, Ms. Stamer also publishes, conducts training and speaks extensively on these and related concerns. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly. For additional information about the experience and services of Ms. Stamer and other members of the Curran Tomko Tarksi LLP team, see here.

If you need assistance with vendor or other outsourcing contracts, or other employee benefits, employment, compensation or other management concerns, wish to inquire about compliance, risk management or training, or need legal representation on other matters please contact Cynthia Marcotte Stamer, CTT Labor & Employment Practice Chair at cstamer@cttlegal.com, 214.270.2402; or your other preferred Curran Tomko Tarski LLP attorney.

If you found this information of interest, you also may be interested in reviewing other updates and publications by Ms. Stamer including:

You can review other recent human resources, employee benefits and internal controls publications and resources and additional information about the employment, employee benefits and other experience of Ms. Stamer here and learn more about other Curran Tomko Tarski LLP attorneys here. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here or e-mailing this information to Cstamer@CTTLegal.com or registering to participate in the distribution of these and other updates on our Solutions Law Press distributions here. For important information concerning this communication click here. If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject to here.

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Posted by Cynthia Marcotte Stamer

Privacy Rule Changes & Posting of Breach Notices On OCR Website Signal New Enforcement Risks For Health Plans, Their Sponsors & Business Associates

February 23, 2010

By Cynthia Marcotte Stamer

The Department of Health and Human Services Office of Civil Rights (OCR) has begun disclosing on its website the employer and other health plans, health care providers, health care clearinghouses and their business associates (Covered Entities) that report breaches of unsecured protected health information (UPIC) affecting more than 500 individuals as required by new rules enacted as part of the Health Information Technology for Economic and Clinical Health Act (HITECH Act). This posting of Covered Entities reporting breaches comes just days after these and other Covered Entities became subject on February 17, 2010 to a host of other tighter federal requirements for the use, access, protection and disclosure of protected health information under Privacy & Security Standards of the Health Insurance Portability & Accountability Act (HIPAA) also enacted as part of the HITECH Act. As failing to comply with the amended rules effective February 17, 2010 can trigger obligations under the Breach Regulations and other exposures, prompt action to manage risk under both the Breach Regulations and the revised HIPAA rules is critical to minimize Covered Entity and business associate exposures under both these rules. With criminal, administrative and civil prosecutions of such violations increasing and likely to expand, timely action to manage compliance and other risks is warranted. Health plans and their business associates also should prepare for increased awareness and oversight of the adequacy of their medical information safeguards as these disclosures and other enforcement actions heighten interest and awareness of employees and others in these rules.

Covered Entity Breach Notification Requirements

OCR posted the initial list of Covered Entities disclosing these breaches on its website for the first time yesterday (February 22, 2010) to comply with breach notification requirements imposed by Section 164.408 of the interim “Breach Notification For Unsecured Protected Health Information” regulation (Breach Regulation) published here.

The Breach Regulation requires Covered Entities subject to the Health Insurance Portability & Accountability Act (HIPAA) to notify affected individuals, OCR and certain other parties following a “breach” of “unsecured” protected health information occurring on or after September 23, 2009. The Breach Regulation implements new breach notification requirements added to HIPAA by Section 13402(e)(3) of the Health Information Technology for Economic and Clinical Health Act (HITECH Act). It and the posting of Covered Entities reporting breaches of protected health information are part of the ongoing implementation and enforcement of new and stricter personal health information privacy and data security requirements for Covered Entities added to HIPAA under provisions of the HITECH Act and expanded remedies for violations signed into law on February 17, 2009 as part of American Recovery and Reinvestment Act of 2009 (ARRA).

You can review the list of Covered Entities that have reported breaches on the OCR website here. Learn more about the Breach Regulation requirements here.

Broader & Stricter Medical Privacy Mandates Effective 2/17/210

Just last Wednesday (February 17, 2010) Covered Entities and their business associates also became subject to tighter federal requirements for the use, access, protection and disclosure of protected health information under amendments to HIPAA’s Privacy & Security Standards enacted by the HITECH Act. The changes that became effective on February 17, 2010 generally require that Covered Entities and their business associates make specific changes to update their written policies, operational procedures, privacy notices, business associate agreements, training, and other management procedures in several respects. For more details, see here.

While the HITECH Act gave Covered Entities and business associates a year to complete the necessary arrangements to comply with these HITECH Act changes, many Covered Entities and business associates have remain unnecessarily exposed under these new requirements by not completing or otherwise failing to adequately implement the necessary arrangements despite expanding liability exposures that can result from noncompliance. To mitigate these exposures, Covered Entities and their business associates should act quickly to review and update their policies, procedures, training, business associate and other services agreements, and other practices and procedures, as well as to implement the training, oversight, and other management necessary to comply with the HITECH Act changes and to mitigate other HIPAA risks.

Exposures Significant & Growing

Covered Entities and business associates failing to devote adequate attention and resources to managing HIPAA compliance and associated risks risk increasing peril. Aside from the potential implications that disclosures of violations may have on patients and others impacting their business, the legal risks of noncompliance for Covered Entities, business associates and others mishandling protected health information are real and growing.

Timely action to comply with the amended HIPAA requirements and Breach Regulations is important both to preserve critical trust in the business, to avoid triggering breach notifications that can undermine this trust and fuel legal complaints, and to avoid exposure to an expanding range of sanctions that can result when a violation occurs.

Amendments made under the HITECH Act have expanded the size and availability of remedies that can be imposed for HIPAA violations as well as the parties empowered to pursue these remedies. Wrongful use, access or disclosure of protected health information in violation of HIPAA subjects participating health plans, health care providers, health care clearinghouses, their business associates and other workforce members and others to civil penalties, criminal prosecution and, since February 17, 2009, civil lawsuits brought by state attorneys general on behalf of citizens of their states whose HIPAA rights were violated. Since September 23, 2009, health plans and other HIPAA Covered Entities as well as their business associates also became obligated to provide breach notification under new mandates imposed by the HITECH Act. Coupled with increased enforcement emphasis by regulators, these expansions to HIPAA’s remedy provisions increase the risk that Covered Entities or business associates violating HIPAA face investigation and sanction. Furthermore, the wrongful use, access or disclosure of protected health information or other confidential information also increasingly is the basis of civil or criminal actions brought under a variety of other federal and state laws.

Expanded HIPAA & Other Federal Prosecutions & Remedies

The expanded requirements imposed under the Breach Regulation and the other HITECH Act changes that took effect on February 17, 2010 follow the implementation changes to HIPAA’s civil and criminal sanctions that took effect on February 17, 2009, when President Obama signed the HITECH Act into law. The HITECH Act amendments to HIPAA’s remedies significantly increase the risk that health plans and other Covered Entities and their business associates will face civil lawsuits, civil or criminal penalties or other consequences for violating HIPAA. Noncompliance with these and other HIPAA requirements subjects Covered Entities and business associates to civil penalties, criminal prosecution, civil damage awards under lawsuits brought by state attorneys general, and other legal remedies. In addition, timely update written policies, procedures, business associate agreements, training and documentation is imperative in order for Covered Entities and their business associates to fulfill their breach notification obligations under new rules enacted as part of the HITECH Act.

HITECH Amendments Expand Liability Exposures

The expanded risks stem in part from the HITECH Act’s amendments to HIPAA’s remedy provisions. Among other things, the HITECH Act amended HIPAA to:

Allow a State Attorney General to sue health plans or other Covered Entities, business associates or both that harm state citizens by committing HIPAA violations after February 16, 2009;
Expand the mandate by OCR to investigate violations and audit compliance with HIPAA;
Require Office of Civil Rights to impose civil sanctions against Covered Entities and business associates involved in violations of HIPAA in accordance with tightened standards added to HIPAA by the HITECH Act;
Revise the criminal sanctions that the Department of Justice can seek against Covered Entities, their business associates and others for violations of HIPAA; and
Amend HIPAA to make clear that HIPAA’s criminal sanctions also can imposed on business associates, workforce members and other persons that improperly use, access and disclose protected health information in violation of HIPAA.

State Attorney General Lawsuit Exposures

Covered Entities and their business associates now also need to be concerned about the potential that a state Attorney General may bring civil suit to remedy damages caused to state citizens by a breach of HIPAA.

The HITECH Act empowers a state attorney general to sue Covered Entities or business associates engaging in HIPAA violations that harms citizens of the state for statutory damages equal to the sum of the number of violations multiplied by 100 up to a maximum of $25,000 per calendar year plus attorneys fees and costs

A HIPAA civil lawsuit filed on January 13, 2010 demonstrates the willingness of at least some states to exercise the new authority created by the HITECH Act on February 17, 2009 to sue Covered Entities and business associates that violate HIPAA for civil damages.

On January 13, 2010 Connecticut Attorney General Richard Blumenthal sued Health Net of Connecticut, Inc. (Health Net) for failing to secure private patient medical records and financial information involving 446,000 Connecticut enrollees and promptly notify consumers endangered by the security breach. The suit also names UnitedHealth Group Inc. and Oxford Health Plans LLC, who have acquired Health Net. The first attorney general enforcement action brought based on amendments made to HIPAA under the HITECH Act, Connecticut charges that Health Net violated HIPAA by failing to safeguard protected medical records and financial information on almost a half million Health Net enrollees in Connecticut then allowing this information to remain exposed for at least six months before notifying authorities and consumers.

Stepped Up Federal Enforcement

Even before the HITECH Act amendments, however, OCR and Department of Justice already were stepping up HIPAA investigation and enforcement. The Department of Justice has obtained a variety of criminal convictions against violators of HIPAA. See, e.g., 2 New HIPAA Criminal Actions Highlight Risks From Wrongful Use/Access of Health Information. Meanwhile, OCR also is emphasizing HIPAA enforcement. In February, 2009, for instance, OCR announced that CVS Pharmacies, Inc. would pay $2.25 million to resolve HIPAA charges. This announcement followed OCR’s announcement in July, 2008 that Providence Health Care would pay $100,000 to resolve HIPAA violation charges. OCR also has taken HIPAA enforcement actions against a broad range of other Covered Entities to redress HIPAA violations or other compliance concerns. To review examples of these other actions, see here. While not resulting in the significant payments involved in CVS or Providence, all Covered Entities involved in these and other enforcement actions or investigations have incurred significant legal and other defense costs, loss of community trust, or both.

In addition to these HIPAA-specific exposures, wrongful use, access or disclosure of medical information also can give rise to liability for health plans and other Covered Entities, business associates, employees and other members of their workforce and others improperly using, accessing or disclosing protected health information. Federal and state prosecutions may and increasingly do criminally prosecute individuals for improperly accessing or using medical or other personal information under a variety of other federal or state laws . See e.g., Cybercrime & Identity Theft: Health Information Security Beyond HIPAA; NY AG Cuomo Announcement of 1st Settlement For Violation of NY Security Breach Notification Law; Woman Who Revealed AIDs Info Gets A Year. Additionally, State courts also increasingly are permitting individuals harmed by HIPAA violations to use HIPAA as the foundation of state law duties used to maintain state negligence, invasion of privacy, retaliation or other claims for damages. Read more here.

State Civil Lawsuits

Meanwhile, disgruntled employees or other business partners also increasingly raise alleged HIPAA misconduct as a basis of their legal complaints. For instance, private plaintiffs employed by Covered Entities also are increasingly pointing to HIPAA as the basis for their retaliation or wrongful discharge claims. See, e.g., Retaliation For Filing HIPAA Complaint Recognized As Basis For State Retaliatory Discharge Claim. Coupled with the HITECH Act changes, these and other enforcement actions signal growing potential hazards for Covered Entities and their business associates that fail to properly manage their HIPAA compliance obligations and risks.

Given these and other developments, Covered Entities and their business associates generally should resist the temptation to underestimate their potential HIPAA exposure for a variety of reasons. In fact, a number of factors demonstrate that the risks are significant and growing for Covered Entities, business associates and others that breach HIPAA’s mandates or otherwise inappropriately access protected health information.

Covered Entities & Business Associates Urged To Act Promptly To Manage Expanded HIPAA Risks & Obligations

As a consequence of these collective HITECH Act changes and growing HIPAA-related and other exposures, Covered Entities, their business associates and business associates generally will find it necessary or advisable among other things to:

Conduct well-documented due diligence within the scope of attorney-client privilege on their own practices and procedures;
Review the adequacy of the practices, policies and procedures of the Covered Entities, business associates, and others that may come into contact with protected health information;;
Renegotiate their service provider agreements to detail the specific compliance obligations of each party relating to for auditing compliance, investigating potential breaches; providing required breach notifications; specify leadership and required cooperation in the event of a breach, charge, or other concern; indemnification and other liability allocations; and other related matters;
Update policies, privacy and other notices, practices, procedures, training and other practices as needed to promote compliance and defensibility;
Conduct well-documented training as necessary to ensure that business associates and other members of the Covered Entity’s workforce understand and are prepared to comply with the expanded requirements of HIPAA, can detect potential breaches or other compliance concerns, and understand and are prepared to follow appropriate procedures for reported suspected violations; and
Pursue appropriate liability and other protection as appropriate to improve their ability to demonstrate both their commitment to compliance and their realistic efforts to ensure that these commitments are both appropriately documented on paper and operationalized in performance.

As part of these compliance and risk management efforts, most Covered Entities and their business associates will find it advisable to devote significant attention to the business associate relationship and its associated business associate agreements. Proper management of the expanded compliance obligations and liability exposures created by the HITECH Act generally will necessitate that Covered Entities and their business associates focus significant attention on the reworking of their operating and contractual relationships including the definition of detailed procedures for monitoring, reporting, investigating, and resolving potential breaches or other compliance concerns.

Even before the impending HIPAA changes scheduled to take effect on February 17, 2010, a strong need for more detailed contracting and planning of these relationships already existed. Since the enactment of HIPAA, the practice of many Covered Entities and their business associates of appending generic “business associate” representations onto existing services contracts without specific tailoring and planning has created undesirable ambiguities in these agreements. Further updating and tailoring of these and other provisions of services agreements has become even more important over the past year in light of the new breach notification mandates that took effect under the HITECH Act in September, 2009, changes to HIPAA’s civil and criminal sanctions that took effect on February 17, 2009, and the impending extension by the HITECH Act to business associates of direct liability for compliance with HIPAA scheduled to occur on February 17, 2010.

These and other stepped up oversight and enforcement activities make it critical that all Covered Entities and their business associates update their policies and practices, conduct training, tighten their compliance and data breach monitoring processes, strengthen their internal controls and documentation, and take other steps to prepare to defend their actions under the newly strengthened Privacy Rules. Covered Entities and their business associates more than ever must ensure their ability to demonstrate to federal regulators the effectiveness of their HIPAA compliance efforts by both adopting the written policies and procedures required by HIPAA and continuously monitoring and administering these safeguards. Covered Entities should consider reviewing the adequacy of their current HIPAA Privacy and Security compliance practices taking into consideration the Corrective Action Plan, published OCR noncompliance and enforcement statistics, their own and reports of other security and privacy breaches and near misses, and other developments to determine if additional steps are necessary or advisable.

For Assistance With Compliance Or Other Concerns

If your organization need advice or assistance in reviewing, updating, administering or defending its HIPAA or other privacy policies, practices, business associate or other agreements, notices or other related activities, consider contacting the author of this article, Curran Tomko Tarski LLP Partner Cynthia Marcotte Stamer at (214) 270-2402 or via e-mail here.

Ms. Stamer is nationally known for her work, training and presentations, and publications on privacy and security of health and other sensitive information in health and managed care, employment, employee benefits, financial services, education and other contexts.

Vice President of the North Texas Health Care Compliance Professionals Association, Past Chair of the ABA Health Law Section Managed Care & Insurance Section and the former Board Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer has more than 22 years experience advising clients about health and other privacy and security matters. A popular lecturer and widely published author on privacy and data security and other related health care and health plan matters, Ms. Stamer is the Editor in Chief of the forthcoming 2010 edition of the Information Security Guide to be published by the American Bar Association Information Security Committee in 2010, as well as the author of “Protecting & Using Patient Data In Disease Management: Opportunities, Liabilities And Prescriptions,” “Privacy Invasions of Medical Care-An Emerging Perspective,” “Cybercrime and Identity Theft: Health Information Security Beyond HIPAA,” and a host of other highly regarded publications. She has continuously advises employers, health care providers, health insurers and administrators, health plan sponsors, employee benefit plan fiduciaries, schools, financial services providers, governments and others about privacy and data security, health care, insurance, human resources, technology, and other legal and operational concerns. Ms. Stamer also publishes and speaks extensively on health and managed care industry privacy, data security and other technology, regulatory and operational risk management matters. Her insights on health care, health insurance, human resources and related matters appear in the Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Managed Healthcare, Health Leaders, and a many other national and local publications. For additional information about Ms. Stamer, her experience, involvements, programs or publications, see here.

Other Recent Developments

If you found this information of interest, you also may be interested in information about upcoming programs to be presented by Ms. Stamer, acquiring a copy of a recording or materials from previous programs she has presented, or arranging training for your organization. For more information about these opportunities, contact Ms. Stamer directly.

If you found this information of interest, you also may be interested in reviewing some of the following recent Updates available online by clicking on the article title:

Curran Tomko Tarski LLP Can Help

If your organization need advice or assistance in reviewing, updating, administering or defending its HIPAA or other privacy policies, practices, business associate or other agreements, notices or other related activities, consider contacting Curran Tomko Tarski LLP Partner Cynthia Marcotte Stamer.

A widely published author and speaker on HIPAA and other employee benefit and human resources related matters, Ms. Stamer has extensive experience advising health plans, their employer and other sponsors, health insurers, TPAs and other business associates and others about HIPAA and other health plan and privacy matters. Currently serving as both Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and as an ABA Joint Committee on Employee Benefits Council representative and Former Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer has more than 23 years experience assisting employers, insurers, plan administrators and fiduciaries and others to design, implement, draft and administer health and other employee benefit plans and to defend audits, litigation or other disputes by private parties, the IRS, Department of Labor, Office of Civil Rights, Medicare, state insurance regulators and other federal and state regulators. A nationally recognized author and lecturer, Ms. Stamer also speaks and writes extensively on these and other related matters. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly. For additional information about the experience and services of Ms. Stamer and other members of the Curran Tomko Tarksi LLP team, see here.

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Posted by Cynthia Marcotte Stamer

Stamer To Present “2010 Health Plan Checkup” At Annual DFW ISCEBS Employee Benefits Fundamentals Workshop

February 22, 2010

Cynthia Marcotte Stamer will discuss the latest changes and requirements affecting employer sponsored group health plans, their sponsors, fiduciaries, insurers and vendors during her presentation titled “2010 Health Plan Checkup” at the Dallas/Fort Worth ISCEBS Annual Fundamentals Workshop currently scheduled for May 13, 2010 in Dallas.

With Congress and federal regulators turning up the heat on health care, keeping up to date with the latest developments is both critical and increasingly challenging for employers, their employee benefits and human resources staff, and the fiduciaries, insurers, administrators and others dealing with health plan design and administration. Coming as U.S. employers continue to struggle to provide health benefits in the face of skyrocketing health benefit costs, tighter health plan medical privacy, nondiscrimination, mental health and other benefit mandates, and a host of other tighter new federal regulations impacting employment-based health plans and their sponsoring businesses, fiduciaries and administrators increasingly are forcing U.S. business leaders to make appropriate health plan cost and compliance management a key management priority. Ms. Stamer will discuss key developments, highlight new developments on the horizon, and provide tips to participants for monitoring and responding to these and other developments. To register or for additional information, contact the Dallas/Fort Worth ISCEBS here.

Nationally recognized for her more than 22 years of work on managed care and other health and other employee benefits, human resources, insurance, and health care matters, Ms. Stamer assists employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend managed care and other medical benefit programs and practices. She also regularly advises and assists these and other clients to monitor and respond to evolving legislation, regulations, enforcement activities by federal and state regulators, evolving product and market changes, and private litigation and other disputes. Past Chair of the American Bar Association (ABA) Health Law Section Managed Care & Insurance Interest Group and the Current Chair of the ABA RPTE Employee Benefits & Compensation Committee, an ABA Joint Committee on Employee Benefits Council member, Chair of the Curran Tomko Tarski Labor, Employment & Employee Benefits Practice and Board Certified in Labor & Employment Law, Ms. Stamer also is a widely published author and highly regarded speaker on these and other employee benefit and human resources matters. Some other recent updates on these topics recently published by Ms. Stamer include :

For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly. For additional information about the experience and services of Ms. Stamer and other members of the Curran Tomko Tarksi LLP team, see here.

If you need assistance with these or other compliance concerns, wish to inquire about federal or state regulatory compliance audits, risk management or training, assistance investigating or responding to a known or suspected compliance or risk management concern, or need legal representation on other matters please contact the author of this update, Cynthia Marcotte Stamer, CTT Labor & Employment Practice Chair at cstamer@cttlegal.com, 214.270.2402; or your other preferred Curran Tomko Tarski LLP attorney.

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Posted by Cynthia Marcotte Stamer

SouthWest Benefits e-Connections Highlights Stamer Article About Importance For Health Plans, Their Sponsors & Business Associates To Update HIPAA Policies, Practices & Agreements

February 22, 2010

Cynthia Marcotte Stamer’s article Health Plans & Business Associates Face 2/17 Deadline To Comply With HIPAA Privacy Rule Changes is featured in the Winter, 2010 edition of the SouthWest Benefits Association e-Connection. The article originally published in the Solutions Law Press HR & Benefit Update highlights the need for health plans, employer and other plan sponsors, administrators, and health insurers as well as the brokers, advisors, and other service providers performing functions on behalf of these entities to update their plans, policies, vendor agreements, practices, privacy notices and other communications and other materials, conduct training and take other steps in response to tighter federal requirements for the use, access, protection and disclosure of protected health information under Privacy & Security Standards of HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (HITECH Act).

Founded in 1975, SouthWest Benefits is a regional, non-profit association designed to foster relationships and support the educational growth of professionals in employee benefits through an annual schedule of professional educational conferences and workshops. As part of these activities, the SWBA is scheduled to host its 35th Annual Conference on May 12th-14th at the Westin Riverwalk in San Antonio. For information about these and other SWBA, see here.

A former Southwest Benefits Association board member who remains active in the organization, Ms. Stamer is a board certified labor and employment attorney recognized, internationally, nationally and locally for her more than 22 years of work, advocacy, education and publications on employee benefit and related matters. As a core focus of her role as the Chair of the Curran Tomko Tarski Labor, Employment & Employee Benefits Practice, Ms. Stamer continuously advises and assists employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources programs and practices. Chair of the American Bar Association (ABA) RPTE Employee Benefits & Compensation Committee, an ABA Joint Committee on Employee Benefits Council member, Ms. Stamer also is a widely published author and highly regarded speaker on these and other employee benefit and human resources matters who is active in many other employee benefits, human resources and other management focused organizations For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly. For additional information about the experience and services of Ms. Stamer and other members of the Curran Tomko Tarksi LLP team, see here.

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Posted by Cynthia Marcotte Stamer

Health Plan Liability Heats Up As Plans & Businesses Face New Obligations, Costs & Exposures under New HIPAA Privacy Rules Effective 2/17 & Other Expanding Federal Health Plan Mandates

February 17, 2010

Today (February 17, 2010), employer and other health plans and health insurers (“covered entities”) and service providers performing functions on behalf of these entities (“business associates”) must begin complying with tighter federal requirements for the use, access, protection and disclosure of protected health information under Privacy & Security Standards of the Health Insurance Portability & Accountability Act (HIPAA), as amended by the Health Information Technology for Economic and Clinical Health Act (HITECH Act). Coming as U.S. employers continue to struggle to provide health benefits in the face of skyrocketing health benefit costs, these and other new federal regulations impacting employment-based health plans and their sponsoring businesses, fiduciaries and administrators are forcing U.S. business leaders to make appropriate health plan cost and compliance management a key management priority.

2/17/10 & Other HIPAA Privacy Rule Changes Require Prompt Attention

The HIPAA Privacy Rule changes scheduled to take effect February 17, 2010 are likely to require that health plans and their business associates update their written policies, operational procedures, privacy notices and business associate agreements in several respects.

While the HITECH Act gave covered entities and business associates a year to complete the necessary arrangements to comply with these impending HITECH Act changes, many health plans and business associates have not completed the necessary arrangements despite expanding liability exposures that can result from noncompliance. To mitigate these exposures, covered entities and their business associates should act quickly both to update their services agreements, plans and policies, practices, and procedures, and to implement the training, oversight, and other management procedures necessary to comply with the HITECH Act changes and to mitigate other HIPAA risks.

The risks of noncompliance for health plans, business associates and others mishandling protected health information are real and growing. Wrongful use, access or disclosure of protected health information in violation of HIPAA subjects participating health plans, health care providers, health care clearinghouses, their business associates and other workforce members and others to civil penalties, criminal prosecution and, since February 17, 2009, civil lawsuits brought by state attorneys general on behalf of citizens of their states whose HIPAA rights were violated. Since September 23, 2009, health plans and other HIPAA covered entities as well as their business associates also became obligated to provide breach notification under new mandates imposed by the HITECH Act.

In addition to these HIPAA-specific exposures, wrongful use, access or disclosure of medical information also can give rise to liability for health plans and other covered entities, business associates, employees and other members of their workforce and others improperly using, accessing or disclosing protected health information. Federal and state prosecutions may and increasingly do criminally prosecute individuals for improperly accessing or using medical or other personal information under a variety of other federal or state laws . See e.g., Cybercrime & Identity Theft:Health Information Security Beyond HIPAA; NY AG Cuomo Annoucment of 1st Settlement For Violation of NY Security Breach Notification Law; Woman Who Revealed AIDs Info Gets A Year. Additionally, State courts also increasingly are permitting individuals harmed by HIPAA violations to use HIPAA as the foundation of state law duties used to maintain state negligence, invasion of privacy, retaliation or other claims for damages. Read more here.

To manage these and other HIPAA-related risks, sponsoring employers, fiduciaries, administrators, insurers and their vendors should begin with carefully and timely reviewing and updating existing plan documents, vendor agreements, privacy notices and other communications and associated practices and policies. The focus of these efforts definitely should seek both to adopt the specific technical changes necessary to make the health plans and their contracts technically comply on paper with these and other HIPAA mandates, and to tailor these documents, communications and practices promote operational compliance and minimize exposure to associated risks. In relation to these efforts, sponsoring employers, insurers, fiduciaries and administrators also should ensure that required certifications from employers and other plan sponsors, representations from business associates, training and other compliance conditions are properly in place. In this respect, employers sponsoring health plans should not overlook the potential need to adopt appropriate policies and implement needed training and safeguards to enable the health plan and the employer demonstrate, if necessary that HIPAA’s requirements for sharing protected health information with members of the employer’s workforce for plan administration, underwriting or certain other purposes have been satisfied.

Other Health Plan Updates Also Required

The HIPAA Privacy Rule changes effective today are only part of the ever-growing list of federal mandates that group health plan sponsors, fiduciaries, insurers, administrators and service providers need to be concerned about. In addition to the new HIPAA Privacy Rule requirements taking effect today, health plans, their sponsors, administrators, fiduciaries, insurers, business associates and other service providers face a host of other new federal health plan and privacy mandates that have taken effect over the past year, and will become subject to additional mandates in upcoming months. Consequently, while focusing on HIPAA compliance, health plans, their employer or other sponsors, insurers, fiduciaries, administrators and service providers also should not overlook the need to review and update their health plans in response to a host of other changes in federal health plan mandates.

In addition to otherwise applicable civil damage awards and civil penalty exposures that can result from violations of these requirements, new Internal Revenue Service regulations that took effect January 1, 2010 also require that employers, health plans or others self-report violations of certain of these requirements and self assess and pay resulting excise taxes arising under the Internal Revenue Code. See, e.g., COBRA, HIPAA, GINA, Mental Health Parity or Other Group Health Plan Rule Violations Trigger New Excise Tax Self-Assessment & Reporting Obligations.

The highly volatile health plan regulatory environment makes it likely that many health plans are not appropriately updated to comply with these and other federal requirements. In recent months, health plans, their employer or other sponsors, administrators and others also have become obligated to comply with a host of other expanded federal health plan rules and requirements. See e.g., New Mental Health Parity Regulations Require Health Plan Review & Updates; New Labor Department Rule Allows Employers 7 Days To Deliver Employee Contributions To Employee Benefit Plans; Newly Extended COBRA Subsidy Rules Require Employers, Administrators Send Required Notices & Update Health Plan Documents & Procedures Quickly; Employer & Other Health Plans & Other HIPAA-Covered Entities & Their Business Associates Must Comply With New HHS Health Information Data Breach Rules By September 23.

These and other developments make it imperative that health plans, their employer or other sponsors, administrators, insurers, fiduciaries and service providers get serious about complying with these and other federal health plan mandates and managing health plan related liabilities and costs. Sponsors, insurers, fiduciaries and administrators should ensure that health plan documents, insurance and other vendor contracts, policies, procedures and communications are timely updated to comply with these and other emerging mandates. When implementing these updates, parties concerned about costs or liabilities also should exercise care to ensure that plan documents, communications, contracts, administrative forms and procedures are optimally designed and drafted not only to be technically compliant, but also to support the enforceability of plan design and cost expectations, minimize administrative and other avoidable costs, and minimize liability exposures. In furtherance of these efforts, employer and other plan sponsors also should consider tightening their practices and requirements for credentialing, selection, oversight and contracting with administrators and vendors, and take other prudent steps to manage health plan related risks.

Curran Tomko Tarski LLP Can Help

If your organization need advice or assistance in reviewing, updating, administering or defending its HIPAA or other privacy policies, practices, business associate or other agreements, notices or other related activities, consider contacting Curran Tomko Tarski LLP Partner Cynthia Marcotte Stamer.

Other Information & Resources

For important information concerning this communication click here.

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Posted by Cynthia Marcotte Stamer

Health Plans & Business Associates Face 2/17 Deadline To Update Policies, Contracts & Procedures For HIPAA Privacy Rule Changes

February 15, 2010

Connecticut AG Lawsuit Highlights Expanding Civil Damage Exposure Risks Of Noncompliance

By Cynthia Marcotte Stamer

By Wednesday, February 17, 2010, employer and other health plans and health insurers (“covered entities”) and service providers performing functions on behalf of these entities (“business associates”) must begin complying with tighter federal requirements for the use, access, protection and disclosure of protected health information under Privacy & Security Standards of the Health Insurance Portability & Accountability Act (HIPAA), as amended by the Health Information Technology for Economic and Clinical Health Act (HITECH Act). The changes scheduled to take effect February 17, 2010 are likely to require that health plans and their business associates update their written policies, operational procedures, privacy notices and business associate agreements in several respects.

2/17/10 Deadline To Comply With HITECH Act HIPAA Amendments

On February 17, 2010, health plans and other covered entities and their business associates will become subject to the latest to take effect in a series of amendments to the HIPAA enacted under the HITEC Act. The new rules are part of a broader series of changes to HIPAA made by the HITECH Act that collectively both significantly expand the obligations of covered entities and their business associates to regarding the use, protection and disclosure of protected health information and the liability exposures that can result when covered entities or business associates violate these requirements.

The changes scheduled to take effect February 17, 2010 are likely to require that health plans and their business associates update their written policies, operational procedures, privacy notices and business associate agreements in several respects. For instance, effective February 17, 2010, the HITECH Act generally requires that covered entities and their business associates revise their written privacy policies, privacy notices and operating procedures:

To meet expanded requirements to honor individual’s requests for special restrictions on uses and disclosures of protected health information to health plans for payment purposes
To restrict protected health information disclosures to the minimum necessary required to accomplish otherwise allowable purpose;
To comply with new rules that require that the covered entity and its business associates treat any use, access or disclosure of any protected health information made for purposes of making communications about products or services as made for marketing, rather than operational, purposes which are prohibited by HIPAA except where HIPAA’s requirements are met;
To comply with new restrictions on certain fundraising communications made for operational purposes including expanded obligations to allow recipients to opt out of further fundraising communications;
To prohibit covered entities or business associates from selling protected health information without meeting the amended requirements of HIPAA that a valid HIPAA authorization from the subject of the information and specific reassurances from the purchaser concerning its subsequent use of the protected health information except as otherwise permitted by HIPAA;
To take into account these tightened restrictions on the use, access or disclosure of protected health information for purposes of complying with new HITECH Act breach notification requirements that took effect in September, 2009, which apply when a covered entity or its business associate knows or should know a breach of “unsecured protected health information” has occurred and for purposes of making the necessary changes in written policies and business associate agreements, training and operational procedures necessary to comply with these rules;
To directly require business associates comply with HIPAA’s requirements in the same manner as other covered entities and make it necessary or advisable that that service provider agreements between health plans and business associates be updated to reflect these and other changes to HIPAA; and
To implement the necessary written policy changes, notification updates, business associate agreement amendments, training, management oversight and other procedural changes necessary to demonstrate fulfillment with these requirements.

Noncompliance with these and other HIPAA requirements subjects covered entities and business associates to civil penalties, criminal prosecution, civil damage awards under lawsuits brought by state attorneys general, and other legal remedies. In addition, timely update written policies, procedures, business associate agreements, training and documentation is imperative in order for covered entities and their business associates to fulfill their breach notification obligations under new rules enacted as part of the HITECH Act.

Under the HITECH Act, health plans and other covered entities and their business associates have been obligated since September 23, 2009 to notify individuals who are the subject of protected health information, the Department of Health & Human Services and in some cases the media if and when a breach of “unsecured protected health information occurs. Failing to timely update written policies, procedures and training increases the likelihood that health plans, other covered entities or business associates will be obligated to provide breach notifications under these new rules, in addition to their otherwise applicable exposures under HIPAA.

HIPAA Enforcement & Liability Exposures Real and Rising

Health plans and other covered entities, their business associates and others involved in health plan design and operations generally should resist the temptation to underestimate their potential HIPAA exposure based on the limited enforcement of HIPAA by the Office of Civil Rights between 2003 and 2009 for a variety of reasons.

First, the changes taking effect on February 17, 2010 follow the implementation changes to HIPAA’s civil and criminal sanctions that took effect on February 17, 2009, when President Obama signed the HITECH Act into law and the new breach notification requirements added by the HITECH Act that took effect on September 23, 2009. The HITECH Act amendments to HIPAA’s remedies significantly increase the risk that health plans and other covered entities and their business associates will face civil lawsuits, civil or criminal penalties or other consequences for violating HIPAA.

The expanded risks stem in part from the HITECH Act’s amendments to HIPAA’s remedy provisions. Among other things, the HITECH Act amended HIPAA to:

Allow a State Attorney General to sue health plans or other covered entities, business associates or both that harm state citizens by committing HIPAA violations after February 16, 2009;
Expand the mandate by the Office of Civil Rights to investigate violations and audit compliance with HIPAA;
Require Office of Civil Rights to impose civil sanctions against health plans and other covered entities and their business associates involved in violations of HIPAA in accordance with tightened standards added to HIPAA by the HITECH Act;
Revise the criminal sanctions that the Department of Justice can seek against health plans and other covered entities, their business associates and others for violations of HIPAA;
Amend HIPAA to make clear that HIPAA’s criminal sanctions also can imposed on business associates, workforce members and other persons that improperly use, access and disclose protected health information in violation of HIPAA.

A HIPAA civil lawsuit filed on January 13, 2010 demonstrates the willingness of at least some states to exercise the new authority created by the HITECH Act on February 17, 2009 to sue covered entities and business associates that violate HIPAA for civil damages.

The HITECH Act empowers a state attorney general to sue covered entities or business associates engaging in HIPAA violations that harms citizens of the state for statutory damages equal to the sum of the number of violations multiplied by 100 up to a maximum of $25,000 per calendar year plus attorneys fees and costs

Even before the HITECH Act amendments, however, the Office of Civil Rights and Department of Justice already were stepping up HIPAA investigation and enforcement. The Department of Justice has obtained a variety of criminal convictions against violators of HIPAA. See, e.g., 2 New HIPAA Criminal Actions Highlight Risks From Wrongful Use/Access of Health Information. Meanwhile, the Office of Civil Rights in February, 2009 announced that CVS Pharmacies, Inc. would pay $2.25 million to resolve HIPAA charges. This announcement followed the Office of Civil Rights announcement in July, 2008 that Providence Health Care would pay $100,000 to resolve HIPAA violation charges. While not resulting in the significant payments involved in CVS or Providence, the Office of Civil Rights also taken HIPAA enforcement actions against a broad range of other covered entities to redress HIPAA violations or other compliance concerns. To review examples of these other actions, see here.

Along side these governmental actions, state courts also increasingly are willing to allow individual plaintiffs to rely on violations of HIPAA as the basis for bringing state privacy, retaliation or other actions. While prior to the recent HITECH Act amendments, federal courts had ruled that private plaintiffs could not sue under HIPAA for damages they incurred from a covered entity’s violation of HIPAA, state courts have allowed private plaintiff’s to use the obligations imposed by HIPAA as the basis of a covered entity’s duty for purposes of certain state law lawsuits. In Sorensen v. Barbuto, 143 P.3d 295 (Utah Ct. App. 2006), for example, a Utah appeals court ruled a private plaintiff could use HIPAA standards to establish that a physician owed a duty of confidentiality to his patients for purposes of maintaining a state law damages claim. Similarly, the Court in Acosta v. Byrum, 638 S.E. 2d 246 (N.C. Ct. App. 2006) ruled that a plaintiff could use HIPAA to establish the “standard of care” in a negligence lawsuit. Meanwhile, private plaintiffs employed by covered entities also are increasingly pointing to HIPAA as the basis for their retaliation claims. See, e.g., Retaliation For Filing HIPAA Complaint Recognized As Basis For State Retaliatory Discharge Claim. Coupled with the HITECH Act changes, these and other enforcement actions signal growing potential hazards for covered entities and their business associates that fail to properly manage their HIPAA compliance obligations and risks.

Health Plans & Business Associates Should Take Timely Action To Comply & Manage Risks

As a consequence of these collective HITECH Act changes and growing HIPAA-related exposures, both health plans and business associates generally will find it necessary or advisable among other things to:

Conduct well-documented due diligence on each other’s practices and procedures to improve their ability to demonstrate both their commitment to compliance and their realistic efforts to ensure that these commitments are operationalized in performance;
Renegotiate their service provider agreements to detail the specific compliance obligations of each party relating to for auditing compliance, investigating potential breaches; providing required breach notifications; specify leadership and required cooperation in the event of a breach, charge, or other concern; indemnification and other liability allocations; and other related matters; and
Pursue appropriate liability and other protection as appropriate.

As part of these compliance and risk management efforts, most covered entities and their business associates will find it advisable to devote significant attention to the business associate relationship and its associated business associate agreements.

Proper management of the expanded compliance obligations and liability exposures created by the HITECH Act generally will necessitate that health plans and other covered entities and their business associates focus significant attention on the reworking of their operating and contractual relationships.

Further updating and tailoring of these and other provisions of services agreements has become even more important over the past year in light of the new breach notification mandates that took effect under the HITECH Act in September, 2009, changes to HIPAA’s civil and criminal sanctions that took effect on February 17, 2009, and the impending extension by the HITECH Act to business associates of direct liability for compliance with HIPAA scheduled to occur on February 17, 2010.

Given these changes and the associated obligations and risks, both health plans and other covered entities and their business associates generally should act quickly to manage their own compliance and to minimize exposures that may result from the other’s compliance deficiencies. As part of these efforts, both covered entities and their business associates generally should review and tighten business associate and other service agreement provisions to provide for more specific and comprehensive HIPAA-related contractual assurances, as well as improved cooperation, coordination, management and oversight.

Curran Tomko Tarski LLP Can Help

If your organization need advice or assistance in reviewing, updating, administering or defending its HIPAA or other privacy policies, practices, business associate or other agreements, notices or other related activities, consider contacting Curran Tomko Tarski LLP Partner Cynthia Marcotte Stamer.

A widely published author and speaker on HIPAA and other related matter, Ms. Stamer has extensive experience advising health plans, their employer and other sponsors, health insurers, TPAs and other business associates and others about HIPAA and other health plan and privacy matters. Currently serving as both Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and as an ABA Joint Committee on Employee Benefits Council representative and Former Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer has more than 23 years experience assisting employers, insurers, plan administrators and fiduciaries and others to design, implement, draft and administer health and other employee benefit plans and to defend audits, litigation or other disputes by private parties, the IRS, Department of Labor, Office of Civil Rights, Medicare, state insurance regulators and other federal and state regulators. As part of this work, she regularly assists clients to review and update policies, practices, contracts, notices and procedures to comply with HIPAA and other requirements. A nationally recognized author and lecturer, Ms. Stamer also speaks and writes extensively on these and other related matters. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly. For additional information about the experience and services of Ms. Stamer and other members of the Curran Tomko Tarksi LLP team, see here.

Other Information & Resources

For important information concerning this communication click here. If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject here.

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Posted by Cynthia Marcotte Stamer

COBRA, HIPAA, GINA, Mental Health Parity or Other Group Health Plan Rule Violations Trigger New Excise Tax Self-Assessment & Reporting Obligations

February 10, 2010

By Cynthia Marcotte Stamer

New Internal Revenue Service group health plan excise tax regulations that took effect January 1, 2010 now require that group health plans, their employers or other sponsors or others administering group health plans file an excise tax return self-reporting violations of the medical coverage continuation requirements of the Consolidated Omnibus Budget Reconciliation Act (COBRA); the non-discrimination, special enrollment and creditable coverage requirements of the Health Insurance Portability & Accountability Act (HIPAA); the Genetic Information Nondiscrimination Act (GINA), the Mental Health Parity and Addiction Equity Act (MHPAEA), the Newborns’ and Mothers’ Health Protection Act (NMHPA), Michelle’s Law, health savings account (HAS) comparable employer contribution rules or certain other federal group health plan mandates to file an excise tax return. The addition of the excise tax reporting requirement adds to the already significant potential costs and liabilities that group health plans, their sponsors and administrators may face for violation of these or other federal group health plan mandates under the Internal Revenue Code (Code) or other applicable laws. As a consequence, plan sponsors, administrators and others involved in the design and administration of group health plans subject to these requirements should ensure that their plan documents, policies and procedures -including those provided through third party service providers – properly are updated and administered in compliance with the applicable federal requirement and that proper steps are taken to timely correct any noncompliance issues that may arise in connection with the ongoing administration of their programs.

Numerous Changes In Law Enhance The Risk Plans Noncompliant

Group health plans, their sponsors, fiduciaries, insurers and administrators must deal with an already complex, and ever expanding array of federal requirements governing the design and administration of group health plans imposed by the Code, the Employee Retirement Income Security Act, the Social Security Act and various other federal laws. Federal law increasingly is curtailing the significant latitude that employers and unions once enjoyed in deciding the benefits, eligibility and other terms and conditions of their group health plans. Noncompliance risks presently are particularly high now in light of the significant number of changes to these requirements that took effect or will take effect during 2009 and 2010. As part of the range of damages, penalties or other liabilities that can arise when these requirements are violated, the Code imposes excise taxes upon employers or certain other parties involved with group health plans that fail to meet the Code’s COBRA, HIPAA GINA, MHPAEA, Michelle’s Law, HSA comparability, or certain other group health plan rules. The excise tax amount triggered is generally $100 per individual for each day of noncompliance. However, for the HSA comparable employer contribution requirements, the excise tax generally equals 35% of all employer contributions made to all HSAs during the applicable calendar year.

Excise Tax Self-Assessment & Reporting Mandates Increase Potential Noncompliance Costs

Prior to 2010, the IRS generally did not require employers or other plans sponsors subject to these excise taxes to report group health plan noncompliance or assess these excise taxes as part of an IRS audit. However, final regulations published last September changed this policy. Effective January 1, 2010, the new regulations now require that group health plan sponsors to self report and pay applicable excise taxes if their group health plan fails to comply with any of the various federal group health plan mandates subject to the new regulations unless the employer or other responsible party demonstrates that it is excused from the reporting requirement under the Code or Regulations.

The timing of the required reporting may vary based on the nature of the group health plan and other factors. For most violations involving a single employer group health plans, the sponsoring employer generally must report the applicable excise tax on IRS Form 8928 (Return of Certain Excise Taxes Under Chapter 43 of the Internal Revenue Code), and pay the tax when reported. Penalties and interest may be assessed for failure to do so on or before the due date (without extension) of the employer’s federal income tax return. When a COBRA violation occurs, however, an insurer or third-party administrator may in some cases be responsible for the payment or reporting of the excise tax in some circumstances. When this is the case, the tax generally will be due by the due date (without extension) of the insurer’s or administrator’s federal income tax return. For multiemployer plans and multiple employer health plans, the return generally will be due by the last day of the seventh month after the end of the plan year. For noncompliance with the HSA comparable employer contribution requirements, the excise tax and Form 8928 must be filed on or before the 15th day of the fourth month following the calendar year in which the employer made the noncomparable contributions.

Recommended Steps To Manage Risks

Ongoing and continuously evolving changes in the requirements applicable to group health plans under the Code and other laws and regulations have significantly increased the likelihood that many group health plans and their processes, forms and procedures may not fully comply with applicable requirements. This often is the case even where the plan sponsor has engaged highly respected insurers, consultants or administrators to assist with the design or administration of its programs. In light of the potentially significant damage, excise tax and other penalty and other liability risks that violations can trigger, plan sponsors, insurers and administrators should among other things:

Review and update as necessary their existing plan documents and related practices for compliance with applicable federal mandates;
Monitor and react promptly to update plan terms and procedures as changes occur;
Implement and administer appropriate procedures to identify and redress compliance problems on a timely basis;
Review the adequacy of vendor compliance and tighten vendor agreements to strengthen the enforceability of quality expectations and to enhance the potential for recourse if these quality commitments are not met; and
Evaluate the advisability of securing liability insurance or other back up protection to help mitigate potential liability, investigation and/or defense costs that may arise if the need to investigate or defend a compliance challenge arises.

For Help In Managing Your Risk

If your organization needs assistance with monitoring, assessing, managing or defending these or other health or other employee benefit, labor and employment, or compensation practices, please contact the author of this article, Curran Tomko Tarski LLP Labor & Employment Practice Group Chair Cynthia Marcotte Stamer or another Curran Tomko Tarski LLP attorney of your choice. Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization and Chair of the American Bar Association RPTE Employee Benefits & Other Compensation Group and a nationally recognized author and speaker, Ms. Stamer is experienced with assisting employers and others about compliance with health and other employee benefit, labor and employment laws, safety, compensation, insurance, and other laws. She also advises and defends employers and other plan sponsors, fiduciaries, employee benefit plans and others about litigation and other disputes relating to these matters, as well as charges, audits, claims and investigations by the IRS, Department of Labor and other federal and state regulators. She has counseled and represented employers on these and other workforce matters for more than 22 years. Ms. Stamer also speaks and writes extensively on these and other related matters. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly. For additional information about the experience and services of Ms. Stamer and other members of the Curran Tomko Tarksi LLP team, see here.

Other Information & Resources

For important information concerning this communication click here. If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject here.

1 Comment | COBRA, Corporate Compliance, Employee Benefits, Employers, Employment Tax, ERISA, Excise Tax, Fiduciary Responsibility, Health Plans, HIPAA, Human Resources, Medicare Part D, Mental Health, Mental Health Parity, Prescription Drugs, Reporting & Disclosure, Tax, Wellness Programs | Tagged: COBRA, Creditable Coverage, Employers, GINA, Group Health plans, Health Plans, HIPAA Mental Health Parity, Insurers, Third party Administrators | Permalink
Posted by Cynthia Marcotte Stamer

Inapplicability of HIPAA Privacy To Disability Insurer Not License To Impose Unreasonable Claims Requirements

February 8, 2010

By Cynthia Marcotte Stamer

While finding the Privacy Standards imposed by the Health Insurance Portability & Accountability Act (HIPAA) inapplicable to disability insurers, a recent Louisiana Court of Appeals nevertheless ruled that the insurer was not entitled to dismissal of the lawsuit challenging the denial of disability benefits brought by a state employee for failure to meet proof of loss requirements based on his failure to sign insurer required medical authorization. Disability insurers and plan fiduciaries should heed the decision as a reminder that exemption from HIPAA does not amount to a license to impose unreasonable proof of loss or requirements inconsistent with a reasonable reading of the terms of the applicable plan or policy, or other applicable regulations.

Harris v. Metropolitan Life Ins. Co., — So.3d —-, 2010 WL 415262, 2009-0034 (La.App. 1 Cir. 2/5/10), involved a lawsuit challenging the continuing refusal of Metropolitan Life Insurance to and its designates to approve the disability benefit claim of Louisiana Supreme Court employee Jack Harris. Metropolitan repeatedly asked insisted that Mr. Harris submit to a physical examination and sign various medical and other authorizations including an “Attending Physician’s Statement” and an “Employee Authorization,” and sign certain other documents. While Mr. Harris sent the “Attending Physician’s Statement” to his treating physician, he declined to sign the Employee Authorization and certain other subsequently requested consents on the grounds of HIPAA. While he provided to a HIPAA-compliant authorizations to his medical providers to release all medical records, medical opinions, and medical reports relating to Mr. Harris’ past and current treatment for purposes of the claim, he declined and instead filed suit contending that the information and releases already provided met the proof of loss requirements of the policy.

Upon motion of Metropolitan, the trial court found that Mr. Harris’ failure to sign the authorizations and submit to the medical examination required by Metropolitan rendered his claim “premature.” Upon appeal, however, the Court of Appeals overruled this determination. While the Court of Appeals agreed with the trial court that the special authorization rules imposed by HIPAA did not apply to a disability insurer such as Metropolitan, it also ruled that its right to require a claimant to sign authorizations, submit to medical examinations or meet other proof of loss conditions must be reasonable in light of the terms of the policy. Accordingly, although the Court of Appeals agreed that the proof of loss and other provisions of the disability policy authorized Metropolitan to require a disability claimant to undergo an independent medical examination “as often as reasonably required,” the Court of Appeals ruled that Mr. Harris’ submission to the independent medical examination was not a condition precedent to the initiation of litigation by an insured and that the “medical authorization” demanded by Metropolitan was far broader than what the policy allowed as reasonably required for the independent medical examination. Accordingly, the Court of Appeals overruled the trial court’s dismissal of the disability claim and remanded the action to the trial court for hearing.

While affirming that the HIPAA Privacy Standards don’t directly apply to disability insurers, the Harris decision also demonstrates that disability insurers should not over-estimate the effect of this exemption. While HIPAA may not apply, disability insurers generally remain bound by the reasonable construction of their policy terms, taking into account otherwise applicable laws and regulations. Accordingly, disability and other HIPAA-exempt insurers and plans should not confuse the inapplicability of the HIPAA authorization requirements for carte blanche to impose unreasonable authorization or other proof of loss requirements inconsistent with their policy terms.

If you have questions about or need assistance evaluating, commenting on or responding to this invitation or other employee benefit, employment, compensation, employee benefit, workplace health and safety, corporate ethics and compliance practices, concerns or claims, please contact the author of this article, Curran Tomko Tarski LLP Labor & Employment Practice Group Chair Cynthia Marcotte Stamer. Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, Chair of the American Bar Association RPTE Employee Benefits & Other Compensation Group, and a Council Member on the ABA Joint Committee on Employee Benefits, Ms. Stamer has more than 22 years experience advising and assisting employers, employee benefit plan and their fiduciaries, insurers, administrators, and others about policy and plan, process, and product design, administration, documentation, risk management and defense under ERISA, COBRA, HIPAA, labor and employment, tax, state banking and insurance, and other laws. Her work includes extensive experience advising and defending employee benefit plan fiduciaries and insurers about the investigation of disability, health and other claims and appeals. She also advises, assists, trains, audits and defends employers and others regarding the federal and state Sentencing Guideline and other compliance, equal employment opportunity, privacy, leave, compensation, workplace safety, wage and hour, workforce reengineering, and other labor and employment and defends related audits, investigations and litigation, charges, audits, claims and investigations by the IRS, Department of Labor and other federal and state regulators. Ms. Stamer also speaks, writes and conducts training extensively on these and other related matters. For additional information about Ms. Stamer and her experience, see here or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly. For additional information about the experience and services of Ms. Stamer and other members of the Curran Tomko Tarksi LLP team, see here.

Other Information & Resources

We hope that this information is useful to you. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here or e-mailing this information here or registering to participate in the distribution of our Solutions Law Press HR & Benefits Update distributions here. Some other recent updates that may be of interested include the following, which you can access by clicking on the article title:

For important information concerning this communication click here. If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject here.

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Posted by Cynthia Marcotte Stamer

New Mental Health Parity Regulations Require Health Plan Review & Updates

January 31, 2010

By Cynthia Marcotte Stamer

Employer and union-sponsored group health plans and insurers generally must update their group health plans to comply with expanded federal “mental health parity” regulations (MHP Regulations) published on Friday, January 29, 2010 will require changes to most covered group health plans to comply with the new rules and to make adjustments to broader benefit provisions as appropriate to mitigate potential cost implications no later than the first plan year beginning after June 30, 2010.

Jointly published by the Treasury, Health & Human Services and Labor Departments and available for review here , the MHP Regulations interpret and implement federal rules prohibiting group health plans and their insurers from imposing certain special limits on benefits provided for mental health and substance abuse treatments not applicable to general medical or surgical benefits.

The Paul Wellstone and Pete Domenici Mental Health Parity and Addition Equity Act of 2008, Public Law 110-343 (MHPAEA) expands the scope of prohibited restrictions on mental health benefits beginning after June 30, 2010. Under the MHPAEA amendments, any covered group health plan that includes mental health and substance use disorder benefits along with standard medical and surgical benefits generally cannot apply more limited benefit limits, out-of-pocket cost limitations, prior authorization and utilization review or other benefit restrictions than apply to medical or surgical benefits. In addition, group health plan utilization review, medical necessity and appropriateness and other rules and procedures used to decide mental health and substance abuse benefits generally must be based on the same level of scientific evidence used by the group health plan or insurer to determine medical and surgical benefits.

Before the MHPAEA amendments took effect, the Mental Health Parity Act of 1996 (MHPA) generally only prohibited group health plans from applying more restrictive aggregate lifetime and annual dollar limits on mental health benefits than applied to general medical or surgical benefits and did not extend these restrictions to substance use disorder benefits.

The MHP Regulations generally apply to group health plans of employers with 50 or more workers that offer mental health or substance use disorder benefits for plan years beginning on or after July 1, 2010. Until then, covered group health plans and their insurers generally must continue to comply with the more limited mental health parity requirements imposed under the MHPA, as well as other federal group health plan mandates.

Federal law increasingly is curtailing the significant latitude that employers and unions once enjoyed in deciding the benefits, eligibility and other terms and conditions of their group health plans, including many significant changes that took effect or will take effect during 2009 and 2010. You can learn more about some of these developments by reviewing the 2009 Health Plan Update presentation posted here. In light of the liabilities and costs arising under these and other rules, plan sponsors, administrators, fiduciaries and executives with responsibility over these plans, their establishment, funding or administration should take prompt and prudent steps to verify that their plan documents, communications, agreements and practices are updated to minimize risks and avoid unanticipated expense.

Other Information & Resources

For important information concerning this communication click here. If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject here.

Comments Off on New Mental Health Parity Regulations Require Health Plan Review & Updates | Disease Management, Employee Benefits, Employers, ERISA, Fiduciary Responsibility, Health Plans, Human Resources, Mental Health | Tagged: Disability Discrimination, Disease Management, Employee Benefits, Employment, Employment Agreements, ERISA, Health Insurance, Health Plans, Human Resources, Insurance, Insurer, Managed Care, Medical Coverage, Mental Health Benefits, Mental Health Parity, Risk Management, Substance Abuse Benefits | Permalink
Posted by Cynthia Marcotte Stamer

Health Plans & Employers Can Expect Pressure To Pay For Childhood Obesity Counseling From New American Academy of Pediatrics Report

January 25, 2010

By Cynthia Marcotte Stamer

New American Academy of Pediatrics recommendations calling for early intervention and intensive behavioral therapy to treat childhood obesity promise to increase demands for employer sponsored and other health plans to reimburse the costs of these treatments.

With health care providers and government officials increasingly emphasizing the need for prevention and intervention, employers and health insurers face greater pressure to offer health benefit coverage for weight management and other obesity prevention and treatment. Aside from determining what treatments to coverage generally, recent changes in the Americans With Disabilities Act statute and its enforcement and interpretation by the Equal Employment Opportunity Commission, the recently effective employment and health plan nondiscrimination rules of the Genetic Information and Nondiscrimination Act, health information and other privacy rules and other legal changes make the appropriate design and administration of obesity and other wellness, disease management and other programs targeting obesity or other chronic conditions legally and operationally challenging. Employers and insurers concerned with these issues should exercise care to properly understand and appropriately manage the legal and operational complexities, risks, costs and benefits when designing health and other programs to manage health care, disability and other costs of obesity and other chronic diseases.

Read the report and about discrimination and other issues that employers and insurers may need to manage under evolving federal rules when deciding how to design and manage obesity and other wellness and disease management programs here.

If you have questions about wellness, disease management or other health and wellness benefit, disability prevention and management, or other employee benefit, employment, compensation, workplace health and safety, corporate ethics and compliance practices, concerns or claims, please contact the author of this article, Curran Tomko Tarski LLP Labor & Employment Practice Group Chair Cynthia Marcotte Stamer.

Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group, an ABA Joint Committee on Employee Benefits Council Member, Past Chair of the ABA Managed Care & Insurance Group and RPTE Welfare Benefits Committee and Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, Ms. Stamer is experienced advising and assisting government leaders, employers, health and other employee benefit plans and their fiduciaries, insurers, financial advisory services, and administrators, health care providers, and others about obesity and other disease management and wellness programs, as well as other related employee benefit and employment matters. A widely published author on these and other health and disability benefit and management concerns, Ms. Stamer has advised and represented employers, health plans and others on these and other matters for more than 20 years. Author of the Personal Health Care Toolkit, Ms. Stamer also has lead the development of wellness and disease management initiatives for the National Kidney Foundation of North Texas and other organizations. Ms. Stamer also speaks and writes extensively on these and other related matters. For additional information about Ms. Stamer and her experience, see here or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly. For additional information about the experience and services of Ms. Stamer and other members of the Curran Tomko Tarksi LLP team, see here.

Other Information & Resources

We hope that this information is useful to you. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here or e-mailing this information here or registering to participate in the distribution of our Solutions Law Press HR & Benefits Update distributions here. Some other recent updates that may be of interested include the following, which you can access by clicking on the article title:

For important information concerning this communication click here. If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject here.

Comments Off on Health Plans & Employers Can Expect Pressure To Pay For Childhood Obesity Counseling From New American Academy of Pediatrics Report | Corporate Compliance, EEOC, Employee Benefits, ERISA, Fiduciary Responsibility, GINA, Health Plans, Human Resources, Internal Investigations, Leave, Mental Health, Rehabilitation Act, Wellness, Wellness Programs | Tagged: ADA, Disability, Disease Management, EEOC, GINA, Health Care, Health Insurance, Health Plans, HIPAA, Obesity, Wellness | Permalink
Posted by Cynthia Marcotte Stamer

New Labor Department Rule Allows Employers 7 Days To Deliver Employee Contributions To Employee Benefit Plans

January 14, 2010

By Cynthia Marcotte Stamer

Regulations published by the Department of Labor today (January 14, 2010) offer employers the opportunity to know their deposit of employee contributions and other amounts withheld from wages or otherwise received from employees with a pension, profit-sharing, health, or other welfare benefit plan is timely for purposes of the fiduciary responsibility requirements of the Employee Retirement Income Security Act (“ERISA”) and the prohibited transaction rules of the Internal Revenue Code (the “Code”) by depositing those amounts with the plan within the seven day period specified in a new safe harbor included in the Regulations.

Certainty about the timeliness of these deposits is important, as mishandling of these employee contributions, participant loan repayments or other employee benefit plan assets frequently triggers judgments, fines and penalties against companies that sponsor employee benefit plans as well as owners, board members, or other members of management. See Mishandling Employee Benefit Obligations Creates Big Liabilities For Distressed Businesses & Their Leaders. Consequently, businesses sponsoring employee benefit programs and owners, officers, directors or other members of management with authority over or responsibility for the handling or application of amounts withheld or collected from employees as employee contributions or plan loans should make arrangements for these amounts to be properly handled and timely deposited with the appropriate employee benefit plan in accordance with these new plan asset regulations.

Title I of ERISA generally requires that employee benefit “plan assets” be held in trust, prudently handled and invested, used for the exclusive benefit of the plan and its participants, and otherwise used and administered in accordance with ERISA’s fiduciary responsibility rules. Meanwhile, the use of “plan assets” of certain employee benefit plans in a manner prohibited by the Code’s prohibited transaction rules also may trigger excise taxes and other penalties.

For purposes of both ERISA and the Code, Labor Department Regulation § 2510.3-102, specifies that amounts (other than union dues) that an employer withholds from wages or otherwise collects from employees as employee contributions or loan repayments to an employee benefit plan generally become plan assets subject to these fiduciary responsibility rules “as of the earliest date on which such contributions or repayments can reasonably be segregated from the employer’s general assets.” Since employers, business owners, members of management can risk exposure to damages, administrative penalties and/or excise taxes, knowing when amounts collected from employees are considered plan assets is a critical first step to managing these risks.

Unfortunately, the subjectivity of this standard leaves room for much uncertainty and debate about the precise deadline by which employee contributions, plan loans and other amounts from employees must be received by the plan. The subjectivity inherent in this standard leaves many employers uncertain about the adequacy of their compliance efforts and frequently fuels debate among plans, debtors, creditors, regulators or others about the when amounts earmarked to be withheld from employee wages cease to be assets of the debtor employer and become plan assets.

To mitigate debate and uncertainty about the timing of these events, Labor Department Regulation § 2510.3-102 as published in final form today includes a new “safe harbor” rule for plans with fewer than 100 participants at the beginning of the plan year. Under the safe harbor, employee contributions, plan loans and other amounts withheld from wages or received from employees for payment to an employee benefit plan are treated as treated timely paid to the plan if deposited with the plan not later than the 7th business day following the day on which such amount is received by the employer (in the case of amounts that a participant or beneficiary pays to an employer), or the 7th business day following the day on which such amount would otherwise have been payable to the participant in cash (in the case of amounts withheld by an employer from a participant’s wages). While this safe harbor assures employers and others that withhold from wages or receive employee contributions or participant loan payments owing to less than 100 participant plans that their deposit will be considered timely if received by the plan within seven days, the plan asset regulations leave open that deposit with the plan more than 7 after receipt might still be considered timely deposit with the plan under certain circumstance.

Where deposit with the plan is not made within the seven-day period established by the safe harbor, the plan asset rules continue to leave room for great subjectivity in the determination of the deadline for deposit. In addition to the seven-day safe harbor, the plan asset regulations clearly establish bright-line deadlines after which the deposit of employee contribution or plan loan amounts always will be considered untimely. Thus, the plan asset rules provide that the deadline for depositing employee contributions and plan loans with the plan in no event ever extends beyond the applicable of the following dates (the “Latest Date”)

For pension plans, the 15th business day of the month following the month in which the employee contribution or participant loan repayment amounts are withheld or received by the employer;
With respect to a SIMPLE plan that involves SIMPLE IRAs the 30th calendar day following the month in which the participant contribution amounts would otherwise have been payable to the participant in cash; and
For health and other welfare benefit plans, 90 days from the date on which the employee contribution is withheld or received by the employer.

In all other instances, the plan asset regulations leave open to uncertainty and debate when and if an employer’s deposit of employee contributions and plan loans more than seven-days after payroll deduction or receipt but before the Latest Date will qualify as timely for purposes of ERISA Title I or the Code’s prohibited transaction provisions.

Companies and owners, officers and directors of businesses that harm plans by failing to ensure that these amounts are timely deposited into an employee benefit plan or otherwise are involved in the mishandling of these funds frequently become subject to prosecution, damage awards, civil penalties and excise taxes. To mitigate potential exposure to these risks, businesses and leaders of businesses that withhold from wages or collect employee contributions or plan loan payments from employees should make arrangements to ensure that these amounts timely are deposited with the appropriate plans and otherwise handled appropriately in accordance with ERISA and the Code.

If your business or employee benefit plan needs assistance evaluating or responding to these or other employee benefit, or other employment, workplace health and safety, corporate ethics and compliance or other concerns or claims, please contact the author of this article, Curran Tomko Tarski LLP Labor & Employment Practice Group Chair Cynthia Marcotte Stamer.

Chair of the American Bar Association RPTE Employee Benefits & Other Compensation Group, a representative to the ABA Joint Committee on Employee Benefits Council, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, Ms. Stamer has advised and represented employers on these and other labor and employment, compensation, employee benefit and other personnel and staffing matters for more than 22 years. She is experienced with assisting employers, insurers, administrators, and others to design and administer group health plans cost-effectively in accordance with these and other applicable federal regulations as well as well as advising and defending employers and others against tax, employee benefit, labor and employment, and other related audits, investigations and litigation, charges, audits, claims and investigations by the IRS, Department of Labor and other federal and state regulators. Ms. Stamer also speaks and writes extensively on these and other related matters. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly. For additional information about the experience and services of Ms. Stamer and other members of the Curran Tomko Tarksi LLP team, see here.

Other Information & Resources

We hope that this information is useful to you. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here or e-mailing this information here or registering to participate in the distribution of our Solutions Law Press HR & Benefits Update distributions here. Some other recent updates that may be of interested include the following, which you can access by clicking on the article title:

For important information concerning this communication click here. If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject here.

Comments Off on New Labor Department Rule Allows Employers 7 Days To Deliver Employee Contributions To Employee Benefit Plans | Bankruptcy, Corporate Compliance, Defined Benefit Plans, Employee Benefits, Employers, ERISA, Fiduciary Responsibility, Health Plans, Human Resources, Internal Controls, Internal Investigations, Restructuring, Retirement Plans, Tax | Tagged: Corporate Compliance, defined benefit plan, Employee Benefits, employee contributions, Employers, Employment, Employment Agreements, ERISA, Health Insurance, Health Plans, Human Resources, Insurance, Insurer, Internal Controls, Internal Investigations, Labor, Minimum Wage, pension plans, plan loans, Retirement Plans, Risk Management, Tax, welfare plans | Permalink
Posted by Cynthia Marcotte Stamer

Stamer Speaks To CPAs About “Privacy & Information Security: Managing Your Accounting Practice’s Liabilities & Counseling Your Clients” January 12, 2010

December 28, 2009

Accountants and their clients face increasing regulatory and business pressures to protect the sensitive business and personal information collected and maintained in the course of their operation to minimize their exposure to personal identity theft and other cybercrime scams by employees, business partners and others. Curran Tomko Tarski LLP Partner Cynthia Marcotte Stamer will speak about “Privacy & Information Security: Managing Your Accounting Practice’s Liabilities & Counseling Your Clients” to members of the Dallas CPA Society on January 12, 2010 beginning at 2:00 p.m.

Part of the Dallas CPA Society Member Appreciation CPE Series Meeting, Ms. Stamer’s presentation will be part of four hours of free CPE training to be provided at a program open to members only at the Hilton Lincoln Centre Hotel located at 5410 LBJ Freeway, Dallas TX 75240 from 1 p.m. to 4:50 p.m. Central Time. (Parking at the facility costs $5.00). To register or for additional information, see here.

If you need help responding to these developments or other legislative, regulatory or enforcement concerns, Curran Tomko Tarski LLP can help. Curran Tomko and Tarski LLP and its attorneys have significant experience assisting businesses and business leaders to manage and defend privacy, data security, tax employee benefit, employment, health care, environmental, safety, securities and other compliance and risk management concerns.

Curran Tomko Tarksi LLP Partner Cynthia Marcotte Stamer has more than 22 years experience helping businesses to use the law, process and technology to manage people and processes, and to manage technology, privacy and data security, employment and other legal and operational risks affecting their businesses. Author of “Privacy & Securities Standards-A Brief Nutshell,” “Privacy Invasions of Medical Care-An Emerging Perspective,” and “E-Health Business and Transactional Law Other Liability-Tort and Regulatory;” published by The Bureau of National Affairs, Inc., and many other publications, Ms. Stamer has extensive experience advising a accounting firms, law firms, banks and financial services organizations, insurers, consultants, health plans, health care providers and others about HIPAA, FACTA, and other privacy, trade secret and other information security and data breach risk management and compliance concerns. Ms Stamer also speaks, publishes and provides public policy input extensively on data security, technology and other internal controls and risk management matters. Chair of the American Bar Association RPTE Employee Benefits & Compensation Committee, an ABA Joint Committee on Employee Benefits Council member, and Chair of the Curran Tomko Tarski Labor, Employment & Employee Benefits Practice, Ms. Stamer also is Board Certified in Labor & Employment law. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly. For additional information about the experience and services of Ms. Stamer and other members of the Curran Tomko Tarksi LLP team, see here.

You can review other recent human resources, employee benefits and internal controls publications and resources and additional information about the employment, employee benefits and other experience of Ms. Stamer here /the Curran Tomko Tarski LLP attorneys here. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here or e-mailing this information to Cstamer@CTTLegal.com or registering to participate in the distribution of these and other updates on our Solutions Law Press HR & Benefits Update distributions here. For important information concerning this communication click here. If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject to here.

Comments Off on Stamer Speaks To CPAs About “Privacy & Information Security: Managing Your Accounting Practice’s Liabilities & Counseling Your Clients” January 12, 2010 | Corporate Compliance, Data Security, EEOC, Employee Benefits, Employers, ERISA, Fiduciary Responsibility, GINA, Health Plans, Human Resources, Internal Controls, Malpractice, Privacy, Professional Liability, Protected Health Information, Risk Management | Tagged: Acountant's Liability, Corporate Compliance, CPA, CPE, Employee Benefits, Employer, GINA, Health Insurance, Health Plans, Human Resources, Internal Controls, Medical Coverage, Privacy, Risk Management, Tax | Permalink
Posted by Cynthia Marcotte Stamer

Mishandling Employee Benefit Obligations Creates Big Liabilities For Distressed Businesses & Their Business Leaders

December 18, 2009

By Cynthia Marcotte Stamer

Business owners, executives, board members, and other business leaders of companies facing financial challenges should heed a mounting series of recent fiduciary liability settlement orders, judgments and prosecutions as strong reminders of the potential personal risk they may face if their health, 401(k) or other employee benefit programs are not appropriately funded and administered as required by the Employee Retirement Income Security Act of 1974, as amended (ERISA).

Businesses leaders struggling to deal with economic setbacks frequently may be tempted to use employee benefit plan contributions or funds for added liquidity or otherwise fail to take appropriate steps to protect and timely deposit plan contributions or other plan assets. A long and ever-mounting series of decisions demonstrates the risks of yielding to these temptations for businesses that sponsor these plans and the business leaders that make these decisions.

EBSA Prosecutes Businesses & Executives That Bungle ERISA Obligations

The mishandling of employee benefit obligations by financially distressed companies during the ongoing economic downturn is fueling an increase in Department of Labor Employee Benefit Security Administration (EBSA) enforcement actions against distressed or bankrupt companies and their officers or directors for alleged breaches of fiduciary duties or other mishandling of medical, 401(k) or other pension, and other employee benefit programs sponsored by their financially distressed companies.

EBSA enforcement activities during 2009 continue to highlight the longstanding and ongoing policy of aggressive investigation and enforcement of alleged misconduct by companies, company officials, and service providers in connection with the maintenance, administration and funding of ERISA-regulated employee benefit plans. A review of the Labor Department’s enforcement record makes clear that where the Labor Department perceives that a plan sponsor or its management fails to take appropriate steps to protect plan participants, the Labor Department will aggressively pursue enforcement regardless of the size of the plan sponsor or its plan, or the business hardships that the plan sponsor may be facing.

EBSA reports enforcing $1.3 billion in recoveries related to pension, 401(k), health and other benefits during fiscal year 2009. EBSA has filed numerous lawsuits to compel distressed companies and/or members of their management to pay restitution or other damages for alleged breaches of ERISA fiduciary duties, to appoint independent fiduciaries, or both for plans sponsored by bankrupt or financially distressed companies.

Recent settlements and judgments obtained by the Labor Department and through private litigation document that officers and other members of management participating, or possessing authority to influence, the handling of heath, 401(k) and other pension, or other employee benefit plans regulated by ERISA may be exposed to personal liability if these benefit programs are not maintained and administered appropriately. This risk is particularly grave when the sponsoring company becomes financially distressed or goes bankrupt, as the handling of employee benefit and other responsibilities becomes particularly disrupted and the lack of company liquidity often leaves executives and service providers as the only or best source of recovery for government officials and private plaintiffs.

Executives Ordered To Pay To Make Things Right

In the December 2, 2009 decision in Solis v. Struthers Industries Inc., for instance, a federal district judge ordered business leader Jomey B. Ethridge liable to pay $303,084.61 to restore assets belonging to the 401(k) plan of bankrupt Struthers Industries in an ERISA fiduciary responsibility action filed by the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA). Filed by the EBSA in the U.S. District Court for the Southern District of Mississippi, the Struthers Industries lawsuit alleged that Ethridge and Struthers Industries allowed employee contributions to be used for purposes other than providing benefits resulting in losses of $310,084.57. According to court documents, Struthers Industries designed and built heat transfer and pressure vessels at its Gulfport facility. In 2001, its 401(k) plan had 278 participants and assets totaling $8,279,083. The company filed for bankruptcy in 2003, and its assets were auctioned off in 2005. An independent fiduciary was appointed by the court in 2007 to manage the plan’s assets. The ordered Ethridge personally to pay $303,084.61 in restitution to the plan for his involvement in the mishandling of the plan’s assets. The order also bars Ethridge from acting as a benefit plan fiduciary in the future.

The Struthers Industries decision comes on the heels of EBSA’s success in Solis v. T.E. Corcoran Co. Inc. last month in recovering more than $89,000 from business owners and operators found to have breached fiduciary duties to the participants of the T.E. Corcoran Co. Inc. Profit Sharing Plan by improperly loaning plan assets to he plan sponsor and an affiliated company. The Labor Department sued T.E. Corcoran Co. and its owners, John F. Corcoran and Thomas E. Corcoran Jr., alleging that the company and its owners caused the plan to lend money to the two companies at below market interest rates, without terms of payment and without documentation in violation of ERISA. The suit filed in the U.S. District Court for the District of Massachusetts, also named as a defendant Coran Development Co. Inc., a company co-owned by the Corcorans. T.E. Corcoran Co. Inc. was the sponsor and administrator of the plan, while John and Thomas Corcoran were trustees of the plan, making all three fiduciaries and parties in interest with respect to the plan. ERISA specifically prohibits the use of employee benefit plan funds to benefit parties in interest.

The Corcoran judgment requires that the plan account balances of defendants John F. Corcoran and Thomas E. Corcoran Jr. be offset in the amount of $89,273 plus interest to be allocated to the accounts of the other plan participants. The offset will make whole all of the accounts of the non-trustee participants. In addition, the court order appoints an independent trustee to oversee the final distribution of the plan’s assets and the proper termination of the plan, requires the defendants to cooperate fully with the independent trustee in this process, and then prohibits them from serving as fiduciaries to any ERISA-covered plan for 10 years.

A complex maze of ERISA, tax and other rules make the establishment, administration and termination of employee benefit plans a complicated matter. When the company sponsoring a plan goes bankrupt or becomes distressed, the rules, as well as the circumstances can make the administration of these responsibilities a powder keg of liability for all involved. Companies and other individuals that in name or in function possess or exercise discretionary responsibility or authority over the maintenance, administration or funding of employee benefit plans regulated by ERISA frequently are found to be accountable for complying with the high standards required by ERISA for carrying out these duties based on their functional ability to exercise discretion over these matters, whether or not they have been named as fiduciaries formally.

In other instances, businesses and their leaders do not realize that the functional definition that ERISA uses to determine fiduciary status means that individuals participating in discretionary decisions relating to the employee benefit plan, as well as the plan sponsor, may bear liability under many commonly occurring situations if appropriate care is not exercised to protect participants or beneficiaries in these plans.

For this reason, businesses providing employee benefits to employees or dependents, as well as members of management participating in, or having responsibility to oversee or influence decisions concerning the establishment, maintenance, funding, and administration of their organization’s employee benefit programs need a clear understanding of their responsibilities with respect to such programs, the steps that they should take to demonstrate their fulfillment of these responsibilities, and their other options for preventing or mitigating their otherwise applicable fiduciary risks.

If you have questions about or need assistance evaluating, commenting on or responding to these or other employment, health or other employee benefit, workplace health and safety, corporate ethics and compliance or other concerns or claims, please contact the author of this article, Curran Tomko Tarski LLP Labor & Employment Practice Group Chair Cynthia Marcotte Stamer. Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization and Chair of the American Bar Association RPTE Employee Benefits & Other Compensation Group, Ms. Stamer is experienced with assisting employers and others about compliance with federal and state equal employment opportunity, compensation and employee benefit, workplace safety, and other labor and employment, as well as advising and defending employers and others against tax, employment discrimination and other labor and employment, and other related audits, investigations and litigation, charges, audits, claims and investigations by the IRS, Department of Labor and other federal and state regulators. Ms. Stamer has advised and represented employers on these and other labor and employment, compensation, employee benefit and other personnel and staffing matters for more than 20 years. Ms. Stamer also speaks and writes extensively on these and other related matters. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly. For additional information about the experience and services of Ms. Stamer and other members of the Curran Tomko Tarksi LLP team, see here.

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Comments Off on Mishandling Employee Benefit Obligations Creates Big Liabilities For Distressed Businesses & Their Business Leaders | Bankruptcy, Corporate Compliance, Defined Benefit Plans, Employee Benefits, Employers, ERISA, Fiduciary Responsibility, Health Plans, Internal Controls, Internal Investigations, Professional Liability, Restructuring, Retirement Plans | Tagged: Bankruptcy, Corporate Compliance, Distressed Company, E&O Liability, EBSA, ERISA, Fiduciary Liability, Fiduciayr Responsibility, Officers & Directors Liability, Reorganization, Restructuring | Permalink
Posted by Cynthia Marcotte Stamer

Employee Benefit Plan Sponsors & Fiduciaries Urged To Review Bonding, Credentials of Staff & Service Providers Under ERISA

December 14, 2009

By Cynthia Marcotte Stamer

Plan sponsors and other plan fiduciaries should take steps to ensure that all of the bonding requirements applicable to their employee benefit plans are met at least annually. Monitoring these compliance obligations is important not only for the 401(k) and other retirement plans typically associated with these requirements, but also for self-insured medical and other ERISA-covered employee benefit plans.

The bonding and credentialing audit should include adopting a written policy requiring appropriate credentialing and bonding and verifying that appropriate bonds are in place for all internal personnel and outside service providers subject to the bonding requirements.

When verifying the bonding requirements, it also is a good idea to conduct a criminal background check and other prudent investigation to reconfirm the credentials and suitability of individuals and organizations serving in fiduciary positions or otherwise acting in a capacity covered by ERISA’s bonding requirements. ERISA generally prohibits individuals convicted of certain crimes from serving, and prohibits plan sponsors, fiduciaries or others from knowingly hiring, retaining, employing or otherwise allowing these convicted individuals during or for the 13-year period after the later of the conviction or the end of imprisonment, to serve as:

An administrator, fiduciary, officer, trustee, custodian, counsel, agent, employee, or representative in any capacity of any employee benefit plan,
A consultant or adviser to an employee benefit plan, including but not limited to any entity whose activities are in whole or substantial part devoted to providing goods or services to any employee benefit plan, or
In any capacity that involves decision-making authority or custody or control of the moneys, funds, assets, or property of any employee benefit plan.

Knowing or intentional violation of this prohibition may expose violating party to fines of up to $10,000, imprisonment for not more than five years, or both. Even where the violation is not knowing or willful, however, allowing disqualified persons to serve in fiduciary roles can have serious consequences such as exposure to Department of Labor penalties and personal liability for breach of fiduciary duty for damages resulting to the plan if it is established that the retention of services was an imprudent engagement of such an individual that caused the loss. When conducting such a background check, care should be taken to comply with the applicable notice and consent requirements for conducting third party conducted background checks under the Fair Credit Reporting Act (FCRA) and otherwise applicable law. As such background investigations generally would be conducted in such a manner as to qualify as a credit check for purposes of the FCRA, conducting background checks in a manner that violates the FCRA credit check requirements itself can be a source of significant liability.

Curran Tomko Tarski LLP Attorneys Can Help

If your organization needs assistance with monitoring, assessing, managing or defending these or other labor and employment, compensation or benefit practices, please contact the author of this article, Curran Tomko Tarski LLP Labor & Employment Practice Group Chair Cynthia Marcotte Stamer at cstamer@cttlegal.com, (214) 270-2402, or another Curran Tomko Tarski LLP attorney of your choice.

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization and Chair of the American Bar Association RPTE Employee Benefits & Other Compensation Group and a nationally recognized author and speaker, Ms. Stamer is experienced with advising and assisting employers with these and other labor and employment, employee benefit, compensation, risk management and internal controls matters. Ms. Stamer is experienced with assisting employers, fiduciaries, bankruptcy trustees, investors, purchasers and others about defined benefit plan and other employee benefit, labor and employment, compensation and other related concerns involved with distressed businesses or benefit plans, bankruptcy and restructuring transactions and other corporate or plan related events. Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization and Chair of the American Bar Association RPTE Employee Benefits & Other Compensation Group and a Joint Committee on Employee Benefit Council Member, Ms. Stamer has advised and represented these and other business clients on employee benefit, labor and employment, compensation, employee benefit and other personnel and staffing matters for more than 20 years. Her experience includes significant experience representing and advising employee benefit plan sponsors, fiduciaries, and service providers and their affiliates; investors, creditors, bankruptcy trustees, and others about employee benefit, labor and employment and related services and compensation concerns affecting transactions involving bankrupt or distressed corporations. Ms. Stamer also speaks and writes extensively on these and other related matters. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly. For additional information about the experience and services of Ms. Stamer and other members of the Curran Tomko Tarksi LLP team, see here.

Other Information & Resources

For important information concerning this communication click here. If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject here.

Comments Off on Employee Benefit Plan Sponsors & Fiduciaries Urged To Review Bonding, Credentials of Staff & Service Providers Under ERISA | Employee Benefits, Employers, ERISA, Fiduciary Responsibility, Human Resources, Internal Controls | Tagged: 401(k) Plan, ERISA, Fiduciary Responsibility, Health Plan, investment advisor, retirement plan, tpa | Permalink
Posted by Cynthia Marcotte Stamer

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