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Periodically Reevaluate Employee Business Expense Reimbursement Practices

April 5, 2017

Employers looking for cost-effective opportunities to sweeten the perceived value their compensation and fringe benefit packages periodically should re-examine their policies for reimbursement of employees for ordinary and necessary business expenses an employee incurs in connection with the performance of his duties, such as:

Required work clothes or uniforms not appropriate for everyday use.
Supplies and tools for use on the job.
Business use of a car.
Business meals and entertainment.
Business travel away from home.
Business use of a home.
Work-related education.

Businesses generally consider a wide range of factors when deciding what expenses to reimburse to employees. In arriving at these decisions, however, many businesses overlook the opportunity to stretch the overall compensation dollars by reimbursing employees for business expenses in lieu of paying cash compensation to the employee but requiring the employee to use after tax dollars to pay business expenses not reimbursed by the employer.

While many employers believe “cash is king” when paying employees, paying employees more cash in lieu of reimbursing employees for business often increases the employment tax liability of the employer while also unwittingly diminishing the value of the cash compensation paid to the employee because of federal tax rules governing individual deductions a business expenses.

While the Internal Revenue Code and associated Internal Revenue Service regulations impose special rules for certain categories of employment, federal tax law generally allows businesses both:

To deduct from the gross income of the business for purposes of determining its adjusted gross income those amounts the business pays as wages as well as amounts paid to reimburse an employee for ordinary and necessary business expenses expended by the employee in the performance of his duties and to exclude such amounts for calculating the employment tax liabilities of both the employer and the employee; and
In many, but not all instances, to exclude all or some of the reimbursement amount from the taxable wages of the employee for income tax and/or employment tax purposes.

The income and employment tax treatment of business expenses paid by an employee generally is much less favorable when an employee seeks to deduct or exclude xpenditures made for ordinary and necessary business expenses from taxable income.

While federal income tax rules generally allow businesses to deduct ordinary and business expenses directly from gross income to arrive at their taxable adjusted gross income, federal tax rules are more restrictive concerning the deduction of business expenses by employees for income tax purposes and provides no easy mechanism to claim credit for such amounts for employment tax purposes.

In general, the Internal Revenue Code generally only allows employees who otherwise have sufficient deductible expenses to itemize deductions to claim any business expenses as a deduction when calculating their federal income taxes. Depending on the income of the workforce and particularly in the case of lower income workers, the itemization requirement effectively bars a large percentage of employees from any possibility of deducting business expenses incurred in the performance of their work.

Beyond the requirement to itemize, the Internal Revenue Code also imposes a second hurdle that further restricts the deductibility of business expenses when claimed by an employee versus a business. Specifically, the Internal Revenue Code generally only allows an employee to deduct business expenses paid by the employee to the extent those expenses exceed 2% of the employee’ adjusted gross income. This means that even those employees who qualify to file itemize deductions cannot deduct the initial 2% of the ordinary and necessary business expenses the employee pays and connection of the performance of his job even though the Internal Revenue Code would allow the employer to deduct the full amount of amounts paid to reimburse the employee for those same expenses.

Since most employees understand that the purchasing power of any cash compensation they receive from the employer is reduced by the amount of any expenses that they pay but are not reimbursed for, considering reimbursing employees for expenses in lieu of paying the employee cash, then requiring the employee to pay those expenses out of taxable income.

Of course, when considering whether to pay or reimburse employee expenses, employers also should evaluate and verify that their planned treatment of an expenditure and its reimbursement otherwise complies with any union or other contracts, as well as any applicable federal and state occupational safety, wage and hour and other laws.

Regardless of whether the employer or the employee plans to claim a business expense for tax purposes, an employer should encourage its employees to keep, and if reimbursing the employee, submit good records for proof of income and expenses. Employers reimbursing business expenses may wish to educate employees about both the tax and financial value of these reimbursement benefits as a part of the overall compensation package provided to employees. Even where an employer does not reimburse its employees all or part of an otherwise deductible business expense, however, it also may want to share Internal Revenue Service resources like “IRS Publication 529, Miscellaneous Deductions,” and “Publication 463, Travel, Entertainment, Gift and Car Expenses” with employees to help educate employees about these tax rules and their opportunities and responsibilities.

About The Author

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: Erisa & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney and management consultant, author, public policy advocate and lecturer widely known for work, teachings and publications.

Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce, internal controls and regulatory compliance, change management and other performance and operations management and compliance. She supports her clients both on a real-time, “on demand” basis and with longer term basis to deal with daily performance management and operations, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy.

A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other concerns by her service in the leadership of a broad range of other professional and civic organization including her involvement as the Vice Chair of the North Texas Healthcare Compliance Association; Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE: Coalition on Patient Empowerment; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; former Gulf Coast TEGE Council Exempt Organization Coordinator; a founding Board Member and past President of the Alliance for Healthcare Excellence; former board member and Vice President of the Managed Care Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; a member and advisor to the National Physicians’ Council for Healthcare Policy; current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section; Past Chair of the ABA Health Law Section Managed Care & Insurance Section; a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group; immediate past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative and current RPTE Representative to the ABA Health Law Coordinating Council; past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a former member of the Board of Directors, Treasurer, Member and Continuing Education Chair of the Southwest Benefits Association and others.

Ms. Stamer also is a highly popular lecturer, symposia chair and author, who publishes and speaks extensively on health and managed care industry, human resources, employment, employee benefits, compensation, and other regulatory and operational risk management. Examples of her many highly regarded publications on these matters include the “Texas Payday Law” Chapter of Texas Employment Law, as well as thousands of other publications, programs and workshops these and other concerns for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, 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 symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations and for clients on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications. For additional information about Ms. Stamer, see CynthiaStamer.com or contact Ms. Stamer via email here or via telephone to (469) 767-8872.

About Solutions Law Press, Inc.™

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NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.

Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department 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.

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Posted by Cynthia Marcotte Stamer

Improve HR Value To Company By Making HR A Performance Rather Than People Department

August 25, 2015

Human resources and other management leaders searching for ways to take their businesses from good to great should critically evaluate their workforce recruitment, management, compensation and benefit practices are properly designed to support business success or inappropriately detract from performance. When designing and administering the human resources and other workforce processes for any business, human resources managers and consultants and the business leaders they support should stop thinking of and administering human resources as the “people” department and start thinking and running the department as the “performance management” department.

The primary responsibility of management is to define the business goals and manage its people and other details to accomplish the goal. Businesses leaders determined to succeed usually take steps to promote achieve desired well-defined goals by adopting detailed implementation plans that depend upon properly qualified workers reliably delivering the required performances their business needs to succeed.

As businesses technically only act through the performances of their people, everything that goes right or wrong or better or worse in a company ultimately depends on what its people do, when and how. Human resource and associated workforce performance both are key drivers of business performance and costs as well as major contributors to liabilities and expense. even the most promising businesses experiences difficulty succeeding unless its people reliably perform as needed to implement the business plan. While businesses can struggle or fail if management chooses a poor business path, even the most promising businesses will experience difficulty achieving success if it can’t get its people to reliably implement the business plan. Therefore, effective workforce management critically impacts every company’s performance and ultimately, its success.

As with any other company resource used in its operations, management must manage workforce resources to meet the needs of the business. Management and its people must understand that the “people department” exists to drive business performance not to maximize employee satisfaction. When recruiting, hiring and promoting workers, business leaders should and must objectively define the tangible education, experience, skills, compensation and other employment terms to fit management expectations of the business needs. However hiring someone who has the capability of doing the job is only part of the equation. Getting the employee to actually do the job as desired for the compensation and other benefits of employment offered by the business is where management comes in to play.

While it’s great when the business needs align with the needs of its people, the management has a duty to put the success of the business ahead of employee satisfaction when these needs do not align. While management can admire the success realized by the management by survey human resource consulting businesses in promoting the idea that management will be unable to hire sufficient employees unless it restructures its business operations and workforce expectations to match survey responses of Gen-X and Millennial workers, the business failures and setbacks of the automobile, steel, airlines and numerous other businesses clearly document the perils to the business and its workers that the business failures and setbacks of the automobile, steel, airlines and numerous other businesses when management pander to compensation or other expectations of workers at the expense of responsible management. Therefore, while management generally should consider the market competitiveness of the company’s employment, compensation, benefits and culture, the implications on the company’s ability to recruit, retain and motivate the workforce talent and performances needed to best operate the business with the least management effort, expense and liability ultimately must determine whether and to what extent to accommodate a particular worker or group of worker’s demands or expectations about hours of work, compensation, benefits and other job satisfaction issues on business performance.

Once management defines the position, its required qualifications and performance requirements, compensation, benefits and other terms based on the business needs of the company, management helps qualified candidates perform their best by clearly defining and communicating management expectations. Management should make clear what the job is, how performance will be judged and the compensation and other benefits and opportunities of the job.

Thus, while surveys and other invitations for members of the team to provide input and feedback can provide valuable insights to management where the performance needs of the business might be advanced by such input, management generally should use care not to send mixed messages by inviting input by workers on matters which management already has determined the course of action required to meet the business needs. Similarly, while management can and should design and administer workforce policies and management to include appropriate flexibility to allow employees flexibility in the performance of their assigned duties, compensation, or other terms of employment within the parameters established by management, unless legally required, management generally should be cautious about accommodating workers’ requests for special treatment or accommodation of the employee’s preferences or needs do not fit the business performance needs determined by management. Likewise, teaming does not mean the team doesn’t have a head coach. While input from employees has a valuable role in businesses, failing to clearly define the parameters and expectations within which employees are expected to perform, inviting input on decisions management already decided, or tolerating diversity in performance where the business needs uniformity undermines the effectiveness of the business and the performance of the worker by confusing or misdirecting the workers.

While occasionally the unique skills and talents of a particular worker may be so valuable that the business needs justify accommodating his demands for prima donna treatment, management should carefully weigh the costs of accommodation of these preferences. Unfortunately, management frequently wastes significant time, money and legal fees apparently qualified candidates that lack perhaps the most important qualification for the position: a desire and enthusiasm for the job management offered rather than another mythical position with duties, titles, responsibilities, compensation or other perks that the candidate wishes he could obtain. In many cases, accommodation of one demand or foible leads to additional demands from the accommodated worker while either alienating or inviting other demands for special treatment for other workers on the team.

Ultimately, the workforce of a business is a team whose success depends on how well the players execute the game plan set by management. Regardless of how great the player’s credentials look on paper, his value to the company’s team depends upon how well his performance fulfills and furthers the performance of the team. The best candidates and employees are competent if not talented workers that have the skill and find fulfillment performing the duties contemplated by management under the leadership of its management for the pay and other offered perks as an opportunity too good to miss. A business that hires and retains workers that readily and enthusiastically perform in accordance with the business strategy and performance expectations established by management generally require less management.

For Legal or Consulting Advice, Legal Representation, Training Or More Information

If you need help reviewing your group health plan or responding to these new or other workforce, benefits and compensation, performance and risk management, compliance, enforcement or management concerns, help updating or defending your workforce or employee benefit policies or practices, or other related assistance, the author of this update, attorney Cynthia Marcotte Stamer may be able to help.

Recognized as a “Top” attorney in employee benefits, labor and employment and health care law extensively involved in health and other employee benefit and human resources policy and program design and administration representation and advocacy throughout her career, Cynthia Marcotte Stamer is a practicing attorney and Managing Shareholder of Cynthia Marcotte Stamer, P.C., a member of Stamer│Chadwick│Soefje PLLC, author, pubic speaker, management policy advocate and industry thought leader with more than 27 years’ experience practicing at the forefront of employee benefits and human resources law.

A Fellow in the American College of Employee Benefit Counsel, past Chair and current Welfare Benefit Committee Co-Chair of the American Bar Association (ABA) RPTE Section Employee Benefits Group, Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, former Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, an ABA Joint Committee on Employee Benefits Council Representative and Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, Ms. Stamer is recognized nationally and internationally for her practical and creative insights and leadership on health and other employee benefit, human resources and insurance matters and policy.

Ms. Stamer helps management manage. Ms. Stamer’s legal and management consulting work throughout her 27 plus year career has focused on helping organizations and their management use the law and process to manage people, process, compliance, operations and risk. Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer helps public and private, domestic and international businesses, governments, and other organizations and their leaders manage their employees, vendors and suppliers, and other workforce members, customers and other’ performance, compliance, compensation and benefits, operations, risks and liabilities, as well as to prevent, stabilize and cleanup workforce and other legal and operational crises large and small that arise in the course of operations.

Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce management operations and compliance. She supports her clients both on a real time, “on demand” basis and with longer term basis to deal with daily performance management and operations, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy. Well known for her extensive work with health care, insurance and other highly regulated entities on corporate compliance, internal controls and risk management, her clients range from highly regulated entities like employers, contractors and their employee benefit plans, their sponsors, management, administrators, insurers, fiduciaries and advisors, technology and data service providers, health care, managed care and insurance, financial services, government contractors and government entities, as well as retail, manufacturing, construction, consulting and a host of other domestic and international businesses of all types and sizes. Common engagements include internal and external workforce hiring, management, training, performance management, compliance and administration, discipline and termination, and other aspects of workforce management including employment and outsourced services contracting and enforcement, sentencing guidelines and other compliance plan, policy and program development, administration, and defense, performance management, wage and hour and other compensation and benefits, reengineering and other change management, internal controls, compliance and risk management, communications and training, worker classification, tax and payroll, investigations, crisis preparedness and response, government relations, safety, government contracting and audits, litigation and other enforcement, and other concerns.

Ms. Stamer uses her deep and highly specialized health, insurance, labor and employment and other knowledge and experience to help employers and other employee benefit plan sponsors; health, pension and other employee benefit plans, their fiduciaries, administrators and service providers, insurers, and others design legally compliant, effective compensation, health and other welfare benefit and insurance, severance, pension and deferred compensation, private exchanges, cafeteria plan and other employee benefit, fringe benefit, salary and hourly compensation, bonus and other incentive compensation and related programs, products and arrangements. She is particularly recognized for her leading edge work, thought leadership and knowledgeable advice and representation on the design, documentation, administration, regulation and defense of a diverse range of self-insured and insured health and welfare benefit plans including private exchange and other health benefit choices, health care reimbursement and other “defined contribution” limited benefit, 24-hour and other occupational and non-occupational injury and accident, ex-patriate and medical tourism, onsite medical, wellness and other medical plans and insurance benefit programs as well as a diverse range of other qualified and nonqualified retirement and deferred compensation, severance and other employee benefits and compensation, insurance and savings plans, programs, products, services and activities. As a key element of this work, Ms. Stamer works closely with employer and other plan sponsors, insurance and financial services companies, plan fiduciaries, administrators, and vendors and others to design, administer and defend effective legally defensible employee benefits and compensation practices, programs, products and technology. She also continuously helps employers, insurers, administrative and other service providers, their officers, directors and others to manage fiduciary and other risks of sponsorship or involvement with these and other benefit and compensation arrangements and to defend and mitigate liability and other risks from benefit and liability claims including fiduciary, benefit and other claims, audits, and litigation brought by the Labor Department, IRS, HHS, participants and beneficiaries, service providers, and others. She also assists debtors, creditors, bankruptcy trustees and others assess, manage and resolve labor and employment, employee benefits and insurance, payroll and other compensation related concerns arising from reductions in force or other terminations, mergers, acquisitions, bankruptcies and other business transactions including extensive experience with multiple, high-profile large scale bankruptcies resulting in ERISA, tax, corporate and securities and other litigation or enforcement actions.

Ms. Stamer also is deeply involved in helping to influence the Affordable Care Act and other health care, pension, social security, workforce, insurance and other policies critical to the workforce, benefits, and compensation practices and other key aspects of a broad range of businesses and their operations. She both helps her clients respond to and resolve emerging regulations and laws, government investigations and enforcement actions and helps them shape the rules through dealings with Congress and other legislatures, regulators and government officials domestically and internationally. A former lead consultant to the Government of Bolivia on its Social Security reform law and most recognized for her leadership on U.S. health and pension, wage and hour, tax, education and immigration policy reform, Ms. Stamer works with U.S. and foreign businesses, governments, trade associations, and others on workforce, social security and severance, health care, immigration, privacy and data security, tax, ethics and other laws and regulations. Founder and Executive Director of the Coalition for Responsible Healthcare Policy and its PROJECT COPE: the Coalition on Patient Empowerment and a Fellow in the American Bar Foundation and State Bar of Texas, Ms. Stamer annually leads the Joint Committee on Employee Benefits (JCEB) HHS Office of Civil Rights agency meeting and other JCEB agency meetings. She also works as a policy advisor and advocate to many business, professional and civic organizations.

Author of the thousands of publications and workshops these and other employment, employee benefits, health care, insurance, workforce and other management matters, Ms. Stamer also is a highly sought out speaker and industry thought leader known for empowering audiences and readers. Ms. Stamer’s insights on employee benefits, insurance, health care and workforce matters in Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, 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 has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications. Ms. Stamer also regularly serves on the faculty and planning committees for symposia of LexisNexis, the American Bar Association, ALIABA, the Society of Employee Benefits Administrators, the American Law Institute, ISSA, HIMMs, and many other prominent educational and training organizations and 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 civic organizations. For instance, Ms. Stamer presently serves on an American Bar Association (ABA) Joint Committee on Employee Benefits Council representative; Vice President of the North Texas Healthcare Compliance Professionals Association; Immediate Past Chair of the ABA RPTE Employee Benefits & Other Compensation Committee, its current Welfare Benefit Plans Committee Co-Chair, on its Substantive Groups & Committee and its incoming Defined Contribution Plan Committee Chair and Practice Management Vice Chair; 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; the former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division; on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications. She also 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 childhood development 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. For additional information about Ms. Stamer, see http://www.cynthiastamer.com or the Stamer│Chadwick │Soefje PLLC website or contact Ms. Stamer via email to here or via telephone to (469) 767-8872.

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Posted by Cynthia Marcotte Stamer

Health Insurer/Vendor’s Claims & Appeals Deficiencies Could Trigger Significant Employer Excise Tax Liability

July 27, 2015

Employers sponsoring group health plan coverage now or in 2014, check the adequacy of your insurer or third party administrator’s claims and appeals processes and notices. Employers that sponsor group health plans that violated certain health care reform mandates for claims and appeals imposed by the Patient Protection and Affordable Care Act (ACA) will face a duty to pay an excise tax of $100 per violation per day under the expanded Form 8928 filing requirements made applicable to employers providing health plan coverage after 2013 under the Internal Revenue Code (Code), as well undermine the enforceability of claims and appeals decisions under Section 502(b) and trigger penalties of $125 per day ($1000 per day in the case of Department of Labor enforcement actions) against the plan administrator under Section 502(c) of the Employee Retirement Income Security Act of 1974 (ERISA).

Insurers and third party administrators providing claims and appeals services also should be concerned. Not only could these vendors face liability under ERISA, employer hit with fees almost certainly will look to the vendors responsible for performing these services for indemnification or other relief. Fixing past problems and preventing new violations is key to mitigating risks for all parties.

Because of the potential legal risks under the Code and ERISA, employers evaluating compliance to determine whether to file a Form 8928 generally should consult with legal counsel about whether and how best to structure and conduct the health plan compliance review to preserve distinctions between their business operations and fiduciary activities performed on behalf of the plan, as well as any opportunities to use attorney-client privilege, work product or other evidentiary rules to mitigate their risks and exposures.

Even before ACA, ERISA already required that group health plans and their plan administrators and fiduciary comply with a long list of highly technical rules when processing and administering claims and appeals and notifying plan members about these activities. The ACA claims and appeals rules covered by the Form 8928 filing and excise tax rules are additional notice and procedural safeguards imposed upon group health plans in addition to these long-standing ERISA claims and appeals procedures. As implemented by current Department of Labor Regulations, these ACA claims and appeals procedures require that group health plans (other than grandfathered plans) both comply with:

All of the pre-existing ERISA claims and appeals rules; and
Notify members or their beneficiaries of their rights to and provide for independent review of coverage rescission decisions and medical judgment-based claims denials in accordance with detailed rules set forth in the Labor Department Regulations; and
Comply with tighter procedural and notice standards for processing claim and appeals imposed by ACA in accordance with the detailed rules set forth in the Labor Department Regulations.

While most employers that sponsor group health plans historically have assumed that the insurers or other health plan vendors hired to administer their programs have designed and administer claims and appeals in compliance with these mandates, the processes and notices of many health plan insurers and self-insured plan claims and appeals vendors typically fall far short of meeting the requirements of even the pre-existing ERISA claims and appeals requirements as implemented by Labor Department Regulations since 2001, much less the additional independent review and other ACA claims and appeals requirements.

Post-2013 deficiencies in the practices of many insurers and other health plan vendors’ claims and appeals processes and notifications now leave many employers exposed to significant excise tax penalties. While under ERISA, group health plans and their responsible plan administrator or other applicable named fiduciary, not the sponsoring employer, generally bear the responsibility and liability for administering the group health plan in accordance with ACA’s claims and appeals and the other group health plan requirements covered by Form 8928, the Code’s extension of the Form 8928 filing requirement and imposition of significant excise taxes against employers that sponsor group health plans that violate these requirements is designed to give businesses sponsoring group health plans meaningful incentives to take steps to ensure that their group health plan is properly designed and administered by its insurers and fiduciaries to comply with the listed requirements.

Under Code Section 6039D, businesses sponsoring group health plans are required to self-assess and pay excise taxes of up to $100 per day for each uncorrected violation of a specified list of federal health plan mandates by filing a Form 8928 when the business files its corporate or partnership tax return for the applicable taxable year. Before 2014, the Form 8928 filing requirement applied to a fairly narrow set of requirements. Beginning with 2014, however, ACA added the ACA claims and appeals rules as well as a long list of other ACA requirements to the health plan violations subject to Form 8928 disclosures and excise taxes. If a business sponsored a health plan that violated the ACA claims and appeals rules or any other health plan rule subject to the Form 8928 filing requirement in 2014 or thereafter, the business should take prompt, well-documented actions to self-correct the violation or timely must file the required Form 8929 and pay the applicable $100 per violation per day excise tax since proof of good faith efforts to maintain compliance, proof of self-correction, or both may mitigate these excise tax and other Form 8928 liability as well as associated ERISA exposures. Likewise, during the current and future years after 2013, businesses offering group health plan coverage to their employees also will want to monitor their health plan’s compliance with the federal group health plan rules covered by Form 8929 reporting to avoid or mitigate these risks going forward.

Since federal group health plan violations that trigger the Form 8928 requirement of a sponsoring employer also generally create potential exposures for the ERISA exposures for the group health plan, parties acting as the “plan administrator” or other “fiduciary” role with respect to the plan or both under ERISA, the group health plan and its plan administrator or other responsible fiduciary (sometimes, but not always the employer or a member of its management), the group health plan, and those parties acting as the plan administrator or fiduciary responsible for administering the plan in compliance with those requirements also will want to be prepared to demonstrate that prudent steps are taken to administer the group health plan in accordance with the applicable mandates, including prudently to investigate and redress any suspected concerns identified in connection with the employer’s Form 8928 filing analysis. Under ERISA, for instance, the group health plan’s failure to strictly comply with any one of the highly technical claims or appeals procedural or notification requirements of ACA can give the affected plan member or its assignee the ability to sue the group health plan without the need to fulfill otherwise applicable appeals or other procedures that otherwise might apply under the group health plan’s claims and appeals procedures as well as have other adverse consequences for the group health plan or its fiduciaries, may heightened the burdens of proof the plan or its fiduciaries must meet to sustain denial determinations, or both. In addition, where the ACA violation included a failure to comply with ACA’s claims or appeals notification requirements, the violation also could provide the basis for the plan member to ask a court to order the plan administrator to pay the plan member up to $125 per day per violation plus attorneys’ fees and enforcement costs, the basis for the Department of Labor to penalize the plan administrator up to $1025 per day per violation per plan member, or both. While technically these ERISA exposures generally run specifically to the plan or the party serving as its plan administrator or responsible fiduciary, the employer frequently ultimately pays for these liabilities either because:

The plan documentation names the sponsoring business as the plan administrator or named fiduciary responsible for these actions;
The vendor agreement between the sponsoring business and the insurer or other service provider that the business hired to perform these duties requires the sponsoring business to indemnify the vendor for these liabilities; or
Both.

While the sponsoring business and parties serving as the plan administrator or other fiduciaries of the plan all have potential legal risk if the plan is not administered in accordance with the ACA claims and appeals procedures or other requirements covered by the Form 8928 filing requirements, all parties need to be mindful of the distinctions between the Form 8928 and other exposures that a sponsoring employer bears under the Code as compared to the ERISA fiduciary responsibility and other duties imposed upon the plan and its fiduciaries under ERISA. Maintenance of proper separation between these roles and appropriate structuring of communications between the sponsoring business with the plan and its fiduciaries and vendors is important to minimize the risk that the sponsoring business unintentionally will create or broaden the fiduciary liability exposures of the business by unnecessarily or inappropriately exercising discretion or control over the administration of plan duties that the plan terms allocate to other parties. Also, plan sponsors engaging in compliance reviews and associated discussions generally have a greater ability to use attorney-client privilege and work product than plan fiduciaries. Accordingly, businesses sponsoring their group health plans and their management generally will want to consult with qualified, experienced legal counsel for advice about whether and how to structure their Form 8928 assessments and associated risk analysis and correction discussions to promote and preserve the ability of the business, as the sponsoring employer, and its management to minimize ERISA fiduciary exposures and claim and use attorney-client privilege and work product evidentiary privileges to contain the scope of ERISA associated risks.

Going forward, businesses also will want to obtain advice of counsel about opportunities to mitigate Form 8928, ERISA and other exposures through more careful credentialing and contracting with health plan insurers and vendors, review and drafting of plan documents, summary plan descriptions and other plan materials, and other risk management and compliance processes and procedures. See Careful Selection & Contracting With Vendors Critical Part of Health Plan Renewals.

While most employers will not be able to negotiate the ideal contractual provisions and all operational violations, careful plan drafting to comply with applicable rules, vendor credentialing and contracting, and monitoring of compliance by an employer can reduce the risk and frequencies of violation and promote timely self-correction. In addition, the documented administration of these and other efforts by the employer can provide invaluable evidence to position the sponsoring employer to minimize or secure a waiver of excise taxes that otherwise might arise under the Code, pursue indemnification for liabilities the employer incurs due to the misfeasance of the insurer or vendor or both.

For Help or More Information

For Legal or Consulting Advice, Legal Representation, Training Or More Information

If you need help responding to these new or other workforce, benefits and compensation, performance and risk management, compliance, enforcement or management concerns, help updating or defending your workforce or employee benefit policies or practices, or other related assistance, the author of this update, attorney Cynthia Marcotte Stamer may be able to help.

A practicing attorney and Managing Shareholder of Cynthia Marcotte Stamer, P.C., a member of Stamer│Chadwick │Soefje PLLC, Ms. Stamer’s more than 27 years’ of leading edge work as an practicing attorney, author, lecturer and industry and policy thought leader have resulted in her recognition as a “Top” attorney in employee benefits, labor and employment and health care law.

Board certified in labor and employment law by the Texas Board of Legal Specialization, a Fellow in the American College of Employee Benefit Counsel, past Chair and current Welfare Benefit Committee Co-Chair of the American Bar Association (ABA) RPTE Section Employee Benefits Group, Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, former Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, an ABA Joint Committee on Employee Benefits Council Representative and Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, Ms. Stamer is recognized nationally and internationally for her practical and creative insights and leadership on HIPAA and other health and other employee benefit, human resources, and related insurance, health care, privacy and data security and tax matters and policy.

Ms. Stamer’s legal and management consulting work throughout her 27 plus year career has focused on helping organizations and their management use the law and process to manage people, process, compliance, operations and risk. Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer helps public and private, domestic and international businesses, governments, and other organizations and their leaders manage their employees, vendors and suppliers, and other workforce members, customers and other’ performance, compliance, compensation and benefits, operations, risks and liabilities, as well as to prevent, stabilize and cleanup workforce and other legal and operational crises large and small that arise in the course of operations.

Well known for her extensive work with health care, insurance and other highly regulated entities on corporate compliance, internal controls and risk management, her clients range from highly regulated entities like employers, contractors and their employee benefit plans, their sponsors, management, administrators, insurers, fiduciaries and advisors, technology and data service providers, health care, managed care and insurance, financial services, government contractors and government entities, as well as retail, manufacturing, construction, consulting and a host of other domestic and international businesses of all types and sizes.

As a key part of this work, Ms. Stamer uses her deep and highly specialized health, insurance, labor and employment and other knowledge and experience to help employers and other employee benefit plan sponsors; health, pension and other employee benefit plans, their fiduciaries, administrators and service providers, insurers, and others design legally compliant, effective compensation, health and other welfare benefit and insurance, severance, pension and deferred compensation, private exchanges, cafeteria plan and other employee benefit, fringe benefit, salary and hourly compensation, bonus and other incentive compensation and related programs, products and arrangements.

She is particularly recognized for her leading edge work, thought leadership and knowledgeable advice and representation on the design, documentation, administration, regulation and defense of a diverse range of self-insured and insured health and welfare benefit plans including private exchange and other health benefit choices, health care reimbursement and other “defined contribution” limited benefit, 24-hour and other occupational and non-occupational injury and accident, ex-patriate and medical tourism, onsite medical, wellness and other medical plans and insurance benefit programs as well as a diverse range of other qualified and nonqualified retirement and deferred compensation, severance and other employee benefits and compensation, insurance and savings plans, programs, products, services and activities. In these and other engagements, Ms. Stamer works closely with employer and other plan sponsors, insurance and financial services companies, plan fiduciaries, administrators, and vendors and others to design, administer and defend effective legally defensible employee benefits and compensation practices, programs, products and technology. She also continuously helps employers, insurers, administrative and other service providers, their officers, directors and others to manage fiduciary and other risks of sponsorship or involvement with these and other benefit and compensation arrangements and to defend and mitigate liability and other risks from benefit and liability claims including fiduciary, benefit and other claims, audits, and litigation brought by the Labor Department, IRS, HHS, participants and beneficiaries, service providers, and others. She also assists debtors, creditors, bankruptcy trustees and others assess, manage and resolve labor and employment, employee benefits and insurance, payroll and other compensation related concerns arising from reductions in force or other terminations, mergers, acquisitions, bankruptcies and other business transactions including extensive experience with multiple, high-profile large scale bankruptcies resulting in ERISA, tax, corporate and securities and other litigation or enforcement actions.

In the course of this work, Ms. Stamer has accumulated an impressive resume of experience advising and representing clients on HIPAA and other privacy and data security concerns. The scribe for the American Bar Association (ABA) Joint Committee on Employee Benefits annual agency meeting with the Department of Health & Human Services Office of Civil Rights for several years, Ms. Stamer has worked extensively with health plans, health care providers, health care clearinghouses, their business associates, employer and other sponsors, banks and other financial institutions, and others on risk management and compliance with HIPAA and other information privacy and data security rules, investigating and responding to known or suspected breaches, defending investigations or other actions by plaintiffs, OCR and other federal or state agencies, reporting known or suspected violations, business associate and other contracting, commenting or obtaining other clarification of guidance, training and enforcement, and a host of other related concerns. Her clients include public and private health plans, health insurers, health care providers, banking, technology and other vendors, and others. Beyond advising these and other clients on privacy and data security compliance, risk management, investigations and data breach response and remediation, Ms. Stamer also advises and represents clients on OCR and other HHS, Department of Labor, IRS, FTC, DOD and other health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns. She also is the author of numerous highly acclaimed publications, workshops and tools for HIPAA or other compliance including training programs on Privacy & The Pandemic for the Association of State & Territorial Health Plans, as well as HIPAA, FACTA, PCI, medical confidentiality, insurance confidentiality and other privacy and data security compliance and risk management for Los Angeles County Health Department, ISSA, HIMMS, the ABA, SHRM, schools, medical societies, government and private health care and health plan organizations, their business associates, trade associations and others.

Ms. Stamer also is deeply involved in helping to influence the Affordable Care Act and other health care, pension, social security, workforce, insurance and other policies critical to the workforce, benefits, and compensation practices and other key aspects of a broad range of businesses and their operations. She both helps her clients respond to and resolve emerging regulations and laws, government investigations and enforcement actions and helps them shape the rules through dealings with Congress and other legislatures, regulators and government officials domestically and internationally. A former lead consultant to the Government of Bolivia on its Social Security reform law and most recognized for her leadership on U.S. health and pension, wage and hour, tax, education and immigration policy reform, Ms. Stamer works with U.S. and foreign businesses, governments, trade associations, and others on workforce, social security and severance, health care, immigration, privacy and data security, tax, ethics and other laws and regulations. Founder and Executive Director of the Coalition for Responsible Healthcare Policy and its PROJECT COPE: the Coalition on Patient Empowerment and a Fellow in the American Bar Foundation and State Bar of Texas. She also works as a policy advisor and advocate to health plans, their sponsors, administrators, insurers and many other business, professional and civic organizations.

Ms. Stamer also is active in the leadership of a broad range of other professional and civic organizations. For instance, Ms. Stamer presently serves on an American Bar Association (ABA) Joint Committee on Employee Benefits Council representative; Vice President of the North Texas Healthcare Compliance Professionals Association; Immediate Past Chair of the ABA RPTE Employee Benefits & Other Compensation Committee, its current Welfare Benefit Plans Committee Co-Chair, on its Substantive Groups & Committee and its incoming Defined Contribution Plan Committee Chair and Practice Management Vice Chair; 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; the former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division; on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications. She also 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 childhood development 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. For additional information about Ms. Stamer, see www.cynthiastamer.com, or http://www.stamerchadwicksoefje.com the member of contact Ms. Stamer via email here or via telephone to (469) 767-8872.

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also may be interested reviewing other Solutions Law Press, Inc.™ resources at www.solutionslawpress.com such as:

Comments Off on Health Insurer/Vendor’s Claims & Appeals Deficiencies Could Trigger Significant Employer Excise Tax Liability | 6039D, ACA, Appeals, Attorney-Client Privilege, Claims, Excise Taxes, Fiduciary Responsibility, Health Benefits, Health Care Reform, Internal Controls, Obamacare | Tagged: 6039D, 8928, ACA, benefits, Claims, compliance, Employer, ERISA, Excise Tax, Form 8927, Health Benefits, Health Claims, Health Plans, Patient Protection & Affordable Care Act, Risk Management, Tax | Permalink
Posted by Cynthia Marcotte Stamer

Obama Administration Proposal Would Extend FLSA Minimum Wage & Overtime Requirements To 5 Million+ Workers

June 30, 2015

U.S. should brace for potentially huge increases in their federal minimum wage overtime costs and liabilities if the U.S. Department of Labor Wage and Hour Division (WHD) implements a Proposed Fair Labor Standards Act Rule Change (Proposed Rule) that would extend overtime pay rights to nearly 5 million additional workers by guaranteeing overtime pay to most salaried workers earning less than an estimated $50,440 next year. While the Proposed Rule has not yet been published in the Federal Register, the WHD released a prepublication copy for public review in connection with President Obama’s announcement of plans to implement the change yesterday.

The FLSA currently requires that covered employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers also must maintain accurate time and payroll records. The FLSA provides that employers who violate the law are liable to employees for their back wages and an equal amount in liquidated damages. Liquidated damages are paid directly to the affected employees.

These FLSA rules generally apply to all common law employees other than those that the employer can prove meet the requirements of one of a limited number of exemptions to these rules. The Proposed Rule would change the requirements for one of the exemptions most commonly relied upon by employers for not paying overtime to salaried workers – the “White Collar Exemption.”

Since 1940 and last updated by the WHD while President George W. Bush was President, generally have required an employer prove that an employee meets each of three tests for one of the FLSA’s White Collar Exemptions to apply:

The employee must be paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed;
The amount of salary paid must meet a minimum specified amount; and
The employee’s job duties must primarily involve executive, administrative, or professional duties as defined by the regulations.

Among other things, the Proposed Rule if adopted as presently proposed would update current WHD regulations governing which executive, administrative, and professional employees (white collar workers) qualify as exempt from the FLSA minimum wage and overtime requirements often referred to as the “White Collar Exemption”:

Immediately raise the threshold under which most salaried workers are guaranteed overtime to equal the 40th percentile of weekly earnings for full-time salaried workers. As proposed, this would raise the salary threshold from $455 a week ($23,660 a year) to a projected level of $970 a week ($50,440 a year) in 2016. WHD says nearly doubling the minimum salary threshold for a worker to qualify as exempt “minimizes the risk that employees legally entitled to overtime will be subject to misclassification based solely on the salaries they receive, without excluding from exemption an unacceptably high number of employees who meet the duties test.”;
Increase the total annual compensation requirement needed to exempt highly compensated employees (HCEs) to the annualized value of the 90th percentile of weekly earnings of full-time salaried workers ($122,148 annually); and
Establish a mechanism for automatically updating these qualifying standard salary and HCE total annual compensation requirements.

Beyond these changes, the WHD also is considering various changes to the duties test and invites suggestions for additional occupational examples in the current White Collar Exemption as well as comments on whether its regulations should require employers to take into account nondiscretionary bonuses when determining whether an employee meets the standard salary requirement.

The Administration claims that the Proposed Rule is needed to workers and their employers with greater “clarity” about when workers qualify for overtime. Employers concerned about minimum wage, overtime and other wage and hour costs should recognize that the Proposed Rule would accomplish this clarification by substantially expanding the income and number of white collar workers that entitled to be paid in accordance with the FLSA’s minimum wage and overtime rules.

Even without the adoption of the Proposed Rule, U.S. businesses already face huge and ever-growing FLSA minimum wage, overtime and recordkeeping exposures. The availability of substantial actual and punitive damages plus attorneys fees and difficulties that unprepared employers frequently encounter meeting their burdens of proof make wage and hour and overtime claims attractive lawsuits for disgruntled employees and their plaintiff’s counsel. Meanwhile, the pro-worker’s rights Obama Administration has made enforcement of these rules a high priority. Increasingly, the reach of these exposures has expanded further as plaintiffs and the WHD have challenges effectively many employers’ classification of workers as independent contractors. See $1.4M FLSA Back Pay Award Demonstrates Worker Misclassification Risks. Amid these already substantial exposures, most employers will view proposals to expand the scope of workers eligible for FLSA rights and protections as extremely concerning.

Employers concerned about the potential implications of this rule should begin reviewing the Proposed Rule in preparation of providing comments and feedback to members of Congress, the WHD through its rulemaking comment process, and the public. The deadline for commenting to the WHD will be 60 days from the date of publication of the Proposed Rule in the Federal Register.

For Legal or Consulting Advice, Legal Representation, Training Or More Information

Recognized as a “Top” attorney in employee benefits, labor and employment and health care law extensively involved in health and other employee benefit and human resources policy and program design and administration representation and advocacy throughout her career, Cynthia Marcotte Stamer is a practicing attorney and Managing Shareholder of Cynthia Marcotte Stamer, P.C., a member of Stamer│Chadwick │Soefje PLLC, author, pubic speaker, management policy advocate and industry thought leader with more than 27 years’ experience practicing at the forefront of employee benefits and human resources law.

A Fellow in the American College of Employee Benefit Counsel, past Chair and current Welfare Benefit Committee Co-Chair of the American Bar Association (ABA) RPTE Section Employee Benefits Group, Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, former Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, an ABA Joint Committee on Employee Benefits Council Representative and Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, Ms.Stamer is recognized nationally and internationally for her practical and creative insights and leadership on health and other employee benefit, human resources and insurance matters and policy.

Ms. Stamer also is active in the leadership of a broad range of other professional and civic organizations. For instance, Ms. Stamer presently serves on an American Bar Association (ABA) Joint Committee on Employee Benefits Council representative; Vice President of the North Texas Healthcare Compliance Professionals Association; Immediate Past Chair of the ABA RPTE Employee Benefits & Other Compensation Committee, its current Welfare Benefit Plans Committee Co-Chair, on its Substantive Groups & Committee and its incoming Defined Contribution Plan Committee Chair and Practice Management Vice Chair; 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; the former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division; on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications. She also 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 childhood development 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. For additional information about Ms. Stamer, see www.cynthiastamer.com, or www.stamerchadwicksoefje.com the member of contact Ms. Stamer via email here or via telephone to (469) 767-8872.

About Solutions Law Press, Inc.™

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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 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 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 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.

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:

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

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 www.solutionslawpress.com.

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 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

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 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

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

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 at here or e-mailing this information here.

Comments Off on Incentives To Get Employee Into Wellness Education Requires Legal Risk Management | 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 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.

For Assistance or Additional Information

About Solutions Law Press

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

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.

Comments Off on 4th Circuit Rejects Two Challenges To Affordable Care Act Constitutionality | 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

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.

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, 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

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

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

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

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