Archived HBS Legislative Updates
San Jose, California Archived HBS Legislative Updates
Group-Term Life Table 1 - There were no changes to the rate table from last year. Section 79 of the Internal Revenue Code (IRC) requires that employers calculate imputed taxable income for employees that receive group life insurance coverage in excess of $50,000. The amount of imputed taxable income must be reported on the employee's Form W-2. The IRC Section 79 allows employees to exclude up to $50,000 from taxable income.- A Model Creditable Coverage Disclosure Notice - Please read this notice carefully and keep it where you can find it. This notice has information about your current prescription drug coverage with [Insert Name of Organization] and about your options under Medicare's prescription drug coverage. This information can help you decide whether or not you want to join a Medicare drug plan. If you are considering joining, you should compare your current coverage, including which drugs are covered at what cost, with the coverage and costs of the plans offering Medicare prescription drug coverage in your area. Information about where you can get help to make decisions about your prescription drug coverage is at the end of this notice.
- BenAlert - Medicare Part D Compliance - Employers who provide prescription drug coverage to Medicare eligible individuals must provide notice annually regarding whether the offered coverage is 'creditable'. (Coverage is deemed creditable when the actuarial value of the coverage is equal to or exceeds the coverage provided under Medicare Part D.) If notice is provided to all plan participants annually prior to November 15 each year, CMS will consider this notice requirement met.
- HITECH Proposed Interim Final Rule - Breach Notifications (09/09) - The American Recovery and Reinvestment Act of 2009 made several changes to the HIPAA privacy rules - including adding a requirement for notice to affected individuals of any breach of unsecured protected health information. On September 23, 2009, the interim final rule from the Department of Health and Human Services (HHS) goes into effect. This Ben Alert summarizes the Ruling. HHS has stated that while it expects covered entities to comply with this Rule as of September 23, it will not impose sanctions for failure to provide the required notifications for breaches discovered through February 22, 2010. Instead, during such period it will work with covered entities to achieve compliance through technical assistance and voluntary corrective action. Please read the entire Alert to understand what your organization must do to comply.
- The Obama Health Care Agenda: What it Means for Benefits Professionals (08/09) - Health care reform has been discussed for nearly 100 years and it appears that the latest convergence of economic, political and social factors has created the final push to significant health care reform in the United States. This discussion will explore the history and drivers of health reform, the economic and political factors that were in play during previous attempts and why this time may be different. We'll also explore the potential economic and employment challenges facing employers and what role government policy and regulation may play in determining the fate of employer-sponsored health benefit programs.
- COBRA Subsidy: The Heat is On IRS Notice 2009-27 (04/09) - With the introduction of the model federal notices, most Plan Sponsors and all COBRA administrators are working to comply with the COBRA subsidy notice requirements. With IRS Notice 2009-27, issued today, we have some further guidance. The purpose of this Memorandum is to discuss and hopefully bring a degree of certainty to the election process.
COBRA Subsidy Model Notices (03/09) - This morning, the Department of Labor (DOL) published model notices for use by employers to notify individuals regarding their potential right to qualify for COBRA premium assistance. Employer/Plan Sponsors must provide one of the four model notices to each individual whose coverage terminated, regardless of the type of qualifying event, at any time from September 1, 2008 to the present within 60 days from the date of enactment (February 17, 2009) of the American Recovery and Reinvestment Act of 2009 (ARRA). The DOL calculates this deadline date to be April 18, 2009.- Children's Health Insurance Program Reauthorization Act of 2009 (03/09) - As many of us were ruminating over the prospect of potential COBRA changes, ultimately adopted into law through the Stimulus Bill (American Recovery and Reinvestment Act of 2009) on February 17, 2009, President Obama signed H.R. 2 into law on February 4, 2009: The Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA), which contains additional employer obligations becoming generally effective on April 1, 2009.
- COBRA Premium Subsidy Now Reality: Overview (02/09) - The act will provide subsidized COBRA benefits to workers (and their families) who lose health care coverage because of involuntary termination of employment. Those who retire or otherwise terminate their employment voluntarily, and those who become eligible for COBRA coverage as a result of reduced hours, divorce, loss of dependent status or another qualifying event are not eligible for subsidized coverage.
- COBRA Premium Subsidy Now Reality: Immediate Action Required - Employers / Plan Sponsors who are subject to state or federal COBRA must provide premium subsidies of no less than 65% of regular COBRA premium to "Assistance Eligible Individuals" beginning March 1, 2009. Employers must provide notice of the subsidy's availability to all eligible individuals within 60 days of the law's enactment.
- Healthy San Francisco Update (02/09) - As you know, the Health Care Security Ordinance (Healthy San Francisco) requires for-profit employers with 20 or more employees (and nonprofits with 50 or more employees) to spend a minimum amount on health care for covered employees and to report on these expenditures annually. On January 15, 2009, San Francisco's Office of Labor Standards Enforcement (OLSE) released an updated Annual Reporting Form (ARF) to be completed by covered employers by April 30, 2009. Attached are the Annual Reporting Form Instructions and Form.
- New Family and Medical Leave Regulations (01/09) - As you may recall, Congress enacted the Family and Medical Leave Act in 1993. The Department of Labor (DOL) issued its only set of FMLA regulations in 1995. Since that time, federal courts have interpreted the FMLA (sometimes inconsistently) and the U.S. Supreme Court actually invalidated portions of the current regulations. So now, the DOL has issued new Final Regulations (New Regulations) which are more comprehensive than the 1995 regulations. Many of the enhancements respond to court decisions; others are a result of comments made during what became a two year comment period (2006-2008). Since the New Regulations are very detailed and require serious study, we have limited this BenAlert to a discussion of the key changes.
- San Francisco Commuter Benefits: Sample Documents and Additional Discussion (12/08) - In September 2008, we published a BenAlert on the City and County of San Francisco's mandate requiring employers to make certain commuter transit benefits available. San Francisco employers with 20 or more employees working at least 10 hours per week (in or outside of San Francisco) must offer the benefit to its employees as of January 19, 2009. The purpose of this Memorandum is to provide additional information about this program and to provide two sample documents (for review by the employer's counsel) as tools for implementation of this program: a pre-tax program and an employer-paid program. These samples are issued subject to review by your client's counsel.
- The Bicycle Commuters Act (12/08) - Effective January 1, 2009, for expenses incurred on or after that date, federal law will allow employers to make bicycle commuting expense reimbursements under IRC Section 132(f) up to $20.00 per month to employees who regularly commute to work by bicycle. Although this is the same section of the Internal Revenue Code as transit passes and parking, very different rules apply to the bicycle benefit.
- Group-Term Life Table 1 (12/08) - There were no changes to the rate table from last year. Section 79 of the Internal Revenue Code (IRC) requires that employers calculate imputed taxable income for employees that receive group life insurance coverage in excess of $50,000. The amount of imputed taxable income must be reported on the employee's Form W-2. The IRC Section 79 allows employees to exclude up to $50,000 from taxable income.
- California Same-Sex Marriages: Impact of Proposition 8 (11/08) - On November 4, 2008, California voters approved an initiative to amend the California Constitution to define marriage as between a man and a woman. Special interest groups already have filed petitions with the California Supreme Court urging invalidation of Proposition 8. The purpose of this BenAlert is to discuss the impact of Proposition 8 at this moment.
- 2008 Plan Year End: Compliance Highlights (11/08) - The purpose of this BenAlert is to provide you with a turnkey list of benefits issues that requires attention between now and the end of 2008, whether or not your plans are calendar year plans. For some of you, 2009 benefits are fixed and open enrollments have begun or are about to begin. 2009 plan design and communication strategies are in place. For others, budget constraints are calling for significant changes in plan design. Regardless of which stage you are in, at some point before year-end you must address your plan compliance obligations.
- New Federal Mental Health Parity Law: What it Means for Plan Sponsors (11/08) - On October 3, 2008, Congress passed and President Bush signed into law the Emergency Economic Stabilization act of 2008 (EESA), also know s the "700 Billion Dollar Bailout Bill" (HR 1424), to encourage certain members of Congress to vote for its passage, EESA contains a number of unrelated but pet legislative proposals which became law with the Bailout Bill. The most well known of these proposals was "The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008", Section 511 et seq. of the Bailout Bill (MHPAEA). The MHPAEA amends the Employee Retirement and Income Security Act (ERISA), the Internal Revenue Code (IRC), and the Public Health Service Act. The following is an overview of the MHPAEA.
- IRS 2009 HSA Maximums (11/08) - Annual contribution limitation. For calendar year 2009, the annual limitation on deductions under § 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan is $3,000. For calendar year 2009, the annual limitation on deductions under § 223(b)(2)(B) for an individual with family coverage under a high deductible health plan is $5,950.
- 2009 Maximum Benefit and Contribution Limits (10/08) - Maximum Benefits and Contributions limits for 2009. Plans covered include, 401 (k) Elective Deferrals, Catch-Up contributions, Defined Contributions Plans, Annual Compensation Limit, among others.
- Complying with Medicare Part D Guidelines (10/08) - You are required to provide annual notification to the CMS (Centers for Medicare and Medicaid) that your prescription drug coverage for the current year was either Creditable or Not Creditable for the purposes of Medicare Part-D anytime between February 15, 2008 and November 15, 2008. This is for their data bank for Medicare-eligible employees and their dependents.
- San Francisco Health Care Security Ordinance (10/08) - The Ninth Circuit, US Court of Appeals ruled last week in favor of the San Francisco Health Care Security Ordinance. We do expect this to be challenged in the Supreme Court, however in the meantime, the ruling remains in effect.
- Federal Benefit Law Notice Requirements as of September 30, 2008 (09/08) - Federal Benefit Law Notice Requitrements as of September 30, 2008. Covers Annual Notices, Event Driven Notices, and Other Notices as in a Military Rights Notice or an Exemption from Mental Health Parity Law.
- Domestic Partner and Same-Sex Marriage Partner Imputed Income Calculator for Federal Income Tax Purposes (09/08) - For federal income tax purposes, providing group health care benefits to a domestic partner or same-sex marriage partner (collectively: Partner) is a taxable event to the employee, requiring the employer to impute income reflecting the value of the coverage provided to the Partner.
- City and County of San Francisco Mandates Transit Benefits (09/08) - On August 22, 2008, Mayor Gavin Newsome signed a new Transit Benefit Ordinance in to law requiring employers with offices in San Francisco to provide one of three transit benefit options to its San Francisco employees; A pre-tax Transit Pass program; A program which reimburses employees for them; Or, door-to-door van pool program at no cost to employees.
- Heroes Earnings Assistance and Relief Act of 2008 (HEART Act) (07/08) - On June 6, 2008, President Bush signed into law the Heroes Earnings Assistance and Relief Tax Act of 2008 (HEART Act). This new legislation provides additional benefits for individuals on active duty in the Armed Forces and amends the Uniformed Services Employment and Reemployment Rights Act (USERRA). The Act provides for liberalization of pension as well as welfare plan rules including the ability to cash out unused contributions from a health FSA (at the employer's option). The purpose of this memorandum is to highlight the pension rules and to discuss the welfare plan changes in more depth.
- Gay Marriage Licenses Now Being Issued: An Early FAQ (06/08) - On May 15, 2008, the California Supreme Court ruled that California's ban on same gender marriage was unconstitutional. Thus, couples of the same gender must be allowed to marry. The new ruling requires that county clerks issue and record marriage licenses to same gender couples in exactly the same manner as issued to opposite gender couples.
- IRS Approves One Time IRA-to-HSA Funding (06/08) - Owners of individual retirement accounts (IRA) who are enrolled in a high-deductible health plan can shift IRA funds into a HSA without facing a tax penalty. The transfer amount, however, cannot exceed the individual's maximum HSA contribution limit. Simple IRAs and SEP IRAs are not eligible.
- The Family and Medical Leave Act and National Defense Authorization Act for FY 2008 (01/08) - Section 585 of the NDAA amends the Family and Medical Leave Act of 1993 (FMLA) to permit a "spouse, son, daughter, parent, or next of kin" to take up to 26 workweeks of leave to care for a "member of the Armed Forces, including a member of the National Guard or Reserves, who is undergoing medical treatment, recuperation, or therapy, is otherwise in outpatient status, or is otherwise on the temporary disability retired list, for a serious injury or illness."
- San Francisco Health Care Security Ordinance Legislative Brief (01/08) - The Employer Spending Requirement (ESR) of the new San Francisco Health Care Security Ordinance (HCSO) was challenged in federal courts which delayed the initial January 1, 2008 effective date. Pending the appeal, the Ninth Circuit Court of Appeals has granted the City's Emergency Motion for a Stay of the court's decision. Until the courts reach a decision on the appeal, the City's program for health benefits for thousands of the City's residents and workers is going forward effective January 9, 2008.
- Steps to Determine Whether a Covered Employer Has Met its Spending Requirement under the HCSO (01/08) - Covered Employers must perform each of these steps to determine whether it is required to make a health care expenditure for any of its covered employees. These steps should be reviewed each quarter and any time changes in an employee's coverage and eligibility status occur.
- New California Laws Effecting Group Health Plans and Plan Sponsors (01/08) - The Unpaid Leave Law requires a qualified employer to allow a qualified employee to take up to 10 days of unpaid leave during a qualified leave period. The healthy care treatment law will prevent health care service plans and health insurers from rescinding or modifying preautorized treatment or services provided by health care providers for any reason. The protected health information law expands the provisions of the confidentiality of Medical Information Act as well as other California personal information privacy laws to apply to electronic health information held by any organization regarding any California resident.
- New California Law Gives Unpaid Leave to Military Spouses (11/07) - The bill requires employers with 25 or more employees ("qualified employers") to provide any employee whose spouse is a member of the Armed Forces of the United States, National Guard or Reserves, who has been deployed during a time of military conflict, up to 10 days of unpaid leave when his or her military spouse is on leave from deployment.
- Department of Labor Releases Final Regulations on 401(k) Plan Default Investment Vehicles (10/07) - The Department of Labor has issued final regulations that provide a safe harbor to qualified plan fiduciaries to guide their selection of default investment alternatives for plan participants. Default investment alternatives are investments that are automatically provided by plan sponsor fiduciaries when participants who are given the opportunity to direct the investment of their defined contribution plan accounts (401k) do not make an investment election. This regulation will be applicable to 401k plans that use automatic enrollment for newly-eligible employees as well as plans that do no receive an election from participations. The final regulations are effective December 24, 2007.
- New Cafeteria Plan Rules (10/07) - The purpose of this legislative update is to highlight the key provisions of these new proposed regulations (the new proposed rules) that will directly affect plan sponsors in the administration of their cafeteria plans. It is not intended as a comprehensive restatement of the new proposed rules.
- California Benefits: 2006 Legislation (07/07) - As you may know, each year, we summarize the new laws enacted in California effecting health and welfare plans. The purpose of this memorandum is to provide you with an overview of the more significant legislation for 2007. We have also included health care legislation not directly effecting health and welfare plans to give you an idea of the direction of California's legislative intent.
- Are You Ready to Incorporate a Wellness Program in your Employee Benefits Plan? (06/07) - Survey after survey in 2007, shows nearly 70% of large companies plan to offer tools and programs to help employees improve their health, including health risk questionnaires and nurse hot lines. Companies' efforts at improving employee health range from simple things, such as flipping the food in company vending machines so the nutritional information faces out, to an increasing number of in-house clinics and pharmacists to help employees with primary care.
- An Update to San Francisco's Sick Leave Ordinance (05/07) - All employers with at least one person employed within the boundaries of the City and County of San Francisco (City) must provide sick pay benefits to employees who work in the City for more than 90 calendar days. Sick leave benefits accrue at the rate of one hour for every thirty hours worked, with a maximum accrual of 40 hours for employers with less than 10 employees and 72 hours for employers with 10 or more employees.
- New HSA Provisions (12/06) - This bill will allow consumers with FSAs, individual retirement plans and health reimbursement arrangements to transfer funds into their HSAs. The passing of this bill greatly enhances the rules governing HSAs. It also expands funding sources for HSAs. The HSA provisions will go into effect on January 1, 2007. If you are presently offering an HSA plan to your employees, you need to communicate to your employees these new regulations which may benefit them.
- Pension Protection Act of 2006 (10/06) - The Pension Protection Act of 2006 is one of the most significant pieces of retirement plan legislation since the enactment of the Employee Retirement Income Security Act of 1974 ("ERISA") more than 30 years ago. The Act makes many changes to the rules governing retirement plans that will affect nearly every plan sponsor and participant. It is a clear message that Americans need to save more for their retirement and Employers now have more tools to help them.
- New Guidance For 2006 Health Savings Accounts (HSA) (11/05) - The Treasury Department has issued new guidance for 2006 on the maximum contribution levels for Health Savings Accounts (HSAs) as well as minimum deductibles and out-of-pocket spending limits for HSA Compatible High Deductible Health Plans. We would like to call your attention to the "New Minimum Deductible Amounts for 2006". For the first two years (2004 - 2005) of the Health Savings Account/HSA program, minimum deductible for High Deductible Health Plans/HDHPs was $1,000 for self-only coverage and $2,000 for family coverage. For 2006 the Treasury has now raised the HDHP deductible amounts for 2006: the minimum deductible for HDHPs increases to $1,050 for self-only coverage and $2,100 for family coverage.
- HIPAA: Final and Proposed Regulations and Special Enrollment Rights Expanded (10/05) - Employers and carriers will need to make changes to their health insurance plan materials and participant communications as of the start of their next plan year (January 1, 2006 for employers with calendar plan years), in order to comply with final regulations under HIPAA. These regulations pertain to rules about pre-existing condition exclusions, certificates of creditable coverage and special enrollment rights.
- 125 Plans: A Second Look at Use It or Lose It Grace Period (10/05) - When the IRS announced a 2½ month grace period for participants to incur claims in a health care or dependent care FSA, the general assumption was that Plan Sponsors would implement it as a safeguard against forfeitures by Plan Participants who could not accumulate enough covered health care or dependent care expenses during the twelve month Plan Year to use all of their pre-tax contributions.