Stronger . . . Services Agreements for Benefit Plans

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By Kevin Selzer

With the exception of certain small businesses, being an employer generally means offering an array of benefits to remain competitive in the worker marketplace.  As the employer grows, typically so does the list of employee benefit plans being offered.  This naturally translates into more service providers, and for good reason.  Employers typically don’t possess the knowledge and skillset to offer these benefits in-house, and ERISA, which applies to most employee benefit arrangements, requires the plans to be administered in accordance with some of the highest standards of care under law. As a result, employers are frequently hiring and replacing service providers.

Today’s post focuses on some tips for employers in a sometimes-overlooked aspect of the process of hiring a service provider – the contract between the employer and the provider.  In concept, the service provider agreement is relatively simple – it needs to set out each party’s role and responsibility in delivering the employee benefit.  As always though, the devil is in the details.  Below are some tips for employers:

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Oh Won’t You Stay…A Little Bit Longer…Because There’s No Need to Sign Your Distribution Form in Person

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by Elizabeth Nedrow and Becky Achten

In June 2020, the IRS issued Notice 2020-42 providing temporary relief from the physical presence requirement for certain participant distribution and beneficiary designation elections required to be witnessed by a notary public or plan representative.  This temporary relief was scheduled to expire June 30, 2021, and now has again been extended by the IRS.

As the COVID-19 pandemic continues, the IRS issued Notice 2021-40, again extending the temporary relief through the 12-month period ending June 30, 2022, as long as the prior requirements are met.  See our January 25, 2021 blog posting for a summary of the requirements. Read more

This is the End: Employers Must Provide Notice of the Expiring COBRA Subsidy Period

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by Brenda Berg

The COBRA subsidy from COVID-19 stimulus bill – The American Rescue Plan Act of 2021 (ARPA) – is nearing an end and in many cases requires employers to provide notices by September 15. The COBRA subsidy covered 100% of COBRA premiums for assistance-eligible individuals for periods of coverage beginning on or after April 1, 2021 through September 30, 2021. We previously covered the details of the subsidy in these posts: These Boots Are Made For Walking…But If You Quit, You Might Not Get the COBRA Subsidy and Lean on Me…New Guidance on Federal COBRA Subsidy. Because eligible individuals have 60 days to elect COBRA, there are still a couple months of coverage periods for which individuals may still be able to elect the subsidy. Read more

Delta Dawn, What’s that Surcharge You’re Adding On? Employers Consider Raising Premiums for Unvaccinated Workers

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by Beth Nedrow

Employers are impacted in many ways by the COVID-19 pandemic, not the least of which are employee health and safety. For the last several months, employers have used mostly soft-sell approaches to encourage their employees to get vaccinated. With the FDA’s approval, employers are showing a willingness to move beyond incentives like gift cards. One of the more notable examples in the headlines lately is Delta Airlines’ decision to implement a premium surcharge on unvaccinated workers. Employees who don’t get the jab will have to pay more in premiums under the Airlines’ medical plan. Read more

Here Comes the Sun: The DOL Intends to Shine the Light on Mental Health Parity

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by Bret F. Busacker

We previously blogged about the new Mental Health Parity and Addiction Equity Act (MHPAEA) reporting and disclosure requirements established by the Consolidated Appropriation Act, 2021 (CAA).

As a refresher, employers and carriers that sponsor group health plans are now required to provide upon request a full analysis of the process followed by the plan in establishing non-quantitative treatment limitations (NQTLs) for the plan and the impact these NQTL’s have on mental health and substance use disorder (MH/SUD) benefits provided by the plan.  This disclosure requirement went into effect on February 10, 2021.

The DOL has recently signaled its intent to focus on MHPAEA issues in filing suit against United Healthcare Insurance Company (“UHIC”) and United Behavioral Health (“UBH”).   Read more

Here We Go Again, PCORI’s Back in Town

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By Benjamin Gibbons

For those employers that sponsor a self-insured health plan, it’s important to be aware that the deadline for your 2021 PCORI filing is August 2, 2021. This deadline applies for plan years ending on December 31, 2020 (or any others between October 1, 2020 and October 1, 2021).  If you haven’t yet made your PCORI filing on IRS Form 720, we recommend doing so as soon as possible. Read more

E-P-C-R-S, find out what it means to me … new IRS Correction Guidance

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by Lyn Domenick

On July 16, 2021, the IRS released updated Employee Plans Compliance Resolution System (EPCRS) guidance for Plan corrections in the form of Rev. Proc. 2021-30. The changes affect the three programs offered by the IRS for correction of plan failures: Self-Correction Program (SCP), Voluntary Correction Program (VCP) and Audit Closing Agreement Program (Audit CAP). The principal changes outlined below are effective as of July 16, 2021, unless otherwise indicated. Read more

I Just Called to Say…I Have a Benefit Claim

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by Lyn Domenick

ERISA provides that when an individual makes a claim for benefits under an employer’s plan, they are entitled to copies of all documents, records, and other information relevant to the claimant’s claim for benefits. The Department of Labor (DOL) recently issued an information letter that concludes that an audio recording of a telephone conversation (in this case, between the claimant and a representative of the plan’s insurer) must be among the materials provided to a claimant upon request. The DOL letter was provided in response to a request from a representative of a claimant who was denied an audio recording because the plan administrator considered it to be made only for quality assurance purposes, and not “created, maintained or relied upon for claim administration purposes.” Read more

Time Has Come Today…For Form 5500 Season

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By Benjamin Gibbons

Days are getting longer, temperatures are getting warmer, plants are looking greener, schools are letting out, Brood X cicadas are emerging…it can only mean one thing…5500 season is approaching.

However, unlike the cicadas and their 17-year cycle, the Form 5500 filing requirements arise every summer for calendar year-end ERISA covered retirement plans and health and welfare plans that cover at least 100 participants.  While it may be easy enough to file an extension and hit the snooze button until October, now is great time for plan sponsors to start thinking about their 5500 obligations. Read more

Baby, What a Big Surprise! Right Before My Very Eyes…

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by Becky Achten

The No Surprises Act (part of the Consolidated Appropriations Act introduced earlier this year) is poised to eliminate some of the surprises that group health plan participants encounter from unexpected charges.  One way the new legislation intends to accomplish this is with Advanced Explanation of Benefits (EOBs). Read more