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
https://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.png00adminhttps://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.pngadmin2021-08-23 09:44:142021-08-23 09:44:14Here Comes the Sun: The DOL Intends to Shine the Light on Mental Health Parity
The Consolidated Appropriations Act of 2021 (“CAA”) established, among other things, new protections from surprise billing and excessive cost-sharing for consumers receiving health care items and services (“No Surprises Act”).
Most group health plans and health insurance issuers that offer group or individual health insurance coverage have a network of providers and health care facilities that agree to accept a specific payment amount for their services. Providers and facilities that are not part of a plan’s or issuer’s network usually charge higher amounts than the in-network providers and facilities. Group health plans and issuers typically do not cover the entire out-of-network costs, leaving the individual with higher costs than if they had been seen by an in-network provider. In many cases, the out-of-network provider may bill the individual for the difference between the billed charge and the amount paid by their plan or insurance, unless prohibited by state law (known as “balance billing”). Read more
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Plan sponsors of defined contribution plans such as 401(k) plans will soon have to provide participants with illustrations of just how much a participant’s account balance might produce on a monthly basis if converted to a single life annuity and, for married participants, a qualified joint and survivor annuity. Many plan sponsors already provide some sort of income illustration on their quarterly benefit statements to help participants with their retirement planning.
https://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.png00adminhttps://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.pngadmin2021-08-06 09:30:152021-08-06 09:30:15Once in a Lifetime – Make that a Year – for Lifetime Income Illustrations of 401(k) Plan Benefits
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
https://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.png00adminhttps://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.pngadmin2021-07-28 10:25:202021-07-28 10:25:20Here We Go Again, PCORI’s Back in Town
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
https://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.png00adminhttps://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.pngadmin2021-07-20 12:04:192021-07-20 12:04:19E-P-C-R-S, find out what it means to me … new IRS Correction Guidance
Most private companies are now well aware that the valuation methods under Code Section 409A are for the purpose of granting Section 409A exempt “stock rights” which include employee stock options with a requirement, among others, that the options be granted at no less than fair market value on the date of grant. It has become a best practice to obtain a valuation from an outside independent valuation firm as soon as the company has sufficient funds as doing so allows the company to obtain a regulatory presumption that the valuation is reasonable providing a more certain tax compliance position. This makes sense given the severe penalties applicable to a “discount option” under Section 409A.
However, we still see some companies struggle with the timing of a Section 409A valuation where the valuation is received by the company on one date but has an earlier effective date. For Section 409A, if options were granted in the period before the valuation was received but after the valuation effective date, and if these options have an exercise price lower than the valuation price, these options will be out of compliance with the Section 409A fair market value on the date of grant requirement. For this reason, we recommend that no awards are granted while a valuation is pending. Read more
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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
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Here Comes the Sun: The DOL Intends to Shine the Light on Mental Health Parity
/in Benefits Plan Creation, Cafeteria Plans, Corporate Governance in Benefits, DOL, ERISA, Fiduciary Duties, Health & Welfare Plans, IRS, Legislation, Litigation, State Benefits Lawsby 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
I Can’t Go For That, No Balance Billing
/in DOL, Health & Welfare Plans, IRS, Legislationby Leslie Thomson
The Consolidated Appropriations Act of 2021 (“CAA”) established, among other things, new protections from surprise billing and excessive cost-sharing for consumers receiving health care items and services (“No Surprises Act”).
Most group health plans and health insurance issuers that offer group or individual health insurance coverage have a network of providers and health care facilities that agree to accept a specific payment amount for their services. Providers and facilities that are not part of a plan’s or issuer’s network usually charge higher amounts than the in-network providers and facilities. Group health plans and issuers typically do not cover the entire out-of-network costs, leaving the individual with higher costs than if they had been seen by an in-network provider. In many cases, the out-of-network provider may bill the individual for the difference between the billed charge and the amount paid by their plan or insurance, unless prohibited by state law (known as “balance billing”). Read more
Once in a Lifetime – Make that a Year – for Lifetime Income Illustrations of 401(k) Plan Benefits
/in 401(k) Plans, 403(b) plans, 457(b) plans, 457(f) plans, Defined Benefit Plans, DOL, Fiduciary Duties, Retirement Plansby Brenda Berg
Plan sponsors of defined contribution plans such as 401(k) plans will soon have to provide participants with illustrations of just how much a participant’s account balance might produce on a monthly basis if converted to a single life annuity and, for married participants, a qualified joint and survivor annuity. Many plan sponsors already provide some sort of income illustration on their quarterly benefit statements to help participants with their retirement planning.
Read more
Here We Go Again, PCORI’s Back in Town
/in DOL, ERISA, Fees, Health & Welfare Plans, IRSBy 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
/in 401(k) Plans, 403(b) plans, Defined Benefit Plans, ERISA, ESOPs, Governmental Plans, IRS, Retirement Plansby 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’ll Be a Child of the Wind…At Least Until I Get a Retroactive 409A Valuation
/in Equity Compensation, Executive Compensationby John Ludlum
Most private companies are now well aware that the valuation methods under Code Section 409A are for the purpose of granting Section 409A exempt “stock rights” which include employee stock options with a requirement, among others, that the options be granted at no less than fair market value on the date of grant. It has become a best practice to obtain a valuation from an outside independent valuation firm as soon as the company has sufficient funds as doing so allows the company to obtain a regulatory presumption that the valuation is reasonable providing a more certain tax compliance position. This makes sense given the severe penalties applicable to a “discount option” under Section 409A.
However, we still see some companies struggle with the timing of a Section 409A valuation where the valuation is received by the company on one date but has an earlier effective date. For Section 409A, if options were granted in the period before the valuation was received but after the valuation effective date, and if these options have an exercise price lower than the valuation price, these options will be out of compliance with the Section 409A fair market value on the date of grant requirement. For this reason, we recommend that no awards are granted while a valuation is pending. Read more
I Just Called to Say…I Have a Benefit Claim
/in 401(k) Plans, 403(b) plans, Defined Benefit Plans, DOL, ERISA, ESOPs, Fiduciary Duties, Health & Welfare Plans, Retirement Plansby 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