With the passing of summer and the children back in school, it is time to get to work and check on benefit compliance items that you may have missed over the summer. Below is a short summary of a number of developments.
Reminder – Medicare Part D Notices
Employers that provide medical coverage that includes prescription drugs must annually provide all Medicare-eligible individuals who are covered by the prescription drug coverage, or eligible for it, with a notice indicating whether the prescription drug coverage is “creditable” or “non-creditable.” Creditable coverage is actuarially equivalent to the standard Medicare Part D prescription drug coverage. The notice is intended to help individuals who are eligible for Medicare decide between the employer coverage and Medicare. The notice is required by the start of the Medicare Part D annual enrollment period which, this year, starts October 15, 2019. Thus, the employer deadline is October 14, 2019. Sample notices can be found on the CMS website.
Narrowly Coordinating HDHPs and Preventive Care Expenses
To be a high deductible health plan (HDHP), a plan must require a plan participant to meet deductibles before benefits are provided. However, as an exception, preventive care benefits can be provided with no deductible or a lower deductible. Under direction to make HDHPs and health savings accounts (HSAs) more accessible, the US Treasury and IRS have identified a number of specific benefits which will be considered “preventive care” solely for the purposes of HDHPs and HSAs even though they are not preventive care for the purpose of the ACA requirement to provide preventive care without deductible. To further confuse the plan requirements, the new list of preventive care benefits are limited to individuals who are diagnosed with specific chronic conditions. For example, the list includes blood pressure monitors only for people with hypertension.
With the season for annual re-enrollments upon us, it would be good to review this new list of preventive care benefits in IRS Notice 2019-45 against the covered benefits and deductibles for any HDHP.
In the Weeds with USERRA
Earlier this summer, the Department of Labor (DOL) issued USERRA Fact Sheet 1 with Q&A’s on many details of determining pension benefits for reemployed military service members. Questions cover what time periods must be considered, when contributions must be made, and determining rates of plan compensation. Examples are included. The Q&As reflect that restoring benefits for members who have been serving in the military is complex and largely individualized. When military service members return to employment, that is when USERRA and the Fact Sheets should be consulted along with counsel to ensure that benefits are properly determined.
ACA Is Here to Stay
In response to an inquiry from Senator Susan Collins, the US Treasury recently confirmed that there are no waivers or reductions based on hardship or other factors in the Employer Shared Responsibility Provisions (ESRP) provisions of the Affordable Care Act (ACA) under which employers pay penalties if they fail to offer minimum essential coverage or they offer such coverage but it is not affordable. The US Treasury letter also confirmed that no transition relief is available for 2017 or thereafter. [Office of Chief Counsel, 2019-0008 4/17/19]
The SPD Can be A Plan Document
A recent 8th Circuit Court opinion affirmed what most practitioners believe – for welfare benefit plans, the SPD (summary plan description) can be the plan document. Just because a SPD is called “summary” does not mean that there must be a separate plan document if the SPD is sufficient and participants are held to the terms of the SPD. In MBI Energy Services v. Hoch, having been paid benefits for his injuries from an accident, the individual claimed the self-funded medical plan could not seek reimbursement after he also recovered from the party causing the accident because the subrogation terms were only in the SPD. The court could not find a document labelled “plan” but looked at the administrative services agreement (ASA) which said that benefits were provided in accordance with the SPD that was an exhibit to the ASA. Therefore the subrogation provisions were part of the “plan”.
This case is a reminder to review welfare benefit plan (e.g., medical, dental, vision, life, disability) documents to identify the plan document, the SPD, and any inconsistencies. This case does not change other case law interpreting SPDs where there is a plan document.