Healthcare Reform
IRS Releases Publication 5164, Test Package for 2018 Electronic ACA Filers
On Sept. 14, 2018, the IRS released Publication 5164, entitled "Test Package for Electronic Filers of Affordable Care Act (ACA) Information Returns (AIR)," for tax year 2018 (processing year 2019). The publication describes the testing procedures that must be completed by those filing electronic ACA returns with the IRS, specifically Forms 1094-B, 1095-B, 1094-C and 1095-C. As a reminder, those who are filing 250 or more forms are required to file electronically with the IRS.
Importantly, the testing procedure applies to the entity that will be transmitting the electronic files to the IRS. Thus, only employers who are filing electronically with the IRS on their own would need to complete the testing. If an employer has contracted with a software vendor who's filing on behalf of the employer, then the testing and this publication would not apply to the employer, but would apply to the software vendor instead.
For reporting year 2018, the IRS provides two options (see pages 12-13) for submitting test scenarios: predefined scenarios and criteria-based scenarios. Predefined scenarios provide specific test data within the submission narrative for each form line that needs to be completed. Criteria-based scenarios give more flexibility to test and create data that may be unique to their organization when completing the necessary test scenarios.
Correction scenarios are also provided (see page 17), but they're not required in order to pass testing.
As a reminder, electronic filing of 2018 returns will be due April 1, 2019 (since March 31, 2019, falls on a weekend). If you're a large employer who's required to file electronically and would like information on third-party vendors who can assist, please contact your advisor.
IRS Publication 5164 >>
AIR Program >>
IRS Releases Updated Publication 5165 for Electronically Filing ACA Information Returns
The IRS released a revised version of Publication 5165, entitled "Guide for Electronically Filing Affordable Care (ACA) Information Returns for Software Developers and Transmitters," for tax year 2018 (processing year 2019). This publication outlines the communication procedures, transmission formats, business rules and validation procedures for returns transmitted electronically through the Affordable Care Act Information Return System (AIR). Employers who plan to electronically file Forms 1094-B, 1095-B, 1094-C or 1095-C should review the latest guidance and make any necessary adjustments to their filing process.
Employers filing electronically must use AIR, and the only acceptable format will be XML. The individual responsible for electronically filing the employer's forms will be required to register with the IRS e-Services and will receive a PIN, which will be used to sign the Terms of Agreement and electronically filed forms.
Publication 5165 >>
AIR Program >>
IRS Releases Updated ACA Information Returns (AIR) Submission Composition and Reference Guide
The IRS has released the latest version of Publication 5258: "ACA Information Returns (AIR) Submission Composition and Reference Guide." The guide has been updated for use in 2019.
This publication is meant to assist various entities with electronic information return (AIR) submissions required under the ACA -- Forms 1094-B and 1095-B under Section 6055, and Forms 1094-C and 1095-C under Section 6056.
The guide includes information on the process for applying for the program, technical requirements and updates to the 2019 version, what testing is necessary before the actual transmission, parameters for filing, and data file size limits. The technical nature of this reference guide reinforces the need for employers to partner with an IT professional (either in-house or external) or experienced vendor if planning to file ACA information returns electronically.
As a reminder, if you're a self-insured employer or an applicable large employer, the deadline to provide information returns to employees or responsible individuals is Jan. 31, 2019, for tax year 2018. Also, employers filing 250 or more forms must file electronically with the IRS. Employers filing fewer than 250 forms may file by paper or electronically. Paper filings are due by Feb. 28, 2019. Those filing electronically must report 2018 data by April 1, 2019 (since March 31, 2019 falls on a weekend).
IRS Website on ACA AIR Program >>
ACA Information Returns (AIR) Submission Composition and Reference Guide >>
Federal Updates
Tax Relief for Victims of Hurricane Florence
The IRS recently published guidance containing certain relief for those individuals and businesses affected by Hurricane Florence. Specifically, the IRS offered extensions in relation to certain tax filing deadlines. The extensions apply automatically to any individual or business in an area designated by the Federal Emergency Management Agency (FEMA) as qualifying for individual assistance.
Specifically, in North Carolina, individuals and businesses that reside in Beaufort, Bladen, Brunswick, Carteret, Columbus, Craven, Cumberland, Duplin, Greene, Harnett, Hoke, Hyde, Johnson, Lee, Lenoir, Jones, Moore, New Hanover, Onslow, Pamlico, Pender, Pitt, Richmond, Robeson, Sampson, Scotland, Wayne and Wilson counties may qualify for tax relief. In South Carolina, individuals who reside or have a business in Chesterfield, Dillon, Georgetown, Horry, Marion and Marlboro counties may qualify for tax relief.
As a result of this relief, individuals or businesses that had forms due on or after Sept. 8, 2018, and before Jan. 31, 2019, have additional time to file the form through Jan. 31, 2019. The relief would apply to quarterly payroll/employment/excise tax filings due, as well as for any employers that may have previously applied for a Form 5500 filing extension.
Affected employers should discuss their filing obligations with their accountant, with this relief in mind.
Help for Victims of Hurricane Florence >>
Tax Relief for North Carolina >>
Tax Relief for South Carolina >>
IRS Releases Additional Guidance on Family and Medical Leave Tax Credit
On Sept. 24, 2018, the IRS released Notice 2018-71 which provides 34 FAQs on the tax credit available to employers who offer paid family and medical leave. As background, the 2017 Tax Cuts and Jobs Act (2017 Tax Reform) added Section 45S to the Internal Revenue Code to establish a new temporary tax credit for employers that voluntarily offer paid family and medical leave to employees.
Section 45S is intended to incentivize employers to offer family and medical leave on a paid basis. To be eligible for the new federal tax credit, an employer must have a written policy that offers at least two weeks (annually) of paid family and medical leave to full-time employees and a proportionate amount to part-time employees that's based on the employee's expected work hours. The paid leave must be available to all employees who have been employed by the employer for at least one year and who, for the prior year, had compensation of not more than 60 percent of the highly compensated employee threshold for the preceding year -- for 2018, this means employees making more than $72,000. Extending the offer of paid family leave to employees with compensation above this threshold is allowable, but the credit would not be available.
A previous set of FAQs explained how to calculate the general business credit, which is equal to 12.5 percent of the amount of wages paid to a qualifying employee while on family and medical leave when the employer provides at least 50 percent of normal wages for up to 12 weeks per taxable year. The credit increases incrementally up to a maximum of 25 percent for employers that offer 100 percent of normal wages during a qualifying leave, is currently available for wages paid in taxable years beginning after Dec. 31, 2017.
Here are some highlights from IRS Notice 2018-71:
- Transition Rule: The credit is generally available for wages paid in taxable years beginning after Dec. 31, 2017, and before Jan. 1, 2020. This transition rule allows eligible employers that set up a qualifying program (or amend an existing program) by Dec. 31, 2018 to claim the credit for eligible leave already provided during their 2018 tax year.
- Leave for Tax Credit Purposes: Family and medical leave eligible for the credit is defined the same as leave as under FMLA. Generally, this includes an eligible employee's leave 1) following the birth of a child or placement of a child for adoption or foster care, 2) for the employee's own serious health condition, or 3) to care for a spouse, child or parent with a serious health condition. In addition, "qualifying exigencies" and care for covered service members with a serious injury or illness (as defined by FMLA) are eligible.
- Employers Not Subject to FMLA: The tax credit is available to all employers, even those that are not subject to FMLA (for example, because the employer is not subject to FMLA or because the employee has not completed the requisite number of hours), as long as they offer certain FMLA-like protections to employees. These businesses must include "non-interference" protections in their written policies. Sample language is given in Q/A 3.
- Additional Restrictions on Eligible Leave: To be eligible for the tax credit, leave must be specifically designated for an FMLA reason, may not be used for any other purpose, and may not be paid by a state or local government or required by a state or local law. Leave provided under an employer's insured or self-insured short-term disability policy may be eligible, if it otherwise satisfies relevant requirements.
Notice 2018-71 also provides guidance on other topics - including who may claim the credit, and how to calculate and claim the credit - and provides several helpful examples. It also mentions that the IRS intends to issue proposed regulations on the credit, although a specific timeframe isn't provided.
Employers that currently offer paid leave to full- and part-time employees should review the FAQs to determine if the current leave program qualifies for the tax credit. If an employer currently does not offer a paid leave program or the program offered does not meet the standard established under Section 45S, they should consider the tax benefits of a paid family and medical leave policy, keeping in mind that this program is temporary (at least currently). Employers may also want to work with outside counsel, since a review of current leave policies and written procedures would be required.
Retirement Update
New IRS Guidance Amends Retirement Rollover Safe Harbors
On Sept. 18, 2018, the IRS released Notice 2018-74, which provides guidance on updating the safe harbor notice required to be sent to plan participants receiving eligible rollover distributions. As background, the IRC requires certain qualified retirement plans (namely 401(a), 403(a), 403(b) and 457 plans) to provide participants with a notice in advance of the participants receiving eligible rollover distributions. Among other things, the safe harbor notice does the following:
- Explains the IRC rules for rollovers
- Notifies the participant that they may transfer their funds to any qualified retirement account
- Discusses the various tax implications of a rollover
Notice 2018-74 modifies prior Notice 2017-74 to include changes to the retirement plan tax rules that occurred as a result of last year's tax reform and other regulatory changes. Specifically, the guidance provides two appendices employers can utilize to provide updated notices. Appendix A includes appropriately updated model notices in case the employer would simply like to replace their previous safe harbor notice. Appendix B provides instructions on how an employer can amend their current notice to reflect the changes in the law and regulations.
While the notice does not give a specific date by which employers should implement the change, it's best for employers to replace or update the notice accordingly so they can provide employees with the most current information.
Announcements
Reminder: Medicare Part D Notice to Employees Deadline Is Oct. 14, 2018
Employers must notify individuals who are eligible to participate in their medical plan whether the plan's prescription drug coverage is "creditable" or "non-creditable" as compared to Medicare Part D coverage.
As a reminder, the Medicare Part D notice of creditable coverage should be distributed to employees no later than Oct. 14, 2018. This notice serves to put Medicare-eligible individuals on notice as to whether or not their employer group coverage is creditable. That information is necessary to help such individuals avoid paying higher premiums (also known as late enrollment penalties) for Medicare Part D coverage.
Employers should consult with their service providers to determine whether their coverage is creditable using either the simplified determination method or an actuarial analysis. Also keep in mind that CMS provides a model notice for employers.
FAQ
How should we maintain group health plan documentation? How long are we required to keep group health plan documents?
In general, when maintaining group health plan records, an employer must consider ERISA, HIPAA and ACA guidelines.
ERISA
The recommendation is to maintain ERISA related documents for eight years. Based upon DOL rulings and statute, records required to be maintained under ERISA include vouchers, worksheets, receipts, and applicable resolutions, claims records, plan documents, summary plan descriptions, copies of filed Form 5500s and Schedules, accountants' reports, enrollment materials, requests for reimbursement for health FSA plans, lists of covered employees, and records of payroll deductions. The ERISA retention period for group health plans is six years and is measured from the date of filing a Form 5500. Because Form 5500 is often filed many months after the end of the plan year, the six year retention period is actually closer to seven years when measured from the end of a plan year. When adding in the possibility of a filing extension, many group health plans use eight years as a rule of thumb for ERISA document retention.
Many items may be able to be kept electronically rather than in paper form. According to DOL regulations, records may be maintained electronically if the electronic recordkeeping system meets certain requirements:
- The system must have reasonable controls to ensure the integrity, accuracy, authenticity and reliability of the records -- and should not allow the modification of documents.
- The system must maintain the records in a reasonable order. (It should have some type of filing system so the records could be retrieved or inspected as necessary.)
- The system must maintain the records in a safe manner and should be backed up properly.
- The system needs to be able to print a readily legible paper copy of the documents.
HIPAA
With regard to HIPAA, covered entities and business associates must retain documentation for the privacy rule for six years from the date the documentation is created or the date it was last in effect, whichever is later. The documentation under the privacy rule includes any action, activity or designation that the privacy rule requires to be documented. Group health plan brokers and employers of fully-insured plans are generally considered to be business associates.
If the documents include protected health information (PHI), HIPAA requires that the information be safeguarded. Any PHI should be kept in files separate from the personnel or files with expanded staff access. Only those who need the information to perform the duties of their job should be granted access.
ACA
The PCOR fee is considered an excise tax under the Internal Revenue Code. As such, the Form 720 instructions indicates that tax returns, records, and supporting documentation must be maintained for at least four years from the date the tax became due, the date the claim was filed, or the date the tax was paid, whichever was later. However, with respect to the documents and records substantiating the enrollment count that was reported, those records must be maintained for at least 10 years. The IRS generally accepts electronic records. However, they retain the right to examine any books, papers or records which may be relevant to a filing.
With regard to the employer mandate, this isn't specifically addressed in the regulations or instructions, but it appears that the same IRS rule that applies to the PCOR filing may also apply here. In other words, records regarding enrollment and offers related to the medical plan must generally be kept for four years, and the IRS retains the right to examine books, papers or records relevant to the filing.
Storage and retention of SPDs, enrollment information, claims information and so on would likely fall under ERISA and HIPAA's requirements to maintain claims records and PHI (and to properly safeguard if documents include PHI). Therefore, the most conservative time frame would be to retain group health plan records for at least eight years measured from the date of filing Form 5500. In other words, an employer would need to retain past documents for at least eight years based upon the date of filing Form 5500. Additionally, retention of PCOR fee filings and employer mandate forms and records likely falls under the IRS's requirements to maintain records for at least four years, but records substantiating those filings should be kept for at least 10 years.
State Updates
Massachusetts
Massachusetts Changes Allowable Payments Owed For Prescribed Schedule II NarcoticsM
On Aug. 9, 2018, Gov. Baker signed H.B. 4742 into law, creating Chapter 208. The new law intends to bolster efforts to mitigate the effects of the ongoing opioid crisis in Massachusetts. Specifically, effective Nov. 7, 2018, if plans provide coverage for any Schedule II narcotic substance that is subject to cost-sharing, plan participants that fill prescriptions in lesser quantities can't be subject to additional copayments or other payments when they fill the remaining portions of these prescriptions.
The new law becomes effective on Nov. 7, 2018. The law contains no new employer obligations, but those employers with fully-insured plans in MA should be aware of the new requirement to limit additional copayments or other payments for Schedule II narcotic substances.
Michigan
Earned Sick Time Act
On Sept. 5, 2018, the Michigan legislature enacted a paid sick leave law that was proposed through an initiative petition. Specifically, the new law requires employers to provide eligible employees with paid sick leave for reasons related to personal or family health needs, domestic violence, sexual assault, or public health needs. If the legislature hadn't enacted the proposed law, it would have appeared on the Nov. 6, 2018, election ballot for approval or rejection by MI's voters.
MI employers with one to nine employees are required to provide employees with one hour of paid sick and safe leave for every 30 hours worked. An employee may use up to 40 hours of paid earned sick time per year, unless the employer sets a higher limit. If an employee of a small business accrues more than 40 hours of earned sick time in a calendar year, the employee is entitled to use an additional 32 hours of unpaid earned sick time in that year, unless the employer allows more. The employee must be able to use paid sick time before unpaid time.
Employees of larger MI employers accrue a minimum of one hour of paid earned sick time for every 30 hours worked and may use up to 72 hours of paid earned sick time per year, unless the employer allows more. Sick time earned by an employee would carry forward from year to year. However, regardless of the carryover, the use limits still apply per single year.
The act includes accrual calculations, notice and documentation requirements, and violations and remedies. The act is effective April 1, 2019.
MI Time to Care petition >>
Michigan Initiatives >>
Requirements for Short-term, Limited Duration Health Policies
On Sept. 14, 2018, Director McPharlin issued Bulletin 2018-20-INS to reiterate Michigan's requirements that relate to short-term, limited duration health insurance policies. The bulletin states that such plans are limited in duration to 185 days or less out of any 365-day period.
As background, the HHS and DOL issued final regulations regarding short-term, limited duration health plans on Aug. 1, 2018. The regulations extend the permissible policy time frame to no more than 12 months (an increase from the previous maximum of three months) and allow such a policy to be renewed or extended for a period of up to 36 months in total. Such short-term policies are exempt from the ACA's individual market rules, but remain subject to state regulation.
The primary purpose of this bulletin is to remind insurers of MI's requirements for short-term, limited duration health policies. Employers should be aware that though these plans may be a lower cost option for individuals that just experienced a separation of employment, it doesn't change an employer's obligation to make an offer of COBRA (or state continuation), if otherwise required.
Michigan Association Health Plans
On Sept. 24, 2018, Director McPharlin issued Bulletin 2018-21-INS to reiterate Michigan's requirements on association health plans (AHPs) and that state law continues to regulate AHPs.
As background, on June 21, 2018, the DOL issued final regulations regarding association health plans (AHPs). Under the regulations, a group or association of employers may act as a single "employer" sponsor of an association health plan under ERISA. The federal regulations attempted to encourage the creation of these associations, but emphasized that the states retain their authority to regulate AHPs. This bulletin clarifies the coordination with MI law.
The main purpose of this bulletin is to remind insurers that the state retains the right to regulate MEWAs, regardless of changes to federal law. Employers should be aware that their participation in a fully insured MEWA will likely fall under MI's jurisdiction. The state also took the time to reiterate that an organization operating (or seeking to operate) a self-funded MEWA must be licensed as an insurance carrier to do so or risk being considered an illegal operation.
Lastly, fully-insured associations created in a state other than MI must comply with all applicable MI insurance law if coverage is issued to an employer with a physical presence in MI that employs at least one MI resident.
Nebraska
Short-Term Duration Medical Plan Filing Requirements
On Sept. 14, 2018, Director of Insurance Ramge issued a Notice addressing short-term, limited duration medical plan filing requirements. The notice identifies Nebraska law related to short-term, limited duration policies. As background, the federal government issued final regulations on short-term, limited duration health plans on Aug. 3, 2018.
This bulletin mentions the federally-required notice that must be issued to consumers upon enrollment in a short-term, limited duration policy. NE requires additional consumer disclosures that identify the length of contract, renewability, pre-existing conditions, free look periods, benefits provided, provider networks, external review, association plans, mandatory and permissive state provisions, annual and lifetime limits, and state mandates. Additionally, the notice indicates that insurers will be required to refile these policies to comply with federal and state law and meet certain marketing requirements.
This notice reminds insurers of the state's requirements for short-term, limited duration health policies. Employers should be aware that though these plans may be a lower cost option for individuals that just experienced a separation of employment, it doesn't change an employer's obligation to make an offer of COBRA (or state continuation), if otherwise required.
New Jersey
New Jersey Issues Proposed Rules for Paid Sick Leave
On Sept. 26, 2018, the New Jersey Department of Labor and Workforce Development (NJDLWD) issued proposed rules to assist employers in compliance of the NJ Paid Sick Leave Act (Act), which goes into effect on Oct. 29, 2018. The proposed rules provide additional clarity with respect to the Act's requirements, including the calculating and recording of earned sick time, employer notice requirements, and potential penalties for noncompliance.
As we discussed in a previous Compliance Corner article , the Act was originally signed on May 2, 2018, and requires employers, regardless of size, to provide earned sick leave to each employee working in NJ and outlines the way that sick leave is to be accrued, advanced, used, paid, paid out and carried over. In NJ, the earned sick leave may be used to cover:
- An employee's own medical needs or the medical needs of a covered family member
- Certain needs resulting from the employee, or a family member of the employee, being a victim of domestic or sexual violence
- An employee's inability to work because of a closure of the employee's workplace, or the school or place of care of a child of the employee, due to a public health emergency
- Time needed by an employee to attend a child's school-related conference, meeting or event as requested or required by the school
Eligible employees must accrue paid leave at a rate of at least one benefit hour per 30 hours worked.
Some notable provisions within the proposed rules include the following:
General Definitions
- The definition of "benefit year" may be any period of twelve consecutive months as established by the employer. Though a subsequent change to the "benefit year" is permissible, the employer must provide written notice to the NJDLWD at least 30 calendar days prior to the proposed change. The notice must include the reason for the proposed change, and a list of current employees with corresponding contact information and a history of accrual, use, payment, payout, and carry-over of earned sick leave for each employee for the preceding two benefit years. If the proposed change is identified as preventing the accrual or use of earned sick leave by an employee, then the Commissioner can impose a benefit year on the employer and deny the proposed change, subject to an appeal process.
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The definition of "family member" is expansive and includes a child, grandchild, sibling, spouse, domestic partner, civil union partner, parent, or grandparent of an employee, or a spouse, domestic partner, or civil union partner of the employee, or any other individual related by blood to the employee or whose close association with the employee is the equivalent of a family relationship.
- A "close association" includes any person with whom the employee has a significant personal bond that is, or is like, a family relationship, regardless of biological or legal relationship.
Use and Documentation of Paid Sick Leave
- Current employees must begin accruing earned sick leave as of Oct. 29, 2018 and employees hired on and after Oct. 29, 2018 must begin accruing earned sick time immediately upon employment. Though the law goes into effect Oct. 29, 2018, an employer isn't required to allow employees to use their earned sick leave until Feb. 26, 2019 (120 days after the Act's effective date of Oct. 29, 2018).
- When an employee is terminated, laid off, furloughed or otherwise separated from employment, but is reinstated or rehired in NJ by the same employer (or successor employer) within six months of separation, any unused earned sick leave accrued by the employee before the separation must be returned to the employee upon rehire and reinstatement.
- For exempt employees, an employer isn't required to maintain records documenting the hours, but instead has the option of either recording the actual hours worked by that employee for the purpose of calculating earned sick leave accrual or presuming, solely for the purpose of calculating earned sick leave accrual, that the employee works 40 hours per week.
- All requests by employees to use earned sick leave shall be treated by the employer as presumptively valid. If the employee's need to use earned sick leave is foreseeable, then the employer may require advance notice, but such notice cannot exceed seven calendar days prior to the first date of leave. If the employee's need to use earned sick leave is not foreseeable (that is, not reasonably anticipated), then the employer may require an employee to provide notice as soon as practicable, but in order to require such notice, the employer must have already notified the employee of this notice requirement.
- An employer may also prohibit an employee from using earned sick leave on certain dates as long as such dates are limited to verifiable high-volume periods or special events that would disrupt employer operations. The rules include examples of a high-volume period, such as holiday travel for the airline industry, or the day or week in which a new product first becomes available for the manufacturers of retail products.
- The proposed rules also provide guidance for an employee that has two or more different jobs with the same employer or where employees are paid overtime, on commission, with tips or on a piecework basis.
Notice Requirements
- Employers must post a notice regarding employee rights and responsibilities under the Act in places accessible to all employees. The notice requirement is satisfied if the employer posts the information on the employer's internet or intranet site or sends the notice through email.
Violations and Administrative Penalties
- A violation of the Act is considered a violation of a "state wage, benefit and tax law" that empowers the NJDLWD Commissioner to direct a suspension or permanent revocation of one or more licenses held by an employer.
- An employer that knowingly and willfully violates the Act would be subject to a fine of not less than $100 and no more than $1,000 and/or not less than ten days and no more than 90 days of imprisonment for the first offense. Upon a second offense, the fine would be no less than $500. Separately, if the NJDLWD Commissioner finds that an employer has violated the Act, they would be able to assess and collect administrative penalties in the amount of $250 for the first violation and between $250 and $500 for a second violation. Each week during which an employee has not been provided the amount of sick leave required by the Act constitutes a separate offense.
NJ employers should review their earned sick leave policy to make sure that they're compliant before the Act becomes effective on Oct. 29, 2018. Employers that already offer paid time off (including personal days, vacation days and sick days) will be compliant under the law, provided the accrual rate is at least as generous as described under the law, all eligible employees are provided leave and employees can use their earned sick time for the same permissible purposes provided in the Act.
A public hearing regarding the proposed rules is scheduled on Nov. 13, 2018, and the NJDLWD is also accepting written comments until Dec. 14, 2018.
North Dakota
Rules and Regulations for Offering Short-Term, Limited Duration Insurance
On Sept. 19, 2018, Insurance Commissioner Godfread issued Bulletin 2018-2. The bulletin reminds insurance companies of the North Dakota rules and regulations that apply to short-term, limited duration policies issued in ND. As background, the federal government issued final regulations on short-term, limited duration health plans on Aug. 3, 2018. ND limits such policies to a period of no more than 12 months, which means only one renewal of a six month policy will be allowed.
This bulletin reminds insurers that the Insurance Department will require insurers to refile for all short-term, limited duration policies by Oct. 8, 2018. In refiling, the insurers will have to certify that they have amended these policies to come into compliance with federal and state law.
The bulletin reminds insurers that ND requires these policies to have no more than a 55 percent loss ratio. Additionally, the bulletin provides the state's required disclosure, which must be in large print and placed on the front cover page of the policy, the certificate of coverage, and the application. The bulletin also identifies the questions that must be answered on the application as well as the requirement for the marketing materials to be filed with the Department by Oct. 8, 2018.
Additionally, the bulletin states that short-term, limited duration policies may only be sold by an appointed producer whose signature and identification number must be included on the application.
This bulletin reminds insurers of the state's requirements for short-term, limited duration health policies. Employers should be aware that though these plans may be a lower cost option for individuals that just experienced a separation of employment, it doesn't change an employer's obligation to make an offer of COBRA (or state continuation), if otherwise required.
Oklahoma
Short-Term, Limited Duration Insurance Requirements
On Sept. 7, 2018, Insurance Commissioner Doak issued Bulletin No. LH 2018-03. The bulletin discusses Oklahoma laws related to limited duration insurance policies. As background, the federal government issued final regulations on short-term, limited duration health plans on Aug. 3, 2018.
This bulletin mentions the federally-required notice that must be issued to consumers upon enrollment in a short-term, limited duration policy. OK does not require additional language in that notice. However, issuers will be required to file forms with the state that demonstrate that they have complied with the federal notice requirements.
Additionally, the bulletin reiterates that OK limits these policies to a period of less than six months, and the policies must be issued on a non-renewable basis.
This bulletin reminds insurers of the state's requirements for short-term, limited duration health policies. Employers should be aware that though these plans may be a lower cost option for individuals that just experienced a separation of employment, it doesn't change an employer's obligation to make an offer of COBRA (or state continuation), if otherwise required.
South Carolina
South Carolina Implements Pregnancy Accommodations Act
On May 17, 2018, Gov. McMaster signed the South Carolina Pregnancy Accommodations Act (HB 3865) into law. HB 3865 was passed in an effort to combat work force pregnancy discrimination by requiring employers to provide reasonable accommodations for medical needs arising from pregnancy, childbirth or related conditions and to notify employees of their rights.
The Act amends existing SC law, which now requires employers with at least 15 employees to provide reasonable accommodations to employees for medical needs arising from pregnancy, childbirth, or other associated medical conditions (including lactation), unless the employer can show that the accommodation would impose undue hardship on business operations. An "undue hardship" is an action requiring significant difficulty or expense when considering the nature and cost of the accommodation as it relates to size, resources and structure of the employer's operation.
Examples of reasonable accommodations include making existing facilities accessible, providing a private place to express breastmilk (other than a bathroom stall), modifying food or drink policies, providing seating or permitting sitting if the job requires employee to stand, providing longer or more frequent breaks, offering assistance with lifting or manual labor, providing light duty or job restructuring, modifying equipment and offering flexible work schedules.
Specifically, as it relates to benefits, these employees must be treated the same as any other persons similar in their ability or inability to work for all employment-related purposes, including receipt of benefits under fringe benefit programs. The law expressly prohibits an employer from discriminating against an individual with respect to compensation or terms, conditions or privileges of employment because of an individual's race, color, religion, sex, age, national origin or disability. Therefore, if employers continue benefits or provide leave for other persons with disabilities, they could not treat those with medical needs arising from pregnancy, childbirth or related conditions differently.
Among other requirements outside of the scope of this article, this law imposes posting and notice requirements effective Sept. 14, 2018. SC employers must post, in an obvious place, information about the right to be free from discrimination for medical needs arising from pregnancy, childbirth, or other related medical conditions in an area accessible to employees. The poster provided by the South Carolina Human Affairs Commission satisfies the poster requirement. In addition, employers must provide written notice of employees' rights under the Act to existing employees and new employees at the beginning of employment. To satisfy this requirement, employers should update their existing handbook policies or may create and distribute a separate notice.
This material was created by PPI Benefit Solutions to provide accurate and reliable information on the subjects covered but should not be regarded as a complete analysis of these subjects. It is not intended to provide specific legal, tax or other professional advice. The service of an appropriate professional should be sought regarding your individual situation. PPI does not offer tax or legal advice. "PPI®" is a service mark of Professional Pensions, Inc., a subsidiary of NFP Corp. (NFP). All rights reserved.