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Recognition of Haynes and Boone Social Media Practice Group

Thanks to Law360 for recognizing our firm’s Social Media Practice Group?áin a recent article!

End of Year PPACA Employer Checklist

Pay PCORI Fee by July 31, 2013 (deadline for calendar year plans, see discussion below). Distribute exchange notices to all employees by October 1, 2013. A model notice is available on the U.S. Department of Labor’s (“DOL“) website, but requires employer customization. Distribute to new hires within 14 days after hire. Distribute Summaries of Benefits and Coverage (“SBCs“) during open enrollment. New model SBC templates are available on the DOL website. Amend plan documents and Summary Plan Descriptions (“SPDs“) to reflect changes effective for the 2014 plan year, including: No pre-existing condition exclusions (all plans); Waiting period no longer than 90 days (all plans); Remove any restricted annual limits on essential health benefits (all plans); Remove exclusion of children eligible for other employer-sponsored coverage (grandfathered plans); Limits on out-of-pocket maximum (apply copays to max) (non-grandfathered plans); Clinical trial coverage (non-grandfathered plans); Nondiscrimination against providers (non-grandfathered plans); and Limits on deductible… Continue Reading

July 31 Deadline Approaching for Submitting PCORI Fees

The deadline for most applicable self-insured health plans (including calendar year plans) to report and remit the Patient-Centered Outcomes Research Institute (“PCORI“) fee due under the Patient Protection and Affordable Care Act (“PPACA“) is July?á31,?á2013.?á The PCORI fee is due no later than July 31 of the calendar year immediately following the last day of the plan year to which the fee applies.?á Plans should use the revised version of Form 720 recently released by the Internal Revenue Service to report and remit the PCORI fee. The revised Form 720 can be found?áhere. Instructions for the revised Form 720 can be found here.

Fifth Circuit Dismisses Fiduciary Breach Claims Under Moench/Kirschbaum Standard

The U.S. Court of Appeals for the Fifth Circuit upheld the dismissal of the plaintiff?ÇÖs complaint alleging that the defendants breached their fiduciary duties by, among other things, permitting the plan to continue offering employer stock as an investment option. The Court explained that the ?Ç£Moench presumption of prudence?Ç¥ adopted in Kirschbaum v. Reliant Energy Inc., 526 F.3d 243, 254 (5th Cir. 2008) applied at the motion to dismiss stage and that the plaintiff failed to allege facts showing the fiduciaries were aware that the employer?ÇÖs viability was threatened – the standard to overcome the presumption of prudence. Kopp v. Klein, No. 12-10416 (5th Cir. July 9, 2013).

Final Regulations Regarding Verification of Eligibility for Qualifying Coverage in an Employer-Sponsored Health Plan

The Centers for Medicare & Medicaid Services recently released final rules under the Affordable Care Act that, among other things, set forth the requirements for verifying whether individuals are eligible for a premium tax credit or certain cost-sharing relief upon their enrollment in a qualified health plan through an exchange. Exchanges will generally rely on information provided by enrollees on their applications for coverage regarding whether or not they are eligible for qualifying coverage in an employer-sponsored health plan. Employers are encouraged, but not required, to assist their employees in completing such applications by providing information on whether the employer?ÇÖs health coverage, if any, is ?Ç£affordable?Ç¥ and provides ?Ç£minimum value.?Ç¥ The final rules can be found?áhere.

IRS Notice Regarding 2014 Transition Relief for Affordable Care Act Information Reporting and Play-or-Pay Penalties

On July 9, 2013, the IRS published Notice 2013-45, formalizing the Treasury Department?ÇÖs earlier announcement of transition relief through 2014 for the Affordable Care Act?ÇÖs (the ?Ç£ACA?Ç¥) employer and insurer reporting requirements under Sections 6055 and 6056 of the Internal Revenue Code (?Ç£Information Reporting?Ç¥) and employer play-or-pay penalties. The Notice indicates that publication of proposed rules regarding Information Reporting is expected this summer. Although compliance with the Information Reporting requirements is not required during 2014, employers and other reporting entities are encouraged to voluntarily comply once the proposed rules have been issued. A copy of the Notice is available?áhere.

Statutorily Deficient ERISA ?º 204(h) Notice Not ?Ç£Egregious?Ç¥ to Support Restoration of Benefits Under Defined Benefit Plan

An employer converted its traditional defined benefit plan to a ?Ç£cash balance?Ç¥ plan. ?áThe conversion eliminated early retirement subsidies, among other things, and employees sued for restoration of the early retirement benefits, alleging the employer?ÇÖs ?Ç£204(h) notice?Ç¥ did not adequately describe the preexisting subsidies. ?áThe 10th Circuit Court of Appeals held the defect was not ?Ç£egregious?Ç¥ (as defined in ERISA?á?º?á204(h)); therefore, restoration of the removed benefits was not required under ?º 204(h).?á?á Jensen v. Solvay Chemicals, Inc., No. 11-8092 (10th Cir. July 2, 2013).

Final Regulations Regarding Coverage of Certain Contraceptive Services Under the Affordable Care Act

The Departments of Health and Human Services, Treasury, and Labor (collectively, the ?Ç£Departments?Ç¥) released final rules under PPACA regarding coverage for women?ÇÖs contraceptive services without cost sharing by non-grandfathered group health plans and insurers.?á The final rules largely adopt proposed rules issued by the Departments in February, except the final rules (1) simplify the religious employer exemption, (2) establish accommodations for ?Ç£eligible organizations,?Ç¥ and (3) modify requirements for funding contraceptive services paid by insurers or third-party administrators for eligible organizations.?á The final rules are effective for plan years beginning on or after January 1, 2014, except the religious employer exemption changes are effective for plan years beginning on or after August 1, 2013.?á The final rules can be found here.?á Self-certification forms for eligible organizations can be found here?áand here.

Employer Play-or-Pay Penalties Under the Affordable Care Act Delayed Until 2015

Treasury also announced that, because Information Reporting is key to Treasury?ÇÖs enforcement of the employer coverage mandate and related penalties under PPACA (i.e., ?Ç£Employer Play-or-Pay?Ç¥), the Transition Relief will extend to the Employer Play-or-Pay penalties, and thus such penalties will not apply until 2015. ?áAccording to Treasury, the Transition Relief does not affect compliance with PPACA?ÇÖs individual coverage mandate or access by individuals to premium tax credits available under PPACA; however, it is currently uncertain how the IRS will administer either of these requirements absent Information Reporting. Treasury indicated that formal guidance regarding the Transition Relief would be issued this week.

Affordable Care Act Information Reporting Requirements Delayed Until 2015

The U.S. Treasury Department (?Ç£Treasury?Ç¥) announced on July 2, 2013, that the mandatory employer and insurer reporting requirements under Sections 6055 and 6066 of the Internal Revenue Code (?Ç£Information Reporting?Ç¥), as enacted by the Patient Protection and Affordable Care Act (?Ç£PPACA?Ç¥), will be postponed by one year (?Ç£Transition Relief?Ç¥).?á Absent the Transition Relief, Information Reporting would have applied to health coverage provided by employers during 2014.?á The Transition Relief may be viewed as a welcome development by employers who need additional time to implement appropriate procedures for administering Information Reporting and other PPACA requirements.

July 2013