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Extension of Certain Timeframes for Employee Benefit Plans

On April 29, 2020, the U.S. Departments of Labor and the Treasury (together, the “Departments”) issued a notice (the “Notice”) requiring that all group health plans, disability and other types of employee welfare benefit plans, and employee pension benefit plans, subject to ERISA and the Internal Revenue Code, must disregard the period from March 1, 2020 until 60 days after the announced end of the COVID-19 National Emergency or such other date as announced by the Departments in a future notice (the “Outbreak Period”) for the following periods and dates: The 30-day period (or 60-day period, if applicable) to request HIPAA special enrollment; The 60-day election period for COBRA continuation coverage; The date for making COBRA premium payments; The date for individuals to notify the plan of a COBRA qualifying event or determination of disability; The date within which individuals may file a benefit claim under the plan’s claims procedures;… Continue Reading

Third Party Administrator of Health Plans Settles with DOL for $16 Million over Fee Disclosure and Claims Processing Issues

The U.S. Department of Labor alleged that, in addition to charging a per-employee monthly fee, which was disclosed, a third party administrator (“MagnaCare”) charged employer-provided health plans an undisclosed markup above the actual amounts paid by MagnaCare to ancillary medical service providers such as labs and radiology and imaging services. The plans paid MagnaCare the full amount, and MagnaCare remitted the lower actual charges to the providers and retained the undisclosed markup, which MagnaCare called a “network management fee.” By operating under this fee arrangement and charging an undisclosed fee that was not approved by plan fiduciaries independent of MagnaCare, the DOL alleged MagnaCare breached its fiduciary duties and committed prohibited transactions under ERISA. In addition, the DOL alleged that MagnaCare did not fully comply with the Affordable Care Act’s “prudent layperson standard” because MagnaCare did not inform participants with diagnosis codes that were not on MagnaCare’s “ER list” that… Continue Reading

May 2020
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