Dear Valued Clients and Associates,
I hope you have been enjoying the warm Summer months and have had the opportunity to take a little bit of time to relax and recharge.
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Here is your August 2018 Newsletter with a combination of HR and Health related news. I hope you enjoy!
Summary Annual Reports Due Sept. 30
Health plans with 100 or more plan participants at the beginning of a plan year are generally required to furnish a Summary Annual Report (SAR) to each health plan participant within 9 months after the end of a plan year. As a result, the deadline for most calendar year plans to satisfy the SAR requirement for plan year 2017 is September 30, 2018.
What must be in a SAR?
A SAR serves as a narrative summary of the group health plan’s Form 5500 annual report. In general, a SAR must provide the following information on the plan year (among other things):
- Name of the insurer
- Total premiums paid
- Value of plan assets at the beginning and end of the plan year
- Amount of plan expenses
Is a Model Notice Available?
While the U.S. Department of Labor has not released a model SAR, federal regulations provide model language. To review this model language, click here and see the section titled “Form for Summary Annual Report Relating to Welfare Plans.”
Check out our Benefits Notices Calendar section for additional information on federal notice requirements.
‘Ghosting’ Behavior Baffles HR Pros, Hiring Managers
Ever had a great job candidate who didn’t respond to your calls, texts and e-mails about a job offer? Or an employee who simply stopped showing up for work? No-shows and mysterious disappearances are happening nationally across a wide range of industries.
Short-Term Health Insurance Soon Available For Up to 36 Months
Effective October 3, 2018, a new rule will allow individuals to purchase short-term, limited-duration health insurance coverage for a period of less than 12 months, and renew such coverage for up to 36 months. Under current law, the maximum coverage period for short-term, limited-duration health insurance is less than 3 months, and these policies cannot be renewed.
Notably, short-term, limited-duration health insurance is:
- Not required to comply with the Affordable Care Act’s ban on pre-existing condition exclusions and lifetime and annual dollar limits.
- Not required to comply with the Affordable Care Act’s essential health benefits requirement, which requires individual health insurance policies to cover, among other things, hospitalizations, emergency services, and maternity care.
- Not “minimum essential coverage,” meaning that policyholders may remain liable for an individual mandate penalty for any month in 2018.
Association Health Plans Final Rule Becomes Effective
Effective August 20th, the final rule will make it easier for small businesses to band together to buy health insurance.
Medical Loss Ratio Rebates Coming Soon to Plan Sponsors
The Affordable Care Act’s medical loss ratio (MLR) rules require group health insurance issuers to provide rebates if their MLR—the percentage of health insurance premiums spent on health care and activities to improve health care quality—falls short of the applicable standard during a reporting year. Each year’s rebates must be issued to plan sponsors by September 30 of the following year. As a result, plan sponsors should be looking for these rebates to arrive in the coming weeks.
The MLR rules provide that issuers must pay any rebates owed to persons covered under a group health plan to the policyholder, who is then responsible for distributing the rebate to eligible plan enrollees. In general, there are several ways rebates may be distributed by plan sponsors to plan enrollees, including:
- A rebate check in the mail;
- A lump-sum reimbursement to the same account that was used to pay the premium if it was paid by credit card or debit card; or
- A direct reduction in future premiums.
In addition to the above methods, employers may also apply the rebate in a way that benefits employees. However, decisions on how to apply or expend the plan’s portion of a rebate are subject to the general standards of fiduciary conduct under the federal Employee Retirement Income Security Act (ERISA).
Visit our section on Medical Loss Ratio (MLR) Rebates & Employer Responsibilities to learn more.
To Tame Prescription Prices, HHS Dips A Toe Into Drug Importation Stream
By Rachel Bluth
The Trump administration signals it is willing to consider such a move if it is carefully tailored to focus solely on specific situations where a high-priced drug is made by one company.
Top 5 New Hire Forms
An employee’s first day on the job can be very stressful for both the employee and employer. While trying to set up the employee with his or her parking pass, email account, and other necessities, employers should also remember that completing the following forms is just as important.
- Form I-9: Under federal law, employers are required to verify the identity and employment authorization of each person they hire by completing and retaining Form I-9. Newly hired employees must complete and sign Section 1 of Form I-9 no later than the first day of employment. Click here to download Form I-9.
- Federal Form W-4: An employee must complete federal Form W-4 in order for the employer to withhold the correct federal income tax from the employee’s pay. Click here to download federal Form W-4.
- State Form W-4: In states with a state income tax, an employee must complete a state Form W-4 or its equivalent in order for the employer to withhold the correct state income tax from the employee’s pay. To obtain a state Form W-4, contact your state’s taxation department.
- Basic Employment Information Sheet: Employers should keep certain basic information about each of their employees on file, including their addresses, phone numbers, and emergency contacts. Click here to download a Basic Employment Information Sheet.
- Direct Deposit Authorization Form: It is now easier than ever for an employer to directly deposit an employee’s paycheck into his or her bank account. Such deposits, however, must be specifically authorized by the employee. Click here to download a Direct Deposit Authorization Form.
Our Recruitment & Hiring section features more great hiring tips.
Employers Assess Risk Tolerance with Wellness Program Incentives
Companies designing 2019 wellness programs must decide what approach to take on program incentives without certain Equal Employment Opportunity Commission guidance.
How Summer Hires May Impact Your ALE Status
Employers that hired seasonal workers this summer are reminded that there is a seasonal worker exception when measuring workforce size to determine whether they are an applicable large employer (ALE) subject to the Affordable Care Act’s employer shared responsibility (“pay or play”) provisions.
Seasonal Worker Exception
The pay or play provisions generally require ALEs—generally those with at least 50 full-time employees, including full-time equivalent employees (FTEs)—to offer affordable health insurance that provides a minimum level of coverage to full-time employees and their dependents in order to avoid paying a tax. However, if an employer’s workforce exceeds 50 full-time employees (including FTEs) for 120 days or less (or 4 calendar months) during the preceding calendar year, and the employees in excess of 50 who were employed during that period were seasonal workers, the employer is not considered an ALE for the current calendar year. A seasonal worker for this purpose is an employee who performs labor or services on a seasonal basis. For example, retail workers employed exclusively during holiday seasons are seasonal workers.
Check out our Pay or Play section for additional details.
Retain Employees Through Training
With the daily demands of keeping a workplace productive and profitable, many managers may overlook one simple perk that has been proven to boost employee retention: professional training. Learn how to use training as a tool to retain your top employees by watching the video below.
For more training tips, check out our HR Training section.
I am constantly looking for ways to improve this newsletter, comments and suggestions are welcome. Thank you!
All the best to your success,
Brandi Bowers | Benefits Consultant
PF Compass Employer Guidance & Benefit Solutions
Source Credits: HR 360, Inc., Keiser Health News, SHRM.org