DOL Issues Final FMLA Regulations

On November 17, the Department of Labor (DOL) issued final regulations regarding the Family and Medical Leave Act (FMLA). The regulations finalize the military related leave introduced in the National Defense Authorization Act of 2008. Additionally, the regulations include other changes and clarifications. An overview of those changes is below:

• Military caregiver leave is finalized. An eligible employee is entitled to up to 26 weeks of leave to care for a family member who is a covered service member who has experienced a serious injury or illness due to active duty.
• An eligible employee whose immediate family member is on active military duty is entitled to up to 12 weeks of leave for any qualifying exigency. Qualifying exigency is defined as short notice deployment, military events and related activities, childcare and school activities, financial and legal arrangements, counseling, rest and recuperation, post-deployment activities and any additional activities upon which the employee and employer agree.
• The current definition of serious health condition includes an absence of three consecutive days and two visits to a healthcare provider. The new regulation clarifies that the two visits must occur within 30 days of the period of incapacity with the first visit occurring within seven days of the incapacity.
• An employee must notify the employer of the need for leave 30 days prior to the leave or the same day (or day after) the employee knows of the need for leave, whichever is earlier.
• An employer’s HR professional, leave administrator, or management official may contact an employee’s health care provider to clarify or authenticate the provider’s certification. An employee’s direct supervisor may not contact the provider.
• An employer must notify the employee of his/her eligibility and rights under FMLA within five days of the employee’s request.
• Employers with handbooks or written policies must include the provisions of the Notice to Employees of Rights under FMLA. If an employer does not have such documents, the employer must distribute the Notice to all newly hired employees.

The regulations include new forms including Certification Forms, Designation Notice, and a combined Notice of Eligibility and Rights and Responsibilities. Employers should amend their policies, handbooks, and forms prior to the law’s effective date of January 16, 2009.

Click here to view final rule.

Click here for more information.

IRS Announces 2009 Medical Mileage Rates

On November 24, 2008, the IRS announced in Revenue Procedure 2008-72, the standard mileage rate used to calculate the deductible costs of operating an automobile for medical purposes, as well as other 2009 mileage rates. As of January 1, 2009, the standard medical mileage rates will be 24 cents per mile driven to receive medical care for reimbursements from a medical flexible spending account (FSA), a health reimbursement account (HRA) or a health savings account (HSA). The new rates are different from the 2008 medical rates that were 19 cents per mile for the first half of 2008 and 27 cents in the second half.

EBSA Issues Guidance on ERISA Bonding Requirement

On November 25, 2008, the DOL’s Employee Benefits Security Administration issued Field Assistance Bulletin 2008-04, which provides guidance on ERISA’s bonding requirement in a question and answer format. Included among the 42 questions are who must be bonded, how much coverage must the bond provide, and what losses must a bond cover.

IRS Releases 2008 Dependent Care Tax Form

The IRS has released the 2008 version of Form 2441 and its instructions ("Child and Dependent Care Expenses"). Even though these forms are substantially the same as the 2007 versions, taxpayers who participate in their employer’s cafeteria plan dependent care assistance plan (DCAP), also known as a dependent care FSA, will need to use these forms to file with their IRS tax returns in order to prove that the amounts run through the cafeteria plan, and reported in box 10 of their form W-2, is not taxable income. These forms may also be used by taxpayers to determine their dependent care tax credit.

Click here to view Form 2441.

Click here for Form 2441 instructions.

Reminder: December 1, 2008 – Individuals Eligible for Health Savings Accounts (HSAs) are Eligible to Contribute up to the 2008 Statutory Maximum

An individual who is eligible for a health savings account (HSA) on December 1, 2008 is eligible to contribute up to the 2008 statutory maximum of $2,900 for single high deductible health plan coverage and $5,800 for family coverage. However, if the individual does not remain HSA eligible until December 31, 2009, what is known as the testing period, then the individual will be subject to adverse taxation.

IRS Announces 2009 Limits for 401(k) Retirement Plans

On October 16, 2008, the IRS announced the 2009 401(k) maximum limits and thresholds for retirement plans in IR-2008-118:

• Annual defined contribution plan limit is increased from $46,000 to $49,000
• Annual compensation limit is increased from $230,000 to $245,000
• Annual elective deferral limit is increased from $15,500 to $16,500
• Annual catch-up contribution limit for individuals age 50 or over is increased from $5,000 to $5,500
• The “highly compensated employee” compensation limit is increased from $105,000 to $110,000
• The “key employee” threshold for top-heavy plans is increased from $150,000 to $160,000

Social Security Announces Initiative to Expedite Certain Disability Applications

The Social Security Administration has announced an initiative entitled Compassionate Allowances that will expedite processing of disability applications in which the applicant is diagnosed with one of 50 listed conditions. For more information including a list of conditions, please see the link below.

Colorado

On November 20, 2008, the Health Insurance Commissioner issued Bulletin B-4.31, which announces the 2009 annual maximum benefit amount for early intervention services for all group and individual health insurance policies issued in the State of Colorado. Effective January 1, 2009, the maximum benefit amount will be $5,935.

Connecticut

Effective October 28, 2008, Connecticut permits same-sex partners to marry. Recently-issued Insurance Bulletin IC-21 states that the term spouse in Connecticut-issued insurance policies now refers to both same-sex and opposite-sex spouses. Same-sex spouses shall have the same policy benefits, terms, and conditions as opposite-sex spouses. The bulletin also clarifies that same-sex partners registered as a civil union in either Connecticut or another state shall also have the same benefits, terms, and conditions as opposite-sex spouses for policies issued in Connecticut.

Indiana

On October 28, 2008, Insurance Commissioner Atterholt issued Bulletin 167 regarding the orthotic and prosthetic device mandate that went into effect on July 1, 2008. The bulletin clarifies that the coverage for such devices must not be subject to a deductible, copayment, or coinsurance that is less favorable than that for other general services and items.

Maryland

On November 10, 2008, the Commissioner of the Maryland Insurance Department issued MD Bulletin 08-33 informing insurers, HMOs and non-profit health service plans that are subject to Maryland Code Insurance Article, §15-837 that they must cover colorectal cancer screenings according to the American Cancer Society’s guidelines. Note that small employers (from 2-50 employees) are not currently subject to these same guidelines.

On October 24, 2008, the MD Insurance Administration adopted emergency COMAR Regulations 31.10.24.01-.04 that were effective October 1, 2008. The regulations apply to discount medical and discount drug plans sold, marketed, or solicited in Maryland and require that monies collected from plan members must be reimbursed or electronic fund transfers must be reversed, less a nominal fee, if the plan membership is canceled within the first 30 calendar days after the effective date.

Click here to view Regulation 31.10.24.03.

Click here to view Regulation 31.10.24.04.

New Jersey

The New Jersey Department of Labor and Workforce Development has released the Family Leave Insurance Poster that employers must post by December 15, 2008. Employers must also provide a written copy of the notification poster to employees by December 15, 2008, to newly hired employees, upon employee request, and at the time an employee requests leave to bond with a newly born or adopted child or to care for a seriously ill family member.

On October 6, 2008, the New Jersey Department of Labor and Workforce Development issued proposed regulations implementing New Jersey's Paid Family Leave Insurance Law, which was originally passed on May 2, 2008, and reported in the May 13, 2008 edition of Compliance Corner. The proposed regulations provide clarification and guidance in a number of areas under the new law, such as the approval process for private plans, the allowance or requirement of employees to first use other accrued paid leave, the claim filing procedures, clarifying when intermittent leave is appropriate, and what notices are required by the employers. Employee contributions must commence January 1, 2009, but employees are not eligible to receive benefits until July 1, 2009.

New York

On November 21, 2008, the Insurance Department’s Office of General Counsel issued Circular Letter 2008-27, a legal opinion which concluded that same-sex spouses of marriages legally performed outside of New York must be treated as legal spouses for purposes of the New York Insurance Law which includes all forms of insurance. The opinion letter further states that if an employer fails to treat same-sex and opposite-sex spouses equally for purposes of health insurance coverage or otherwise, this may represent unlawful discrimination under New York Executive Law § 296(1)(a).

The State of New York Insurance Department's General Counsel issued several Opinion Letters in October.

• On October 6, 2008, Opinion 10-6-2008, OGC 08-10-01 concluded that individuals covered by a group's health insurance do not have to be in a formal employer-employee relationship, as long as the employer has control over the employee, which does not include most independent contractors. The Opinion also reiterates that there is no New York insurance law that specifies or regulates the amount that an employer must contribute for group health insurance coverage which they sponsor.

  

• On October 14, 2008, Opinion 10-6-2008, OGC Op. No. 08-10-05 concludes that even though the NY Insurance Department does not have any authority over independent self-funded groups, according to ERISA, the NY Department does have authority over self-funded “association” groups, especially where each employer member of the association has 51 or more employees.

  

Rhode Island

On November 20, 2008, Health Insurance Commissioner Koller released Consumer Alert Health Insurance Bulletin 2008-5 as a warning to completely research all discount health cards prior to purchasing them as a supplement to reduced health plan coverages.

Texas

On October 28, 2008, Attorney General Abbott issued Opinion GA-0674 concerning group coverage for serious mental illnesses. TX Insurance Code Section 1355.004 requires group health benefit plans to provide coverage for no less than 45 inpatient days and 60 outpatient visits for serious mental health. Section 1355.004 also requires group plans to provide outpatient coverage for serious mental illness under the same terms as outpatient coverage for physical illness. The Opinion concludes that if a plan provides for more than 60 outpatient visits for physical illness, it must provide the same for serious mental illness.

Vermont

On October 22, 2008, the VT Department of Banking, Insurance, Securities and Health Care Administration issued Revised Bulletin HCA-127 that clarifies the Department's policy and commitment to mental health parity. There will be no discrimination in disability income replacement insurance policies against persons who are disabled due to a mental health condition. This bulletin shall apply to individual policies and group policies issued or renewed on or after November 1, 2009 and all other policies must come into compliance no later than November 1, 2012.

Wisconsin

On November 4, 2008, the residents of Milwaukee passed a referendum that will require Milwaukee employers to provide employees with one hour of sick paid leave for each 30 hours worked up to an annual maximum of 72 hours. Employers with less than 10 employees must provide up to 40 hours annually. Employers that currently provide paid leave that satisfies the requirements are not required to provide additional time. The law will become effective in February 2009.