Proposed Changes to Form 5500 Include Elimination of Filing Exemption for Small Group Health Plans

HR-recordsThe U.S. Department of Labor and other federal agencies have released two proposed rules revising the Form 5500 and Form 5500-SF Annual Returns/Reports that are required to be filed by certain employee benefit plans.

Among other changes, the proposed rules would:

  • Introduce basic reporting requirements for all group health plans that have fewer than 100 participants and are covered by Title I of the Employee Retirement Income Security Act (ERISA)–most of which are currently exempt from reporting requirements;
  • Create a new schedule (Schedule J), by which applicable group health plans would satisfy certain ERISA reporting requirements added by the Affordable Care Act (ACA); and
  • Revise the Schedule C reporting requirements to more closely track the information that plan service providers are required to disclose to plan fiduciaries.

The target for implementing the proposed revisions is the Plan Year 2019 Form 5500 Series Annual Returns/Reports, though some form changes may be made earlier or later.

You may review our Benefits Notices Calendar for additional notice and disclosure requirements that apply to group health plans under federal law.

Penalties Increase for Employers Violating Certain Federal Labor Laws

Common-Mistakes-when-Paying-EmployeesEmployers that do not comply with certain requirements under a number of federal labor laws will face increased fines beginning with civil penalties assessed after August 1, 2016 (whose associated violations occurred after November 2, 2015).

Key Penalty Increases
Penalty increases announced by the U.S. Department of Labor that may be of particular interest include:

  • Repeated or willful violations of the Fair Labor Standards Act (FLSA) minimum wage or overtime pay requirements will be subject to a penalty of up to $1,894 per violation (formerly $1,100);
  • Willful violations of the Family and Medical Leave Act (FMLA) posting requirement will be subject to a penalty not to exceed $163 for each separate offense (formerly $110) (note: covered employers must post this general notice even if no employees are eligible for FMLA leave);
  • Failure to provide employees with a Children’s Health Insurance Program (CHIP) notice will be subject to a penalty of up to $110 per day per violation (formerly $100);
  • Failure to provide a Summary of Benefits and Coverage (SBC) will be subject to a penalty of up to $1,087 per failure (formerly $1,000);
  • Failure or refusal to file a Form 5500 will be subject to a penalty of up to $2,063 per day (formerly $1,100); and
  • Violations of the Occupational Safety and Health Administration’s posting requirement will be subject to a maximum penalty of $12,471 for each violation (formerly $7,000).

Our Compliance by Company Size chart features a summary of key federal labor laws that may apply to a company based on its number of employees.

Physician-Owned Hospitals and the ACA

Even though doctors currently have an ownership interest in just 5% of the 5,700 hospitals in the U.S., the ACA will not allow physicians to increase their ownership interest or pursue ownership in additional hospitals. The potential for conflict of interest and concerns about physician owners “cherry picking” the more profitable patients were the impetus behind Section 6001 of the Affordable Care Act that was passed in 2010.

Challenges to the law continue to come along, including a House bill sponsored by Representative Sam Johnson of Texas that would suspend the moratorium on expansion of physician-owned hospitals (POHs) for 3 years and grandfather in several POHs that were under development when the Affordable Care Act was passed. The legislation is based on a recent study that reviewed patient populations, quality of care, costs and payments in 2,186 hospitals, 219 of which were partly physician-owned. The study showed little difference in patient care between POHs and non-POHs, in fact 7 of the top 10 hospitals receiving quality bonuses in the new Hospital Value-Based Purchasing Program were physician-owned hospitals.

One study by the Centers for Medicare and Medicaid Services showed that a majority of physician owners have less than a 2% interest in their institution. As healthcare continues to evolve from fee-for-service to more value-based, there is no doubt that the debate over physician-owned hospitals will continue.

Apps and Wearables Double

mobile-deviceAccording to studies by Accenture, the number of U.S. consumers using wearables or mobile apps to manage their health has doubled in just the past 2 years. One interesting fact is that while the vast majority of users are willing to share the data collected with their doctors, and many with their health plans, fewer than a third want the information shared with their employer.

Game Show Education

quizzify-2Healthcare education is rarely all fun and games, but a new approach might be succeeding at making it just that! They’re being called online education programs – offered to employees as both mobile and online applications.

One popular program called “Quizzify” promises to save money, boost morale, improve health and engage employees by making learning about medical care fun and interesting. And, it promises to do this all without requiring any medical data from participants. Using a game-show contest format, the program asks participants to click through questions as they compete with co-workers for prizes. Not only do people get the chance to receive wellness information, but they also learn about taking care of themselves and even avoiding costly treatment when it may not be needed at all.

And, while this particular service is not free, it may offer a fun, refreshing approach to traditional wellness communication.

Certain Employers May Receive Marketplace Notices

health-care-reform-road-signHealth Insurance Marketplaces are now sending letters to notify certain employers that one or more of their employees has been determined eligible for advance premium tax credits and cost-sharing reductions and has enrolled in a Marketplace plan. Because these events may trigger employer penalties under the Affordable Care Act’s “pay or play” provisions, employers may seek to appeal an employee’s eligibility determination.

Employer Appeals Process
Marketplaces must notify employers within a reasonable timeframe following any month of the employee’s eligibility determination and enrollment. Employers have 90 days from the date stated on the Marketplace notice to file an appeal. In the appeal, the employer may assert that it provides its employee access to affordable, minimum value employer-sponsored coverage or that its employee is enrolled in employer coverage, and therefore that the employee is ineligible for advance payments of the premium tax credit or cost-sharing reductions.

An appeal will not determine if the employer is subject to a “pay or play” penalty, as only the IRS, not the Marketplace or the Marketplace Appeals Center, can make such determinations.

The Pay or Play section of your HR library features step-by-step guidance, worksheets, and calculators that can help employers understand if they will be subject to a penalty and how to calculate it.

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Health Conscious Hotels

hotelsTrade associations report that to respond to growing requests from fitness-minded travelers, hotels are moving well beyond basic spas and fitness rooms. 84% of hotels offered fitness facilities in 2014, but the number of hotels offering in-room fitness equipment has doubled in the past 10 years. Some chains now offer rooms with a stationary bike, elliptical or treadmill plus free workout wear and sneakers delivered to your room. Yoga mats and videos, healthy minibars and room service menus including stir-fried veggies and tofu are growing trends.

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