Question: Are there nondiscrimination rules that apply to group-term life insurance benefits? Short Answer: Yes, Section 79 imposes nondiscrimination rules that generally require employers to offer non-key employees the same level of coverage as offered to key employees. Section 79 Nondiscrimination: General Rule The nondiscrimination rules that apply to group-term life insurance plans generally require […]
Question: What are the potential ACA employer mandate penalties for failure to timely offer coverage to a new full-time hire (including a full-time temp or intern)? Compliance Team Response: Short Answer: The “B Penalty” ($312.50/month in 2019, $321.67/month in 2020) may apply for the failure to timely offer coverage to a new full-time hire. […]
Question: Are gift card rewards from a wellness program always taxable income to the employee? Are there any non-taxable alternatives? Short Answer: Yes, gift cards are always taxable income to employees. Alternatives include de minimis non-cash-equivalent items or health benefit rewards. General Rule: All Cash or Cash Equivalent Compensation is Taxable Any form of compensation […]
With the October 15 start of the Medicare open enrollment period looming comes the annual reminder that the Part D Notice of Creditable Coverage (the “Notice”) is due to employees by the same date. The purpose of the Notice is to inform employees whether their employer-sponsored group health plan’s prescription drug coverage is at least as […]
Question: When can COBRA qualified beneficiaries enroll new dependents or change plan options? Short Answer: COBRA qualified beneficiaries can make plan changes upon experiencing HIPAA special enrollment events, moving outside the plan’s regional service area, and during the plan’s open enrollment period. General Rule: Same Coverage as in Effect Upon the Qualifying Event The general […]
Question: What are the benefits of maintaining ACA grandfathered plan status, and what is required for a plan to preserve grandfathered status? Compliance Team Response: Short Answer: Outside of fully insured plans in the small group market, there is little reason to maintain ACA grandfathered plan status at this point. Overview of ACA Grandfathered […]
Question: What are the ACA employer mandate and reporting requirements when an ALE acquires a non-ALE that keeps its EIN after the acquisition? Compliance Team Response: Short Answer: The non-ALE seller becomes subject to the ACA employer mandate and reporting requirements upon the acquisition by the ALE buyer. “Applicable Large Employer” Status Includes Entire […]
Question: What are the tax consequences of an employer’s gym and exercise equipment reimbursement arrangement as part of its broader wellness program? Short Answer: The general rule is that any employer payment/reimbursement for gym, health club, spa, exercise equipment, or other similar expenses that are intended for general fitness and health is standard taxable income […]
Question: What nondiscrimination rules apply to a specialty HRA (such as an infertility HRA) that an employer would like to make available on different terms to different employee classes? An HRA is a self-insured group health plan, and therefore it is subject to the §105(h) nondiscrimination rules. This includes specialty HRAs such as infertility HRAs, […]
Question: Does the SF HCSO require employers to make City Option contributions for employees who waive a very generous offer of employer-sponsored group health plan coverage? Short Answer: Yes, employers will still need to contribute quarterly to the City Option on the waived SF employees’ behalf unless an exception applies. City Option Contributions Required: The […]
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