As 2015 begins, the Occupational Safety and Health Administration (OSHA) is sharpening its emphasis on inspecting and citing employers who violate its recordkeeping standard. This takes on greater importance because of the changes and new reporting requirements effective on January 1, 2015.
New OSHA Reporting Rules
Under the new rules, all employers are now required to contact OSHA within 24 hours following an occurrence of any in-patient hospitalizations, amputations, or loss of an eye, as well as the current requirement to contact OSHA within eight hours following a fatality. For reporting compliance, employers have three options when contacting OSHA: 1) call the nearest area office; 2) call OSHA’s 24-hour hotline 1-800-321-OSHA(6742); or 3) report online.
New Recordkeeping And Posting Requirements
Many new categories of employers must now maintain and post OSHA injury and illness records going forward. Employers who were already covered must complete and post their 2014 annual summary by February 1, 2015 and keep it posted until April 30, 2015. Employers must utilize the annual summary form (form 300A) to comply with the posting requirements. Even if you have no recordable injury or illness, you must still complete your 300 logs and post the 300A summary.
Below are some key details that are frequently misunderstood or overlooked which can lead to OSHA citations.
Executive Certification
OSHA’s recordkeeping standard requires a certification of the 300A summary by a company executive. Four specific management officials may be considered “company executives” for purposes of certifying the 300A summary: 1) an owner of the company; 2) an officer of the corporation; 3) the highest-ranking company official working at the location; or 4) the immediate supervisor of the highest-ranking company official working at the location. This official must certify that he or she has reviewed the OSHA 300 logs and related records, and reasonably believes, based on knowledge of the process underlying the development of the data, that the posted summary is accurate and complete.
OSHA describes this requirement as imposing “senior management accountability” for the integrity and accuracy of the reported data. Human resources managers and safety directors normally cannot sign the OSHA 300A summary unless they are officers of the company.
Number Of Employees And Hours Worked
The annual summary requires employers to include a calculation of the annual average number of employees covered by the log and the total hours worked by all covered employees. The purpose of this requirement is to help employers compare the relative frequency of significant occupational injuries and illnesses at their workplace as compared to other establishments.
Posting Process
The 300A summary must be posted in each establishment in a conspicuous place or places where notices to employees are customarily posted. You are under a duty to ensure that the posted annual summary is not altered, defaced or obscured during the entire posting period.
Those employers who maintain these records in electronic form should still retain the signed posted summary after the February 1 to April 30 posting period, to prove that it was properly signed.
You should provide copies of the 300A summary to any employee who may not see the posted summary because they do not report to a fixed location on a regular basis. Even where an establishment has had no recordable injuries or illnesses, you must still post the 300A summary with zeros in the appropriate lines and certified by a company executive.
Record Review
Before the annual summary is prepared, the recordkeeping rule imposes an express duty to review the log (form 300) to verify that entries are complete and accurate. Employers must review the records as “extensively as necessary” to ensure accuracy.
OSHA scrutinizes the forms 301, 300 and 300A for even minor errors in descriptions and boxes checked. Take time to review the forms for technical errors as well as to review accident reports, first aid logs and other related materials to ensure that all recordable incidents have been included and that records are consistent. Employers have a duty to update and maintain records for five years plus the current year and provide them upon request for inspection by OSHA investigators.
Newly Covered Employers
Finally, all employers who have previously been partially exempt from OSHA recordkeeping requirements and were not required to maintain the form 300, should review the updated industry exemption list to see if they are now covered. Under the new rule, 25 industries that were previously exempt are not, and must now maintain the OSHA 300 logs and other required documentations.
On December 22, 2014, the Departments of Health and Human Services (HHS) issued proposed regulations for changes to the Summary of Benefits and Coverage (SBC).
The proposed regulations clarify when and how a plan administrator or insurer must provide an SBC, shortens the SBC template, adds a third cost example, and revises the uniform glossary. The proposed regulations provide new information and also incorporate several FAQs that have been issued since the final SBC regulations were issued in 2012.
These proposed changes are effective for plan years and open enrollment period beginning on or after September 1, 2015. Comments on the proposed regulations will be accepted until March 2,2015 and are encourages on many of the provisions.
New Template
The new SBC template eliminates a significant amount of information that the Departments characterized as not being required by law and/or as having been identified by consumer testing as less useful for choosing coverage.
The sample completed SBC template for a standard group health plan has been reduced from four double-sided pages to two-and-a-half double-sided pages. Some of the other changes include:
Glossary Revisions
Revisions to the uniform glossary have also been proposed. The glossary must be available to plan participants upon request. Some definitions have been changed and new medical terms such as claim, screening, referral and specialty drug have been added. Additional terms related to health care reform such as individual responsibility requirement, minimum value and cost-sharing reductions have also been added.
Paper vs Electronic Distribution
SBCs may continue to be provided electronically to group plan participants in connection with their online enrollment or online renewal of coverage. SBCs may also be provided electronically to participants who request an SBC online. These individuals must also have the option to receive a paper copy upon request.
SBCs for self-insured non-federal government plans may continue to be provided electronically if the plan conforms to either the electronic distribution requirements that apply ERISA plan or the rules that apply to individual health insurance coverage.
Types of Plans to Which SBCs Apply
The regulations confirm that SBCs are not required for expatriate health plans, Medicare Advantage plans or plans that qualify as excepted benefits. Excepted benefits include:
SBCs are required for:
Florida’s minimum wage is currently $7.93 per hour. Beginning January 1, 2015, Florida’s minimum wage will increase to $8.05 per hour, which is a 1.5% (or $0.12) increase from last year.
Employers of “tipped employees” who meet eligibility requirements for the tip credit under the Fair Labor Standards Act (FLSA) may count tips actually received as wages under the FLSA. The employer, however, must pay “tipped employees” a direct wage. Effective January 1, 2015, the new minimum wage for tipped employees should become $5.03 per hour plus tips.
Florida law requires a new minimum wage calculation each year on September 30, based on the Consumer Price Index. If that calculation is higher than the federal rate (which is currently $7.25 per hour), the state’s rate would take effect the following January.
Please contact our office if you need a copy of the 2015 Florida Minimum Wage Poster. Be sure to post the new Minimum Wage Poster by January 1st.
The Affordable Care Act will require Applicable Large Employers (i.e. large employers subject to the employer mandate) and employers sponsoring self-insured plans to comply with new annual IRS reporting requirements. The first reporting deadline will be February 28, 2016 as to the data employers collect during the 2015 calendar year. The reporting provides the IRS with information it needs to enforce the Individual Mandate (i.e. individuals are penalized for not having health coverage) and the Employer Mandate (i.e. large employers are penalized for not offering health coverage to full-time employees). The IRS will also require employers who offer self-insured plans to report on covered individuals.
Large employers and coverage providers must also provide a written statement to each employee or responsible individual (i.e. one who enrolls one or more individuals) identifying the reported information. The written statement can be a copy of the Form.
The IRS recently released draft Forms 1094-C and 1095-C and draft Forms 1094-B and 1095-B, along with draft instructions for each form.
Which Forms Do I File?
When?
Statements to employees and responsible individuals are due annually by January 31. The first statements are due January 31, 2016.
Forms 1094-B, 1095-B, 1094-C and 1095-C are due annually by February 28 (or by March 31, if filing electronically). The first filing is due by February 28, 2016 (or March 31, 2016, if filing electronically).
Even though the forms are not due until 2016, the annual reporting will be based on data from the prior year. Employers need to plan ahead now to collect data for 2015. Many employers have adopted the Look Back Measurement Method Safe Harbor (“Safe Harbor”) to identify full-time employees under the ACA. The Safe Harbor allows employers to “look back” on the hours of service of its employees during 2014 or another measurement period. There are specific legal restrictions regarding the timing and length of the periods under the Safe Harbor, so employers cannot just pick random dates. Employers also must follow various rules to calculate hours of service under the Safe Harbor. The hours of service during the measurement period (which is likely to include most of 2014) will determine whether a particular employee is full-time under the ACA during the 2015 stability period. The stability period is the time during which the status of the employee, as full-time or non-full-time, is locked in. In 2016, employers must report their employees’ full-time status during the calendar year of 2015. Therefore, even though the IRS forms are not due until 2016, an employee’s hours of service in 2014 will determine how an employer reports that employee during each month of 2015. Employers who have not adopted the Safe Harbor should consider doing so because it allows an employer to average hours of service over a 12-month period to determine the full-time status of an employee. If an employer does not adopt the Safe Harbor, the IRS will require the employer to make a monthly determination, which is likely to increase an employer’s potential exposure to penalties.
What Must the Employer Report?
Form 1095-C
There are three parts to Form 1095-C. An applicable large employer must file one Form 1095-C for each full-time employee. If the applicable large employer sponsors self-insured health plans, it must also file Form 1095-C for any employee who enrolls in coverage regardless of the full-time status of that employee.
Form 1095-C requires the employer to identify the type of health coverage offered to a full-time employee for each calendar month, including whether that coverage offered minimum value and was affordable for that employee. Employers must use a code to identify the type of health coverage offered and applicable transition relief.
Employers that offer self-insured health plans also must report information about each individual enrolled in the self-insured health plan, including any full-time employee, non-full-time employee, employee family members, and others.
Form 1094-C
Applicable large employers use Form 1094-C as a transmittal to report employer summary information and transmit its Forms 1095-C to the IRS. Form 1094-C requires employers to enter the name and contact information of the employer and the total number of Forms 1095-C it submits. It also requires information about whether the employer offered minimum essential coverage under an eligible employer-sponsored plan to at least 95% of its full-time employees and their dependents for the entire calendar year, the number of full-time employees for each month, and the total number of employees (full-time or non-full-time) for each month.
Form 1095-B
Employers offering self-insured coverage use Form 1095-B to report information to the IRS about individuals who are covered by minimum essential coverage and therefore are not liable for the individual shared responsibility payment. These employers must file a Form 1095-B for eachindividual who was covered for any part of the calendar year. The employer must make reasonable efforts to collect social security numbers for covered individuals.
Form 1094-B
Employers who file Form 1095-B will use Form 1094-B as a transmittal form. It asks for the name of the employer, the employer’s EIN, and the name, telephone number, and address of the employer’s contact person.
Failure to Report – What Happens?
The IRS will impose penalties for failure to timely provide correct written statements to employees. The IRS will also impose penalties for failure to timely file a correct return. For the 2016 reporting on 2015 data, the IRS will not impose a penalty for good faith compliance. However, the IRS specified that good faith compliance requires that employers provide the statements and file the returns.
On November 7th, 2014, the U.S. Supreme Court agreed to hear King v. Burwell. The case will argue whether or not subsidies in the marketplace should be limited to states with state-run Exchanges. According to the New York Times, “If the challengers are right, millions of people receiving subsidies (through the federal Exchange) would become ineligible for them, destabilizing and perhaps dooming the law.” Arguments are due to begin in December, and a ruling will be issue by next June.
The key question in the case deals with the conflicting IRS ruling stating that “subsidies are allowed whether the exchange is run by a state or by the federal government.” Those challenging the law in this case say that this rule conflicts with the statutory language set forth in the Affordable Care Act (ACA).
Two lower courts, the U.S. Court of Appeals for the District of Columbia in Halbig v. Burwell and the U.S. Court of Appeals for the Fourth Circuit in King v. Burwell, have already issued conflicting opinions regarding the IRS’ authority to administer subsidies in federally facilitated Exchanges. In addition, two other cases are being litigated in the lower courts on the same issue. In Pruitt v. Burwell, a district court in Oklahoma ruled against the IRS in September, and a decision in a fourth court case, Indiana v. IRS, is expected shortly. Of course, the Supreme Court ruling could render the lower court decisions moot.
The Department of Labor has just published a series of FAQs regarding premium reimbursement arrangements. Specifically, the FAQs address the following arrangements:
Situation #1: An arrangement in which an employer offers an employee cash to reimburse the purchase of an individual market policy.
When an employer provides cash reimbursement to the employee to purchase an individual medical policy, the DOL takes the position that the employer’s payment arrangement is part of a plan, fund, or other arrangement established or maintained for the purpose of providing medical care to employees, regardless of whether the employer treats the money as pre or post tax to the employee. Therefore, the arrangement is considered a group health plan that is subject to the market reform provisions of the Affordable Care Act applicable to group health plans and because it does not comply (and cannot comply) with such provisions, it may be subject to penalties.
Situation #2: An arrangement in which an employer offers employees with high cost claims a choice between enrollment in its group health plan or cash.
The DOL takes the position that offering a choice between enrolling in the group health plan or cash only to employees with a high claims risk would be discriminatory based on one or more health factors. The DOL states that such arrangements will violate such nondiscrimination provisions regardless of whether (1) the cash payment is treated by the employer as pre-tax or post-tax to the employee, (2) the employer is involved in the selection or purchase of any individual medical policy, or (3) the employee obtains any individual health insurance. The DOL also notes that such an arrangement, depending on facts and circumstances, could result in discrimination under an employer’s cafeteria plan.
Situation #3: An arrangement where an employer cancels its group policy, sets up a reimbursement plan (like an HRA) that works with health insurance brokers or agents to help employees select individual insurance policies, and allows eligible employees to access the premium tax credits for Marketplace coverage.
The DOL takes the position that such an arrangement is a considered a group health plan and, therefore, employees participating in such arrangement are ineligible for premium tax credits (or cost-sharing reductions) for Marketplace coverage. The DOL also takes the position that such arrangements are subject to the market reform provisions of the ACA and cannot be integrated with individual market policies to satisfy the market reforms. Thus, such arrangements can trigger penalties.
Key Takeaway
There has been quite a bit of banter regarding whether any of the foregoing arrangements could be an effective way for employers to avoid complying with the market reforms and other provisions of the Affordable Care Act applicable to group health plans. These FAQs are a strong indication that the DOL will be forceful in its interpretation and enforcement of these provisions.
On November 4, 2014, the IRS released Notice 2014-69 which outlines that health plans that fail to provide substantial coverage for in-patient hospitalization services or for physician services (or both) referred to as Non-Hospital/Non-Physician Services Plan) are now not considered as providing the minimum value coverage as intended by the minimum value plan requirements for the employer mandate under ACA.
For employers who have already entered into a binding written commitment to adopt, or have begun enrolling employees in, a Non-Hospital/Non-Physician Services Plan prior to November 4, 2014, they will not be penalized for not meeting the employer mandate for the 2015 plan year if that plan year begins no later than March 1, 2015. This is based on the employer’s reliance on the results of the Minimum Value Calculator (a Pre-November 4, 2014 Non-Hospital/Non-Physician Services Plan) as outlined in previous guidance.
For employers who have not entered in to a written commitment to adopt, have not begun enrolling employees in a Non-Hospital/Non-Physician Services Plan on or after November 4, 2014, or have a plan year that begins after March 1,2015, no relief will be given under the employer mandate.
Pending final regulations, employees will not be required to treat a Non-Hospital/Non-Physician Services Plan as providing minimum value coverage for purposes of determining their eligibility for a premium tax credit “aka premium subsidy” in the Marketplace.
An employer that offers a Non-Hospital/Non-Physician Services Plan (including a Pre-November 4, 2014 Non-Hospital/Non-Physician Services Plan) to an employee:
(1) must not state or imply in any disclosure that the offer of coverage under the Non-Hospital/Non-Physician Services Plan prevents an employee from obtaining a premium tax credit, if otherwise eligible, and
(2) must timely correct any prior disclosures that stated or implied that the offer of the Non-Hospital/Non-Physician Services Plan would prevent an otherwise tax-credit-eligible employee from obtaining a premium tax credit.
Without such a corrective disclosure, a statement a Non-Hospital/Non-Physician Services Plan provides minimum value will be considered to imply that the offer of such a plan prevents employees from obtaining a premium tax credit/subsidy. However, an employer that also offers an employee another plan that is not a Non-Hospital/Non/-Physician Services Plan and that is affordable and provides minimum value is permitted to advise the employee that the offer of this other plan will or may preclude the employee from obtaining a premium tax credit.
The deadline for submitting the required information and scheduling the requirement payment, which must be done through www.pay.gov is November 15, 2014.
The Affordable Care Act (ACA) provides for a transitional reinsurance program to help stabilize premiums for coverage in the individual health insurance marketplace during the first 3 years of operation (2014-2016). The program is designed to primarily transfer funds from the group market to the individual market, where high risk individuals are more likely to be covered.
Payments under the reinsurance program are funded by “contributions” (aka fees) payable by health insurance carriers for fully funded groups and third party administrators on behalf of self-insured group health plans. However, under ACA regulations, the self insured group is ultimately responsible for the payment.
The transitional reinsurance fee requirement applies on a per capita basis with respect to each individual covered by a plan that is subject to the fee. The total amount of the fee for 2014 is $63 per covered life and will decrease to $44 per covered life in 2015. The amount of the fee in 2016 has not yet been established by CMS, but will be lower than the 2015 amount. The fee applies to major medical coverage, retiree medical coverage, and COBRA coverage. Plans that are not subject to the reinsurance fee include FSAs, HSAs, Dental & Vision coverage, coverage that fails to provide minimum value, and EAP programs to name a few.
The transitional reinsurance fee is imposed on the “contributing entity”, defined as an insurer/carrier for fully-insured coverage or the group for self insured coverage. Third -party administrators (TPAs), administrative service only entities (ASO) and others may submit on behalf of the contributing entity, though CMS has specified that the TPA or ASO is not required by law to do so.
Because the fee is imposed on the self insured plan and not the plan sponsor, plan assets may be used to pay the assessment/fee. The IRS has also noted that plan sponsors can treat the fee as an ordinary and necessary business expense for tax purposes.
The term covered lives includes everyone under the plan, including spouses, dependents, and retirees. CMS has named several options for counting covered lives, depending on if the plan is fully insured or self funded. The methods of counting covered lives for the reinsurance fee are similar to, but not exactly the same, as the Patient Centered Outcomes Research Institute (PCORI) count methods. A full description of each counting method can be found on the CMS website here.
Regardless of the counting method chosen, plans must maintain documentation of the count, including all materials provided by TPAs in arriving at the figure, for at least 10 years. CMS may audit a plan to assess its compliance with the program requirements and it will be crucial to be able to produce this information.
The entire reinsurance fee process takes place on www.pay.gov. This process is separate from the Health Insurance Oversight System (HIOS) which is used, for example, to obtain a Health Plan Identifier (HPID). The applicable form became available on October 24, 2014. While this leaves somewhat limited time for plan sponsors to submit the applicable form and schedule the fee by the November 15, 2014 deadline, CMS has yet to issue guidance that the submission date will be delayed.
In order to successfully complete the reinsurance fee submission, plan sponsors (or their representatives) need to:
After registering on Pay.gov, the submitter will select the Transitional Reinsurance program Annual Enrollment and Contribution Submission Form. The form requires basic company and contact info, payment type, benefit year, and the annual enrollment count. After the information is entered on the form, plan sponsors will need to upload their supporting documentation CSV file. After the enrollment and supporting documentation is submitted, the form will auto-calculate the amount owed. Plans then need to schedule payment(s) for this amount . The form cannot be submitted without payment information. Plans can choose to remit payment for the entire benefit year once (the full $63 per covered life) or plans can submit two separate payments for the year. If the separate payment method is used, the first payment ($52.50 per covered life) is due by January 15, 2015 and the second payment ($10.50 per covered life) is due by November 15, 2015. Regardless of the option chose, all payments MUST be scheduled by November 15, 2014.
The IRS and Social Security Administration released the 2015 cost-of-living (COLA) adjustments that apply to health flexible spending accounts (FSAs) in Revenue Procedure 2014-61. The new annual limit for health FSAs, including general-purpose and limited-purpose health FSAs, is $2,550 for plan years starting on or after January 1, 2015.
The $2,550 limit is prorated for short plan years (plan years that are shorter than 12 months) and any carry over amount from participants’ previous plan years may be added to the limit. For instance, participants may elect $2,550 for the 2015 plan year and carry over a maximum of $500 from the previous plan year, making their total account value $3,050 for the 2015 plan year. In other words, the $500 carryover does not count against or affect the $2,550 salary reduction limit. Please note that an employer must decide to allow to either offer participants a option of a max $500 carryover OR the 2.5 month extension to use funds. An employer can not offer both options under their plan.
The rush for group health plan administrators to navigate the Centers for Medicare & Medicaid Services (CMS) website and obtain a Health Plan Identifier (HPID) ahead of the November 5th deadline is over. On October 31, 2014, the CMS Office of e-Health Standards and Services (OESS), the division of the Department of Health & Human Services (HHS) that is responsible for enforcement of the HIPAA standard transaction requirements, announced a “delay, until further notice,” of the HPID requirements. The regulatory obligations of plan administrators delayed by this notice are the: (i) obtaining of a HPID, and (ii) the use of the HPID in HIPAA transactions.
This delay comes on the heels of a recommendation by the National Committee on Vital and Health Statistics (NCVHS), an advisory body to HHS. The NCVHS asked HHS to review the HPID requirement and recommended that HPIDs not be used in HIPAA transactions. NCVHS’s primary opposing argument to implementation of the HPID standard was that the healthcare industry has already adopted a “standardized national payer identifier based on the National Association of Insurance Commissioners (NAIC) identifier.”
Whether HHS will adopt the recommendations of the NCVHS on a permanent basis remains to be seen, but for the time being, plan administrators may discontinue the HPID application process and should stay tuned for further announcements from HHS.