CONEXIS Compliance Update Banner
Distributed May 7, 2014
In this edition:
New FAQs Related to ACA Implementation
HHS Announces Special Enrollment Period for COBRA Beneficiaries
New FAQs Related to ACA Implementation
The Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury (collectively referred to as the "Departments") recently released frequently asked questions (FAQs) to help people understand and implement various provisions of the Affordable Care Act (ACA). These FAQs focus on:
Updated model notices from the DOL (see details below)
Cost-sharing limitations
Coverage of preventive services
Health FSA carryover and excepted benefits (see details below)
Summary of benefits and coverage
Updated Model Notices
The DOL has model notices that group health plans may use to comply with COBRA regulations requiring the provision of a General Notice and an Election Notice as well as a Premium Assistance Notice required under the Children’s Health Insurance Program Reauthorization Act (CHIPRA). While the COBRA Election Notice was updated in 2013, it has been revised with a better description of special enrollment rights since the Marketplace is now open. Similar updates have been made to the CHIPRA notice.
Click the linked documents below to obtain model notices:
COBRA General Notice
COBRA Election Notice
CHIPRA Premium Assistance Notice
In addition, the DOL released proposed regulations which would eliminate the model COBRA Election Notice and General Notice from the appendices of DOL COBRA regulations and allow the DOL to publish all subsequent updates to these notices directly to the DOL website.
The use of the DOL model notices is not mandatory. However, a plan administrator’s use of the model notice (appropriately completed and adjusted) is considered a "safe harbor" and good faith compliance standard.
Health FSA Carryover and Excepted Benefits
Generally, excepted benefits provided under a group health plan or health insurance coverage are exempt from HIPAA and ACA market reform requirements, and typically, a health FSA is an excepted benefit if it meets the following conditions:
Availability Condition: The group health plan is classified as a "non-excepted benefit" and is made available to all employees who are eligible FSA participants; and
Maximum Benefits Payable Condition: The arrangement is structured so the maximum benefit payable to any eligible participant cannot exceed two times the participant’s salary reduction election (or if greater, $500 plus the amount of the salary reduction election).
When the Treasury Department and IRS modified the "use-or-lose" guidance and introduced the new health FSA carryover feature, the guidance noted that the $500 carryover does not affect the maximum amount of salary reduction contributions that a participant can make. The FAQs clarify that the carryover amount (up to $500 of unused funds remaining in the participant’s health FSA at the end of the plan year) should not be included when determining if the health FSA satisfies the maximum benefits payable limit under excepted benefits guidance.
Additional Information
Please review the FAQs on the DOL website for additional details related to model notices and the FSA carryover feature. You will also find FAQs related to cost-sharing limitations, coverage of preventive services, and summary of benefits and coverage.
HHS Announces Special Enrollment Period for COBRA Beneficiaries
On May 2, 2014, HHS released guidance announcing the creation of a 60-day special enrollment period for individuals eligible for and currently enrolled in COBRA continuation coverage. This enrollment period began on May 2, 2014 and ends July 1, 2014, which gives COBRA qualified beneficiaries additional time to consider coverage options from the Federally-facilitated Marketplace. State-based Marketplaces are encouraged to adopt similar special enrollment periods.
As always, we will carefully review this new guidance and provide a detailed breakdown as well as the impact to employers and qualified beneficiaries in the near future. We’ll send this information to you by email as soon as it is available.
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