The year 2011 will soon be in the history books so it is not too early to work on the master “to do” list for 2012. Here are a dozen suggestions for benefits and insurance professionals who are involved with flexible benefits, by Rich Glass, JD, Chief Compliance Officer, Infinisource, Inc.
- Keep an eye on the agencies. We expect major guidance to be issued in 2012. Look for final rules on nondiscrimination testing for fully insured plans (a new Patient Protection and Affordable Care Act (PPACA) requirement that was delayed by Notice 2011-1) and cafeteria plans, updating the proposed cafeteria plan regulations the IRS issued in 2007.
- It’s not as easy as S-B-C. Effective March 23, 2012, group health plans must provide a Summary of Benefits and Coverage (SBC). The PPACA limits the document to four pages in 12-point font. The rules don’t apply to health flexible spending accounts (FSAs), but they might apply to health reimbursement arrangements (HRAs).
- Hit the reset button. Don’t forget to change the dollar thresholds for benefits with annual limits, such as the minimum high-deductible health plan (HDHP) deductible, the HDHP out-of-pocket maximum, the HSA maximum contribution limits for individuals and families, the limits for highly compensated employees and key employees, the medical mileage rate, the qualified transportation fringe benefit limits for parking and transit passes and the Social Security taxable wage base.
- Get ready for another fee. For plan years ending after Sept. 30, 2012, group health plans must pay a patient-centered outcomes research fee, equal to $2 per participant. The fee drops to $1 per participant in later years until almost the end of this decade.
- Pay attention to Box-ing. Box 12 of the W-2 gets a new code DD in 2012 for reporting of employer-sponsored group health plan coverage. Employers with fewer than 250 W-2s in 2011 get an additional one-year delay.
- Get hip to HIPAA. Two sets of regulations should be finalized in 2012: (1) the interim final rule on transactions; and (2) the proposed regulations on accounting of disclosures.
- Listen for the Supremes. The PPACA’s future will likely be decided sometime in the late spring or early summer. The U.S. Supreme Court has agreed to hear challenges to the law; it could strike down all of the PPACA, parts of the law (for example, the individual mandate that takes effect in 2014) or uphold the law.
- Just say “no” to drugs. Remember that health FSAs, HSAs and HRAs still cannot reimburse over-the-counter (OTC) drugs on a pre-tax basis, unless the participant provides evidence of a doctor’s prescription. Other non-drug OTC items (for example, bandages and braces) are still reimbursable.
- Stay creditable. Employer plans offering prescription drug coverage, including HRAs, must report the creditable status of their plans within 60 days of the start of the new plan year.
- No more rollovers. Be sure that you no longer initiate qualified distributions from health FSAs and HRAs to an HSA. As of Jan. 1, 2012, this practice will be prohibited.
- Solicit feedback. If you have not done so lately, make 2012 the year that you survey your employees about what they like and don’t like. Find out what new and innovative ideas they have. Many of those ideas may come from their former employers and actually have validity. Several web-based survey instruments are available (for a nominal fee or even free of charge).
- Get ready for 2013. It’s not too early to plan for the next year, especially the $2,500 cap on employee contributions to health FSAs. Currently, the effective date of this PPACA provision is unclear. Does the limit apply to plan years starting on or after Jan. 1, 2013, or reimbursements on or after that date? Another question: Will you consider an employer contribution (for example, matching, seed) to bolster employees’ FSAs? In addition, the Medicare tax will increase by 0.9 percent on individuals with wages above $200,000 (single) and $250,000 (married filing jointly).
So there it is: 12 ideas to start your 2012 “to do” list. There is little doubt that next year, you will find plenty more to add.