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CHIP Reauthorization Act of 2009
As you may already be aware, the Children's Health Insurance Program Reauthorization Act of 2009 (CHIP) requires employers to inform employees of potential opportunities currently available in the State in which the employee resides for group health plan premium assistance under Medicaid and CHIP. The Department of Labor has created a Model Employer CHIP Notice for this purpose.
For plan years beginning March 1 or April 1, the Notice must be provided to employees by May 1, 2010. For plan years beginning on or after May 1, 2010, it must be provided by the first day of the next plan year, except that plans renewing on January 1, 2011 must provide the Notice before January 1.
You may include the Notice with other employee materials, such as enrollment packets, open enrollment materials or your Plan Booklet, as long as the materials are distributed by the first day of the new plan year.
The Notice must be distributed annually. The Department of Health & Human Services will periodically update its website with the list of states that offer premium assistance. You are only required to send it to employees who live in one of states listed in the Notice, but for ease of distribution you may choose to provide it to all employees.
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Healthcare Reform Legislation
Hot off the press are the latest elements of the Patient Protection and Affordable Care Act, aka Healthcare Reform Legislation, of most interest to employers.
This information is based on the Senate version of the health care reform legislation as amended by the House reconciliation bill. There could be further changes and amendments to the reconciliation piece during Senate consideration, and there is a remote chance that the Senate could fail to pass the reconciliation package. Both scenarios would result in changes to the legislation and this summary. Thus, this is not the final Act.
Read the Act
You may also use the links below to navigate through the Act:
Individual Mandate
Guaranteed Issue
American Health Benefit Exchanges
Employer Requirements
Private Insurance Mandates
Merging of Individual & Small Group Markets
Expansion of Public Programs
New Taxes and Fees
HSA & FSA Changes
Medial Loss Ration (MLR)
Small Business Tax Credit
Prevention/Wellness Programs
CLASS Act
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The Rap On Wrap Plan Documents
Let's start with the basics. A wrap plan document is legal document that combines and incorporates, by reference, all group insurance policies and contracts that provide benefits to employees. A summary plan description (SPD) is not a wrap plan document.
Oftentimes, sponsoring employers, often referred to as Plan Sponsors, look to their insurance company policy or contract as their "plan document." This belief creates problems for Plan Sponsors because contracts and policies are almost always incomplete regarding the specific information required by ERISA. Those group insurance policies are written to cover the legal needs of the insurance carrier, not to satisfy the requirements of ERISA, or to provide legal protection to the Plan Sponsor.
Now as for the practical reasons for adopting a "wrap" plan document:
- The wrap plan document will contain important and explicit language clarifying the Plan Sponsor's position on its legal obligations, discretionary powers, benefit limitations compared to the policy, entitlements to amend/terminate provisions.
- Adopting a wrap plan document enables the Plan Sponsor to collapse 5500 filings (life, LTD, medical, dental, vision) into a single filing.
Some Plan Sponsors believe that they can file all employee benefit plans on a single 5500 filing simply because the benefits are similar or because it is convenient. Without a written wrap plan document combining the benefits into a single plan, this is mistaken thinking. If caught in audit or review, the IRS or DOL can impose missed filing penalties and take corrective action, by rejecting the filing and requiring that each of the plans re-file separately for all prior years. In the absence of a plan document that combines the benefits into a single plan, the DOL will assess penalties based on each policy or program separately.
The benefits of documenting your employee benefit plans into a written plan document are numerous, but the top reasons are:
- It is required by law.
- It maximizes the Sponsor's flexibility and operational discretion.
- It allows combining 5500s, improving efficiency and reducing expense.
Gibson Insurance Group can provide you with direct access to experts in this field to ensure that you are in compliance with this requirement. Please contact us at 800-814-2122 for more information.
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EFAST2!
EFAST2 is the Department of Labor's (DOL) new fully electronic processing system for Form 5500. Starting with the first 2009 plan year filing, the DOL requires all retirement and welfare benefit plans to file Form 5500 electronically.
How is this going to happen? Here's a simple 3 step summary for Plan Sponsors:
1. OBTAIN FILING SIGNER CREDENTIALS.
- All persons who have signed, or will be signing, the Form 5500 must apply for electronic signer credentials. These credentials are obtained by registering on the EFAST2 website, www.efast.dol.gov, using the I-REG system.
2. PREPARE & FILE YOUR RETURN.
- Your return(s) can be prepared using one of three options:
- I-FILE, the DOL's web-based filing system;
- A private web-based system; or
- A third-party preparer with Internet transmission to DOL.
- The new electronic filing requirements are for the government only. You are still required to print a fully-executed hard-copy of the return, maintaining it in your permanent plan files. This is a DOL requirement.
- Next, you file your return electronically using one of the 3 options above. The option that you choose will be determined by whether or not you are using a third-party company to assist you with your Form 5500 preparation. If you are filing your own returns, you may likely utilize I-FILE on the DOL website.
- Remember, under no circumstance will you be allowed to mail in Form 5500 returns for plan years 2009 & later. If you are still filing 2008 returns then you will sign and mail paper copies to Lawrence KS. However, for all 2009 and later plan year filings, you will file electronically via EFAST2.
3. VISIT THE DOL WEBSITE
- Please visit www.efast.dol.gov now & read the section titled, "Getting Ready for Electronic Filing & 2009 Form 5500" for more specific explanations about EFAST2 & the new filing requirements. As things unfold, many updates are likely to occur, as the system itself and the new process will evolve over the next several months.
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