The past year has seen a number of new state and local laws covering a range of benefits-related areas. However, this legislative and regulatory patchwork has a downside for employers, who may find it increasingly difficult to deal with complying with the requirements of multiple jurisdictions.
A new proposed regulation opens the way to expand association health plans (AHPs). AHPs are plans sponsored by a group of unrelated employers, linked by factors such as a common industry or geography. These AHP plans will be allowed to offer reduced benefits in order to lower the cost of coverage. The stated goal of the proposed regulation is to make it easier for small employers to buy lower cost health insurance.
The Affordable Care Act (“ACA”) remains on the books. And, in a significant new development, the IRS is poised to begin levying penalties on employers, under the ACA’s employer mandate, for 2015. These penalties may be significant and it we cannot anticipate any “relief” reaching back to 2015.
The proposed Tax Cut and Jobs Act (“TCJA”) has generated a number of big stories with big numbers, such as $1.5 trillion to lower individual tax rates and $1.5 trillion to lower corporate tax rates. But, also lurking in the 430-page draft, are many important “smaller” provisions that will affect the HR world.
As the political battles – and stalemate – over the Affordable Care Act continues, employers may find themselves with the worst of all worlds. The portions of the ACA that create the greatest burdens on employers, such as the mandates, taxes and administrative obligations under the ACA stay, in place. At the same time, uncertainty in the individual markets creates blowback that hurts employers in a number of ways.
Two recent cases illustrate the risks of allowing plan practices to diverge from plan documents. In one case, Acosta v. Macy’s, the Department of Labor has brought a lawsuit against Macy’s department store for (among other things) changing the payment methodology for calculating out-of-network claims without appropriately modifying the Macy’s plan document. In the other case, Erwood v. Life Ins. Company of North America, an administrator’s failure to follow documented plan procedures triggered a $750,000 judgment. Both of these cases highlight how easy it is to overlook the fundamental ERISA responsibility of ensuring that plan administration syncs up with the plan documentation. And, both of these cases highlight the risks posed by such failure.