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Compliance Updates

AFFORDABLE CARE ACT
The passage of the Affordable Care Act (ACA) in 2010 added significant new legal requirements for local associations and their benefit funds that provide health-related benefits -- such as dental, vision, catastrophe major medical and medical reimbursements -- to their members. With the complexity of the ACA and its ever-changing components, it is critical that local associations and their benefit funds seek legal counsel to ensure that they are complying.

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HIPAA SECURITY RISK ASSESSMENT TOOL

In March 2014, the Department of Health & Human Services (HHS) made available an online interactive HIPAA Security Risk Assessment (SRA) Tool to aid in performing and documenting a risk analysis. The HIPAA Security regulations require covered entities and business associates to conduct a risk assessment in order to determine the potential risks and vulnerabilities to electronic protected health information.

Although the SRA Tool was designed specifically for health care practices, it can also be useful for group health plans such as benefit funds offering health-related benefits. Ideally, legal counsel should validate a benefit fund's risk assessment, but the SRA Tool can be considered a good resource and template.

Click here to access the SRA Tool.



HIPAA PRIVACY & SECURITY FINAL REGULATIONS
The Department of Health & Human Services released final Health Insurance Portability and Accountability Act (HIPAA) regulations on January 17, 2013 (click here to view the press release). The final rule is based on statutory changes under the 2009 Health Information Technology for Economic and Clinical Health Act (HITECH) and the 2008 Genetic Information Nondiscrimination Act (GINA) with some additional changes.

With the complexity of the HIPAA regulations, it is critical that local associations and their benefit funds seek legal counsel to ensure that they are in compliance.

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COBRA UPDATE
Local associations and their benefit funds that provide health-related benefits such as dental, vision and medical reimbursements to their members should be aware that the Department of Labor (DOL) updated its model COBRA general and election notices in May 2014 (click here to view the revised notices). These model notices reflect that the Healthcare.gov Marketplace is now open and better describe how it interacts with COBRA.

Local associations and their benefit funds should seek legal counsel to ensure that they are in compliance with COBRA.

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WELFARE BENEFITS FOR SAME-SEX SPOUSES
The United States Supreme Court recently issued two landmark decisions affecting the treatment of same-sex spouses for purposes of federal and state law.

-- The first decision, U.S. v. Windsor (June 26, 2013), struck down Section 3 of the Defense of Marriage Act, which defined “marriage” as only between a man and a woman for purposes of federal law.

-- The second decision, Obergefell v. Hodges (June 25, 2015), declared same-sex marriage a constitutional right.

As a result of these decisions, the treatment of same-sex spouses under retirement and welfare plans has changed significantly over the past three years. In fact, the IRS has issued specific guidance regarding the treatment of welfare benefits in light of these decisions.

Under this guidance, welfare plans may permit mid-year election changes in cafeteria plans as a result of the expansion in plan terms to cover same-sex spouses. In addition, the value of coverage provided to a same-sex spouse can no longer be imputed upon the participant. Further, COBRA rights, HIPAA special enrollment rights, FMLA rights, and the rights of all benefits and features under a welfare plan that apply to spouses now apply to same-sex spouses as well.

Notably, with respect to self-insured welfare plans, there is no specific mandate requiring same-sex spousal coverage. However, the risk of lawsuits for violations of Title VII of the Civil Rights Act of 1964 and state anti-discrimination laws likely greatly outweighs any perceived benefit of excluding same-sex spouses.

Local associations and their benefits funds should seek legal counsel to ensure that they are in compliance with federal and state laws affecting the coverage of same-sex spouses.

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NEW YORK STATE LAWS - AGE 29 DEPENDENT COVERAGE & EXTENDED CONTINUATION
New York state law requires that insured medical plans offer young adults the ability to maintain coverage under their parents’ group health plan through age 29. Another New York state law adds another 18 months of continuation coverage on top of the traditional 18 months of COBRA or New York state continuation coverage. These laws do not apply to dental-only, vision-only and pharmacy-only plans nor do they apply to self-funded health plans.

More information about this topic can be found by clicking here and here.

Locals and their benefit funds may want to check with their employers to find out how these laws affect any fully-insured health benefits offered by the employer. Benefit funds should also check with their legal counsel to determine whether these laws affect any health-related programs that they offer.

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IRS REQUIRES GROUP HEALTH PLAN EXCISE TAX REPORTING IN 2010
For plan years beginning on or after January 1, 2010, welfare plans that fail to comply with COBRA, the HIPAA portability and nondiscrimination requirements, and other federal group health plan mandates (including the numerous Affordable Care Act mandates) must file an excise tax return to report the failures and pay any applicable excise tax due.

In certain circumstances, governmental plans are exempt from the IRS excise tax (which must be reported using IRS Form 8928). If you believe that your local's benefit fund has violated any of these federal mandates, you should contact legal counsel to determine whether you need to file Form 8928. Additional penalties and interest may be assessed for failure to do so.

It is important for governmental plans to note that parallel taxes under the Public Health Services Act may apply to these plans even in cases where the IRS excise tax does not apply.

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