Mary Rosen, associate regional director of the U.S. Department of Labor (DOL) for New England including upstate New York, recently gave a presentation on common issues with health-care plans. She also described six tips for common plan errors and three new initiatives the DOL is working on. Based upon common errors seen by the DOL, […]
Mary Rosen, associate regional director of the U.S. Department of Labor (DOL) for New England including upstate New York, recently gave a presentation on common issues with health-care plans. She also described six tips for common plan errors and three new initiatives the DOL is working on.
Based upon common errors seen by the DOL, the six tips for health-care plan fiduciaries to consider are:
1. Carefully select and monitor service providers
- Document the process of selecting the service providers, including the data that was reviewed;
- Confirm that the fees and expenses paid a plan are reasonable;
- Monitor plan service providers.
2. Make required disclosures to participants and beneficiaries
- Make sure the summary plan description (SPD) is complete and written in plain English;
- Furnish the SPD to participants within 90 days of coverage; redistribute every five years;
- Distribute the summary of material modifications (SMM) or an updated SPD if material changes are made.
3. If a request for disclosure is made, disclose as much as possible
- Deliver disclosures by hand delivery, by U.S. mail, and by electronic delivery (if certain standards are met);
- Posting in a common work area is usually not enough.
4. Understand your plan and your responsibility
- Read and understand the plan document and the SPD;
- Follow the terms of the plan;
- Do not use personal discretion in interpreting the terms of the plan;
- Make sure claim procedures are followed, including time limits for response for claims.
5. Make timely contributions and monitor use of plan assets
- See safe-harbor regulation 2510.3-102;
- Relief can be granted under DOL Technical Release 92-01;
- Be aware of classification of the medical loss ratio rebate
- See DOL Technical Release 2011-04;
- Be watchful for prohibited transactions.
6. File reports with government and keep good records
- Form 5500 series return must be filed unless an exemption exists;
- If you hire a third-party administrator, make sure you understand what it is doing, as the duties to maintain records cannot be delegated.
Rosen in her presentation also described the following three federal Department of Labor health-care plan initiatives:
1. Health Benefit Security Project
A comprehensive national health-enforcement project combining the Employee Benefits Security Administration health-plan enforcement initiatives with the new protections under the Patient Protection Affordable Health Care Act of 2010.
2. Self-Funded Health Case Fees Initiative
This project seeks to uncover hidden fees in self-funded health plans. The project includes the review of fees commonly found in self-funded health plans including base medical service fee, recovery of overpayments, subrogation, corporate group and third-party revenue, medical-benefits drug rebate payments, stop-loss premiums and other fees and services.
3. Emergency Services Project
A project to determine if health-care plans are complying with the patient protection requirements of the Affordable Care Act regarding the coverage of emergency services. This project will identify large self-funded health plans that provide coverage for emergency services and determine if services will be covered and whether the plan is properly reimbursing for out-of-network emergency room visits.
Mary Anne Cody is a partner at Mackenzie Hughes LLP in Syracuse. Cody concentrates her law practice on financial-planning issues for businesses and individuals. Her areas of emphasis include estate planning, fiduciary compliance, and business tax and succession planning. Contact Cody at mcody@mackenziehughes.com. This Viewpoint article is drawn from the Mackenzie Hughes Blog, called “Plain Talk.”