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WHA Financial Solutions' Compliance
Corner newsletter contains valuable information on timely
compliance and regulatory issues. Each newsletter is archived by date at www.whafs.com.
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DOD Issues Proposed
Regulations Regarding TRICARE Incentives
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The Department of Defense (DOD) has issued proposed
regulations that will implement provisions of a 2007 law that prohibits employers
from offering incentives to its employees to not enroll in the group
health plan and to enroll instead in the government program TRICARE, if
they are eligible. However, Section 125 Cafeteria Plans are treated a bit
differently in that the law would not affect them as long as the plan
treats all employees the same and does not illegally "take into
account" TRICARE eligibility. These guidelines are very similar to
the regulations that prohibit employers from "taking into account"
Medicare or Medicare eligibility and from encouraging employees to choose
Medicare over the employer-provided medical plan.
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FSA
Plan Documents Determined to be Misleading
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The
cafeteria plan regulations state that for health flexible spending
arrangement (FSA) purposes, the medical expense is incurred when the medical
care is provided, not when the participant is billed, charged, or pays
for the expenses. In a recent court ruling, O'Meara v. CIT Group Inc, an
employer was found to have committed a fiduciary breach of duty for
failing to inform its participants of this definition. The plan's summary
plan description and new employee guide instead referred to the Internal
Revenue Service's Publication 502 which permits an individual to deduct
an expense based on when it is paid. Thus, the court determined that the plan
must reimburse a participant for eligible expenses for services that were
received in the previous year but paid for in the current year.
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Choosing a Retirement
Solution for Your Small Business - DOL Video
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The
Department of Labor (DOL) has published an online video as a retirement
resource for small businesses. The video, entitled Choosing a Retirement
Solution for Your Small Business, features four small business owners and
their decisions to implement a retirement plan including a simplified
employee pension (SEP), a SIMPLE IRA, and a 401(k) plan.
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State Updates
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Effective July 1, 2008, any group health policy that
provides coverage for basic health care services must also provide coverage
for orthotic devices and prosthetic devices, including repairs and
replacements. The individual's physician must deem the device as
"medically necessary to restore or maintain the enrollee's ability
to perform activities of daily living or essential job related activities
and [must not be] solely for comfort or convenience."
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WHA Financial
Solutions, Inc.
800-362-7121
or 608-274-1820
The
information included in WHA Financial Solutions' Compliance Corner is
intended for general information purposes only. This information
does not and is not intended to constitute legal advice. Any
decisions whether to implement these ideas should be made by the reader
in consultation with professional financial, tax, and legal counsel.
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