On May 18th the Treasury Department and IRS announced a new rule that will allow employers to modify their FSA plan’s "use-it-or-lose-it" requirement.
Under the old rules employees who had not spent all of their funds by the end of the year had to forfeit the unspent amount. The new rules allow participants to submit claims for reimbursement of healthcare and dependent care expenses incurred up to 2 ˝ months after the end of the plan year.
We will keep you advised as additional details become available. To view the official press release go to:
http://www.treas.gov/press/releases/js2456.htm
The U.S. Chamber of Commerce has joined a number of employer groups in expressing concern about employees who abuse their FMLA rights. The groups have submitted proposals that include clarification of the definition of “serious health condition”, allowing employers to call doctors to verify FMLA claims and allowing employers to require minimum four hour increments for FMLA leave.
In unrelated news, the Labor Department is expected to issue a proposed rule this year to address recent court rulings interpreting the FMLA. We will provide additional information once the proposed rules are released. For more information about the FMLA please visit:
http://www.dol.gov/esa/whd/fmla/index.htm
The Department of Labor has recently posted Spanish-language model COBRA notices on it’s website. These notices correspond to the English notices previously posted to conform to the DOL’s May 2004 final COBRA regulations.
Although the COBRA law does not require employers to provide COBRA notices in languages other than English, these new versions should be useful to employers with Spanish-speaking employees.
For a copy of the Model General Notice: http://www.dol.gov/ebsa/ModelGeneralNoticeSP.doc
For a copy of the Model Election Notice:
http://www.dol.gov/ebsa/ModelElectionNoticeSP.doc
As promised in our last edition, we will be bringing you an overview of each of the six statutory disability laws. At the end of our series we will follow up with a summary chart providing the highlights of each law. We start our series with New York:
New York requires employers to provide a minimum level of disability benefits but employees share in the cost. Employees may contribute 0.5% of wages not to exceed $.60 weekly. Employees are generally covered after four consecutive weeks of employment, not necessarily with the current employer. The minimum weekly benefit is $20, the maximum weekly benefit is $170 (unchanged since 1989!). The benefit waiting period is 7 days per disability. The maximum duration of benefits is 26 weeks. Generally, disability benefits and sick pay may be received simultaneously. The law also provides for a post-employment coverage period of 4 weeks.
For more information please contact your Thesco Account Executive.
- In 2001, 1.458 million Americans filed for bankruptcy. According to a survey conducted by Health Affairs, a health care policy journal, about half of bankruptcy filers cited medical causes. Health Affairs reports: “ Among those whose illness led to bankruptcy, out-of-pocket costs average $11,854 since the start of illness; 75.7 percent had insurance at the onset of illness. Medical debtors were 42 percent more likely than other debtors to experience lapses in coverage. Even middle-class insured families often fall prey to financial catastrophe when sick.” (www.healthaffairs.org).
- According to a report recently released by the Employment Policy Foundation, an estimated 14.5% of employees took FMLA leave last year, costing employers $21 billion in lost productivity, health benefits and labor replacement costs.(www.epf.org)
Does a COBRA beneficiary who originally waives or declines COBRA continuation have the right to revoke that declination?
This questions will be answered in our next edition of Thesconnection.
Does an Employer have an obligation to include COBRA participants in their annual benefits open enrollment?
Yes. Employers do have an obligation to include COBRA participants in open enrollment. The COBRA law provides that COBRA participants are eligible to continue with the “same benefits that are available to non-COBRA (i.e. active) health plan participants”. The law requires that COBRA participants be notified of open enrollment and HIPAA special enrollment opportunities.