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Chaz

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Chaz last won the day on January 10 2014

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  1. If an auditor concludes that a plan has a "significant deficiency" in the plan's internal controls (but that deficiency does not rise to a "material deficiency"), must that be reported in the plan's financial statements attached to the plan's Form 5500?
  2. Here's a follow-up: https://www.fda.gov/inspections-compliance-enforcement-and-criminal-investigations/warning-letters/electrx-and-health-solutions-llc-614251-03022023
  3. You would need to look at the FDA rules regarding prohibitions on importing drugs, among other things. We looked at it and, despite the vendors' marketing efforts regarding its legality ("We have an opinion from a law firm!"), we were unable to recommend that our client proceed with this program.
  4. If (and only if) the move to another country results in the loss of eligibility for coverage, then I would permit an election change each time the move occurs. I don't think there is any rule regarding a time frame for such moves or whether such move has to be "permanent."
  5. What if, for example, there are three family members with family COBRA coverage and are paying one premium for all family members? If they want to drop the child's coverage mid year can the COBRA premium be unilaterally reduced to the level for Employee + Spouse?
  6. Thanks for your thoughts. One thing, though: Wouldn't a business associate typically be an independent contractor, not an agent? If so, wouldn't this apply to when the covered entity's notification obligation starts? "In contrast, if the business associate is an independent contractor of the covered entity (i.e., not an agent), then the covered entity must provide notification based on the time the business associate notifies the covered entity of the breach." (I'll admit to being generally unfamiliar with the tenets of the "federal common law of agency," which is mentioned in the regs.)
  7. Under HIPAA, a business associate must notify a covered entity health plan no later than 60 days from the time it discovered a breach of unsecured protected health information. If a business associate has, say, thousands of covered entity clients and discovers that only a few participants of only a few of the covered entity health plans are affected by a breach (and the business associate does not know which ones until later), when does that 60-day window start? Does it start when it determines which specific covered entities are affected? Or does it start when it discovered the breach (which would require that it notify all of its clients, most of which would ultimately be unaffected)? I could not find any HHS guidance on point. Thanks.
  8. Section 125 permits election changes (other than in the case of certain HPIAA special enrollment events), including upon divorce, to be effective only on a prospective basis. The Code permits an employee to pay for coverage on a pre-tax basis only for certain specified dependents. An ex-spouse is not not one of these specified dependents. ERISA requires plan fiduciaries to administer a health plan in accordance with its terms. Virtually all plans provide that ex-spouses are not eligible for coverage. If an employee notifies the employer on December 1 than he or she was divorced from his or her covered spouse on November 1 (and provides sufficient evidence of such), when can/must the employer remove the spouse from coverage? (Leave COBRA out of the analysis.) If the employer removes the spouse prospectively from December 1, the employer is seemingly complying with Code Section 125 but has it violated its fiduciary obligations under ERISA because it covered the ex-spouse in contradiction with the terms of the plan and must the employee impute income for the payrolls in November in which the employee paid for the ex-spouse's coverage? If the employer removes the spouse retroactively from coverage back to November 1, will it be violating the Section 125 election change rules but be in compliance with ERISA and the other sections of the Code? I know that the ACA's rescission rules generally prohibit retroactively terminating coverage except in the case of fraud and intentional misrepresentation. But that means, doesn't it, that the ACA does contemplate rescissions under certain circumstances while the cafeteria plan rules do not. To me, this is an inherent contradiction between these various laws. I'm sure others have recognized this but I have not seen much discussion of it. Any thoughts are appreciated.
  9. Okay that makes sense but what if the plan design is to pay 100% of the cost of coverage for HCPs and 75% for non-HCPs regardless of the tier of coverage? What would the tax consequences be to those HCPs in that scenario?
  10. For HCEs for whom the employer pays 100% of the cost of coverage, wouldn't that be $0 in extra gross income?
  11. What would the consequences be to the highly compensated participants in the event that the IRS determined that this plan design was "too creative"?
  12. If the employer outsources the fiduciary responsibility to the TPA as a general matter, making this exception (even once) may make it more likely that, if things go south, that the TPA will claim that the ultimate fiduciary responsibility rests with the employer (in this but also in other future circumstances) and the TPA is merely performing ministerial acts. I imagine that the employer can paper this over to minimize this risk but it is still a consideration.
  13. The CAA requires, among other things, that a group health plan attest, by December 31, 2023, that it "will not enter into an agreement, and has not, subsequent to December 27, 2020, entered into an agreement" with a service provider that contains a gag clause. A covered health plan entered into a master services agreement with a carrier (say, Blue Cross) in 2010 that contains an offending gag clause. The master agreement has not been amended since originally executed, except that the financial terms of the agreement change each year (including in 2021, 2022, and 2023), subject to the parties' agreement on such revised terms. The parties have agreed each year to the subsequently changed financial terms Two questions: 1-Do the revised financial terms mean that the services agreement has been amended such that the plan has entered into an agreement after December 27, 2020, so that the plan cannot make the attestation. Or can the plan make the attestation because the original agreement predates the effective date of the gag rule requirement? 2-If the answer to the first question is that the plan cannot make the attestation due to the changes in financial terms, can an amendment retroactively removing the offending clause even fix the situation? (Because the plan has, in effect, "entered in an agreement" that contains a gag clause and amending the agreement, even retroactively, doesn't really change that.) Any thoughts are appreciated. Thanks!
  14. Can a pre-paid legal services plan that an employer makes available to employees fit into the DOL safe harbor for voluntary plans and thus not be subject to ERISA assuming all the requirements of the safe harbor are satisfied?
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