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Full Text: October 2004 Issue, Current Developments in Employee Benefits Published by Ballard Spahr (PDF)

10 pages. The edition includes: New COBRA Notice Requirements, DOL Publishes Final Regulations on Automatic Rollover Safe Harbor, Deadline Looms for Compliance with HIPAA Security Rules, Taxation of Domestic Partner Health Coverage under the New Jersey Domestic Partnership Act, New York City Equal Benefits Law Enacted, IRS Issues Model Amendments for Governmental Section 457(b) Deferred Compensation Plans, and IRS Finalizes Incentive Stock Option Regulations.

Law Firm to Offer Opinion Letters on Tax-Qualified Status of Plan Documents in Response to Change in IRS Program

"The [IRS] has largely ended its determination letter program by which sponsors of individually designed retirement plans can obtain confirmation that their plan documents are tax-qualified.... Effective January 1, 2017, the IRS will issue determination letters only when a plan is initially established or terminated.... In response to the void created by the IRS, Ballard Spahr has developed a new Retirement Plan Opinion Letter Program. Under the Program, Ballard Spahr will review an individually designed retirement plan document (and any amendments) and issue an opinion letter regarding the plan document's tax-qualified status. For most plan sponsors, we anticipate providing our new service on an annual basis (for a flat fee) to address qualification requirements as they are updated each year."

Courts Split on Enforcement of No Surprises Rules

"The Federal District Court of Connecticut ruled that an implied private right of action to enforce arbitration decisions exists under the No Surprises Rules. The Fifth Circuit ruled that no implied private right of action to enforce arbitration decisions exists under the No Surprises Rules." [Guardian Flight, LLC v. Aetna Life Ins. Co., No. 24-0680 (D. Conn. May 14, 2025); Edwards v. Guardian Life Ins. of Am., No. 24-60381 (5th Cir. June 20, 2025)]

Mental Health Brake: 2024 MHPAEA Regs Put on Hold

"In a motion to stay proceedings in a lawsuit challenging those regulations, the [Departments] notified the court that they intend to: [1] Reconsider the regulations, with the possibility of rescinding or modifying the rules. [2] Issue a policy of non-enforcement for the new regulatory requirements taking effect in 2025 and 2026. [3] Re-examine their enforcement policy under the MHPAEA more broadly.... The court granted the Departments' motion ... but requiring them to report back to the court on their progress every 90 days." [ERIC v. HHS, No. 25-0136 (D.D.C. complaint filed Jan. 17, 2025; HHS motion for abeyance filed May 12, 2025, granted May 12, 2025)]

Fifth Circuit Upholds No Surprise Billing Regs

"The court's decision ... offers relief from the need to recalculate the QPAs applicable to services or disclose additional information to providers about the methodology used in determining QPAs.... However, under the ruling, many claims administrators and insurers will need to vary their practice of pending claims for a period while seeking needed information. When the NSA rules apply, they will need to process a claim within 30 days of receiving a bill.... The decision may also signal how courts will apply the Supreme Court's standard that limits the discretion of regulating agencies." [Texas Medical Association (TMA) v. HHS, No. 23-40605 (5th Cir. Oct. 30, 2024)]

Tobacco Surcharge Lawsuits Spotlight Wellness Reg Compliance (PDF)

"[U]nder Loper Bright, employers have greater freedom to question whether the HIPAA wellness regulations represent a reasonable interpretation of HIPAA's nondiscrimination regulations and may encourage judges to do the same.... [It] is not immediately clear that tobacco usage should be considered a health status, and we may see courts declining to defer to the agency's interpretation of health status.... [C]ourts may find that tobacco usage is a lifestyle choice -- not a health status -- and thus outside the reach of HIPAA's nondiscrimination protections."

Practical Pointers for Compliance with New MHPAEA Regs

"[If] your plan is subject to ERISA, you will have a fiduciary obligation to monitor the process for completion of the comparative analysis.... You should learn enough about the rules to be able to identify NQTLs, engage one or more service providers to assist with the comparative analysis, and especially if your plan is subject to ERISA, monitor and review the work of those service providers and ask appropriate questions.... The rules require a comparative analysis to be conducted and documented regardless of whether a government official ever asks for it."

The FTC's Revised Health Breach Notification Rule Is Now in Effect

"A new rule, which took effect this week, expands the scope of the HBNR, as the FTC ramps up enforcement activity related to disclosures of identifiable health data, and other agencies implement changes to the Health Insurance Portability and Accountability Act (HIPAA), Part 2, and Information Blocking rules regulating similar data."

Final Section 1557 Rules: Highlights for Health Plan Sponsors

"Plans that are subject to the rules must take specific administrative compliance measures that include designating an individual to coordinate compliance (if the employer has more than 15 employees), establishing written policies and procedures, and issuing notices to plan participants. The regulations address ... coverage for gender transition and gender-affirming care and the potential for bias in algorithms and other tools that assist in making health care and coverage decisions."

HIPAA Breach Notifications: A Question of Timing

"Sometimes an investigation takes months to complete, and the HIPAA deadline for providing notice may have passed before a health plan or health care provider even knows who was affected by the breach and is entitled to notice. Plan administrators ... need to consider how and when they can provide appropriate notice to individuals ... taking into account HIPAA's requirements, the terms of the applicable business associate agreement, concerns about causing undue alarm, and other factors."