Written & Edited By: HRC Marketing Staff
Mobile Application updates
HSA Changes for 2013 Tax Year
FSA Contribution Limits
IRS Benefit Limits for 2012
News Update November 1, 2011
On October 20, 2011 the IRS posted changes related to various benefits for employees affecting everything from pension plans, 401k's, medical saving accounts, health savings accounts, and commuter benefit plans.
HR Concepts would like to assure our partners and clients that we will be updating our employee education documents, forms, and procedures to comply with these new changes in the coming weeks. In particular we are preparing updated educational materials for enrollment meetings in order to clarify the limits to pre tax benefits administered by HR Concepts. For those sponsoring or considering a Commuter Benefit Plan please note transit reimbursement account expenses will be dropping from $230/month to $125/month and parking reimbursement limits will be increasing from $230/month to $240. There are also minor increases in the High Deductible Plan Maximums for HSA plans. Please review the following highlights as you consider the employee benefit offerings in 2012. To see the most recent IRS announcement regarding benefit limit changes go here.
Medicare Eligibility Notifications to HR Concepts
Announcement October 11, 2011
HR Concepts has received a number of inquiries from participants who are no longer covered under their Group Health Plan and are eligible for Medicare coverage but Medicare reports that they still have an active HRA plan with HR Concepts. Why does this happen?
HR Concepts Mobile Benefits 2.0
System Enhancements - July 21, 2011
This update (version 2.0), includes the ability to quickly view all claims requiring receipts right from the main screen and the much-anticipated ability to submit receipts for claims using the mobile device's camera.
Secure Email Update
Announcement - July 11, 2011
HR Concepts is now in the process of transitioning all of our Email communications through Postini Email Encryption Services in partnership with Google Apps. We felt this change was necessary in order to stay ahead of the many email related threats and to make exchanging sensitive information as easy as possible for our clients and their participants. In upcoming weeks you may receive secure emails through this new Encryption portal or you may create your own Secure Email account and send us your sensitive information using this new service from here.
What does Email Encryption have to do with me?
All of us have become increasingly aware of the many public cases of individuals having their sensitive information exposed inadvertently. With that concern in mind, HR Concepts has put the protection of our clients Personal Information (PI) and Personal Health Information (PHI) as one of our highest priorities. To that end HR Concepts has partnered with Google & Postini Email Encryption Services in order to maintain the highest level of security and protection for all inbound and outbound email communication between HR Concepts and our clients. Postini Email encryption will provide our clients with the ability to initiate secure communications with HR Concepts as well as secure all of our inbound and outbound email communication through an encrypted email portal relying upon industry leaders in encryption and email filtering technology.
Features and Benefits
Message Encryption, Portal Delivery provides the following benefits:
HR Concepts Recognized by Lighthouse1 for Outstanding Achievements Again!
Minneapolis, Minnesota - May, 2011 - For the second year in a row HR Concepts has been honored by Lighthouse1 with a 2011 Excellence Award for outstanding business achievements. Following up on last year's efforts earning the Market Maker award, HR Concepts received the Excellence Award for Innovator at Partner Conference 2011, the annual Lighthouse1 Partner conference held recently in Minneapolis. HR Concepts was selected for this award because of its pacesetter efforts in creatively addressing needs in the consumer-driven healthcare market.
" HRC is proud to accept this award from Lighthouse1 as it is reflective of our mutual goal of using technology to advance the ease of use and value of Consumer Driven Healthcare. HR Concepts continually strives to drive down the cost of healthcare through our innovative use of the LH1 platform in that we are consistently being challenged to keep our plans flexible, our systems functional, and our implementation cost effective. We look forward to new endeavors and unique opportunities partnering with LH1 as we navigate the challenges of Healthcare Reform in a competitive landscape." (Peter H. Jennings, CEO/President HR Concepts, LLC)
The Excellence Awards, established in 2009, are presented yearly and recognize Lighthouse1 Partners that have achieved notable accomplishments with the Lighthouse1 platform. Lighthouse1 Team Members contributed Excellence Award nominations. The 2011 Excellence Awards were presented in seven categories: New Partner, Evangelism, Innovator, Leadership, Market Maker, Service Excellence, and Partner of the Year. Lighthouse1 and its partners serve more than 2.5 million consumers, making Lighthouse1 the nation's largest web-based healthcare solution that manages HSAs, HRAs, FSAs, and Transit Plans.
My Digital Wellness Coach Update
As a wellness company and benefits administrator, HR Concepts strives to address all the health and wellness needs of our clients. To that end HR Concepts has partnered with My Digital Wellness Coach in order to provide our clients and their participants with the best in breed tools, information, videos, articles, advice, nutrition, fitness, and so much more! We are confident this will enable our participants to achieve their wellness goals in 2011.
How do I sign-up for My Digital Wellness Coach?
Upon renewal of your company's account with HRC, participants who elect to enroll in an HRA, HSA, or FSA plan are eligible to create their own My Digital Wellness Coach account by going to the registration page here! From there click on the Sign-Up link and enter your personal information to complete the registration process. This account is being provided free of charge for all our participants. A spouse or family member can sign up for their own personal account through MYDWC.com or by contacting HRC for as little as $1/month. We hope you enjoy the use of MyDigitalWellnesscoach.com and please don't hesitate to contact our customer care department for assistance with the account registration process.
My Digital Wellness Coach is your single source for the "best-of-the-best" information, tools, and advice to help you set and achieve your health and wellness goals! MYDWC brings together the top medical, nutrition, fitness, and wellness resources to help you on your path to wellness. Doctor-developed and client-proven assessment tools recommend the top three Healthy Living Programs based on your risk factors and readiness to change. MyDWC provides HabiTrackers which help you stay on track to meet your goals. Motivating messages can be sent to your in-box or mobile device to keep you inspired. Videos and digital coaches ensure you learn as you go. The more you use My Digital Wellness Coach, the more it's customized for your individual needs. Healthy menus, challenging fitness routines, and interesting articles based on your preferences are recommended each time you login. Signing up for My Digital Wellness Coach is like having an army of personal trainers, nutritionists, and health practitioners all cheering for your success!
HR Concepts Partners with My Digital Wellness Coach
HR Concepts has signed a long term agreement contract with MYDWC.com to provide our clients and their participants with the best in breed tools, information, videos, articles, advice, nutrition, fitness, and so much more to enable our participants to achieve their wellness, health, fitness, and/or nutrition goals in 2011. Upon renewal of your company's account with HRC, participants who elect to enroll in an HRA, HSA, or FSA plan will receive a welcome email within 30 days of signing up providing
them with a sign up code for MYDWC.com and a web address to finish the setting up of their MYDWC account. This account is being provided free of charge for all our participants. A spouse or family member can sign up for their own personal account through MYDWC.com or by contacting HRC for as little as $1/month. We hope you enjoy the use of MYDWC.com and please don't hesitate to provide us feedback regarding this new value added benefit. Thank you for your business and support, enjoy!
My Digital Wellness Coach is your single source for the "best-of-the-best" information, tools, and advice to help you set and achieve your health and wellness goals. MYDC brings together the top medical, nutrition, fitness, and wellness resources to help you on your path to wellness. Doctor-developed and client-proven assessment tools recommend the top three Healthy Living Programs based on your risk factors and readiness to change. MYDWC provides HabiTrackers which help you stay on track to meet your goals. Motivating messages can be sent to your in-box or mobile device to keep you inspired. Videos and digital coaches ensure you learn as you go. The more you use My Digital Wellness Coach, the more it's customized for your individual needs. Healthy menus, challenging fitness routines, and interesting articles based on your preferences are recommended each time you login. Signing up for My Digital Wellness Coach is like having an army of personal trainers, nutritionists and health practitioners all cheering for your success!
Check it out now: www.MYDWC.com
As part of our ongoing commitment to providing the best possible service to our clients, HR Concepts has recently completed a thorough review of our COBRA administration technology platform and the other options available on the market. As a result of this review, we have chosen to upgrade our COBRA administration technology platform and will soon begin a conversion to the new platform. The platform we have selected will empower us to provide the level of service you and your COBRA Qualified Beneficiaries expect from HR Concepts.
The platform we have selected is used by administrators supporting tens of thousands employers and hundreds of thousands of COBRA participants. The new system has a robust web-based interface that allows a host of new features including:
The new system will also provide a robust platform for HR Concepts to effectively administer COBRA in the now ever changing legislative landscape demonstrated by the American Recovery and Reinvestment Act of 2009 (ARRA) as continually amended.
We thank you for your business and for your understanding and patience during this conversion. Your satisfaction and the quality of the services we deliver to you are of utmost importance to us. Our technology solutions, service and management teams are working diligently to ensure this new system conversion is conducted quickly and accurately to minimize any disruption to you our valued clients and your COBRA beneficiaries.
Health Care Reform Update:
Medical Flexible Spending Accounts and OTC Expenses
HR Concepts strives to keep our clients and partners informed with the most up to date information as it relates to Health Care Reform. HRC has provided various updates to parts of the reform as it relates to Section 125, Flexible Spending Accounts (FSA), and Health Reimbursement Arrangements (HRA). This HRC Insider was written to address the various questions that HRC has been receiving regarding changes to OTC eligible expenses. This notice is going to both participants with a valid email address and employer contacts so everyone is aware of this change.
As of January 1, 2011, there are a number of changes occurring in reference to OTC purchases and the use of your Medical Flexible Spending Account. Many OTC medicines and products will no longer be eligible for reimbursement without a doctor's prescription or Medical Necessity Form. If you are currently enrolled and using the HRC Total Access Card for your OTC medical expenses, you will no longer be able to use the card for certain expenses once the law takes affect on January 1. OTC claims that are no longer eligible to be put on the card will need to be submitted manually. In order to be reimbursed manually for certain OTC medicines and products you will need a signed prescription from your doctor or have a Medical Necessity Form filled out. As an out of pocket OTC expense these pieces of additional documentation will be required before the claim can be paid in our system.
The following list of medicines and products will assist you in the process of determining eligible expenses. A Medical Necessity Form may be completed by your doctor to satisfy IRS requirements of providing a prescription to substantiate a medical need. HRC will provide a Medical Necessity Form on our website or by request through our Customer Care Departments or for employers by request from our Client Relations team.
Receipt Reminder Requests
Administrative Update - June 14, 2010
It is important for companies to evaluate their business practices to determine if they are operating in the most cost effective and responsible method. In an effort to keep our clients in compliance and to facilitate participants in getting their receipts to us after their debit card swipe, HR Concepts has decided to increase the amount and frequency of receipt requests. Receipts Requests will be sent via email or regular mail three times after the participant uses their HRC Total Access Card for their FSA, HRA, Parking, Transit, Biker, and Dental Accounts. The first request will be sent 2 days after the card swipe and again on the 14th day and 21st day after the card swipe (If participant doesn't respond with sending in the receipt). By moving the first request up to 2 days after the card use, HRC is hoping participants will be able to find their receipts and get them to HRC in a timelier manner. Failure to send in receipts could jeopardize the plans eligibility.
In considering clients' feedback and in an effort to better service and keep informed our participants, HRC has decided to continue our monthly employee statements. These monthly statements will continue to include the participant's account balance and receipts needed for verification. These statements will be sent via email around the 15th of each month. If a participant does not have an email address in our system, they can simply call Customer Care to update their account with a valid email address, ask for their balance or request a statement be mailed whenever they would like a paper statement.
Industry Update - April 2010
HR Concepts strives to keep our clients and partners informed with the most up to date information as it relates to Health Care Reform. HRC has provided various updates to parts of the reform as it relates to Section 125, Flexible Spending Accounts (FSA), and Health Reimbursement Arrangements (HRA). This HRC Insider was written to address the various questions that HRC has been receiving regarding the final changes to these plans as of today.
As a part of the Patient Protection and Affordable Care Act signed into law on March 23, 2010 there are changes to the classification of OTC eligible expenses for reimbursement from flexible spending accounts, health reimbursement arrangements and health savings accounts that limit the list to a few items unless a doctor provides a prescription for OTC expenses. Additional changes include required health coverage for children under age 26, tax favored health coverage for children under 27, and the reduction of maximum FSA contributions starting January 1, 2013. HRC is committed to providing accurate and relevant information as it pertains to these changes and the impact upon the administration of these services.
OTC reimbursement eligibility
Due to the new health care reform legislation, over-the-counter (OTC) drugs, medicines and biologicals will be eligible for reimbursement only if the request is accompanied by a doctor's prescription. As of January 1, 2011 a doctor's prescription submitted along with the reimbursement request will be required in order to be reimbursed for such expenses as pain relievers, allergy medicines, or diaper rash creams for example. One exception to this is the use of insulin will remain eligible as a tax-free reimbursement without a prescription. Please refer to the list below for additional information on how this will impact your flexible spending account plan.
Please be aware this change in eligible OTC will be effective January 1, 2011. The change to OTC will apply to all plans, regardless of when the plan was effective. Therefore, this will affect all plans and participants at the same time regardless of the plan year start date. Expenses incurred on and after January 1, 2011 will require a doctor's prescription, however OTC expenses incurred prior to January 1, 2011 will still be eligible.
This change will also impact how participants use their HRC Total Access Card. OTC purchases will no longer be eligible for payment using their Total Access Card as of January 1, 2011. HRC is still in the process of clarifying the specific list of items affected and we will provide participants a list of affected items closer to the effective date. The current list of affected items includes the following items:
Employer-Provided Health Coverage for Dependent Children
With the recent passage and enactment of Health Care Reform and the Affordable Care Act effective March 30, 2010, there are a series of changes related to the medical coverage of dependent children under the age of 27. Per IRS Notice 2010-38, group health Plans and health insurance issuers are required to “provide dependent coverage of children to continue to make such coverage available for an adult child until age 26”. An additional amendment to this notice states that the IRS would “extend the general exclusion from gross income for reimbursements for medical care under an employer-provided accident or health plan to any employee’s child who has not attained age 27 as of the end of the taxable year”. Simply put, although the new law requires coverage for dependent children under 26 it allows for tax favored coverage for dependent children up to 27. Also, the IRS notice explains that flexible spending accounts can be modified to pay for uncovered expenses of employees' dependent children under age 27. The tax free reimbursement of medical care for children under 27 takes effect March 30, 2010 while the Public Health Service Act which requires coverage of dependent children under the age of 26, will take effect on or after September 23, 2010 when the next plan year begins. For this particular change a child includes a son, daughter, stepchild, adopted child, or eligible foster child who is already covered or added to the employee's insurance plan before the end of the year.
FSA Annual Limits
Beginning January 1, 2013, FSA's will have an annual maximum election limit of $2,500 per year. This maximum limit will be increased annually based upon inflation to allow the FSA maximum election to be adjusted in accordance with the cost of living. FSA's will continue to be "use-it-or-lose-it" accounts. That is, any unused balance for one year can't be used to fund health care spending in the next year.
HRC will continue to update all enrollment and educational materials along with our web site to keep all of our brokers, partners, clients, and participants informed of any additional changes based upon the Health Care Reform legislation.
Industry Update - February 13, 2009
What is the American Recovery & Reinvestment Act?
On February 17, 2009 President Barack Obama signed into law the Economic Stimulus bill called the American Recovery & Investment Act. The Act has several different considerations, but in this addition of the HRC Insider we will talk about how it affects COBRA and the administration of COBRA. This new law requires immediate action from all employers that are subject to the rules and regulations of COBRA and its requirements go into effect on March 1, 2009.
Overview of the Act as it relates to COBRA
All employees that were involuntarily terminated on or after September 1, 2008 are eligible to enroll through COBRA onto their previous company's health plans. A special notice and election period will begin March 1, 2009 for all the employees that either did not elect COBRA after their qualifying event, or did choose a health plan on COBRA, but now are eligible to make an election change between the health plans offered and have 65% of the premium covered by the government. The following is an overview of the Act:
How will HR Concepts administer this new regulation?
HR Concepts will be contacting all our existing COBRA clients to gather the necessary information on each employee who we were notified that they terminated on or after September 1, 2008. As soon as the Secretary of Labor releases the new language for the notification letter and our systems are updated, HR Concepts will send out new COBRA notification letter sets to each terminated employee outlining their eligibility and rights to enroll. These new letters we will be sending are considered new COBRA notification letters and will enable eligible participants to enroll or change their election on COBRA.
As a COBRA client of HR Concepts you will not need to do anything different with us other than notify us each time you have a qualifying event, if the event was an involuntary termination. The participants that qualify for this subsidy will be billed for their portion of the 35% of premiums. Each month we will send to you the premiums collected, along with a billing report, minus any 2% commissions we are entitled to.
(HR Concepts strives to keep you updated in the regulations and changes that affect all your qualified plans. However, HR Concepts can never provide legal or tax advice. This outline is for discussion purposes only and should not be construed as legal advice or guidance. Any questions regarding COBRA laws, an employer is directed to seek their own independent counsel.
FSA Changes for 2013 Tax Year
The Internal Revenue Service recently issued updated guidance for employers and administrators regarding the new $2500 limit on Flexible Spending Accounts to take effect January 1, 2013. This updated guidance clears up a number of outstanding questions regarding this ruling. Please refer to IRS Notice 2012-40 for the official guidelines.
Please contact your account executive team at HR Concepts if you have any additional questions or concerns. We appreciate your understanding and patience as we continue to navigate healthcare reform and the ongoing changes that result from it.
Transit Accounts: Compliance Update
Acceptable Transit Authorities: On January
1, 2012, IRS Revenue Ruling 2006-57 took effect. This ruling, which has been delayed several times, adds additional restrictions to the usage of Transportation Benefit Debit Cards. Beginning on January 1, 2012 any Transportation Benefit Debit Cards with HR Concepts are restricted for use at merchant terminals which only sell transit fare media. Details of the IRS rulings related to the use of commuter benefit debit cards in association to the IRS Section 132(f) Qualified Transportation Fringe Benefit can be found here.
The regulation indicates that the benefit card must be terminal restricted so that the transactions are limited to POS terminals that sell only transit fare media. Please review the acceptable transit ID list found here to determine which transit authorities are in compliance with
the IRS ruling.
Open Enrollment Reminders
News Update November 1, 2011
As we begin the renewal process for many of our clients we would like each of our employer groups and partners to be aware of the benefits and advantages of setting up an automated file feed with your payroll vendor. HR Concepts has been working with payroll vendors such as ADP on a weekly file feed for a number of our clients that ensures accurate payroll deductions, teminations and additions are processed automatically. Once this feed is put into place with HRC all of these updates adn changes occur without the employer having to notify us. There is generally a small cost to this type of file feed but the time savings for HR staff and IT resources for each of our employers is significant. Along with ADP HR Concepts has also worked with a number of third party online enrollment and payroll vendors on a weekly eligibility file feed. Please contact our sales department for additional information regarding this functionality. 603-647-1147 option 4 or firstname.lastname@example.org
CMS Reporting Changes
Announcement October 11, 2011
Updated Annual Benefit Level Reporting Threshold
HR Concepts would like to notify all of our clients and brokers that HRA reporting requirements are changing as of October 3, 2011. Per the latest alert from the Centers for Medicare & Medicaid services only HRA plans with a plan benefit of $5000 or greater are required to be reported to the CMS according to the section 111 guidelines. Please note that all rollover funds from the previous plan will be calculated into the threshold requirement. Any plans that have a total plan benefit of $5000 or more including funds from last year will be subject to mandatory reporting requirements. This is an increase from the $1000 threshold initially implemented by CMS. The official CMS Alert outlining the change can be found here.
What does this change mean to you?
If the total plan benefit for your participants is under $5000 there will be fewer concerns or issues around quarterly CMS reporting. HR Concepts will be responsible for calculating the total plan benefit along with any other reporting requirements in order to stay in compliance as a responsible reporting entity.
Text Message Alerts and Mobile Application Updates
System Enhancements - June 1, 2011
It is clear that Smartphone use is rapidly on the rise and has become an essential element for the daily lives of many consumers. According to the Nielsen Company, the amount of mobile users with a Smartphone is projected to increase to 49% by Q3 2011. In a recent article, Apple reports to have sold 47 million iPhones in 2010 and, according to Google, 350,000 Android phones are activated every day. With the increased use of Smartphone's there is a corresponding demand from users to be able to access all of their personal data from a single device including their health and wellness information. HR Concepts has answered this demand by partnering with industry leading technology providers to give you access to your information when and where you want! Please forward this to your participants so they are familiar with our current offerings and future updates to our mobile technology platform.
Recent Mobile App Changes
The latest version of HR Concepts' Mobile Benefits (version 1.5) includes enhancements which give participants greater insight into their benefit transaction details and history on their Apple or Android powered device.
4. Available Balance
Text Message Alerts
SMS text message alerts are now available for all mobile devices on AT&T, Nextel, Sprint, Verizon, and T-Mobile networks! Consumers can opt in/out via the Consumer Portal and configure which alerts they prefer to receive. The alerts options include the following:
Setup Confirmation Alert. A confirmation alert is sent to the consumer upon setting up text alerts.
Claim Confirmation Alert. A claim confirmation alert is sent when a claim has been filed.
Claim Denial Alert. A claim denial alert is created after the denial and denial with repayment letter reports are generated. Message is sent after 8:00 a.m. in the consumer's time zone.
Receipt Reminder Alert. This alert is created after the receipt reminder letter report is generated. Message is sent after 8:00 a.m. in the consumer's time zone.
Upcoming Enhancements Version 2.0
By the end of July 2011 all participants will be able to download or update the HR Concepts Mobile Benefits application to add receipt images via their mobile devices for claims already submitted via the Consumer Portal. Additional Enhancements to the mobile apps will include:
Transit Plan and Dependent Care Legislation
Industry Update - March 1, 2011
Congress approved a one year extension through 12/31/2011 of the pre-tax mass transit benefit cap of $230 per month. Without the extension, the monthly maximum contribution would be reduced to the prior limit of $120.
The legislation also extends prior expiring changes to the dependent care tax credit, which has the following impact on dependent care benefits:
In Notice 2010-94, the IRS delayed the effective date for the transit plan debit card ruling (Revenue Ruling 2006-57) until January 1, 2012: http://www.irs.gov/pub/irs-drop/n-10-94.pdf. The delay is to provide transit systems more time to adapt their technology for compatibility with the requirements for vouchers.
HR Concepts in partnership with Lighthouse1 Mobile is now offering a new way for our participants with an FSA, DCA, HRA, or an HSA account to easily check their available balances using an iPhone, iPod Touch, iPad, or Android powered device! Every consumer enrolled in our system is now enabled to securely access their account and view account balances from anywhere if they have one of these devices! With future releases, Lighthouse1 Mobile will be enhanced to allow consumers to submit claims for reimbursement and send receipts using their mobile device's camera. In addition, upcoming releases will enable consumers with any mobile device, including Blackberry and Palm, to receive account balances and configurable alerts via text message. Because the mobile application is built upon the Lighthouse1 platform, the same logic is used to determine and display active accounts and available balances. So, there's no additional training or support needed for participants to start making use of this new offering. When participants log into the Consumer Portal they will notice updated text referring them to the iTunes App Store and Android Market in order to obtain the application. HR Concepts is committed to providing our employers and partners the highest level of consumer technology in the benefits administration industry and we will continue to work with Lighthouse1 and our partners to ensure that all of our participants will be able to access their information in the most seamless way possible. We hope you appreciate HRC's ongoing efforts towards maintaining a secure and convenient system for managing your accounts with us. Please do not hesitate to contact your account executive if you have further questions.
HR Concepts is now working with a national interpreter service in order to assist all of our non-English speaking participants with questions related to their FSA, DCA, HRA, or HSA plan. This service allows us to setup a conference call with an interpreter fluent in the language of the participant along with an HR Concepts customer service representative, and the non-English speaking participant. This service provides interpreters for all of the following languages and dialects listed here.
This list of languages represents over 98.6% of the languages spoken in the world today! HR Concepts will be able to assist virtually any language need in order to communicate with our participants. With this added service HR Concepts will also be able to provide professionally trained interpretation that is both HIPAA and GLBA compliant, protecting the privacy of the participant's personal health information (PHI) along with other sensitive personal information (PI). HR Concepts will continue to identify other ways in which to provide added services to make your benefit plans more efficient and easier to use.
Medical Flexible Spending Accounts and Over The Counter (OTC) Expenses
Industry Update - October 29, 2010
What you need to know about Healthcare Reform and your FSA account
1) As of January 1, 2011, there are changes occurring in reference to OTC purchases and the use of your Medical Flexible Spending Account. These changes are part of the Patient Protection and Affordable Care Act signed into law on March 23, 2010.
2) Many OTC medicines and products will no longer be eligible for reimbursement without a doctor's prescription or Medical Necessity Form.
3) If you are currently enrolled and using the HRC Total Access Card for your OTC medical expenses, you will no longer be able to use the card for certain expenses once the law takes effect on January 1.
4) OTC items that are no longer eligible to be put on the card will need to be submitted manually.
5) In order to be reimbursed manually for certain OTC medicines and products you will need a signed prescription from your doctor or have a Medical Necessity Form filled out. The additional documentation required for submission will need to be sent to HR Concepts before the claim can be processed and paid in their system.
The following OTC items are examples of items that require a doctor's prescription or Medical Necessity Form:
The following list of OTC items is an example of items that are still eligible for purchase and will not require additional documentation:
HRC will continue to update materials and our web site to keep all of our participants informed of any additional changes based upon the Health Care Reform legislation.
You are can download a copy of the medical necessity form here:
HR Concepts Recognized by Lighthouse1 for Outstanding Achievements
Industry Update - September 7, 2010
HR Concepts was recently honored by Lighthouse1 with a 2010 Excellence Award for outstanding business achievements. HR Concepts received the Excellence Award for Market Maker at Partner Conference 2010, the annual Lighthouse1 partner conference held recently in Minneapolis.
Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA), added mandatory reporting requirements for certain insurers, self-insured entities, and third party administrators that will enable the Center for Medicare and Medicaid Services (CMS) to determine when the Medicare program does not have primary payment responsibility for expenses that are able to be reimbursed by Medicare. To comply with Section 111 reporting, HR Concepts has been tracking in greater detail the data necessary for these reporting requirements. The CMS Section 111 rules apply to different types of plans such as Healthcare Reimbursement Arrangements which would identify HR Concepts as a "Responsible Reporting Entity" or RRE. Since HR Concepts is administering the HRA plan for a number of our clients we have been taking steps to ensure that we have the most current Medicare related information available to CMS. Section 111 reporting is required for HRA plans that cover medical benefits though there are exceptions to this which include the following:
Any employer group who subscribes to an HRA plan with employer funding of at least $1,000 will need to be included with this reporting. This includes employees or dependents aged 45 and older who are enrolled in an HRA. It also includes covered individuals who have been receiving kidney dialysis or who have received a kidney transplant. In order for our systems to be able to identify potential Medicare claimants and to have the most accurate data, we may be requesting additional or updated information in the following areas:
Industry Update - April 22, 2010
April 15, 2010, Congress passed and the President later signed the Continuing Extension Act of 2010 (the "Act") that extended to May 31, 2010 the eligibility for the 65% premium subsidy for COBRA premiums for individuals that incur an involuntary termination of employment on or before that date. Prior to this Act, the eligibility time period for the COBRA premium subsidy expired on March 31, 2010. This Act modifies the American Recovery and Reinvestment Act of 2009 (ARRA), which was amended by the Temporary Extension Act of 2010 earlier this year.
HRC is currently modifying our systems to comply with these new changes and extension by April 23, 2010. We will be able to provide:
*A modification to include the requisite ARRA subsidy language and modified forms for each individual that incurs a Qualifying Event on or before May 31, 2010.
*The ability to automatically print letters to re-notify individuals who (i) incurred a Qualifying Event on or after April 1, 2010, and (ii) whose COBRA Election Notice or State Continuation Eligibility Notice was printed after April 1, 2010 so that their notice did not incorporate the COBRA premium subsidy offer.
HRC's staff is working carefully on these changes to make sure that we add these new capabilities while maintaining all other capabilities currently in our system. Thank you again for being an HR Concepts' client. We will continue to respond when changes to the COBRA law are enacted.
As a client of HR Concepts, please let us know if any of the qualifying events that have taken place since April 1, 2010 have been involuntary terminations. We will correct your account for these employees and resend their COBRA paperwork.
For additional information regarding the Temporary Extension Act, please see www.dol.gov/ebsa/COBRA
(HR Concepts strives to keep you updated on the regulations and changes that affect all your qualified plans. However, HR Concepts can never provide legal or tax advice. This notification is for informative purposes only and should not be construed as legal advice or guidance. Any questions regarding COBRA laws, an employer is directed to seek their own independent counsel.)
Industry Update - March 7, 2009
GOOD NEWS: The Emergency Economic Recovery Act signed into law by President Obama on February 17, 2009 provides a significant increase in Commuter Expense allowances for employees from $120.00 to $230.00 per month. Parking Expenses for 2009 remain at $230 a month. These limits are indexed for inflation.
Internal Revenue Code Section 132 and the Transportation Equity Act for the 21st Century (TEA-21) allows employers to offer employees the opportunity to set aside a portion of their salary to pay for certain transportation expenses. The employee will not be taxed on amounts set aside and used for qualified expenses (that is, pre-tax dollars are used to pay the commuting expenses). Under IRS Section 132 and TEA-21 qualified transportation expenses generally include payments for the use of mass transportation (for example, train, subway, bus fares), and for parking (see further details below).
For 2009 the maximum monthly pre-tax contribution for mass transit was $120.00, and $230.00 for parking; however the $120.00 Commuter Expense was increased to $230.00 on February 17, 2009 by President Obama when he signed The Emergency Economic Recovery Act.
How Section 132 Works:
The transportation fringe benefit is similar to the pre-tax flexible spending accounts available for medical expenses and dependent care. One important difference, however, is the transportation benefit does not include a "use it or lose it penalty," as is the case with medical/dependent care flexible spending accounts.
Before the start of the Section 132 plan year, individual employees elected to set aside a certain amount of pre-tax salary to cover qualified costs incurred in commuting to work. The employee will designate an amount (up to $230.00 per month) for mass transit expenses and a separate amount (up to $230.00 per month) for parking expenses -- separate reimbursement accounts are maintained for each category, and funds cannot be commingled or transferred between accounts (for example, amounts cannot be transferred from the mass transit to the parking account).
As the employee incurs Section 132 expenses during the year, a request form may be submitted to the plan administrator for reimbursement. If the employee does not use the full amount before the end of the program year, the left over amount is carried forward to the next year.
Who is Eligible Under Section 132:
As a general rule, the transportation fringe benefit can only be provided by employers to employees. Common law employees and officers of corporations are eligible (the law does not include non-discrimination requirements for the benefit). Sole proprietors, partners, independent contractors, and two-percent shareholders of S corporations are not eligible for this transportation fringe benefit.
Qualified Parking Expenses:
Parking expenses that can be paid with pre-tax dollars include the costs of (1) parking a vehicle in a facility that is near the employee's place of work, or (2) parking at a location from where the employee commutes to work (for example, the cost of parking in a lot at the train station so that the employee can continue his/her commute on the train).
Qualified Mass Transit Expenses:
Transit passes for mass transportation to and from work. Qualified amounts include costs of any pass, token, fare card, voucher, or other item that entitles the employee to use mass transit for the purpose of traveling to or from his/her place of work. However, when a transit voucher program is readily available, Federal regulations prohibit the use of cash reimbursement as a way to provide transit benefits. Section 132(f) (3) states: Transit Benefits can include cash reimbursement to an employee as long as the reimbursement is for any transit pass, and a voucher or similar instrument which can be used to purchase the transit pass is not readily available for direct distribution to the employee.
The mass transit can be a public system, or a private enterprise provided by a company/individual who is in the business of transporting people in a "commuter highway vehicle." Such a vehicle must have a seating capacity for six or more adults (not including the driver), and at least 80% of the of the vehicles' mileage must be from transporting employees to and from their place of work. Additionally, the vehicle must be carrying at least three passengers (not including the driver). Commuter highway vehicles may be owned or leased by an employer to be used by employees or a third-party provider for transportation purposes. Employees can also own and operate commuter highway vehicles.
What is an HRA?
A Healthcare Reimbursement Arrangement (HRA) is a self insured health plan sponsored by an employer for the purpose of reimbursing an employee for certain out of pocket expenses associated with being enrolled in the group health plan. With the ever increasing premiums for healthcare coverage, employers are finding it necessary to offer a high deductible health plan to reduce their premium cost. Employers then offer to reimburse some or all of the deductible/co-pays associated with the high deductible health plan that a participant will incur. The HRA allows the employer to reimburse the employee for the covered expenses as outlined by the HRA legal document. Because an HRA is considered a self insured health plan, it is subject to the COBRA laws and regulations.
HRA and COBRA
Because the HRA is a company sponsored health plan, it is subject to COBRA. Under COBRA, employees have the right to elect to maintain their enrollment in the HRA. By electing to have their HRA while covered under COBRA, employees are able to submit their claims against the account for reimbursement. The real questions is not are employees allowed to have the account, but rather who is going to pay for the HRA expenses?
There are two schools of thought regarding who should be funding the HRA while it covers someone on COBRA. Most employers do not charge any premium assessment to the participant on COBRA because of the belief that no premium is being charged for regular employees who are enrolled on the HRA while employed. However, employers do have the right to charge a premium plus 2% to any COBRA participant who elects to have their HRA while on COBRA. To calculate the premium amount, several different methods have been developed; however, no specific guidance has been given by the government. The following methods appear to be the most popular:
If it is the first year of the HRA offering, an actuarially method must be used. Some guidance suggest taking the actual maximum claims that could be paid for each category of coverage (single, 2-person, family) and simply calculate this amount by 75%, add 2% for COBRA administration, and divide by 12 months to get a monthly premium per category.
Second year method might use an actuarially method or "past-cost" basis whereby a plan sponsor takes the past claims for the previous year per each category of coverage (single, 2-person, family) and adds the claims up, divide by the amount of covered participants per category, add 2% for COBRA administration, and divide by 12 to get the monthly premium per category.
All of the above rates would be calculated each year and rolled out to the COBRA participants. Regardless of which method is used, the entire balance of the annual election could be used from day one of the plan year by the COBRA participant.
HR Concepts strives to keep you updated in the regulations and changes that affect all your qualified plans. However, HR Concepts can never provide legal or tax advice. This outline is for discussion purposes only and should not be construed as legal advice or guidance. Any questions regarding COBRA laws and HRA's, an employer is directed to seek their own independent counsel.
About HRC Insider
The HRC Insider is the newsletter and broadcast communication service of HR Concepts, LLC. Its sole purpose is to educate and inform the clients, participants, and partners of HR Concepts on industry news, updates, and matters pertaining to HRC. The content of the HRC Insider is for informational purposes only and is not intended as legal or tax advice. If you have any contributions or articles you would like to see distributed, please contact us via email at email@example.com.
We hope you enjoy our content and find the information useful!
Forms / Policies / General
Cobra System Enhancements
As part of our ongoing commitment to providing the best possible service to our clients, HR Concepts has recently completed a thorough review of our COBRA administration technology platform and the other options available on the market. As a result of this review, we have chosen to upgrade our COBRA administration technology platform and will soon begin a conversion to the new platform....