On August 1, 2011, the U.S. Departments of Labor, Health and Human Services, and Treasury issued an interim final rule under the Patient Protection and Affordable Care Act requiring non-grandfathered health plans to cover a wide range of women’s preventive services without cost-sharing (including, co-insurance, co-pays, and deductibles).  Theses services include well-woman visits, contraception, breastfeeding supplies and support, domestic violence screening, screening for gestational diabetes, human papillomavirus DNA testing for women 30 years and older, human immunodeficiency virus screening and counseling, and sexually transmitted diseases counseling.  The interim final rule is effective for plan years beginning on or after August 1, 2012.

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The Patient Protection and Affordable Care Act of 2010 amended the Internal Revenue Code to require, beginning January 1, 2011, that employers report the aggregate cost of employer-provided health coverage on Forms W-2 issued to employees.  This requirement was later delayed by the IRS, in Notice 2010-69, to January 1, 2012.  On September 19, 2011, the IRS provided further relief from this reporting requirement in Notice 2011-38, which exempts employers that contribute to multiemployer plans, and delays the compliance date for employers with less than 250 employees until at least January 1, 2013.

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As part of implementing federal health reform, New York State has adopted a law requiring insurance plans in the small group markets to spend 82 cents of every premium dollar received on medical services, and plans in the large group market to spend 85 cents of every premium dollar received.  Insurers that do not meet these thresholds must refund the difference between the amount they are required to spend on medical care and what they actually spent to policy holders.  As a result of this law, 11 health insurers in New York State (including Excellus, Blue Cross and Blue Shield, Healthnet, and Aetna) will refund $114.5 million in premiums to New York State policy holders this year.

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On August 31, 2012, the IRS issued Notice 2012-58 (the “Notice”), which provides guidance for employers on determining which employees are treated as full-time employees for purposes of the employer shared responsibility provisions of the Patient Protection and Affordable Care Act (“PPACA”). The employer shared responsibility provisions, which are contained in new Section 4980H of the Internal Revenue Code, provide that an employer with 50 or more full-time equivalent employees could be subject to a financial penalty if any low-income, full-time employee is certified to receive a premium tax credit or cost-sharing reduction payment in connection with health insurance coverage purchased through an American Health Benefit Exchange beginning January 1, 2014. Generally, this may occur when either: (1) the employer does not offer minimum essential coverage under an employer-sponsored plan to its full-time employees (and their dependents); or (2) the employer offers minimum essential coverage to its eligible employees and their dependents, but that coverage is unaffordable relative to an employee’s household income (meaning the employee’s contribution toward the cost of the coverage exceeds 9.5% of his or her gross income) or does not provide minimum value (meaning that at least 60% of the allowable costs under the plan are paid by the plan).

Under the Notice, which expands and modifies guidance previously issued by the IRS, employers may use a “look-back” period of up to 12 months to determine whether new variable-hour employees or seasonal employees are full-time. An employee is a variable-hour employee if at the outset of his or her employment it cannot reasonably be determined whether he or she will work an average of 30 hours per week. The Notice also provides employers with the option to use an administrative period of up to 90 days in which to determine which employees are eligible for coverage and to notify them of such eligibility, and provides guidance on transitioning new employees from the new employee determination method to the determination method chosen by the employer for ongoing employees. The Notice does not address questions previously raised to the IRS regarding the application of these requirements to multiemployer plans.

Employers may rely on the guidance contained in this Notice at least through the end of 2014.

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On April 2, 2012, the Department of Labor (“DOL”) issued Field Assistance Bulletin No. 2012-01, which provides guidance on the use of Apprenticeship and Training Plan assets for program graduation ceremonies and marketing.  Under the guidance, the DOL will not consider a plan’s payment of expenses associated with a “modest graduation ceremony” attended by graduating apprentices, family, plan officials, and other persons connected with the program, including “light refreshments,” and “token awards/gifts” for non-apprentices an impermissible use of plan assets provided: (a) the amount of the expense is modest in relation to the plan’s assets; (b) the expenses are approved in accordance with internal accounting, recordkeeping, and administrative controls designed to prevent inappropriate, excessive, or abusive expenditures of plan assets; and (c) the expenses are costs for the ceremony.  Similarly, the DOL will consider outreach expenses for “marketing or promotion of the apprenticeship program” a permissible use of plan assets so long as the expenses are consistent with the fiduciaries’ obligation to be prudent and economical in the use of the plan assets.  For example, the purchase of t-shirts bearing the program’s logo (purchased at a reasonable price from a non-party in interest) would be considered an acceptable plan expense, while the purchase of tickets to sporting events for apprentices, trustees, or plan officials would not.

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