HITECH Webinars

With all the changes brought about by the HITECH Act, it helps to have an overview of just what this Act means on a practical level. I have just completed two webinars with HITECH Answers that lay out what the Act does and how to ensure you comply with the new requirements it has ushered in.

You can check out the webinars here.

A COBRA Lurking in the New Health Reform Bill?

When the House Education and Labor Committee approved the America's Affordable Health Choices Act of 2009 (H.R. 3200) the approved version of the Bill contained an interesting amendment. Representative Susan Davis, D-Calif. proposed an amendment, previously approved by the panel in a voice vote, that would extend COBRA coverage. Normally COBRA coverage lasts 18 months for those who have been laid off or quit, and 36 months for those entitled to COBRA due to death, divorce or marital separation. The amendment, however, would extend COBRA coverage until the beneficiaries become eligible under a new employer's health care plan or through a federal or state-based health insurance exchange. Those exchanges, which would be authorized under the broader bill, would not be established until at least 2013.

The amendment would apply to individuals receiving COBRA on or after the Bill is passed, and could allow COBRA beneficiaries to receive years of additional COBRA coverage from their former employers.

The following are helpful articles:

Business Insurance Article

Plan Sponsor

403(b) Plan Administrators Can Breathe (a Little) Easier: Transitional Relief Offered by the Department of Labor

On July 20, the Department of Labor (DOL) issued Field Assistance Bulletin 2009-02, which detailed transitional relief for plan administers of 403(b) plans. This relief applies to the Form 5500 annual reporting requirement that large plans (generally plans with 100 or more participants) include the report of an independent qualified public accountant.

Recognizing the burden this might place on 403(b) plan administrators because the plans often include multiple individual contracts, the DOL eased the reporting burden a bit. Administrators of 403(b) plans do not need to treat annuity contracts and custodial accounts as part of the employer’s Title I plan or as plan assets for purposes of ERISA’s annual reporting requirements provided that:

• The contract or account was issued to a current or former employee before January 1, 2009;
• The employer ceased to have any obligation to make contributions (including employee salary reduction contributions), and in fact ceased making contributions to the contract or account before January 1, 2009;
• All of the rights and benefits under the contract or account are legally enforceable against the insurer or custodian by the individual owner of the contract or account without any involvement by the employer; and
• The individual owner of the contract is fully vested in the contract or account.

Additionally, plans do not need to count as participants for reporting purposes any current or former employees with contracts or accounts that are excludable from the plan's Form 5500 or Form 5500-SF under the above transition relief.

Finally, the DOL will not reject a Form 5500 because it contains a "qualified," "adverse" or disclaimed opinion if the reason for this opinion is solely because pre-2009 contracts were not covered by the audit or included in the plan's financial statements.

Final Increase in Federal Minimum Wage

On July 24, 2009, the federal minimum wage will increase from $6.55 to $7.25 per hour. This is the final increase required by the Fair Minimum Wage Act, which was signed into law on May 24, 2007. This Act increased the federal minimum wage from $5.15 to $7.25 since it became effective.

Employers should remember, however, that certain states have higher minimum wage requirements.

Health Care Reform Bill Moves Through Committees

House leaders introduced the America's Affordable Health Choices Bill of 2009 (H.R. 3200) on July 14. The Bill is a trillion dollar health care overhaul that seeks to make health insurance available to all Americans. By July 17th, both the Education and Labor and the Ways and Means Committees had approved the Bill.

Part of the Bill proposes prohibiting the use of health savings accounts, health reimbursement arrangements, and flexible spending accounts for over-the-counter drugs. The Bill would, however, permit employers to allow their employees to include their same-sex or opposite-sex partners without including this cost in the employees' taxable income. A summary of the Bill is included here.

The American Medical Association, the AARP, and the AFL-CIO, among others, have endorsed the Bill, and the legislation has been praised by Democrats. Some Republicans, however, have criticized the Bill's affordability. Senator Michael B. Enzi of Wyoming, citing to its trillion dollar price tag, described the Bill as anything but affordable, despite its name.

Live Blog of Sotomayor's Hearing

The SCOTUS blog is providing an interesting way to follow the Sotomayor hearings (in case you're not already tired of hearing about all things Sotomayor). Click here for a live blog of the hearings. It starts at 9:00 a.m. EDT. Check it out.

HITECH Headaches: HIPAA issues for Business Associates

One part of the American Recovery and Reinvestment Act (ARRA) overlooked by the press is the HITECH Act. Despite its snazzy acronym, the HITECH Act has not received much airtime. This is surprising given the impact it has for business associates (BAs) (i.e., entities providing services to HIPAA "covered entities").

Previously, HIPAA only applied directly to health care providers, health plans, and health care clearing houses (collectively known as "covered entities"). BAs that provide services to these covered entities and receive protected health information (PHI) generally enter a business associate agreement (BAA). Previously, however, HIPAA's penalties did not apply directly to BAs. At most, BAs might be subject to contract remedies if they breached a BAA, but they would not face the stiff penalties reserved for HIPAA violations.

Oh how times have changed. Now, thanks to the HITECH Act, BAs are subject to the enforcement actions and penalties under HIPAA. Unlike before, a breach of a BAA is now a legal violation and not simply a breach of contract. BAs should become completely familiar with these new provisions and their new responsibilities.

The following are helpful links that address the HITECH Act:

Alston & Bird: The HITECH Act

Nixon Peabody's Training on the HITECH Act

U.S. Department of Health and Human Services

HITECH Answers