IRS Notice 2009-03: Delayed Effective Date for 403(b) Plan Documents In 2007 the
IRS issued final regulations for 403(b) plans which, among other things, required 403(b) plans toadopt written plan documents that satisfied the regulations by January 1, 2009. This requirement was problematic because many 403(b) plans did not previously have a plan document, there is no prototype plan document program currently available for 403(b) plans,and there is no determination letter program for IRS approval of individually designed 403(b)plan documents. The IRS recently delayed this effective date until December 31, 2009, although 403(b) plans must operate in compliance with areasonable interpretation of the new regulations during 2009 and must retroactively correct any operational failures that occur during 2009 to conform to the terms of the written plan document. Worker, Retiree, and Employer Recovery Act of 2008 Earlier this month Congress passed, and President Bush has indicated he will sign, the Worker, Retiree, and Employer Recovery Act of 2008 (the “Act”). The Act contains two main components.
Title I contains technical corrections related to the Pension Protection Act of 2006 (“PPA”). Title IIprovides relief to both plan sponsors and plan participants related to the current economic crisis.
Following are some Title I technical corrections relevant to defined contribution plans:
• Plans must allow for non-spouse beneficiary rollovers for plan years starting January 1, 2010, or later and the beneficiary must receive an eligible rollover distribution notice.
• Automatic contributions arrangements can include the 90 day permissible withdrawal
feature regardless of whether the plan’s default fund qualifies as a QDIA.
• Gap period earnings are not required to be included when making distributions of excess deferrals (PPA previously eliminated the need for gap-period earnings when distributing excess contributions or excess aggregate contributions).
The key impact on defined contribution plans in Title II is that required minimum distributions (often referred to as “RMD’s” or 70 ½ distributions) otherwise due for 2009 are waived. This impacts all 401(a) plans (including 401(k) plans); 403 (a) and (b) plans; certain 457(b) plans and IRA’s. Congress did not make any changes to the RMD requirements for 2008 distributions.
Nothing in this publication constitutes legal or tax advice upon which any 3rd party may rely.
Source: Great West Life Legal Wise Newsletter
Wednesday, December 24, 2008
Colorado Health Insurance Regulations and Laws that Take Affect 2009
Understanding The New Changes And How It Will Affect The Colorado Insurance Market.
As the New-year begins it is a good idea to look at and have a good understanding of the new House Bills 1355 and 1385. First we will take a look at HB 1355 and see how the second part in taking affect and when full implementation begins. The first part of HB1355 (Affective 1/1/2008), basically leveled the playing field in the group health insurance market by taking away the insurance carriers ability to rate up your business for known insurance risks. The second part has insurance carriers changing the way they used to be able to give discounts to healthier (Small Business 1-50 Employees), groups in the Colorado health insurance market. Part I, took affect January 2008, and part II will take affect January 2009. In conjunction to these mandated changes in the market carriers can now have to implement the following type of rating structure for small business 1-50 employees in Colorado. So here is what HB1355 means to you and your clients
• Health conditions can no longer be used in determining a group’s final Rates.
• SIC code and/or Tobacco status may be used to determine a group’s final Rates, but still has to remain within the range of 0.75-1.10 of filed rates.
• SIC codes Rates: The allowable range within the law is 0.75-1.10 for SIC codes.
• Every carrier has developed a list of SIC codes, and the specific range varies dramatically from carrier to carrier.
• Tobacco status may be used to LOAD Only - No discounts for groups, to a maximum of a 15 point load. The carriers using tobacco loads are: Anthem, Humana and UHC.
A combination of SIC code and tobacco status load cannot exceed 1.10 of filed rates.
The illustrated employee rates age-banded table rates do not have the SIC code factor applied to them.
• SIC codes have been assigned on a Carrier-specific basis by every Carrier.
• Range of SIC codes vary by Carrier; however all are within the range of 0.75-1.10.
• Tobacco Status loads is being applied during the Underwriting process by Anthem, Humana, and United HealthCare. The tobacco load may not exceed 15%, or 1.10 of the filed rate in situations where the SIC code factor + the maximum Tobacco status load is being applied. The group’s rate cannot exceed 1.10 of the filed rate.
• All Carriers have reported some level of rate decrease on their filed rates from December to January. Rocky Mountain Health Plans are not using Sic Codes until 4/1/09 and are awaiting approval from the DOI.
House Bill 1385: This legislation mandates that full commissions disclosure happens for every individual and small group business owner. How it works? All insurance brokers' and insurance companies will have to provide a "Commission Disclosure Form" for every insurance product being prosposed to each client. The "Commission Disclosure Form" shall have a signature line for both arties to sign off on the disclosure. This form shall be kept in a file for audits if they should ever happen for either insurance broker or insurance company.
Every product has a different commission that is charged per product. One important thing to note is if you use an insurance company direct they won't pay the commission. However, it’s important to note, the premiums won't be cheaper if you don't use a broker.
We suggest you look over the disclosure and see if the broker has been providing this value added service as most professional brokers are worth doing business with especially if you don't have to pay more for it...
For more information contact Health Shop, Inc 303-425-4466 or
www.benefitsblvd.com or www.buycoloradohealthinsurance.com
As the New-year begins it is a good idea to look at and have a good understanding of the new House Bills 1355 and 1385. First we will take a look at HB 1355 and see how the second part in taking affect and when full implementation begins. The first part of HB1355 (Affective 1/1/2008), basically leveled the playing field in the group health insurance market by taking away the insurance carriers ability to rate up your business for known insurance risks. The second part has insurance carriers changing the way they used to be able to give discounts to healthier (Small Business 1-50 Employees), groups in the Colorado health insurance market. Part I, took affect January 2008, and part II will take affect January 2009. In conjunction to these mandated changes in the market carriers can now have to implement the following type of rating structure for small business 1-50 employees in Colorado. So here is what HB1355 means to you and your clients
• Health conditions can no longer be used in determining a group’s final Rates.
• SIC code and/or Tobacco status may be used to determine a group’s final Rates, but still has to remain within the range of 0.75-1.10 of filed rates.
• SIC codes Rates: The allowable range within the law is 0.75-1.10 for SIC codes.
• Every carrier has developed a list of SIC codes, and the specific range varies dramatically from carrier to carrier.
• Tobacco status may be used to LOAD Only - No discounts for groups, to a maximum of a 15 point load. The carriers using tobacco loads are: Anthem, Humana and UHC.
A combination of SIC code and tobacco status load cannot exceed 1.10 of filed rates.
The illustrated employee rates age-banded table rates do not have the SIC code factor applied to them.
• SIC codes have been assigned on a Carrier-specific basis by every Carrier.
• Range of SIC codes vary by Carrier; however all are within the range of 0.75-1.10.
• Tobacco Status loads is being applied during the Underwriting process by Anthem, Humana, and United HealthCare. The tobacco load may not exceed 15%, or 1.10 of the filed rate in situations where the SIC code factor + the maximum Tobacco status load is being applied. The group’s rate cannot exceed 1.10 of the filed rate.
• All Carriers have reported some level of rate decrease on their filed rates from December to January. Rocky Mountain Health Plans are not using Sic Codes until 4/1/09 and are awaiting approval from the DOI.
House Bill 1385: This legislation mandates that full commissions disclosure happens for every individual and small group business owner. How it works? All insurance brokers' and insurance companies will have to provide a "Commission Disclosure Form" for every insurance product being prosposed to each client. The "Commission Disclosure Form" shall have a signature line for both arties to sign off on the disclosure. This form shall be kept in a file for audits if they should ever happen for either insurance broker or insurance company.
Every product has a different commission that is charged per product. One important thing to note is if you use an insurance company direct they won't pay the commission. However, it’s important to note, the premiums won't be cheaper if you don't use a broker.
We suggest you look over the disclosure and see if the broker has been providing this value added service as most professional brokers are worth doing business with especially if you don't have to pay more for it...
For more information contact Health Shop, Inc 303-425-4466 or
www.benefitsblvd.com or www.buycoloradohealthinsurance.com
Saturday, December 15, 2007
Colorado House Bills 1164 & 1355
HB 1164, effective September 30, 2004, allowed for rates to be increased up to 10% or discounted up 25%. Creating a rate between .75 to 1.1. Rates may also be adjusted uniformly or individually up to 15% for tobacco use. Renewal rates cannot increase by more than 15% due to claims experience and health status.
House Bill 1355 is a measure to return to “community rating” whereby the same medical costs are charged to employees across the board without regard to individual group claims experience or health status. This bill eliminates the current rating structure of HB 1164 which was .75% to 1.1% by the following changes. Effective January 1, 2008 for all small group health (1-50 employees) insurance renewals will no longer be rated up using the surcharge of 10% that was allowed for non-healthy groups. Changing the rating structure to the following .75% to 1.0 % thus eliminating the 10% rate up/surcharge for groups with apparent medical risks. In January 1, 2009 the rating structure changes to a flat table rate of 1.0 thereby eliminating the surcharge or discount available under HB1164 .
If you are interested in reading the entire House Bills please click on the links provided above.
House Bill 1355 is a measure to return to “community rating” whereby the same medical costs are charged to employees across the board without regard to individual group claims experience or health status. This bill eliminates the current rating structure of HB 1164 which was .75% to 1.1% by the following changes. Effective January 1, 2008 for all small group health (1-50 employees) insurance renewals will no longer be rated up using the surcharge of 10% that was allowed for non-healthy groups. Changing the rating structure to the following .75% to 1.0 % thus eliminating the 10% rate up/surcharge for groups with apparent medical risks. In January 1, 2009 the rating structure changes to a flat table rate of 1.0 thereby eliminating the surcharge or discount available under HB1164 .
If you are interested in reading the entire House Bills please click on the links provided above.
Wednesday, November 28, 2007
Colorado Cobra Law & Guidelines
COBRA
Federal Law
Employer groups with 20 or more employees (full and part time) on more than 50% of typical business days in the previous calendar year. Church groups and federal government employees are exempt from COBRA; Federal employees have Temporary Continuation Coverage (TCC) – refer to Feds EOC. Any employee, spouse, dependent or child born to or adopted by a covered employee during COBRA coverage is eligible if covered under a group health plan the day before the qualifying event. COBRA participant must pay 100% of group premium + a 2% administrative fee may be added to the Dues, or up to an additional 50% may be added to the Dues for a COBRA participant during any disability extension of the COBRA eligibility period.
QUALIFYING EVENTS:
Termination of employment (except for gross misconduct) or reduction of working hours of covered employee (and enrolled dependents) so as to not qualify for group coverage: 18 months
Death of covered employee, dependents can continue for: 36 months
Divorce or legal separation from covered employee, dependents can continue: 36 months
Dependent child ceases to be a dependent under the requirements of this Agreement: 36 months
Covered employee becomes entitled to Medicare; dependents can continue: 36 months
A determination of disability of a qualified COBRA beneficiary under the Social Security Act prior to termination or reduction of hours (other than for gross misconduct) or within the initial sixty (60) days of COBRA coverage: 29 months
USERRA (Military Leaves): 24 months
ADMINISTRATION:
Employer or a third party administrator administers plan. It is the EMPLOYER”S responsibility to notify subscriber and
dependents of COBRA coverage option. Employer is responsible to notify The Insurance Carrier of employees or dependents who have elected COBRA. Continuee will be billed on group bill. Employer is responsible for collecting the premium; 2% (or 50% for disability extension) may by added by employer for administration costs. If the group bills COBRA, it is their responsibility to bill the additional 2% or 50% for administration costs.
Notification: Employer must notify plan administrator of employee qualifying event within 30 days. Plan administrator has 14 days following date of termination to notify employee of continuation rights. If employer and plan administrator are one and the same, employer has 44 days to notify employee.
Employee has 60 days to elect or waive COBRA coverage from date of loss of coverage or date of notification by employer, whichever is later. A qualified beneficiary must pay current Dues for COBRA coverage no later than 45-days after the beneficiary’s election to continue coverage. After the initial 45 day period, payment due dates are determined by the employer, employee must pay within 30 days of established due date.
It is the EMPLOYERS responsibility to notify continuee of benefit or premium changes.
Federal Law
Employer groups with 20 or more employees (full and part time) on more than 50% of typical business days in the previous calendar year. Church groups and federal government employees are exempt from COBRA; Federal employees have Temporary Continuation Coverage (TCC) – refer to Feds EOC. Any employee, spouse, dependent or child born to or adopted by a covered employee during COBRA coverage is eligible if covered under a group health plan the day before the qualifying event. COBRA participant must pay 100% of group premium + a 2% administrative fee may be added to the Dues, or up to an additional 50% may be added to the Dues for a COBRA participant during any disability extension of the COBRA eligibility period.
QUALIFYING EVENTS:
Termination of employment (except for gross misconduct) or reduction of working hours of covered employee (and enrolled dependents) so as to not qualify for group coverage: 18 months
Death of covered employee, dependents can continue for: 36 months
Divorce or legal separation from covered employee, dependents can continue: 36 months
Dependent child ceases to be a dependent under the requirements of this Agreement: 36 months
Covered employee becomes entitled to Medicare; dependents can continue: 36 months
A determination of disability of a qualified COBRA beneficiary under the Social Security Act prior to termination or reduction of hours (other than for gross misconduct) or within the initial sixty (60) days of COBRA coverage: 29 months
USERRA (Military Leaves): 24 months
ADMINISTRATION:
Employer or a third party administrator administers plan. It is the EMPLOYER”S responsibility to notify subscriber and
dependents of COBRA coverage option. Employer is responsible to notify The Insurance Carrier of employees or dependents who have elected COBRA. Continuee will be billed on group bill. Employer is responsible for collecting the premium; 2% (or 50% for disability extension) may by added by employer for administration costs. If the group bills COBRA, it is their responsibility to bill the additional 2% or 50% for administration costs.
Notification: Employer must notify plan administrator of employee qualifying event within 30 days. Plan administrator has 14 days following date of termination to notify employee of continuation rights. If employer and plan administrator are one and the same, employer has 44 days to notify employee.
Employee has 60 days to elect or waive COBRA coverage from date of loss of coverage or date of notification by employer, whichever is later. A qualified beneficiary must pay current Dues for COBRA coverage no later than 45-days after the beneficiary’s election to continue coverage. After the initial 45 day period, payment due dates are determined by the employer, employee must pay within 30 days of established due date.
It is the EMPLOYERS responsibility to notify continuee of benefit or premium changes.
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