Running a small business is subject to many trade, environmental and labor regulations, and some of these also apply to benefits plans. The federal government is the principal regulator of employee benefit plans, determining factors such as tax-favored status, reporting requirements, privacy, eligibility, non-discrimination rules and continuation of coverage after termination of employment. Some of the federal laws include: ADA, COBRA, ERISA, FMLA, GLBA and HIPAA. For NJ companies with less than 20 employees, the NJ State Continuation (NJSC) statute applies, rather than COBRA, for providing benefits to employees after they have left employment. To help with regulations such as these, small business owner/operators should attend continuing education and work with professionals to resolve specific issues. NJ benefits brokers are required to receive continuing education, and membership in the National Association of Health Underwriters (NAHU) is critical to ensuring proper training, professionalism and understanding of new employee benefits laws and regulations.
The US Department of Labor’s enforcement authority under ERISA has been expanded to include employer responsibilities under many additional health laws and regulations, including:
- Newborns’ and Mothers’ Health Protection Act (NMHPA)
- Women’s Health and Cancer Rights Act (WHCRA)
- Mental Health Parity and Addiction Equity Act (MHPAEA)
- Genetic Information Nondiscrimination Act (GINA)
- Michelle’s Law
- Bona Fide Group Wellness Plan Rules
Most recently, there have been many changes due to PPACA, and there are many aspects of the law that have been included in new regulations that are in different stages of drafting and finalization. As an example, a recent regulation that has gone into effect is the new employer requirement to provide a Summary of Benefits and Coverage (SBC). As of the next plan anniversary, health insurance issuers and group health plans are required to provide an easy-to-understand summary about a health plan’s benefits and coverage. This new regulation is designed to help members understand and evaluate health insurance choices. The new forms include:
- A short, plain language Summary of Benefits and Coverage (SBC), and
- A uniform glossary of terms commonly used in health insurance coverage, such as “deductible” and “copayment”
All insurance companies and group health plans must use the same standard SBC form to help compare health plans. The SBC form also includes details, called “coverage examples,” which are comparison tools to show what the plan would generally cover in two common medical situations. Members have the right to receive the SBC when shopping for or enrolling in coverage or can request a copy from the issuer or group health plan. Members may also request a copy of the glossary of terms from the health insurance company or group health plan.
Another good example of employee benefit plan regulations concerns insurance company and IRS regulations surrounding employer and employee contributions to the benefit plan premiums. While the insurance companies are primarily concerned that the employer contributes sufficiently towards the premium, the IRS has become more concerned with discrimination in favor of highly compensated employees. This issue can also get complicated by the type of business formation (e.g. partnership, S-Corporation, etc.). It is important for small business owners/operators to stay apprised of evolving regulations to the stay in compliance, and working with professionals including an experienced broker is recommended to get the latest information.
State laws generally follow model laws developed by the National Association of Insurance Commissioners (NAIC), to specify standards to mandate benefits and regulate policy provisions, exclusions and limitations, company ratings and loss ratios. Within NJ, group health insurance plans are regulated by the “Small Employer Health (SEH) Board” and here’s a link to a very useful guide which I’ve had many opportunities to read. But even an established marketplace like the NJ SEH Program undergoes revisions due to new laws such as PPACA, and there are ongoing updates to SEH regulations to be in compliance with the new law.
These are just several examples of regulatory and compliance issues that small business owners and benefits specialists need to be aware of. Here are several educational websites for Benefits Info, Reporting and Fiduciary responsibilities. Additional sources of information, NJ and Regional organizations to help consumers include:
- NJ HMO Report Card
- NJ Hospital Report Card
- NJ Health Link
- NJ Physician Profile Database
- NJ Association of Health Underwriters
- NJ Prescription Drug Registry
- NJ Regional Healthcare Report Card
- Choosing Quality Healthcare
- Hospital Performance Reports
Of course, an experienced broker will also be very helpful with compliance issues!
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