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New Year, New Penalties | Maryland Benefit Advisors

Department of Labor Publishes Updated Penalties for OSHA Violations

On January 2, 2018, the U.S. Department of Labor (DOL) published updated, inflation-adjusted penalties for violations of various laws regulated by the DOL and its internal components or divisions, including the Occupational Health and Safety Administration (OSHA). The DOL is required to adjust the level of civil monetary penalties for inflation by January 15 each year pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Inflation Adjustment Act).

Because of the Inflation Adjustment Act, rates for OSHA penalties have increased three times in the last 17 months (August 1, 2016, January 13, 2017, and January 2, 2018). Therefore, for violations occurring after November 2, 2015, the penalty amounts incurred by employers will depend on when the penalty is assessed, as follows:

  • If the penalty was assessed after August 1, 2016 but on or before January 13, 2017, then the August 1, 2016 penalty level applies.
  • If the penalty was assessed after January 13, 2017 but on or before January 2, 2018, then the January 13, 2017 penalty level applies.
  • If the penalty was assessed after January 2, 2018, then the current penalty level applies.

The applicable January 2, 2018 penalty levels for violations of the Occupational Safety and Health Act of 1970 (OSH Act) are as follows:

  • Willful violations: $9,239 – 129,936 (up from $9,054 – $126,749 after January 13, 2017 and $8,908 – $124,709 after August 1, 2016)
  • Repeated violations: $129,936 (up from $126,749 after January 13, 2017 and $124,709 after August 1, 2016)
  • Serious violations: $12,934 (up from $12,675 after January 13, 2017 and $12,471 after August 1, 2016)
  • Other-than-serious violations: $12,934 (up from $12,675 after January 13, 2017 and $12,471 after August 1, 2016)
  • Failure to correct violations: $12,934 (up from $12,675 after January 13, 2017 and $12,471 after August 1, 2016)
  • Posting requirement violations: $12,934 (up from $12,675 after January 13, 2017 and $12,471 after August 1, 2016)

These increases apply to states with federal OSHA programs and states with OSHA-approved state plans. Violations occurring on or before November 2, 2015 are assessed at pre-August 1, 2016 levels.

Employers are encouraged to familiarize themselves with these increased penalties and consult counsel if they have questions about the penalty level applicable to a potential violation.

By Nicole Quinn-Gato

Originally posted by www.ThinkHR.com

Driving in to 2018 | Maryland Benefit Advisors

How Changes to the Mileage Reimbursement Rate and Qualified Transportation Benefits Will Impact Employers in 2018

On December 14, 2017, the Internal Revenue Service released the 2018 standard mileage rates used to calculate deductible costs of operating vehicles for business purposes. The rate increased by one cent  from 53.5 cents in 2017 to 54.5 cents in 2018. Employers who adopt the IRS standard mileage reimbursement rate in their employee handbook or other employment policy will need to update their reimbursement practices to reflect this change.

Additionally, as we previously reported, the tax plan signed into law by President Trump on December 22, 2017 impacts qualified transportation benefits (also known as commuter benefits). In the past, employers could deduct the amount they provide toward an employee’s qualified parking, transit passes, or vanpool expenses up to certain federal limits ($255 in 2017 and $260 in 2018) as a business expense. However, under the new tax law, employers can no longer deduct this expense beginning in 2018. Moreover, while employees can continue to exclude qualified parking and transit benefits from their income, qualified bicycle commuting expenses will no longer be excludable.

The tax law requires the Secretary of Treasury to issue regulations or other guidance as necessary to implement these changes; however, the law goes into effect for all amounts paid or incurred after December 31, 2017. Employers who have already budgeted for 2018 may need to review their assumptions to measure the impact of these taxable expenses.

Employers should consult tax or legal professionals to determine the best options for handling parking and other commuter policies should they want to change existing policies.

By Nicole Quinn-Gato

Originally published by www.ThinkHR.com

Employer Medicare Part D Notices Are Due Before October 15 | Maryland Benefit Advisors

Are you an employer that offers or provides group health coverage to your workers? Does your health plan cover outpatient prescription drugs—either as a medical claim or through a card system? If so, be sure to distribute your plan’s Medicare Part D notice before October 15.

Purpose
Medicare began offering “Part D” plans—optional prescription drug benefit plans sold by private insurance companies and HMOs—to Medicare beneficiaries many years ago. Persons may enroll in a Part D plan when they first become eligible for Medicare. If they wait too long, a “late enrollment” penalty amount is permanently added to the Part D plan premium cost when they do enroll. There is an exception, though, for individuals who are covered under an employer’s group health plan that provides “creditable” coverage. (“Creditable” means that group plan’s drug benefits are actuarially equivalent or better than the benefits required in a Part D plan.) In that case, the individual can delay enrolling for a Part D plan while he or she remains covered under the employer’s creditable plan. Medicare will waive the late enrollment premium penalty for individuals who enroll in a Part D plan after their initial eligibility date if they were covered by an employer’s creditable plan. To avoid the late enrollment penalty, there cannot be a gap longer than 62 days between the group plan and the Part D plan.

To help Medicare-eligible persons make informed decisions about whether and when to enroll in a Part D drug plan, they need to know if their employer’s group health plan provides creditable or noncreditable prescription drug coverage. That is the purpose of the federal requirement for employers to provide an annual notice (Employer’s Medicare Part D Notice) to all Medicare-eligible employees and spouses.

Employer Requirements

Federal law requires all employers that offer group health coverage including any outpatient prescription drug benefits to provide an annual notice to plan participants. The notice requirement applies regardless of the employer’s size or whether the group plan is insured or self-funded:

  • Determine whether your group health plan’s prescription drug coverage is “creditable” or “noncreditable” for the upcoming year (2018). If your plan is insured, the carrier/HMO will confirm “creditable” or “noncreditable” status. Keep a copy of the written confirmation for your records. For self-funded plans, the plan actuary will determine the plan’s status using guidance provided by the Centers for Medicare and Medicaid Services (CMS).
  • Distribute a Notice of Creditable Coverage or a Notice of Noncreditable Coverage, as applicable, to all group health plan participants who are or may become eligible for Medicare in the next year. “Participants” include covered employees and retirees (and spouses) and COBRA enrollees. Employers often do not know whether a particular participant may be eligible for Medicare due to age or disability. For convenience, many employers decide to distribute their notice to all participants regardless of Medicare status.
  • Notices must be distributed at least annually before October 15. Medicare holds its Part D enrollment period each year from October 15 to December 7, which is why it is important for group health plan participants to receive their employer’s notice before October 15.
  • Notices also may be required after October 15 for new enrollees and/or if the plan’s creditable versus noncreditable status changes.

Preparing the Notice(s)
Model notices are available on the CMS website. Start with the model notice and then fill in the blanks and variable items as needed for each group health plan. There are two versions: Notice of Creditable Coverage or Notice of Noncreditable Coverage and each is available in English and Spanish:

Employers who offer multiple group health plans options, such as PPOs, HDHPs, and HMOs, may use one notice if all options are creditable (or all are noncreditable). In this case, it is advisable to list the names of the various plan options so it is clear for the reader. Conversely, employers that offer a creditable plan and a noncreditable plan, such as a creditable HMO and a noncreditable HDHP, will need to prepare separate notices for the different plan participants.

Distributing the Notice(s)
You may distribute the notice by first-class mail to the employee’s home or work address. A separate notice for the employee’s spouse or family members is not required unless the employer has information that they live at different addresses.

The notice is intended to be a stand-alone document. It may be distributed at the same time as other plan materials, but it should be a separate document. If the notice is incorporated with other material (such as stapled items or in a booklet format), the notice must appear in 14-point font, be bolded, offset, or boxed, and placed on the first page. Alternatively, in this case, you can put a reference (in 14-point font, either bolded, offset, or boxed) on the first page telling the reader where to find the notice within the material. Here is suggested text from the CMS for the first page:

“If you (and/or your dependents) have Medicare or will become eligible for Medicare in the next 12 months, a federal law gives you more choices about your prescription drug coverage. Please see page XX for more details.”

Email distribution is allowed but only for employees who have regular access to email as an integral part of their job duties. Employees also must have access to a printer, be notified that a hard copy of the notice is available at no cost upon request, and be informed that they are responsible for sharing the notice with any Medicare-eligible family members who are enrolled in the employer’s group plan.

CMS Disclosure Requirement
Separate from the participant notice requirement, employers also must disclose to the CMS whether their group health plan provides creditable or noncreditable coverage. The plan sponsor (employer) must submit its annual disclosure to CMS within 60 days of the start of the plan year. For instance, for calendar-year group health plans, the employer must comply with this disclosure requirement by March 1.

Disclosure to CMS also is required within 30 days of termination of the prescription drug coverage or within 30 days of a change in the plan’s status as creditable coverage or noncreditable coverage.

The CMS online tool is the only method allowed for completing the required disclosure. From this link, follow the prompts to respond to a series of questions regarding the plan. The link is the same regardless of whether the employer’s plan provides creditable or noncreditable coverage. The entire process usually takes only 5 or 10 minutes to complete.

Originally published by www.thinkhr.com