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From Spencer’s Benefits Reports: Following are recent health care questions that were submitted by subscribers and the answers from Spencer editors.
COBRA And Open Enrollment
Q: Can a COBRA continuee be given the option of choosing between two or more plan options if the options are offered at open enrollment?
A: COBRA beneficiaries generally have the same rights as active employees. Therefore, if active employees have an annual open enrollment, or if there is a special open enrollment period, then COBRA beneficiaries also must be given the same open enrollment opportunity.
Terminated Plans, 5500 Forms
Q: We have a welfare plan that adopted a resolution terminating the plan effective Dec. 31, 2008; however, claims were filed in 2008 and paid in early 2009. What is the deadline for a final Form 5500 for a welfare plan in this situation? Because this is a terminated plan, how are the participants with outstanding claims reported on the 5500?
A: According to the instructions to the Form 5500, a welfare plan cannot file a final Form 5500 if the plan still is liable to pay benefits for claims that were incurred prior to the termination date, but not yet paid. In this case, a final Form 5500 will be filed in 2010.
Participants with outstanding claims should be listed as participants. The instructions to the 5500 form indicate that an individual is not a participant only when both of the following have occurred:
Mental Health Parity Exemptions
Q: If an employer has a self-funded retiree Medicare carve out plan, is the carve-out plan exempt from the Mental Health Parity Act (MHPA)? Would the answer change if the carve-out plan only was the secondary payer for Medicare-eligible expenses?
A: The MHPA applies to all group health plans (with a small employer exception). Thus, if the carve-out plan is a group health plan and if it provides mental health benefits, it must comply with the MHPA.
Calling In Sick And HIPAA
Q: How do the HIPAA privacy rules affect an employer’s ability to communicate flu (including H1N1 virus) symptoms to employees? For example, if an employee calls in sick due to flu symptoms, may the employer tell employees who work in the same department as the sick employee?
A: This information likely is not protected by the HIPAA privacy rules.
One of the most confusing aspects of the privacy rules for employers is the determination of what information it holds is protected by the privacy rules. First, an employer that performs no covered functions is not a covered entity, and no information it maintains is protected by the privacy rules. This determination, however, is more difficult for the employer that is a covered entity (e.g., a self-funded plan maintained and administered by the employer).
In its capacity as a covered entity, all of the protected health information (PHI) maintained by an employer is protected by the privacy rules. As an employer, however, it becomes necessary to distinguish between employment records and PHI. This determination can be blurred when the medical information in question relates to an employee of the covered entity.
In order to dispel some of the confusion, it is important to understand that the definition of “protected health information” expressly excludes “employment records held by a covered entity in its role as an employer.” Further, the Department of Health and Human Services recognized that an employer is required to have certain medical information in its employment records in order to comply with its obligations under the Family and Medical Leave Act, the Americans with Disabilities Act, and other similar laws. In addition, an employer may require information relating to occupational injury, disability insurance eligibility, sick leave requests and justifications, drug screening results, workplace medical surveillance, and fitness-for-duty tests to be in its employee records.
The key determination turns on why the employer has the information. If the information was properly disclosed to the employer and maintained by that employer as part of an employment record, that information is not subject to the protections of the privacy rules. Conversely, if the employer maintains the information due to one or more of the covered functions it performs, such information constitutes PHI and is protected by the privacy rules in the hands of that employer. This analysis might result in the information in question being protected by the privacy rules in the hands of those portions of the employer that perform covered functions, and not protected by the privacy rules when it is in the possession of those portions of the employer that do not perform covered functions, including in the employment record of an employee. Although such a conclusion seems illogical, it is often the proper result under the privacy rules.
For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.
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