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  1. In June 2013 the Supreme Court issued a decision invalidating a section of DOMA, the law which limited federal recognition of marriages to opposite-sex couples.1  And so, applicable state law now determines the marital status of same-sex couples for federal purposes. Several federal agencies, including the IRS for purposes of the Tax Code2 and the DOL for purposes of ERISA,3 have determined that the applicable state is the state where the marriage was celebrated, not the state of residence. So for example, if a health plan document provides coverage is available to a “spouse” as recognized under federal law, that would include a same-sex spouse even if the spouse resides in a state that does not recognize the marriage.4  As a result of the Windsor decision, coverage for a same-sex spouse and the spouse’s dependents is now tax-free to the employee, and the IRS has issued special procedures for claiming refunds/adjustments of overpaid taxes in prior years.5  Read more here.
  2. In April 2013 the Supreme Court issued U.S. Airways v. McCutchen, holding that an ERISA plan’s clear terms regarding its subrogation/reimbursement rights will trump any contrary equitable doctrines (such as the “make whole” or “common fund” doctrines).6  If a plan document fails to address a particular issue (such as whether the plan pays a share of the injured person’s attorney’s fees), McCutchen allows equitable doctrines to fill the “gap.” Read more here.
  3. Beginning in 2013 taxable sponsors of health plans had to include retiree drug subsidy (“RDS”) payments in income. RDS payments are made by the Federal Government to those employers/plans which provide prescription drug coverage to Medicare-eligible retirees—after a rather long and involved CMS application process. One popular cost-saving alternative so far: Employer group waiver plans (” EGWP” (pronounced egg-whip)). An EGWP generally eliminates the CMS application process for the plan sponsor, leaving that to the pharmacy benefit manager or insurer (as applicable).
  4. Marijuana is now legal in Washington and Colorado, decriminalized in other states, and permitted for medical purposes in still others. However, health plans don’t have to cover marijuana, even with a doctor’s prescription.
  5. The DOL has updated its model COBRA election notice.7  The DOL’s changes primarily alert employees of the availability of individual Health Insurance Exchange coverage.8
  6. In January 2013 HHS issued a final rule on HIPAA privacy, security, enforcement, and breach notification.9  By September 23, 2013, plans should have updated their privacy procedures and policies; should have required business associates sign a business associate agreement (BAA) that has been updated for the final rule (plans have up to an additional year to update BAAs in place before January 24, 2013); and should have updated their privacy notice. (Exceptions apply.10)  Read more here.
  7. In May 2013 the agencies issued final regulations on the wellness program exemption from HIPAA’s nondiscrimination rules, effective for plan years beginning on or after January 1, 2014.11  The final regulations update the current rules and incorporate changes made by PPACA. Read more here.
  8. In November 2013 the agencies issued final regulations and a related set of FAQs implementing the Mental Health Parity and Addiction Equity Act (“MHPAEA”) of 2008. Among other things, the final regulations incorporate previously-issued FAQ guidance, modify and clarify the rules on nonquantitative treatment limitations, and clarify the interaction of MHPAEA and other federal laws (such as PPACA’s preventive care requirements).12  Read more here.

From all of us here at MMPL, your employee benefits law firm.

Not intended as legal advice.

  1.  U.S. v. Windsor, 133 S. Ct. 2675 (2013).
  2. See Rev. Rul. 2013-17.
  3. DOL Technical Release 2013-04.
  4. Of note, health plans are not required to offer coverage to spouses. However plans that cover spouses but exclude same-sex spouses now risk a claim the plan is discriminatory.
  5. See Rev. Rul. 2013-17, IRS Notice 2013-61, and IRS Notice 2014-1.
  6. U.S. Airways, Inc. v. McCutchen, 133 S. Ct. 1537 (2013).
  8. DOL Technical Release 2013-02.
  9. 78 FR 5565.
  10. For example, plans that maintain the privacy notice online must have posted the updated notice by 9/23/13 and included a copy in their next annual mailing to participants, and plans that do not maintain the notice online must have distributed the revised notice by 11/22/13. 45 C.F.R. § 164.520(c)(1)(v).
  12. 78 FR 68239.