Viewing posts from: October 2011

Benefits of Enhancing Employee Communications

Posted October 31, 2011 by Megan DiMartino

Effectively communicating an employee benefits package to potential and current employees is essential to attracting and retaining talented employees. That’s why AP Benefit Advisors creates customized communications packages, developed specifically for each client. Communicating a new employee benefits plan is extremely important, as is addressing issues as they arise throughout the year. Employees need a communications program that is clear, concise, and relevant to their needs and interests.

Benefits plan documents can be very confusing and complex.  The key is to simplify this information and put it in laymen’s terms, greatly increasing the odds that employees will understand their options and make informed decisions. If you’re only providing insurance carrier booklets, you may be missing an opportunity to better communicate your program, especially the features that help control costs. Effective communication is vital if you want to see a return on your group health benefit investments and retain top talent.

AP Benefit Advisors employs a fully-equipped, in-house graphics department, staffed with experienced designers and writers. These designers create visually appealing, easy-to-read employee benefits communication materials that adhere to your corporate branding standards. When employee communications break down, it can cost a company with respect to retention and potential legal fees. The impact on employees can be similarly detrimental. Through clear, concise dissemination of employee benefits programs, companies and employees prosper. As Benjamin Franklin always said, an ounce of prevention is worth a pound of cure.

IRS Releases 2012 COLA (Cost of Living Adjustments): 2012 401(k) limit increased; New Parking & Transit Limits.

Posted October 24, 2011 by Megan DiMartino

Traditionally the Internal Revenue Service provides revised retirement plan limits each year in by the 15th of October. For the second year in a row, the IRS was later than expected (Oct 20, 2011).  If you already printed your 2012 Benefit Guides then you need just a little bit of an update.  The limits are as follows:

IRS 401K Benefits Guide

For more information:

IRS Announces Pension Plan Limitations for 2012
IRS’ COLA Table (shows 2009 through 2012)
IRS Revenue Procedure 2011-52 (which lists inflation adjusted limits for the 2012 tax year), including:

Qualified transportation fringe benefits under Section 132 are:

  • $125 per month, reduced from $230 per month, for transportation in a commuter highway vehicle and any transit pass under IRC Section 132(f)(2)(A); and
  • $240 per month, increased from $230 per month, for qualified parking under IRC Section 132(f)(2)(B).

Modifications to Coverage

Posted October 20, 2011 by Megan DiMartino

If there is a material modification made to a plan, other than in connection with a renewal of coverage (i.e., for mid-year modifications), that would affect the content of the SBC, a Notice of Modifications must be used. A modification is “material” if alone, or in conjunction with other changes, it would be considered by an average participant to be an important change in covered benefits or other terms of coverage. It can be either an increase or decrease in benefits or coverage. The notice must be provided no later than 60 days before the changes become effective. This requirement is different from the Summary of Material Modifications (SMM) requirement under ERISA, which requires notice within 210 days after the close of the plan year in which the modification was adopted, or in the case of a material reduction in covered benefits, not later than 60 days after the date of adoption of the modification. The notice requirement may be satisfied either by a separate notice describing the material modification, or by providing an updated SBC reflecting the modification. The SBC can be drafted to comply with this notice requirement, as well as the SMM requirement under ERISA.

Guidance Issued on Summary of Benefits and Coverage

Posted October 13, 2011 by Megan DiMartino

The Affordable Care Act requires group health plans to provide a standardized 4-page summary of benefits beginning in 2012, and to provide updates to that summary no later than 60 days prior to the effective date of any changes made. By requiring coverage information in a standardized format, the reform allows consumers and plan participants to make direct comparisons between the coverage available under different policies or coverage options.

Proposed regulations were recently issued regarding the Summary of Benefits and Coverage (SBC), and guidance was also issued regarding a Uniform Glossary of Insurance Terms. The guidance addresses when, how, and to whom the SBC must be distributed and provides templates, instructions and related materials to assist with the SBC and Uniform Glossary. Several gaps were left in the guidance, and comments on the regulations are requested by October 21, 2011; thus, we can expect further guidance to be issued (although it is doubtful that they might be available before you go to print with your 2012 enrollment materials).

Employer Obligations under Medicare Part D

Posted October 7, 2011 by admin

Each year, Medicare beneficiaries are allowed to voluntarily enroll in a Medicare outpatient prescription drug program (“Medicare Part D”).  The law that authorizes this Medicare benefit also imposes an obligation on employers and plan sponsors that provide prescription drug coverage to Medicare beneficiaries.  Employers must disclose to all group members (members, retirees, spouses and dependents) who are eligible to enroll in Medicare Part D, whether the employer group coverage is “creditable prescription drug coverage” or “non-creditable prescription drug coverage.”

Prior deadline of Nov 15th is now Oct 15th

In prior plan years, the deadline for employers/plan sponsors to notify employees had been November 15th.  However, the deadline is now October 15, 2011. 

Clients of AP Benefit Advisors, LLC have been compliant with this standard in several ways, and, generally always during the first 60 days of each plan year—which means our clients need not worry whether the deadline to comply was 11/15 and is now 10/15.  For example, our clients that have calendar year plans generally distribute their Medicare D certificates of creditable coverage by the end of February (and that is well in advance of the 10/15 deadline). 

Note:  If you were to only send Medicare D certificates of creditable or non-creditable coverage by October 15th—you would be telling plan participants that the plan they’ve been on for the past ten (10) months is or isn’t creditable.  If it isn’t creditable – you’ve done your employee a great disservice (they’ll likely be charged higher Medicare D premiums as a “late entrant”).  While that information is required to be distributed and disclosed, it is interesting that CMS/HHS has never actually reconciled that these employees will likely be going through an open enrollment for their employer’s plan and will be selecting a new plan for 2012, and it is that plan’s Medicare-credibility that participants should be comparing to the one they are selecting by October 15th not the plan that they’ve had for the past ten (10) months.


For more information, including CMS model notices and guidance, visit the CMS website.

For historical background on this topic, please read our Compliance Chronicle from August of 2005:


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