A Message from Yozell Associates | Compliance Update
02/09/2010
Dear Yozell Clients and Friends:
To say that 2009 was a year full of challenges is certainly an understatement. Many clients were faced with a business climate that resulted in difficult decisions impacting their employee benefit plans; contributions to 401k plans suspended, reductions in employer contributions toward medical premiums, employee lay-offs and the complexities related to COBRA subsidies.
2010 continues to present us with some of the highest medical increases in years and uncertainty relative to any national health care reform. (For an in-depth review of each of the major healthcare reform proposals we suggest you read the Kaiser Family Foundations’ side by side comparison tool found at: http://www.kff.org/healthreform/sidebyside.cfm ).
As a reminder and to assist you with some compliance issues we suggest you take a moment to review the following items.
Massachusetts Fair Share and Employer HIRD Reporting
All Massachusetts employers, with eleven of more full-time equivalent employees, are required to complete their Fair Share Contribution and Employer HIRD form for the quarter ending December 31, 2009. This must be completed within 45 days of the close of the quarter. Employers, who were notified of their failure or near failure of the Fair Share testing, were required to continue to file on a quarterly basis during 2009.
To complete and file your FSC and employer HIRD reports, visit the DUA website: https://fsc.detma.org/ .
Attached for your reference is the 2010 Employee HIRD form. You should begin using this form for all employees who have been offered your group health insurance but have declined coverage. You are required to keep these forms for three years.
In addition you should secure a signed 2010 HIRD form from all non-benefit eligible employees for whom you have offered to set-up a Section 125 pre-tax payroll option for their individual coverage purchased through the Commonwealth Connector.
Over-Age Dependent Tracking
Due to Massachusetts Health Care Reform, all fully insured health insurance policies provide for dependent coverage up to the lesser of age of 26 or two years after the parent provided at least 50% support. Because of this law, it is possible for a dependent to be enrolled on an insurance policy but not eligible for tax-free benefits. Therefore, employees who carry their over-aged dependents on a family policy may be subjected to imputed income and related Federal income taxes. In addition the insurance companies have discontinued tracking eligibility for these dependents and are expecting employers to terminate coverage when appropriate. We suggest you use the attached tracking and verification form that Yozell Associates developed in order to properly identify which overage dependents are still eligible and which employees should have imputed income added to their 2009 W-2.
According to the IRS, the imputed income should be equal to the fair market value of the insurance for each month the over-aged dependent was covered.
Massachusetts Data Security
As of March 1, 2010 Massachusetts’ Data Security law will take effect. Any business or employer receiving or possessing a residents’ personal private information, such as a social security number, checking account information, and employee payroll records must comply with this law.
Last October Yozell Associates held a seminar on this topic. If you need additional information on how to comply with this law please send an email to your Yozell Associates’ Account Manager.
COBRA Subsidy Extension As a follow up to our recent communication, this is a reminder that the ARRA COBRA subsidy program has been extend. Individuals, whose 9 months of subsidy terminated in December, are now eligible for an additional 6 months of subsidy. Former employees or AEI’s will need to be notified of this extension and the “transition period” in which to pay the COBRA subsidized premium before February 17, 2010. The Department of Labor has posted additional information and model notices on its website: http://www.dol.gov/ebsa/COBRAmodelnotice.html .
Additionally, any employee who is involuntarily terminated on or before February 28, 2010 will now be eligible for 15 months of COBRA subsidy.
FMLA and H1N1
For employers subject to FMLA regulations, The Department of Labor has issued additional guidance relative to coordinating and approving FMLA leave as it relates to illnesses from H1N1. We again suggest you visit the DOL website for additional information.
As you discuss your 2010 goals with your Yozell Associate Account Manager, we want to remind our clients about the Total Compensation Statements we make available to you as part of our services. This valuable communication tool can be a useful means to help employees focus on their “total compensation” provided by their employer which includes salary, benefits, time-off and other perks.
We hope you have found this information helpful and we look forward to providing you with updated guidance as it become available.
Best Regards,
Marijane Norris Geary  2010 Employee HIRD Form
 2010 Overage Dependent Form
2010 Overage Dependent Form Instructions
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