Hamilton Headlines
March 21, 2016

CMS Hits Humana With $3.1 Million Penalty for Violations Found in Audit of Medicare Operations

The Centers for Medicare and Medicaid Services has levied a $3.1 million penalty against Humana, the single largest imposed against 129 organizations found in violation of Medicare Advantage and prescription drug plans in a 2015 audit.

Humana's civil penalty was based on an audit of its Medicare operations from April 20, 2015 through May 7, 2015, CMS said. Humana's systemic failure in complying with requirements related to Parts C and Part D resulted in enrollees experiencing inappropriate delays or denials in receiving covered benefits or increased out-of-pocket costs, CMS said.

Other organizations with fines at a million or above include: Medical Card System, $1.29 million; Envision Pharmaceutical Services, $2.59 million; Aetna, $1 million; and UnitedHealth Group, $2.1 million.

Concerns Persist Over Ransom Paid to Hospital Hackers

Last month, a major hospital agreed to pay $17,000 to a group of criminal hackers in order to regain control of its computer network. Actually, the hospital paid 40 bitcoins, the open source digital currency demanded by the
hackers .
In a statement shortly after the incident, Allen Stefanek, president of Hollywood Presbyterian Medical Center, defended the decision to play ball with the criminals.

"The quickest and most efficient way to restore our systems and administrative functions was to pay the ransom and obtain the decryption key," he said in a Feb. 17 statement. "In the best interest of restoring normal operations, we did this."

He further assured staff and patients that the malware had been cleared from its system.
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FAQ: What Are The Penalties For Not Getting Insurance?
If you're uninsured, you may have questions about possible penalties for not having coverage. The fine may be bigger than you expect. Here are the details:

Is everyone required to have health insurance or pay a fine?

Most people who can afford to buy health insurance but don't do so will face a penalty, sometimes called a "shared responsibility payment."  The requirement to have health insurance , which began in 2014, applies to adults and children alike, but there are exceptions for certain groups of people and those who are experiencing financial hardship.

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Employer Cannot Escape Claims That It Cut Employee Hours to Avoid ACA Requirements
A trial court recently refused to dismiss an ERISA lawsuit alleging that the employer intentionally interfered with employees' benefit rights by managing their work hours under 30 hours a week in order to avoid the requirement to offer health coverage or pay ACA assessments. This decision could encourage plaintiffs' attorneys to file lawsuits in similar circumstances. Employers considering workforce changes that could result in loss of health coverage can minimize their litigation risk by closely coordinating with legal counsel about actions and employee communications concerning those changes.

The Affordable Care Act (ACA) imposes employer shared responsibility requirements that are commonly referred to as the "employer mandate." Beginning in 2015, large employers were required to offer minimum essential coverage to full-time employees and their dependents, or pay a non-deductible assessment if at least one full-time employee enrolls in marketplace coverage and receives a premium tax credit or cost-sharing reduction. Even if they offer employees coverage, large employers may still be subject to an assessment if the coverage they offer to full-time employees is "unaffordable" or fails to provide minimum value. For these purposes, a full-time employee is one who, for a given calendar month, either averages at least 30 hours of service per week, or has worked at least 130 hours that month. The ACA does not impose coverage requirements for part-time employees, meaning those who average fewer than 30 hours per week or fewer than 130 hours in a month.

ERISA Section 510 prohibits employers from taking action - including a discharge, fine, suspension, expulsion, discipline or discrimination - against a participant or beneficiary for exercising a right under ERISA, and from interfering with a participant or beneficiary in attaining a benefit under an ERISA benefit plan (including a health plan).
Render Retirement Plan Audits Painless 

Employee retirement plans are heavily governed by the Department of Labor (DOL)-no surprise there. But before benefit plan sponsors prepare for a plan audit, take a step back and consider what triggers an audit, such as the number of eligible plan participants and what the DOL will be looking for when reviewing Form 5500 filings and audited financial statements, including deposit timeliness, compensation deferrals and employee education.

Why is a correct audit filing so important? The DOL relies on Form 5500 filings to ensure that plan reporting is in compliance with the Employee Retirement Income Security Act (ERISA). In addition, the DOL and the Department of Health and Human Services derive from Form 5500s data used to analyze retirement plan trends and benefits. Both agencies examine these filings closely and may ask companies numerous questions when reviewing them.

Required vs. Option
To prepare for an audit, the first thing plan sponsors should do is determine if they are required to get one. An audit is based in part on the number of employees who are eligible to participate in the plan at the beginning of the year. Generally, the magic number is 100. If an employer has at least that many eligible participants, including terminated employees with account balances still in a retirement plan, they should plan on an audit. If an audit is required, HR representatives should work with their independent accountant to file Form 5500. Late forms and those filed incorrectly are red flags for the DOL, though these are two of the easiest things to fix.
  -- ACA Reporting   
Forms 1095-C are due to employees by March 31, 2016 (instead of February 1, 2016).

Forms 1094-C and 1095-C to be filed with the IRS by May 31, 2016 (instead of February 29, 2016) or June 30, 2016 (instead of March 31, 2016), if filing electronically.

--D.C. Commuter Benefit
The January 1, 2016 effective date has received a 90-day grace period. Employers must have benefits in place by 4/1/2016.  

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Please note that Hamilton Insurance does not provide legal advice, and this does not constitute advice of any kind for any 
particular situation. Instead, this is intended as non-comprehensive general information serving as a starting point for further 
discussion. Please contact your tax and/or legal advisors for information about how these issues affect you.  
About Us
H amilton Insurance , a top ranked independent broker in the Washington DC/Metropolitan Area and the nation, has over 35 years of experience in providing insurance brokerage, risk management and employee benefit solutions. It represents a full suite of commercial, health & welfare, and personal insurance solutions, supported by risk compliance and group benefit administrative services. 

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