IRS Raises HSA Limits for 2007

On November 9, 2006, the Internal Revenue Service released the new maximum contribution levels for Health Savings Accounts (HSAs), out-of-pocket spending limits for High Deductible Health Plans (HDHPs), and minimal deductible limits that must be used in conjunction with HSAs. These amounts have been indexed for cost-of-living adjustments for 2007 and are included on page 16 of Revenue Procedure 2006-53, which is available online at http://www.irs.gov/pub/irs-drop/rp-06-53.pdf The monthly limitation on tax deductibility for coverage under a HSA (as of the first day of such month) is 1/12 of the lesser of (a) the HDHP's annual deductible, or (b) the applicable maximum HSA contribution limit* shown on the chart below. The current limits and corresponding 2007 limits for self-only and family coverage's are compared in the chart below.

Women's Health and Cancer Rights Act: Employer Annual Notice Requirements

As we have reported in prior Federal Legislative Updates since 1998, written notice of coverage under the Women's Health and Cancer Rights Act (WHCRA) of 1998 must be given to plan participants:

- upon enrollment (either a qualifying notice created by the plan administrator or the "WHCRA Notice upon Enrollment in the Plan," which follows, can be used for this purpose), and

- annually thereafter (either the "WHCRA Notice upon Enrollment in the Plan," or the "WHRCA Model Annual Notice," which follows, or other qualifying notice language can be used for this purpose).

The following is a summary of the primary questions and issues surrounding the notice requirements under this act. Additional information is available online at http://www.dol.gov/ebsa/publications/whcra.html.

Q. What plans must provide the notices?

A. According to this law, as implemented by the U.S. Department of Labor (DOL), it is a requirement for employer-sponsored group health plans. Certain plans that are "church plans" or "governmental plans" may not be subject to this law. Plan administrators of these types of plans should contact their legal advisors or the DOL if they are uncertain if the WHCRA applies.

Q. When must the annual notice be delivered?

A. Anytime during the plan year. Some plans may find it convenient to include the notice with annual enrollment materials.

Q. Must the plan give the annual notice to persons who enrolled during the same plan yea, and thus already received notice?

A. No

Q. How must the notice be delivered?

A. Any reasonable method that ensures actual delivery of the notice to all participants can be used. This may include any of the following:

- In person delivery

- A special insert in a periodical delivered to employees

- First class mail

- Second or third class mail if return and forwarding postage is guaranteed ad address correction is requested

- Electronic notification

- A summary plan description (SPD)< a summary of material modification (SMM), or summary annual report (SAR)

Note: If you elect this last approach, keep in mind the WHCRA, the notices must contain the information provided in the model notices (see next page).

WHCRA Model Notice Options

For informational purposes only - please contact your attorney for specific compliance information.

Women's Health and Cancer Rights Act of 1998:

Model Annual Notice

"Do you know that your plan, as required by the Women's Health and Cancer Rights Act of 1998, provides benefits for masterctomy-related services including all stages of reconstruction and surgery to achieve symmetry between the breasts, prostheses, and complications resulting from a mastectomy, including lymphedema? Call your Plan Administrator [phone number here] for more information."

WHCRA Notice upon Enrollment in the Plan (it can also be used to meet annual notice requirements):

Notice Regarding the Women's Health and Cancer Rights Act of 1998

Under federal law, the WHCRA notice provided upon enrollment in the plan must state that for the covered worker or family member who is receiving mastectomy-related benefits, coverage will be provided in a manner determined in consultation with the attending physician and the patient, for:

- All stages of reconstruction of the breast on which the mastectomy was performed;

- Surgery and reconstruction of the other breast to produce a symmetrical appearance;

- Prostheses; and

- Treatment of physical complications at all stages of the masterctomy, including lymphedema.

These benefits may be subject only to deductibles and coinsurance limitations consistent with those established for other benefits under the plan or coverage.

Changes Affecting USERRA

The Veterans' Housing Opportunity and Benefits Improvement Act of 2006 (Public Law 109-233) was signed by the President. Effective June 15, 2006, the Uniformed Services Employment and Reemployment Rights Act (USERRA) was amended. Included in the law are provisions that impact group health provisions in two ways.

1. Service members who reinstate group medical, dental, vision, or prescription drug coverage are to be charged the same premium rate as similarly covered persons.

2. If coverage under the group medical, dental vision, or prescription drug plan terminates due to eligibility for medical or dental coverage under TRICARE (Chapter 55, Title 10) due to a delayed-effective-date active-duty order under Section 1074 (Chapter 55, Title 10), continuation and reinstatement provisions under USERRA will apply. USERRA reinstatement provisions will apply even if the active-duty order is canceled before active duty begins.

Medicare Modernization Act: Part D Annual Creditable Status Notices Mailed to Plan Sponsors for Distribution

The Medicare Prescription Drug, Improvement and Modernization Act (MMA) of 2003 requires employer sponsored group health plans that offer prescription drug coverage to disclose to their Medicare eligible employees whether or not the prescription drug coverage they provide is "creditable," meaning at least as generous as Medicare Part D. Additional information is available on-line at http:www.cms.hhs.gov/home/medicare.asp