First Quarter

FROM THE TOP OF THE TREE

With the acquisition of BenefitOne of America and our growing capabilities in the Human Resource, Benefit and Payroll outsourcing areas, we have renamed ourselves Mangrove Employer Services. We believe that the name Mangrove Employer Services better reflects our focus on the employer services marketplace. We are still a software company, but the distinction is that now we are not just a software company.

Along with our new name, we have several changes in our executive management team to announce. 

While I will continue to act as the Chief Executive Officer, Brian Meharry of BenefitOne has joined us as the new President and Chief Operations Officer.  For those of you who don't know Brian, we are pleased to put him in the limelight this quarter in a new "Spotlight" column.

Paul Zugay is now our Chief Information Officer. Paul is transitioning from his current role as Vice President of Consulting Services. Paul’s expertise in managing software development, HR and Payroll products, and quality assurance efforts will be a great asset to our information systems departments.

Bob Mills continues as  our Chief Finance Officer, bringing 20 years of significant payroll and financial analysis and leadership to his current role.

Jim McKenzie, also of BenefitOne, has joined us as our Chief Technology Officer. Jim brings over 20 years of experience in Information Technology and business services and brings his focus on continually improving technology infrastructure.

UPCOMING EVENTS

APA Conference and Tradeshow –

May 23-25, 2007, in Las Vegas at Bally’s Hotel. 
Come visit us at Booth 102.

SHRM Conference and Tradeshow –

Letter from the Top of the Tree

Upcoming Events

COBRA and HIPAA Notices

Spotlight

New IRS Guidance on Medical Reimbursements

New Newsletter Title Announced

By Wendy Drumwright,
Contracts and Compliance Manager

This article describes several of the most common notices required by either HIPAA or COBRA regulations. Please feel free to use this checklist as an aid to determine if your current plan notice procedures are within HIPAA or COBRA compliance. Each of these notices require proof that the materials were supplied to the applicable individuals.

By the Letters

COBRA – Consolidated Omnibus Budget Reconciliation Act of 1985

ERISA – Employee Retirement Income Security Act

FSA – Health Flexible Spending Arrangement

HIPAA – Health Insurance Portability and Accountablility Act of 1996

When to provide this notice:  Covered employees must have received this notice on 4/14/03 or 4/14/04 (depending on the plan) or at the time of the individual’s enrollment in the plan and again within 60 days after material change to the notice.  Plans  must also provide notice of availability of the privacy notice at least once every three years. 

q   COBRA Election Notice – The plan administrator must notify each qualified beneficiary losing coverage under the plan, as a result of a qualifying event, of his or her rights under COBRA (unless the notice of unavailability described below is provided).  An election form for continuation coverage must also be provided.

When to provide this notice:  The employer has 30 days to advise the COBRA administrator, who then has 14 days to issue the notice to each qualified beneficiary. 

q   Notice of Unavailability of COBRA Coverage – The plan administrator who determines that an individual who furnished a notice of Qualifying Event (QE), a notice of second Qualifying Event, or a notice of disability, is not entitled to COBRA coverage (or an extension of the maximum COBRA coverage period), must provide the individual with an explanation as to why he or she is not entitled to the requested coverage.

When to provide this notice:  The individual submitting the QE request is entitled to receive this notice within 14 days of the request. (Continued on Page 3.)

q   HIPAA Initial Notice – HIPAA portability regulations require group health plans provide potential enrollees with a description of their special enrollment rights.  In addition, a plan that has a preexisting condition exclusion (PCE) must inform potential enrollees of the existence and the terms of the PCE and provide an explanation of their HIPAA right to reduce the PCE period by demonstrating creditable coverage. 

When to provide this notice:  Employees should receive this notice at or before the time the employee is initially offered enrollment in the group health plan. 

q   COBRA General Notice – COBRA requires an initial notice of COBRA rights to be provided to all covered employees and their covered spouses.  There are 13 specific items that must be included in this notice.  Note: Employees and spouses may become covered at different times; when this occurs, separate notices must be provided to employee and spouse.  This notice was previously known and continues to have the “nickname” COBRA Initial Notice.   

When to provide this notice:  Covered employees and spouses must receive this notice within 90 days of coverage under the employer’s group health plan. 

q   HIPAA Privacy Notice – This notice describes how employee medical information may be used and disclosed by the plan, the individual’s rights in regards to privacy and the plan’s legal duties with respect to protected health information. A fully insured group health plan that has access to protected health information (other than summary health information and enrollment information) must be prepared to provide a privacy notice.  In addition, employers providing an FSA as part of their group health plan are required to provide this notice.

Spotlight

We are putting Mangrove President and Chief Operating Officer, Brian Meharry, in the spotlight this quarter.

(Continued from Page 2.)

q   HIPAA Certificate of Creditable Coverage – HIPAA requires group health plans and health insurers to issue certificates of creditable coverage (“HIPAA Certificates”) to all individuals who lose coverage under the plan.  HIPAA Certificates must be issued when regular coverage is lost; when COBRA coverage is lost; and when an individual requests a HIPAA Certificate while covered by the plan or within two years after losing coverage

When to provide this notice:  If the certificate is being provided because of a loss of coverage that is also a COBRA qualifying event, then it must be provided within the timeframe for delivering the COBRA election notice.  Other Certificates must be provided as soon as the plan, acting in a reasonable and prompt fashion, can provide them.

q   Summary Plan Description (SPD) – Private-sector, nongovernmental welfare benefit plans (which include group health plans) must distribute an SPD.  Although the SPD is considered an ERISA document, COBRA and HIPAA regulations require that the SPD disclose COBRA and HIPAA rights and obligations and include notice procedures in order to qualify as “reasonable procedures.”  We suggest the use of a qualified ERISA plan attorney for creation/review of the SPD.

When to provide this notice:  Within 90 days whenever employees and spouses become covered under the employer’s group health plan. 

q   Summary of Material Modification (SMM) – The SMM is another ERISA requirement that may impact COBRA or HIPAA notice procedures.  After an SPD has been provided to plan participants, changes may occur in the information required in the SPD.  Any “material” change, including HIPAA and COBRA procedural changes, must be reported to plan participants.  Plan administrators may report these changes through an SMM, which limits itself to describing the modification or change, saving the cost of reissuing the SPD. 

When to provide this notice:   Covered employees and their covered spouse receive this notice within 210 days after the end of the plan year in which a modification or change is adopted.  However, an SMM relating to a material reduction in covered services or benefits under a group health plan must be furnished not later than 60 days after the adoption of the reduction. Caution: There will often be times, depending on the amendment, when SMMs should be furnished well before the deadline or in advance of the effective date of the change.

Brian Meharry, President
and C.O.O.

Leadership

Passionate about the customer

Cares greatly about our associates

Fiscally responsible approach

Process-oriented

Open, honest and direct about desired results

Sports

Avid Toronto Maple Leaf and Tampa Bay Lightning fan

Huge Tampa Bay Buccaneers Fan

Enjoys playing and watching golf

By Lori Krucki, C.P.P.

q    2008:  With the new IRS ruling, after December 31, 2007, health FSA or HRA debit cards may not be used at any store, vendor or merchant that does not have healthcare-related merchant category codes unless the store, vendor or merchant has implemented an inventory information approval system.

q    2009:  By December 31, 2008, health FSA and HRA debit card may not be used at stores with the “drug stores and pharmacies” merchant category code unless:

• The store participates in the inventory information approval system as described in the IRS notice 2006-69, or

• On a store-location by store-location basis, 90% of the store’s gross receipts during the prior taxable year consisted of items tat qualify as §213(d) expenses.

New Newsletter Title Announced

We have announced the new name of the Mangrove newsletter. This is the first issue to be titled the Mangrove Monitor.  When Mangrove Benefit Services joined the Mangrove family, we wanted our newsletter to have a title that reflected more than just Tree's Company. 

Thanks to Elaine Casson of Mangrove Benefit Services for submitting the new name for our newsletter, and thanks to Becky DeBerry  for submitting the second place entry: The Mangrove Monitor. Elaine will be receiving a $25 gift certificate, and Becky will be receiving a Mangrove T-shirt.

For questions and comments, please email the chief editor directly at lkrucki@emangrove.com.
© 1997-2007, Mangrove Software, Inc., and Mangrove Employer Services, Inc. All rights reserved.

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