Chair's ColumnThis Saturday, at the Section’s Annual Membership Meeting in Chicago, I will turn over the Chair’s gavel to Greg Pemberton. Greg will be a fine Chair, ably assisted by your continuing and newly-elected members of the Governing Council of the Section, our Interest Group, Publications, Programs, other Member leadership and our Section staff. Thank you for the privilege of serving you this past year. As a member-driven, volunteer-led Section, I am proud of what we have accomplished this past year. I am looking forward to my continuing role with the Section to make it even more meaningful to our Members.
by J.A. (Tony) Patterson, Jr., Fulbright & Jaworski, L.L.P., Dallas, TX
Recent Rule Changes Likely Require Updates To Health & Cafeteria Plan Documents, Administration Forms, Communications and Procedures; Act Quickly To Make Needed Changes Before Upcoming Enrollment PeriodTime is getting short for employers and plan administrators to update their health plans and healthcare flexible spending plan documents, administrative forms, communications and practices to comply with changes to Federal regulations that are taking or have already taken effect this year. Since many of these changes impact on eligibility and enrollment, most employers and plan administrators will want to ensure the required updates are completed before their upcoming annual enrollment periods. Highlights of some of these changes include newly mandated required notifications regarding employer-provided prescription drug coverage due in November, changes to the rules applicable to flexible spending accounts in cafeteria plans under Internal Revenue Code Section 125, new guidance regarding the special enrollment and creditable coverage mandates of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), and new COBRA regulations applicable to post-November 26, 2004 plan years.
by Cynthia M. Stamer, P.C., Member, Glast, Phillips & Murray, P.C., Dallas, TX
Federal Tax Issues Related to Professional Courtesy and Cafeteria Discounts
by Joy Bode, Mike Watson and J.A. (“Tony”) Patterson, Jr., Fulbright & Jaworski, L.L.P.
Historically, many hospitals have provided discounts on medical services (“professional courtesy discounts”), and cafeteria meals (“cafeteria discounts”) to non-employee physicians on the hospital’s medical staff (“staff physicians”). Some time in the late 1980s and early 1990s, for various reasons, hospitals began discontinuing professional courtesy and cafeteria discounts. One of the driving forces in this change was the enactment of the Stark Law restrictions on physician self-referrals, which affected for-profit and tax-exempt hospitals and hospital systems alike (42 U.S.C. § 1395nn). During the late 1980s and early 1990s, the Internal Revenue Service (“IRS”) also weighed in on the topic of professional courtesy and cafeteria discounts with respect to tax-exempt hospitals and hospital systems. During the course of IRS audits of these exempt organizations ( “EOs”), the IRS often raised concerns about the taxability of discounts provided to physicians and the effect of such discounts on the EO’s tax-exempt status. Many of these EOs were forced as part of their settlements with the IRS to discontinue providing discounts to staff physicians. In addition, the IRS often required the EO to send Forms 1099 to physicians who received discounts during a number of previous years, treating such discounts as income. As a result of these audits, many, if not most, EOs discontinued providing cafeteria and professional courtesy discounts to staff physicians.
Interest Group Spotlight
Employee Benefits & Executive Compensation
The Employee Benefits & Executive Compensation Interest Group focuses on the rules governing health and other welfare benefit plans with particular emphasis on HIPAA, COBRA, Medicare Secondary Payor rules, and ERISA Title I rules, as well as executive compensation issues. The Interest Group examines the special problems that not-for-profit employers in the health care industry have in providing employee benefits to their employees. In addition, the Interest Group considers the application of ERISA concepts to various forms of managed health care, the impact of state health care initiatives on employer-sponsored health plans, and the ramifications of alternative workforces on an employer’s benefit plans. The Interest Group also participates in all activities of the ABA's Joint Committee of Employee Benefits, including the annual question and answer sessions with the federal government agencies regulating employee benefits.
The IG is led by Chair Linda E. Rosenzweig, Seyfarth Shaw LLP, Washington, DC and Vice Chairs Phyllis C. Borzi, O'Donoghue & O'Donoghue, Washington, DC; Gregory L. Needles, Morgan Lewis & Bockius LLP, Washington, DC and Christopher S. Sears, Indianapolis, IN.
If you would like to join the Interest Group, continue by clicking the following link: Health Law Section IG Sign-up Form.
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