Medicare Coordination of Benefit Rules

Employers sponsoring group health plans that cover individuals enrolled in Medicare should understand Medicare’s “coordination of benefits” (COB) rules, which determine whether the group health plan or Medicare pays first on health care claims. The “primary payer” pays what it owes on a health care claim first. If the primary payer does not pay the health care claim in full, the claim is sent to the “secondary payer” to pay any remaining covered portion. The following chart is a visual guide which summarizes Medicare’s COB rules for employer-sponsored health plans.

Federal Youth Employment Laws

Early work experience can be a great opportunity for teenagers to learn important skills. Youth workers can also often be an integral part of an organization’s hiring plan, especially when filling seasonal positions. However, complying with federal and state youth employment laws can be difficult and isn’t always straightforward. During the summer months, we often field questions from our clients on the employment laws for youth. The following documents will assist you and your organization stay in compliance.

IRS & Treasury Guidance on Educational Assistance Programs

On June 17, 2024, the IRS & Treasury issued FAQs regarding the Educational Assistance Program, provided guidance to taxpayers ,and clarify the rules surrounding tax-fee educational assistance benefits for student loan payments. FS-2024-22

The DOL Overtime Rule Went Into Effect July 1, 2024

The new Department of Labor salary threshold for exempt employees went into effect July 1st. The new rule requires employers to pay exempt administrative, executive, professional, outside sales, and computer employees at least $844 a week and highly compensated employees at least $132,964 a year. Additional increases are scheduled to go into effect on January 1, 2025.

On June 28, a federal district court ruled that the State of Texas as an employer does not have to comply with the new salary thresholds. The order is limited to Texas because the state was the only party challenging the rule in that lawsuit. Other lawsuits remain pending, but employers must comply with the new rule unless or until a court strikes it down.

Preparation for Filing Form 5500 for Calendar Year Plans

As we approach the deadline for filing IRS (Internal Revenue Service) Form 5500, it is crucial for ERISA (Employee Retirement Income Security Act) plans with 100 or more participants as of the first day of the plan year to ensure compliance. The deadline for filing is the last day of the seventh month following the end of the plan year. For detailed guidance, refer to the IRS Form 5500 Corner.

Automatic Extension for Filing:

Employers can obtain an automatic extension to file Form 5500, Form 5500-SF, Form 5500-EZ, Form 8955-SSA, or Form 5330 by submitting IRS Form 5558. This extension allows filings up to the 15th day of the third month after the original due date.

Important Update on Electronic Filing:

Due to administrative issues within the IRS, electronic filing of Form 5558 via EFAST2 will be postponed until January 1, 2025. Until then, plan sponsors and administrators should continue to use the paper form 5558 to request an extension for filing Form 5500 series or Form 8955-SSA. This one-time extension grants up to 2 ½ months after the standard due date.

Key Points to Remember:

Eligibility – Plans with 100+ participants as of the first day of the plan year must file Form 5500.

Deadline – File by the last day of the seventh month following the end of the plan year.

Extension – Use IRS Form 5558 for an automatic extension up to the 15th day of the third month after the due date.

Temporary Measure – Use paper Form 5558 until January 1, 2025, due to delays in electronic filing implementation.

AI and the Law: Recent Developments and Implications

In Michigan, most companies and individuals currently operate in an environment largely free of AI-specific laws and regulations. However, this may soon change as the legal landscape begins to catch up. Those using or considering AI in their operations are increasingly subject to legislative and regulatory oversight from various jurisdictions and regulatory bodies.

Significant Laws, Regulations, and Guidance:

Blueprint for an AI Bill of Rights:

In October 2022, the White House Office of Science and Technology Policy (OSTP) proposed a set of principles known as the Blueprint for an AI Bill of Rights. This blueprint aims to protect the American public’s rights through five principles:

1. Safe and effective systems
2. Algorithmic discrimination protections
3. Data privacy
4. Notice and explanation
5. Human alternatives, consideration, and fallback

President Biden’s Executive Order on AI:

A year later, President Biden issues an executive order emphasizing responsible AI development. Key directives include:

• Rigorous evaluations of AI systems for safety and security
• Standardized testing procedures
• Addressing security risks
• Prioritizing equity and civil rights
• Enhancing privacy rights and protections
• Supporting research grant for innovation
• Establishing a National AI research resource

AI Risk Management Framework:

The National Institute of Standards and Technology (NIST) provides ongoing guidelines for managing AI risks through its AI Risk Management Framework. This framework addresses safety, trustworthiness, and evaluation of AI systems, aiding in AI governance and risk management.

EU’s Artificial Intelligence Act:

On March 13, 2024, the European Union passed the EU Artificial Intelligence Act, regulating AI comprehensively. It imposes stricter rules for higher-risk AI systems, particularly those impacting health, education, employment, and safety. This act aims to set global standards for future AI legislation.

Colorado Artificial Intelligence Act:

On May 17, 2024, Colorado enacted the Colorado Artificial Intelligence Act (CAIA), focusing on high-risk AI applications. It mandates transparency, accountability, risk assessments, and human oversight, requiring companies to disclose AI usage in consequential decisions.

Michigan AI Election Bill:

On November 30, 2023, Michigan enacted a law banning AI-generated deepfake political ads within 90 days of an election unless clearly disclosed. This early adoption signals Michigan’s intent to lead in AI regulation across multiple sectors.

Other States Engagement:

Beyond the states with enacted AI laws, seven others – New York, California, Washington, Texas, Louisiana, Illinois, and Connecticut – are actively reviewing comprehensive AI legislation addressing compliance, accountability, development, deployment and privacy.

Midyear Employment Law Trends

We are more than halfway through 2024! The midyear point is a great time for employers to evaluate their compliance with recent and upcoming employment laws. Understanding and responding to these trends will be essential for employers’ success for the remainder of 2024 and beyond. This Compliance Bulletin highlights some of the key employment law trends and challenges that employers will continue to face in 2024 and beyond.

Here is a guide for easy reference.

If you have questions or need help with any of these items, we’re here to help. Email us at .

CMS Preserves Creditable Coverage Simplified Determination Method in Final Part D Instructions for 2025

On April 1, 2024, the Centers for Medicare and Medicaid Services (CMS) issued Final Part D Redesign Program Instructions for calendar year 2025. The Final Program Instructions contain a detailed description of, and guidance related to, changes to the Part D benefit newly in place for calendar year 2025 made by the Inflation Reduction Act of 2022. This Legal Update explains further.

Question of the Month

Q. What steps can employers take to ensure compliance with the latest changes in family and medical leave laws?

A. Employers can ensure compliance by staying updated on federal and state regulations, reviewing and updating their leave policies regularly, and training HR staff on the latest legal requirements. Implementing robust tracking systems for leave requests and maintaining clear communication with employees about their rights and responsibilities under these laws is also crucial. Consulting with legal experts can help navigate complex compliance issues and avoid potential penalties.