Client Alert: State Supreme Court Decision Creates Limited Tax Refund Opportunities

IRS Eagle

Taxpayers who filed as, or were included as a member of, a unitary business group could qualify for a refund following a decision by the Michigan Court of Appeals that the Michigan Supreme Court chose to let stand on January 24, 2017.

“We are not persuaded that the question presented should be reviewed,” said the court.

Left in place is the Michigan Court of Appeals decision in LaBelle Management, Inc. v Department of Treasury that provides a potential refund opportunity for taxpayers that filed as, or were included  as a member of, a unitary business group based on the Department’s interpretation of the constructive ownership rules contained in Revenue Administrative Bulletin (“RAB”) 2010-1.

In LaBelle, the Court of Appeals reversed a Michigan Court of Claims decision upholding the Department’s conclusion that two related entities should be treated as members of a unitary business group because Labelle “indirectly” owned the other entities. The forced combination was based, in part, on the Department’s interpretation of constructive ownership rules. Citing Revenue Administrative Bulletin 2010-1, the Court of Claims looked to “contextually analogous” provisions in the Internal Revenue Code to find that indirect ownership includes situations involving “constructive ownership”.

The Court of Appeals, in a “take-the-language-of-the-statute-seriously” opinion, took issue with the trial court’s interpretation of “indirect ownership” as used in the definition of a unitary business group under the Michigan Business Tax (MBT).  LaBelle challenged the Department’s reliance upon IRC Sec. 318 to define indirect ownership to include constructive ownership or ownership through attribution. The Court of Appeals found in favor of LaBelle, holding that indirect ownership as used in the MBT definition of a unitary business group means “ownership through an intermediary” while “constructive ownership” means “ownership as a result of a legal fiction.” “Indirect ownership and constructive ownership are two different concepts,” according to the Court of Appeals.

In reversing the lower court, the Court of Appeals opined that if the Department’s interpretation, were to be accepted, it would expand the definition of the term “unitary business group” beyond what the Legislature intended.  The end result being that none of the entities involved owned more than 50 percent of any other entity, through an intermediary or otherwise, thus, neither Labelle nor any of its related entities constituted a unitary business group.

Now, as a published decision, LaBelle is binding upon the Department. Taxpayers who filed unitary Michigan Business Tax returns or who are filing combined Corporate Income Tax returns based on the interpretation of the term “indirect” in RAB 2010-1 or RAB 2013-1, should consider reviewing whether the Court of Appeals’ holding in LaBelle might reduce their liability. Taxpayers should consider amending their unitary business group returns where appropriate to do so.  Under the Treasury’s all or none theory, taxpayers may qualify for the small business credit if they do not have to file unitary.

A word of caution, taxpayers should be aware of the impact of the statute of limitations.  Normally, a taxpayer has 4 years from the date that the return was due to claim for refund.  As the last MBT year for most taxpayers was 2011, most tax years are now closed (closing in 2016).  As with most things with tax there are a number of exceptions to the running of the statute of limitations.

However, following the Court of Appeals in Labelle, the Department took the unusual measure of filing a motion to stay the effect of the court’s published opinion until the Department had exhausted all of its appellate rights. The Court of Appeals granted the Department’s motion placing the binding effect of the decision in a sort-of limbo, until the Supreme Court’s recent denial of review.  Not to suggest anything sinister, but while the binding effect of the Labelle decision was stayed, the statute of limitations to amend returns and possibly make refund claims continued to run.  As a result, only a small handful of taxpayer may still have viable refund claims based on Labelle.

The control test under Michigan’s corporate Income Tax requires “direct or indirect” ownership.  In RAB 2013-1, the Department opined that “[i]indirect ownership includes ownership through attribution” and “an ownership interest is indirectly owned by a person when that person constructively owns such an interest.” As a result of the Labelle decision, the Department’s interpretation of indirect ownership for CIT purposes is questionable.

If you have any question about the Labelle decision, please contact Paul McCord.


Fraser Trebilcock attorney Paul McCord, PaulV. McCord has more than 20 years of tax litigation experience, including serving as a clerk on the U.S. Tax Court and as a judge of the Michigan Tax Tribunal. Paul has represented clients before the IRS, Michigan Department of Treasury, other state revenue departments and local units of government. He can be contacted at 517.377.0861 or pmccord@fraserlawfirm.com.

Client Alert/Reminder: Form W-2 Reporting Due / Disclosure Due to CMS for Medicare Part D

FB - FinalTreeUPCOMING DEADLINES: (1) FORM W-2 REPORTING; AND

(2) MEDICARE PART D NOTICES TO CMS

Reminder:  Form W-2 Reporting on Aggregate Cost of Employer Sponsored Coverage

Unless subject to an exemption, employers must report the aggregate cost of employer-sponsored health coverage provided in 2016 on their employees’ Form W-2 (Code DD in Box 12) issued in January 2017. Please see IRS Notice 2012-9 and our previous e-mail alerts for more information.

The following IRS link is helpful and includes a chart setting forth various types of coverage and whether reporting is required: http://www.irs.gov/Affordable-Care-Act/Form-W-2-Reporting-of-Employer-Sponsored-Health-Coverage.  Please note this is a summary only and Notice 2012-9 should also be consulted.

If you have questions regarding whether you or your particular benefits are subject to reporting, please feel free to contact us.

Deadline Coming Up for Calendar Year Plans to Submit Medicare Part D Notice to CMS

As you know, group health plans offering prescription drug coverage are required to disclose to all Part D-eligible individuals who are enrolled in or were seeking to enroll in the group health plan coverage whether such coverage was “actuarially equivalent,” i.e., creditable. (Coverage is creditable if its actuarial value equals or exceeds the actuarial value of standard prescription drug coverage under Part D.) This notice is required to be provided to all Part D eligible persons, including active employees, retirees, spouses, dependents and COBRA qualified beneficiaries.

The regulations also require group health plan sponsors with Part D eligible individuals to submit a similar notice to the Centers for Medicare and Medicaid Services (“CMS”).  Specifically, employers must electronically file these notices each year through the form supplied on the CMS website.

The filing deadline is 60 days following the first day of the plan year.  If you operate a calendar year plan, the deadline is the end of February.  If you operate a non-calendar year plan, please be sure to keep track of your deadline.

At a minimum, the Disclosure to CMS Form must be provided to CMS annually and upon the occurrence of certain other events including:

1) Within 60 days after the beginning date of the plan year for which disclosure is provided;
2) Within 30 days after termination of the prescription drug plan; and
3) Within 30 days after any change in creditable status of the prescription drug plan.

The Disclosure to CMS Form must be completed online at the CMS Creditable Coverage Disclosure to CMS Form web page at:

https://www.cms.gov/Medicare/Prescription-Drug-Coverage/CreditableCoverage/CCDisclosureForm.html

The online process is composed of the following three step process: (1) Enter the Disclosure Information; (2) Verify and Submit Disclosure Information; and (3) Receive Submission Confirmation.

The Disclosure to CMS Form requires employers to provide detailed information to CMS including but not limited to, the name of the entity offering coverage, whether the entity has any subsidiaries, the number of benefit options offered, the creditable coverage status of the options offered, the period covered by the Disclosure to CMS Form, the number of Part D eligible individuals, the date of the notice of creditable coverage, and any change in creditable coverage status.

For more information about this disclosure requirement (instructions for submitting the notice), please see the CMS website for updated guidance at:

https://www.cms.gov/Medicare/Prescription-Drug-Coverage/CreditableCoverage/CCDisclosure.html

As with the Part D Notices to Part D Medicare-eligible individuals, while nothing in the regulations prevents a third-party from submitting the notices (such as a TPA or insurer), ultimate responsibility falls on the plan sponsor.

 

This email serves solely as a general summary of the Form W-2 reporting requirements and CMS disclosure for Medicare Part D.

This correspondence is intended to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.

Questions? Contact us to learn more.


Elizabeth H. Latchana, Attorney Fraser TrebilcockElizabeth H. Latchana specializes in employee health and welfare benefits. Recognized for her outstanding legal work, in both 2018 and 2015, Beth was selected as “Lawyer of the Year” in Lansing for Employee Benefits (ERISA) Law by Best Lawyers, and in 2017 as one of the Top 30 “Women in the Law” by Michigan Lawyers Weekly. Contact her for more information on this reminder or other matters at 517.377.0826 or elatchana@fraserlawfirm.com.

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Client Alert: Estate and Gift Tax Limits Announced for 2017

TTrusts & Estates - Fraser Trebilcockhe IRS has issued the estate and gift tax limits for 2017 (Rev. Proc. 2016-55). For an estate of a person dying in 2017, the basic exclusion amount is $5,490,000 for determining the credit against federal estate tax. This means that for a person dying in 2017, no federal estate tax will be imposed if his or her gross estate is less than $5,490,000. Therefore, with proper estate planning, an individual could transfer up to $5,490,000, or a married couple could transfer up to $10,980,000, to their children without paying federal estate tax.  The basic exclusion amount  for 2017 was adjusted for inflation up from the 2016 amount of $5,450,000.

In 2017, the first $14,000 of gifts of a present interest made to any person is not included in the total amount of taxable gifts. For example, a person can gift up to $14,000 of a present interest from January to December 2017 without reporting the gift to the IRS, without using any lifetime gift tax exemption, and without paying gift tax. However, if you are a married couple wanting to make a similar gift, slightly different rules apply.  Gifts to a spouse who is a United States citizen are not restricted by this $14,000 limitation. For gifts to a spouse who is not a United States citizen, the first $149,000 of gifts of a present interest are not included in the total amount of taxable gifts that must be reported to the IRS.

Other gifts not restricted by the $14,000 limitation include qualified gifts paid directly to institutions for educational or medical purposes. A qualified gift would include direct payment to a college or university for another person’s tuition or direct payment to a hospital for another person’s medical bills.  The annual exclusion amount for gifts is periodically adjusted for inflation but adjustments do not happen every year. For example, the $14,000 exclusion amount for gifts for 2017 is the same as it was in 2016.

Stay tuned for updates on what tax changes may come out of the 115th United States Congress. It is expected that tax reform, in one shape of another, will happen. We will keep you up-to-date on changes that may impact your income, estate and gift taxes.


Teahan, Marlaine

For help understanding these estate and gift tax limits, or for reviewing your will or trust under these new tax limits, contact Marlaine C. Teahan, chair of Fraser Trebilcock’s Trusts and Estates Department. Marlaine can be reached at 517-377-0869 or mteahan@fraserlawfirm.com.

Employers Take Note – IRS Extends Deadline for 2016 ACA Information Reporting For Individuals!

 

FB - FinalTreeThe Internal Revenue Service (“IRS”) has extended the deadline for 2016 Information Reporting by employers (and other entities) to individuals under Internal Revenue Code sections 6055 and 6056 by just over one month.  However, the deadline for these entities to file with the Internal Revenue Service (IRS) remains the same.

IRS Notice 2016-70 extends the due dates for the following 2016 information reporting Forms from January 31, 2017 to March 2, 2017:

  • 2016 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage
  • 2016 Form 1095-B, Health Coverage

However, the due dates for filing these Forms and their Transmittals with the IRS remains unchanged.  Specifically, the due date for filing the following documents with the IRS is February 28, 2017; however, if filing electronically, the due date is March 31, 2017 (employers who are required to file 250 or more Forms must file electronically):

  • 2016 Form 1094-B, Transmittal of Health Coverage Information Returns, and the 2016 Form 1095-B, Health Coverage
  • 2016 Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, and the 2016 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage

As a result of these extensions, individuals might not receive a Form 1095-B or Form 1095-C by the time they file their 2016 tax returns.  In such case, IRS Notice 2016-70 explains that individual taxpayers may instead rely on other information received from their employers or other coverage providers for purposes of filing their tax returns and do not need to wait to receive Forms 1095-B and 1095-C before filing.  Once they do receive their forms, the individuals should keep it with their tax records. You can find the full Notice here.

Please note that no further extension beyond the March 2, 2017 deadline is allowed.  Therefore, this deadline for furnishing the Forms to individuals must be met.  However, additional extensions may still be available for filing these Forms with the IRS.

Background

As provided in previous Client Alerts, information reporting requirements are applicable under two Internal Revenue Code (“Code”) sections as follows:

  • Section 6055 for insurers, self-insuring employers, and certain other providers of minimum essential coverage; and
  • Section 6056 for applicable large employers.

By way of background, the IRS requires applicable large employers and sponsors of self-insured health plans to report on the health coverage offered and/or provided to individuals beginning calendar year 2015.  Although the reporting requirements extend to other entities that provide “minimum essential coverage” (such as health insurance issuers), this Client Alert focuses on the requirements imposed on employers.

Employers who are deemed applicable large employers, as well as employers of any size who offer self-funded health coverage, must carefully review and study these instructions, which set forth numerous details, definitions and indicator codes which must be used to complete the requisite forms.  The instructions address the “when, where and how” to file, extensions and waivers that may be available, how to file corrected returns, and potential relief from penalties imposed for incorrect or incomplete filing.

The IRS utilizes information from these returns to determine which individuals were offered minimum essential coverage, whether individuals were eligible for premium tax credits in the Marketplace, as well as to determine penalties to be imposed on employers under Pay or Play (Code section 4890H; Shared Responsibility for Employers Regarding Health Coverage, 26 CFR Parts 1, 54, and 301, 79 Fed. Reg. 8543 (Feb. 12, 2014)).   Due to the impact of proper reporting, a clear understanding of these forms and instructions is essential.

Code section 6056 applies to applicable large employers (generally employers with at least 50 full-time employees, including full-time equivalent employees).  Information with respect to each full-time employee (whether or not offered coverage) must be reported on Form 1095-C.  Transmittal Form 1094-C must accompany the Forms 1095-C; all the Forms 1095-C together with the Transmittal Form 1094-C constitute the Code section 6056 information return that is required to be filed with the IRS.  For applicable large employers who self-insure, there is a separate box to complete which incorporates the information required under Code section 6055.

Code section 6055 applies to employers of any size who self-insure.  Non-applicable large employers with self-funded plans must report their information on Form 1095-B, as well as on transmittal Form 1094-B.  All of the Forms 1095-B together with the Transmittal Form 1094-B constitute the Code section 6055 information return that is required to be filed with the IRS.  Again, if the employer who self-insures is also an applicable large employer, the employer will instead use Forms 1095-C and 1094-C, which include a section for self-insured plans.

Employers subject to these requirements must report in early 2017 for the entire 2016 calendar year.

Additionally, employers must provide informational statements to the individuals for whom they are reporting.  Form 1095-C or Form 1095-B (as applicable) may be used as this informational statement.

The links to the Final Forms and Instructions are below:

2016 Forms for Applicable Large Employers (Code Section 6056)

2016 Instructions for Forms 1094-C and 1095-C: click here.

Form 1095-C, Employer Provided Health Insurance Offer and Coverage: click here.

Form 1094-C, Transmittal of Employer Provided Health Insurance Offer and Coverage Information Returns: click here.

Additionally, the IRS has posted numerous Questions and Answers regarding Code section 6056 on its website, here.

2016 Forms for Employers who Self-Fund (Code Section 6055)

2016 Instructions for Forms 1094-B and 1095-B

Form 1095-B, Health Coverage

Form 1094-B, Transmittal of Health Coverage Information Returns

The IRS’ Questions and Answers regarding Code section 6055 can be found here.

Change in Forms for 2016

The changes to the 2016 forms are reflected in the above Instructions but are relatively minor in scope.  The most noteworthy changes are to Form 1094-C with the removal of the Line 22 box for “Qualifying Offer Method Transition Relief” as it was only applicable for 2015; as well as two new Line 14 codes (1J and 1K) added to Form 1095-C which are available to reflect conditional offers of coverage to an employee’s spouse. As explained in the instructions, a conditional offer of coverage to a spouse is “an offer of coverage that is subject to one or more reasonable, objective conditions (for example, an offer to cover an employee’s spouse only if the spouse is not eligible for coverage under Medicare or a group health plan sponsored by another employer).”  See 2016 Instructions for Forms 1094-C and 1095-C.

Penalties Imposed

Both sets of Instructions (for Forms 1094/1095-B and Forms 1094/1095-C) set forth the following penalty information for failure to comply with the information reporting requirements for 2016:

The penalty for failure to file a correct information return is $260 for each return for which the failure occurs, with the total penalty for a calendar year not to exceed $3,193,000.

The penalty for failure to provide a correct payee statement is $260 for each statement for which the failure occurs, with the total penalty for a calendar year not to exceed $3,193,000.

Special rules apply that increase the per-statement and total penalties if there is intentional disregard of the requirement to file the returns and furnish the required statements.

However, the IRS has continued the good faith transition relief from penalties for 2016.   Indeed, IRS Notice 2017-70 states:

Specifically, this notice extends transition relief from penalties under sections 6721 and 6722 to reporting entities that can show that they have made good-faith efforts to comply with the information-reporting requirements under sections 6055 and 6056 for 2016 (both for furnishing to individuals and for filing with the Service) for incorrect or incomplete information reported on the return or statement. This relief applies to missing and inaccurate taxpayer identification numbers and dates of birth, as well as other information required on the return or statement. No relief is provided in the case of reporting entities that do not make a good-faith effort to comply with the regulations or that fail to file an information return or furnish a statement by the due dates (as extended under the rules described above).

Thus, it is imperative to timely distribute and file the forms; otherwise penalties may ensue.

This correspondence is intended to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.

 

Questions? Contact us to learn more.


Elizabeth H. Latchana specializes in employee health and welfare benefits. Recognized for her outstanding legal work, she was selected as the 2015 “Lawyer of the Year” in Lansing for Employee Benefits (ERISA) Law by Best Lawyers. Contact her for more information on this reminder or other matters at 517.377.0826 or elatchana@fraserlawfirm.com.
Click HERE to sign up to receive email updates and alerts on matters related to Employee Benefits.

New Rules Make Preventative Care for Alzheimer’s, Diabetes More Accessible for Medicare Patients

Employee Benefits AlertNew rules for Medicare services are about to take effect that will give people greater access to preventative care. The Centers for Medicare & Medicaid (CMS) decided that, beginning January 1, 2017, Medicare will pay more for cognitive and behavioral assessments, diabetes prevention programs, and to patient-centered care for people living with multiple chronic conditions and cognitive impairment conditions, including Alzheimer’s disease.

CMS says the new payment rules are part of a push by the Administration to create a health-care system that emphasizes prevention and results in better care, smarter spending, and healthier people. The additional funding will go toward care coordination and patient-centered care, mental and behavioral health care, and cognitive impairment care assessment and planning.

Clinicians will also have the opportunity to be paid more for spending more time with patients. That extra time with physicians could be critically important for patients who have multiple chronic conditions, as older adults sometimes do.

For more information from CMS about the new rules, visit its website here and blog here.

Questions? Contact us to learn more.


Mysliwiec, Melisa

Fraser Trebilcock provides counsel on all matters relating to the legal planning for care and support of those needing Medicare and Medicaid. Attorney Melisa M. W. Mysliwiec focuses her work in the areas of Elder Law and Medicaid planning, estate planning, and trust and estate administration. She can be reached at mmysliwiec@fraserlawfirm.com or 616-301-0800. You can also click here to learn more about our Trusts & Estates practice.

Is Your Employer Group Health Plan Design Compliant with the Section 1557 Nondiscrimination Rules?

FB - FinalTreeAs an employer, you are likely subject to Title VII of the Civil Rights Act.  But did you know that your group health plan may also be subject to similar nondiscrimination rules?  Employers should carefully analyze whether and to what extent they must comply with Section 1557, which is the nondiscrimination section of the Affordable Care Act.  Similar to Title VII, it prohibits discrimination on the basis of race, color, national origin, sex, age, or disability; however, this law specifically regulates health programs and activities.

If you or your health plan are deemed a covered entity under Section 1557, you have some additional compliance measures to undertake, which include:

-Ensuring your group health plan offers compliant coverage (changes must be made by January 1, 2017)

-Posting appropriate notices within significant publications, on the premises, and on your website

-Ensuring proper grievance procedures are adopted and followed (if applicable)

Here are the questions you should be asking:

  • Does a covered entity exist?
  • If yes, will the employer be liable?
  • Does the employer’s group health plan offer compliant coverage?
  • Are the employer’s physical facilities compliant?
  • Are the proper notices included in significant publications and posted on the premises and websites?
  • Are the appropriate grievance procedures being followed?
  • If Section 1557 in not applicable, why should I care?

Covered Entities

While this is not a comprehensive review, please be aware that health programs or activities receiving federal funds must carefully scrutinize their responsibilities under Section 1557.  A “covered entity” is an entity that operates a health program or activity, any part of which receives Federal financial assistance.  The definitions of “health program or activity” and “federal financial assistance” are:

Health program or activity means the provision or administration of health related services, health-related insurance coverage, or other health related coverage, and the provision of assistance to individuals in obtaining health-related services or health-related insurance coverage. For an entity principally engaged in providing or administering health services or health insurance coverage or other health coverage, all of its operations are considered part of the health program or activity, except as specifically set forth otherwise in this part. Such entities include a hospital, health clinic, group health plan, health insurance issuer, physician’s practice, community health center, nursing facility, residential or community-based treatment facility, or other similar entity. A health program or activity also includes all of the operations of a State Medicaid program, a Children’s Health Insurance Program, and the Basic Health Program.”

Federal financial assistance. (1) Federal financial assistance means any grant, loan, credit, subsidy, contract (other than a procurement contract but including a contract of insurance), or any other arrangement by which the Federal government provides or otherwise makes available assistance in the form of: (i) Funds; (ii) Services of Federal personnel; or (iii) Real and personal property or any interest in or use of such property, including: (A) Transfers or leases of such property for less than fair market value or for reduced consideration; and (B) Proceeds from a subsequent transfer or lease of such property if the Federal share of its fair market value is not returned to the Federal government. (2) Federal financial assistance the Department provides or otherwise makes available includes Federal financial assistance that the Department plays a role in providing or administering, including all tax credits under Title I of the ACA, as well as payments, subsidies, or other funds extended by the Department to any entity providing health-related insurance coverage for payment to or on behalf of an individual obtaining health related insurance coverage from that entity or extended by the Department directly to such individual for payment to any entity providing health-related insurance coverage.”

If the employer operates a health program or activity and receives federal financial assistance, the employer must next determine if it can be held responsible for violations of Section 1557.

Employer Liability

Providing a health plan for employees and receiving federal financial assistance in some other capacity will not necessarily mean that the employer can be liable under Section 1557.  Instead, there are only three instances where employer liability is at issue for discrimination in employee health benefit programs.

A covered entity that provides an employee health benefit program to its employees and/or their dependents shall be liable for violations of this part in that employee health benefit program only when:

  • The entity is principally engaged in providing or administering health services, health insurance coverage, or other health coverage (such as hospitals, carriers, TPAs, etc);
  • The entity receives Federal financial assistance a primary objective of which is to fund the entity’s employee health benefit program (such as by receiving Retiree drug subsidies); or
  • The entity is not principally engaged in providing or administering health services, health insurance coverage, or other health coverage, but operates a health program or activity, which is not an employee health benefit program, that receives Federal financial assistance; except that the entity is liable under this part with regard to the provision or administration of employee health benefits only with respect to the employees in that health program or activity.

If the employer can be liable, it must ensure it offers compliant coverage, has disability accessible premises, posts the required notices, and follows grievance procedures (for employers with 15 or more employees).

Compliant Coverage, Notices & Grievance Procedures, and Physical Location Accessibility

If subject to Section 1557, the employer must ensure nondiscriminatory plan coverage is in effect by January 1, 2017.  Again, coverage cannot discriminate on the basis of race, color, national origin, sex, age, or disability; however, the law also specific requirements with regard to gender identity and transition exclusions and limitations.

Notices describing Section 1557 must be posted and must include taglines for at least the top 15 languages spoken in in the applicable state by individuals with limited English proficiency.

In a conspicuously-visible font size, the Notices must be posted:

  • In significant publications and significant communications targeted to beneficiaries, enrollees, applicants, and members of the public, (except for significant publications and significant communications that are small-sized, such as postcards and tri-fold brochures, which instead use a shorter notice with only 2 taglines);
  • In conspicuous physical locations where the entity interacts with the public (i.e., where other legal notices are posted for employees); and
  • In a conspicuous location on the covered entity’s Web site accessible from the home page of the covered entity’s Web site.

With respect to the Web site requirement, the Preamble provides the following additional information:

We stated that covered entities may satisfy the requirement to post the notice on the covered entity’s home page by including a link in a conspicuous location on the covered entity’s home page that immediately directs the individual to the content of the notice elsewhere on the Web site. Similarly, we stated with regard to the requirement to post taglines that covered entities can comply by posting ‘‘in language’’ Web links, which are links written in each of the 15 non-English languages posted conspicuously on the home page that direct the individual to the full text of the tagline indicating how the individual may obtain language assistance services. For instance, a tagline directing an individual to a Web site with the full text of a tagline written in Haitian Creole should appear as ‘‘Kreyo`l Ayisien’’ rather than ‘‘Haitian Creole.’’

Sample notices and procedures can be found within the regulations and on the government website:

For the final regulations click here: https://www.gpo.gov/fdsys/pkg/FR-2016-05-18/pdf/2016-11458.pdf

The notices and translated taglines are here: http://www.hhs.gov/civil-rights/for-individuals/section-1557/translated-resources/

FAQs can be found here: https://www.hhs.gov/sites/default/files/2016-05-13-section-1557-final-rule-external-faqs-508.pdf

The following link provides information on taglines: http://www.hhs.gov/civil-rights/for-individuals/section-1557/1557faqs/top15-languages/index.html

Finally, HHS has since listed the top 15 languages by state: https://www.hhs.gov/sites/default/files/resources-for-covered-entities-top-15-languages-list.pdf

Additionally, Section 1557 requires that physical locations be disability compliant, and the employer must adopt grievance procedures to handle Section 1557 complaints consistently.

Nondiscrimination Compliance with Health Plan Coverage Even if Section 1557 if Inapplicable

Please note that even if an employer is not subject to Section 1557, the Office for Civil Rights of the Department of Health and Human Services (OFR) may refer a discriminatory design to the EEOC for investigation.  Please see the Preamble to the regulations at https://www.gpo.gov/fdsys/pkg/FR-2016-05-18/pdf/2016-11458.pdf :

Where … the alleged discrimination relates to the benefit design of a self-insured plan—for example, where a plan excludes coverage for all health services related to gender transition—and where OCR has jurisdiction over a claim against an employer under Section 1557 because the employer falls under one of the categories in § 92.208, OCR will typically address the complaint against that employer.

As part of its enforcement authority, OCR may refer matters to other Federal agencies with jurisdiction over the entity. Where, for example, OCR lacks jurisdiction over an employer responsible for benefit design, OCR typically will refer or transfer the matter to the EEOC and allow that agency to address the matter.

Therefore, careful attention to Section 1557’s requirements is important for plan design regardless of direct employer liability under the law.

This correspondence is intended to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.

Questions? Contact us to learn more.


Elizabeth H. Latchana, Attorney Fraser TrebilcockElizabeth H. Latchana specializes in employee health and welfare benefits. Recognized for her outstanding legal work, in both 2018 and 2015, Beth was selected as “Lawyer of the Year” in Lansing for Employee Benefits (ERISA) Law by Best Lawyers, and in 2017 as one of the Top 30 “Women in the Law” by Michigan Lawyers Weekly. Contact her for more information on this reminder or other matters at 517.377.0826 or elatchana@fraserlawfirm.com.

Why Your Caretaker Agreement Should Be Medicaid-Compliant, Even If You’re Not on Medicaid

Trusts & Estates - Fraser TrebilcockUnder current Medicaid policy, what you don’t know about care contracts might actually hurt you.  The definition of what is considered a care contract under Medicaid policy is broad.  Currently, any arrangement under which an individual is paying for health care monitoring, medical treatment, securing hospitalization, visitation, entertainment, shopping, home help or other assistance with activities of daily living is considered a personal care contract.  Further, any arrangement which pays for expenses such as home/cottage/car repairs, property maintenance, property taxes, homeowner’s insurance, heat and utilities for the homestead or other real property of the client’s is considered a home care contract.  These are the types of things that allow individuals to age in place and remain in their homes as long as possible, as opposed to entering a nursing home.

The reason Medicaid’s care contract policy will harm those who don’t know about it is all payments made to caregivers for any of these types of services within 5 years of applying for Medicaid benefits will be considered a divestment for purposes of Medicaid eligibility unless a Medicaid-compliant caregiver contract was in place.  Divestments are defined as transfers for less than fair market value.  Divestments result in a penalty period during which Medicaid will not pay for an individual’s costs for long-term care services, home and community-based services, home help, and home health.

Most people do not anticipate entering a nursing home or needing long-term care Medicaid benefits.  Even so, they are expected to know when and if this will occur, and they need to know at least 5 years in advance so that they can take the necessary precautions with respect to personal care and home care contracts, or face penalty.  No one has a crystal ball that views 5 years out; therefore, the best practice is to establish Medicaid-compliant caretaker contracts for all personal care and home care contracts to ensure no penalty is assessed in the event that long-term care Medicaid is needed in the future.

Additionally, this policy applies equally to arrangements with both relatives (anyone related by blood, marriage or adoption) and non-relatives (including third-party commercial providers).

For a personal or home care agreement to be considered Medicaid-compliant (i.e. not be considered a transfer for less than fair market value [i.e. divestment] for purposes of Medicaid), each of the following must be met:

  1. The services must only be performed after a written legal contract/agreement has been executed between the client and provider.
  2. The contract/agreement must be dated, notarized, and signed by the provider and the client, either individually or by the client’s agent under a power of attorney, guardian, or conservator, provided that the person signing for the client is not the provider or the beneficiary of services.
  3. No services may be paid for until the services have been provided (there cannot be prospective payment for future expenses or services).
  4. At the time that services are received, the client cannot be residing in a nursing facility, adult foster care home (license or unlicensed), institution for mental diseases, inpatient hospital, or intermediate care facility for individuals with intellectual disabilities.
  5. At the time that services are received, the client cannot be eligible for home and community based wavier, home health, or home help.
  6. The contract/agreement must show the type, frequency and duration of such services being provided to the client and the amount of compensation being paid to the provider.
  7. Payment for companionship services is prohibited.
  8. At the time services are received, the services must have been recommended in writing and signed by the client’s physician as necessary to prevent the transfer of the client to a residential care or nursing facility.

Note, also, that there is a presumption that relatives who provide home and personal care services do so for love and affection only.  Payment for home and personal care services to relatives creates a rebuttable presumption that the payment was a transfer for less than fair market value (i.e. a divestment).  Therefore, even if a Medicaid-compliant caregiver contract is in place for services provided by a relative, if and when Medicaid is applied for, the Department of Health and Human Services will determine fair market value for such services by comparing the contract price to other area businesses which provide such services.  If the relative’s rate was greater, it will very likely be considered a divestment.  For this reason, it would be wise to compare a relative caretaker’s cost of services to other providers in the area in advance to be sure the rate is similar.  Additionally, it is recommended that the documentation gathered is retained in case fair market value is contested in the future.

Questions? Contact us to learn more.


Mysliwiec, Melisa

Fraser Trebilcock provides counsel on all matters relating to the legal planning for care and support of those needing Medicare and Medicaid. Attorney Melisa M. W. Mysliwiec focuses her work in the areas of Elder Law and Medicaid planning, estate planning, and trust and estate administration. She can be reached at mmysliwiec@fraserlawfirm.com or 616-301-0800. You can also click here to learn more about our Trusts & Estates practice.

 

US EPA Approves and Disapproves of Michigan’s Changes to the Inland Lakes & Streams and Wetland Protection Acts

EPAOn July 2, 2013, the Governor signed into law 2013 Public Act 98 which made some very significant changes to Michigan’s Inland Lakes & Streams and Wetlands Protection Acts which are known as “part 301” and “part 303,” respectively, of Michigan’s Natural Resources and Environmental Protection Act. The federal Clean Water Act required the United States Environmental Protection Agency (“USEPA”) to approve or disapprove those changes in the law. According to the Michigan Department of Environmental Quality, the failure of Michigan to make legislative changes to comply with the federal Clean Water Act would have resulted in the USEPA’s termination of Michigan’s authority to regulate wetlands which are subject to the federal law.

On July 5, 2013, the State of Michigan requested the USEPA to approve 2013 Public Act 98. On December 11, 2013, the USEPA conducted a public hearing in Lansing and received more than 200 comments about this Act at that hearing. The USEPA also received many written comments about this legislation.

On December 13, 2016, three years after it held the public hearing, the USEPA released the results of its review of this public act. It approved some of the changes and disapproved others. The USEPA’s publication of its findings did not say whether it was going to withdraw or not withdraw Michigan’s authority to regulate federally protected wetlands. Odds are it will not do so.

The USEPA approved the legislation which exempted one from the need to obtain a permit to maintain an agricultural drain as long as that maintenance did not change the drain’s location, depth and bottom width as of July 1, 2014 and as long as that work was done either by the landowner or pursuant to Michigan’s drain code of 1956. The USEPA also approved the legislation which describes and defines the “best management practices” for drain maintenance. However, the USEPA disapproved the legislation which would have allowed a landowner to replace a culvert without a permit from the MDEQ.

The USEPA disapproved the exemption from the permit requirement for provided controlled access for livestock crossing. It also approved the new definition of an agricultural drain which is a human-made conveyance of water that does not have continuous flow, flows primarily as a result of precipitation induced runoff, serves agricultural production and was constructed either before January 1, 1073 or was built in compliance with Michigan’s wetland protection act.

The USEPA disapproved of the Michigan law which would have allowed a landowner to construct a water treatment pond or storm water detention facility, construct a new drain in upland property to remove excess soil from agricultural lands, and engage in an agricultural soil and water conservation practice to enhance water quality without obtaining a permit from the MDEQ. The USEPA also disapproved of the law’s provision that an area which becomes contiguous to a water body created by commercial excavation for sand, gravel or mining activities is not subject to regulation under the amended Act.

The USEPA also disapproved of the Act’s definition of whether a wetland is “continuous” to the Great Lakes or an inland lake, river or stream; it also disapproved the Act’s statement that the MDEQ shall not consider an agricultural drain in determining whether a wetland is continuous to such a body of water. The USEPA disapproved of the Act’s provision that a drainage structure such as a culvert, ditch or channel is not a wetland.

The USEPA also approved some changes in the law which impose new requirements for blueberry farmers and approved most of the Act’s technical changes to the permitting process such as those pertaining the fees which the MDEQ can charge and the time the MDEQ should take to issue a permit.

It remains to be seen how Michigan’s Legislature, the MDEQ, the agricultural community and persons commonly described as “environmental activists” will respond to the USEPA’s approvals and disapprovals of parts of Michigan’s 2013 changes to the Inland Lakes & Streams and Wetland Protection Acts. Stay tuned.

Additional Resources:

Click HERE for a complete look at the USEPA’s decision for each PA 98 revision, as well as supporting documents and additional information provided by the government.

Click HERE for a look back at history of this legislation and the process which culminated in the passage of 2013 Public Act 98.

Questions? Contact us to learn more.


perry-everett-web-blogAttorney Michael H. Perry is a shareholder and previous President of Fraser Trebilcock with over 35 years of environmental and litigation experience. You can contact Mike at mperry@fraserlawfirm.com or 517.377.08846.

Scott D. Everett is the Director of Legislative Affairs for Fraser Consulting, a subsidiary of Fraser Trebilcock law firm that provides full-service lobbying assistance. You can reach Scott at severett@fraserlawfirm.com or 517.377.0839.

Free Program: Legal and Financial Planning for Alzheimer’s Disease

The diagnosis of Alzheimer’s disease makes planning for the future more important than ever. There are programs available that can help offset costs for families, but it’s crucial to have accurate information about legal and financial planning before making any major decisions.

Legal and Financial Planning for Alzheimer’s Disease is an interactive workshop where you will have a chance to learn about important legal and financial issues to consider, how to put plans in place, and how to access legal and financial resources near you. If you or someone you know is affected by Alzheimer’s disease or dementia, we invite you to join us at MSUFCU’s Farm Lane Branch for a free presentation with the Alzheimer’s Association.

Tuesday, December 13, 2016
MSUFCU Farm Lane Branch
4825 E. Mt. Hope Road
East Lansing, MI 48823
6:00 p.m. – 7:00 p.m.

CLICK HERE TO REGISTER

Topics covered will include:

  • Making legal plans that fit your needs
  • Legal documents you’ll need and what they mean for all of you
  • How to find legal and financial assistance
  • Practical strategies for making a long-term plan of care
  • Tax deductions and credits
  • Government programs that can help pay for care

stethoscope heart


Attorneys Paula J. Manderfield and Melisa M. W. Mysliwiec will present the workshop along with Fraser Trebilcock Marketing Director and current Alzheimer’s Association board member Julie Holton. Fraser Trebilcock is proud to present “Legal and Financial Planning for Alzheimer’s Disease” along with the Alzheimer’s Association. If you would like more information, go to alz.org or email 
marketing@fraserlawfirm.com.

Federal Court Enjoins New Overtime Pay Rules

Nine days before the December 1, 2016, effective date, a federal district court in Texas has issued a nationwide injunction against implementation of the United States Department of Labor’s new rules which would dramatically increase the salary thresholds for most workers exempt from the overtime pay requirement of the Federal Fair Labor Standards Act.  The injunction is a preliminary injunction, meaning that it is not a permanent injunction.  The court did state that the Plaintiffs, numerous state attorneys general, are likely to succeed in a final decision, and, therefore, a preliminary injunction preserving the status quo is warranted.

At this time, there is no news on whether the Department of Labor intends to pursue an emergency appeal of the preliminary injunction.  It is also unknown whether the new administration’s Labor Department and Justice Department will continue to defend the new regulation after the presidential inauguration.

The preliminary injunction does not forbid employers from adopting the new, higher salary thresholds voluntarily; employers have always been permitted to treat exempt employees as nonexempt for overtime purposes.  But for the time being at least, compliance with the new overtime pay thresholds will not be mandatory.

Read the Department of Labor’s overview of the new overtime regulations by clicking HERE.


For questions or further clarification regarding this issue, contact attorney Brandon W. Zuk at 517.377.0831 or bzuk@fraserlawfirm.com, or Aaron L. Davis at 517.377.0822 or adavis@fraserlawfirm.com

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