Short-Term Changes for Health Coverage Certificates and Transit Benefits

The American Recovery and Reinvestment Act of 2009 (ARRA), generally known as the economic stimulus package, will temporarily require employers to disregard breaks in healthcare coverage lasting more than 63 days when issuing certificates of creditable healthcare coverage.  The act also temporarily increases pre-tax transportation benefits though December 2010.

Under the Health Insurance Portability and Accountability Act (HIPAA), employers with group health plans or their plan administrators, must provide certificates of creditable coverage to employees and their qualifying dependents when group health coverage ends, disregarding any gaps in coverage of less than 63 days.  Effective February 17, 2009, the date the economic stimulus package was signed into law, employers must now disregard any breaks in coverage, including those of more than 63 days, for employees and their qualifying dependents that lost coverage between September 1, 2008, and February 17, 2009.  Employers who do not administer certificates of creditable coverage in-house should work with health plan providers or third-party administrators to send revised certificates to qualifying current and former employees as well as their qualifying dependents as soon as possible. Pre-tax transportation benefits have also been temporarily adjusted by the economic stimulus package.  The monthly limit for pre-tax transportation benefits, such as transit passes and/or vanpooling benefits under Code Section 132(f) of the Internal Revenue Service Code was temporarily increased from $120 per month to $230 beginning on March 1, 2009.  This temporary increase will continue through December 2010.  Because the increase cannot be implemented automatically, employers who offer this benefit must require employees who wish to take advantage of the temporary increase to submit new election forms.  The adjustment cannot be made retroactively, which forces many employers to push the start date to April 1, 2009.  The limit for qualified parking expenses remains at $230 per month. For other employer-related changes brought on by the American Recovery and Reinvestment Act of 2009, including changes related to the Consolidated Omnibus Budget Reconciliation Act (COBRA), immigration, payroll processing and executive compensation, read AGC's article Employer Adjustments Required by Economic Stimulus Package. For complete information on the economic stimulus package and its impact on the construction industry, visit www.agc.org/stimulus.