Out-of-State Association Insurance Contracts: Did you know that health insurance sold to a Maryland resident that is issued or delivered to an association out-of-state must now be accompanied by certain disclosures to the applicant? A carrier must disclose that coverage is predicated on membership in the association, and that membership costs are in addition to the cost of the health care premium. A carrier also must list the specific Maryland mandated benefits that are not included in the out-of-state contract, and inform the applicant that he/she may purchase an individual health benefit plan with those mandated benefits from a carrier licensed in Maryland. Carriers offering out-of-state contracts must inform applicants that the terms and conditions of such contracts are not regulated by Maryland. The new regulations apply to all out-of-state contracts issued, delivered or renewed after October 1, 2009.
Section 409A Corrections: Did you know that the Internal Revenue Service recently issued new guidance that allows for the correction of deferred compensation plans that do not comply with Section 409A of the Internal Revenue Code? Deferred income under a non-compliant plan must be included in a taxpayer's current income, and such income is subject to an additional 20% tax and interest. The new guidance permits non-complying plans to be brought into compliance with limited, or in some cases, no current income inclusion or additional taxes, provided the plans are corrected by December 31, 2010.