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Health plans - design


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Physician's State Law Claim for Disability Benefits Preempted by ERISA
"[T]he court first had to determine that three disability insurance policies constituted an ERISA-governed benefit plan and that ERISA still controlled the plan even though the radiologist's employer was defunct by the time his claim arose.... Relying on Third Circuit precedent, the court held further that the funding could come from the employer, the employee, or both, and the payment of the premiums by Hershan, an employee, satisfied that requirement. In addition, the employer had participated in a meaningful way in creating or administering the plan, by enabling the employees to enjoy a 15% premium discount pursuant to the Salary Allotment Agreements and by handling payments for the premiums. This was enough to 'establish or maintain' a plan." [Hershan v. Unum Group Corp., No. 2:14-6120 (D.N.J. Feb. 5, 2015] (Williams Mullen)
[Opinion] Letter from American Academy of Actuaries to HHS About 2016 Premium Rate Filing Implications of King v. Burwell (PDF)
"If no action is taken to allow enrollees access to premium subsidies in the affected states, there are options to help mitigate the potential for inadequate 2016 premiums. One option is for HHS and states to allow issuers to submit two sets of contingent premium rates -- one set reflecting pricing assumptions that would be appropriate if premium tax credits continue to be available and the other reflecting pricing assumptions that would be appropriate if premium tax credits are no longer allowed.... Another option is to allow issuers in affected states more flexibility to revise and resubmit their rates[.]" (American Academy of Actuaries)
King v. Burwell: What a Subsidy Shutdown Could Mean for States
"In Florida alone, 1.6 million people have selected plans through the federal marketplace; in Texas, it's 1.2 million. The vast majority of these enrollees receive subsidies that would end after a Subsidy Shutdown, and even those with unsubsidized coverage would soon face higher premiums. As many enrollees stop paying their premiums, hospitals and doctors will go unpaid and illness will go untreated. If there is no federal solution to the Subsidy Shutdown, it will be up to governors to decide whether they are willing to take the steps necessary to establish a state marketplace and restore the subsidies." (The Commonwealth Fund)
High Rate of Shopping and Switching in Obamacare Plans Is a Good Sign
"More than half of people who bought insurance on HealthCare.gov last year explored their options before choosing a 2015 plan ... Of those 2.2 million who shopped, more than half switched to a new health plan. Those high rates of shopping and switching are unusual in public health insurance marketplaces." (The New York Times; subscription may be required)
Britain's Top Doctor Says National Health Service May Be Forced to Abandon Free Healthcare for All
"The NHS is 'not fit for the future' and unless it undergoes radical change it may be forced to abandon free healthcare for all, in the future, the service's top doctor has warned. Medical director of NHS England Professor Sir Bruce Keogh said the NHS must become far less reliant on hospitals and needed a 'complete transformation' of the way it operates.... 'This will open up a whole series of discussions about whether the NHS is fit for purpose, whether it's affordable, and whether the compact with the citizen of free healthcare for all is sustainable in the longer term.' " (Daily Mail)
[Guidance Overview] IRS Issues Initial 'Cadillac' Tax Guidance, Welcomes Comments on Various Aspects
"A wide array of coverage is considered applicable coverage under Section 4980I, including health flexible spending accounts, Archer medical savings accounts, health savings accounts, governmental plans, coverage for on-site medical clinics, retiree coverage and multiemployer plans, the notice said.... The agencies expect to include employer contributions to HSAs and Archer MSAs in applicable coverage, and exclude employee after-tax contributions to HSAs and Archer MSAs. In addition, Treasury and the IRS said they anticipate future proposed rules will exclude on-site medical clinics 'that offer only de minimis medical care to employees' from applicable coverage." (Bloomberg BNA)
How One Employer Drove Adoption of an HSA-Eligible Heath Plan to 50%
"With a technical workforce of over 3,800 employees in the United States, the Synopsys benefits team learned that engineers tend to think about health care spending in terms of cash management. Employees ask how much money needs to be allocated up front vs. monthly. When employees did the math, they understood that monies remaining in their HSA belong to them -- not the company -- and that they could build up their health savings over time." (Fidelity Investments)
Federal Employees Health Benefits (FEHB) Program: An Overview (PDF)
"The Federal Employees Health Benefits (FEHB) Program provides health insurance to federal employees, retirees, and their dependents. This report provides a general overview of FEHB. It describes the structure of FEHB, including eligibility for the program and coverage options available to enrollees, as well as premiums, benefits and cost sharing, and general financing of FEHB. The report also describes the role of the Office of Personnel Management (OPM) in administering the program." [CRS Report R43922, Feb. 25, 2015] (Congressional Research Service [CRS])
Self-Purchasers Are Confident, But Feel Unprepared for High Medical Costs
"Seventy percent of the [consumers who purchased their own health insurance] surveyed reported feeling financially secure, compared to 66% of the general population, and 74% of [such] self-purchasers expect their financial situation to improve in the next 12 months, compared to 69% of the general population. Furthermore, 93% of self-purchasers said they think more about the cost of their health insurance than they do about the cost of cable television, compared to 63% of the general population." (Wolters Kluwer Law & Business)
[Guidance Overview] Five Health Care Developments Important to Employers
"This [article addresses] these important health care issues confronting employers: [1] Potential ACA Changes Impacting Health Care Employers Under the New Congress; [2] Pending Supreme Court Cases Involving the Affordable Care Act; [3] Telemedicine and Employers: The New Frontier; [4] Wellness Programs Under EEOC Attack -- What to Do Now; and [5] Employer-Sponsored, On-Site Health Care." (Epstein Becker Green)
Insurance Markets in a Post-King v. Burwell World
"Insurers in the affected states would immediately find themselves in a situation where premiums revenues were insufficient to cover the health care expenses of the remaining enrollees, who would be far sicker on average than what insurers assumed when they set their premiums for 2015. This would trigger a classic adverse selection 'death spiral,' where insurers would seek very large premium increases, which in turn would cause the healthier of the remaining enrollees to drop coverage." (Henry J. Kaiser Family Foundation)
[Guidance Overview] OPM Finalizes Changes to ACA Multi-state Plan Program
"Among other changes (some of which are non-substantive and technical), the final regulations address benefits provided under the MSPP, the phased-in approach to coverage, application and contracting procedures, and compliance actions." (Practical Law Company)
Humana to Integrate Weight Watchers Programs Into Employer-Sponsored Health Plans
"Humana aims to help lower obesity rates by partnering with Weight Watchers, giving its members with employer-sponsored plans access to Weight Watchers weight loss programs that are integrated within Humana's own wellness program. The insurer called the partnership a 'first-of-its-kind program' that connects its members to either Weight Watchers' online or in-person weight loss programs for free for six months and then at a 'significant discount' afterward[.]" (FierceHealthPayer)
[Opinion] Letter from Sens. Hatch and Grassley to Treasury: Administration's Guidance on Cadillac Tax Caves to Unions
"The structure of this tax creates a draconian policy that will penalize countless Americans with a 40 percent excise tax, whether they are a shop foreman, a factory manager, or an office secretary. Now is not the time to divide workers against one another, creating different rules to protect favored constituencies from a poorly designed, drafted, and implemented law. Instead, we urge you to work with Congress to relieve all Americans from the burdens of the health care law." (U.S. Senate Committee on Finance)
[Opinion] State Expectations: Setting The Record Straight In King v. Burwell
"The King petitioners allege that the Internal Revenue Service overstepped its authority by issuing regulations authorizing residents of states with federally run exchanges to access premium tax credits. The petitioners claim that Congress intentionally limited access to premium tax credits to residents of state-based exchanges as a way to encourage states to run their own exchanges. In support, some state officials claim that they interpreted the law in this manner and that it impacted their state's decision not to operate a state-run exchange. These assertions, like their analysis of the statutory language, fall flat under any serious scrutiny, however." (Christine Monahan, Kevin Lucia, and Sabrina Corlette, in Health Affairs)
[Guidance Overview] ACA Countdown to Compliance for Employers (PDF)
135 pages. "52 weekly blog posts that comprise the series ... [which] appeared in the Mintz Levin Employment Matters Blog during 2014. Each of the posts addressed compliance issues affecting employers with a particular, though not exclusive, focus on that law's employer shared responsibility (a/k/a 'pay-or-play) rules. The end of the series coincided with the January 1, 2015 'go live' effective date of the new rules. The issues discussed week-to-week were generally gleaned from newly-issued guidance or developing problems, questions or concerns." (Mintz Levin)
Beware of Stop-Loss Coverage Gaps When Choosing a Self-Funded Major Medical Plan (PDF)
8 pages. "Several national and regional suppliers have developed self-funded arrangements consisting of administrative services, provider networks, and stop-loss coverage to protect against unusually large claims. Many of these arrangements are well constructed, and many of these suppliers are highly regarded. But there is often a significant lack of coordination between the general coverage terms of the underlying self-funded group health insurance plans (which are subject to the ACA's insurance market and other reforms) and the terms of the accompanying stop-loss coverage (which is not considered health insurance and therefore is not subject to the ACA). This gap in coverage could result in major unanticipated claims liability for the unwary firm that adopts a self-funded arrangement." (Mintz Levin)
[Guidance Overview] Minimum Value Requirement Means Health Plans Must Cover Physician and Hospital Services
"[CMS] says allowing these designs to be treated as providing [minimum value (MV)] not only would allow an employer to avoid the shared responsibility payment that the statute [imposes when ... not offering coverage], but would harm employees (particularly those with significant health risks) who would find such coverage unacceptable, by denying them access to a premium tax credit for individual coverage purchased through an exchange. It continues by saying that a plan that excludes substantial coverage for inpatient hospital and physician services is not a health plan in any meaningful sense and is contrary to the purpose of the MV requirement." (Thompson SmartHR Manager)
[Guidance Overview] IRS Issues Initial Cadillac Tax Guidance (PDF)
"This anticipated treatment of employee pre-tax contributions to HSAs will have a significant impact on HSA programs. If implemented as the agencies anticipate, it could mean many employer plans that provide for HSA contributions will be subject to the Cadillac tax as early as 2018, unless the employer limits the amount an employee can contribute on a pre-tax basis." (Buck Consultants at Xerox)
[Guidance Overview] IRS Issues Preliminary Guidance on Cadillac Tax
"The guidance addresses three main subjects under the Cadillac tax: [1] The types of coverage subject to the tax; [2] The method for determining the cost of that coverage; and [3] The dollar limit at which the tax begins to apply.... Significantly, the new notice does not address any delay in the effective date of the tax, which is scheduled to go into effect for taxable years beginning after December 31, 2017." (Ballard Spahr LLP)
[Guidance Overview] Beginning the Regulatory Conversation About the Cadillac Tax
"Under the approach to the rule that the IRS is considering, an employer would begin by aggregating all employees who are covered by a particular benefit package, such as a high- or low-option or HMO or PPO plan. Those groups would then be disaggregated into self-only and other-than-self-only coverage. Beyond this, the IRS is considering allowing (but not requiring) health plans to further disaggregate members either based on bona-fide occupation-related criteria (not including health status), or based on a limited number of specific criteria the IRS might list, such as number of individuals in unit, geographic location, or current and former employees. Comments on these different approaches are requested, although since rules applied are supposed to be similar to COBRA rules, the IRS suggests that if it makes changes to these rules it might change COBRA rules as well." (Timothy Jost, in Health Affairs)
[Guidance Overview] IRS Clarifies Prior Guidance on Premium Reimbursement Arrangements, Provides Limited Relief
"[T]he Agencies have reiterated and clarified their view that premium reimbursement arrangements tied directly to the purchase of individual insurance policies are employer group health plans that are subject to, and fail to meet, the ACA's market reforms (such as the preventive services and annual limits requirements). This is the case whether or not the reimbursements or payments are treated by an employer as pre-tax or after-tax to employees." (Proskauer's ERISA Practice Center)
Employers See Wellness Programs as Boosting Productivity, Performance
"More than 90 percent of business leaders say that promoting wellness can affect employee productivity and performance.... When business leaders were asked directly about the top organizational priorities influenced by employee health, they most often listed productivity and performance.... Most business leaders (57 percent) also said their organizations viewed health as an investment in human capital or as part of the organization's core business strategy. Less than a third saw investments in health primarily as a health care cost containment strategy, and fewer still as an expense." (Society for Human Resource Management [SHRM])
[Official Guidance] Text of IRS Notice 2015-16: Excise Tax on High Cost Employer-Sponsored Health Coverage (PDF)
26 pages. "This notice is intended to initiate and inform the process of developing regulatory guidance regarding the excise tax on high cost employer-sponsored health coverage under Section 4980I ... [which] applies to taxable years beginning after December 31, 2017. Under this provision, if the aggregate cost of 'applicable employer-sponsored coverage' ... provided to an employee exceeds a statutory dollar limit, which is revised annually, the excess is subject to a 40% excise tax. This notice describes potential approaches with regard to a number of issues under Section 4980I ... and invites comments ... The issues addressed in this notice primarily relate to [1] the definition of applicable coverage, [2] the determination of the cost of applicable coverage, and [3] the application of the annual statutory dollar limit to the cost of applicable coverage.... Treasury and IRS anticipate issuing another notice, before the publication of proposed regulations under Section 4980I, describing and inviting comments on potential approaches to a number of issues not addressed in this notice, including procedural issues relating to the calculation and assessment of the excise tax." (Internal Revenue Service [IRS])
[Guidance Overview] Small-Scale Excise Tax Relief for Small Employers
"The relief provided by Notice 2015-17 allows small employers only a short period of time (approximately 4-1/2 months) to continue the now disfavored method of contributing to the cost of their employees' health insurance coverage on a tax-favored basis.... [In] 2014 legislators made several inquiries challenging the September 2013 guidance, and introduced legislation that would permanently exempt stand-alone HRAs and EPPs offered by small business from the ACA market reforms.... As it is uncertain whether a permanent legislative solution will evolve, small employers should take advantage of the new compliance window to search for an alternative means of contributing to employee healthcare costs if they chose to do so." (Verrill Dana LLP)
[Guidance Overview] Administration Disallows Plans Without Hospital Coverage
"Plans lacking substantial coverage of hospital and physician services do not qualify as 'minimum value' coverage under the law and so do not shield employers from fines of $3,000 or more per worker, [HHS] said late Friday.... One way to certify a plan as minimum value is to plug its components -- benefits, deductibles and so forth -- into the official calculator. Many were shocked to learn that the calculator gave passing scores to plans with no inpatient hospital coverage. Now HHS is saying: Ignore the calculator. Large-employer plans must pay for substantial amounts of hospital care no matter what." (Kaiser Health News)
[Guidance Overview] Welcome Relief from Penalties for Medical Premium Reimbursement Arrangements
"The transition relief exempts employer payment plans from ... excise taxes [1] for 2014 for employers that are not 'applicable large employers' (ALEs) for 2014, and [2] for January 1 through June 30, 2015 for employers that are not ALEs for 2015. After June 30, 2015, all employers may be liable for excise taxes if they continue these 'employer payment plans' in effect.... The IRS transition relief exempts from the above excise taxes an arrangement that reimburses or pays for the premiums for individual medical insurance policies of 2% or more shareholders, until the later of the date further guidance is issued or December 31, 2015.... This transition relief does not apply to reimbursements or payments for the premiums for individual health insurance policies for employees of an S corporation who are not 2% or more shareholders." (McKenna Long & Aldridge LLP)
[Guidance Overview] Under FAQ Guidance, Non-EHB Supplemental Coverage May Qualify as Excepted Benefits
"The agencies noted that some insurers have been marketing single-benefit supplemental coverage as an excepted benefit. Thus, the FAQ provides needed clarification of how these products will be treated by the regulators -- but it also means that plan sponsors, insurers, and their advisors will need to be familiar with the various state EHB requirements because coverage will not qualify as an excepted benefit under this guidance if any benefit in the coverage is an EHB in the state where the coverage is marketed. For example, states may differ as to whether alternative treatments (such as chiropractic care or acupuncture) are included in EHB." (Thomson Reuters / EBIA)
[Guidance Overview] IRS Grants Relief for Small Employers, S Corporations, and Medicare/TRICARE Arrangements but Reiterates Excise Tax Risks of Paying Employees' Individual Insurance Premiums
"The IRS has gone out of its way to emphasize, repeatedly, the compliance problems and potential excise taxes posed by paying or reimbursing employees' individual insurance premiums (or reimbursing medical expenses other than through an integrated HRA). While the transitional relief provided here is welcome, the negative inference for employers not eligible for relief speaks volumes. The IRS expects employers with 50 or more FTEs to either discontinue employer payment plans or self-report their violations and pay excise taxes. And while the Notice refers to all of the relief as transitional, it does not specify any durational limit for the Medicare or TRICARE relief." (Thomson Reuters / EBIA)
Planning for the Year Ahead in Benefits
"Preparing for Employer Shared Responsibility tax reporting ... Reporting coverage for employees ... Reporting coverage for retirees and COBRA or other non-employees.... Qualifying offer and 98% offer methods ... New limited temporary small employer safe harbors for offering certain health insurance reimbursement accounts ... Recent retiree medical litigation following the Supreme Court's decision in M&G Polymers USA, LLC v. Tackett ... Evolving families and beneficiary designations." (Winstead PC)
[Guidance Overview] 2016 Benefit and Payment Final Rule, Consumer & Provider Provisions
"The preface notes that CMS has become aware of benefit designs that discourage enrollment based on age or health condition and that this is prohibited, even if the benefit design is based on a state's benchmark plan.... The final rule clarifies that health plans may refuse to count out-of-network charges toward cost-sharing limits but are not required to do so. Cost-sharing for out of network services does not count toward actuarial value calculations, however." (Timothy Jost, in Health Affairs)
[Guidance Overview] IRS Provides Penalty Relief for Employer Payment Plans Offered by Small Employers
"In a notable Q&A from last year, ... the IRS emphasized that employer payment plans were subject to $100/day excise taxes, which could total $36,500 per year, per employee. The Departments acknowledge in Notice 2015-17 that some employers who have offered health coverage through an employer payment plan may need additional time to adopt an alternative ... However, the transition relief window provided under the Notice (that is, through June 2015) is relatively short." (Practical Law Company)
[Official Guidance] Text of CMS Final Regs: Notice of Benefit and Payment Parameters for 2016
476 pages. "This final rule sets forth payment parameters and provisions related to the risk adjustment, reinsurance, and risk corridors programs; cost sharing parameters and cost-sharing reductions; and user fees for Federally-facilitated Exchanges. It also finalizes additional standards for the individual market annual open enrollment period for the 2016 benefit year, essential health benefits, qualified health plans, network adequacy, quality improvement strategies, the Small Business Health Options Program, guaranteed availability, guaranteed renewability, minimum essential coverage, the rate review program, the medical loss ratio program, and other related topics....

Using the same methodology as set forth in the 2014 Payment Notice and the HHS Notice of Benefit and Payment Parameters for 2015, we finalize a 2016 uniform reinsurance contribution rate of $27 annually per enrollee, and the 2016 uniform reinsurance payment parameters -- a $90,000 attachment point, a $250,000 reinsurance cap, and a 50 percent coinsurance rate. We are decreasing the attachment point for the 2015 benefit year from $70,000 to $45,000, while retaining the $250,000 reinsurance cap and a 50 percent coinsurance rate. In this rule, we also finalize the definition of 'common ownership' for purposes of determining whether a contributing entity uses a third-party administrator for core administrative functions. In addition, this final rule discusses the reinsurance contribution payment schedule and accompanying notifications. We also extend the good faith safe harbor for non-compliance with the HHS-operated risk adjustment and reinsurance data requirements through the 2015 calendar year. We are finalizing a clarification and a modification to the risk corridors program....

We also finalize several provisions related to cost sharing. First, we establish the premium adjustment percentage for 2016, which is used to set the rate of increase for several parameters detailed in the [ACA], including the maximum annual limitation on cost sharing for 2016. We establish the maximum annual limitations on cost sharing for the 2016 benefit year for cost-sharing reduction plan variations. For reconciliation of 2014 cost-sharing reductions, we are finalizing and expanding our proposal to permit issuers whose plan variations meet certain criteria to estimate the portion of claims attributable to non-essential health benefits to calculate cost-sharing reductions provided....

For 2016, we finalize a Federally-facilitated Exchange (FFE) user fee rate of 3.5 percent of premium, the same rate as for 2015....

In this final rule, we are finalizing a number of standards relating to essential health benefits (EHBs), including a definition of habilitative services, coverage of pediatric services, and coverage of prescription drugs. This final rule also provides examples of discriminatory plan designs and amends requirements for essential community providers (ECPs)." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])

[Guidance Overview] Text of CMS Fact Sheet: Benefit and Payment Parameters for 2016 (PDF)
5 pages. "The final HHS Notice of Benefit and Payment Parameters released today establishes key standards for issuers and Marketplaces for 2016. It includes payment parameters applicable to the 2016 benefit year, and proposes new standards to improve consumers' experience and ensure coverage is affordable and accessible. Today's final rule generally addresses coverage that will be available to consumers in 2016. Key policies in today's final rule include: Market Rules.... Eligibility, Enrollment, and Benefits ... Payment Parameters ... Other Provisions ... Good Faith Compliance Extension through 2015." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
[Official Guidance] Text of CMS Final 2016 Letter to Issuers in the Federally-Facilitated Marketplaces (PDF)
67 pages. "This Letter provides issuers seeking to offer qualified health plans (QHPs), including stand-alone dental plans (SADPs), in the Federally-facilitated Marketplace s (FFMs) or the Federally-facilitated Small Business Health Options Programs (FF-SHOPs) with operational and technical guidance to help them success fully participate in those Marketplaces in 2016." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
Sears Gave Its Workers More Health Care Choices -- and Here's What Happened
"In the first year after Sears moved its employees into a private health insurance exchange, workers signed up for health plans that looked like the ones they had before. The next year, they shopped based on the price of premiums. But in year three, something interested happened: They signed up for the plans that offered the best value. Now, Chief Human Resources Officer (CHRO) Dean Carter says Sears employees like the choices that a private exchange affords them -- and it would be very hard to reverse that. And it's saving the giant retailer a lot of money; in the first year alone, the company saved $38 million, he says." (The Advisory Board Company)
Defined Contribution Health Arrangements: The Finance Perspective
"Before transitioning to a DC arrangement, define objectives, weigh the multiyear implications, and ensure your approach aligns with the total rewards strategy and desired employee value proposition. If your primary objective is to de-risk the health benefit program or avoid the 2018 excise tax, a DC arrangement is not the right solution." (Towers Watson)
Text of Third Circuit Opinion: Continued Service Can Provide Sufficient Consideration for Promise of Lifetime Retiree Benefits (PDF)
"The Plan, whose stated 'purpose . . . [was] to reward [Campbell] for her loyal and continuous service to the Company,' required Diamond State or its successor [here, Sussex] to provide lifetime health-insurance benefits to Campbell and her husband at its 'sole cost and expense' upon Campbell's retirement from the Company.... In granting Sussex's motion for summary judgment, the District Court ruled that the Plan is unenforceable for lack of consideration because Campbell 'was not required to work for any additional period of time ... after the Plan was adopted' ... Even if Campbell could have retired immediately and still received health-insurance benefits, she did not indicate any present intent to do so at the time of the Plan's adoption.... Because a reasonable trier of fact could find that the consideration for the Plan took the form of Campbell's 'continuous services and loyalty' up until her actual date of retirement ... the District Court erred in granting Sussex summary judgment on this ground." [Campbell v. Sussex County Federal Credit Union, No. 13-4141 (3d Cir. Feb. 19, 2015)] (U.S. Court of Appeals for the Third Circuit)
[Official Guidance] Text of OPM Final Regs: Establishment of the Multi-State Plan Program for the Affordable Insurance Exchanges
69 pages. "The U.S. Office of Personnel Management (OPM) is issuing a final rule implementing modifications to the Multi-State Plan (MSP) Program based on the experience of the Program to date. OPM established the MSP Program pursuant to the [ACA]. This rule clarifies the approach used to enforce the applicable standards of the [ACA] with respect to health insurance issuers that contract with OPM to offer MSP options; amends MSP standards related to coverage area, benefits, and certain contracting provisions under section 1334 of the [ACA]; and makes non-substantive technical changes." (Office of Personnel Management [OPM])
[Guidance Overview] IRS Grants Limited Transition Relief to Small-Employer Premium Reimbursement Arrangements
"Although ALEs with 50 to 99 full-time employees (including full-time equivalents) may rely on a different transition rule to avoid any ACA 'play-or-pay' penalties during 2015, there is no similar relief in Notice 2015-17.... Note that this transition relief is limited not only in duration (i.e., only through June 30, 2015), but also in scope. It applies only to a small employer's reimbursement (or direct payment) of health premiums ... Small employers now have just over four months in which to wind down any impermissible premium-reimbursement arrangement. In its place, they may wish to adopt a plan through a SHOP Marketplace. Although individuals may enroll through a Marketplace during only annual or special enrollment periods, there is no such limitation on an employer's ability to adopt a plan through a SHOP." (Spencer Fane)
[Guidance Overview] IRS Provides Temporary Safe Harbor for Premium Reimbursement Arrangements
"Small employers and certain other plan sponsors can continue to reimburse individual premiums until July 1, without the threat of extreme penalties for offering coverage that does not comply with Affordable Care Act insurance mandates, under new guidance from the [IRS].... This stay on enforcement is good for 2014 and up to June 30, 2015. After July 1, 2015, employers previously enjoying this transition relief could be liable for the excise tax under Code Section 4980D." (Thompson SmartHR Manager)
2015 Survey on Retiree Health Care Strategies
"Nine out of 10 employers (89%) say retirement medical benefit security is somewhat to extremely important to their retirees. While plan sponsors want to honor their promises to their retirees, cost and risk concerns are influencing them to adjust their approach.... These factors (as well as the high cost of health care) are influencing employers to change their approach[:] ... [1] The accounting liability on their balance sheets (92%); [2] Ongoing administration and expense (90%); [3] ERISA obligations such as reporting, disclosure and fiduciary responsibilities (84%); [4] The absence of an efficient funding vehicle (54%)." (Towers Watson)
[Guidance Overview] IRS Offers Limited Transition Relief for Certain Premium Reimbursement Plans
"The main problem that employer payment plans have is that they generally constitute 'group health plans' for ACA purposes, but unless they are paired or 'integrated' with ACA-compliant group health coverage they fail to meet ACA market reform requirements, including the requirement to cover preventive care, and the prohibition on an annual dollar limits." (E is for ERISA)
[Guidance Overview] Chart of Disallowed Pay or Play Tactics (PDF)
4-page chart lists seven common plan design techniques that can trigger pay-or-play penalties. (E is for ERISA)
[Official Guidance] Text of CMS Final Rule: Basic Health Program -- Federal Funding Methodology for Program Year 2016
48 pages. "This document provides the methodology and data sources necessary to determine federal payment amounts made in program year 2016 to states that elect to establish a Basic Health Program under the [ACA] to offer health benefits coverage to low-income individuals otherwise eligible to purchase coverage through Affordable Insurance Exchanges.... [O]nce the final methodology has been published, we will only make modifications to the BHP funding methodology on a prospective basis with limited exceptions." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
[Guidance Overview] IRS Issues More Guidance on Premium Payment Arrangements
"The [IRS] continues to struggle with the question of how the [ACA] affects various arrangements through which employers attempt to pay premiums for employees to purchase health insurance coverage in the individual market.... On February 18, 2015, it released yet another guidance on this issue, this one focused on small employers.... The agencies have taken the position that employer payment plans are group health plans, and thus must comply with the ACA's market reforms. A group health plan must under these reforms cover at least preventive care and may not have annual dollar limits. A premium payment-only HRA or other payment arrangement that simply pays employee premiums does not comply with these requirements. An employer that offers such an arrangement, therefore, is subject to a fine of $100 per employee per day." (Timothy Jost, in Health Affairs)
Employers Should Disband Employee Weight Control Programs
"American corporations continue to expand wellness programs, which now reach an estimated 90% of workers in large organizations, yet no study has demonstrated that the main focus of these programs -- weight control -- has any positive effect. There is no published evidence that large-scale corporate attempts to control employee body weight through financial incentives and penalties have generated savings from long-term weight loss, or a reduction in inpatient admissions associated with obesity or even long-term weight loss itself.... Quite the contrary, overscreening and crash dieting can impact employee morale and even harm employee health." (American Journal of Managed Care)
[Opinion] Comments by 18 Employer Groups to HHS Urging Delay in Expansion of Small Group Market Definition (PDF)
"As employer organizations, we urge you to issue a two-year delay of the expansion of the small group market definition as soon as possible.... [This delay is needed to:] [1] preserve the intended timeline in the ACA that afforded businesses subject to the employer responsibility requirements two initial years of offering coverage in the large group market before being subject to the more extensive benefit and rating requirements in the small group market; [2] Protect the ability of employers to select from a broader array of coverage options; and [3] Mitigate the dramatic premium increases that will occur with the expansion." (U.S. Chamber of Commerce and 17 other employer organizations)
[Official Guidance] Text of IRS Notice 2015-17: Health Coverage Reimbursement Arrangements of Smaller Employers Get Relief from Sec. 4080D Excise Tax Through June 30, 2015 (PDF)
"This notice reiterates the conclusion in previous guidance addressing employer payment plans, including Notice 2013-54 ... that employer payment plans are group health plans that will fail to comply with the market reforms that apply to group health plans under the [ACA] ... This notice also provides transition relief from the assessment of excise tax under Internal Revenue Code Section 4980D for failure to satisfy market reforms in certain circumstances. The transition relief applies to employer healthcare arrangements that constitute [1] employer payment plans, as described in Notice 2013-54, if the plan is sponsored by an employer that is not an Applicable Large Employer (ALE) under Code Section 4980H(c)(2) ... [2] S corporation healthcare arrangements for 2-percent shareholder-employees; [3] Medicare premium reimbursement arrangements; and [4] TRICARE-related health reimbursement arrangements (HRAs). This notice also provides additional guidance on the tax treatment of employer payment plans.... [T]he excise tax under Code Section 4980D will not be asserted for any failure to satisfy the market reforms by employer payment plans that pay, or reimburse employees for individual health policy premiums or Medicare part B or Part D premiums [1] for 2014 for employers that are not ALEs for 2014, and [2] for January 1 through June 30, 2015 for employers that are not ALEs for 2015. After June 30, 2015, such employers may be liable for the Code section 4980D excise tax." (Internal Revenue Service [IRS])
[Guidance Overview] DOL and HHS Enforcement Activities Targeting Health Plans and Insurers (PDF)
7 pages. "[T]he ACA and MHPAEA's enforcement scheme splits regulatory authority between state governments and the federal government -- and even federal enforcement is split among three different agencies, depending on the type of health plan at issue. This tangled enforcement scheme runs the risk of overlapping enforcement actions that could impose significant and unnecessary compliance costs on plan sponsors and insurers. This article provides a high-level overview of how ACA and MHPAEA enforcement authority is allocated between the states and the federal government, and how (and when) three federal agencies -- [HHS, DOL and IRS] -- may enforce the ACA and MHPAEA. [The article also discusses] current enforcement activities by HHS and DOL against insurers and plan sponsors ... [and] offers suggestions on how insurers and plan sponsors can best prepare for ACA and MHPAEA audits." (Groom Law Group)
Views on Employment-Based Health Benefits: Findings from the 2014 Health and Voluntary Workplace Benefits Survey
"[H]ealth insurance in particular continues to be, by far, the most important employee benefit to workers. Most workers are satisfied with the health benefits they have now, although nearly one-third would change the mix of wages and health benefits, which may reflect an intensifying desire for real wage growth. Choice of health plans is important to workers, and they would like more choices, but most workers express confidence that their employers or unions have selected the best available health plan.... Individuals are not highly comfortable that they could use an objective rating system to choose health insurance nor are they extremely confident that a rating system could help them choose the best health insurance." (Employee Benefit Research Institute [EBRI])
Engaging Health Care Consumers: The Lowe's Experience
"In the early 2000s, to assist employees in managing chronic illnesses such as diabetes and other medical conditions and reduce overall health care costs, Lowe's became an early adopter of a disease management program managed by a health plan.... Lowe's quickly learned that third-party credibility was one of the most important things that mattered to employees, especially when it came to something as personal as health care. In retrospect, the results of Lowe's early disease management program aren't surprising." (Health Affairs)
Top Ten Employee Questions on Enrolling in Health Plans
"An analysis of the top 10 questions asked by full-time active employees who enrolled in health plans ... shows that when offered a meaningful choice of health plans on private exchanges, first-time enrollees need basic information about their plan choices and how health insurance works. This underscores the importance of employers and exchange providers offering education, decision support tools and personalized, expert advice to help employees choose the plans that are best for them and their families. Here are the top 10 questions employees asked[.]" (Towers Watson)
Even Insured Consumers Get Hit with Unexpectedly Large Medical Bills
"[M]any consumers who take pains to research which doctors and hospitals participate in their plans can still end up with huge bills. Sometimes, that's because they got incorrect or incomplete information from their insurer or health-care provider. Sometimes, it's because a physician has multiple offices, and not all are in network ... Sometimes, it's because a participating hospital relies on out-of-network doctors, including emergency room physicians, anesthesiologists and radiologists.... Efforts by doctors, hospitals and other health providers to charge patients for bills not covered by their insurers are called 'balance billing.' The problem pre-dates the federal health law and has long been among the top complaints filed with state insurance regulators." (Kaiser Health News)
More Employers Investigating Benefits of Private Exchanges
"47 percent of respondents have already implemented or are considering a private exchange for full-time employees by 2018, and 37 percent of respondents are doing the same for retirees.... [E]mployers remain committed to providing benefits to their full-time employees, with 96 percent of respondents saying they were very likely to offer coverage in 2016. That number is up from 77 percent in last year's survey and remains high over the near term, declining to 88 percent of respondents very likely to offer benefits in 2018.... 26 percent of respondents have implemented the public exchange for COBRA participants, and 11 percent have implemented for pre-65 retirees, both up from 6 percent in 2013." (The Institute for HealthCare Consumerism [IHCC])
2015 Workplace Wellness Trends Survey Results (PDF)
"More than half of all organizations (55%) have budgets devoted to wellness, and more than four in five offer some type of wellness initiative. Among organizations with wellness offerings, seven years is the average amount of time these efforts have been in place.... 59% are primarily offering wellness to invest in/increase worker health and engagement, while 41% aim to control/reduce health-related costs.... One in five organizations without a wellness budget expects to adopt a budget in the next two years.... The top barriers to wellness implementation are not enough time for workers to participate, dispersed worker populations and difficulty keeping momentum going." (International Foundation of Employee Benefit Plans [IFEBP])
Pressure Mounts to Overhaul Military Health Plans
"Total costs of pay and healthcare for active military members, retirees and veterans is around $417 billion a year, or more than 60 percent of the combined DOD/VA budget, according to retired major general Arnold Punaro, chairman of the Reserve Forces Policy Board, who recently warned that the DOD could 'turn into a benefits company that occasionally kills a terrorist.' " (Healthcare Payer News)
Union Plans Need to Look Ahead to 'Cadillac' Tax Despite Lack of Guidance
"Most employers are anxiously awaiting guidance on the tax, dubbed the 'Cadillac' tax, but collectively bargained plans are especially sensitive to the timing of the guidance's rollout because the contracts they are negotiating now could stretch to or past Jan. 1, 2018.... At a minimum ... employers should have the tax in the back of their minds when they are negotiating, and they may want to consider putting a clause in the contract that would allow them to reopen negotiations in 2017 once more guidance is out." (Bloomberg BNA)
Actuarial Model for Wellness
"The Society of Actuaries is pleased to make available research material that explores the current wellness environment. The project consisted of three phases: a literature search summarizing current research, a survey of the actuarial and vendor community, and interviews with researchers in the field." [Editor's note: page includes links to Literature Search; Survey Results; two Appendices; Researcher Interviews; and a Study Report.] (Society of Actuaries)
Figuring Out Whether a Doctor Is in Your Plan's Network Is Harder Than You Think
"Just because a medical group is in someone's provider network, consumers can't be confident that all the physicians in the medical group are also in network.... That situation might occur if some of the physicians in a medical group agreed to accept the rates negotiated with an insurer, but others did not... The physicians who didn't accept the network rate would be out-of-network for a patient, even if other members of the medical group were in network." (Kaiser Health News)

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