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[Guidance Overview]
Foreign Language Assistance Duties for SBCs and SPDs
"[For] SBCs distributed to participants in counties [in which, based on U.S. Census data, 10 percent or more of the population is literate only in the same non-English language], the employer (for a self-funded plan) or insurance carrier (for an insured plan) must do all of the following: Provide oral language services (such as a telephone customer assistance hotline) that include answering questions in Spanish and providing assistance with filing claims and appeals (including external review) in Spanish. Upon request, provide an SBC that has been translated to Spanish. Include, in the English-language version of the SBC, a prominently displayed statement in Spanish that clearly tells employees how to access the language services provided by the employer or carrier."
(E is for ERISA)
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Federal District Court Finds Blue Cross Blue Shield of Michigan Liable for Wrongfully Paying Itself Certain Fees (PDF)
The plaintiffs are two employers sponsoring self-insured health plans for which Blue Cross Blue Shield of Michigan provided claims administration services and health care provider network access under an Administrative Services Contract. "These cases are about certain fees that Blue Cross allocated to itself as additional administrative compensation.... Section 1106(b)(1) prohibits a fiduciary from 'deal[ing] with the assets of the plan in his own interest or for his own account.' This is plainly what Blue Cross did when it unilaterally determined the amount of Disputed Fees to keep as part of its administrative compensation and collected those fees from plan assets. Because Section 1106(b)(1) sets forth 'an absolute bar against self dealing' by a fiduciary, Blue Cross is liable." [Boroughs Corporation v. Blue Cross Blue Shield of Michigan, No. 11-12565 (E.D. Mich., Sept. 7, 2012)]
(U.S. District Court for the Eastern District of Michigan)
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Federal District Court Finds Michigan Tax as Applied to Self-Insured Health Plan Claims Is Not Preempted by ERISA (PDF)
"The [Michigan Health Insurance Claims Assessment Act] imposes an assessment of 1% on the value of all claims paid by every carrier or third party administrator for medical services that are rendered in Michigan to a resident of Michigan.... As defined in the Act, the word 'carrier' includes, inter alia, certain 'group health plan sponsor[s].... [This Court] concludes that the Act does not have an impermissible 'connection with' an ERISA plan. Because the Court has already concluded that the Act does not impermissibly 'refer to' an ERISA plan, it does not 'relate to' ERISA under either prong of the preemption analysis and is therefore not preempted under [ERISA section] 514(a)." [Self-Insurance Institute of America, Inc. v. Snyder, No. 11-15602 (E.D. Mich., Sept. 7, 2012)]
(U.S. District Court for the Eastern District of Michigan)
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Moderate Premium Increases For Employer-Sponsored Health Plans in 2012
"Even with the lingering effects of the recession, cost-sharing levels remained relatively stable in 2012. Also remaining stable was the rate at which employers offered coverage ... The average annual premiums in 2012 were $5,615 for single coverage and $15,745 for family coverage, an increase of 3 and 4 percent, respectively, from 2011. The percentage of firms offering health benefits, 61 percent, was similar to last year's, as was the percentage of workers at offering firms who were covered by their firm's health benefits, 62 percent."
(HealthAffairs)
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Rate Review Saves Estimated $1 Billion for Consumers
"Based on initial findings, the Rate Review Program and the 80/20 rule are helping to slow premium growth and have resulted in real savings to consumers across the country. To date, Americans have saved an estimated $1 billion on their health insurance premiums thanks to rate review. State-based Rate Review Programs were created or strengthened by the health care law. Additionally, 13 million Americans have benefitted from $1.1 billion in rebates made possible by the 80/20 rule. By holding insurance companies accountable, rate review and the Affordable Care Act's Medical Loss Ratio policy (or 80/20 rule) have yielded an estimated $2.1 billion in savings to consumers in one year."
(Healthcare.gov)
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Funding the Patient-Centered Outcomes Research Trust (PDF)
"Retiree-only plans, while exempt from many other provisions of the [ACA], are considered applicable self-insured plans subject to the CER Fee. ... Most, but not all, health FSAs will qualify as excepted benefits.... Plans with a calendar year policy year will file for each year beginning with 2012 and ending in 2018, since the 2019 policy year ends after October 1, 2019."
(Alston + Bird LLP)
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Reminder: Upcoming Health Care Reform Deadlines
"[Under the ACA,] new obligations are imposed on employers and group health plans with respect to the provision of a summary of benefits and coverage and W-2 reporting requirements. Beginning in 2013, moreover, employee salary reduction contributions to health flexible spending arrangements will be limited to $2,500 per year. [This] Alert highlights upcoming deadlines with respect to those obligations."
(Patterson Belknap Webb & Tyler LLP)
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Guidance on 90-day Waiting Periods for Group Health Plans
"Eligibility conditions based solely on the lapse of a time period cannot last more than 90 days. However, plans may continue to impose other eligibility conditions as long as they are not designed to avoid compliance with PPACA's 90-day waiting period limitation. The Notice provided ... examples of plan designs that will satisfy the 90-day waiting period limitation."
(Faegre Baker Daniels)
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The Price for Retail and Hospitality
"If you employ lots of low-paid, part-time employees, you can expect your company's healthcare costs to go up at a sharper rate than if you employ lots of well-compensated, full-time workers. That's according to a recent Mercer survey of 1,203 employers on how they expect the Patient Protection and Affordable Care Act to affect them. More than 60 percent of the employers expect the healthcare-reform law will result in some increase in cost, while one third of those expect cost increases of 5 percent or more. Nearly half the employers in industries with large part-time populations—retail and hospitality—expect PPACA to increase their healthcare costs by 3 percent or more in 2014, when many of the law's provisions go into effect."
(Human Resource Executive Online)
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Dreading Obamacare, CFOs Plan for Perils
"A combination of the continuing sluggish economy, the ceaseless upward spiral in health-care costs, and the impending creation of health exchanges as required by the law has more and more CFOs thinking about deep-sixing employee health benefits. "Insurance risk is an unknown, and when you're faced with health-care costs that are rising faster than other costs, it's a risk that every employer is going to analyze, all the way to paying the [$2,000-per-employee] penalty [for not offering coverage],' says Richard Ramos, CFO at Maritz, a $2 billion provider of employee motivation, incentive-travel, and customer-loyalty programs."
(CFO)
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Implications of Medicaid Expansion Decisions on Private Coverage (PDF)
"State and federal policymakers and regulators should consider several issues as they are making their Medicaid expansion decisions: Individual market premiums could increase in states that opt out of the Medicaid expansion, due to health status differences of new enrollees. Exchange premiums also may increase due to spreading fixed reinsurance subsidies over a larger enrollee population. Basic Health Program decisions by states, pending clarifications from HHS, can affect the risk profile of enrollees in an exchange. Employers may be at greater risk of penalties in states that don't expand Medicaid eligibility."
(American Academy of Actuaries' Pension Committee)
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IRS Adopts Safe Harbors to Determine Full-Time Employees for Employer Shared-Responsibility (Play or Pay) Purposes
"Employers in industries with highly variable workweeks or high employee turnover should find this guidance to be helpful in managing volatility in enrollment while reducing the risk of incurring the penalty. While the guidance is stated in very technical terms, several detailed examples illustrate how the measurement periods, stability periods, and administrative periods interact. Employers can rely on these safe harbors through the end of 2014—i.e., for measurement periods that begin in 2013 or 2014 and the associated stability periods (including stability periods ending after 2014)."
(Thomson Reuters / EBIA)
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Sixth Circuit Affirms That TPA Breached Fiduciary Duties by Using Plan Assets to Pay Its Expenses Instead of Claims
"[T]he Sixth Circuit agreed that the TPA was an ERISA fiduciary because it exercised control and authority over plan assets, controlling where the funds were deposited and how and when they were disbursed. As a fiduciary, the TPA had a duty to use plan assets solely in the interests of plan participants and beneficiaries and was prohibited from dealing with plan assets in its own interest or for its own account. Instead, the TPA had used plan assets for its own purposes in a 'classic case of self-dealing.'" [Guyan Int'l, Inc. v. Prof'l Benefits Adm'rs, Inc., 2012 WL 3553281 (6th Cir. 2012)]
(Thomson Reuters / EBIA)
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Agencies Issue Temporary Guidance on Health Care Reform's 90-Day Waiting Period Limitation
"While this guidance is certainly welcome, and will be useful for plans implementing design changes in order to comply with the new waiting period rules by 2014, it leaves important questions unanswered. Notably, it does not address the challenge that arises when a plan provides that coverage begins as of the first day of the month after the waiting period ends. Since, under the guidance, it appears that the leeway to begin coverage as of the first of the next month is limited to variable-hour employees, plans would be wise to strictly comply with the statutory language, under which the waiting period may not exceed 90 days (i.e., with no delay to the beginning of the following month)."
(Thomson Reuters / EBIA)
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Benefits in General; Executive Compensation
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Employer Costs for Employee Compensation During June 2012
"Private industry employers spent an average of $28.80 per hour worked for employee compensation in June 2012, the U.S. Bureau of Labor Statistics reported today. Wages and salaries averaged $20.27 per hour worked and accounted for 70.4 percent of these costs, while benefits averaged $8.52 and accounted for the remaining 29.6 percent. Total compensation costs for state and local government workers averaged $41.10 per hour worked in June 2012. Total compensation costs for civilian workers, which include private industry and state and local government workers, averaged $30.61 per hour worked in June 2012."
(U.S. Bureau of Labor Statistics)
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Can Lack of Access to Sick Leave Be Dangerous to Your Health?
"Battling the abuse—or supposed abuse—of sick leave has been an HR challenge for decades, but now a report suggests that not having a sick leave policy can be damaging to both employee health and organizational productivity. The report, from the U.S. Centers for Disease Control and Prevention's National Institute for Occupational Safety and Health indicates that workers with paid sick leave are 28 percent less likely to be the victims of non-fatal workplace injuries than those without such benefits available to them. Those in high-risk fields (e.g. construction, manufacturing) realize the greatest benefit."
(Human Resource Executive Online)
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Guidance Issued on Employee Expense Reimbursement Arrangements
"The IRS issued guidance on situations in which employers recharacterized wages as nontaxable reimbursements and whether they satisfied the business connection and other requirements to be treated as paid under an accountable plan under Sec. 62(c) (Rev. Rul. 2012-25). The revenue ruling covers four situations. In three of the four situations, the IRS ruled that the employer's payments were recharacterized wages that did not qualify as nontaxable reimbursements."
(Journal of Accountancy)
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Unsolicited and Informal ERISA Complaints May Be the Basis for ERISA Section 510 Retaliation Claims in the Seventh Circuit
"[T]he Seventh Circuit held that ERISA Section 510 protects from retaliation employees who lodge unsolicited, informal complaints regarding alleged violations of ERISA, in addition to those who make complaints or provide information in connection with formal proceedings such as claims procedures, administrative actions or court proceedings. In so holding, the Seventh Circuit joined the Fifth and Ninth Circuits Circuits and widened the split with the Second, Third, and Fourth Circuits." [George v. Junior Achievement of Central Indiana (7th Cir. No. 11-3291, Sept. 4, 2012)]
(Littler Mendelson LLC)
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Effective Employee Communication: The Benefits of Best Practices
"Employers spend millions of dollars to offer a benefit and sometimes a surprisingly small amount to ensure that employees understand and appreciate it. Communications—what you say, how you say it, when you say it, who you say it to—can make a world of difference in how employees or members feel and think about their benefits, workplace, and employer."
(Milliman)
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Press Releases
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