Health & Welfare Plans Newsletter

March 5, 2015

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Milliman
in TX

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Hessel & Associates
in IL

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DC Retirement Board
in DC

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Ameritas
in CT, MA, ME, NE, NH, NY, RI, VT

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Bankers Trust Company
in IA

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Bankers Trust Company
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Transamerica Retirement Solutions
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Verisight
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Employee Fiduciary
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Webcasts and Conferences

Retirement Plan Issues for U.S. Territories - U.S. Virgin Islands
RECORDED
(IRS [Internal Revenue Service])

ACA Play-or-Pay and Minimum Essential Coverage (MEC) Reporting
March 12, 2015 WEBCAST
(Mercer)

FMLA Master Class for Florida Employers: Overcome Compliance and Employee Leave Challenges
March 12, 2015 in FL
(HRhero.com)

Legislative Update: Retirement Plans
March 26, 2015 WEBCAST
(TRI-AD)

Professional Standards/Ethical Dilemmas Seminar
April 12, 2015 in DC
(Conference of Consulting Actuaries)

HIPAA Privacy & Security
April 17, 2015 in OR
(Thomson Reuters / EBIA)

COBRA Compliance for Group Health Plans
April 17, 2015 in OR
(Thomson Reuters / EBIA)

View All Webcasts and Conferences



[Guidance Overview]

New Out-Of-Pocket Maximum Rule Is 'Embedded' in HHS Preamble
"This embedded rule means that plans (including self-funded plans) will now have to have embedded out-of-pocket limits for each individual covered under family coverage.... The preamble provides that the embedded out-of-pocket limit applies to all plans. Sponsors of high deductible plans (HDHPs) that are intended to be compatible with health savings accounts (HSAs) should note that the out-of-pocket limits set by the IRS for HSA compatible HDHPs are lower than the limits set by HHS for Affordable Care Act purposes.... It is not entirely clear whether the clarification applies for 2015 plan years, which are now underway, or to 2016 and later plan years." (Benefits Bryan Cave)  


[Advert.]

Ready for ACA Reporting? Join our free web briefing on March 12!

Sponsored by Mercer Select

With a user-friendly website, daily emails, and regular web briefings, Mercer Select members stay informed about health, retirement, and other key benefit, comp and HR issues. Register for a free web briefing on ACA play-or-pay and MEC reporting on Mar. 12 at 1 pm ET.



[Guidance Overview]

IRS Health Insurance Provider Fee News for the 2015 Reporting Season (PDF)
Topics include: a list of six key dates in 2015, a reminder about e-filing of the Form 8963, a link to additional resources, and how to contact an Insurance Provider Fee (IPF) analyst at the IRS. (Internal Revenue Service [IRS])  

[Guidance Overview]

IRS Releases First Guidance on ACA's 'Cadillac Tax'
"[IRS Notice 2015-16] offers a number of initial ideas and proposed approaches on how various Excise Tax issues may be resolved. The Notice also requests comments from practitioners on specific parts of the Excise Tax, as well as related issues under [COBRA]. Notably, the Notice does not provide further guidance on which party will be liable for the Excise Tax in the case of self-funded coverage -- i.e., whether that is the plan sponsor, the third-party administrator, or the plan administrator listed on the plan's Form 5500. In addition, the Notice does not indicate whether there are any circumstances under which the Excise Tax may be paid from plan assets." (Proskauer Rose LLP)  

Employers Expect to Make Changes to Healthcare Benefits
"The majority of U.S. employers (84%) are expecting to make changes to their full-time employee health benefit programs over the next three years ... [E]mployers project health care costs to increase 4% in 2015 after plan changes, compared to the 4.5% employers predicted for 2014. Without plan changes, projections are for an increase of 5.2%. These modest increases are still more than double the current rate of inflation and are a primary factor driving employers' affordability concerns as the 2018 excise tax in the Patient Protection and Affordable Care Act approaches. Two in five employers that have done extensive modeling of their plans say they will trigger the excise tax in 2018. Two-thirds say the tax will have an impact on their health program strategies." (Towers Watson)  

Anthem Security Breach May Require Plan Sponsor Action
"Even if the Anthem breach does not amount to a privacy violation that triggers the HIPAA breach notification requirement, it is certainly an event that should garner the attention of plan fiduciaries under ERISA. Plan fiduciaries are obligated to act prudently and with the best interests of participants and beneficiaries in mind, whether the plan is self-funded or fully insured. Regardless of whether sensitive health information was compromised in the breach, Anthem has acknowledged that other personal information ... may have been disclosed. At a minimum, plan fiduciaries should take steps to ensure that Anthem and/or the Blue Cross entity with whom the plan has engaged provide adequate identity protection and credit monitoring services to affected participants." (Spencer Fane)  

Bipartisan Bill Offers Proposed Fix for Wellness Plans
"[T]he legislation [1] would resolve the issue of whether an incentive or surcharge permitted (indeed, encouraged) under the [ACA] is nonetheless impermissible under the ADA and GINA.... [2] provides that collecting information about a manifested disease or disorder of a family member would not be an unlawful acquisition of genetic information of the employee under GINA.... [3] would supersede any regulations promulgated by the EEOC on these issues in the coming months." (Seyfarth Shaw LLP)  

Multiemployer Health Benefits: Key Facts at a Glance
"[This report] shows statistics on ... [1] Median actuarial plan value, [2] Grandfathered status, and [3] Likelihood of family coverage triggering the excise tax in 2018. It also includes information on the following types of participant cost sharing: [1] Medical plan in-network deductibles; [2] Medical plan annual out-of-pocket maximums for in-network coverage; [3] Copayments for primary office, specialist office and emergency room visits; [4] Retail pharmacy benefit copayments; and [5] Individual dental plan annual in-network benefit maximum." (Segal Consulting)  

Supreme Court Hears Arguments on Availability of ACA Tax Subsidies Through Federal Exchanges (PDF)
"The King case involves more than the legal issue of the degree of deference that courts should afford to administrative agencies when interpreting the words used in a statute. The Court's decision in King will have real consequences for insurers, employers and millions of people.... Likewise, insurers who offer products on federally-established Exchanges could potentially be deprived of billions of dollars in premium dollars that they expected to receive for coverage sold on such Exchanges.... Additionally, if the Court rules that subsidies for coverage obtained through a federally-established Exchange are not available, the ACA's employer mandate penalty would not apply to large employers with full-time employees who obtain coverage through federal Exchanges." [King v. Burwell, No. 14-1158 (4th Cir. July 22, 2014; cert. pet. granted Nov. 7, 2014, argued Mar. 4, 2015)] (Groom Law Group, via Taxes The Tax Magazine)  

Will Concern for States' Rights Win Out in Subsidies Battle?
"[W]hat may eventually prove to be the key line of questioning may have been kicked off by Justice Sonia Sotomayor, who expressed concern about the consequences of a ruling for the challengers. If a state's residents don't receive subsidies, she told [petitioners' attorney Michael] Carvin, it will lead to a 'death spiral': because a large group of people in those states will no longer be required to buy health insurance, but insurers will still be required to offer insurance to everyone, only sick people will buy health insurance. And that will cause everyone's insurance costs to rise, leading more people to drop out of the insurance market. States will then feel like they have no choice other than to establish their own exchanges to ward off the 'death spiral' -- a scenario that is so coercive that it violates the Constitution." [King v. Burwell, No. 14-1158 (4th Cir. July 22, 2014; cert. pet. granted Nov. 7, 2014, argued Mar. 4, 2015)] (SCOTUSblog)  

Oral Argument Analysis: Setting Up the Private Debate on the ACA
"From the time that the Supreme Court agreed in November to hear the challenge to subsidies on the thirty-four insurance exchanges set up by the federal government instead of by the states, the Obama administration and its supporters have talked darkly about the collapse of the entire ACA if that challenge succeeded.... The uncertain thing, as the hearing approached, was whether that message would get through to the nine members of the Court who would be the deciders. If there was one dominant theme at the actual hearing, aside from how to read a complex federal statute, it was that a victory for the challengers would come at perhaps a serious loss -- perhaps a constitutional loss, but at least a human and social loss in the end of the most ambitious (and audacious) health care plan ever enacted in America." [King v. Burwell, No. 14-1158 (4th Cir. July 22, 2014; cert. pet. granted Nov. 7, 2014, argued Mar. 4, 2015)] (Lyle Denniston, via SCOTUSblog)  

Surprises at Obamacare's Oral Arguments
"Anthony Kennedy raised new questions about constitutionality -- questions that neither the government nor the challengers brought up in their briefs. Ruth Bader Ginsburg questioned whether the plaintiffs in King v. Burwell ... even had standing to challenge the [ACA]. Chief Justice John Roberts, seen as a swing vote in the case, kept his cards close to the chest and barely participated in the oral arguments. And Samuel Alito threw a total curve ball, describing an idea for subsidies no one saw coming." [King v. Burwell, No. 14-1158 (4th Cir. July 22, 2014; cert. pet. granted Nov. 7, 2014, argued Mar. 4, 2015)] (Sarah Kliff, in Vox)  

[Opinion]

King v. Burwell: Finding a Path Forward After an Executive Overreach
"Justice Anthony Kennedy ... expressed concern that if the federal government really intended only to give subsidies to states that built their own exchanges, it could be an 'unconstitutional form of federal coercion.' ... Under this view, if the Court were to rule in favor of the petitioners and uphold the law as written, it would in effect be endorsing the federal government's unconstitutional coercion of the states. But ... if the Court were to side with the government, it would be endorsing illegal activity by an administrative agency. And it is not clear that the destruction envisioned from the absence of a state exchange would result: The United States managed for nearly a century to have health insurance markets operating without the help of federal exchanges." (Health Affairs)  

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