Health & Welfare Plans Newsletter

July 29, 2015

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ESOP Administrator
Blue Ridge ESOP Associates
in ANY STATE

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USI Consulting Group
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Staff Consultant, Defined Contributions
USI Consulting Group
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401(k) Plan Administrator
PASI, LLC
in CT

Retirement Plan Account Manager
M Advisory Group
in CA

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Loren D. Stark Company
in TX

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Farmer & Betts
in FL, LA, MI, MN, MO, NC, OH, SC, TN, TX

Employee Benefits Account Manager
Celedinas Insurance Group
in FL

Retirement Plans Analyst
Edelman Financial Services
in NY

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[Official Guidance]

Text of CMS FAQs on State-Based Marketplace Options for Implementing Exemptions from the Shared Responsibility Payment (PDF)
"[CMS has] determined that the HHS exemption option is an efficient process for [state-based marketplaces (SBMs)] that has minimized confusion for consumers. We, therefore, intend to propose regulations that would authorize this option on a permanent basis, and, in the interim, will not take any enforcement action against SBMs that continue to use the HHS service for exemptions beyond the start of open enrollment for 2016.... States that did not establish SBMs or use their own eligibility platforms do not have the option to process their own exemptions.... As a condition of using the HHS exemption option, the SBM must furnish HHS with 'any information available through the Exchange that is necessary for an applicant to utilize the process administered by HHS' ... Electronic exemption application capabilities are not a requirement." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])  


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[Guidance Overview]

Healthy Caution Advisable in Designing Wellness Plans Due to New Scrutiny of Medical Exams and Inquiries (PDF)
"This article explores the history of enforcement of the ADA's medical examination and inquiry provisions related to wellness programs, the EEOC's proposed ADA wellness program regulations and the intersection between the ADA, HIPAA and ACA in relation to the proposed regulations." (Alston & Bird LLP, via Bloomberg BNA Daily Labor Report)  

[Guidance Overview]

EHB Prescription Drug Standard: Pharmacy and Therapeutics Committees
"[B]eginning in 2017 HHS will require [qualified health plans (QHPs)] to establish Pharmacy and Therapeutics (P&T) Committees to review and update plan formularies in conjunction with the USP Medicare Model Guidelines. Although new to QHPs, all Medicare Part D plans and some state Medicaid programs operate P&T Committees.... Even though QHPs are not required to have P&T Committees until 2017 (or sooner in some states), health advocates and consumers have a new tool to ensure that [essential health benefit (EHB)] formularies meet the needs of enrollees P&T Committees demonstrate the importance of advocacy efforts and lay the groundwork for future improvements in EHB prescription drug standards." (National Health Law Program [NHeLP])  

[Guidance Overview]

EHB Prescription Drug Standard: United States Pharmacopeia Classification System (PDF)
"In the Essential Health Benefits Final Rule from February 2013 (Final Rule 2013), HHS chose the USP Medicare Model Guidelines classification system (version 5.0) as the comparison tool to determine EHB prescription drug coverage.... [H]ealth plans must cover at least the greater of [1] one drug in every USP therapeutic category and class or [2] the same number of drugs in each USP category and class as the state's EHB base-benchmark plan.... The Final Rule 2016 adopts an approach that combines: [1] the use of a [Pharmacy and Therapeutic (P&T)] committee and [2] the existing USP standard. This change will go into effect beginning with plan years on or after January 1, 2017." (National Health Law Program [NHeLP])  

[Guidance Overview]

Amendments to California's Sick Pay Law Now in Effect (PDF)
"[As] of July 1, 2015, employers must provide paid sick leave to all employees who work in California for the same employer for 30 or more days within one year from commencing employment ... The law does not require employees to provide employers with medical verification to take sick leave.... [S]ick leave must be provided upon oral or written request of the employee. If the need for leave is foreseeable, the employee must give reasonable advance notice; where the need is not foreseeable, the employee need only give notice as soon as practicable." (Mayer Brown)  


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Some Group Health Plans Must Pay PCORI Fees by July 31
"The fee due depends on the date your most recent plan year ended.... For plan years that ended between January 1, 2014, and September 30, 2014, the fee is $2.00 per covered life and is due by July 31, 2015. For plan years that ended between October 1, 2014, and December 31, 2014, the fee is $2.08 per covered life and is due by July 31, 2015. The insurance carrier is responsible for paying the PCORI fee on behalf of a fully insured plan." (Warner Norcross & Judd LLP)  

Cadillac Tax Bringing Unprecedented Changes to Benefits Enrollment and Coverage
"Purchasing 'rich' plans based on the assumption that 'the more they pay, the better the plan,' can result in a financial disservice to employees as it excludes HSA tax benefits and subsequent future retiree medical funding. While these employees are over-insured in medical coverage, they are under-insured regarding income protection coverage and life insurance.... [T]he Cadillac Tax will significantly impact employer involvement in the way employees view their overall benefit offering." (Benefitfocus)  

IBM Pays for Women to Ship Breast Milk, Pushes Ahead in Race to Attract Female Tech Talent
"In September, IBM will launch a delivery program for nursing moms who are away on business, which is the first of its kind because it is a service moms can use to ship their expressed milk back home overnight in temperature-controlled packages -- and IBM will pay for it.... Many other companies cover the cost of shipping breast milk of working mothers, but most leave it up to the woman to figure out ... IBM is the first to handle the mechanics and technology of it." (TechRepublic)  

National Health Expenditure Projections 2014-2024 (PDF)
"For 2014-24, health spending is projected to grow at an average rate of 5.8 percent per year (4.9 percent on a per capita basis). Health spending is projected to grow 1.1 percent faster than Gross Domestic Product (GDP) per year over this period; as a result, the health share of GDP is expected to rise from 17.4 percent in 2013 to 19.6 percent by 2024. Given the ACA's coverage expansions and premium subsidies together with population aging, federal, state and local governments are projected to finance 47 percent of national health spending by 2024 (from 43 percent in 2013)." [Also available: NHE Projections 2014-2024 -- Tables; NHE Historical and Projections 1960-2024; and Projections Methodology.] (Office of the Actuary, Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])  

Healthcare Spending Expected to Accelerate
"The nation's respite from accelerating health care costs appears to be over. Spending on health care will outpace the nation's overall economic growth over the next decade ... Things changed in 2014, the [CMS] report says ... [as] 8.4 million gained coverage that year, and people with health insurance use more medical services and prescriptions than do the uninsured.... Spending on Medicaid, the federal-state health insurance program for low-income people, also has jumped.... Government will become a more dominant player as the federal, state, and local government share of health care rises to 47 percent in 2024, from 43 percent in 2013." (InsuranceNewsNet.com)  

[Opinion]

American Benefits Council Comment Letter to CMS on Requirements for the Health Plan Identifier (PDF)
"The Council shares the significant concerns expressed in the [National Committee on Vital and Health Statistics (NCVHS)] letter and strongly support s its recommendation to eliminate the HPID in administrative transactions. We urge that the Department not proceed with implementation. There is ongoing confusion among employer plan sponsors as to why the HPID is needed and, if required, how the HPID would or should be used." (American Benefits Council)  

[Opinion]

Is the California ACA Exchange a Model for the Nation?
"The last half century has confirmed that free markets in health insurance are highly dysfunctional. The reason that Covered California is working is that it is very highly regulated, dictating which insurers can participate, what benefits their plans must offer beyond those mandated by ACA, while aggressively negotiating with insurers on prices, rejecting those that are too high." (Physicians for a National Health Program [PNHP])  

Benefits in General; Executive Compensation

Looking Past Due Diligence for Benefit Plans in Mergers and Acquisitions (PDF)
"Corporate transactions involving the sale or purchase of another company or division are complex events. While employee benefit plans generally are considered in these transactions, the time and attention devoted to these plans are often minimal. This exposes the parties to additional risks, both in terms of direct costs and in long term administrative complexities. This article will review the various risks that often are undiscovered during the standard due diligence process. Health plans and retirement plans, including multiemployer plans, and executive compensation plans are all considered." (Benefits Quarterly, published by the International Society of Certified Employee Benefit Specialists [ISCEBS])  

States Begin to Issue Guidance on Marriage Benefits
"Some states mention the payroll issues in their guidance and some states do not. All the states that issue guidance generally focus on income tax issues and sometimes other issues, such as pensions." [Article includes a summary of guidance issued by Alabama, Kentucky, Louisiana, Michigan, Nebraska, North Dakota, and Ohio.] (Wolters Kluwer Law & Business)  

Access to Retirement and Medical Benefits by Occupation, March 2015
"Retirement benefits were available to 66 percent of private industry workers in the United States in March 2015.... Among workers in management, professional, and related occupations in private industry, 80 percent had access to retirement benefits -- compared with 39 percent in service occupations.... Medical care benefits were available to 69 percent of private industry workers in March 2015. Within private industry, 87 percent of workers in management, professional, and related occupations had access to medical care, compared with 41 percent in service occupations." (U.S. Bureau of Labor Statistics [BLS])  

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