Health & Welfare Plans Newsletter

September 2, 2015

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[Guidance Overview]

Health & Welfare Plan Developments, Summer 2015 (PDF)
24 presentation slides by attorneys John Hickman and Ashley Gillihan. Topics include: [1] Supreme Court: King v. Burwell, et al.; [2] Supreme Court: Obergefell; [3] IRS Cadillac Tax Guidance; [4] DOL Conflict of Interest Guidance; [5] EEOC ADA Guidance for Wellness Programs; [6] Pay or Play and Its Impact on Employer Coverage; [7] IRS Notice 2015-17; Big Data Breaches and Wake Up Call for HIPAA Compliance; [8] IRS Announcement 2015-22 Tax-Free Identity Protection; [9] Final ACA Regulations and Cost Sharing Guidance; and [10] a more detailed description of the upcoming excise tax on high cost health plans (Cadillac tax). (Alston & Bird LLP)  


[Advert.]

Register for NBCH's 20th Annual Conference, Nov. 16-18 in Dallas

Sponsored by National Business Coalition on Health [NBCH]

This must-attend event convenes employers, health plans, providers, business health coalitions and other key stakeholders focused on the future of health care and benefits. Free admission for employers that are members of an NBCH coalition. Join us.



[Guidance Overview]

Latest Guidance for Employers and Multiemployer Plan Sponsors on Reporting Required by the ACA
"The instructions provide additional guidance on how employers would prepare the Form 1095-C for full-time employees for whom they contribute to a multiemployer plan, clarifications for what sponsors of multiemployer plans need to do, and some additional minor clarifications." (Segal Consulting)  

[Guidance Overview]

Draft Instructions for ACA Reporting by Employers
"These instructions state that for the plan sponsor of a health plan and an HRA to be the same, the coverages must be reported by the same reporting entity. Consequently, under the new instructions a plan sponsor that provides a self-insured HRA and an insured group health plan would have to report the HRA coverage despite the fact that the insured coverage is reported by the health insurance carrier." (Segal Consulting)  

[Guidance Overview]

Redefining the OPEB Obligation for Governmental Plans (PDF)
12 pages. "Major changes to accounting and financial reporting for OPEB liabilities include: [1] stipulating a single actuarial cost method based for valuation of OPEB liabilities, [2] reporting an OPEB liability on the face of the financial statements, [3] changing the way the discount rate is calculated, [4] enhanced note disclosures and Required Supplementary Information (RSI), [5] accelerated recognition of liability changes and [6] the separation of funding and accounting." (Bryan, Pendleton, Swats & McAllister, LLC)  

Brief of Petitioner to Supreme Court Supporting Application of Vermont Health Care Database Law to TPA of Self-Insured ERISA Plan (PDF)
71 pages. "The Second Circuit erroneously interpreted [ERISA] in holding that Vermont's law is preempted as applied to self-insured plans. That holding is especially anomalous because Liberty Mutual's third-party administrator is a health insurer that already collects and reports claims data for itself and for other self-insured ERISA plans that it administers. The Second Circuit's holding runs afoul of [the U.S. Supreme Court's] conclusion two decades ago that ERISA was not intended to displace the States' authority over 'general health care regulation.' ... Vermont's health care database statute has nothing to do with the purposes of ERISA and does not regulate the financing of the plan, the benefits offered, or the relationship between the plan and its members. It says nothing about how a plan must be structured and gives the State no authority to oversee its administration. Accordingly, ERISA does not preempt this Vermont statute." [Gobeille v. Liberty Mutual Ins. Co. (2d Cir. Feb. 4, 2014, cert. pet. granted June 29, 2015, brief submitted Aug. 28, 2015) (Vermont Green Mountain Care Board)  


[Advert.]

Changes to Cafeteria Plans: What You Need to Know to Prepare

Sponsored by Lorman and BenefitsLink

September 22 -- This timely topic will help persons responsible for cafeteria plan administration and compliance understand the foundational requirements applicable to every cafeteria plan and inform them of how the landscape is rapidly changing. BenefitsLink discount.



IRS Requires Employer-Sponsored Health Plans to Cover Inpatient Hospital and Physician Services
"The IRS explained that the reason for the change was that allowing plans that fail to provide substantial coverage of inpatient hospital or physician services to be treated as providing minimum value would adversely affect employees (particularly those with significant health problems) who may find this coverage insufficient, by denying them the premium tax credit for coverage they purchased through an exchange, while at the same time allowing the employer to avoid the Sec. 4980H employer shared-responsibility payment. Employer-sponsored health plans that omit critical benefits that individuals in poor health use disproportionately would likely enroll far fewer of these individuals. This would drive down employer costs at the expense of those in poor health who are discouraged from enrolling." (Journal of Accountancy)  

Most Proposed Essential Health Benefits for 2017 Are Based on Small Group Plans
"As was true from 2014 through 2016, the vast majority of states have proposed using one of the largest small group plans operating in their states as the EHB benchmark for 2017. For 2017 HHS is requiring plans to cover prescription drugs across a broad range of therapeutic categories and classes, and plans must have separate visit limits on habilitative and rehabilitative services." (Bloomberg BNA)  

The Expanded Role of Finance Executives in Employer-Sponsored Health Care: Questions a CFO Should Ask (PDF)
"The rapidly changing health care landscape has broadened the involvement of Finance executives in many aspects of employer-provided health care benefit assessment and decision making.... [These] questions and answers ... offer essential guidance for Finance executives to help create a cost-effective, sustainable health benefit program for their organizations. [1] What is our health care cost? What's driving it? ... [2] What is our cost position? ... [3] What's behind the cost variation? ... [4] What actions should we take now to understand the impact of the 2018 excise tax on my organization? ... [5] How do we evaluate whether private exchanges are the best way for our organization to optimize health program performance in the years ahead? ... [6] Where can Finance focus to help optimize our health programs?" (Towers Watson)  

Employer-Sponsored Health Care: The ACA's Impact (PDF)
47 pages. "Three in five respondents to the survey believe the law has had a negative effect on their organization.... More than half of organizations describe their current status as compliant and developing some tactics or multiyear strategies to deal with reform ... Ninety-four percent of all surveyed organizations continue to provide health care coverage for all full-time employees in 2015 and, among that group, nearly all plan to continue coverage in 2016.... Less than 5% of organizations provide coverage to full- or part-time employees through private health insurance exchanges." (International Foundation of Employee Benefit Plans [IFEBP])  

Few, If Any, ACA Fixes in Play; Efforts Focus on Finding Employer-Driven Solutions
"As employers continue to wrestle with rising health care costs because of the Affordable Care Act's looming excise tax on high-cost plans, new benefit mandates, and cost shifting from federal health care programs, it is becoming increasingly clear that the private sector, not government, must lead the way to a more sustainable future.... [Current issues include:] [1] Employers considering new health care strategy ... [2] Push to repeal ACA excise tax ... [3] IRS working on proposed ACA excise tax rule ... [4] Two EEOC rules on wellness programs anticipated this fall." (HR Policy Association)  

Medical Stop-Loss Premium Survey (PDF)
"The rising frequency of truly catastrophic claimants continues -- with one in five respondents reporting a claimant in excess of $1 million over the last two policy years. Stop-loss remains the primary focus of risk management, with interest in captives and private exchanges remaining slight at 10% or less amongst respondents.... The primary focus of the survey remains current premium rates ... Stop-loss premium reflecting over 550,000 covered employees is measured." (Aegis Risk, for the International Society of Certified Employee Benefit Specialists [ISCEBS])  

Millions of Employees Don't Get Paid Time Off for Holidays or Vacation
"As Labor Day approaches, about a quarter (24 percent) of private sector workers will not be enjoying a paid day off on Monday. A similar number (23 percent) earn no paid vacation time. While this overall lack of paid holidays and vacation time is quite telling (especially compared to our international peers, who more or less universally mandate paid time off), access to paid time off varies dramatically between workers by their pay." (Economic Policy Institute)  

Benefits in General; Executive Compensation

DOL Criminal Enforcement Cases, January 2006 through September 2014 (PDF)
24 pages. "The AICPA Employee Benefit Plan Audit Quality Center has developed this summary analysis of [EBSA's] criminal enforcement actions involving employee benefit ... to assist members in their consideration of fraud in employee benefit plan financial statement audits.... This tool includes examples of potential fraudulent activities, followed by summaries of actual fraud that has occurred, presented by plan type." (American Institute of Certified Public Accountants [AICPA])  

Third Circuit: Failure to Disclose Deadline to File Suit in Benefit Denial Letter Warrants Setting Aside Limitations Provision in Plan
"The Third Circuit ...expressed concern that if administrators were not required to disclose the suit deadline in the denial letter, 'plan administrators could easily hide the ball and obstruct access to the courts' by burying the provision in lengthy plan documents, like the 91-page plan document in that case...., it is debatable whether a denial letter must include the plan's limitation period in the first instance. Even the First Circuit acknowledged in [Candelaria v. Orthobiologics] that one 'could arguably read this regulation as setting forth two distinct requirements. That is, it could be argued that notice of the right to sue under ERISA is in addition to, and divorced from, notice of review procedures and the time frame pertaining to such procedures.' " [Mirza v. Ins. Admin. of America, Inc., No. 13-3535 (3d Cir. Aug. 26, 2015)] (Wilson Elser)  

EPCU Project: 5500 Non-Filer/DOL Project
"The [EPCU] will collaborate with the [DOL] Office of the Chief Accountant (OCA) to contact Form 5500 non-filers identified using payroll and plan data in our records. Our primary goal is to ensure compliance with annual filing requirements. Additional goals include identifying the underlying causes for noncompliance and making recommendations for removing impediments to compliance." (Internal Revenue Service [IRS])  

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