Health & Welfare Plans Newsletter

February 9, 2017

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Webcasts and Conferences

Establishing Risk Management Protocols for Defined Benefit Plans and Defined Contribution Plans - Part 1 of 4
February 23, 2017 WEBCAST
PRMIA

What You Need to Know About Your Welfare Benefit Plan Documents
February 28, 2017 WEBCAST
ftwilliam.com

Retirement Plans: Steering the Fiduciary Ship
March 7, 2017 in MA
Morgan Lewis & Bockius LLP

Independent Accountant's Role in the Annual Form 5500 Process
April 6, 2017 WEBCAST
American Bar Association [ABA]

Washington Legislative Update
May 22, 2017 in DC
International Foundation of Employee Benefit Plans [IFEBP]

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Demystifying Three Confusing Lines on IRS Form 1095-C
"Among other changes to the IRS Instructions, the IRS eliminated two codes (Codes 1I and 2I are now marked as 'reserved') and added two new codes for 2016 to describe conditional offers of coverage made to employees' spouses."
Corporate Synergies

[Advert.]

Join ECFC, March 8-10, for our Annual Conference in Washington DC

Sponsored by ECFC [Employers Council on Flexible Compensation]

The Annual Conference in Washington will feature congressional speakers, ECFC lobbying team, inside the beltway keynote speakers, regulatory agency and scheduled meetings on Capitol Hill with congressional members and staffers, and more.


Four Changes to Make Now If Your Company Is Covered by the Federal Contractor Sick Leave Order
"Make sure your sick leave policy allows for carryover that meets the final rule's requirements and implement an accrual method if you do not already have one.... Make sure your leave policy provides leave for domestic violence.... If state law allows, do not provide for payout of accrued, but unused sick leave.... Consider whether it makes sense to have a PTO policy that includes sick leave or a separate sick leave policy."
Polsinelli PC

Facebook Boosts Bereavement Leave
"[Facebook] will now give employees up to 20 days of paid bereavement leave in the event of an immediate family member's death and up to 10 days for the death of an extended family member.... Facebook's generous bereavement policy puts it far ahead of most -- if not all -- U.S. employers. Although 80 percent of U.S. companies have bereavement policies, they offer an average of only four paid days of leave for the death of an immediate family member"
HRE Daily

Text of District Court Order Enjoining Merger of Anthem and Cigna (PDF)
"[T]he merger will be enjoined due to its likely impact on the market for the sale of health insurance to 'national accounts' ... within the fourteen states where Anthem operates as the Blue Cross Blue Shield licensee.... [P]laintiffs have established that the high level of concentration in this market that would result from the merger is presumptively unlawful under the U.S. Department of Justice and Federal Trade Commission Horizontal Merger Guidelines ... The evidence has also shown that the merger is likely to result in higher prices, and that it will have other anticompetitive effects: it will eliminate the two firms' vigorous competition against each other for national accounts, reduce the number of national carriers available to respond to solicitation s in the future, and diminish the prospects for innovation in the market." [U.S. v. Anthem, No. 16-1493 (D. D.C. Feb. 8, 2017)]
U.S. District Court for the District of Columbia

Federal Judge Blocks Anthem's Planned Acquisition of Cigna
"The ruling echoed a decision last month by a different judge who blocked Aetna Inc.'s plans to take over Humana Inc.... Judges found that merging top industry rivals threatened to harm consumers on price and service, with the benefits of those deals failing to outweigh the threats. While Aetna is considering a possible appeal in its case, [the Feb. 8 ruling] almost certainly kills the Anthem-Cigna transaction, as discord between the companies has grown considerably since they announced their deal in July 2015."
The Wall Street Journal; subscription may be required

[Advert.]

Understanding the Math of Your Health Plan Renewal

Sponsored by Lorman and BenefitsLink

Feb. 27 webinar. Understand concepts and terminology in your health insurance renewal to identify inefficiencies and design and build successful strategies that can have both short and long term cost savings.


Honeywell Loses Round Over Retiree Health Cuts, Moves to Trial
"The language 'for the life of the retiree or surviving spouse,' included in collective bargaining agreements, unambiguously provided a contractually vested right to lifetime full medical coverage benefits, [the court ruled]. People who retired before the expiration of the CBA are entitled to lifetime benefits, but those who retired after the expiration date will move to trial to determine whether their benefits were vested at the time they retired[.]" [Kelly v. Honeywell Int'l, Inc., No. 16-543 (D. Conn. Feb. 8, 2017]
Bloomberg BNA

Opioid Addiction: Implications for Employers (PDF)
"Employers can contribute toward curbing the opioid addiction epidemic in a number of ways and should play an instrumental role in facilitating increased awareness of and access to needed programming.... This article will explore the size and prevalence of the opioid epidemic, reflect on its implications for employers -- including public policy initiatives -- and suggest specific strategies for employer interventions."
Benefits Quarterly, published by the International Society of Certified Employee Benefit Specialists [ISCEBS]

Administration Considers ACA Market Stabilization
"On February 1, 2017, the administration sent to the Office of Management and Budget a proposed 'market stabilization' rule. The proposed rule is rumored to contain a provision that would raise the age rating ratio in the individual market from the statutory 3-to-1 ratio to 3.49-to-1, increasing premiums for older people and decreasing them for younger enrollees."
Timothy Jost, in Health Affairs

Reports of the Demise of Obamacare Repeal and Replace Are Greatly Exaggerated
"[T]he repeal part is still on track to occur this spring ... likely in March.... The Republicans are now looking to see how much of the replace elements they can include under the Senate budget reconciliation rules.... [T]hey are looking to include the expansion of health savings accounts ... a provision that would encourage states to create high risk pools and provide federal funds for them ... reforming Medicaid by creating a form of state block grants via per capita limits, and including a new tax credit scheme to subsidize consumer purchases of individual health insurance."
Bob Laszewski's Health Care Policy and Marketplace Review

Grandfathered, Grandmothered, and ACA-Compliant Health Plans Have Equivalent Premiums
"Across all states, the proportions of small employers that offered grandfathered, grandmothered, and ACA-compliant plans were roughly equal (35.4%, 29.7%, and 34.9%, respectively), as were the premiums ($538, $476, and $481) and deductibles for single coverage ($1,851, $2,380, and $2,175). Employees also paid a similar share of premium costs across the three plan types.... [A]fter controlling for geographic region, industry, workforce income, and other variables, ... premiums for grandfathered plans, which must maintain the same plan design they had in 2010, were significantly higher."
The Commonwealth Fund

[Opinion]

Obamacare Exchanges Were in Big Trouble Before Trump
"[A]ny of these theories of the decline suggests that Obamacare was already incredibly fragile. The program was either: [1] primed to decline anyway, [2] primed to decline as soon as a Republican took the White House and voters began worrying about the future of the program, or [3] so vulnerable that a small amount of advertising could make the difference between enrollment growth and a significant decline. All three of these theories suggest that this program badly needs to be replaced with something that doesn't begin to topple as soon as anyone looks at it funny."
Megan McArdle, on Bloomberg

[Opinion]

Anthem Responds to Court's Adverse Decision on Acquisition of Cigna
"The company promptly intends to file a notice of appeal and request an expedited hearing of its appeal to reverse the Court's decision so that Anthem may move forward with the merger, which was approved by over 99% of the votes cast by the shareholders of both companies."
Anthem, Inc.

[Opinion]

Cigna Comments on Injunction Blocking Transaction with Anthem
"Cigna intends to carefully review the opinion and evaluate its options in accordance with the merger agreement. Cigna remains focused on helping to improve health care by delivering value to our customers and clients and expanding our business around the world."
Cigna

Benefits in General

Advisory Council on Employee Welfare and Pension Benefit Plans to Meet on March 22
[T]he 185th open meeting of the Advisory Council on Employee Welfare and Pension Benefit Plans (also known as the ERISA Advisory Council) will be held on March 22, 2017.... The purpose of the open meeting is to welcome the new members, introduce the Council Chair and Vice Chair, and set the topics to be addressed by the Council in 2017."
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

Best Practices for Workplace Financial Wellness Programs (PDF)
12 pages. "A highly effective financial wellness program can save an organization well into the millions of dollars for large companies -- and that's focusing on the easiest costs to measure: wage garnishments, absenteeism and utilization of FSAs and HSAs. With additional analysis, companies can also measure healthcare costs savings, reduction in costs associated with delayed retirement, employee engagement, productivity, retention, and morale."
Financial Finesse

Frequently Asked Questions about Workplace Financial Wellness Programs (PDF)
13 pages. "What percentage of employees are financially well? ... What is the difference between financial wellness and financial security? ... Where are employees falling short with respect to financial wellness? ... What is the difference between financial education, financial advice and financial wellness? ... What kind of companies need financial wellness and should roll it out as a key employee benefit? ... What are the biggest financial wellness needs across generations?"
Financial Finesse

Retiree Benefits: A Tale of Two Cities (States)
"Many states' combined costs -- pensions, other post-employment benefits (OPEBs) such as health insurance, and payments on all government bonds -- appear manageable. More worrisome are the eight states with the highest combined costs: Illinois, New Jersey, Connecticut, Hawaii, Kentucky, Massachusetts, Rhode Island, and Delaware. [States with high pension burdens also tend to have high costs for retiree health benefits].... [T]he picture overall [for cities] is a mix of a handful of deeply troubled jurisdictions and many where the costs appear manageable. The eight major cities with the highest total cost burdens range from the predictable -- Chicago and Detroit -- to surprises such as Wichita, Kansas, and Portland, Oregon."
Squared Away Blog, by the Center for Retirement Research at Boston College

Trump's 2-for-1 Regulatory Reduction Challenged in Court
"President Donald Trump's Executive Order requiring two regulations be repealed for every new one adopted and related OMB guidance have been challenged in a law suit ... by Public Citizen, the Natural Resources Defense Council and the Communications Workers of America.... The complaint alleges that the agencies cannot lawfully comply with the president's order because doing so would violate the statutes under which the agencies operate and the Administrative Procedure Act." [Public Citizen v. Trump, No. 17-253 (complaint filed Feb. 8, 2017)]
Dodd-Frank.com, a blog by Stinson Leonard Street

Executive Compensation and Nonqualified Plans

[Guidance Overview]

IRS Updates Golden Parachute Audit Guide
"The [2017 Audit Techniques Guide (ATG)] is the first update released since the release of the IRS's initial 2005 ATG ... The ATG includes: [1] an overview of the rules and the consequences of potential adjustments in the audit; [2] the documentation an IRS agent should review as background regarding a corporation's golden parachute payments; and [3] the nine steps involved in a parachute examination, including an examination flow chart. The 2017 ATG expands and updates the list of documents for IRS examiners to review in connection with a golden parachute examination."
Orrick

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David Rhett Baker, J.D., Editor and Publisher  davebaker@benefitslink.com
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BenefitsLink Health & Welfare Plans Newsletter, ISSN no. 1536-9595. Copyright 2017 BenefitsLink.com, Inc. All materials contained in this newsletter are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of BenefitsLink.com, Inc., or in the case of third party materials, the owner of those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.

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