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Health plan admin - misc


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The American Health Care Act: Details on the ACA Repeal and Replace Bill (PDF)
27 presentation slides. "AHCA would repeal pay or play entirely, significantly simplify the reporting requirements, plus provide a lengthy Cadillac tax delay to 2026.... The HSA contribution limit would nearly double, up to over $13,000 for family coverage. There may also be a push in the Senate to permit utilization of HSA for premiums. These shifts will require employers to place a renewed emphasis on their HDHP offerings for 2018. Be prepared to consider adding HDHP options if you don't already!" (ABD Insurance & Financial Services)
[Guidance Overview] IRS Memo Rejects Purported Favorable Tax Treatment of Wellness Payments
"In addition to refuting the 'too good to be true' tax claims, [CCM 201719025] clarifies the IRS's position on tax treatment of payments from fixed indemnity plans ... A recent CCA had suggested that, where premiums for fixed indemnity insurance are paid pre-tax, the benefits are taxable, regardless of the amount or type of medical expenses that triggered the payment ... This CCA acknowledges prior guidance stating that fixed indemnity payments attributable to pre-tax contributions will be taxable only to the extent that they exceed otherwise unreimbursed medical expenses." (Thomson Reuters / EBIA)
Reporting Requirements Here to Stay Under AHCA, But May Become Simpler
"The AHCA modifies and then repeals the Code Sec. 36B premium assistance tax credit, and creates an advanceable, refundable tax credit for individuals to purchase state-approved, major medical health insurance and unsubsidized COBRA coverage. Eligible individuals must not have access to government health insurance programs or an offer of health insurance from any employer." (Wolters Kluwer Law & Business)
[Guidance Overview] Incorrect TINs: An Employer's Nightmare Returns with the 2016 Form 1095-C Reporting Season
"[O]ne of the most common errors employers received when submitting the Form 1094-C/Form 1095-C packet for the 2016 reporting season was an error message stating there is an incorrect taxpayer identification number (TIN).... This article is intended to explain how the IRS software searches TINs, the improvements that have been made, and what an employer needs to do if it received an error message indicating there is a TIN issue with one (or more) of the Forms 1095-C it submitted to the IRS. The good news is an employer still does not need to go through the solicitation process if it receives a TIN error message for an incorrect TIN!" (Accord Systems, LLC)
Form 5500 Delinquency Can Be Costly
"Article highlights: [1] [DOL] has established a new maximum penalty for failure to file; [2] Maximum monetary fine for Form 5500 filing violations is now $2,063 per day; [3] Penalties stemming from delinquent 5500 filings are to be treated on a cumulative basis." (EBCG)
No SCOTUS Review: Health Benefits Opt-Out Payments Must Be Included in Overtime Calculation
"In a case of first impression, the 9th U.S. Circuit Court of Appeals ... [had] ruled that when an employer pays an employee cash for opting out of its health insurance, that payment must be considered part of the employee's 'regular rate of pay' under the FLSA. This means it must be used in calculating compensation for overtime hours. The High Court declined to take up the case May 15." (HRDailyAdvisor)
Boosting Voluntary Benefits Enrollment Is a Win-Win
"Employers can get a huge return on demonstrating the value of voluntary benefit plans once their employees understand how the coverage works and the risks of not having it.... The key is to incorporate voluntary benefits into your existing communications strategy. Communication channels, like benefit websites, blogs, and other social media platforms, are your best bet when it comes to keeping employees informed." (Frenkel Benefits)
[Guidance Overview] Controlled Group and Affiliated Service Group Rules for Retirement and Cafeteria Plans (PDF)
"[A] foreign-based corporation (or group of individuals) may have wholly owned subsidiaries in other countries that in turn have wholly owned subsidiaries in the U.S., which are in fact part of a controlled group. Most often, these U.S. controlled groups do not have centralized operations and are not even aware that there are other related entities in the U.S.... Less familiar to many service-type companies are the rules treating affiliated (through ownership) service organizations as a single employer for retirement and cafeteria plan purposes. The ownership thresholds triggering application of these rules are much lower for this type of group than for controlled groups." (EisnerAmper)
Two Recent Cases Illustrate Costs of Ignoring Process in Benefits Administration
"In neither case was it likely that problems arose due to a lack of knowledge of the specific rules that should have been followed; what may have been lacking is a good understanding of why it's important to follow those rules.... [E]stablishing, following, and monitoring a compliant process matters. And if the rules seem unworkable, see if you can re-work them and find a way to comply. The cost of noncompliance can be steep." (Stinson Leonard Street)
[Guidance Overview] IRS Guidance on Tax Treatment of Benefits Paid by Self-Funded Fixed-Indemnity Plans
"The IRS concludes [in CCM 2017 19025] that because these plans do not involve a risk of economic loss as a result of overpayments or rewards for wellness plan participation, this is not insurance for federal tax purposes. Therefore, since the plans are neither insurance nor have the effect of insurance, amounts received by employees are not excluded from the employees' income and are subject to FICA payments from both the employer and employees." (The Wagner Law Group)
HHS Expands Direct Obamacare Enrollment: Will Insurers Respond?
"The move could be an early sign the Trump administration will take a backseat to the private sector in getting Americans to sign up for health insurance ... Direct enrollment, when consumers sign up for health insurance directly with the companies selling plans, presents an opportunity for insurers with great websites to capture a larger share of the individual market ... People signing up for insurance won't be directed to HealthCare.gov, where they can see a host of health plans ... reducing the risk they'll purchase a competitor's product." (Bloomberg BNA)
[Guidance Overview] 2018 Inflation-Adjusted Amounts for Heath Savings Accounts
"The HSA contribution limit for the 2018 calendar year for individual coverage will be $3,450, and the limit for family coverage will be $6,900.... What about the California HDHP rules? ... What about the American Health Care Act?" (ABD Insurance & Financial Services)
[Guidance Overview] CMS to Expand Direct Enrollment on Healthcare.gov
"CMS 'may release' future guidance on privacy and security requirements, and also that privacy and security issues will be a subject for the third-party compliance audits that [direct enrollment] entities must undergo.... Entities seeking to participate in the proxy direct enrollment process must retain third-party auditors to validate their compliance with requirements and undergo compliance audits and CMS testing and readiness review before they begin using the process." (Timothy Jost, in Health Affairs)
Trump Administration Starts to Chip Away at ACA Regs
"Starting in the next open enrollment period, consumers who use an approved third-party website to enroll in ACA exchange plans will be able to finish the enrollment process through that website, rather than being redirected to Healthcare.gov to finish their application ... Consumer feedback indicated that the redirect process confused potential enrollees and made it more difficult for them to finish their applications[.]" (FierceHealthcare)
The Fifth Circuit Calls Into Question Its Standard of Review in ERISA Denial of Benefits Cases
"The Plan ... did not provide deference to the decisions of Plan Administrator. However ... the Court applied the abuse of discretion standard to examine the plan administrator's factual determinations.... [T]he Court noted that it is the only circuit that would apply deference to factual determinations made by a plan administrator when the plan does not vest them with that discretion, and also pointed to the growing number of state laws prohibiting discretionary clauses in insurance contracts." [Ariana M. v. Humana Health Plan of Texas, Inc., No. 16-20174 (5th Cir. Apr. 21, 2017)] (National Law Review)
Feds to Nix Healthcare.gov Enrollment for Small Business Plans
"Under the CMS plan, not yet released as a proposed rule, employers would no longer be able to enroll in SHOP plans through the federally run SHOP exchanges available in 33 states through the HealthCare.gov portal. Employers could still use the federal portal to check if they qualify for the small business tax credit." (Society for Human Resource Management [SHRM])
[Opinion] SHOP's a Flop
"The SHOP Exchange was created to provide employers with less than 50 employees an easy to use process to enroll employees in group health insurance.... Turns out SHOP enrollment is extremely cumbersome, there are less plan options compared to the off exchange market, and that tax credit, well it hasn't been worthwhile for most employers. Plus it's only available for a maximum of two years.... Less than 3% of projected enrollment. That is why SHOP should be dropped." (InsureBlog)
Ransomware: The Smart Person's Guide
"Because of the ease of deploying ransomware, criminal organizations are increasingly relying on such attacks to generate profits.... While home users have traditionally been the targets, healthcare and the public sector have been targeted with increasing frequency. Enterprises are more likely to have deep pockets from which to extract a ransom.... How do I protect myself from a ransomware attack?" (TechRepublic)
[Official Guidance] Text of CMS Health Insurance Exchange Guidance: Proxy Direct Enrollment Pathway for 2018 Individual Market Open Enrollment Period (PDF)
"CMS will no longer require the consumer-facing redirect with Security Assertion Markup Language (SAML) for all individual market enrollment transactions for coverage offered through the Federally-facilitated Exchanges (FFEs) and State-Based Exchanges on the Federal Platform (SBE-FPs) that rely on HealthCare.gov for individual market eligibility and enrollment functions, and will permit [Direct Enrollment (DE)] entities to use a 'proxy direct enrollment' pathway, under which DE entities may collect consumer information on its website and input that information into HealthCare.gov. This approach is intended to provide consumers with access to new and innovative shopping experiences for individual market coverage offered through the FFEs and SBE-FPs and further stabilize the risk pool by providing more ways for consumers to access coverage." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
Lincoln National Ducks Political Consultant's ERISA Lawsuit
"Lincoln properly offset a former lawyer's disability benefits to account for money he received as a freelance political consultant, a federal judge ruled May 16. The lawyer argued that Lincoln wrongly offset his benefits before he reported this consulting income for tax purposes -- a practice he said affects beneficiaries across all Lincoln-issued disability policies. The judge rejected this claim because the lawyer hadn't first raised it through Lincoln's internal procedures." [Barber v. Lincoln Nat'l Life Ins. Co., No. 17-0034 (W.D. Ky. May 16, 2017] (Bloomberg BNA)
After Wannacry, Experts Worry Healthcare's Vulnerabilities Will Make the Next Ransomware Attack Even Worse
"As industries across the globe recover from the WannaCry ransomware attack that hit more than 300,000 machines in 150 countries, cybersecurity experts are concerned that the next attack will be even more vicious and damaging. And healthcare providers with legacy systems and subpar defenses will inevitably end up in the crosshairs." (FierceHealthcare)
Court Faults Employer for Failing to Provide Accurate Information Regarding Life Insurance Conversion
"The judge faulted WellStar for not understanding its life insurance policy and incorrectly assuming that its former employee was still covered.... The court considered the fact that WellStar did not follow its own written procedures in determining it had breached its duty to the plaintiff." [Erwood v. Life Ins. Co. of North America and Wellstar Health System, Inc. Group Life Ins. Program, No. 14-1284 (W.D. Penn. Apr. 13, 2017)] (Vorys, Sater, Seymour and Pease LLP)
[Guidance Overview] CMS Announces Plans to Effectively End the SHOP Exchange
"Small employers have always had the option of enrolling directly with insurers or through agents or brokers, and removing enrollment through the FF-SHOP as an additional option does not expand their choices.... A primary purpose -- if not the primary purpose -- of the SHOP exchange was to allow employees of small businesses to choose among a broad range of health plan options. With the end of the FF-SHOP, it is more likely that the choices available to employees of small group will be limited to a single plan or to a few plans offered by a single insurer." (Timothy Jost, in Health Affairs)
[Guidance Overview] Taxability of Wellness Plan Rewards (PDF)
"Any wellness incentive that is not medical care is taxable, unless it is a nontaxable fringe benefit.... Common Mistakes: [1] Assuming that all incentives are nontaxable because wellness programs provide medical care. [2] Assuming that because wellness program incentives tend to be small, they are nontaxable. [3] Failing to communicate a wellness program incentive's taxability to employees." (Cowden Associates, Inc.)
CMS to Let Small Businesses Bypass ACA Marketplace
"To give small firms more flexibility in buying coverage, [CMS announced on May 15] that a small business or its broker could directly enroll employees with an insurance company, rather than having to do so through the SHOP marketplace. The move follows a rule implemented by the Obama administration in December, which says some insurers no longer have to offer a SHOP plan in a given state in order to participate in that state's individual marketplace." (Morning Consult)
Younger Employees Becoming Savvy Health Care Spenders
"Millennials: Are more satisfied than older employees with their health plan choices ... Are more likely to make cost-conscious health care decisions, such as seeking the cost of a procedure before receiving care.... Have the highest rates of regular exercise and normal weight, yet also are more likely to smoke.... One in 3 Millennials has turned down a job in part because of poor insurance offerings[.]" (Society for Human Resource Management [SHRM])
[Official Guidance] CMS to Provide Small Businesses More Flexibility When Enrolling in Healthcare Coverage (PDF)
"CMS will be exploring a more efficient implementation of the Federally-facilitated SHOP Marketplaces in order to promote insurance company and agent/broker participation and make it easier for small employers to offer SHOP plans to their employees, while maintaining access to the Small Business Health Care Tax Credit. CMS intends to propose rulemaking that would change how small employers and employees in SHOPs using HealthCare.gov enroll in SHOP plans taking effect on or after January 1, 2018." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
NHS Hospitals Across England Hit by Large-Scale Cyber-Attack
"The IT systems of NHS sites across the country appear to have been simultaneously hit, with a pop-up message demanding a ransom in exchange for access to the PCs.... Details of patient records and appointment schedules, as well as internal phone lines and emails, have all been rendered inaccessible." (The Guardian)
[Guidance Overview] Action Required Before Year-End: Disability Plans Claims and Appeals Procedures
"The newly issued final regulations took effect on January 18, 2017 and will apply to all disability benefits claims filed on or after January 1, 2018.... [Employers should] work with their disability plan insurance carriers, third party administrators, and attorneys to ensure that all underlying disability plans and associated documentation (including any ERISA wrap plans, Code section 125 cafeteria plans, and claims denial forms) are reviewed and updated to ensure legal compliance with the requirements for claims filings beginning January 1, 2018. The final regulations are lengthy, comprehensive, and require detailed review and analysis." (Fraser Trebilcock)
Eighth Circuit Jimmies the Lid on Pandora's Fiduciary Duty Box
"In an opinion that may result in increasingly complex ERISA benefits litigation, the Eighth Circuit has allowed a breach of fiduciary duty claim premised on alleged faulty claims handling practices to proceed in conjunction with a claim for benefits.... Given how out of step Jones is with longstanding practice, it is likely that Aetna will seek en banc review, or even file a petition of certiorari with the Supreme Court. Nevertheless, while this case continues to work its way through the courts, it is likely that plaintiffs will rely on Jones in justifying pairing routine claims for benefits with claims for equitable relief." [Jones v. Aetna Life Ins. Co., No. 16-1714 (8th Cir. May 8, 2017)] (Seyfarth Shaw LLP)
AHCA Passed by Narrow Vote, But Effect Still Unknown
"The precise impact on employer reporting continues to remain unclear. The requirement imposed on employers to offer coverage to full-time employees, and to measure and report part-time or full-time status, appears to remain intact." (Hodges-Mace)
Canadian Court Dismisses ERISA 'Controlled Group' Claim
"The decision holds that an ERISA controlled group claim fails because the claim raises a question of corporate personality -- namely, whether corporate separateness may be disregarded to impose a plan sponsor's liability on its affiliates -- and that the law of the place of incorporation, rather than US law, applies to such questions. Because the laws of the places of incorporation, British Columbia and Alberta, do not include ERISA, and because ERISA's controlled group provisions were the sole basis for liability, the claim fails. The decision creates an important guide to the limits of controlled group liability in Canada, and potentially in other jurisdictions guided by the decision." [Walter Energy Canada Holdings, Inc. (Re), 2017 BCSC 709, May 1, 2017] (Latham & Watkins)
Second Circuit Upholds Dismissal of ERISA Claims Against Plan Defendants for Alleged 'Cross-Subsidization' Scheme
"[P]laintiffs alleged that Family Dollar negotiated a discount on the basic life insurance premium it paid, and that the Hartford offset some of this discount by increasing the supplemental life insurance premium charged to the employees who purchased supplemental coverage.... The Court determined that Family Dollar used plaintiffs' premiums for the sole purpose of covering insurance costs under the Plan, and that its use of cost-reduction strategies to minimize its cost of providing employees with basic and supplemental life insurance did not constitute a transfer for its own benefit or self-dealing in its own interest." [Hannan v. Hartford Financial Services, Inc., No. 16-1316 (2d Cir. Apr. 25, 2017)] (Robinson & Cole LLP)
[Guidance Overview] IRS Announces HSA and HDHP Limitations for 2018
"ACA out-of-pocket maximums are higher than the maximums for HDHPs.... [T]he ACA requires that the family out-of-pocket maximum include 'embedded' self-only maximums on essential health benefits.... The HDHP rules do not have a similar rule, and therefore, one family member could incur expenses above the HDHP self-only out-of-pocket maximum ($6,650 in 2018)." (Proskauer's ERISA Practice Center)
What a Difference an 'H' Makes ... Again
"[In] many respects, the AHCA is less 'repeal and replace' and more 'retool and repurpose,' but there are some significant changes that could affect employers, if this bill becomes law as-is. [This article includes] a brief summary of the most important points... [T]he employer reporting requirement is not removed by this bill, so that will continue to be a compliance obligation. The open question is whether this bill will make it through the Senate." (Benefits Bryan Cave)
[Guidance Overview] Audit Reveals Pay-or-Play Enforcement Issues (PDF)
"At this time, the IRS has been unable to identify the employers potentially subject to an employer shared responsibility penalty or to assess any penalties. To enforce these rules going forward, the IRS plans to mail a letter to ALEs informing them of their potential liability for a penalty.... These letters are separate from the Section 1411 Certification sent by [HHS] that employers began receiving in 2016.... Section 1411 Certifications do not trigger or assess any penalties for any employers[.]" (Cowden Associates, Inc.)
[Guidance Overview] CRS Report on H.R. 1628: The American Health Care Act (AHCA) (PDF)
72 pages. "This report contains three tables that, together, provide an overview of all the AHCA provisions. Table 1 includes provisions that apply to the private health insurance market, Table 2 includes provisions that affect the Medicaid program, and Table 3 includes provisions related to public health and taxes. Each table contains a column identifying whether the AHCA provision is related to an ACA provision (e.g., whether it repeals an ACA-related provision). In addition to the three tables, the report includes more detailed summaries of each AHCA provision, and two graphics showing the effective dates of AHCA provisions." [Report R44785, May 4, 2017] (Congressional Research Service [CRS])
GAO Report on HHS Rule on ACA Market Stabilization for 2018
"GAO reviewed the [HHS] new rule on the [ACA] and market stabilization. GAO found that [1] the final rule (a) makes changes that HHS expects will help stabilize the individual and small group markets and affirm a state regulator role; and (b) amends standards relating to special enrollment periods, guaranteed availability, and the timing of the annual open enrollment period in the individual market for the 2018 plan year; standards related to network adequacy and essential community providers for qualified health plans; and the rules around actuarial value requirements; and [2] HHS complied with applicable requirements in promulgating the rule." (U.S. Government Accountability Office [GAO])
[Official Guidance] Text of IRS Rev. Proc. 2017-36: Indexing Adjustments for Calculations of Premium Tax Credit and Eligibility for Minimum Essential Coverage (PDF)
"This revenue procedure ... [1] updates the Applicable Percentage Table ... for 2018. This table is used to calculate an individual's premium tax credit....[2] updates the required contribution percentage ... for plan years beginning after calendar year 2017. The percentage is used to determine whether an individual is eligible for affordable employer-sponsored minimum essential coverage under Section 36B.... [3] cross-references the required contribution percentage ... for plan years beginning after calendar year 2017 ... The percentage is used to determine whether an individual is eligible for an exemption from the individual shared responsibility payment because of a lack of affordable minimum essential coverage." (Internal Revenue Service [IRS])
[Guidance Overview] HHS Final Rule Aims to Provide Some Stability to the Individual Health Insurance Market
"[T]he final rule makes a number of changes intended to promote full-year coverage and provide insurers with additional flexibility.... Plans or employers with active or retired participants that use the individual market for coverage should understand that the enrollment process for coverage will be slightly more difficult, and be prepared to answer questions that may arise from participants and their families." (Segal Consulting)
[Guidance Overview] Five Items to Consider If You Are Assessed an Employer Mandate Penalty
"[The TIGTA report] states the IRS will contact the employer prior to any formal assessment of a section 4980H penalty.... [A] response to the IRS will be critically important in determining whether the employer will be assessed a penalty." (Accord Systems, LLC)
[Official Guidance] Text of CMS Memo: HHS-Operated Risk Adjustment Data Validation (HHS-RADV) -- 2016 Benefit Year Implementation and Enforcement (PDF)
"CMS has assessed the results of the 2015 benefit year HHS-RADV pilot and received feedback from issuers and their initial validation audit (IVA) entities suggesting the need for an additional transition year to ensure the successful implementation of risk adjustment data validation. Therefore, CMS is converting 2016 benefit year HHS-RADV to a second pilot year, forgoing payment adjustments until 2017 benefit year HHS-RADV, and implementing process refinements that will reduce the burdens of HHS-RADV." [Unnumbered document, May 3, 2017] (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
Ninth Circuit Denies Health Care Providers' ERISA Claims
"Consistent with the Second, Third, Sixth, Seventh, and Eleventh Circuits, the Ninth Circuit held that medical providers were not 'beneficiaries' under Section 502(a) of ERISA and therefore could not bring suit directly under ERISA.... The Court also denied the plaintiffs' derivative claims." [DB Healthcare, LLC v. Blue Cross Blue Shield of Ariz., Inc., No. 14-16518 (9th Cir. Mar. 22, 2017)] (Robinson & Cole LLP)
Fifth Circuit Maintains Default Deferential Standard of Review in Denial of Benefit Claims, But Suggests It May Soon Be Overruled
"Commenting that '[t]he pillars supporting Pierre may have thus eroded', the Fifth Circuit's concurrence suggests that the tides may be changing, and that Firestone's requirement for discretionary language may soon apply equally to questions of plan interpretation and fact in the Fifth Circuit." [Ariana M. v. Humana Health Plan of Texas Inc., No. 16-20174 (5th Cir. Apr. 21, 2017)] (Robinson & Cole LLP)
Addressing the Risks of Related Employer Status for Benefit Plan Purposes (PDF)
"In determining related employer status, there is no 'conservative' approach.... If a group health plan covers the employees of two or more employers who are not in the same controlled group (but who might be in the same affiliated service group), the plan becomes a MEWA. MEWAs are subject to additional reporting requirements and may also be subject to state insurance laws in some situations. And, if a pension plan covers two or more unrelated employers, it requires special language in the plan document applicable to 'multiple employer plans' as well." (Boutwell Fay LLP)
Insurers' Dark Secret: Shared Savings and Facility R&C
"Some questions self-funded employers should be asking about how their claims are handled: [1] What percentage of the savings is my insurer taking as its fee? [2] Is there any dollar cap on this fee or does the insurer continue to make more as the billed charges move further away from their starting point? [3] Is the member paying cost-share on the insurer's fee and if not does the employer actually save money on a net basis? [4] What incentive does the insurer have to combat fraudulent and abusive charges when they are getting paid on the savings from these bills?" (Frenkel Benefits)
TIGTA Report Evaluates IRS Preparedness to Enforce ACA Employer Shared Responsibility Provisions
"The TIGTA report affirms that proposed IRS [Employer Shared Responsibility Payment (ESRP)] notices should be expected in the coming months for the 2015 reporting year.... [L]arge employers ... should prepare to analyze and respond ... Proposed ESRP notices for 2016 should also be expected later this year, although timing remains uncertain. These proposed notices are expected to identify employees who received federally subsidized health coverage through a state Marketplace." (ADP)
Five Ways to Motivate Millennials Through Employee Communication
Infographic. "Millennials make up close to 40% of the United States workforce. However, less than one-third of them are engaged at work. Encouraging Millennials to take action concerning their employee benefits can be a difficult task. Fortunately, there are several communication tactics organizations can use to motivate even the most uninterested Millennial." (Milliman Retirement Town Hall)
PCORI Fee Payment Due July 31 (PDF)
"The fees are calculated using the average number of lives covered under the policy or plan, and the applicable dollar amount for that policy or plan year. For insured health plans, the carrier or HMO is responsible for reporting and paying the fee. Employers that sponsor a self-insured health plan must pay the fee for that plan. Payers -- insurers or employers -- use IRS Form 720 to report and remit the fee." (EPIC)
Checklist for Strategic and Compliant Enrollment Communications (PDF)
"The checklist includes recommended content for compliant enrollment communications and required health plan notices which you may wish to provide at enrollment time. [It also] outlines considerations for successfully communicating the value of (and encouraging enrollment in) your employee benefit plans." (EPIC)
[Guidance Overview] Employer Shared Responsibility: Have Penalties Been -- Or Will Penalties Ever Be -- Assessed?
"By not expanding the matching program, information return reporting leads to mismatches and unnecessary notices ... [The authors] have been unable to determine whether any of these types of penalties have been assessed, although based on the [Taxpayer Advocate Service], it appears that none have as of yet.... This is of particular concern to ALEs because efforts that must be taken to either correct or confirm that correct information was submitted to the IRS are costly and time-consuming." (Perkins Coie LLP)
IRS Information Letter Addresses HSA Ineligibility Due to Medicare Entitlement
"Medicare entitlement is automatic for some individuals ... Other individuals must file an application to be entitled to benefits (e.g., working individuals beyond age 65 who are eligible to receive Social Security benefits but who have not applied for them). Employers rehiring retirees should be aware of these rules and avoid setting up HSAs for Medicare-entitled employees. Excess pre-tax contributions to a preexisting HSA caused by failing to recognize an employee's ineligibility could trigger an additional 6% excise tax ... if the amounts are not timely distributed." (Thomson Reuters / EBIA)
TIGTA Report Underscores IRS's Difficulties in Implementing Employer Shared Responsibility
"In early January, the IRS updated its employer shared responsibility webpage to note that it expected to send letters 'beginning in early 2017' informing ALEs of potential Code Section 4980H liability for the 2015 year ... [T]he webpage [has been] updated to state that the letters will be issued 'in 2017' -- perhaps a tacit acknowledgment of the delay resulting from the complexity and struggles involved in implementing employer shared responsibility, as underscored by the report." (Thomson Reuters / EBIA)
Employers Finding All-Encompassing Strategy Key to Effective Health Care Programs
"Actions employers will take to improve the employee experience of the health care program include: [1] Implement a high-tech enrollment process with decision support.... [2] Offer greater choice of health plan options and types of benefits.... [3] Improve navigation of health care providers.... Actions employers will take to improve the employee experience of the well-being program include: [1] Provide access to a portal for tracking activity and incentives.... [2] Routinely ask for employee feedback to enhance program offerings.... [3] Personalize rewards for employees who engage in the well-being program.... [4] Offer access to tools to help households meet their financial goals." (Willis Towers Watson)
Insurer Did Not Breach Fiduciary Duty by Disclosing Substance Abuse Claim to Employer
"[T]he Court observed that FedEx's plan specifically obligated Aetna to notify FedEx if an employee sought benefits for substance abuse.... [T]he Court held that Aetna did not breach its fiduciary duty by declining to change its report to FedEx after Aetna received additional information about plaintiff's claim, because the additional information did not render Aetna's report inaccurate." [Williams v. FedEx Corp. Services and Aetna Life Ins. Co., No. 16-4032 (10th Cir. Feb. 24, 2017)] (Robinson & Cole LLP)
Private Health Insurance Exchanges Set to Grow Rapidly
"Employers are likely to adopt private health exchanges in growing numbers, seeking to save money and meet consumer demands. Health plans will have to invest in IT and re-orient their sales efforts to the individual." (HealthLeaders Media)
Plan Administrator's Failure to Notify Beneficiary of Life Insurance Conversion Rights Was Breach of Fiduciary Duty
"The Court found that that LINA had provided an Administrative Services Manual to WellStar that explained the conversion process, and stated that WellStar was required to give notice of conversion rights. However, WellStar did not have a process for giving that notice, and did not give it to plaintiff or her husband.... [The Court imposed a surcharge of] $750,000, the amount of coverage lost by their failure to convert." [Erwood v. Life Ins. Co. of North America and Wellstar Health System, Inc. Group Life Ins. Program, No. 14-1284 (W.D. Penn. Apr. 13, 2017)] (Robinson & Cole LLP)
Annual Planning for Your Company's Health Benefit Programs: Best Practices Check List
"The list [in this article] contains 25 health benefit best practices from the Mercer National Survey of Employer-Sponsored Health Plans. Each year [Mercer compares] the performance of employers that use the most of these best practices with those using the fewest (the top and bottom quartiles). And each year [the comparison indicates] that those using the most best practices have lower average healthcare cost increases. (In 2016, the two groups had average increases of 3.8% and 4.8%, respectively.)" (Mercer U.S. Health News)

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