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Health plans - design

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[Opinion] The Biggest Health Issue We Aren't Debating: Unaffordable, High Deductibles
"High deductible plans, which require people to pay large amounts out of pocket before their medical bills are covered, are a good deal for some middle and upper income people. But many lower and moderate income Americans simply don't have $1,500 to $3,000 to pay for the colonoscopy that might save their life, or a stress test that might reveal the heart disease which is the cause of their chest discomfort." (Drew Altman, via Axios)
Tax Reform: Side-by-Side Comparison of Employee Benefit Provisions of House and Senate Bills
"The House initially took a heavy hand to many favorable executive compensation provisions and made some important changes in the retirement and welfare areas, but the House Ways and Means Committee relented a bit. The Senate Finance Committee proposal, as modified ... followed suit in its approach to executive compensation." (Seyfarth Shaw LLP)
CVS Buyout of Aetna Could Come This Month
"Dow Jones reported that the deal is being driven by the possibility of Amazon entering the pharmacy business. The deal could help CVS make better use of its retail space, selling insurance, drawing blood and other services Amazon couldn't easily match[.]" (
Most Americans Don't Have Long-Term Care Insurance
"Only 25% of adults reported having LTC insurance. 'It is too expensive' was the most common reason chosen for not having LTC insurance (53%), ahead of 'I don't want to pay for something I may never need' (25%) ... [A]mong those who do not have LTC insurance, nearly half -- 49% -- of Americans with annual household income of $75,000 or more cited it being too expensive as a reason they don't have LTC insurance." (OneAmerica)
Tax Reform Legislation Moves Through the House and Senate (PDF)
"[Both bills] contain several provisions that would change the tax rules with respect to retirement plans, executive and nonqualified deferred compensation (NQDC') arrangements, employee fringe benefits, and health and welfare plans. [Includes a link to a] side-by-side summary comparing the retirement, executive compensation, fringe benefit, and health and welfare provisions in the House and Senate bills[.]" (Groom Law Group)
[Opinion] In Defense of High-Deductible Health Plans
"Are these plans a smart way to avoid rising premiums or do they offer unaffordable coverage dressed up as something else? The answer, I think, depends on the patient. Young people in relatively good health, for instance, are perfectly suited to realize the benefits of HDHPs.... Those with serious chronic conditions may not have the same financial incentive to choose an HDHP; people with small children might want the peace of mind that comes with a more comprehensive plan.... Fortunately, there are viable alternatives for those who find themselves equally put off by high-premium plans and HDHPs." (Manhattan Institute for Policy Research)
Employers Working to Keep Health Costs for Employees Down
"Two-thirds of employers (66%) say their company is extremely/very aware of the potential changes to health care policy coming out of Washington D.C., and more than one-quarter (26%) of employers report that the most common fear among their employees is losing health care due to a pre-existing condition." (PLANSPONSOR)
[Opinion] ACA: The Health Care Law That Continues to Escape Death
"On an average daily basis, total sign-ups are up 60% over the start of last year's open enrollment period, and sign-ups among new consumers are up 53%.... One possible explanation for this apparent success is the peculiar math resulting from the termination of cost-sharing subsidy payments to insurers." (JAMA Forum)
The Employer Penalty, Voluntary Compliance, and the Size Distribution of Firms: Evidence from a Survey of Small Businesses
"A new survey of 745 small businesses shows little change in the size distribution of businesses between 2012 and 2016, except among businesses with 40-74 employees, in a way that is closely related to whether they offer health insurance coverage.... Between 28,000 and 50,000 businesses nationwide appear to be reducing their number of full-time-equivalent employees to below 50 because of that mandate. This translates to roughly 250,000 positions eliminated from those businesses." (National Bureau of Economic Research [NBER])
[Guidance Overview] IRS Releases Guidance on QSEHRAs
"The IRS recently released almost 60 pages of guidance on Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs) ... [IRS Notice 2017-67 covers] topics such as who is an eligible employer, substantiation requirements, and the notice requirement. The Notice underscores the complexity associated with operating a QSEHRA and some traps for the unwary." (HUB International)
Insurer Participation in the 2018 Individual Marketplace (PPT)
6 slides. "48% of exchange enrollees have a choice of three or more insurers in 2018, down from 58% in 2017 and 85% in 2016.... 1,623 counties have only one exchange insurer in 2018 compared to 1,036 counties in 2017 ... 52% of counties will have one exchange insurer in 2018, compared to 33% of counties with one exchange insurer in 2017." (Henry J. Kaiser Family Foundation)
Fifth Annual Transamerica Survey: Employers Hold Steady in Time of Uncertainty (PDF)
91 presentation slides. "Companies are less likely in 2016 (13 percent) and 2017 (13 percent) than they were in 2015 (18 percent) to say they stopped providing health insurance in the past year....31 percent of employers have made changes in the past 12 months to health benefits they offer.... [E]mployers report they changed plan options (29 percent) or implemented a wellness program (27 percent).... [O]ne in six (17 percent) say they reduced or eliminated company contribution to cover costs for healthcare benefits (other than health insurance) and 13 percent say they did the same to cover cost for health insurance.... [T]hree out of four employees say they are satisfied with the health insurance plan and other benefits their company offers." (Transamerica Center for Health Studies)
2017 Global Benefits Attitudes Survey
"Employees ... with choice and flexibility today are twice as likely to feel their benefit program meets their needs.... More than one-fifth of employees expect to still be working at age 70 or later. Over 60% say their employer retirement plan is their primary means of saving for retirement. Employees look to their employers for support in improving their health and well-being, and becoming more financially secure. Although companies are responding with programs that support physical, emotional, financial and social well-being, ... [e]mployee engagement in well-being programs remains low. Employers could likely boost engagement by designing programs that leverage the workplace environment and promote the use of new technologies." (Willis Towers Watson)
Improving Health Plan Quality, Satisfaction, and Lowering Costs: What's in Your Five-Year Plan?
"The top two won't be a surprise to anyone with responsibility for managing a health program: taking action to manage high-cost claims and spending on specialty drugs. But the third on the list -- with 70% of large employers citing it as important or very important -- was unexpected: a focused strategy for creating a culture of health." (Mercer)
Senate Tax Bill Revisions Kill ACA Individual Mandate, Preserve Current Retirement and NQDC Contributions
"Unlike the House version, the Senate bill, as amended, would effectively repeal the [ACA's] individual mandate ... Like the House tax bill, the Senate version now keeps pretax retirement contributions to 401(k) and similar plans intact.... Senate Republicans added an employer credit for paid family and medical leave to the bill.... [By] Nov. 15 the NQDC provision was gone from the revised mark-up of the bill." (Society for Human Resource Management [SHRM])
Keys to Successful Business and Community Health Collaboration (PDF)
"[A] growing number of business leaders are investing in the health of their employees, but they also increasingly recognize the importance of engaging in efforts to create a culture of health in the communities they serve and to address concerns such as community access to health care and healthy food, emotional health issues, obesity, and graduation rates -- all factors that contribute to community health." (Health Enhancement Research Organization [HERO])
Influence of Incentives and Incentive Design on Employee Participation and Satisfaction
"The low rate of outcome-based only and activity-based only approaches was notable, as were the findings that most employers were using participation-based incentives alone or in combination with other approaches and that 63% did not use any type of outcome-based component.... [F]inancial incentives were associated with higher participation rates for health assessments (54% participation) and biometric screenings (52% participation)[.]" (HERO)
California Fines Anthem $5 Million for Failing to Address Consumer Grievances
"The state Department of Managed Health Care criticized Anthem, the nation's second-largest health insurer, for systemic violations and a long history of flouting the law in regard to consumer complaints.... Before this latest action, California had already fined Anthem more than $6 million collectively for grievance-system violations since 2002." (Kaiser Health News)
Embedded Deductibles and Out-of-Pocket Maximums Can Present Compliance Challenges
"Embedded [out-of-pocket maximums (OOPMs)] work the same way as embedded deductibles. However, unlike embedded deductibles, embedded OOPMs are required [by the Affordable Care Act].... HDHPs have a separate maximum on the family OOPM. This means HDHPs must have an overall family OOPM that is the lesser of the HDHP OOPM ($13,300 for 2018) or the HHS-required family OOPM ($14,700 for 2018)." (HUB International)
Description of the Chairman's Modification to the Chairman's Mark of the Tax Cuts and Jobs Act
103 pages. "Scheduled for markup before the Senate Committee on Finance on November 15, 2017 ... The Chairman's modification strikes the following proposals: [1] Item III.H.1, Nonqualified deferred compensation, [2] Item III.K, Determination of worker classification and information reporting requirements, [3] Item III.M.2, Application of 10-percent early withdrawal tax to governmental section 457(b) plans, and [4] Item III.M.3, Elimination of catch-up contributions for high-wage employees." [Also available: Estimated revenue effects of these modifications.] (Joint Committee on Taxation [JCT], U.S. Congress)
[Guidance Overview] The (Unintended) Impact of the ACA on Divorce
"Historically, a divorce could have a dramatic impact on health care coverage, particularly for people who relied on an employed spouse for health insurance. The reality of losing health insurance prevented some spouses from pursuing divorce, and in other cases a divorce would result in a loss of coverage, often for years.... ACA and its health insurance exchanges have had an impact on the divorce dynamic. Spouses may no longer be dependent upon breadwinner spouses' employer-provided health insurance coverage. And, in some cases, given ACA-provided subsidies, combined insurance costs may be lower if a couple divorces. Here are five ways in which ACA might change divorce." (Fox Rothschild LLP)
Modeling the Effects of the Individual Mandate on Health Insurance Coverage
17 presentation slides. "CBO discusses the theoretical and empirical basis for its estimates of the effect on health insurance coverage of repealing the individual mandate ... These slides reprise material presented to CBO's Panel of Health Advisers in September 2017, with the addition of updated estimates published [in Nov. 2017]." (Congressional Budget Office [CBO])
Senate GOP Tax Bill to Include Individual Mandate Repeal; Healthcare Groups Urge Congress to Reconsider
"Including a repeal of the mandate in tax legislation could help pay for some of the tax cuts Republicans want. [CBO] estimates the savings will total $338 billion over 10 years." (FierceHealthcare)
[Guidance Overview] Healthcare Reform: Questions and Answers for Employers
165-page compilation of Q&As covering all aspects of the ACA. Updated through Nov. 14, 2017. (Arthur J. Gallagher & Co.)
Healthcare CEOs Say Leaders Need to Redefine Wellness
"As companies complete for talent and corporate culture becomes a differentiator in recruitment, it's clear that organizations need to shift focus from the financials to the people. And by making physical and mental wellness a number one priority, senior-level financial executives may discover an alternative solution to the health care crisis." (Financial Executives International Daily)
Employees Wary of Narrow Networks? Here's How to Win Them Over
"Only 7% of self-insured employers offer narrow networks to their employees.... 38% of the biggest (5000+ employee) firms operate what are known as high-performance networks.... Employers should be completely transparent about how they construct their networks.... Employers need to aggressively combat the misconceptions surrounding narrow networks.... Patient access must be protected.... employers need to ensure that the high-performers in their network are, in fact, high-performers." (mpirica)
[Opinion] Narrow Networks Benefit Insurers, Not Patients
"Narrow networks are a tool of private insurance companies designed to enhance their business model rather than to improve patient service. They add to the administrative waste that characterizes the private insurance model of health care financing." (Physicians for a National Health Program [PNHP])
[Opinion] Hospital Impact: The Upside of Narrow-Network Insurance Plans
"Nationwide, disjointed care channels are preventing providers from reaching the quadruple aim: exceptional health outcomes, an exceptional experience for the people we serve, and an exceptional experience for providers, at an affordable cost. The ability to truly execute the quadruple aim depends on having an individual receive care within a defined network. The advantage of more targeted choice in narrow network plans is that providers can deliver quality across the continuum of care while being responsible stewards of resources." (FierceHealthcare)
OPM Withdraws Proposed Rule on Health Care Premiums for Some Feds
"On the eve of open enrollment for 2018, the Office of Personnel Management announced that it is withdrawing a proposed rule that would have required some federal employees to keep paying their health insurance premiums when they are on unpaid leave.... Currently, agencies generally pay for the entirety of FEHBP premiums for employees on leave without pay. Employees then repay their portion of the insurance contribution when they return to work." (Government Executive)
How Does Health Care Fare in Congress' Attempts to Simplify the Tax Code?
"While the direct impact of tax reform on health care costs is still unknown, the federal budget resolution passed last month recommends a $1.8 trillion reduction in health care spending, including a $1.3 trillion cut to non-Medicare health programs and another $473 billion cut to Medicare over the next 10 years.... [A]ny decrease in public funding for health care will likely shift expenses to privately sponsored health insurance coverage." (The Alliance)
How Employees Can Make Themselves Ineligible for HSA Contributions
"In 2004, the [IRS] confirmed that an employer only has three responsibilities regarding HSA eligibility and communicating this to the HSA custodian: [1] Ensure the employee is covered by an HSA-eligible high-deductible health plan (HDHP) sponsored by the employer; [2] Confirm that the employee is not covered by any non-HDHP coverage sponsored by the employer; and [3] Provide the employee's age (for purposes of the catch-up contribution). So why should employers care about HSA disqualification if it is primarily an employee concern?" (HR Daily Advisor)
House Tax Bill Clears Committee, Senate Unveils Its Own Bill
"Significant for employer plan sponsors is that the Senate's proposal does not eliminate dependent care flexible spending accounts. The original House bill eliminated the ability of employers to sponsor these programs, which allow working parents to pay up to $5,000 of daycare expenses tax free." (Lockton)
What Could the End of DACA Mean for Your Employees' Health and Welfare Benefits?
"[E]mployers need to be aware of some benefit issues, should the rescission remain unchanged. For instance, do the normal rules for continuation of health care coverage under COBRA apply to DACA-covered employees when their work permits expire? That's just the tip of the iceberg.... It may be difficult to aim an approach solely at DACA-covered employees, given that employers cannot ask employees whether their work permits are due to DACA or some other work visa program, and most employers may not want non-DACA-covered employees to be inadvertently included in the approach." (Willis Towers Watson)
Montana Mental Health Parity Law Not Preempted by ERISA, Applies to Disability Income Replacement Benefits
"A participant ... [asserted that] plan terms limiting benefits for mental illness to 24 months ... violated Montana's mental health parity law. The plan's insurer argued that ERISA preempted the state law ... [T]he court acknowledged that the law is aimed at hospitalization, treatment, and similar benefits but cited several reasons why it is not limited to those benefits.... Also, the law expressly excludes other types of coverage, such as workers' compensation, leading the court to conclude that the state legislature would have expressly excluded disability income replacement benefits had it so intended." [Sand-Smith v. Liberty Life Assur. Co. of Boston, No. 17-004 (D. Mont. Oct. 23, 2017)] (Thomson Reuters / EBIA)
2018 Inflation-Adjusted Limits Affect Many Employee Benefit Plans
"[Rev. Proc. 2017-58] sets out the 2018 inflation adjustments for ... health flexible spending arrangements (FSAs), qualified transportation fringe benefits, qualified adoption assistance programs, penalties related to the [ACA] individual mandate and qualified long-term care (LTC) premiums. The limits also include ... the qualified retirement plan limits released in Notice 2017-64 and the recently announced Social Security taxable wage base. The 2018 tax limits may affect design, administration, communication and tax reporting for these benefits." (Willis Towers Watson)
Individual Stop-Loss Is Now Optional for Next Generation ACOs (PDF)
"As [Next Generation Accountable Care Organizations (NGACOs)] evaluate whether they should participate in the individual NGACO stop -- loss program, many aspects of the NGACO stop -- loss methodology must be considered. Several factors will make it difficult for an NGACO to choose whether to have its financial settlement based upon capped or uncapped claims[.]" (Milliman)
The Next Generation ACO Program: Financial Results for 2016 (PDF)
"Across all NGACOs in 2016, the program had $48 million in gross savings and $3 8 million in shared savings. Shared savings are the net amounts paid by CMS to the NGACOs. If we separate the NGACOs into those that had savings and those that had losses (as shown in Figure 1), we see that the former had $58 million in shared savings and the latter $20 million in shared losses." (Milliman)
The New Contraception Coverage Rules: Four Things to Know
"[1] The rules offer new exemptions.... [2] Multiple types of employers can quality for exemptions.... [3] Not very many employers are expected to take advantage of the new rulings.... [4] Preparing now will ease headaches later." (Managed Healthcare Executive)
Drug Pricing Crisis and the Role of the Intermediary: How Did We End Up Here? (PPT)
14 PowerPoint slides. Topics include: [1] Contributing factors; [2] Independent pharmacy marketplace realities; [3] PBM influence in U.S. supply chain; [4] PBMs, plan benefit design and lack of fiduciary responsibility; [5] PBM revenue streams; [6] Maximum Allowable Cost (MAC) pricing: PBM proprietary drug pricing standard. (National Community Pharmacists Association [NCPA])
CBO Report: Repealing the Individual Health Insurance Mandate -- An Updated Estimate (PDF)
"The analysis underlying this estimate incorporates revised projections of enrollment in health insurance, premiums, and other factors ... CBO and JCT estimate that repealing that mandate starting in 2019 -- and making no other changes to current law -- would have the following effects: [1] Federal budget deficits would be reduced by about $338 billion between 2018 and 2027. [2] The number of people with health insurance would decrease by 4 million in 2019 and 13 million in 2027.... [3] Nongroup insurance markets would continue to be stable in almost all areas of the country throughout the coming decade. [4] Average premiums in the nongroup market would increase by about 10 percent in most years of the decade[.]" (Congressional Budget Office [CBO])
Tax Reform Proposal Would Impact Savings Arrangements
"The Ways and Means Committee continues to make changes to the bill before the House of Representatives votes on it. The vote was expected to occur during the week of November 13, 2017, but may occur earlier. Meanwhile, the Senate is working on a tax reform bill of its own. Although the legislative process is still ongoing, [this article provides] a summary of the more significant provisions from the initial proposal that could become law and affect tax-favored savings arrangements." (Ascensus)
Some States May Want to Change Obamacare Benefits
"Beginning in 2019, states could annually set benchmark essential health benefits that health plans are required to cover under the [ACA] by basing them on coverage available in other states under the [HHS proposed] Notice of Benefit and Payment Parameters for 2019 ... Wisconsin is considering filing a waiver under Section 1332 of the ACA, and it could consider making changes to its essential health benefits package in that context ... Oklahoma may resubmit a 1332 waiver, and state officials are studying the 2019 payment notice proposal ... Prescription drugs may be the most likely category to undergo changes in benefits[.]" (Bloomberg BNA)
[Opinion] American Academy of Actuaries Comment Letter to DOL, HHS and Treasury on Association Health Plans, Short-Term Limited-Duration Insurance, and Use of HRAs (PDF)
"The extent to which broader access to [association health plans (AHPs)] could result in market segmentation and adverse selection in ACA-compliant markets depends on many factors ... How would the employer mandate rules apply to employers providing coverage through an AHP?.... If access to AHPs is expanded at any time during 2018, premiums for ACA-compliant plans could be understated to the extent that AHPs attract a healthier enrollee population, worsening the risk profile of the ACA-compliant markets.... [A]ll AHPs, both self-funded and fully insured, would need to be subject to state-level consumer protection laws." (American Academy of Actuaries)
QSEHRA Revives Opportunity for Small Business HRAs
"The primary appeal of the QSEHRA for most small business owners is that it's a way to provide employee 'health benefits', without taking on the full burden -- and cost uncertainties -- of offering group health insurance. Instead, employers can control their costs by explicitly setting a monthly dollar amount that becomes available to employees for reimbursement, avoiding payroll taxes on any dollars actually spent, and keeping any unused QSEHRA dollars that aren't actually claimed by employees as a reimbursement ... QSEHRA benefits are not available for most small business owners themselves, though with the above-the-line deduction for health insurance premiums for small business owners, the QSEHRA would often be a moot point anyway." (Nerd's Eye View)
New Tax Reform Bill: Major Changes to Executive Compensation Lead Impact on Benefits and Compensation Practices (PDF)
9 pages. "Employers that have used nonqualified deferred compensation plans to attract and retain highly compensated employees ... would need to consider alternatives to achieve their goals ... With the possible exception of incentive stock options, there would appear to be no reason for employers to grant stock options or stock appreciation rights.... [R]ule changes would ease the ability of employees to take hardship withdrawals and would reduce some of the complexity in administering hardship withdrawals.... As a taxable contribution, [Dependent Care FSAs] would be effectively eliminated as they would have no value to employees.... The Tax Bill does not eliminate Health Care Flexible Spending Accounts." (Mazursky Constantine LLC)
Value-Based Care Growing as a Way to Reduce Employer and Employee Health Costs
"Providers, namely hospitals and large regional health care systems, are increasingly being asked by payers to accept at-risk reimbursement, where payment is heavily influenced by the quality and outcome of patient care." (PLANSPONSOR)
GAO Report on FEHBP: Enrollment Remains Concentrated Despite More Plan Offerings and Effects of Adding Plan Types Are Uncertain
"[D]espite more available plan offerings in recent years [under the Federal Employees Health Benefits Program], enrollment has become more concentrated within the largest health insurance carrier in a county. Specifically, the median share of enrollment held by the largest carrier in a county increased from 58 percent in 2000 to 72 percent in 2015. Further, one carrier -- the Blue Cross Blue Shield Association -- was the largest carrier in 93 percent of counties in 2000 and 98 percent of counties in 2015." [GAO-18-52, published Oct. 5, 2017, released Nov. 6, 2017] (U.S. Government Accountability Office [GAO])
Reference-Based Pricing -- Not Just for Large Groups Anymore
"The objective is to motivate participants to search for the most cost-effective provider of care since the member is responsible for charges above the set reference-based pricing level.... For small employers, this could be viewed as an improvement over traditional plans since members can visit any medical provider." (Frenkel Benefits)
Tax Cuts and Jobs Act: Good News for 401(k) Plans, Bad News for Nonqualified Deferred Compensation
"While there were no adjustments to contributions to 401(k) plans under the Act, that does not mean that the final version of the bill will not include some form of Rothification.... The Act liberalizes certain rules relating to hardship distributions.... This proposal would eliminate many standard forms of deferred compensation, such as 401(k) mirror plans. It also removes from the Code, with respect to services performed after December 31, 2017, Sections 409A, 457(b) (for tax exempt employers), 457(f), and 457A ... The exclusions for adoption assistance, dependent care, qualified moving expenses, and employee achievement awards are repealed." (The Wagner Law Group)
[Opinion] How Ethics and Transparency Can Solve the PBM Crisis
"The pharmacist should be at the center of care coordination to ensure that each prescription is the right medication ... Under a pay-for-performance model, the PBM's goals align with those of the plan sponsor.... The PBM should then facilitate any needed changes to the prescription through the prescriber.... Medications selected for the formulary must be the most effective, regardless of cost or rebate.... PBMs must proactively focus on clinical efficiency and accuracy." (Employee Benefit News)
Effect of On-Site Clinics on HDHPs and HSAs
"An on-site health clinic may offer the following permissible medical benefits at no cost, without affecting HSA eligibility: 'permitted' coverage (such as vision and dental care), 'preventive care' (such as shots and screenings), and 'insignificant' medical benefits (collectively, permissible benefits).... If an on-site clinic provides 'significant benefits' for free or at reduced-cost (i.e., below fair market value), an employee may lose eligibility for an HSA." (Jackson Lewis P.C.)
Tax Reform Contemplates Changes to Employee Benefits
"Elimination of certain income tax exclusions ... Loosen[ed] restrictions on hardship distributions from 401(k) plans ... Reduction in minimum age for in-service distributions from 457(b) plans and [DB] plans ... Extended rollover period for plan loan offset amounts ... Modified nondiscrimination testing rules for frozen legacy plans ... Additional limitations on archer medical savings accounts (Archer MSAs)." (Proskauer's ERISA Practice Center)
New York Anti-Subrogation Law Prohibits Offsets for Settlements; Choice-of-Law Provisions May Not Govern Offset and Subrogation Rights
"The U.S. Court of Appeals for the Second Circuit has ruled that New York's anti-subrogation statute ... applies both to 'offsets' for prospective benefit payments and to reimbursements for prior benefit disbursements. In so holding, the Second Circuit ruled that a Plan's choice-of-law provisions may not be dispositive of which jurisdiction's anti-subrogation statute will apply to govern disbursement and/or recovery of that Plan's assets." [Arnone v. Aetna Life Ins. Co., No. 15-2322 (2d Cir. June 22, 2017)] (Robinson & Cole LLP)
[Guidance Overview] QSEHRAs Provided by '21st Century Cures Act' May Not Be a Total Cure
"Employers desiring to offer a QSEHRA must be aware that these arrangements are different in many significant respects from the health reimbursement arrangements first recognized under IRS Notice 2002-45 (HRA) and QSEHRAs also carry many additional requirements, such as the requirement that the individual must certify that they have MEC before each expense is reimbursed in order for the expense to be eligible and excluded from the individual's income and to not disqualify the QSEHRA. Disqualifying a QSEHRA means loss of the income tax exclusion for the individual, and depending upon the violation it may mean loss of being exempt from the group health plan definition and would trigger application of all provisions applicable to group health plans under the Code, COBRA, the ACA requirements(including the requirement that HRAs be integrated with a group health plan) and under the Medicare secondary payer statute." (Winstead PC)
House of Representatives Releases Tax Reform Proposal: The Tax Cuts and Job Act
"The tax reform proposal does not provide any relief from ... the tax on high cost health plans (the 'Cadillac tax'), the cap on employee contributions to health FSAs, the requirement that drugs be prescribed to be reimbursed from an FSA, HRA or HSA and the increase in the penalty tax for disqualified distributions from an HSA.... Employers will no longer be able to deduct expenses for qualified transportation fringe benefits paid or incurred after December 31, 2017 ... However, the proposal does not change the non-taxable nature of these qualified transportation fringe benefits. This means that employers will not be able to deduct any pre-tax transit and parking amounts, but they will remain tax advantaged for individual employees." (Employers Council on Flexible Compensation [ECFC])
GOP Tax Bill Outlines Significant Changes for Benefits and Compensation
"There is nothing in the bill that would limit pretax retirement savings or require them to be converted to Roth after-tax savings ... Some of the most significant changes relate to limits on executive compensation ... Beginning in 2018, individuals would no longer be permitted to convert a traditional IRA to a Roth IRA, or vice versa.... There are a few modest changes for tax-qualified retirement plans ... Beginning in 2018, the pretax treatment of expenses under a dependent care flexible spending account would be repealed.... Qualified tuition reimbursement plans through which employers can provide pretax tuition assistance to employees would be repealed effective in 2018.... Several other pretax fringe benefit arrangements would no longer be eligible for tax benefits beginning in 2018, including transportation fringe benefit plans, adoption assistance plans, qualified moving-expense reimbursement arrangements, employee achievement awards, and Archer medical savings accounts." (Ballard Spahr LLP)
[Guidance Overview] A Step Toward 'Replace' Without the 'Repeal': The Trump Administration Re-Regulates Obamacare
"This year's [Proposed Notice of Benefits and Payment Parameters] is more sweeping in scope than its predecessors, covering not only Exchange-specific policies, such as the Navigator program and Qualified Health Plan (QHP) certification, but also policies that impact the wider commercial small group and individual insurance markets -- like essential health benefits, medical loss ratio and rate review rules. However, a number of hot-topic areas are not addressed, including Section 1332 state innovation waivers (for which CMS shares jurisdiction with the Department of Treasury), segregation of abortion funds, and language access standards for Exchanges, QHP issuers and web-brokers. Comments to the proposed rule are due on November 27." (Faegre Baker Daniels)
Employer Strategies Tame Healthcare Cost Growth
"The average total health benefit cost per employee rose a modest 2.6% in 2017. Of course, behind the average, actual experience ranged from flat or decreased cost for over a fourth of employers to increases of greater than 10% for more than a third.... 'Transparency tools' (now offered by 82% of employers with 500+ employees) help consumers compare healthcare prices and quality, while telemedicine provides a low-cost alternative to an office visit (offered by 71%).... In 2017, 30% of all covered employees enrolled in a high-deductible consumer-directed health plan (CDHP). That's nearly flat from 2016." (Mercer)
[Guidance Overview] Implementing State Flexibility on MLRs
"HHS's proposed payment rule would encourage states to apply again to reduce their individual market MLRs below 80 percent beginning with 2019, allowing insurers as needed to stabilize their individual insurance markets. CMS is, therefore, proposing to reinstate and streamline a collection of information to allow states to request reductions in the minimum MLR in their individual market. To request an adjustment to its MLR, a State will have to submit information regarding insurers selling coverage in its individual market, including earned premium and incurred claims, number of enrollees, commissions, and net underwriting gain, as well as each insurer's risk-based capital level." (Timothy Jost, in Health Affairs)
[Opinion] The Ugly Consequences of Single-Payer Health Care
"Last year, two separate analyses ... came to the same conclusion: The Sanders 'single-payer' bill is going to cost the American people far more than the senator and his academic and congressional allies claim, and the taxes to finance this massive enterprise are going to be huge." (The Heritage Foundation)

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