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Health & Welfare Plans Newsletter

July 12, 2010

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[Guidance Overview]
Health Net to Pay $250,000 to Settle First-Ever State HIPAA Privacy Suit
Excerpt: "The Health Information Technology for Economic and Clinical Health (HITECH) Act of 2009 amended HIPAA to give state attorneys general the power to bring a civil action on behalf of state residents when the attorney general believes they have been victims of a HIPAA violation."
(Thompson Publishing Group Inc.)

[Guidance Overview]
Provider Payment for Emergency Services under New Plan Rules
Excerpt: "Section 10101(h) of the Affordable Care Act health reform legislation requires that health plans and insurers provide coverage for all emergency services without regard to whether the provider is in- or out-of-network, without requiring preauthorization, without imposing administrative requirements more burdensome than those applicable to emergency care provided in-network, and without imposing higher cost-sharing burdens on patients."
(Proskauer Rose LLP)

[Guidance Overview]
Proposed HHS Rulemaking Expands HIPAA Privacy and Security Rules
Excerpt: "The Rule modifies the Privacy Rule, the Security Rule and the Enforcement Rule. It will broaden the applicability of the Privacy and Security Rules requirements to business associates, and apply the Privacy and Security Rules to electronic protected health information."
(Nixon Peabody LLP)

[Guidance Overview]
Final Application and FAQs for Early Retiree Reinsurance Program (PDF)
4 pages. Excerpt: "Buck Comment. In identifying the plan for purposes of the application, a plan sponsor will need to coordinate carefully any actions that are being considered in implementing 'retiree-only plans' to avoid health reform market mandates."
(Buck Consultants)

[Guidance Overview]
If You Lose Grandfathered Status of Your Health Insurance Plan, What Do You Avoid? (PDF)
Excerpt: "If you lose grandfathering, you will not have to, among other things: Include a notice with your plan communication material which implies you are depriving employees of certain benefits; Maintain documentation of your plan as it existed on 3/23/2010 for perpetuity; Calculate the impact of certain benefit changes (increasing copayments, increase cost sharing using a formulae contained in the regulations); Postpone or rework plan changes for the coming year."
(ERISAdiagnostics Inc.)

[Guidance Overview]
Ninth Circuit Issues Ruling in Standard Insurance Co. v. Morrison on Discretionary Clause Issue
Excerpt: "The Ninth Circuit held that Morrison's practice of disapproving discriminatory clauses is specifically directed toward entities engaged in insurance and substantially affects the risk pooling arrangement between insured and insurer, more so than other laws that have been upheld by the U.S. Supreme Court; thus, the practice is saved from ERISA preemption."
(Passion for Subro!)

[Guidance Overview]
DOL FAQ Provides Enforcement Safe Harbor for Determining Parity for Outpatient Benefits Under MHPAEA
Excerpt: "The FAQ makes it clear that the new enforcement safe harbor for outpatient benefits and the special rule for multi-tier prescription drugs under the regulations are the only sub-classifications that are permitted when applying the MHPAEA parity rules."
(Employee Benefits Institute of America)

Proposed Rules Implementing Key HITECH Act Provisions to Be Published in Federal Register
Excerpt: "An advance copy of the proposed rules covering modifications to implement many of the statutory changes under the HITECH Act has just been released."
(Employee Benefits Institute of America)

HHS Proposing Changes to Bolster the Existing Federal Health Privacy Law
Excerpt: "A news release from the Department of Health and Human Services (HHS) said the department is proposing changes to the privacy, security, and enforcement rules in the Health Insurance Portability and Accountability Act (HIPAA)."

Boosting Wellness Participation Without Excessive Costs
Excerpt: "Successful employers share a common commitment in their wellness strategy. They provide broad-based and targeted communication to their workforce and develop a healthy workplace culture with strong support from senior leadership."
(Towers Watson)

When Choosing a Health Insurance Plan, Know What You'll Owe
Excerpt: "Many group policies provide limits on annual out-of-pocket expenditures, including co-insurance, deductibles and co-pays. With these plans, once you pay, say, $5,000 or $6,000 for a single person in approved medical bills, your insurer will cover 100 percent of additional treatment. The new health care law will limit all cost-sharing, including co-insurance payments, beginning in 2014."
(The New York Times; free registration required)

Changes for Employers, Health Insurers Coming with Health Reform Implementation
Excerpt: "Starting in September, changes to health insurance could significantly alter how insurers operate and how employers provide coverage for workers."
(Henry J. Kaiser Family Foundation)

Companies Adding End-of-Life Support Services to Their Life-Event Employee Programs
Excerpt: "With more baby boomers either caring for parents who are nearing death or suffering from life-ending diseases themselves, HR has a mounting responsibility to help workers make those final plans. Issues include wills, advanced directives about medical treatment, financial advice and grief counseling."
(Human Resource Executive Online)

Washington, D.C.'s Effort to Regulate Pharmacy Benefit Managers Ruled Invalid
Excerpt: "The District of Columbia Council passed the AccessRx Act in 2004 in response to rising prescription drug prices. Title II of the act had sought to regulate PBMs by imposing fiduciary duties on the companies and requiring them to disclose certain financial information including rebates, discounts and similar payments."
(Business Insurance)

HHS Opens 'Web Portal' on July 1 to Provide Health Care Access Information
Excerpt: "[T]his is only stage one -- an October update is expected to add more information, including price estimates for private insurance plans."
(Employee Benefits Institute of America)

District Court Rules for Retirees on Health Benefits
Excerpt: "The SPD stated that the company 'hoped' to continue the benefits indefinitely but reserved the right to change the payments at any time. Jonker declared in his ruling: 'This language is not an unqualified statement that the employer retained the unilateral right to amend and terminate the plan.'"

Will Having More Insurers Control Health Care Costs Better?
Excerpt: "A common theme among health reformers has been that the small-group and individual markets for health insurance are too concentrated and thus inadequately competitive. The proposed remedy is to have more independent insurers compete within local markets."
(Health Affairs)

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Benefits in General; Executive Compensation

[Guidance Overview]
Court Rulings that Federal Ban on Same-S.ex Marriage is Unconstitutional Raises Significant Implications for Employee Benefit Plans
Excerpt: "Assuming the [Department of Justice] is successful in obtaining a stay of the decisions, employers will need to closely follow the progress of the appeals of these cases (and separate DOMA litigation in California)."
(McDermott Will & Emery)

U.S. Corporations/HR Leaders Need to Prepare for New Federal Law That Requires Nonbinding Shareholders' Vote on Executive-Pay Packages
Excerpt: "Say-on-pay has gained impetus in a climate where the public wants to put brakes on executive compensation. Even without a law, some 80 U.S. companies have already adopted voluntary say-on-pay voting. In addition, about 240 financial institutions covered by the Troubled Asset Relief Program (TARP) of 2008 are required to have a vote."
(Human Resource Executive Online)

Hewitt Associates, Inc. to Merge with Aon Corporation
Excerpt: "This morning Aon Corporation and Hewitt Associates, Inc. announced that the boards of directors of both companies have approved a definitive agreement under which Hewitt will merge with a subsidiary of Aon."

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