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[Guidance Overview]
15 Things the IRS Might Ask an Employer in a COBRA Coverage Audit
"[O]n March 26, the IRS posted on its website 'Audit Techniques and Tax Law to Examine COBRA Cases' which summarizes the COBRA law and the penalties for noncompliance [and] explains the steps an IRS examiner will take in determining if a 'taxpayer' failed to comply with COBRA."
(Thompson)
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[Guidance Overview]
Final Regulations Impose Reinsurance 'Contribution' on Fully Insured and Self-Insured Plans Starting in 2014
"The Affordable Care Act (ACA) provides for a State-based transitional reinsurance program to help stabilize premiums for coverage in the individual health insurance market during the first three years of operation of the Exchanges (2014-2016).... The program is funded through 'contributions' from fully insured and self-insured plans.... Final Regulations [issued on Mar. 16] provide that the contribution requirement will be imposed on a per capita basis based on the number of enrollees and that the contribution is payable to HHS by health insurance issuers and third-party administrators on behalf of self-insured plans[.]"
(Alston & Bird LLP)
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[Guidance Overview]
State Law Claims Preempted Where COBRA Coverage Was Not Provided under Individual Policy
"This case was fairly straightforward because the employee's COBRA coverage was provided under the employer's plan and not an individual conversion policy. In cases where an individual conversion policy is issued, the law is mixed; some courts have ruled that the individual policy is governed by ERISA because it derives from an ERISA plan, and others have ruled that once an individual conversion policy is in place, it is no longer subject to ERISA."
(Thomson Reuters/EBIA)
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[Guidance Overview]
Implementing $2,500 FSA Limits for Non-Calendar Year Plans
"While the IRS has not officially condoned any particular method for complying with this requirement, there appear to be are a few options as to how employers with non-calendar plan years can address this new rule.... Regardless of which option an employer chooses, we suggest (1) communicating the limits to plan participants in advance of the effective date of the change and (2) amending the plan document to specifically describe the desired approach."
(Porter Wright)
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[Guidance Overview]
Agencies Promise Sponsor-Friendly Approach to Summary of Benefits and Coverage Rules
"While the clarifications to the FAQ final rules are welcome, the Departments' failure to delay implementation is a major disappointment to many. The [HHS, IRS and DOL] may well view the grant of a good faith compliance period as a major concession, and perhaps it is. But 'good faith compliance' is a notoriously imprecise standard. And where — as here — the penalties for non-compliance can be steep, the lack of certainty is worrisome."
(Mintz Levin)
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[Guidance Overview]
Departments Issue FAQs Simplifying Summary of Benefits and Coverage (PDF)
"While the FAQs provide helpful relief and additional guidance in many key areas, the basic SBC requirements, including the effective date, are largely unchanged from the final regulations. For self-insured plans, complying with the SBC requirements falls on the plan sponsor. For insured plans, while the issuer is generally responsible for providing the SBC, the plan sponsor is also responsible for the distribution of the SBCs."
(Buck Consultants)
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[Guidance Overview]
Supreme Court Declines to Review Sixth Circuit's Rejection of Class Certification in ERISA Fee Case
"The named plaintiff, a multi-employer trust fund, sued [Blue Cross Blue Shield of Michigan ('BCBSM')] for breach of fiduciary duty based on BCBSM's collection of so-called 'other than group' ... fees that it retained from the plaintiff's assets and those of the class members to subsidize the cost of providing Medigap coverage to senior citizens. The plaintiff claimed these OTG fees violated Michigan law and thus constituted a breach of fiduciary duty under ERISA."
(Porter Wright)
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Health Care Reform Case Ripples Outward
"After three days of historic Supreme Court debate, the political world and health-care companies confronted the prospect of President Barack Obama's health law being wiped away, a decision that would upend years of planning by businesses ... insurers would have to ditch changes to their businesses designed to bring in millions of new customers.... Companies facing the law's requirements would be reprieved, including health firms set to pay new taxes and businesses that would have been required to insure their employees or pay a fee."
(The Wall Street Journal)
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Supreme Court Hears Arguments on Severability, State Sovereignty
"[T]he U.S. Supreme Court heard oral argument on the two remaining issues involving the ACA. The morning session concerned the issue of severability — if the Court determines that the individual mandate is unconstitutional, can the mandate be severed from the rest of the ACA, or does it drag down part or all of the ACA with it? The afternoon session concerned the issue of state sovereignty — did the federal government improperly coerce the States into acquiescing in the ACA's expansion of the Medicaid program in violation of the Spending Clause?"
(Faegre Baker Daniels)
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Three Days of Hearings Yield Five Take-Aways
"The 11th U.S. Circuit Court of Appeals is the only appellate court to have struck down the mandate, and even then, it overruled a lower-court decision to say that none of the rest of the law should be invalidated too. But the nine justices devoted a lot of attention Wednesday morning to how closely entwined the mandate might be with the other provisions in the voluminous law. The chief justice indicated at one point that he thought those provisions had nothing to do with the mandate. But he also later suggested those provisions were included as sweeteners to get votes to pass the bill — and that, as a result, they should go too."
(The Wall Street Journal)
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Jonathan Gruber, Economist, Is Health Care's 'Mr. Mandate'
"[Jonathan] Gruber has spent decades modeling the intricacies of the health care ecosystem ... It is his research that convinced the Obama administration that health care reform could not work without requiring everyone to buy insurance. 'As soon as I started reading the dispatches my stomach started churning,' Mr. Gruber said of the arguments on Tuesday ... 'Losing the mandate means continuing with our unfair individual insurance markets in a world where employer-based insurance is rapidly disappearing.'"
(The New York Times; free registration required)
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Justices Question Extent of Federal Power
"The Supreme Court ended three momentous days of argument Wednesday over the constitutionality of the Obama administration's signature health-care law, with opponents pushing their rhetoric into fundamental questions about the limits of Washington's power."
(The Wall Street Journal)
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Supreme Court Day 3: Justice Scalia Becomes Unplugged Over Severability
"[A]s they did Tuesday, members of the court's conservative majority, — and Justice Antonin Scalia in particular — appeared supremely reluctant to allow the law, if gutted of the insurance mandate, to stand. Scalia lived up to his reputation for being one of the court's most voluble and humorous members. He tore into the government's arguments with relish, and joined his conservative colleagues in fretting openly about how a surviving law would affect insurance companies' bottom line."
(NPR)
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Description of Oral Arguments in Supreme Court on Severability Issue
"Today's argument on severability took on renewed importance in light of Tuesday's arguments on the constitutionality of the individual mandate, in which it appeared that the Justices were closely divided. If the mandate is indeed found unconstitutional, the question of how much of the ACA is allowed to remain standing becomes paramount."
(HighRoads)
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The Final Day of Legal Arguments Over the Health Care Law
"Near the end of the final segment or oral arguments on the constitutionality of the Affordable Care Act, dealing with whether the Medicaid extensions are constitutional, Chief Justice Roberts turned to Solicitor General, Donald Verilli, and said, 'Mr. Verilli, you have fifteen minutes left.' Verilli responded, wryly 'Lucky me.'"
(The Brookings Institution)
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Transcript Highlights: The Medicaid Expansion Arguments
"In the final arguments before the Supreme Court Wednesday, the justices looked at the health law's expansion of Medicaid, the joint federal-state health program for low-income people.... Excerpts of the arguments follow."
(Kaiser Health News)
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Justices Spar over Health Law: What's Left If Mandate Dies?
"With six hours of argument complete, it was clear that the justices gave the government a hard time on multiple fronts, leaving the fate of President Barack Obama's signature legislation unclear. That leaves a tense waiting period ahead for the administration and the health-care industry, with the court's decision expected by the end of June."
(The Wall Street Journal)
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Justices Ask if Health Law Is Viable without Mandate
"The questions from the justices indicated that at least some of them were considering either striking down just the requirement, often called the individual mandate, or the entire law."
(The New York Times; free registration required)
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Justices Suggest Other Parts of Health Law May Be Thrown Out
"The justices were divided on whether to go further and throw out everything that remains of the health-care law if they void the mandate. The court's four Democratic appointees urged a limited ruling and the Republican appointees offered various levels of support for toppling all remaining provisions."
(Bloomberg)
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Majority for Individual Mandate Seems Elusive after Persistent Questioning from 'Swing' Justices
"[P]ersistent questioning from 'conservative' Justices — Scalia, Alito, Kennedy and Roberts — about: (1) where to draw the line on Congress' power to mandate purchases; (2) whether the mandate extends government control to area that rightly belongs to individuals; and (3) whether a straightforward tax would be more equitable, made any balance-changing support for the measure look scant."
(Thompson)
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Supreme Court Oral Arguments on Day 2: Is the Individual Mandate Constitutional?
"Even if the Court ultimately rules the individual mandate is unconstitutional, that does not necessarily spell the end of health care reform. The Court may decide to strike only the individual mandate, leaving the rest of the Affordable Care Act in full effect. Moreover, [the] arguments suggested several ways that Congress could accomplish the same result. For example, both sides seemed to agree that a single payer system would pass constitutional muster, as would a system where Congress regulated payment for health care at the point of delivery (i.e. in the doctor's office)."
(Miller Johnson)
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Lower Copays Help Ensure Medication Adherence
"[Insurers should] take such steps as referring asthmatic children to specialists, providing families with written treatment plans and better explaining the importance of regular medication use.... Insurers also should consider fully covering services and interventions that promote overall child health because it could help prevent chronic diseases from developing as the children grow up[.]"
(FierceHealthPayer)
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Testimony at Mar. 29 House Ways and Means Health Subcommittee Hearing on Individual and Employer Mandates in Health Care Law
"House Ways and Means Health Subcommittee Chairman Wally Herger (R-CA) ... announced that the Subcommittee on Health will hold a hearing [on Mar. 29] to explore the constitutional concerns raised by the individual mandate and economic problems caused by the employer mandate which were created in the Democrats' health care law." Contains links to the written testimony presented at today's hearing by representatives from the Judicial Crisis Network, Dechert LLP, the Tax Foundation, Duke University School of Law, the Manhattan Institute for Policy Research, the Council for Affordable Health Coverage, Barton Mutual Insurance Company, and Georgetown Cupcake, Inc.
(House Ways and Means Health Subcommittee)
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Family Health Care Costs to Exceed $20,000 this Year
"The cost to cover the typical family of four under an employer plan is expected to top $20,000 on health care this year, up more than 7% from last year, according to early projections by independent actuarial and health care consulting firm Milliman Inc. In 2002, the cost was just $9,235[.]"
(CNN Money)
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Long-Term Care Insurance Policy Costs Rising
"Insurance companies have been making major adjustments because the claims on long-term health care policies have exceeded their predictions ... The reason: People are living longer and developing long-term illnesses[.]"
(USA TODAY)
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Strong Privacy and Security Rules Crucial to Success of Health Insurance Exchanges
"These exchanges will require new and unique exchanges of data among state agencies, the federal government, private health plans, businesses, individuals and the exchange itself. This process will trigger the creation, collection, exchange, and disclosure of personally identifiable information. Exchanges will handle, at a minimum, basic demographic information, financial information, immigration information, incarceration information and Social Security Numbers."
(Center for Democracy & Technology)
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Unfunded Pension Obligations Boost States' Debt Burden Measurement
"The ratio of median total debt burden for states relative to residents' total personal income more than doubles when accounting for unfunded pension obligations, according to Fitch Ratings ... Fourteen of the 43 states rated by Fitch have a combined liability of more than 10%, according to a report about the new measurements."
(Pensions & Investments)
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Final HITECH Rules Reach OMB
"In addition to finalizing the HITECH changes to HIPAA's privacy, security and enforcement rules proposed in July 2010 by [HHS], the rules will finalize genetic privacy rules that HHS proposed in 2009, as well as HITECH rules on enforcement and breach notification that the agency issued in 2009 in interim final form."
(Thompson)
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[Opinion]
Insurance Is Not a Product
"[Robert Toth writes that he cringed in horror as he] listened to the Supreme Court debate on health care reform, and not for the reasons you may otherwise suspect. What concerned [him] greatly, and which is something which ultimately has an impact on the retirement industry, was the common reference by SCOTUS (Supreme Court of the United States) to insurance as a 'product,' and without effective response from the Solicitor."
(Business of Benefits)
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Benefits in General; Executive Compensation
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What Constitutes an Appeal? Not a Mere Request for Records
"[The] claimant's letter to Plan with the following language did not constitute an appeal: 'We will be reviewing the records and obtaining additional medical information for my client's appeal of the decision to terminate her Long Term Disability.'"
(Lane Powell PC )
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Press Releases
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