States Moving Ahead On Defining 'Essential' Health Insurance Benefits Under Federal Law; Disparities Arise
"California and Washington state will require coverage of acupuncture. Arkansas wants prevention counseling for women at high risk of breast cancer but not coverage of expensive infertility treatment. Oregon opted against covering bariatric surgery for obesity but insurers will have to cover cochlear implants for hearing. These are some of the decisions states have made as they determine what minimum insurance benefits millions of their residents will be entitled to in 2014 under the federal health law."
(Kaiser Health News)
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Consumer-Driven Health Plans Overtake HMOs
"[M]ore than a quarter of companies say they may take a defined-contribution approach to healthcare within the next few years by giving employees a set amount of money to buy insurance on a private healthcare exchange. Fifty-eight percent of the companies [recently] surveyed ... offered some type of consumer-driven health plan (CDHP) last year, up from 41% the previous year, while just 38% offered an HMO, down from 41%. Preferred provider organizations (PPOs) are still more common than either CDHPs or HMOS and were offered by 79% of employers."
(Treasury & Risk)
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Research Finds Huge Variation in Out-of-Pocket Costs Among 10 Health Insurance Plans
"[R]esearchers at the Georgetown University Health Policy Institute assessed coverage under 10 health plans in Massachusetts.... Consumer out-of-pocket costs under the hypothetical scenarios varied greatly: For breast cancer, patient costs ranged from $2,004 for one of the low-deductible plans to $55,250 for one of the young adult plans. For heart disease, patient costs ranged from $1,881 to $39,355. For diabetes, patient costs ranged from $507 to $4,126."
(Robert Wood Johnson Foundation)
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Small Employer Potentially Liable for Former Employee's Health Costs Due to Erroneously Extending COBRA Coverage
"A federal court was recently asked to determine whether an employer could liable for monetary damages when it erroneously extended COBRA coverage to an employee, even though the employer was exempt from COBRA because it had fewer than 20 employees.... [T]he court determined that the employer could be liable for the employee's continuation coverage for the following reasons: (1) the employer, not the insurer, knew the exact number of persons it employed; (2) the insurance contract placed the burden for complying with federal laws such as COBRA squarely on the employer; and, (3) under the terms of the insurance contract, the insurer expressly disclaimed any warranties or representations that the employer's health plan complied with federal law." [Hanysh v. Buckeye Extrusion Dies, Inc.]
(HighRoads)
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HIPAA Enforcement Actions: Recent Cases and Trends (PDF)
"Despite proposed cuts to [the U.S. Department of Health and Human Services Office for Civil Rights (OCR)]'s 2013 fiscal year budget, OCR has no intention of curbing its enforcement activities. In fact, OCR has stated that it is looking to have enhanced enforcement impact by focusing on increased efficiency and high-impact cases."
(Drinker Biddle)
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More Health Plan Communications Go Digital
"While employers continue to use a variety of methods to distribute their required Summary Plan Descriptions (SPDs), electronic distribution is the most prevalent approach used with active employees: 80 percent of respondents use some form of electronic distribution, and posting SPDs to a portal is the most popular approach."
(Society for Human Resource Management)
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Court Addresses Required Notices to Employees on FMLA Leave About Health Coverage Continuation or Discontinuance
"[This] case serves as a reminder ... [that] employers [must] provide employees taking FMLA leave with advance written notice of the conditions under which payments for health coverage must be made.... Written notice is also required prior to dropping the health coverage of an employee on FMLA leave for failure to pay his or her share of the premiums on time. Employers should be aware that these notices must meet specific content and distribution requirements." [Rodriguez v. Atria Senior Living Group, Inc., 2012 WL 3457718 (S.D.N.Y. 2012)]
(Thomson Reuters / EBIA)
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[Opinion]
Despite Criticism, Affordable Care Act Does Much to Contain Health Care Costs (PDF)
"It appears from Centers for Medicare & Medicaid Services (CMS) actuaries and Congressional Budget Office (CBO) projections that the rate of growth in health care spending has already slowed, in part because of the economy, but also because of provisions of the Affordable Care Act. In this brief we discuss the managed competition framework embedded in health insurance exchanges, the Medicare provider payment cuts, the excise tax on high cost health insurance plans and several other proposals designed to slow cost growth."
(Urban Institute)
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Benefits in General; Executive Compensation
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[Official Guidance]
Text of DOL Advisory Opinion 2012-06A: Joint Fund Is Not ERISA-Covered Plan But Could Become One
"[T]he only benefits which can be said to be provided by the LECET Fund's activities accrue generally to the construction industry in Hawaii and participating employers and their covered bargaining unit employees as a whole rather than to individual participants or beneficiaries.... [G]eneralized industry and workplace improvements of the sort that may be generated by the activities of a labor management cooperation committee are not 'benefits' covered by section 3(1)(B) of ERISA ... Accordingly ... the LECET Fund is not an employee benefit plan covered under Title I of ERISA. The absence of any explicit limitation in the Trust Agreement that would prevent the Fund from providing ERISA-covered welfare or pension benefits to participants or beneficiaries precludes us from assuring you that the Fund will not be an employee benefit plan if it is operated so as to provide a welfare or pension benefit within the meaning of Title I of ERISA."
(Employee Benefits Security Administration)
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Joint Fund Provides No Individual Benefits, Thus Not ERISA-Covered Plan, DOL Says
"A fund administered by a joint labor-management board of trustees but providing no benefits to individual participants or beneficiaries is not an employee welfare benefit plan under [ERISA] ... DOL said any benefits provided by the activities of [the Fund] ... accrue generally to the construction industry in Hawaii rather than to participants or beneficiaries upon a specific occurrence."
(Bloomberg BNA)
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IRS Proposed Regs Clarify Application of Meal and Entertainment Deduction Limit
"The proposed regulations ... clarify that the rules for applying the exceptions to the Secs. 274(a) and (n) deduction limits apply to reimbursement or other expense allowance arrangements with employees, whether or not a payor is an employer. Any party that reimburses an employee is a payor and bears the expense if the payment is not treated as compensation and wages to the employee."
(Journal of Accountancy)
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Hodgson Russ Employee Benefits Developments, September 2012
Monthly newsletter; this issue includes the following articles: Department of Labor Updates 408b-2 Notice Procedures; Guidance Issued on ERISA 101(j) Notice on Underfunded Defined Benefit Plans; Health Care Reform Guidance on the Play-or-Pay Mandate; Eighth Circuit Denies Deference to Administrative Decision and Upholds $749,037 Award; Plan's Statute of Limitation Provision Bars Benefits Claim; Fourth Circuit Affirmed Decision Dismissing Claims on Definition of Normal Retirement Age.
(Hodgson Russ LLP)
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Sixth Circuit Rules That Payments Made as Part of Severance Program Are Not Subject to FICA Withholding
"In so deciding, the Court rejected longstanding [IRS] rulings on the treatment of supplemental unemployment benefits ('SUB payments') under FICA, as well as a contrary decision by the U.S. Court of Appeals for the Federal Circuit in CSX Corp. v. United States, 518 F. 1328 (Fed. Cir. 2008)." [United States v. Quality Stores, Inc., No. 10-1563 (6th Cir. Sept. 7, 2012)]
(Epstein Becker & Green, P.C. and The ERISA Industry Committee)
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Press Releases
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