Health & Welfare Plans Newsletter

September 26, 2014

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Voluntary Benefits Account Manager
Buck Consultants a Xerox Company
in CA, CO, GA, TX

Employee Benefits Associate
Bass Berry & Sims
in TN

Retirement Plan Sales Specialist
Envoy Financial
in CO

Retirement Fulfillment Operations Manager
University of California Office of the President
in CA

Business Analyst
General Board of Pension and Health Benefits
in IL

Retirement Specialist
Nationwide
in CA

401(k) Client Service and Support Manager
Paychex, Inc.
in NY

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Webcasts and Conferences

Governmental Pension Reporting — The New Standards
October 8, 2014 in
(Accounting Continuing Professional Education Network [ACPEN])

View All Webcasts and Conferences



[Guidance Overview]

Deadline for Obtaining Health Plan Identifier Quickly Approaching
"Large health plans (plans with annual receipts in excess of $5 million) must obtain an HPID by November 5, 2014. Small health plans have until November 5, 2015 to comply. 'Receipts' for this purpose appear to be claims paid.... Although it appears that most insurers will obtain the HPID on behalf of fully-insured plans, some insurers are requiring the plan sponsor to obtain an HPID." (Mazursky Constantine LLC)  


[Advert.]

PPACA Employer Filing Requirements Webinar on October 2, 2014

Sponsored by Sutherland Asbill & Brennan LLP

Join Sutherland Asbill & Brennan LLP for a webinar focused on employer filing requirements under Code sections 6055 and 6056, as added by the PPACA. The panel will include Sutherland attorneys Andrea Gehman, Paul Lang and Vanessa Scott. Register now!



[Guidance Overview]

Determining Full-Time Status When the Applicable Look-Back Measurement Period Changes (PDF)
"Employers that use different measurement periods for different groups of variable employees or different entities within the controlled group will want to review [IRS Notice 2014-49] and implement administrative procedures to address variable employee transfers. Employers with collective bargaining employees, health plans with different plan years or other business conditions that may warrant a change in measurement periods, should first familiarize themselves with these rules." (Wilkins Finston Law Group LLP)  

[Guidance Overview]

New Election Changes Permitted Under Cafeteria Plans
"Cafeteria plans are now permitted to allow employees to revoke their coverage election mid-year in two new scenarios.... If an employee has a reduction in hours to less than 30 per week, the cafeteria plan may allow the employee to revoke coverage if the employee intends to enroll in coverage offered through the Marketplace or in another group health plan.... If an employee chooses to cease coverage under an employer-sponsored group health plan in order to purchase coverage offered through the Marketplace during a designated open enrollment or special enrollment period, a plan may allow the employee to revoke coverage and enroll in Marketplace coverage." (Seyfarth Shaw LLP)  

[Guidance Overview]

New Reinsurance Fee Under the ACA
"A plan sponsor of a self-insured plan may use any of ... four methods to determine the number of covered lives in the plan for the nine-month period of Jan. 1 through Sept. 30. Plan sponsors must use only one method for any calendar year; however, they are not required to use the same method from one year to the next and do not need to use the same method for calculating the reinsurance fee and the PCOR fee. Since the different counting methods can produce different results, it is advisable for an employer to do the computations under more than one method to determine which one produces the lowest fee." (McGladrey)  

[Guidance Overview]

Demystifying the Language of the ACA
"In order to determine whether and how to comply with the employer mandate, Large Employers should evaluate the changes that may need to be made to their employer group health plan. Specifically, [1] The waiting period, does it need to be shortened? [2] The eligibility provisions, do they need to be changed? [3] The premium cost, is it affordable at all income levels? [4] The benefits offered, do they satisfy minimum value? Large Employers should also prepare a financial analysis of the impact of being compliant versus non-compliant with the employer mandate, considering both the failure to offer coverage penalty and the coverage offered penalty." (Texas CEO Magazine)  

Consumers Don't Trust Insurers or Employers as Source of Health & Wellness
"Many wellness programs could be doomed to fail based on a recent survey finding that most consumers don't trust their insurers or employers as a source of health and wellness.... [J]ust 8 percent rely on their health insurers as a source of health and wellness. And just 10 percent rely on employers....Steps that insurers can take include creating a wellness platform approach that, for example, provides health itineraries informing consumers of health activities, preventative services and location-based guidance." (FierceHealthPayer)  

Debate Grows Over Employer Plans With No Hospital Benefits
"As companies prepare to offer medical coverage for 2015, debate has grown over government software that critics say can trap workers in inadequate plans while barring them from subsidies to buy fuller coverage on their own. At the center of contention is the calculator -- an online spreadsheet to certify whether plans meet the [ACA's] toughest standard for large employers, the 'minimum value' test for adequate benefits." (Kaiser Health News)  

DC Sick and Safe Leave Act Amendments Take Effect; Revised Poster Issued
"The revisions accelerate workers' ability to take paid sick leave from one year to 90 days after starting work, allow former temporary workers to claim credit for time worked with their employer on a trial basis, and require employers to reinstate accrued leave banks for individuals who transfer to work locations outside the District and return within one year. The new law also extends paid sick and safe leave benefits to both temporary workers and tipped employees not covered in the original 2008 legislation." (Littler)  

ACA Small-Business Exchanges Offer Cheaper Health Coverage
"Health plans available to small businesses on the law's new health marketplaces are on average about 7 percent cheaper than comparable plans offered elsewhere ... For middle-tier plans, for instance, the disparity translates into about $220 in annual premium savings for plans purchased on the SHOP exchanges." (The Washington Post; subscription may be required)  

Consumer Group Sues Two More California Plans Over Narrow Networks
"Insurers Cigna and Blue Shield of California misled consumers about the size of their networks of doctors and hospitals, leaving enrollees frustrated and owing large bills, according to two lawsuits filed this week in Los Angeles. Both cases allege that the insurers offered inadequate networks of doctors and hospitals and that the companies advertised lists of participating providers that were incorrect. Consumers learned their doctors were not, in fact, participating in the plans too late to switch to other insurers, the suits allege, and patients had to spend hours on customer service lines trying to get answers. Both cases seek class action status." (Kaiser Health News)  

How 'Any Willing Provider' Laws Make Health Care More Expensive
"The preponderance of the evidence shows clearly that [any willing provider (AWP)] laws lead to higher spending. Rather than protect consumer choice, AWP laws interfere with meeting consumer and employer demand for lower-priced plans. The potential for AWP laws to become more disruptive to health care financing in the future will likely spur greater efforts by providers to pass such laws to protect themselves from further competition. But if they succeed, the costs to consumers, employers and taxpayers could be even larger than we have seen in the past." (America's Health Insurance Plans [AHIP])  

A Medicare Program Loses More Health Care Providers
"Four more hospital systems recently have dropped out of the Pioneer Accountable Care Organization program, a key part of the federal health law, leaving just 19 of the original 32 participants.... The 32 Pioneer ACOs had such experience and were supposed to serve as models for hundreds of other ACOs following them. But participants have complained from the start about some of its stringent rules and benchmarks. Thirteen of the Pioneers left the program last year, after failing to meet their performance targets." (The Wall Street Journal; subscription may be required)  

Benefits in General; Executive Compensation

Companies with Company Stock Funds in 401(k) Plan or ESOP Should Review Compliance in Light of Recent SEC Enforcement Actions
"Section 16(a) of the Securities Exchange Act of 1934 requires that 'insiders' must electronically file a Form 4 Statement of Changes of Beneficial Ownership of Securities with the SEC on or before the 2nd business day after nearly any transaction involving company stock. Examples of transactions that an insider must report include: [1] Grants of stock options; [2] Cashless exercise of stock options (and any sale of shares); ... [3] Open market purchases or sales of company stock; ... [and] [4] 'Discretionary Transactions' under a 401(k) plan, ESOP, Non-qualified excess benefit plan, or stock purchase plan (ESPP)." (Winston & Strawn LLP)  

Misclassified Employees Not Barred from Recovering Damages Based on Value of ERISA Plan Benefits They Should Have Been Provided
"[This case] reminds us that not every dispute referring to ERISA-regulated benefit plans will support the preemption defense. The Gray court's systematic analysis of the preemption defense provides useful instruction on how to apply it. [It] also offers a caution that the misclassification of workers as independent contractors can have broader consequences than just an impact on the calculation of wages and payroll taxes." [Gray v. FedEx, No. 4:06-CV-00422 (E.D. Mo. Sept. 5, 2014)] (Williams Mullen)  

IRS Issues Final Rules on Compensation Deduction Limit for Health Insurers
"The final rules are similar to the proposed regulations that were released in 2013 in many respects but add several rules clarifying the treatment of members of a controlled group after a corporate transaction, modify several rules for applying the limit to deferred compensation and other specific types of compensation, and clarify certain rules for determining the premiums for health insurance. The final regulations also retain the de minimis rule that was announced in Notice 2011-2 with certain clarifications." (Sutherland Asbill & Brennan LLP)  

Press Releases

Seasoned Senior Account Executive Joins Burnham Benefits
Burnham Benefits Insurance Services Inc.

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