Health & Welfare Plans Newsletter

December 17, 2014 logo logo LinkedIn logo Twitter logo Facebook logo
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Webcasts and Conferences

January 16, 2015 WEBCAST
(Clearwater Compliance)

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[Official Guidance]

Text of CMS Bulletin #15: Guidance for Issuers on Special Enrollment Periods Related to the Passive Re-Enrollment Process During the 2015 Open Enrollment Period (PDF)
"CMS will provide the following Special Enrollment Periods (SEPs) for a small number of Qualified Individuals affected by the passive re-enrollment process. These SEPs will allow certain Qualified Individuals to enroll in a Qualified Health Plan through the Federally-facilitated Marketplace with a January 1, 2015 coverage effective date. The SEPs [listed in a table in this document] are specifically for Qualified Individuals who may otherwise experience a gap in coverage as a result of the passive re-enrollment process ... CMS is providing Qualified Individuals 60 days to select a plan from the later of the following two dates: [1] January 1, 2015; or [2] Five days after the date provided on the enrollment confirmation message." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])  


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[Guidance Overview]

Upcoming Health and Welfare Plan Requirements Checklist for Employers
"As 2014 draws to a close, employers should turn their attention to several upcoming compliance obligations for the health and welfare benefit plans they sponsor. [In this article] is a list of upcoming health and welfare compliance initiatives that require action by employers, including preparation for upcoming fees and penalties under the [ACA], filing of required forms and distribution of relevant notices." (McDermott Will & Emery)  

[Guidance Overview]

Being Proactive v. Reactive: ACA's Prohibition on Discrimination in Group Health Insurance
"[T]he IRS has informally indicated that an extension of eligibility to former employees who are [highly compensated individuals (HCIs)] would raise an eligibility discrimination issue, and all former employees should be considered in the test....If the IRS does not change its position when it issues new guidance, ... all former employees will need to be aggregated and tested in a group distinct from active employees. Thus, if the group of former employees extended continued coverage benefits all or mostly HCIs, it will not pass the eligibility test....[If] an insured plan is determined to be discriminatory, the penalty for the employer would be much more severe than the penalty for a discriminatory self-funded plan." (Benefits Bryan Cave)  

[Guidance Overview]

CRomnibus includes 'Expatriate Health Coverage Clarification Act' (PDF)
"The CRomnibus provides a permanent statutory exemption from most of the ACA's requirements for statutorily-defined 'expatriate health plans.'... Expatriate health plans now officially qualify as an eligible employer-sponsored plan that is minimum essential coverage. This means that an expatriate health plan will satisfy the enrollee's individual mandate.... [T]he exemption does not apply for the new health information reporting requirements for the beginning of 2016." (ABD Employee Benefits)  

[Guidance Overview]

Guidance on Reimbursing Individual Health Insurance Premiums and Offering High-Risk Employees a Choice Between Enrollment and Cash
"In some circumstances, it is acceptable to provide more favorable treatment based on a health factor, a practice known as benign discrimination. For example, some plans allow disabled dependents to remain covered past age 26. However, the Departments state that offering cash in lieu of coverage only to employees with high medical claims risk is not a permissible form of benign discrimination under the HIPAA rules." (Sibson Consulting)  


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Text of D.C. Court of Appeals Opinion Regarding Liability of 'Related Person' for Premiums to United Mine Workers Health Plan After Employer Ceased Operations and Contributions (PDF)
17 pages. "The Coal Act requires coal operators and 'any related person' to pay for miners' health care in monthly installments. 26 U.S.C. Section 9712(d)(3), (4); see 29 U.S.C. Section 1145. A cause of action to collect such installment payments separately accrues with each missed payment.... Like the MPPAA installment liability, ... Coal Act installment liability separately accrues with each missed payment.... Bibeau maintains that it owes interest only on delinquent contributions... The remedial provision, 29 U.S.C. Section 1132(g)(2), does not distinguish between unpaid contributions and interest ... Accepting Bibeau's approach would mean that if employers were not 'delinquent' for purposes of interest until they received notice from the Plan, then they would also not be 'delinquent' for purposes of unpaid contributions." [Holland v. Bibeau Construction Co., No. 13-7093 (D.C. Cir. Dec. 16, 2014)] (U.S. Court of Appeals for the District of Columbia Circuit)  

ACA Cadillac Tax: Essential Issue for 2015 Labor Contract Negotiations
"The Cadillac tax has been recently described as more of a 'Camry' or 'Chevy' tax.... [E]ven ACA-silver tier plans, depending on geographic location, could be subject to the excise tax soon after 2018 due to the tax's thresholds being tied to the general CPI-U, rather than the faster increasing index of health care costs. According to a recent Towers Watson survey, 54% of employer plans will trigger the excise tax by 2020 if current health care benefit strategies remain unchanged.... Employers who will be negotiating new three year contracts in 2015 do not have the luxury of deferring consideration of this issue as the Cadillac tax will begin before the expiration date on such contracts." (Clifton Budd & DeMaria, LLP)  

Supreme Court Invites Solicitor General Brief on Petition for Certiorari in Vermont ERISA Preemption Case
"Issue: Whether the Second Circuit -- in a two-to-one panel decision that disregarded the considered opinion advanced by the United States as amicus -- erred in holding that [ERISA] preempts Vermont's health care database law as applied to the third-party administrator for a self-funded ERISA plan." [Gobeille v. Liberty Mutual Ins. Co., No. 14-181 (2d Cir. Feb. 4, 2014; cert. pet. filed Aug. 13, 2014)] (SCOTUSblog)  

Findings from the SHRM/EBRI 2014 Health Benefits Survey (PDF)
"[O]nly 1 percent of plan sponsors are planning to eliminate health benefits in 2015.... A relatively large number of employers continue to introduce wellness rewards and penalties ... Few employers are planning to make changes to eligibility for spousal coverage and part-time worker benefits, and few are moving toward tiered networks, private health insurance exchanges, value-based insurance design, and reference pricing." (Employee Benefit Research Institute [EBRI])  

De Facto Private Right of Action Under HIPAA: Is Ohio Next?
"HIPAA does not provide a private cause of action to individuals affected by a health care privacy breach. This means that an individual whose PHI has been used or disclosed by a health care provider in violation of HIPAA may not bring a civil claim against the health care provider under HIPAA. Moreover, HIPAA specifically preempts any contrary provision of state law ... Recent decisions by state courts, however, have held that HIPAA is the standard industry practice for health care providers and may form the basis for state law negligence claims involving disclosure of patient medical records." (Thompson Hine)  

Benefits in General; Executive Compensation

[Guidance Overview]

IRS Releases Inflation-Adjusted Limits for 2015
"[Rev. Proc. 2014-61 includes] 2015 inflation-adjusted limits for certain benefit-related tax provisions. [This chart] shows the limits that apply to health flexible spending arrangements, qualified transportation fringe benefit plans, adoption assistance programs, qualified long-term care premiums and qualified retirement plans. The chart also identifies the Social Security taxable wage base, personal exemption and standard deduction amounts for 2015." (Towers Watson)  

Estimating Stock Compensation Volatility
"[This study] found that stock compensation volatility estimates are predicted just as well by using historical volatility as by blending historical with implied volatility. Further, longer-term windows of up to 15 years were shown to outperform the comparable-window forecasts typically in use." (PricewaterhouseCoopers)  

ISS Modifies Elements of Its CEO Pay-for-Performance Test
"The first modification alters ISS scoring methodology under its quantitative pay-for-performance tests that may result in slightly fewer U.S. companies showing a pay misalignment. The second modification revises ISS's peer group selection methodology for certain energy companies." (Meridian Compensation Partners, LLC)  

Tick, Tock: The Time for Year-End Financial and Tax Planning with Equity Comp Is Almost Over
"The clock is running out for year-end decisions that may have a big impact on your equity awards, including restricted stock units or stock options. [This article provides] an introduction to the major issues arising with equity compensation at the close of the year." (  

Press Releases

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