Health & Welfare Plans Newsletter

February 12, 2015

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DC Pension Administrator
Pension Consultants, Inc.
in CT

Regional Manager - Retirement Education & Planning Services
Transamerica Retirement Solutions
in CA

401(k)/ESOP Administrator
Swerdlin & Company
in GA

Junior Accountant
Bates & Company, Inc.
in FL

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Webcasts and Conferences

What You Need To Do To Keep Compliant: 2015 ACA Checklist
February 19, 2015 WEBCAST
(International Foundation of Employee Benefit Plans [IFEBP])

Participant Loans
February 25, 2015 WEBCAST
(McKay Hochman Co., Inc.)

Making Open Enrollment Less Painful: The Remedy
February 26, 2015 WEBCAST
(International Foundation of Employee Benefit Plans [IFEBP])

Final IRS Instructions for Affordable Care Act Reporting Forms
March 19, 2015 WEBCAST
(Lockton)

Final IRS Forms 1094 and 1095: Line-by-Line Analysis for Employers and Advisors
March 19, 2015 WEBCAST
(Thomson Reuters / EBIA)

ERISA Litigation National Institute
May 13, 2015 in IL
(ABA Joint Committee on Employee Benefits)

Long-Term Disability Benefits Advanced Seminar
May 15, 2015 in IL
(ABA Joint Committee on Employee Benefits)

View All Webcasts and Conferences



[Official Guidance]

Text of CMS Ruling: Implementing U.S. v. Windsor for Purposes of Entitlement and Enrollment in Medicare Hospital Insurance and Supplementary Medical Insurance
"Note that the rules for recognizing a same-sex marriage (and treatment of a same-sex relationship that is not a marriage) for purposes of eligibility and entitlement controlled by Title II of the Social Security Act (the Act) are different than the rules for recognizing a same-sex marriage (and treatment of a same-sex relationship that is not a marriage) for benefits provided under Title XVIII of the Act.... CMS has adopted a policy of interpreting sections 1818(d), 1837(i) and 1839 of the Act in a manner that treats same-sex marriages on the same terms as opposite-sex marriages to the greatest extent reasonably possible and uses a celebration rule where possible. 'Celebration rule' means that a same-sex marriage is recognized and treated as a lawful marriage (where marital status is relevant to a determination of entitlement) if the same-sex marriage was lawful where and when it occurred. Individuals in non-marital same-sex relationships (such as domestic partnerships or civil unions that are not marriages) are not considered married.... This Ruling is effective on February 9, 2015, with respect to appeals on, initiated, or reopened in accordance with applicable rules after February 9, 2015, for entitlement and enrollment determinations made on or after June 26, 2013. This ruling does not apply to appeals of entitlement and enrollment determinations made before June 26, 2013." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])  


[Advert.]

Earn Your Certificate in Health and Welfare Plans

Sponsored by International Foundation of Employee Benefit Plans [IFEBP]

Stay ahead of the latest changes and trends in the health care landscape! Attend the Certificate in Health and Welfare Plans program February 23-28, 2015 in Lake Buena Vista (Orlando), Florida and stay informed. Register Now.



[Guidance Overview]

Final IRS Instructions for ACA Reporting Forms Confirm Massive Data Collection, Assimilation Effort Will Be Required (PDF)
"We hoped that the IRS was finding a way to streamline and simplify the reporting forms and instructions that employers will use in connection with the [ACA's] employer and individual mandates. Those hopes were dashed on Monday when the IRS released the final reporting forms and instructions. On the plus side, employers who began data-gathering efforts based on the draft forms and instructions will need few, if any, adjustments.... [This article includes] some notes on the finalized forms and instructions." (Lockton)  

Supreme Court: Sixth Circuit Can No Longer Infer Lifetime Vesting for Collectively-Bargained Retiree Welfare Benefits
"Notably, the Court said nothing about the ways in which other circuits have dealt with issues involving the modification or termination of collectively-bargained retiree welfare benefits. For example, the Seventh Circuit presumes that welfare benefits terminate when the collective-bargaining agreement under which they are provided expires. Thus, although Tackett definitely provides some relief for employers in the Sixth Circuit, much remains to be answered." [M&G Polymers USA, LLC v. Tackett, No. 13-1010 (U.S. Jan. 26, 2015)] (Andrews Kurth)  

Supreme Court Mows Down Yard-Man
"Although the Court overturned the Sixth Circuit's Yard-Man inference, it did not directly answer M&G's question on appeal -- whether the Court preferred (a) the Yard-Man inference, (b) the Third Circuit's position requiring a clear statement that the benefits are intended to survive an agreement's expiration, or (c) the Second and Seventh Circuit analysis that simply requires some language that reasonably supports an interpretation that the benefits should continue. The Court declined to resolve ambiguity among the circuits, instead limiting its analysis to the Yard-Man inference." [M&G Polymers USA, LLC v. Tackett, No. 13-1010 (U.S. Jan. 26, 2015)] (Sutherland Asbill & Brennan LLP)  

Anthem Data Breach Shows There Is No Such Thing as Privacy in the Health Care Industry
"[HHS] provides detailed information on breaches in which the data of more than 500 patients was exposed.... [T]he number of such incidents has increased from 13 in 2008 to 256 in 2013. The total number of patients affected by such privacy breaches increased from about half a million people in 2008 to nearly nine million people in 2014.... Although it is neither economic nor technically possible to completely eliminate the risk of data breaches, the current market structure and regulatory framework in the health care sector differentiate it from other industries and make it especially prone to future hacking attacks." [Editor's note: chart shows data breaches and affected individuals in four types of health care entities.] (The Brookings Institution)  

Anthem to Notify HHS of Breach and Provide Identity Theft and Other Protections (PDF)
"[On] Wednesday February 11, 2015, Anthem announced that it would undertake the HIPAA Breach Notification requirements under the HIPAA Privacy Rules. In fact, according to Anthem, HHS does NOT want individual health care plans or plan sponsors to notify HHS of a 'breach' under the Privacy Rule. Anthem indicated it would also undertake the 'media' breach notifications. Anthem has stated it would be handling breach notifications required under state laws to the extent they are aware of such laws." (United Actuarial Services, Inc.)  

Report from Anthem 'Town Hall Meeting' About Data Breach (PDF)
"Anthem said health plan sponsors using Anthem or an Anthem-member program as an insurer or third-party administrator will receive a list of affected members.... Anthem said it has determined that the phishing email it cautioned its members about was actually sent by a firm that sends innocuous phishing emails to individuals, to demonstrate to employers and others how vulnerable they may be to phishing expeditions. Unfortunately for that firm, the phishing email soon went viral. Anthem said individuals who clicked the link in the phishing email were simply directed to a site warning about the danger of phishing emails.... Anthem said that the breach compromised no insurance broker information or healthcare provider data." (Lockton)  

Anthem Cyber Attack: FAQs for Clients and Brokers (PDF)
"What happened?... When and how did you discover the attack? ... How many people are impacted? ... What information has been compromised? ... Why should I trust you with my employee's data in the future? ... What measures have you taken to protect against further cyber attacks? ... What are your security protocols? Why didn't they work? ... How will members be notified that their information was in the database? ... Does this impact Blue Cross and Blue Shield plans not owned by Anthem?" (Anthem)  

Paid Sick Time Laws Sweep the Nation
"Perhaps the biggest challenge for multi-jurisdictional employers will be dealing with the laws' various differences.... [E]mployers with locations in multiple jurisdictions with paid sick leave laws will have to craft separate sick leave policies for each location.... As an alternative, employers can adopt an ERISA plan that covers PTO and sick leave benefits ... When done correctly, this can allow employers to have one uniform nationwide policy and pre-empt these various state and local sick pay ordinances." (Baker & McKenzie, via Lexology)  

Text of Third Circuit Opinion Reversing Grant of Injunctions Barring Application of HHS Contraceptive 'Accommodation' to Non-Profit Religious Organizations (PDF)
"[T]he self-certification form does not trigger or facilitate the provision of contraceptive coverage because coverage is mandated to be otherwise provided by federal law. Federal law, rather than any involvement by the appellees in filling out or submitting the self-certification form, creates the obligation of the insurance issuers and third-party administrators to provide coverage for contraceptive services.... [S]ubmitting the self-certification form means only that the eligible organization is not providing contraceptive coverage and will not be subjected to penalties.... Even if we were to conclude that there is a burden imposed on the appellees' religious exercise, we would be hard-pressed to find that it is substantial.... [T]he inclusion of houses of worship in the exemption and religious nonprofits in the accommodation does not impose a substantial burden on the Zubik/Persico appellees [who are nonprofit Catholic organizations covered under their respective diocesan health plans]." [Geneva College v. HHS, Nos. 13-3536, 14-1374, 14-1376 and 14-1377 (3d Cir. Feb. 11, 2015)] (U.S. Court of Appeals for the Third Circuit)  

Exchange Tax Credits or Employer Coverage: What's Better for Low-Income Americans?
"On the exchanges, a person just above the poverty level, with $17,500 of annual income, would pay about $700 a year towards health insurance premiums, and out-of-pocket spending would be capped at $2,250, for a maximum annual spending amount of $2,950. The same individual could face premium contributions as high as $1,660 under employer coverage, and out-of-pocket spending could reach $6,600, the highest annual spending allowed under the ACA. All told, a low-income individual with employer coverage could pay about $8,200 in premiums and out-of-pocket spending, more than twice as much as an exchange enrollee with the same income." (RAND Corporation)  

[Opinion]

AHIP Says Health Insurers Are Ready and Waiting for ICD-10
"[H]ealth plans strongly support implementation of ICD-10 without further delay. Additional setbacks leave the health system in a stalled transition between two different coding systems and undermine improvements in care delivery for patients." (America's Health Insurance Plans [AHIP])  

[Opinion]

Five Key Points in Briefs About King v. Burwell Supporting Premium Subsidies
"The diversity of signatories that have filed such briefs supporting the continuation of tax-credit premium subsidies in all states is exceedingly impressive. In quantity and diversity of participation, and in the substantive quality of the briefs, the submissions in favor of retaining premium subsidies far surpass the submissions from ACA opponents." (Families USA)  

Benefits in General; Executive Compensation

SEC Proposes Expanded Hedging Policy Proxy Disclosure
"Since the Dodd-Frank requirement is a disclosure rule and not a listing exchange requirement, companies are not required to have in place any particular hedging policy. Instead, they must simply disclose the existence of any policy, its terms and who is covered. Companies adopting anti-hedging policies must decide whether to cover all employees or whether there are some circumstances in which hedging is permissible. Companies also will need to review existing policies to make sure they are worded broadly enough to cover all potential hedging transactions, assuming that is the policy goal." (Towers Watson)  

FICA Case Has Broad Implications for Deferred Compensation Plans (PDF)
"This case highlights the importance of handling FICA payroll taxes correctly under nonqualified deferred compensation plans. And, it can be interpreted more broadly -- to illustrate the potential for provisions or clauses in plan documents to create unintended participant rights. The plan in this case gave the employer discretionary control over the tax withholding applied to the participants' benefits and obligated them to properly manage FICA tax withholding. One has to wonder whether the retirees would have prevailed with different plan language." [Davidson v. Henkel Corp., No. 12-cv-14103 (E.D. Mich. Jan. 6, 2015)] (Buck Consultants at Xerox)  

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