Health & Welfare Plans Newsletter

February 16, 2015

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Employee Benefits Jobs


Webcasts and Conferences

2015 A,B,C's of Employee Benefits
February 18, 2015 WEBCAST
(Ascension)

Savings Fitness Workshop
February 26, 2015 in MA
(Employee Benefits Security Administration [EBSA], U.S. Department of Labor)

2015 EBP Audit Best Practices & Compliance Workshop
March 3, 2015 in AZ
(CBIZ MHM, LLC)

Retirement Plan Compliance Assistance Seminar
March 5, 2015 in PA
(Employee Benefits Security Administration [EBSA], U.S. Department of Labor)

Voluntary Fiduciary Correction Program (VFCP) with the Department of Labor (DOL)
March 18, 2015 WEBCAST
(Western Pension & Benefits Council)

12th Annual World Health Care Congress
March 22, 2015 in DC
(World Congress)

2015 NIPA Annual Forum & Expo (2015NAFE)
May 3, 2015 in NV
(NIPA [National Institute of Pension Administrators])

National Conference
June 7, 2015 in DC
(SPARK Institute)

View All Webcasts and Conferences



[Official Guidance]

Text of DOL FAQs on ACA Implementation (Part XXIII): Excepted Benefits
"[T]he Departments intend to propose that coverage of additional categories of coverage would be considered to be designed to 'fill in the gaps' of the primary coverage only if the benefits covered by the supplemental insurance product are not an essential health benefit (EHB) in the State where it is being marketed.... Pending publication and finalization of the above proposed regulations, the Departments will not initiate an enforcement action if an issuer of group or individual health insurance coverage fails to comply with the provisions of the PHS Act, ERISA, and the Code ... with respect to health insurance coverage that [1] provides coverage of additional categories of benefits that are not EHB in the applicable State (as opposed to filling in cost-sharing gaps under the primary plan); [2] complies with the applicable regulatory requirements and meets all of the criteria in the existing guidance on 'similar supplemental coverage'; and [3] has been filed and approved with the State (as may be required under State law)." (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])  


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[Official Guidance]

Text of CMS Notice: Timing of Reconciliation of Cost-Sharing Reductions for the 2014 Benefit Year (PDF)
"[CMS] will reconcile 2014 benefit year cost-sharing reductions for all issuers in April 2016, rather than in April 2015.... [M]any issuers using the simplified methodology are falling short of the 12,000 member month credibility threshold for a particular subgroup more frequently than anticipated -- and will be required to use the simplified 'AV methodology,' which may yield inaccurate estimates of cost-sharing reductions provided to eligible enrollees in those plans.... [M]any issuers using the standard methodology are continuing to have difficulty upgrading their systems in time for reconciliation of advanced payments of cost-sharing reductions ... putting at risk the accuracy of those calculations. Therefore, to enhance the accuracy of reconciliation of reductions in out-of-pocket expenses that issuers provided to eligible ... enrollees, CMS will permit issuers that selected the simplified methodology to switch to the more accurate standard methodology, and will reconcile 2014 benefit year cost-sharing reductions for all issuers beginning on April 30, 2016." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])  

[Official Guidance]

Text of CCIIO Sub-Regulatory Guidance: Minimum Essential Coverage Application Review Process (PDF)
"[The ACA] provides that individuals must maintain minimum essential coverage (MEC), pay the individual shared responsibility payment, or qualify for an exemption.... Regulations were ... issued providing for an administrative process for applying for MEC status, with eligibility for designation under this process conditioned on meeting certain standards, including compliance with 'substantially all' [ACA] requirements.... This guidance clarifies the existing standard of review for the MEC application process: it does not designate additional categories of MEC." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])  

[Guidance Overview]

Pay-or-Play, as Applied to Contingent Workers: Final Regs Provide Clarity But Not Complete Relief
"[T]he IRS reaffirms its position that it will use a common law definition of employee to determine employer-employee status.... Employers that engage a significant number of '1099 employees' run a tremendous risk of incurring the pay-or-play mandate's $2,000 per full-time employee 'no coverage offered' penalty, even when they offer coverage to all of the employees they categorize as full-time.... There is no blanket exemption for short-term employees -- if employment extends beyond the end of the third full calendar month of employment, the employer must offer coverage regardless of the projected termination date[.]" (Proskauer's ERISA Practice Center)  

[Guidance Overview]

IRS Releases Final Forms 1094 and 1095 for Reporting Employer Health Coverage Information and New Publication 5196 Offering Further Guidance
"Although technically for use by entities choosing to submit voluntary reports in 2015 (for 2014 coverage), the final forms and instructions are clearly designed with mandatory reporting in mind (among other things, the instructions are replete with information relevant only to mandatory reporting, including 2016 deadlines and 2015 transition relief). Procrastination is not an option: Until final 2015 forms are released, employers by necessity will be relying on these final forms and instructions to identify the information they need to track for reporting in 2016, while staying alert to any future changes." (Thomson Reuters / EBIA)  

[Guidance Overview]

Philadelphia Enacts Paid Sick Leave Ordinance for Virtually All Employers
"Under the new law, an employer cannot require, as a condition of taking sick time, that an employee search for or find a replacement worker to cover the hours during which the employee is absent.... The Ordinance creates a rebuttable presumption of unlawful retaliation automatically when an employer takes adverse action against an employee within 90 days of when the employee: [1] Files a complaint or alleges a violation of this law; [2] Informs 'any person' about an alleged violation of the law; [3] Cooperates with an investigation or prosecution of an alleged violation of the law; [4] Opposes any policy, practice, or act that is unlawful under the law." (Littler)  

[Guidance Overview]

Philadelphia Paid Sick Leave Law Enacted
"The law applies to all employers with employees in Philadelphia. Employers with fewer than 10 covered employees do not have to provide paid sick leave, but must allow employees to take similar amounts of unpaid leave. Certain workers, such as independent contractors, temporary employees hired for less than six months, interns, and adjunct professors are excluded." (Ballard Spahr LLP)  

[Guidance Overview]

Philadelphia Adopts Controversial Paid Sick Leave Law
"The Promoting Healthy Families and Workplaces Act, which takes effect in May, provides that employees of covered employers are entitled to accrue paid sick time at the rate of one [1] hour for every forty [40] hours the employee works in Philadelphia, to a maximum of forty [40] hours per year, unless the employer selects a higher limit. Employers may be subject to the law's requirements even if they do not have an office, plant or other facility within city limits, so long as they employ at least ten [10] employees who perform at least forty [40] hours of work per year in Philadelphia." (Saul Ewing LLP)  

Despite Amara Decision, SPD Can Set the Terms of a Plan
"Sometimes, particularly in welfare plans, documentation is rather informal, and important provisions, such as administrative discretion, subrogation, and procedures for submitting benefit claims and appealing denied claims, may appear only in the SPD. Does Amara render them unenforceable?... [A plaintiff] contended that the Supreme Court had drawn a clear line between plans and summaries of plans, with only the former being enforceable. The court's response was that (i) a plan without a plan document is impossible under ERISA, (ii) the plan document must 'specify the basis on which payments are made to and from the plan,' ERISA, Section 403(b)(3), and (iii) the only document that specified the basis of payments in this instance was the summary plan description. Hence, the summary was the plan." [Bd. of Trustees of the National Elevator Industry Health Benefit Plan v. Montanile, No. 14-11678 (11th Cir. Nov. 25, 2014)] (Steptoe & Johnson LLP)  

Eighth Circuit Affirms Denial of Statutory Penalties for Failure to Timely Provide COBRA Election Notice
"Leaves of absence often present COBRA compliance challenges, and when disability benefits are included in the mix, confusion can result. This employer's difficulties likely started with its continuation of medical plan coverage pending the outcome of the employee's LTD benefit application. Employers wishing to extend coverage in such situations should have procedures in place to ensure that COBRA obligations are not overlooked." [Cole v. Trinity Health Corp., No. 14-1408 (8th Cir. Dec. 15, 2014)] (Thomson Reuters / EBIA)  

Employer Considerations: ACA Individual Shared Responsibility Provisions and the 2014 Tax Return Season
"Regardless of not being required to provide any coverage information, employers may want to consider taking [some] proactive steps as it relates to their employees' 2014 tax returns. First, an employer may want to specifically communicate to its employees that it is not required to issue any documentation regarding employee coverage under its health plan (or lack thereof). Second, as a courtesy, the employer could make available IRS Publication 5187, Health Care Law: What's New for Individuals & Families, which provides guidance on the individual shared responsibility provision under IRC 5000A, including its reporting requirements." (Findley Davies)  

Latest Update on Anthem Data Breach
"Even if currently with another insurance company or other provider other than Anthem or a BCBS entity (e.g., Aetna, Cigna, Humana, United Healthcare, etc.), ask your carrier or other insurance provider what protocols or processes they have in place to mitigate the possibility of a similar cyber-threat occurring in the future[.]" (Polsinelli PC)  

Can Staples Manage Employee Hours to Avoid Offering ACA-Required Health Coverage?
"Staples employees have voiced frustration against a long-standing company policy that states part-time employees cannot work more than 25 hours per week. Employees allege that strict enforcement of this policy clashes with the ACA's employer mandate.... Staples has denied that they are reducing employee hours to avoid offering health coverage per the employer mandate. However, an employee's claim of violation under Section 510 depends on what that employee is told." (William Gallagher Associates)  

Employers Making Up Minds on Private Exchanges; Proponents Just Not Sure How and When to Act (PDF)
"[W]hile only a few employers have already moved to an exchange-based model, 17% of responding companies have taken significant steps toward adopting a private exchange strategy. Although not appearing to be in any hurry, 45% of respondents envision adopting a defined contribution approach using a private exchange with in the next three or more years." (Chelko Consulting Group)  

Federal Paid Sick Leave Bill Reintroduced
"The law would apply to employers with 15 or more employees, and permit workers to accrue an hour of paid leave for every 30 hours worked, up to a maximum of 56 hours per year. Smaller employers would be required to provide unpaid leave." (Littler)  

Are Uninsured Adults Who Could Gain Medicaid Coverage Working?
"Nearly three out of four (72%) of the uninsured adults who could gain Medicaid coverage live in a family with at least one full-time or a part time worker and more than half (57%) are working full or part-time themselves.... The majority of workers in this group (52%) work for small firms with less than 50 employees that will not be subject to ACA penalties for not offering coverage[.]" (Henry J. Kaiser Family Foundation)  

[Opinion]

Sorry Dartmouth, Geographic Variation in Medical Procedure Rates Is Not Unique to the U.S.
"[A 2010 Report] from the Dartmouth Institute made much of the national variation in Medicare hip replacement rates in 2000-01... Reaching such a conclusion ... requires assuming that the U.S. population is composed of identical people identically distributed over a featureless geographic plain that is everywhere the same.... [T]he most common reason for hip replacement is osteoarthritis and that it is well known that the prevalence of primary osteoarthritis of the hip occurs at much higher rates in Caucasians than in other population groups.... Indicting the U.S. health system for varying procedure rates also fails to address the fact that hip replacement rates vary by country even when the countries in question have centrally controlled, government run, health care systems that deliver precisely equal treatment, at least on paper." (National Center for Policy Analysis Health Policy Blog)  

[Opinion]

Why High Risk Pools (Still) Won't Work
"[H]igh-risk pools: [1] are prohibitively expensive to administer, [2] are prohibitively expensive for consumers to purchase, and [3] offer much less than optimal coverage, often with annual and lifetime limits, coverage gaps, and very high premiums and deductibles." (The Commonwealth Fund)  

Benefits in General; Executive Compensation

[Official Guidance]

Text of IRS Notice 2015-15: Proposed Requirements for Employee Consents Used to Support a Claim for Refund of Employment Taxes (PDF)
"Questions have arisen concerning what information must be provided in an employee consent and whether an employee consent may be requested, furnished, and retained in an electronic format. The proposed revenue procedure clarifies that, in addition to providing the relevant name, address, and taxpayer identification number, a valid employee consent must identify the basis of the claim for refund and be signed by the employee under penalties of perjury. The proposed revenue procedure also provides guidance as to what constitutes 'reasonable efforts' to secure an employee consent when a consent is not obtained. The proposed revenue procedure permits, but does not require, the employee consent to be requested, furnished, and retained in an electronic format, as an alternative to a paper format." (Internal Revenue Service [IRS])  

[Guidance Overview]

SEC Proposes Hedging Disclosure Rule (PDF)
"The proposed rule is aimed at providing more information and transparency to investors about whether employees and directors are able to skirt company requirements to hold stock for the long term by entering into hedging contracts that would allow them to receive their compensation even if the company does not perform well." (Alston & Bird LLP)  

[Guidance Overview]

SEC Proposes New Rules Requiring Issuer Disclosure of Hedging Policies for Employees and Directors (PDF)
"The SEC's stated intention is for the proposed disclosure to be more 'principles-based' so that the disclosure obligation covers all transactions that establish downside protection of equity securities, whether by purchasing or selling a security or derivative security or otherwise, in which employees, officers, directors or any of their designees are either prohibited or permitted to execute." (Fried, Frank, Harris, Shriver & Jacobson LLP)  

[Guidance Overview]

SEC Proposes Rules for Hedging Disclosure
"The proposed rules come on the heels of efforts by the major proxy advisory firms in recent years to have companies adopt hedging policies (by treating the absence of such a policy as a basis for recommending 'against' votes for sitting directors). In response to these efforts, many companies have begun disclosing in their proxy statements that they have anti-hedging policies for executive officers. If the SEC's proposed disclosure requirements are adopted in their present form, companies likely would need to reexamine the terms of their existing policies and assess whether changes or clarifications would be appropriate." (McGuireWoods LLP)  

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