Health & Welfare Plans Newsletter

February 27, 2015

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Senior Consulting Actuary
Milliman
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Rea & Associates, Inc.
in OH

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OneAmerica Financial Partners
in IN

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Evercore Trust Company
in DC

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Transamerica Retirement Solutions
in IL

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Transamerica Retirement Solutions
in MA

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in PA

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Webcasts and Conferences

King v. Burwell: Debating the Future of the ACA
RECORDED
(National Institute for Health Care Management Foundation)

Avoiding Medicare Mistakes: What Group Health Plan Sponsors and Advisors Need to Know
RECORDED
(Thomson Reuters / EBIA)

FEE DISCLOSURE: Issues, Solutions & Opportunities
March 6, 2015 in CA
(Western Pension & Benefits Council - Orange County Chapter)

ACA 101: What You Need to Know Briefing
March 6, 2015 in DC
(Alliance for Health Reform)

FINRA Exam Priorities
March 10, 2015 WEBCAST
(Regulatory Compliance, LLC )

Getting It Right - Know Your Fiduciary Responsibilities: Part 1: Basic Fiduciary Responsibilities for Employer-Sponsored Group Health Plans
March 12, 2015 WEBCAST
(Employee Benefits Security Administration [EBSA], U.S. Department of Labor)

ERISA Litigation Update: Order in the Court!
March 19, 2015 in CA
(Western Pension & Benefits Council - Orange County Chapter)

401(k) Advisor Symposium
March 25, 2015 in VA
(401k Rekon)

Inside the Beltway
March 31, 2015 WEBCAST
(Drinker Biddle & Reath LLP)

Understanding The Patient Protection And Affordable Care Act Workshop
March 31, 2015 in MA
(Employee Benefits Security Administration [EBSA], U.S. Department of Labor)

Dual-Eligibles Initiatives: What’s Working? What’s Not? What’s New?
April 16, 2015 WEBCAST
(Atlantic Information Services, Inc.)

View All Webcasts and Conferences



[Official Guidance]

Text of IRS Publication 974: Premium Tax Credit (PTC), Rev. February 2015 (PDF)
"This publication provides additional information to help you determine if your health care coverage is minimum essential coverage. This publication also provides additional instructions for taxpayers in the following special situations. [1] Taxpayers who are filing a separate return from their spouses because of domestic abuse or abandonment. [2] Taxpayers who must repay excess APTC and want to determine their eligibility for penalty relief. [3] Taxpayers who need to calculate PTC and APTC for a policy that covered an individual not lawfully present in the United States. [4] Taxpayers who are filing a tax return but who are not claiming any personal exemptions. [5] Taxpayers who need to determine the applicable second lowest cost silver plan (SLCSP) premium. [6] Taxpayers who married during the tax year and want to use an alternative calculation that may lower their taxes. [7] Self-employed taxpayers. The next edition of [this IRS publication], which the IRS plans to issue in March 2015, will cover the additional topic of taxpayers with certain shared policy allocations." (Internal Revenue Service [IRS])  


[Advert.]

Summit on Voluntary & Ancillary Benefits, March 11-12, 2015, Atlanta, GA

Sponsored by World Congress

Focuses on considering, choosing and offering voluntary and ancillary benefits programs. Faculty includes benefits leaders from Amazon, The Home Depot, Popeyes, and Walmart. HR/Benefits Staff: Attend for $195 – Use Promo Code BLINK1



[Guidance Overview]

IRS Issues Initial 'Cadillac' Tax Guidance, Welcomes Comments on Various Aspects
"A wide array of coverage is considered applicable coverage under Section 4980I, including health flexible spending accounts, Archer medical savings accounts, health savings accounts, governmental plans, coverage for on-site medical clinics, retiree coverage and multiemployer plans, the notice said.... The agencies expect to include employer contributions to HSAs and Archer MSAs in applicable coverage, and exclude employee after-tax contributions to HSAs and Archer MSAs. In addition, Treasury and the IRS said they anticipate future proposed rules will exclude on-site medical clinics 'that offer only de minimis medical care to employees' from applicable coverage." (Bloomberg BNA)  

[Guidance Overview]

DOL Broadens FMLA Protections for Same-Sex Spouses
"Employers with FMLA policies that define 'spouse' in terms of the marriage laws of an employee's state of residence should amend that definition before the March 27, 2015 effective date of the new regulation. Under the new rule, there may still be instances in which a married couple would not be entitled to spousal leave under the FMLA -- for example, a couple that legally married in a foreign country at an age at which no state in the United States would permit a marriage. Such instances are likely to be extremely rare, however. Employers applying the new definition of 'spouse' should take care to do so in a uniform manner." (Kilpatrick Townsend)  

ADA, FMLA and Medical Marijuana: How Do They Mix?
"The fact that I might be using medical marijuana during my FMLA time off is irrelevant. Indeed, if my condition requires me to take time off from work to use medical marijuana, that time off would also be covered by the FMLA.... What if the employer has a 'zero tolerance' drug free workplace policy? Does the employer have to take the employee back when he/she tests positive for marijuana use after an FMLA covered absence to smoke marijuana as a medical treatment?" (Seyfarth Shaw LLP)  

Sometimes a Government Employee's Benefits Could Be Governed by ERISA
"[E]mployee benefit plans established by governmental entities are exempt from ERISA. But ERISA might apply if the employee benefit for the government employee is established through an association. Moreover, you need to make sure the 'governmental entity' is actually a 'governmental entity' under ERISA. For example, plans that involve both public and private employers may result in ERISA application." [Raible v. Union Security Insurance Co., No. 2:14-cv-1307 (W.D. Pa. Feb. 20, 2015)] (Lane Powell PC)  


[Advert.]

Changes to Cafeteria Plans: What You Need to Know to Prepare - March 26 webinar

Sponsored by Lorman and BenefitsLink

This webinar explores design choices to consider within the regulatory framework established by the IRS, and provides tools to ensure that plan design, documentation and administration are in compliance with applicable requirements. BenefitsLink discount.



Physician's State Law Claim for Disability Benefits Preempted by ERISA
"[T]he court first had to determine that three disability insurance policies constituted an ERISA-governed benefit plan and that ERISA still controlled the plan even though the radiologist's employer was defunct by the time his claim arose.... Relying on Third Circuit precedent, the court held further that the funding could come from the employer, the employee, or both, and the payment of the premiums by Hershan, an employee, satisfied that requirement. In addition, the employer had participated in a meaningful way in creating or administering the plan, by enabling the employees to enjoy a 15% premium discount pursuant to the Salary Allotment Agreements and by handling payments for the premiums. This was enough to 'establish or maintain' a plan." [Hershan v. Unum Group Corp., No. 2:14-6120 (D.N.J. Feb. 5, 2015] (Williams Mullen)  

How One Employer Drove Adoption of an HSA-Eligible Heath Plan to 50%
"With a technical workforce of over 3,800 employees in the United States, the Synopsys benefits team learned that engineers tend to think about health care spending in terms of cash management. Employees ask how much money needs to be allocated up front vs. monthly. When employees did the math, they understood that monies remaining in their HSA belong to them -- not the company -- and that they could build up their health savings over time." (Fidelity Investments)  

Anthem Data Breach: How Safe Is Health Information Under HIPAA? (PDF)
"Payers and providers of health care have considerable discretion in how they implement the HIPAA security standards. Each standard is accompanied by one or more implementation specifications. Some implementation specifications are required ... Other implementation specifications are 'addressable.' ... Encryption is one of the addressable measures. Entities that choose not to use encryption must document the reasons and implement an 'equivalent alternative measure if reasonable and appropriate.' The Anthem breach calls into question whether health care payers and providers should be permitted such latitude in implementing the HIPAA security standards versus a more prescriptive, mandatory approach." [CMS Insights IN10235, Feb. 24, 2015] (Congressional Research Service [CRS])  

Britain's Top Doctor Says National Health Service May Be Forced to Abandon Free Healthcare for All
"The NHS is 'not fit for the future' and unless it undergoes radical change it may be forced to abandon free healthcare for all, in the future, the service's top doctor has warned. Medical director of NHS England Professor Sir Bruce Keogh said the NHS must become far less reliant on hospitals and needed a 'complete transformation' of the way it operates.... 'This will open up a whole series of discussions about whether the NHS is fit for purpose, whether it's affordable, and whether the compact with the citizen of free healthcare for all is sustainable in the longer term.' " (Daily Mail)  

Five Things to Know About King v. Burwell and Its Possible Consequences
[1] This case does NOT challenge the constitutionality of the health law.... [2] If the court rules against the Obama administration, millions of people could be forced to give up their insurance.... [3] A ruling against the Obama administration could have other effects, too.... [4] Consumers could lose subsidies almost immediately.... [5] Congress could make the entire issue go away by passing a one-page bill. But it won't." (Kaiser Health News)  

King v. Burwell: What a Subsidy Shutdown Could Mean for States
"In Florida alone, 1.6 million people have selected plans through the federal marketplace; in Texas, it's 1.2 million. The vast majority of these enrollees receive subsidies that would end after a Subsidy Shutdown, and even those with unsubsidized coverage would soon face higher premiums. As many enrollees stop paying their premiums, hospitals and doctors will go unpaid and illness will go untreated. If there is no federal solution to the Subsidy Shutdown, it will be up to governors to decide whether they are willing to take the steps necessary to establish a state marketplace and restore the subsidies." (The Commonwealth Fund)  

Nearly 7.5 Million Consumers Could See Premium Increases as Result of King v. Burwell
"Eighty-seven percent of federal exchange customers currently receive a subsidy. As a result, if the Court declares subsidies illegal in federal exchange states, average monthly premium contributions for enrollees could increase between 122 percent and 774 percent, depending on the state. Residents in Alaska and Mississippi will see the highest percentage increases in their premium contributions, if the Court rules in favor of the plaintiffs." (Avalere Health)  

High Rate of Shopping and Switching in Obamacare Plans Is a Good Sign
"More than half of people who bought insurance on HealthCare.gov last year explored their options before choosing a 2015 plan ... Of those 2.2 million who shopped, more than half switched to a new health plan. Those high rates of shopping and switching are unusual in public health insurance marketplaces." (The New York Times; subscription may be required)  

Special Enrollment Periods in 2014: A Study of Select States
"[As] the second open enrollment period ends -- and as open enrollment periods shorten in future years -- special enrollment periods (SEPs) will warrant increasing attention. This paper analyzes the legal framework, limited enrollment data, and first year special enrollment experiences in five State-Based Marketplaces (SBMs) and finds that Marketplace systems and consumer outreach and enrollment efforts did not yet match the significant potential for SEP enrollment." (Urban Institute)  

Federal Employees Health Benefits (FEHB) Program: An Overview (PDF)
"The Federal Employees Health Benefits (FEHB) Program provides health insurance to federal employees, retirees, and their dependents. This report provides a general overview of FEHB. It describes the structure of FEHB, including eligibility for the program and coverage options available to enrollees, as well as premiums, benefits and cost sharing, and general financing of FEHB. The report also describes the role of the Office of Personnel Management (OPM) in administering the program." [CRS Report R43922, Feb. 25, 2015] (Congressional Research Service [CRS])  

[Opinion]

Letter from American Academy of Actuaries to HHS About 2016 Premium Rate Filing Implications of King v. Burwell (PDF)
"If no action is taken to allow enrollees access to premium subsidies in the affected states, there are options to help mitigate the potential for inadequate 2016 premiums. One option is for HHS and states to allow issuers to submit two sets of contingent premium rates -- one set reflecting pricing assumptions that would be appropriate if premium tax credits continue to be available and the other reflecting pricing assumptions that would be appropriate if premium tax credits are no longer allowed.... Another option is to allow issuers in affected states more flexibility to revise and resubmit their rates[.]" (American Academy of Actuaries)  

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