Health & Welfare Plans Newsletter

March 12, 2015

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Employee Benefits Jobs

Part Time On Call Retirement Planning Consultant
Transamerica Retirement Solutions
in AR, CA, FL, GA, HI, IL, MI, MO, NJ, NY, TN, TX, UT

Client Service Manager
CBIZ
in OH

Compliance Research Analyst - Health/Welfare & Retirement Plans
MidAmerica Administrative & Retirement Solutions, Inc.
in FL

Junior Plan Manager
Morehead Plan Administrators, LTD.
in NC

Defined Benefit Administrator
Pentegra Retirement Services
in CT, NC, NY, VT

Sr. Retirement Plan Document Administrator
Benefit Consultants Group
in NJ

Implementation Specialist
BPAS, Inc. [Benefit Plans Administrative Services]
in PA

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Webcasts and Conferences

Flexible Compensation Specialist (FCS) Study Course - Session 1: Flexible Spending Arrangements (FSA)
April 1, 2015 WEBCAST
(ECFC [Employers Council on Flexible Compensation])

Navigating The Maze: How To Stay Compliant With the Affordable Care Act (ACA)
April 9, 2015 WEBCAST
(PlanSource)

An Overview of the Employee Benefit Security Administration's New York Regional Office
April 9, 2015 WEBCAST
(New York City Bar Association)

2015 Mid-Sized Retirement & Healthcare Plan Management Conference - Is It Time to Re-Examine Your Benefit Plans?
April 26, 2015 in MA
(University Conference Services)

38th Annual Conference - “ESOPs: Creating Our Destiny”
May 7, 2015 in DC
(ESOP Association)

HSAs, HRAs, and Consumer-Driven Health Care
May 13, 2015 in MN
(Thomson Reuters / EBIA)

ERISA Compliance for Health & Welfare Plans
May 13, 2015 in MN
(Thomson Reuters / EBIA)

Trustees and Administrators Institutes - Planning for the Future, Choosing the Best Route
June 15, 2015 in CA
(International Foundation of Employee Benefit Plans [IFEBP])

View All Webcasts and Conferences



[Guidance Overview]

ACA Reporting and Disclosure: The Complexity Continues (Part 2 of 3)
"Instructions for the 'C Forms' include several changes and clarifications worth noting: As with the 1095-B, a TIN may be used where an SSN is not available. Employers that cover non-employees (e.g. COBRA, retirees) may, but are not required to, use the B Forms instead of 1095-C Part III. The C Forms require employers to count their total number of employees, in addition to just full-time employees. The two counting methods from the draft instructions (first or last day of the calendar month) remain, plus now employers may count on the first or last day of the payroll period starting in the calendar month." (Benefits Bryan Cave)  


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CMS FF-SHOP Updates and Live Q&A (PDF)
March 10, 2015; 23 presentation slides. "2015 IT Priorities for FF-SHOP include: [1] Enrollment/Reconciliation (will utilize a process similar to Individual Marketplace); [2] Ability for employers and employees to renew coverage (auto-renewal of employees deferred for 2015); [3] Additional FF-SHOP generated notices (as finalized in 2016 Payment Notice); [4] Dental plan enhancements (as finalized in 2016 Issuer Letter); and [5] Limited employer/employee user interface enhancements (e.g., allowing employee choice in all states)." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])  

ACA-Free Zone: Limited Wraparound Plan Comments
"Regulators want to keep insurers or other parties from using cleverly designed excepted benefits products that would create a new class of limited-benefit medical insurance plans that would be exempt from the PPACA annual benefits limits ... Medical insurers' lack of enthusiasm for, and understanding of, the proposed 'limited wraparound' benefits product line has surfaced in comments trade groups have filed in response to draft regulations released in December.... Health insurers are afraid the wraparound plans would disrupt the existing excepted benefits markets.... are afraid the wraparound products would suddenly turn a federal agency, OPM, into a major excepted benefits regulator.... [and] have no idea how federal regulators think the products would work." (LifeHealthPro)  

SBC Generation and Implementation: Two Years Into the Process
27 pages. "Of the health plans ... interviewed, all have implemented systems and/or processes to address the issues; however, there were myriad approaches with no two identical solutions. The systems built have fixed, at a minimum, the acute pain felt industry-wide by the SBC program's initial launch.... There is still concern that some of the solutions implemented are short-term fixes and lack the extensive components and features to be sustainable and adaptable when regulations are modified or changed moving forward." (Leavitt Partners and HighRoads)  

Program Measurement and Evaluation Guide: Core Metrics for Employee Health Management (PDF)
89 pages. "The goal of this collaborative project and the Guide is to provide standard measures for the assessment of employee health management. This project does not seek to be prescriptive about the types of programs offered to an employee population. Rather, the recommended metrics can be applied to any program intended to improve the health of a population." (Health Enhancement Research Organization [HERO] and Population Health Alliance)  


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Formulary Exclusions May Be Yesterday's News
"[P]harmacy benefit managers and health plans appear to be turning their attention to contracts that put drug companies on the hook for reimbursing payers if those high-priced drugs do not live up to their promised results. In fact, one senior official of a national PBM ... [said] that the PBM would rather not exclude a drug from coverage ever again, preferring instead to pursue outcomes-based or other contracting terms that would bring payers some form of predictability in their drug costs." (HealthLeaders InterStudy)  

Anthem Refused Full Security Audits, Feds Say
"In 2013, the Inspector General of the Office of Personnel Management, the agency overseeing the federal employee health benefits program, performed an audit of Anthem's IT security -- albeit an incomplete one.... While the insurer was lauded in some areas, its vulnerability could not be fully accessed because auditors were denied access to some of the company systems.... With limited information, the OPM OIG determined that Anthem had 'not implemented technical controls to prevent rogue devices from connecting to its network' and may have neglected to perform vulnerability scans on several servers with federal employee data....More than a year later, Anthem's servers were hacked[.]" (Healthcare Payer News)  

Health Care Spending Probably Jumped Five Percent in 2014
"American health-care spending likely snapped a five-year streak of historically slow growth last year ... The nation's nearly $3 trillion medical bill grew 5 percent last year, compared with an average annual rate of 3.9 percent from 2009 to 2013 ... The increase in health-care spending will add around 0.2 percentage points to the fourth quarter's GDP growth[.]" (Bloomberg)  

Benefits in General; Executive Compensation

Rochow Revisited: No Multi-Million Dollar Disgorgement Award
"This case is a big win for insurers and plan administrators. It sets a clear line prohibiting duplicative recovery and provides guidance as to what constitutes 'separate and distinct' injuries that would give rise to equitable relief. In addition, it makes clear that equitable relief is available only when relief available elsewhere in ERISA is insufficient, thus reinforcing the usual reading of [Varity Corp. v. Howe] that Section 502(a)(3) is a catch-all provision, and not one that provides relief in conjunction with Section 502(a)(1)(B). Finally, it eliminates as a remedy recovery that could have made ordinary benefits decisions prohibitively expensive." [Rochow v. LINA, No. 12-2074 (6th Cir. Mar. 5, 2015)] (Seyfarth Shaw LLP)  

Plop Plop, Fizz Fizz, Oh What a Relief It Is: Sixth Circuit Says No Disgorgement for Arbitrary Denial of Benefits
"With a deep split in the opinions, and vigorous argument on both sides, one should expect to see the disgorgement theory asserted in other cases. The better argument is the one presented by the majority, but there are arguments to make, as shown by the dissent." [Rochow v. LINA, No. 12-2074 (6th Cir. Mar. 5, 2015)] (Lane Powell PC)  

Federal District Court: ERISA Does Not Provide Breaching Fiduciary with Right to Relief from Another Fiduciary
"The plan administrator argued that it tried to inform Brown of the risk of losing his benefits if he did not enroll in the individual plan, but the union prevented it from giving correct information. In dismissing the third-party complaint, the court first held that the union was not a fiduciary by virtue of having made representations to participants that they would keep their LTD benefits. Second, the court held that even if the union was a fiduciary, ERISA does not provide breaching fiduciaries the right to seek relief from other fiduciaries." [Brown v. Cal. Law Enforcement Ass'n, No. 3:14-cv-03559-JCS (N.D. Cal. Mar. 2, 2015)] (Proskauer's ERISA Practice Center)  

Pension Changes Affecting Executive Comp Disclosures; Proxy Hysteria Arrives
"Bloomberg reported in a video and an article that GE CEO Jeffrey Immelt was rewarded with an 88% increase in compensation despite sluggish performance. The company attributed the compensation increase to his reshaping of the company and to an increase in the value of his pension.... The pension plans in which Immelt participates did not change. He wasn't granted a massive benefit increase resulting in his total compensation doubling. What happened was that his 2014 compensation replaced his 2009 compensation (remember 2009 was a horrible year for the US and global economies) in a 5-year average, pension discount rates dropped (this increases the present value of pension benefits), and the Society of Actuaries released a new mortality table (I suspect GE adopted it) reflecting longer life expectancies in general." (Benefits and Compensation with John Lowell)  

SEC Proposes Expanded Disclosures of Hedging Policies
"Under the proposed rule, companies could cross-reference the hedging policy disclosure in Item 407, which would meet the [compensation discussion and analysis] requirement for disclosure of hedging policies for [named executive officers]. However, this would make the entire policy, if it goes beyond covering just executive officers, subject to a say-on-pay vote." (Towers Watson)  

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