Health & Welfare Plans Newsletter

May 1, 2015

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Employee Benefits Jobs

Retirement Plan Administrator II
Fulton Financial Advisors (a subsidiary of Fulton Financial Corporation)
in PA

Pension Administrator
Scholz, Klein & Friends Enlightened Retirement Group, Inc.
in TX

Health Care Planning Manager
Wegmans Food Markets, Inc.
in NY

Health & Productivity Business Analyst
National Business Group on Health
in DC

Account Manager
Northwestern Benefit Corporation of Georgia
in GA

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Webcasts and Conferences

Cadillac Tax Under Code § 4980I: IRS Notice 2015-16 Fills in the Details
RECORDED
(Thomson Reuters / EBIA)

The Critical Difference: HIPAA Security Evaluation v HIPAA Security Risk Analysis
May 15, 2015 WEBCAST
(Clearwater Compliance)

AuditWorld 2015
May 19, 2015 in LA
(Clearwater Compliance)

The New Proposed Fiduciary Conflict of Interest Rule - How Will It Affect Financial Advisors?
May 19, 2015 in CA
(Western Pension & Benefits Council - Orange County Chapter)

PPACA & Wellness: Creating Programs That Cut Healthcare Costs and Compliance Worries
May 26, 2015 WEBCAST
(Thompson Information Services)

Fostering Workplace Culture to Support Emotional Health & Ensuring Compliance with the Mental Health Parity and Addiction Equity Law
June 2, 2015 WEBCAST
(Midwest Business Group on Health)

401(k) Plan Workshop 2015 - Cincinnati
June 2, 2015 in OH
(SunGard Relius)

Form 5500 Workshop 2015 - Cincinnati
June 3, 2015 in OH
(SunGard Relius)

M&A Due Diligence for ERISA Attorneys: A Case Study
June 23, 2015 in IL
(ABA Joint Committee on Employee Benefits)

New Mortality Tables – Their Use and Application
June 23, 2015 WEBCAST
(ASPPA [American Society of Pension Professionals & Actuaries])

What You Need to Know About ERISA: A Comprehensive Overview
October 8, 2015 in NY
(Bloomberg BNA)

View All Webcasts and Conferences



[Guidance Overview]

CMS Releases 2016 Medicare Part D Benefit Parameters (PDF)
"Plan sponsors that want to remain qualified for the employer retiree drug subsidy will have to determine if their 2016 prescription drug coverage is at least actuarially equivalent to the 2016 standard Medicare Part D coverage and should also consider whether to move Medicare retirees into an employer group waiver plan [EGWP]. Plan sponsors that provide coverage directly or indirectly through an EGWP or Part D plan may want to evaluate the impact of the new parameters and provisions on their plans." (Buck Consultants at Xerox)  


[Advert.]

Private & Public Exchange Summit, July 15-16

Sponsored by World Congress

Join Payer and Exchange executives in July for the 6th Annual Private and Public Exchange Summit. The Summit will explore approaches for health plans and exchanges to improve market share, encourage engagement, and reduce the cost trend.



[Guidance Overview]

CMS Presentation: Unified Rate Review Issuer Training (PDF)
49 presentation slides. Topics: [1] Rate filing process overview; [2] Technical demonstration; [3] Key dates; [4] CMS and state coordination; [5] Resubmissions; [6] Mapping terminating plans; and [7] Contact information. (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])  

[Guidance Overview]

Hold the Phone! Washington Adopts Telemedicine Parity Law
"Washington is the 24th state to adopt a full or partial telemedicine parity law.... [T]he new law requires parity in coverage, but does not mandate parity in payment. In other words, the payment for the same covered service may vary when furnished virtually versus in-person. Additionally, the Parity Law defines telemedicine narrowly, excluding telephone, email or other modes of communication that do not include a video component." (Davis Wright Tremaine LLP)  

[Guidance Overview]

EEOC Proposed Rule on Wellness and the ADA: What Employers Need to Know
"The EEOC explained that it did not include the 50 percent incentive for tobacco programs because ... most of those programs do not seek employee medical information at all. If not, there would be no ADA issue. But if a tobacco program does seek such information (for example, through testing for nicotine, or monitoring blood pressure), then the tobacco program would have to be included in computing the 30-percent limit for incentives.... The EEOC has explicitly disagreed with a wellness/ADA decision from the U.S. Court of Appeals for the Eleventh Circuit, Seff v. Broward County.... Because the program fell within the safe harbor, the court said, it was irrelevant whether the program was 'voluntary' or whether medical inquiries made in connection with the program violated the ADA. The EEOC's position is that this 'safe harbor' provision in the ADA does not apply to wellness programs." (Constangy, Brooks, Smith & Prophete, LLP)  

[Guidance Overview]

New EEOC Rules Offer Long-Awaited Guidance on How to Incentivize Wellness Program Participation Without Violating the ADA
"The EEOC takes the position that this 'voluntary' standard is the only safe harbor available for finding wellness program incentives permissible. In particular, the EEOC position is that the ADA's 'bona fide plan' safe harbor applicable to insurance does not apply. Notably, if an employer limits the medical plan options available to an employee who refuses to participate in a wellness program, the program will be considered involuntary and in violation of the ADA.... The EEOC Proposed Rule asks for comments regarding whether to be truly voluntary (and not coercive), a wellness program incentive should be limited so that the cost of coverage is not considered unaffordable to employees under the ACA[.]" (Drinker Biddle)  

Ninth Circuit: Insurance Contract Overrules More Specific Terms in SPD
"MetLife argued that because no conflicting language existed in the official plan document, that the SPD terms should prevail. IBM's health benefits manager testified that 'no separate formal plan document existed for the plan beyond the SPD booklet.' ... But in spite of rulings giving SPDs force in the absence of conflicts, the 9th Circuit rejected MetLife's arguments." [Prichard v. Metropolitan Life Ins. Co., No. 12-17355 (9th Cir. Apr. 21, 2015)] (Thompson SmartHR Manager)  

Ninth Circuit: SPD Alone Cannot Grant Plan Administrator Discretionary Authority to Determine Eligibility for Benefits
"[T]he Ninth Circuit found that the relevant insurance certificate provided that the plan consisted of the group policy and the employer's application. In other words, the insurance certificate identified these documents, and not the SPD, as the entire agreement between the employer and insurer." [Prichard v. Metropolitan Life Ins. Co., No. 12-17355 (9th Cir. Apr. 21, 2015)] (The Wagner Law Group)  

Are Employee Benefits for Public School Teachers Governed by ERISA? Yes!
"When you see a claim for disability or life insurance benefits by a public school teacher, you might assume the claim is not governed by ERISA because of the governmental plan exception. But don't stop there. You need to see how the benefit was set up. If the benefit was funded through a union plan, ERISA might apply." [Wilson v. Provident Life and Accident, No.  C14-1479RSL (W.D. Wash. April 29, 2015)] (Lane Powell PC)  

Text of CMS Medicare Provider Utilization and Payment Data: Part D Prescriber
"The new [Medicare Provider Utilization and Payment Data: Part D Prescriber] dataset identifies providers using their National Provider Identifier (NPI) and the specific prescriptions that were dispensed on their behalf, listed by brand name (if applicable) and generic name. For each prescriber and drug, the dataset includes the total number of prescriptions that were dispensed, which include original prescriptions and any refills, and the total drug cost. The total drug cost includes the ingredient cost of the medication, dispensing fees, sales tax, and any applicable administration fees and is based on the amount paid by the Part D plan, Medicare beneficiary, government subsidies, and any other third-party payors.... CMS has also created three types of summary tables: [1] a prescriber level summary, [2] a drug level-summary at the national level, and [3] a drug level-summary at the state level." [Also available: CMS Fact Sheet describing this first-ever release of prescription drug data.] (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])  

Underlying Cost Trend for Large Employers Remains Modest Despite ACA Concerns
"Since 2011, total premiums (including the employer and employee portions) increased by 9.4 percent, or about 2 percent every year. From 2014 to 2015, total premiums increased 2.6 percent, which is relatively modest when compared to the previous decade. This could be partially due to more employers offering high-deductible plans with higher co-pays and implementing flexible spending accounts and consumer-directed health plans[.]" (Wolters Kluwer Law & Business)  

What We've Got Here Is a Failure to Communicate: Reporting Offers of Coverage for Common Law Employees
"Under the Affordable Care Act (ACA), employers are required to report on the offers of coverage made to their common law employees.... if an offer of coverage is made on behalf of a staffing company or multiemployer plan, how will the employer have this information? ... [T]he rules allow the multiemployer plan to report on the employers behalf ... [but] there is no similar rule for staffing companies.... Staffing firms and multiemployer plans may or may not be aware of these reporting rules, or of the scope of data needed for reporting. If they aren't, they will need some lead time to be able to assemble the data in time for reporting in early 2016." (Benefits Bryan Cave)  

The Doctor Will Video Chat with You Now: UnitedHealthcare to Cover Virtual Visits
"Insurance company UnitedHealthcare will start covering visits to the doctor's office -- via video chat.... This move to cybermedicine could save insurers a ton of money -- or have unintended consequences.... It could be that people grab a doctor online for skin rashes, colds and coughs -- and by getting care early on, they prevent an expensive catastrophe. Or maybe people wait too long when they really just need to see a doctor in person. Or it could be this service brings out the inner hypochondriac in us and leaves the insurer with a bigger bill to co-pay." (National Public Radio)  

California Appellate Court: City Lawfully Changed Retiree Medical Contributions After the Labor Agreements Expired
"The associations alleged that fully paid retiree health insurance was a vested benefit protected by the Contracts Clause of the United States and California Constitutions.... [T]he City argued that once the [memoranda of understanding (MOUs)] expired, so did any expectation of retiree medical benefits for employees who had not retired during the term of the MOUs. In an unpublished opinion, the Court of Appeal agreed[.]" [South Pasadena Police Officers' Assn. et al. v. City of South Pasadena, B254176 (Cal. Ct. App. Mar. 9, 2015; unpub.) (Liebert Cassidy Whitmore)  

Benefits in General; Executive Compensation

[Official Guidance]

Text of IRS Chief Counsel Memo 201518013: Correction of a Failure to Comply with Section 409A (PDF)
"Issue: Does the correction of a failure to comply with section 409A(a) of the Internal Revenue Code applicable only to compensation subject to a substantial risk of forfeiture avoid income inclusion under section 409A if the correction is made before the compensation vests but during the service provider's taxable year in which it vests? Conclusion: No.... The correction of a failure to comply with section 409A(a) during a taxable year indicates that a failure existed during the taxable year in which the correction is made. In accordance with section 409A(a)(1)(A)(i), a failure applicable to deferred compensation subject to a substantial risk of forfeiture that lapses during the taxable year results in income inclusion of the deferred amount under section 409A, regardless of whether the failure is corrected during the same taxable year but before the substantial risk of forfeiture lapses." (Internal Revenue Service [IRS])  

EBSA Announcement: Notice of Temporary Relocation of Public Disclosure Room
"Renovation of [EBSA's] Public Disclosure Room (PDR) will necessitate a temporary relocation and suspension of operations for a total of up to six [6] business days. The renovation will begin on or after May 11 and is expected to last four to six weeks. The PDR will be closed up to three [3] business days prior to moving to the temporary location and up to three [3] business days after the renovation.... While the PDR is at this temporary location, the telephone number will remain (202) 693-8673, and the hours of operation will temporarily change to 8:00am-4:00pm Monday through Friday." (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])  

2015 Trends and Developments in Executive Compensation
"A majority of companies (57%) indicated that they recently evaluated the relationship between pay and performance. In doing so, most companies studied the relationship over at least a three-year period.... Nearly three-quarters of companies indicated they engaged with their institutional shareholders in preparation for their 2015 Say on Pay vote.... Approximately 60% of companies responded that 2015 long-term incentive (LTI) grant values are about the same as 2014; only 6% of companies indicated that grant values decreased year over year." (Meridian Compensation Partners, LLC)  

[Opinion]

Should Company Officers Run Retirement and Other Benefit Plans?
"[L]itigation teaches that it isn't so much the question of whether directors should ever be a plan fiduciary -- accidentally or deliberately -- that is important, but rather the act of thinking logically in advance about who best in a company should have what roles with regard to a plan. Doing the latter not only protects against unanticipated litigation exposures, but also decreases the likelihood of litigation by increasing the probability that the plan will be in the hands of the executives best placed to run it well." (Stephen Rosenberg, The Wagner Law Group)  

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