Health & Welfare Plans Newsletter

May 19, 2015

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Employee Benefits Jobs

Defined Contribution Plan Administrator
San Diego Pension Consultants
in CA

Pension Administrator
Employee Benefit Resources, Inc.
in MT

Retirement Service Consultant
Ascensus
in MN

Assistant Plan Administrator
TPA Firm located in Hunt Valley, MD
in MD

Sr Manager Plan Documents
Great-West Financial
in CO

Retirement Services Consultant
CUNA Mutual Group
in WI

Attorney - ERISA
UNITE HERE HEALTH
in IL

Actuarial Analyst
USI Consulting Group
in NY

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Webcasts and Conferences

Choosing a Retirement Solution For Small Businesses Workshop
June 9, 2015 in MA
(Employee Benefits Security Administration [EBSA], U.S. Department of Labor)

28th Annual Cincinnati Employee Benefits Conference
June 11, 2015 in OH
(Cincinnati Bar Association)

Employer Round Table
June 30, 2015 in IL
(Midwest Business Group on Health)

Employer Forum on Pharmacy Benefits and Specialty Drugs
July 15, 2015 in IL
(Midwest Business Group on Health)

View All Webcasts and Conferences



[Guidance Overview]

Crediting Employees for Hours of Service When No Work Is Performed, and Keeping Employees on Your Health Plan When They No Longer Work
"[This article looks] specifically at what an employer must count as an hour of service during an employee's measurement period to ascertain whether that employee is, in fact, a full-time employee. Once full-time status is confirmed in any given situation, [the authors address] the conditions of employment that would require that an employee remain covered under your health plans." (Benefit Revolution)  


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[Guidance Overview]

The Summer Interns Are Coming! Do We Offer Health Coverage?
"Will the intern be employed on the first day of a fourth full calendar month? ... Which measurement method are you applying? ... Wouldn't it be simpler to just offer coverage to your summer interns? Most interns probably will not elect to enroll anyway. And offering coverage avoids [this] complex analysis ... which doesn't even address potential issues regarding the plan document's eligibility provisions, the 90-day waiting period and bona fide orientation period rules, Section 125 nondiscrimination, or Section 105(h) nondiscrimination (for self-insured plans)." (ABD Insurance & Financial Services)  

[Guidance Overview]

The ACA's 'Toyota Tax'
"If you are an employer, you might ask, 'How do we determine the value of the coverage that we are providing?' The answer is: That's a great question ... It appears that the final regulations are likely to require an employer to look at the coverage in which the employee is enrolled (rather than the cheapest available), and then use rules similar to those that apply for determining the 'applicable premium' for COBRA to determine the cost of that coverage." (McAfee & Taft)  

[Guidance Overview]

Attorney General Delays Implementation of Massachusetts Paid Sick Time Law for Many Employers
"Employers who satisfy [certain] requirements will not have to comply with the Paid Sick Time Law until January 1, 2016.... [A]ny paid time off (usable for any purposes) appears to count toward the 30-hour requirement, so many employers will meet this criteria for all or a significant portion of their workforces. However, the second requirement -- that the employee's use of paid leave between July 1 and December 31 in connection with the employer's existing policy must be job protected and subject to the Paid Sick Time Law's non-retaliation and non-interference provisions -- is a bit less clear and poses some obstacles to compliance." (Nixon Peabody LLP)  

Will the Typical American Family of Four Be Driving a 'Cadillac Plan' by 2018? (PDF)
"In 2015, the cost of healthcare for a typical American family of four covered by an average employer-sponsored preferred provider organization (PPO) plan is $24,671 ... The amount will almost certainly surpass $25,000 in 2016.... Growth rate up in 2015 due to prescription drug prices... Costs for our typical family have more than doubled over the past decade.... [A] family of four ... is likely to reach the Cadillac tax much sooner if the plan is provided by a smaller employer and if trends exceed recent levels." (Milliman)  

Despite Low Inflation, Employers Should Expect Health Care Premiums to Surge Into 2016
"The survey of more than 65 insurance companies nationwide found that, before any plan design changes, overall claim costs will continue to increase by 7 to 10 percent, indicating even higher premium rates in 2015 and 2016.... Medical claim increase trends ... range from 7.2 percent for HMO to 9.0 percent for Indemnity Fee-for-Service annually, slightly below 2014 level... The survey showed a continued increase in prescription drug cost trends as a result of price increases in generic drugs, and growing use of specialty biotech drugs,... Healthcare claim trends for 2016 expected to increase for most products." (Wells Fargo)  

Change to Mammogram Guidelines Could Lead to Coverage Shift
"Millions of women could lose access to free mammograms under changes to breast cancer screening guidelines that influence insurers ... [This] analysis is based on an update to breast cancer screening recommendations proposed by the U.S. Preventive Services Task Force, a group of medical experts whose work guides health care standards and policy. The public comment period on the proposal expires Monday." (National Public Radio)  

Federal District Court Finds Retiree Health Plan's Lifetime Limit Did Not Violate the ACA
"The court was not persuaded by the plaintiff's argument that Congress repealed ERISA's retiree plan exception by implication when it enacted the ACA. The court reasoned that under ERISA's retiree plan exception, the provision cited by the plaintiff involving conflicts between the ACA's changes to the PHSA (as added to ERISA) and ERISA's pre-ACA group health plan requirements, did not apply to retiree-only plans." [King v. Blue Cross and Blue Shield of Illinois, No. 3:13-CV-1254-CAB-JMA (S.D. Cal. May 13, 2015)] (Practical Law Company)  

Uninsured Rate for Americans Ages 50-64 Dropped 31 Percent Since December 2013 (PDF)
"[T]he share of Americans ages 50 to 64 without health insurance fell by nearly a third, from 11.6 percent to 8.0 percent, between December 2013 and December 2014. Overall, the number of 50- to 64-year olds with health coverage increased by approximately 2.2 million between December 2013 and December 2014.... The 27 states that chose to expand Medicaid eligibility as of December 2014 saw the largest drop in the uninsured rate among the 50- to 64-year-old age group, from 9.8 percent in December 2013 to 5.5 percent in December 2014. States that did not expand their Medicaid programs saw a smaller decrease in their uninsured rate among this age group, from 13.8 percent to 11.0 percent." (AARP Public Policy Institute and Urban Institute)  

Congressman Pushes for Appointment of ACA Watchdog
"The legislation calls for the creation of a special inspector general for monitoring the Affordable Care Act, or SIGMA.... If [the] bill is passed, the watchdog's jurisdiction will include the Department of Health and Human Services, Department of Treasury, Social Security Administration, Department of Defense, Department of Homeland Security, Veterans Affairs, Department of Labor and the Peace Corps." (The Daily Signal)  

[Opinion]

ECFC Comment Letter to IRS on 'Cadillac Tax' (Notice 2015-16) (PDF)
"The Agencies should confirm in final guidance that limited scope vision and/or dental coverage is exempt from the Excise Tax when self-funded; confirm the application of this exemption to consumer-directed benefit arrangements (FSAs and HRAs); and expand application of the exemption to exclude any HSA-compatible (i.e., limited purpose) FSA or HRA.... [T]he guidance should clarify that employer contributions to an HSA are not included in the Excise Tax determination unless the HSA is a group health plan ... The guidance should clarify that voluntary supplemental excepted benefit coverage should not be included (even when funded on a pre-tax basis) unless the arrangement would be part of a Section 5000 group health plan.... Salary reduction contributions to consumer-directed arrangements FSAs and HSAs should not be counted for purposes of determining the Excise Tax." (Employers Council on Flexible Compensation [ECFC])  

Benefits in General; Executive Compensation

Arbitration: ERISA's New Playground (PDF)
"At the ripe old age of 41, the ERISA statute finds itself at a crossroads. Although the momentum of new ERISA rules and regulations is accelerating, the actual number of high-stakes lawsuits is declining. Why is that? ... Employers of all stripes are increasingly mandating arbitration of employment disputes, including ERISA disputes. Not only are employers mandating that employees agree to mandatory arbitration, they are including a waiver of class action claims as part of the arbitration agreement. By including class action waivers in the employee arbitration agreement, the employer blunts the economic incentives for plaintiffs' lawyers to pursue employee plan benefit claims." (Baker & McKenzie, via Benefits Law Journal)  

ERISA Participant's Supplemental Submission Doesn't Restart Exhaustion Clock
"A federal district court in New Jersey held that supplemental documentation submitted by a participant in connection with the claims review process did not restart the clock for a claims administrator to decide the participant's appeal.... Prudential argued that it had 90 days from the date Plaintiff submitted her supplemental documentation, not 90 days from the date her appeal was initially submitted. According to the court, the 90-day clock did not restart upon the submission of the additional documentation." [Lewis-Burroughs v. The Prudential Ins. Co. of Am., No. 14-cv-1632 (D.N.J. Apr. 30, 2015)] (Proskauer's ERISA Practice Center)  

GAO Report on Regulatory Guidance Processes: DOL and HHS Could Strengthen Internal Control and Dissemination Practices
"DOL's [written departmental procedures for approval of significant guidance] were not available to staff and required updating. HHS had no written procedures.... [DOL] posted their significant guidance on a departmental website as directed by OMB; HHS did not.... However, GAO identified factors that hindered online access, including long lists of guidance and documents dispersed among multiple web pages.... GAO is recommending that HHS and DOL ensure consistent application of OMB requirements for significant guidance. GAO also recommends that ... [HHS and DOL] strengthen the use of internal controls in guidance production processes and improve online guidance dissemination." (U.S. Government Accountability Office [GAO])  

Companies That Failed Say-on-Pay in 2015
"As of May 15, 2015. 1,009 companies held Say on Pay votes in 2015. 15 companies (1.5%) have failed with an average 61% 'Against' vote. 6 have failed votes in previous years. 3 had 1-year total shareholder returns of over +10%. 2 received +90% 'For' votes in 2014's vote." (Steven Hall & Partners)  

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