Health & Welfare Plans Newsletter

September 18, 2015

BenefitsLink.com logo EmployeeBenefitsJobs.com logo LinkedIn logo Twitter logo Facebook logo
Get Retirement News  |  Advertise  |  Previous Issues  |  Search

Employee Benefits Jobs


Webcasts and Conferences

Excise Tax on High-Cost Health Plans: Strategies You Can Use
September 24, 2015 WEBCAST
(Mercer)

Overview of New IRS Section 430 Regulations
October 1, 2015 WEBCAST
(Conference of Consulting Actuaries)

View All Webcasts and Conferences


Subscribe Now to This Newsletter (free)

We also publish the BenefitsLink Retirement Plans Newsletter (free): Subscribe Now


[Official Guidance]

Text of CCIIO Technical Guidance 2015-0002: Q&A on the Medical Loss Ratio Reporting and Rebate Requirements for the 2014 MLR Reporting Year (PDF)
"The purpose of this bulletin is to provide guidance regarding limited circumstances under which a health insurance issuer will not be treated as out of compliance with the regulatory deadline for 2014 reporting year MLR rebate distribution to policyholders and enrollees under section 2718 of the Public Health Service Act (PHS Act) and 45 CFR Section 158.240. These limited circumstances are if the issuer [1] pays the rebates no later than October 30, 2015, and [2] timely submitted its 2014 MLR Reporting Form and Risk Corridors Plan-Level Data Form but was required to resubmit those forms in September 2015." (Center for Consumer Information and Insurance Oversight [CCIIO], Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])  


[Advert.]

Practical Law – Exclusive Offer for BenefitsLink Subscribers

Sponsored by Thomson Reuters / Practical Law

Whether you're a new attorney or a seasoned practitioner, Practical Law provides the resources needed to help you work smarter and faster. Our Employee Benefits and Executive Compensation covers topics including retirement plans, health & welfare plans and executive compensation arrangements. Learn more.



[Guidance Overview]

A Reminder About Offers of Coverage to Employees on Unpaid Leave
"The point the IRS emphasizes ... is that the employee must actually return from the unpaid leave of absence before they may be treated as a new employee. If you use the monthly measurement method to determine full-time status, this distinction has little effect; unpaid, non-FMLA leave does not count as hours of service towards the 130 hour per month requirement, so you may not have to offer coverage for some or all of the months the employee is absent. However, if you use the lookback method to determine full-time status, an employee who was determined to be full-time and offered coverage during a stability period must continue to be offered coverage through the end of the stability period while on an unpaid leave, even after 13 continuous weeks." (Graydon Head & Ritchey LLP)  

[Guidance Overview]

Frequently Recurring Questions Regarding the Impact of the ACA on Employers: Part 1 (PDF)
"Rather than sponsoring its own group health plan for employees, can an employer reimburse employees' premiums for health care coverage that they have obtained elsewhere? ... Wait, I thought the IRS allowed employers to reimburse employees' premiums under some individual health care plan without the reimbursement being taxable to the employee? ... Are there any exceptions under which an employer could reimburse its employees' premiums for health care coverage not being offered by that employer? ... If an employer agrees to pay the COBRA premiums of a (now former) employee following that employee's termination of employment (through, for example, a severance agreement), would that type of arrangement trigger any excise taxes? ... Can an employer offer its employees a higher salary if they agree not to enroll in the employer's group health plan? ... Can an employer provide higher health care premium subsidies to company executives than it provides for its rank and file employees?" (Hinkle Law Firm LLC)  

[Guidance Overview]

IRS Proposes Revisions to ACA Reporting for Health Reimbursement Arrangements
"The proposed new anti-duplication rules, which will apply month-by-month and individual-by-individual, will provide that if an individual is covered by multiple MEC plans or programs provided by the same provider, reporting is required for only one of them.... [If] an individual is enrolled in a self-insured group health plan for a given month and also is takes part in an HRA sponsored by the same employer, the employer ... is required to report only one type of coverage for that individual (which most likely would be the self-insured group health plan) for that month.... Under the second proposed anti-duplication rule, reporting generally is not required for MEC for which an individual is eligible only if the individual is covered by other MEC for which MEC reporting is required, so long as the two types of coverage are sponsored by the same employer." (E is for ERISA)  

[Guidance Overview]

Executive Order Establishes Paid Sick Leave for Federal Contractors and Subcontractors
"Does the Executive Order apply to all federal contracts and subcontracts? No.... Does the Executive Order apply to all employees of federal contractors? It would appear not. The Executive Order requires that the paid sick leave benefits be extended to all employees 'in the performance of the contract or any subcontract thereunder...' The forthcoming regulations, however, may provide greater insight into this question." (Michael Best & Friedrich LLP)  

[Guidance Overview]

Federal Contractors and Subcontractors Face Executive Order Requiring Them to Provide Employees with Paid Sick Leave (PDF)
"[T]he order adds additional onerous requirements to the patchwork of existing state and municipal sick leave laws... [Many] laws ... do not allow for the use of sick leave to address the effects of domestic violence. As such, ... unless the regulations address the issues of conflicting laws, a federal contractor will have to allow for the accrual and usage of sick leave under both the local law and the Order.... This will make it extremely difficult for Contractors to accurately track how much sick leave is available and how much has been used by a covered employee." (Fox Rothschild LLP)  

The Push Towards Paid Family and Medical Leave Continues
"In addition to these pushes at both the executive and legislative levels, an open letter [sent] to Congress ... was signed by more than 200 business school professors from 88 higher education institutions. These professors wrote in support of a national paid leave standard, including the one provided under the FAMILY Act. The letter stresses the business benefits of providing paid leave, which according to the authors include controlling costs and maximizing productivity through higher retention rates. The letter references state sick leave programs adopted in California, New Jersey, and Rhode Island as successful examples of paid leave insurance programs." (Gray Plant Mooty)  

Third Circuit Allows Providers to Sue Health Insurers Directly
"In other circuits, a health care provider, such as a physician, hospital or surgery center, could sue the insurer directly, provided the patient had signed an assignment of the right to payment from the insurer -- something a patient typically does when registering for treatment. But in the Third Circuit... courts were likely to rule that the assignment of the patient's right to payment wasn't sufficient to permit the provider to sue the insurer.... [On] September 11, 2015, ... [a] unanimous three-judge panel cited a combination of statutory law, case law and common sense in support of its conclusion that all a health care provider needs is an assignment of a right of payment in order to proceed against a health insurer." [North Jersey Brain & Spine Ctr. v. Aetna, Case No. 14-2101 (3d Cir., Sept. 11, 2015)] (Faegre Baker Daniels LLP)  

ERISA Preemption and State Bans on Discretionary Clauses
"Following the promulgation of a model law by the National Association of Insurance Commissioners that bans the inclusion of so-called discretionary clauses in health and disability insurance policies, several states have issued laws or regulations adopting the NAIC's model law.... The reason discretionary clauses have been singled out for attention is because of a 1989 Supreme Court ruling, Firestone Tire & Rubber Co. v. Bruch ... The Supreme Court held in Firestone that the typical judicial review standard applied in adjudicating ERISA cases is the de novo standard, which requires the court to independently adjudicate whether the benefit claimant is entitled to the benefits sought." (DeBofsky & Associates, PC)  

Employers Predict Another Year of Relatively Low Growth in Cost of Providing Health Benefits
"Early responses from a major Mercer survey still in the field show employers predicting that health benefit cost per employee will rise by 4.2% on average in 2016 after they make planned changes such as raising deductibles or switching carriers.... Employers said cost would rise by an average of 6.4% in 2016 if they made no changes. That's down from 7.1% for 2015 and is the lowest rate of underlying cost growth seen since Mercer began collecting this information in 2005, when employers said cost would rise 10% if they made no changes (after changes, the actual average increase was just 6.1%)." (Mercer)  

Appeals Courts Now Split on Contraceptive Mandate
"The Eighth Circuit said that one alternative that the government could use would be to have the entities file a simple notice of their objection to the coverage. Such a notice, the panel ruled, would be 'less onerous' than the alternatives the government has devised, and the entities would not be providing any information about their insurers to aid the government in starting coverage ... Requiring the government to initiate a search to learn which insurer provides coverage for a given entity would not be a significant burden on the government and would not involve the entities in the process." [Dordt College v. Burwell, No. 14-2726 (8th Cir. Sept. 17, 2015); Sharpe Holdings, Inc. v. HHS, No. 14-1507 (8th Cir. Sept. 17, 2015)] (SCOTUSblog)  

New FEHBP Enrollment Option Will Result in Winners and Losers
"The self-plus-one option could save those currently enrolled in FEHBP's self and family plan on average 6 percent in current premium costs in 2016 ... while self and family premiums are expected to rise by 7 percent on average.... Insurance carriers reported to OPM that currently more than 1 million self and family contracts (of the 2.1 million self and family contracts) had only one dependent listed. Of those enrollments, approximately 60 percent were retirees and 40 percent were active federal employees. Because OPM has shown that the FEHBP enrollee pool skews older, it's possible the self-plus-one option might not be cheaper for everyone who chooses it." (Government Executive)  

The Experiences of State-Run Marketplaces That Use HealthCare.gov
"This brief explores the experiences of four states -- Idaho, Nevada, New Mexico, and Oregon -- that established their own exchanges but have operated them with support from the federal HealthCare.gov eligibility and enrollment platform. Drawing on discussions with policymakers, insurers, and brokers, [the authors] examine how these supported state-run marketplaces perform their key functions. [They] find that this model may offer states the ability to maximize their influence over their insurance markets, while limiting the financial risk of running an exchange." (The Commonwealth Fund)  

Benefits in General; Executive Compensation

Plaintiffs' Misdirected Demand for Documents Fails, Claim for ERISA Civil Penalties Is Dismissed
"The court noted that the purpose of the civil penalty under section 502(c) 'is not to compensate participants for injuries but to punish noncompliance with ERISA.' The statute sets out important disclosure requirements, among them the obligation of the plan administrator, upon written request from any participant or beneficiary, to furnish a copy of the latest [documents] ... [T]he Boyd plaintiffs did not ask the correct entity for the documents. Sysco was the plan administrator of the plan, UBH was the claims administrator for the mental health benefits, and nothing in the plan defined the 'plan administrator' as the 'claims administrator.' " [Boyd v. Sysco Corp., No. 4:13-cv-00599 (D.S.C. Sept. 3, 2015)] (Williams Mullen)  

Pending Supreme Court Case Carries Implications for ERISA Class Actions
"Many courts do not now require that a class definition exclude the possibility that a class member suffers no injury.... A Tyson win therefore could mean that a putative ERISA class challenging a defective Summary Plan Description that applied to a class of plan participants will not be certified unless class counsel can trace the defect, in roadmap fashion, to a common injury for each class member. It could mean that a putative ERISA class challenging allegedly excessive fees for a plan investment in a defined contribution plan will not be certified unless class counsel can show how each class member will receive a common increase in benefits should the claim succeed." [Tyson Foods v. Bouaphakeo, No. 14-1146 (8th Cir. Aug. 25, 2014; cert. pet. granted June 8, 2015)] (Seyfarth Shaw LLP)  

Press Releases

Connect   LinkedIn logo   Twitter logo   Facebook logo

Additional useful links:

BenefitsLink.com, Inc.
1298 Minnesota Avenue, Suite H
Winter Park, Florida 32789
Phone (407) 644-4146
Fax (407) 644-2151

Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

Copyright 2015 BenefitsLink.com, Inc. — but feel free to forward this newsletter without further permission from us, if you do not modify the newsletter in any way (including this lower portion).

All materials contained in this newsletter are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of BenefitsLink.com, Inc., or in the case of third party materials, the owner of that content. You may not alter or remove any trademark, copyright or other notice from copies of the content.

Links to websites other than those owned by BenefitsLink.com, Inc. are offered as a service to readers. The editorial staff of BenefitsLink.com, Inc. was not involved in their production and is not responsible for their content.

We are proud of our Privacy Policy.

Thanks for reading this newsletter!