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[Guidance Overview]
Recent IRS Letter Rulings Shine Helpful Light on Reallocation of VEBA Assets (PDF)
"Two recent companion private letter rulings (PLR 201530022, July 24, 2015, and PLR 201532037, Aug. 7, 2015) ... suggest that employers who would like to reallocate some of their VEBA assets to fund other 'permissible benefits' should take a fresh look at the situation. While the income tax impact of the 'tax benefit' rule needs to be evaluated, the cash flow savings to the company may outweigh any tax cost as long as the reversion tax would not apply (and there are very strong arguments that it shouldn't)."
(Groom Law Group)
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Re-Employing Retirees? Take Steps to Avoid Problems with Health & Welfare Plans
"Many employers carve out independent contractors from eligibility under health and welfare plans. However, a rehired retiree often fails to be a true independent contractor under IRS rules, leaving the employer potentially vulnerable to a claim that they were wrongfully excluded from coverage. In a medical plan, that type of claim can result in an employer having to retroactively pay for any medical claims that arose during the time that the individual should have been eligible under the terms of the Plan. And those claims that an employer's insurance company or stop-loss carrier will refuse to pay are left to the employer to pay."
(Warner Norcross & Judd LLP)
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District Court Denies Class Certification in Excessive Fee Case Against Service Provider
"The court held that certification under Rule 23(b)(1) is only appropriate in cases in which the rights to some limited quantity of money are being adjudicated, and the adjudication of the rights of one individual would necessarily decrease the pool available for other claimants. Where the proposed class here included multiple plans, the adjudication of one plaintiff's claim would not necessarily affect all class members." [Santomenno v. Transamerica, No. CV 12-0278 (C.D. Cal. Aug. 28, 2015)]
(Goodwin Procter)
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Post-ACA Trends in Health Coverage for Small Businesses: Views from the Market (PDF)
"Some states are not closely monitoring enrollment in small-group markets ... The SHOP continues to have a minimal enrollment ... In some states, a significant proportion of small-group employers remain in non-ACA-compliant plans ... Some small employers are dropping health coverage with an expectation that employees will shift to the individual marketplace ... In some states, small employers appear to be shifting away from association health plans, while other types of group purchasing arrangements may be gaining a foothold for future growth." [5-page executive summary; 14-page full report is also available.]
(Robert Wood Johnson Foundation)
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How to Add a Master Health Plan to Your Professional Employer Organization's Menu of Services (PDF)
"[H]ealthcare, though important to employees, has always been relatively complicated and expensive for small businesses to provide. Accessing this key benefit through a [professional employer organization (PEO)] gives employers a simple turnkey solution.... This article will explain the different options available to PEOs and outline the steps to take when adding a master health plan as a benefit for your clients and their employees."
(Milliman via PEO Insider)
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After-Tax HSAs May Help Employers Avoid Cadillac Tax
"Shifting premiums to employees cannot reduce Cadillac taxable plan costs because the tax is levied on the sum of the employee and employer contributions.... HRA, and HSA and health FSA contributions on a pre-tax basis will be counted when calculating the Cadillac tax.... But employee contributions made on a post-tax basis into those accounts will not be counted. And limited-scope dental and vision coverage will not be counted either. Of these, employee payments to HSAs are the most advantageous because individuals can get tax exemptions for those."
(Thompson SmartHR Manager)
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Forces Join to Fight the Cadillac Tax
"[By] the mid-2020s, virtually all plans will be over the cost limit, according to various analyses. Why? Because after 2018, annual increases in the thresholds are indexed to the Consumer Price Index rather than to medical-cost inflation, which has been significantly outpacing CPI for many years and presumably will continue doing so.... An NBGH survey of 140 member organizations asked how long they think they'll be able to make plan changes that delay the impact of the tax. Most respondents said it would only be two or three years."
(CFO)
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PACE and EACH Acts Pass House of Representatives
"The CBO estimated that the PACE Act would reduce the deficit by $400 million over ten years because it would reduce premiums in the mid-size employer market, thus increasing taxable income of employees. It is thus one of the few potential amendments to the ACA that does not increase the deficit ... The EACH Act extends the ACA's religious conscience exemption from the individual mandate to purchase health insurance ... Parallel legislation to both the PACE and EACH act is pending in the Senate."
(Timothy Jost, in Health Affairs)
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Insurers Face $4.9 Million in Penalties for Late Filing of IRS Form
"A total of 143 insurers out of 477 failed to file Form 8963, known as the Report of Health Insurance Provider Information, with the [IRS] by the April 15 deadline ... The late filing of Form 8963 is especially problematic because the IRS does not have a process to correct the amount all covered entities must pay once it distributes its final fee letters."
(FierceHealthPayer)
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Health Spending Represents Increasing Share of GDP
"Last week's third estimate of Gross Domestic Product for the second quarter confirms that growth in health spending might be moderating somewhat from its initial Obamacare fueled rush. Unfortunately, it is not a clear break in the trend of health spending consuming an increasing share of our national income."
(National Center for Policy Analysis Health Policy Blog)
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Pittsburgh's New Sick Leave Ordinance Challenged in State Court
"In August, the City of Pittsburgh, Pennsylvania passed an ordinance that will require most employers to provide workers with paid or unpaid sick time.... Shortly thereafter, the Pennsylvania Restaurant and Lodging Association and a group of Pittsburgh businesses filed a challenge to Pittsburgh's new Ordinance in state court, seeking declaratory relief to invalidate the law. Plaintiffs allege that the sick leave Ordinance is unenforceable because it imposes obligations on employers that are impermissible under the Pennsylvania Municipalities Act and State Constitution."
(Proskauer's Law and the Workplace)
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[Opinion]
Analyses of Certain Health Benefit Provisions of the Budget Reconciliation Package
"[S]everal House committees are marking up budget reconciliation legislation to repeal important components of health reform. Together, these measures threaten to undo historic gains in health coverage and undermine the foundations of health reform." [The web page includes links to CBPP's analyses of the health reform provisions of the reconciliation legislation.]
(Center on Budget and Policy Priorities [CBPP])
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Benefits in General; Executive Compensation
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Press Releases
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