Health & Welfare Plans Newsletter

December 28, 2015

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[Guidance Overview]

Employer Flex Credits: You May Need to Redesign Your Cafeteria Plan
"Notice 2015-87 provided guidance and clarification on employer flex credits and whether they count for purposes of affordability.... In order for the employer flex credits to be counted as a reduction of what the employee must pay for health plan coverage, the employee must be able to use the contributions solely to pay for health plan coverage. If the employer flex credits can be used by employees for non-health care benefits (such as life insurance or dependent care spending accounts), the flex credits will not be seen as reducing the employee's required contribution (even though the employee is paying less for the coverage). Also, flex contributions that can be used for a taxable benefit, such as cash, will not operate to reduce an employee's required contribution towards the cost of coverage." (Graydon Head & Ritchey LLP)  


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[Guidance Overview]

IRS Pinpoints ACA Affordability Percentage for Safe Harbor
"Before [the final regs issued Dec. 16], there was no official connection between Section 4980H -- the ACA regulations in the Internal Revenue Code that detail the employer shared responsibility requirements -- and any percentage other than 9.5 percent, which remained the only rate given in ACA regulations for affordability testing.... [The December 16] guidance allows employers, essentially, to [use the inflation-adjusted percentage] for 2015 in measuring affordability even though the instructions and forms are based on 9.5 percent." (Society for Human Resource Management [SHRM])  

[Guidance Overview]

CMS Releases Draft 2017 Letter to Issuers in the Federally Facilitated Marketplaces
"Much of the letter to issuers is process oriented; it tells insurers what information they have to file where and when. Other sections of the letter largely repeat information found in the 2016 or 2015 letters to issuers as the operation of the marketplaces become more and more routine. But other sections of the letter lay out in greater detail new initiatives identified in the payment rule. In the case of the 2017 letter, provisions on network adequacy, discriminatory benefit design, and formulary review are of particular interest." (Health Affairs)  

State Health Care Database Laws vs. ERISA: Supreme Court to Decide
"The question in this case reviews whether or not states can require health care providers and health care payers to provide claims data and related information to the state's health care database.... [T]his case focuses on whether ERISA preempts the state's health care database law when applied to a third-party administrator of a self-funded plan." [Gobeille v. Liberty Mutual Ins. Co., (2d Cir. Feb. 4, 2014, oral arg. Dec. 2, 2015)] (DeBofsky & Associates, P.C.)  

Opioid Addiction Treatment Argued as 'Essential' Insurance Benefit
"Many commercial insurers pay for MAT, a therapy where people take medication and counseling to reduce their cravings for opioids.... But some physicians and patient advocates say insurance companies have instituted high copays and other barriers that result in inadequate coverage for the treatment. Methadone and buprenorphine, the two most common drugs used in MAT, could cost someone thousands of dollars per year out of pocket." (Modern Healthcare Online; free registration required)  

Obamacare Plans Put Big Dent in Customers' Wallets
"One in 10 Obamacare customers who earn between just two and five times the federal poverty level will have coverage costs that exceed 21 percent of their incomes ... And the median Obamacare customer who earns in that range spends more than 10 percent of their income on monthly premiums and out-of-pocket health expenses, the analysis found." (CNBC)  

[Opinion]

American Benefits Council Request to IRS for Streamlined ACA Reporting Extension Request Process
"Since final Instructions for the Forms were not released until September of 2015, and the AIR testing for tax year 2015 did not begin until November of 2015, employers have had limited time to learn and understand the complex rules with respect to the reporting.... It would benefit both the employer community and the IRS if this process could be streamlined, at least for the 2016 filings. We urge the IRS to allow employers either to: (a) avail themselves of an automatic extension, without the need to make any formal filing before the IRS; or (b) file a request for extension that only requires the provision of a limited amount of information ... and to provide for an automatic thirty-day extension if such a request is granted." (American Benefits Council)  

[Opinion]

Suspend. Delay. Postpone. Repeat.
"By postponing the Cadillac Tax from 2018 to 2020, pausing the Medical Device Tax for 2017 and 2018, and also pausing the Health Insurance Tax for 2017 the federal government is reducing revenues to fund Obamacare by $32.1 Billion.... The total cost over ten years of eliminating these three taxes will decrease Obamacare revenues by $331,900,000,000. This makes up more than half of the revenues Obamacare is supposed to generate over that same time period." (InsureBlog)  

[Opinion]

Obamacare Makes Employer-Based System Even Worse
"The exclusion of health insurance from federal tax now costs the government $248 billion annually. This tax subsidy has distorted America's healthcare marketplace.... Second, the employer exclusion encourages firms and individuals to seek overly generous insurance benefits. Subsidies cause people to consume more of something. Since a dollar of untaxed health benefits is worth more than a dollar of taxed wages, workers understandably opt for more health benefits.... Obamacare failed to address these problems." (Sally Pipes, President of Pacific Research Institute, in Forbes)  

Benefits in General; Executive Compensation

How a High-Deductible Health Plan Can Boost Your Retirement Savings
"Owing to HSAs' flexibility, investors should attempt to maximize their HSA deposits before maxing out their 401(k) contributions. Those supersavers who are already hitting their 401(k) contribution limit can use HSAs as a way to maximize their pretax deposits and minimize their taxable income for the year." (MarketWatch)  

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David Rhett Baker, J.D., Editor and Publisher
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BenefitsLink Health & Welfare Plans Newsletter, ISSN no. 1536-9595. Copyright 2015 BenefitsLink.com, Inc. 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.

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