Health & Welfare Plans Newsletter

January 13, 2016

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Employee Benefits Jobs

Actuarial Services Project Manager
CBIZ Retirement Plan Services
in MD, NJ, PA

Exchange Solutions Senior Project Analyst
Willis Towers Watson
in MN, PA

Senior Actuarial Analyst
The Segal Group
in NY

Senior Implementation Consultant
VALIC
in TX

Associate Attorney (ERISA Fiduciary practice area)
Groom Law Group
in DC

Senior Pension Consultant
USI Consulting Group
in CT

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Webcasts and Conferences

ERISA in 2016: What May Change and What Will Stay the Same
January 28, 2016 WEBCAST
(Regulatory Compliance, LLC )

Optimize Benefits Cost Management for Your Organization in 2016
February 3, 2016 WEBCAST
(Business Insurance)

ERISA Litigation National Institute
May 18, 2016 in IL
(ABA Joint Committee on Employee Benefits [JCEB])

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[Official Guidance]

CMS Web-Broker Public List, January 2016 (PDF)
"CMS regulations establish additional requirements that apply when an agent or broker uses their own website, or that of another agent or broker, to facilitate enrollment in a qualified health plan through the FFM. CMS refers to such agents or brokers who enroll qualified individuals, employers, and employees through public-facing websites as 'web-brokers.'... This list contains the names of web-brokers who have completed FFM registration ... for the 2016 plan year. This list is current as of January 6, 2016 and CMS anticipates updating the information on a monthly basis." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])  


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[Guidance Overview]

How Employers Should Handle Retroactive Reinstatement of Transit Benefits Parity
"Employers may correct only the employer share of FICA tax that corresponds to the employees' share of FICA tax that has been repaid or reimbursed to the employees. Employers using this special procedure do not need to obtain written statements from each employee confirming that the employee did not make a claim ... and will not make a claim for refund of FICA tax overcollected in a prior year, which is usually required when employers refund FICA tax to employees." (Journal of Accountancy)  

[Guidance Overview]

Retroactive Changes to Transportation Benefits May Impact Taxable Wages for 2015
"The Act does not mandate that employers provide additional transit benefits to their employees for 2015 and employees cannot retroactively increase their compensation elections.... [If] an employer offered its employees transit benefit that exceeded the previous excludable limits, then it may need to evaluate if it needs to reduce includable wages for 2015." (Graydon Head & Ritchey LLP)  

[Guidance Overview]

IRS Addresses 2015 Increase in Transportation Benefits
"Normally, an employer that reports excess transit benefits as includible in gross income and wages, and withholds income and FICA taxes, must make corrections by filing Form 941-X for each quarter in which the error occurred. However, Notice 2016-6 provides a special administrative procedure that employers may use if they: [1] Treated excess transit benefits as wages in 2015. [2] Have not yet filed Form 941 for the fourth quarter of 2015. [3] Repay or reimburse employees for any overcollected FICA tax for all four quarters of 2015 on or before filing the fourth quarter Form 941." (Practical Law Company)  

[Guidance Overview]

IRS Private Letter Rulings Address Reallocation of VEBA Assets
"Employers might want to revisit the strategy of reallocating some VEBA assets to fund other 'permissible benefits.' PLR 2015 32037 allows the employer to amend its VEBA to add other permissible benefits for another group of beneficiaries without causing a reversion and the associated excise tax and loss of tax-exempt status. Moreover, as demonstrated in PLR 2015 30022, an employer may find that, even where there is a tax cost to adding new benefits to the VEBA under the tax benefit rule, the employer's cash flow savings may compensate for those costs." (Towers Watson)  


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State and Local Government Benefits Association (SALGBA)

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Number of Paid Sick Leave Days in 2015 Varies by Length of Service and Establishment Size
"In March 2015, 61 percent of workers in private industry had paid sick leave benefits. About 7 in 10 of those workers received a fixed number of sick leave days each year. Most of the rest received sick leave through a consolidated leave plan, which provides a single amount of time off for workers to use for any purpose. Among those who received a fixed number of sick leave days, the amount varied depending on the employee's length of service and the size of the establishment." (U.S. Bureau of Labor Statistics [BLS])  

Spokane Paid Sick Leave on the Way
"For employers with at least 10 employees, employees accrue one hour of [paid sick leave (PSL) per 30 hours of work to an annual maximum of 40 hours. Employees at smaller employers accrue up to 24 hours.... PSL may be used for bereavement relating to the death of a family member. Tacoma, WA and Oregon allow use for this reason as well." (Jackson Lewis P.C.)  

Verizon Anti-Assignment Clause Upheld by Eleventh Circuit
"In affirming the district court's decision to dismiss the provider's complaint against Verizon, a three-panel judge held that the participants' assignment of benefits to the provider was void and unenforceable because the plan's terms included a valid anti-assignment clause." [Griffin v. Verizon Comm. Inc., No. 15-13525 (11th Cir. Jan. 12, 2016)] (Bloomberg BNA)  

Five Open Enrollment Mistakes to Avoid
"Letting the confusion carry on ... Ignoring the numbers ... Communicating only during OE ... Talking only to the employee ... Disregarding activity outside of OE." (Benefitfocus)  

The Health and Welfare 'Wrap' Document: What It Is and Why You Want One
"One common mistake employers make is assuming that the certificates and booklets provided by insurers contain all of the provisions necessary to satisfy the SPD requirement -- but that is rarely the case. Smaller employers often assume that there is a small employer exemption to the SPD requirement (not true); other employers believe that their health and welfare plans are not subject to ERISA (rarely true).... [M]any employers are unaware of the 5500 requirement, or believe that it applies only to 401(k) and other retirement plans (not the case).... One way to make compliance easier is through a welfare wrap document." (Mintz Levin)  

Concierge Medical Care Comes to the Middle Class
"Patients pay $100 a month or less directly to the physician for comprehensive primary care, including basic medication, lab tests and follow-up visits in person, over email and by phone. The idea is that doctors can focus on treating patients, since they no longer have to wade through heaps of insurance paperwork. They spend less on overhead, driving costs down.... It's legal under the Affordable Care Act ... But since it doesn't cover specialists or emergencies, consumers still need a high-deductible health plan. Still, the combined cost of the monthly fee and that plan is often still cheaper than traditional insurance." (National Public Radio)  

Anthem Targets $3 Billion in Drug Cost Savings with Express Scripts
"Anthem said it is working to renegotiate the contract this year to avoid overpaying for pharmaceuticals based on current market conditions. It first announced that it was going to rework the contract about two years ago, but it has not previously disclosed an estimate on the cost savings from the move." (Reuters)  

PBMs Can Help Bend the Cost Curve
"As the industry struggles to adapt to the growing demand of justifying the value of a product or service, payers and pharmacy benefit managers are negotiating indication or outcome-based pricing proposals with manufacturers. Leading the way is Express Scripts." (American Journal of Managed Care)  

CMS Addresses Viability of Health Insurance Marketplaces, and More ACA Developments
"CMS intends to clarify certain [special enrollment periods (SEPs)] to ensure that they are used appropriately and as intended.... CMS is going to eliminate certain SEPs that were helpful in getting the marketplaces underway but are no longer needed.... CMS also intends to review its risk adjustment program to ensure it is operating as intended." (Health Affairs)  

Press Releases

DOL Obtains Judgment to Distribute $1.3M to Participants in Ants Software Inc. 401(k) Plan in Dunwoody, Georgia
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

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BenefitsLink Health & Welfare Plans Newsletter, ISSN no. 1536-9595. Copyright 2016 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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