Health & Welfare Plans Newsletter

January 14, 2016

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Employee Benefits Jobs

Retirement Plan Consultant
Intac Actuarial Services
in NJ, NY

Participant Call Center Specialist for Retirement Plan Administration
Ingham Retirement Group
in FL

DB Plan Administrator/Actuarial Analyst
Aegis Pension Services, Inc.
in FL

DC Retirement Plan Consultant
Benefit Plans Administrative Services, Inc. [BPAS]
in PA

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Webcasts and Conferences

Healthcare Reform: Lessons Learned
January 27, 2016 WEBCAST
(Conference of Consulting Actuaries)

Strategic Approaches to Human Resources Issues in Corporate Transactions: Merger, Acquisitions and Retirement Plans
February 10, 2016 WEBCAST
(Bloomberg BNA)

69th Annual National Conference
May 3, 2016 in TN
(PSCA [Plan Sponsor Council of America])

Advanced ERISA Benefit Claims Litigation
May 20, 2016 WEBCAST
(ABA Joint Committee on Employee Benefits [JCEB])

2016 ACOPA Actuarial Symposium
August 5, 2016 in IL
(ASPPA College of Pension Actuaries [ACOPA])

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Discussions


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[Official Guidance]

Text of IRS Q&As on Reporting of Offers of Health Insurance Coverage by Employers (Section 6056), Updated January 12, 2016
Topics include: [1] Basics of Employer Reporting: Questions 1-4; [2] Who is Required to Report: Questions 5-12; [3] Methods of Reporting: Questions 13-17; [4] How and When to Report the Required Information: Questions 18-32. (Internal Revenue Service [IRS])  


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[Official Guidance]

Text of IRS Q&As on Information Reporting by Health Coverage Providers (Section 6055), Updated January 12, 2016
Topics: [1] Basics of Provider Reporting (Questions 1-4); [2] Who is Required to Report (Questions 5-15); [3] What Information Must Providers Report (Questions 16-19); and [4] How and When to Report the Required Information (Questions 20-30). (Internal Revenue Service [IRS])  

[Official Guidance]

Text of Correction to IRS Final Regs on Minimum Value of Eligible Employer-Sponsored Plans and Other Rules Regarding the Health Insurance Premium Tax Credit
The document contains corrections to Section 1.36B-3, Computing the premium assistance credit amount, of the final regulations issued Dec. 18, 2015, on the health insurance premium tax credit. (Internal Revenue Service [IRS])  

[Guidance Overview]

Protecting Federal Tax Information in ACA Printed Notices (PDF)
"All information received by the Marketplace from the IRS for purposes of verifying income or making an eligibility determination for insurance affordability programs is protected tax return information of the individual taxpayer to whom it pertains (by SSN).... Whenever FTI is printed, additional physical security protections along with record keeping logs to track the chain of custody, and secure handling and storage of FTI in paper form, must be employed at all times to prevent unauthorized disclosure or inadvertent access by unauthorized individuals." (Internal Revenue Service [IRS])  

[Guidance Overview]

IRS Tax Tip 2016-05: Five ACA Facts for Applicable Large Employers
"Some of the provisions of the Affordable Care Act only affect your organization if it's an applicable large employer. An ALE is generally one with 50 or more full-time employees, including full-time equivalent employees. The vast majority of employers will fall below the ALE threshold number of employees and, therefore, will not be subject to the employer shared responsibility provisions. If you are an ALE, here are five things to know[.]" (Internal Revenue Service [IRS])  

[Guidance Overview]

Preparing for ACA Reporting: What Employers Need to Know
"[In] 2016, ALEs need to file Forms 1094-C and 1095-C with the IRS, and furnish Forms 1095-C to their full-time employees (and any non-full-time employees enrolled in their self-insured plan). These forms report information about the health coverage offered under an ALE's employer-sponsored plan for the 2015 calendar year.... [T]his year ALEs must furnish a copy of the Form 1095-C to individuals by March 31, 2016 and file Form 1094-C and 1095-C with the IRS by May 31, 2016 (June 30, 2016 if filed electronically)." (ADP)  

[Guidance Overview]

ACA Treatment of Fringe Benefits Provided Under Federal Contracts
"Employers subject to the by the [McNamara-O'Hara Service Contract Act or the Davis-Bacon Act and related acts] must keep in mind that while monetary contributions to fringe benefits are taken into account for purposes of the 'affordability' requirement under the ACA, applicable large employers must continue to meet the ACA's mandate to offer minimum essential coverage that is affordable and provides minimum value to full-time employees in order to avoid ACA penalties." (Jackson Lewis P.C.)  

[Guidance Overview]

Congress Grants Retroactive Transit Parity, IRS Issues Payroll Guidance
"As it may take some time to complete and provide the corrected forms, the employer should consider notifying affected employees immediately that corrected forms will have to be issued, as some employees may have already started preparation of their 2015 individual income tax returns upon receiving their W-2s. This marks the third time since 2013 that Congress has granted retroactive transit parity and therefore the third time that the IRS has had to issue payroll guidance as to the retroactivity. Because this time Congress has made parity permanent, after years of lobbying from mass-transit advocates, payroll managers will thankfully not have to deal with retroactivity issues in future years." (McGuireWoods LLP)  

[Guidance Overview]

New HIPAA Privacy Rule Permits Disclosures to Background Check System
"The [National Instant Criminal Background Check System (NICS)] provision allows two types of covered entities to use or disclose PHI for purposes of NICS reporting: [1] those covered entities with the lawful authority to make adjudications or commitment decisions that subject individuals to the federal mental health prohibitor, and [2] those covered entities that serve as repositories of information for NICS reporting purposes. These two types of covered entities may include state departments of mental health, public health, state records repositories, or other state agencies, boards, or commissions outside of the court system. The rule does not create a blanket exception that would permit other types of covered entities to disclose PHI about their patients to the NICS." (McDermott Will & Emery)  


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Five Key Considerations for Value-Based Health Plans
"[1] Attract and Retain a Highly Qualified and High Performing Workforce? ... [2] Balance Cost, Quality, Service, and Access? ... [3] Shift to Value Based Contracting? ... [4] Access as a Design Objective Priority? ... [5] Patient Exposure to Cost?" (Arlington Healthcare Group)  

The Incidence of Mandated Health Insurance: Evidence from the ACA Dependent Care Mandate (PDF)
"Using data from the Survey of Income and Program Participation (SIPP), we find that workers at firms with employer-based coverage -- whether or not they have dependent children -- experience an annual reduction in wages of approximately $1,200. Our results imply that the marginal costs of mandated employer-based coverage expansions are not entirely borne only by the people whose coverage is expanded by the mandate." (National Bureau of Economic Research [NBER])  

Federal District Court in Wisconsin Turns Away EEOC Challenge to Employer's Wellness Arrangement
"The Court made a distinction between wellness programs associated with a group health plan and those formed independent of a group health plan.... The Court also considered the proposed regulations released by the EEOC and found nothing about the safe harbor's applicability to medical examinations that are part of a wellness program and are used to administer and underwrite insurance risks associated with an employer's health plan." [EEOC v. Flambeau, Inc., No. 14-cv-638 (W.D. Wis. Dec. 30, 2015)] (Michael Best & Friedrich LLP)  

HHS to Review ACA Risk Adjustment Program
"[Acting CMS Administrator Andy Slavitt] said there are 'four or five principal things' that have been suggested to the CMS to improve the risk adjustment program. Those include reflecting prescription drug costs and reflecting the fact that some people may only be in plans for part of a year, he said. The one-year moratorium on the health insurance tax of $13.9 billion included in appropriations legislation enacted in December 2015 will help stabilize premiums for 2017, Slavitt said. In addition, the reinsurance program in effect from 2014 through 2016, the third premium stabilization program in the ACA, paid $7.9 billion, 25 percent higher than expected. It has also been 'a stabilizing force to date,' he said." (Bloomberg BNA)  

Global Medical Cost Increases in 2016 Expected to Be 2.5 Times Higher Than General Inflation
"[A]verage cost increases for employer-sponsored medical plans globally will be 9.1 percent in 2016. This is 5.5 percentage points higher than the global average projected inflation rate of 3.6 percent.... [P]rojected trend rates are expected to vary significantly by region. Both Latin America and the Middle East are expected to see double-digit average medical trend rates in 2016, while Europe and North America will experience trend rates just below 6 percent. Still, average trend rates for all regions are expected to exceed average regional inflation levels by at least 4 percentage points." (Aon Hewitt)  

Critics Say ACA 'Risk' Strategies Are Having Reverse Robin Hood Effect
"In early summer, a small, nonprofit HMO in Birmingham, Ala., got a surprise from the federal government: a bill for $1.7 million. The charge, which amounted to a startling two-fifths of the premium money that Viva Health had collected from 1,100 customers, stemmed from an obscure part of the [ACA] designed to support health plans with lots of sick, expensive customers by giving them money from plans with healthier customers.... Blue Cross and Blue Shield of Alabama, which dominates the market in which Viva sells, is getting more than $2.5 million." (The Washington Post; subscription may be required)  

Court Invalidates Pittsburgh Paid Sick Leave Law
"[T]he Court held that the ordinance is invalid because no state statute expressly permitted Pittsburgh to enact it. Employers need not comply with the city's paid sick leave requirements. However, the city may still appeal the decision or lobby the state legislature for statutory authority to enact local paid sick leave laws." (Vorys, Sater, Seymour and Pease LLP)  

Illinois' Largest Health System Acquires 56 Walgreens Clinics
"The 56 clinics represent about 14% of Walgreens' retail health centers nationwide. They will be rebranded as 'Advocate Clinic at Walgreens' and are scheduled to open under the health system's ownership in May. The clinics will use the same electronic health record system as other Advocate providers.... This is the second such deal that Walgreens has reached with a health system.... 'Going forward we envision our clinic portfolio to be a hybrid of self-managed and outsourced locations,' [said Walgreens Healthcare Clinics CMO Pat Carroll]." (The Advisory Board Company)  

Plan Selections by Zip Code in the Health Insurance Marketplace: January 2016
"The dataset provides the total number of Qualified Health Plan selections by ZIP Code for the 38 states that use the HealthCare.gov platform, including the Federally-facilitated Marketplace, State Partnership Marketplaces and supported State-based Marketplaces, during the Marketplace open enrollment period to date (November 1, 2015-January 9, 2016)." (Assistant Secretary for Planning and Evaluation [ASPE], U.S. Department of Health and Human Services [HHS])  

[Opinion]

This Supreme Court Case Threatens to Sink Healthcare Price Transparency
"[W]hat the court decides in Gobeille could spell the end of state efforts to inject long-overdue price transparency in health care pricing, potentially affecting millions of Americans.... he incredible lack of patient-relevant information, even as we ask patients to shoulder an ever-growing share of health care costs, should be a first-order concern for anyone remotely interested in continued reforms to our health care system. Actual prices paid to providers are locked up better the gold in Fort Knox -- breaking down these walls is the first step in tearing down the health care 'fortress.' " (Forbes)  

[Opinion]

Are Provider-Led Health Care Networks Too Big to Fail?
"Are provider-led health care networks equipped to function like insurance companies? Do they have the expertise and experience to assess population health risks and costs and to accurately price health insurance products? The answer is no, and the current effort to consolidate providers and make them into ersatz insurers is a prescription for disaster." (Health Affairs)  

[Opinion]

ERIC Participates in Wisconsin's Telemedicine Rulemaking
"ERIC agrees with the Board's proposed regulations that the standard of care and professional ethics governing in-person visits should apply in the same manner to telemedicine visits and appreciates the Board's position that telemedicine may be used to establish a physician-patient relationship when the standard of care does not require an in-person visit." (The ERISA Industry Committee [ERIC])  

Benefits in General; Executive Compensation

Supreme Court Declines to Review Validity of Forum Selection Clauses in ERISA Plans
"On Jan. 11, 2016, the U.S. Supreme Court declined to accept review of Smith v. Aegon Companies Pension Plan ... The holding of the Sixth Circuit, the only court of appeals to have considered this issue, allows ERISA plan sponsors to designate the federal courts in which their participants may bring claims arising under ERISA. Plan sponsors, particularly those with participants scattered throughout multiple states, often favor this approach because it brings uniformity to the treatment of their plans." (Greensfelder Hemker & Gale PC, via Lexology)  

Millennials in the Dark About Their Benefits
"Compared to their older colleagues, Millennials are less interested in -- and less knowledgeable about -- their workplace benefits ... That could be driving low retention rates among young workers.... Millennials are less likely than others to find the benefits package a potential employer offers to be extremely important in their decision to accept or reject a job.... Millennials also are more likely than those in other age groups to report that they would prefer to take the money employers spend on employee benefits and decide for themselves whether to purchase those benefits and how much to purchase ... Preferences for communications about employee benefits also fall along a generational continuum." (Society for Human Resource Management [SHRM])  

How to Involve Compensation Committees in M&A-Related Decisions
"[T]he compensation committee should be involved in the design and execution of acquisition-related executive compensation programs in order to maximize the likelihood that key employees are retained and the acquisition is successful, while appropriately managing the company's financial risk. Here are a few of the M&A-related items that compensation committees are most likely to focus on." (Towers Watson)  

Press Releases

US Labor Department Files Lawsuit to Recover $31K in Missing Plan Assets from TSPA Holding Inc. in Austin, Texas
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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