Health & Welfare Plans Newsletter

January 18, 2016

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Nicholas Pension Consultants
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Webcasts and Conferences

Designing Your Wellness Plan to Avoid Enforcement Action and Litigation Risks
February 8, 2016 WEBCAST
(Lorman Education Services)

PBGC Reportable Events: What You Need to Know About the New Rules
March 17, 2016 WEBCAST
(Lorman Education Services)

2016 City Event
March 24, 2016 in CO
(PSCA [Plan Sponsor Council of America])

2016 City Event
March 24, 2016 in GA
(PSCA [Plan Sponsor Council of America])

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[Official Guidance]

Text of CMS Draft Manual for Reconciliation of Advance Payment of Cost-Sharing Reductions for Benefit Years 2014 and 2015 (PDF)
38 pages. "This draft manual provides information on the process for reconciling advance payment of cost-sharing reduction amounts that QHP issuers have been paid to reflect the cost-sharing reductions amounts those issuers provided to eligible Marketplace enrollees. This draft manual provides QHP issuers with general instructions on using the standard, simplified, and actuarial value methodologies ... for the purpose of determining the value of cost-sharing reduction amounts provided to eligible Marketplace enrollees, and further describes the data elements issuers are required to submit when the annual cost-sharing reduction reconciliation process begins in spring 2016." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])  


[Advert.]

35th Annual ISCEBS Symposium - Sept. 18-21

Sponsored by International Foundation of Employee Benefit Plans [IFEBP]

The Symposium is a must-attend event for corporate benefits professionals. Designed with a variety of U.S., Canadian and globally oriented sessions, the Symposium is an opportunity to learn from industry colleagues, experts and leaders.



[Guidance Overview]

Health FSAs and COBRA Continuation
"[Notice 2015-87] states that the carryover amount must be included in determining the amount of the benefit that a qualified beneficiary is entitled to receive.... The Notice clarifies that this does not include any unused carry-over amounts carried over from the previous plan year.... [H]ealth FSAs must allow carryovers by similarly situated COBRA beneficiaries, on the same basis as non-COBRA beneficiaries. However, the FSA is not required to allow a COBRA beneficiary to elect additional salary reduction amounts for the carryover period, or to have access to any employer contributions to the health FSA made during the carryover period." (Compliance Dashboard)  

[Guidance Overview]

IRS Issues Additional Guidance on Employer Mandate
"In Notice 2015-87, the IRS announced that the annual cost-of-living adjustment will apply to the Affordability percentage, beginning in 2015.... Of course, the notice was released too late to allow employers to adjust employee premiums for 2015 and (for most employers) for 2016. However, the increased percentages can provide some breathing room, especially for employers relying on the W-2 wages and rate of pay affordability safe harbors." (Mazursky Constantine LLC)  

[Guidance Overview]

Notice 2016-4 Extends the Deadlines for 2015 ACA Information Reporting
"Employers may want to consider taking the following steps in light of Notice 2016-4: ... [1] [P]erform testing and take other steps to confirm accuracy, to ensure the ability to duplicate results, and to streamline efforts for 2016. [2] Revisit timelines and other coordination efforts with service providers involved in the process. [3] Consider issuing a communication to employees providing general information that will assist them in filing their 2015 federal tax returns. [4] Keep track of the facts relating to the compliance process in the event that the extended deadlines are not met and a 'reasonable cause' argument would need to be made." (Krieg DeVault)  

[Guidance Overview]

A Permanent 'Path' to Maximize Tax Savings: New Legislation Retroactively Increases the Exclusion for Mass Transit Benefits
"Although the PATH Act provides tax relief for mass transit benefits previously elected in 2015, it does not allow employees to make retroactive transit benefit elections for 2015. Rather, it changes the tax treatment of the 2015 salary reductions and disbursements that actually occurred in 2015.... For some employees who commute using mass transit, the changes implemented by the PATH Act potentially mean hundreds of dollars in income tax and [FICA] tax savings and refunds for 2015. For employers, this may also include significant FICA tax savings for last year." (Morgan Lewis)  

[Guidance Overview]

IRS Provides Guidance on Tax Reporting for Retroactive Increase in 2015 Qualified Transportation Benefits
"Employers who operated their qualified transportation plans on the assumption that transit parity would be restored retroactively have once again been rewarded. Those who treated excess transit benefits as income and wages for 2015 must now move quickly, especially if they have not yet filed Form 941 and want to take advantage of the special administrative procedure." (Thomson Reuters / EBIA)  

[Guidance Overview]

HHS Issues Guidance on Individuals' Right to Access Their PHI
"Covered entities may require individuals to request access in writing and may offer electronic means for submitting requests, but they may not require individuals to come to a physical office, use a web portal, or mail a request.... Individual access rights extend to PHI maintained by a business associate on a covered entity's behalf, so covered entities are also responsible for providing access to PHI held by business associates." (Thomson Reuters / EBIA)  

[Guidance Overview]

New York City Earned Sick Time FAQs Updated
"[Topics addressed in the article include:] [1] Written sick leave Policies ... [2] Front-loading and carryover ... [3] Notice of employee rights ... [4] Joint-employer relationships ... [5] Employees covered and not covered ... [6] Per diem/on-call employees ... [7] Independent contractors ... [8] Misuse/abuse of sick leave ... [9] Reasons for using sick leave ... [10] Foreseeable and unforeseeable notice.... [11] Retaliation ... [12] Complaints and enforcement." (Jackson Lewis P.C.)  

Union Appeals Court's Decision Invalidating Pittsburgh Paid Sick Days Act
"The Service Employees International Union Local 32 BJ has appealed the December 21, 2015, Order of the Allegheny County Court of Common Pleas invalidating ... the ordinance requiring all employers of employees within the Pittsburgh city limits to provide paid sick leave to all full- and part-time employees. While the appeal, filed on January 14, 2016, is pending, the [Act] remains ineffective. Employers are not obligated to revise their policies at this juncture." (Jackson Lewis P.C.)  


[Advert.]

Weight Loss at the Workplace: Legal Issues in Reducing Health Care Costs and Promoting Wellness

Sponsored by Lorman and BenefitsLink

January 28 webinar - Learn about issues to identify and address when formulating and implementing a corporate wellness program that is aimed at weight loss. BenefitsLink discount.



Amicus Briefs Posted Online in Supreme Court Case Challenging Application of Contraceptive Coverage Mandate to Little Sisters of the Poor and Other Religious Organizations
The briefs are towards the bottom of the target web page. Excerpt: "Issue: Whether the HHS contraceptive-coverage mandate and its 'accommodation' violate the Religious Freedom Restoration Act by forcing religious nonprofits to act in violation of their sincerely held religious beliefs, when the government has not proven that this compulsion is the least restrictive means of advancing any compelling interest." (SCOTUSblog)  

Patterns in Prescription Utilization for High-Deductible Health Plan Enrollees Show Concerning Trends
"High-deductible health plans (HDHPs) are growing in popularity, with 20% of employees in these plans in 2013 compared to only 4% in 2006.... [T]here is evidence that these HDHPs result in reduced healthcare costs ... [S]avings were driven by reductions in outpatient care and drug spending ... [T]he overwhelming percentage of total savings [in drug spending for chronic illness] came from reducing use of therapies." (American Journal of Managed Care)  

Health Spending Approaches 18% of GDP for the First Time ... Again (PDF)
"National health spending in November 2015 was 5.0% higher than health spending in November 2014.... The health spending share of GDP was fractionally below 18.0% in October. This is the third time in recent years that spending has been estimated to approach this benchmark share due to revisions either in health care spending or GDP.... Spending in November 2015, year over year, increased in all major categories. Home health care grew the fastest, by 9.6%, with prescription drugs also showing rapid growth at 9.2%." (Altarum Institute)  

[Opinion]

Insurer Rewards Push Women Toward Mammograms
"In choosing among competing guidelines, women are being asked to strike a delicate balance. The trade-offs are complex, and dependent on personal values ... Employer and health plan incentives suggest that mammograms are inherently worthwhile and risk glossing over these nuances. This complicated weighing of pros and cons should not be sidestepped by simply paying women to have mammograms. Instead, employers and health plans should offer incentives that reward the use of evidence-based decision aids." (Harald Schmidt, in The New York Times; subscription may be required)  

Benefits in General; Executive Compensation

[Guidance Overview]

Another Suggested Stock Incentive Plan Revision for 2016
"[C]urrently, to avoid triggering liability treatment, any shares withheld to cover the taxes due at settlement of an option or award must be limited to the minimum required statutory withholding of the award holder. [FASB recently] affirmed its decision to broaden this provision to allow shares to be withheld for taxes up to the maximum individual tax rate in the applicable jurisdiction.... [Most] companies ... have hardwired the minimum required statutory tax-withholding requirement into their stock plan documents. Given the liberalization of this requirement, however, most companies (and many executives) will want to preserve the flexibility to withhold taxes at a higher rate in some circumstances." (Winston & Strawn LLP)  

[Guidance Overview]

Comments on Proposed Changes to Regs on Disability Claims Procedures Due January 19
"Pension plans, disability plans, and grandfathered group health plans are not necessarily familiar with the claims procedures established under the ACA for non-grandfathered group health plans. The new requirements may have greatest administrative impact on those plans that are administered internally by the plan sponsor.... Plans with a definition of disability the same as under the Social Security Act may be able to minimize additional administrative costs by relying on a determination of disability made by the Social Security Administration where practical." (Cheiron)  

Supreme Court Passes on ERISA Plan Lawsuit Venue Case
"The Supreme Court has denied a petition to review a case about restriction-of-venue clauses in retirement plan documents related to ERISA challenges -- based not on the weakness of appellees' arguments but on a lack of conflict among the circuit courts. The U.S. Supreme Court will not take up Smith v. Aegon Companies Pension Plan, despite the opinion of the U.S. Solicitor General that the district and appellate courts erred in allowing the enforcement of a plan document's venue-restriction clause in the case." (PLANSPONSOR)  

Press Releases

DOL Files Suit to Recover $80K in Missing Plan Assets from J.E. Keever Mortuary Inc. in Ennis, Texas
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

Savant Capital, LLC Certified to ERISA 3(16) Administrator Role
Centre for Fiduciary Excellence [CEFEX]

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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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