Health & Welfare Plans Newsletter

February 4, 2016

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Newport Group
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MassMutual Financial Group
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MassMutual Financial Group
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Webcasts and Conferences

401(k) Testing Techniques
RECORDED
(FIS Relius Education)

Selling Your Business to Your Employees Via an ESOP
February 10, 2016 WEBCAST
(Ohio Employee Ownership Center)

Mergers & Acquisitions and Multiple/Multi-Employer Plans
February 16, 2016 in CA
(Western Pension & Benefits Council - San Diego Chapter)

Safe Harbor Midyear Amendments: Yes You Can!
February 17, 2016 WEBCAST
(FIS Relius Education)

Risk Management for Retirement Benefits Professionals
February 18, 2016 WEBCAST
(Western Pension & Benefits Council)

2016 NIPA Annual Forum & Expo
May 1, 2016 in NV
(NIPA [National Institute of Pension Administrators])

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Discussions


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[Official Guidance]

Text of Instructions for IRS Form 8963: Report of Health Insurance Provider Information (PDF)
Revised Feb. 2016. "File Form 8963 during each fee year ... to report net premiums written for U.S. health risks during the data year ... The IRS will use that information when figuring the annual fee imposed by Affordable Care Act (ACA) section 9010....Generally, covered entity means any entity with net premiums written for health insurance for U.S. health risks during the fee year that is: [1] A health insurance issuer ... [2] A health maintenance organization ... [3] An insurance company that is subject to tax under subchapter L, Part I or II, or that would be subject to tax under subchapter L, Part I or II, but for the entity being exempt from tax under section 501(a); [4] An insurer that provides health insurance under Medicare Advantage, Medicare Part D, or Medicaid; or [5] A non-fully insured multiple employer welfare arrangement (MEWA)." (Internal Revenue Service [IRS])  


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[Guidance Overview]

IRS Health Care Tax Tip 2016-14: Averaging Full-time and Full-time Equivalent Employees and Why it Matters
"To determine if your organization is an applicable large employer for a year, count your organization's full-time employees and full-time equivalent employees for each month of the prior year. If you are a member of an aggregated group, count the full-time employees and full-time equivalent employees of all members of the group for each month of the prior year. Then average the numbers for the year." (Internal Revenue Service [IRS])  

Regulatory Attempts to Control 'Surprise' Medical Bills
"New York's surprise medical bill law is ground-breaking, as much for its approach to resolving payment disputes between insurers and physicians as for its protection of patients. Pennsylvania's insurance commissioner recently proposed a similar approach. A proposed federal regulation would ... [protect] patients in plans offered in the ACA's marketplaces from higher out-of-network cost sharing, but not from balance billing. By excluding protection from balance billing, the federal proposal avoids having to enter the thicket of setting standards for how much out-of-network physicians should be paid." (JAMA Forum)  

Retiree Health Benefits Case Remanded to District Court for Additional Fact Finding
"Rather than decide whether 'clear and express' language is needed to establish an intent to vest under ordinary principles of contract law, the Sixth Circuit remanded to the district court to make factual determinations as to the parties' agreement outside the 'shadow' of the Yard-Man decision." [Tackett v. M&G Polymers, No. 12-3329 (6th Cir. Jan. 21, 2016)] (Proskauer's ERISA Practice Center)  

Puerto Rico Supreme Court Addresses Conditions for Breastfeeding in the Workplace
"On January 25, 2016, the Supreme Court of Puerto Rico held that employers in Puerto Rico should provide a safe, private, and hygienic place for working nursing mothers to extract breast milk during the nursing period as provided under Act No. 427-2000, as amended (Act 427). The Supreme Court further held that, given certain conditions, failure by an employer to provide a safe, private, and hygienic place to extract breast milk may be a constitutional violation of the working mother's right to privacy under the Constitution of Puerto Rico if the working mother's decision to breastfeed her child is affected by the employer's violation of Act 427." (Littler)  

[Opinion]

Cadillac Tax: Is Crucial Tool for Delivery-System Reform
"The tax thresholds were intentionally set far above the cost of the plans held by most workers in order to target the least-efficient plans.... The President's fiscal year 2017 budget proposal would further improve the tax's targeting. The most significant provision specifies that in any state where the average premium for 'gold' coverage on the state's individual health insurance marketplace would exceed the Cadillac-tax threshold under current law, the threshold would instead be set at the level of that average gold premium." (New England Journal of Medicine)  

[Opinion]

Administration's Proposed Changes to Cadillac Tax Deserve Serious Look
"The President's 2017 budget will recommend improvements in the 'Cadillac tax' -- the excise tax on high-cost health insurance plans. While some suggest repealing the tax, reforming it to preserve most of its revenues and its ability to slow health care cost growth makes far more sense." (Center on Budget and Policy Priorities)  

[Opinion]

The ACA and Its Employment Effects
"[Recent] studies provide useful new information, but they do not mean, as some reporting on them seems to suggest, that there is nothing to worry about with respect to the ACA's effects on labor markets. Given the structure of the ACA, it would be hard to conclude the law would not eventually reduce hours worked or total compensation, although the magnitude of the resulting changes may be hard to detect in the U.S.'s large and complex labor markets." (Health Affairs)  

[Opinion]

Claims That the ACA Would Be a Job Killer Are Not Substantiated by Research
"Contrary to predictions that the ACA would reduce employment, [the authors] find that the employment-to-population ratio is 0.9 percentage points higher than expected in 2015 after accounting for trends and demographic factors. The actual employment-to-population ratio exceeds its expected value by a larger amount (1.9 percentage points) among adults with a high school education or less who are likely to have been more affected by the ACA's health insurance coverage expansions." (Health Affairs)  

Benefits in General; Executive Compensation

[Guidance Overview]

Text of IRS Fact Sheet 2016-8: 2015 Tax Changes (PDF)
Topics include: [1] Standard mileage rates revised; [2] New starter retirement account available; [3] One-rollover-per-year limit for IRA owners; [4] Health care changes; [5] Health care reminders; [6] Health care basics. (Internal Revenue Service [IRS])  

The Retro-Effect: Outstanding Issues in Qualified Plan Recognition of Same-Sex Marriage as Highlighted by Schuett v. FedEx
"[This case] highlights the reality and potential impacts of a retroactive application of Windsor. Plan administrators and fiduciaries should remain aware of the possibility of claims brought under Title I of ERISA to enforce a benefits claim by a participant in a same-sex marriage who retired before the Windsor decision ... Furthermore, Plan administrators should be aware that plan amendments that provide for recognition of same-sex marriages beginning on the date of the Windsor decision will not protect the plan and fiduciaries from Title I claims stemming from events prior to the Windsor decision." [Schuett v. FedEx Corp., No. 15-cv-0189 (N.D. Cal. Jan. 4, 2016)] (Trucker Huss)  

Supreme Court Decision Means It's Time to Review Benefit Plan Subrogation and Reimbursement Practices
"This Supreme Court decision's effect may not be limited to health benefit plans. Similar situations could arise with pension or disability benefit overpayments because of fraud or unintentional errors. The Court ruling may limit a plan sponsor's ability to recover these overpayments if the money has already been spent on consumable or intangible goods or services, such as everyday living expenses. This decision may also result in health plans reconsidering or delaying the payment of medical expenses in situations that involve injuries caused by a third party." [Montanile v. Bd. of Trustees of Nat. Elevator Ind. Health Benefit Plan, No. 14-723 (U.S. Jan. 20, 2016)] (International Foundation of Employee Benefit Plans [IFEBP])  

Are Your Benefits Management Decisions Under-Informed?
"Employers have typically drawn from three main sources of information to help them plan their benefits programs.... Third-Party Consultants ... Employee Surveys ... Industry Surveys ... [T]here's a fourth method that employers can now add to their toolkit for even greater perspective: real-time, big data aggregation.... Just as Amazon and Netflix guide their users' decisions by showing them what similar users have done, revealing actual benefits enrollment activity can promote a new level of clarity in program planning." (Benefitfocus)  

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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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