Health & Welfare Plans Newsletter

February 12, 2016

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Senior 401(k) Administrator
Guidant Financial
in WA

Retirement Planning Consultant
Transamerica
in CA

Benefits Attorney
The Air Line Pilots Association, Int'l
in VA

Senior Recordkeeping Specialist
Hooker & Holcombe, Inc.
in ANY STATE, CT

Investment Advisor
Magis Financial Partners
in PA

3(16) Administrator
Associated Pension Consultants, INc.
in ANY STATE

Retirement Plan and Health & Welfare Plan Administration
Direct Retirement Solutions
in NY

401(k)/Retirement Plan Administrator
Wells Thomas, LLC
in CT

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Webcasts and Conferences

Demystifying ESOP Benefit Distributions
February 17, 2016 WEBCAST
(Ohio Employee Ownership Center)

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Discussions


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[Guidance Overview]

IRS Health Care Tax Tip 2016-18: Reporting Health Coverage on IRS Tax Forms
"While most taxpayers will simply need to check a box on their tax return to indicate they had health coverage for all of 2015, there are a few forms and specific lines on Forms 1040, 1040A, and 1040EZ that relate to the health care law." (Internal Revenue Service [IRS])  


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Text of Fifth Circuit Decision: Administrator of Self-Funded Plans Not Subject to Texas Prompt Payment Law (PDF)
21 pages. "A Texas statute ... requires healthcare insurers to make coverage determinations and pay claims made by preferred healthcare providers within a specified time or face penalties.... HCSC is a mutual legal reserve company that operates in Texas as Blue Cross and Blue Shield of Texas ... BCBSTX acts as the administrator for employer self-funded plans ... [We hold that the Texas statute] is not applicable to BCBSTX's activities as administrator of the self-funded plans or state government plans[.]" [Health Care Service Corporation v. Methodist Hospitals of Dallas, No. 15-10154 (5th Cir. Feb. 10, 2016)] (U.S. Court of Appeals for the Fifth Circuit)  

Can Employees Be Disciplined When They Exceed the Frequency or Duration on Their FMLA Medical Certification?
"If this FMLA regulation at Section 308(e) (which allows you to contact the doctor regarding [an employees absence] pattern) is to have ANY meaning, it must mean that an employer has the right to discipline the employee for absences that exceed the physician's medical opinion. After all, we have given the doctor two chances to provide cover the for the employee -- [1] the initial certification and, with [a] letter explaining the pattern, [2] the recertification.... To be clear, this position is not without risk, particularly given that no courts have offered their opinion on the issue." (FMLA Insights)  

Growing Number of Employers Offering Paid Paternal Benefits to New Dads
"As employees push for more job flexibility ... employers are being very cautious and strategic regarding paid leave, exploring different possibilities.... U.S. employers [may] eventually settle on offering FMLA's 12 weeks of time off as paid leave.... Financial-service companies, investment bankers, technology employers and start-ups have been on board with paid paternal leave for a while ... because it helps attract young talent. But other employers complain that it adds another fixed cost to their overstretched budget." (Human Resource Executive Online)  

A Closer Look: Workplace Wellness Outcomes
"When it comes to measuring wellness program success ... employers are using value-on-investment (VOI) measures in addition to return-on-investment (ROI) numbers. Just over one-quarter (28%) of organizations are measuring their wellness program success with traditional ROI. Half are using at least one VOI measure to track success including employee engagement (30%), turnover (22%), absenteeism (18%), productivity (17%) and recruitment/referral rates (13%)." (International Foundation of Employee Benefit Plans [IFEBP])  

Private Health Insurance Premiums and Federal Policy
"CBO and the staff of the Joint Committee on Taxation (JCT) project that in 2016, the average premium for an employment-based insurance plan will be about $6,400 for single coverage and about $15,500 for family coverage.... Over the period from 2005 to 2014, premiums for employment-based insurance grew by 48 percent for single coverage and by 55 percent for family coverage....This report reviews the available evidence about premium levels and growth; analyzes the major federal subsidies, taxes, fees, and regulations that affect premiums; and examines how insurers' own actions affect premiums." (Congressional Budget Office [CBO])  

CBO Releases Report on Private Health Insurance Premiums and Federal Policy
"The CBO report examines the effect of 10 ACA regulations on insurance premiums. The CBO estimates that the individual mandate will have a significant effect on lowering premiums, by as much as 20 percent, because it drives healthy individuals into health insurance markets.... The CBO projects, on the other hand, that the employer mandate will not have a noticeable effect on premiums, as it will simply shift individuals from the non-group to the group market and does not increase the size of the pool." (Health Affairs)  

Private Health Insurance Market Reforms in the ACA (PDF)
23 pages. "This report provides background information about the private health insurance market, including market segments and regulation. It then describes each ACA market reform. The reforms are grouped under the following categories: obtaining coverage, keeping coverage, cost of purchasing coverage, covered services, cost-sharing limits, consumer assistance an d other health care protections, and plan requirements related to health care providers. The Appendix provides details about the types of plans that are required to comply with the different reforms." [Report No. R42069, Feb. 10, 2016.] (Congressional Research Service [CRS])  

The Ongoing Saga of the ACA Contraceptive Mandate: Where Are We Now? (PDF)
"This very public debate that has involved federal authorities, the Supreme Court, interest groups and individuals has left many confused about where the mandate comes from, what it says and how it applies to different groups. In this white paper, [the authors] attempt to combine and summarize the complex and many times disjointed answers federal authorities have provided to these important questions." (Lockton)  

Congress Refuses ACA Funding, Slams Insurance Agents in the Wallet
"In December, Congress refused an administration request to provide insurers with $2.5 billion in bailout money to help cover their 2014 losses. Because these payments, part of the ACA's risk corridor program, haven't been paid to the insurers, the insurers in turn are reducing or eliminating agent commissions.... For agents who serve the small group market, business improved as the increasing cost of individual coverage made small group coverage more attractive." (InsuranceNewsNet.com)  

Medical Costs for BCBS Individual Plans Outpaced Premiums in 2015
"BCBS plans spent $20.7 billion on medical claims during the first three quarters, but took in just $20.4 billion in premiums, a sharp contrast from 2014 earnings in which premiums outpaced medical costs." (FierceHealthPayer)  

[Opinion]

'Risk Adjustment' Threatens Obamacare
"Risk adjustment is intended to smooth out the unpredictability of the health insurance marketplace ... While well-intended, the implementation of this safeguard has had the unintended consequence of ... taking money from predominantly new, small, innovative plans ... and giving it to the big, established insurance carriers.... The simplest option is a percentage limit on risk adjustment payments assessed to insurance carriers." (Peter Beilenson, in The Baltimore Sun)  

Benefits in General

Obama Administration Budget Proposals Would Again Impact Retirement and Health Benefits (PDF)
"[T]he 2017 package ... includes several new items of significance, including proposals to: [A]mend [ERISA] to permit unaffiliated employers to adopt a defined contribution multiple employer plan (MEP) that would be treated as a single plan for purposes of ERISA.... Account for geographic variation by increasing the threshold for the 'Cadillac Tax' ... Give the [PBGC] the authority to adjust premiums for multiemployer plans ... [P]rovide $6.5 million to allow three states to pilot and evaluate state-based 401(k)-type programs or automatic enrollment IRAs ... [P]rovide $100 million in new funding through the [DOL] to allow States and nonprofits to design, implement, and evaluate new approaches to expand retirement and other employer-provided benefit coverage ... [I]ncrease DOL's budget by 4.9% -- with a 64% increase for [EBSA] -- and the [IRS] budget by 12%." (Groom Law Group)  

Pension Commission Calls for New Jersey Public Worker Health Care Cuts
"The proposal calls for freezing the pension system and moving active public employees onto a cash balance retirement plan, but it hinges largely on reducing health care costs to free up cash.... The commission argues pension and health benefits need to be rethought to prevent them from swallowing 27 percent of the state's annual budget by 2022.... This year, it's 14.3 percent." (NJ.com)  

Executive Compensation and Nonqualified Plans

Executive Pay Remains in Shareholder Proponents' Sights
"Companies likely will see proposals focused on single-trigger change-in-control stock vesting, clawbacks, mandatory stockholding and severance pay in the coming year ... [T]he SEC's work on a Dodd-Frank Act requirement in which public companies would have to adopt mandatory 'clawback' policies ... may result in fewer clawback proposals.... [T]he number of compensation-related proposals have decreased since the advent of say-on-pay votes in 2011, giving way to environmental, social and corporate governance resolutions[.]" (Bloomberg BNA)  

BofA Shareholders to Vote on Deferring Executive Pay to Cover Legal Fines
"The [SEC] has cleared the way for Bank of America shareholders to vote on a proposed requirement that its top executives have a portion of their annual pay deferred to cover future legal fines.... While it remains unclear whether the proposal will pass, shareholders at Citigroup failed to approve a similar proposal last year." (Charlotte Observer)  

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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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