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February 16, 2016 logo logo LinkedIn logo Twitter logo Facebook logo
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[Guidance Overview]

Expiration of Shared Responsibility Transition Relief
"In its final rule on employer shared responsibility under the ACA, the IRS granted several temporary exceptions to the requirements of the rule ... In general, those exceptions expired at the beginning of 2016, or will expire sometime during the 2016 calendar year. Employers should determine which, if any, of the transition rules they used and take action to comply or prepare to comply with the strict terms of the final rule going forward." (Compliance Dashboard)  


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[Guidance Overview]

CMS and Major Commercial Health Plans Announce Alignment and Simplification of Quality Measures
"[CMS] and America's Health Insurance Plans (AHIP), as part of a broad Core Quality Measures Collaborative of health care system participants, released seven sets of clinical quality measures ( These measures support multi-payer alignment, for the first time, on core measures primarily for physician quality programs. This work is informing CMS's implementation of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) through its measure development plan and required rulemaking, and is part of CMS's commitment to ensuring programs work for providers while keeping the focus on improved quality of care for patients." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])  

Dave and Busted? Reductions in Employee Work Schedules May Not Negate Employer's ACA Health Coverage Mandate
"The court found that the complaint 'sufficiently and plausibly' alleged enough facts to support a possible finding that Dave & Buster's intentionally interfered with the plaintiffs' rights to receive benefits under the company's health plan. The court noted that the complaint referenced specific e-mails and other communications that the plaintiffs allegedly received when their work schedules were reduced, as well as public statements by senior executives and disclosures in the company's securities filings, which overtly explained that the workforce management protocols were instituted to thwart the potential impact of the ACA on the company's bottom line." [Marin v. Dave & Buster's, Inc., No. 15-3608 (S.D.N.Y. Feb. 9, 2016)] (National Law Review)  

Over Half of Large Employers Now Offer High-Deductible Health Insurance Plans; Millennials Top Takers
"52 percent of large employers [surveyed] now offer high-deductible health plans ... [M]illennials -- born between 1980 and 1989 -- selected HDHPs more than any other age group. However, while approximately 44 percent of employees in this group chose HDHPs, a much smaller number of these employees took full advantage of health savings accounts (HSAs), leaving a significant amount of tax-free money on the table that could offset high deductibles." (Benefitfocus)  

The Value of Value-Based Insurance Design: Savings from Eliminating Drug Co-Payments
"Geisinger's $0 co-pay drug program for its chronically ill employee population was associated with positive cost savings and a 5-year return on investment of approximately 1.8. [Value-based insurance design (VBID)] implementation within the context of a wider employee wellness program targeting the appropriate population can potentially lead to positive cost savings." (American Journal of Managed Care)  


Top 5 Employee Benefit Trends for 2016

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ERISA Plan Cannot Recover Spent Settlement Fund, High Court Rules (PDF)
"This conclusion is consistent with several earlier Supreme Court cases involving similar facts where the Court stuck to traditional equitable principles in interpreting 'appropriate equitable relief,' refusing to adopt a more expansive definition.... Failing to timely pursue and collect settlement proceeds to which a plan is entitled under its subrogation and reimbursement provisions could itself be come the basis for a breach of fiduciary duty claim brought by other plan participants." (Xerox HR Services)  

Why Pay Employees to Exercise When You Can Threaten Them?
"Rewarding people with money, it turns out, didn't inspire more people to achieve their goal. About 30 percent of people who got no money performed their 7,000 steps, compared with about 35 percent of those with a potential reward, a statistically insignificant difference ... The people who faced a penalty for failure, however, reached their goal 55 percent of the time." (Bloomberg)  

Employee Meals with a Side of Tax
"For technology giants located in the heart of Silicon Valley, it has become standard practice to shower their employees with handsome perks such as on-site gyms and a seemingly unlimited supply of lavish meals.... Because the incentives are symbiotic, encouraging the employees to work longer hours and collaborate in a more casual work setting, while simultaneously providing employees with free, gourmet meals, the Section 119 applicability becomes muddied ... The IRS has added Section 119 to the 2015-2016 Priority Guidance Plan, with the intent to dissect the Code Section further and determine if changes are necessary." (Schneider Downs)  

CFOs: Controlling Costs Isn't the Only Health Benefits Goal
"88 percent of CFOs said cost control is one of their top 5 goals in managing health benefits ... But 34 percent said health benefits are also an important tool for achieving strategic goals, including: [1] Attracting, retaining and engaging talent. [2] Helping employees become better health care consumers. [3] Helping employees better manage their health. [4] Improving workforce productivity.... CFOs who cited the importance of helping enrollees to be better health care consumers and to better manage their health are more likely to: Increase the scope of their wellness programs. Link health insurance premiums to lifestyle factors. Offer financial incentives for wellness program participation." (Society for Human Resource Management [SHRM])  

Health Spending Growth Slowed to 4.9% in December, Still 5.9% for 2015 Overall
"Preliminary estimates show health spending grew only 4.9% in December 2015 compared to December 2014, continuing a steady decline from a peak of 6.8% in February 2015. Spending on hospitals and prescription drugs, each of which is growing at less than half the rate observed in February, led the decline.... Health care prices in December 2015 were 1.2% higher than in December 2014, up from 1.1% in November, exhibiting an upward trend from its all-time low [growth] rate of 0.9% in September 2015." (Altarum Institute)  

Florida Insurance Regulator Approves Aetna's Acquisition of Humana
"Florida's insurance regulator approved Aetna Inc.'s acquisition of Humana Inc., and required no divestitures, an important win for the companies from a state that is a key market. The $34 billion deal still needs to win approval from the federal Justice Department's antitrust officials ... as well as other states. But Florida is a cornerstone of Humana's Medicare franchise, so its review was closely watched." (The Wall Street Journal; subscription may be required)  


Push to Repeal Cadillac Tax Must Continue in 2016
"[As] employers already undertake steps to avoid the tax there is no evidence that the changes are actually lowering health care costs ... A Milliman study found that factors such as 'the industry in which they work, their age and gender' can lead to increased premiums and the adjustments fail 'to compensate for the impact on premiums of age and sex in many areas of the country.' The law's threshold adjustment for these factors is simply insufficient." (John F. Tiberi and James A. Klein, in The Hill)  

Executive Compensation and Nonqualified Plans


Compensating Executives in a 'Challenging' World
"ConocoPhillips shareholders are asking that the Compensation Committee develop a program to determine which portions of a bonus should be paid immediately, which portions should be deferred, and what adjustments should be made to those deferrals based on performance.... [It's] a bit of a nightmare for people who need to figure out how to make such a plan 409A-compliant and for those who need to administer FICA tax payments.... More than ever, the Compensation Discussion and Analysis (CD&A) will be very key. Explaining why the mix of objective and subjective factors was chosen can go a long way to appeasing large shareholders." (Benefits and Compensation with John Lowell)  

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