Health & Welfare Plans Newsletter

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Webcasts and Conferences

Affordable Care Act: Information Reporting by Providers of Minimum Essential Coverage
March 29, 2016 WEBCAST
(IRS [Internal Revenue Service])

DOL's Fiduciary Advice: Final Regulations
April 14, 2016 WEBCAST
(Practising Law Institute)

Hone Your HIPAA Expertise
April 14, 2016 WEBCAST

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[Guidance Overview]

Departments Addresses Application Date of Proposed SBC Template Changes
"Once finalized, the Departments intend that health plans and issuers that maintain an annual open enrollment period will be required to use the new SBC template and associated documents beginning on the first day of the first open enrollment period that begins on or after April 1, 2017 with respect to coverage for plan years (or, in the individual market, policy years) beginning on or after that date." (Wolters Kluwer Law & Business)  


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[Guidance Overview]

Vermont Becomes Fifth State with a Paid Sick Leave Law
"While the law takes effect on January 1, 2017, employers with five or fewer employees who are employed for an average of 30 hours or more per week will not be subject to the law until January 1, 2018. 'Employee' is defined as a person who is employed for an average of 18 hours or more per week during a year.... Eligible employees are entitled to accrue one hour of sick leave for every 52 hours worked ... Employees generally must be permitted to carryover unused, accrued sick time from one year to the next year ... Employees can be required to make 'reasonable efforts' to avoid scheduling routine or preventative health care during the work hours." (Proskauer's Law and the Workplace)  

2016 Annual Report to Congress on Self-Insured Group Health Plans (PDF)
16 pages. "The Form 5500 data show that approximately 50,200 health plans filed a Form 5500 for 2013, an increase of 2 percent from the health plans that filed a Form 5500 for 2012. Of health plans filing a 2013 Form 5500, about 20,300 were self-insured and approximately 4,100 mixed self-insurance with insurance (mixed-insured). Self-insured plans that filed a Form 5500 covered approximately 31 million participants in 2013 and held assets totaling about $77 billion. In 2013 there were nearly 26 million participants covered by mixed-insured group health plans; these mixed-insured group health plans held almost $139 billion in assets." (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])  

Highlights from the 2013 Form 5500 Group Health Plans Report (PDF)
41 pages. "Findings from private sector employer-sponsored group health plans filing Form 5500 series welfare reports for plan year 201 3 are summarized below. This document is Appendix A to the Report to Congress: Annual Report on Self-Insured Group Health Plans for 2016." [Also available: 2013 Form 5500 Data: January, 2016, Reflecting Statistical Year Filings (Excel tables)] (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])  

Small Employer Health Tax Credit: Limited Use Continues Due to Multiple Reasons
"The maximum amount of the credit does not appear to be a large enough incentive for employers to offer or maintain insurance. Also, few small employers qualify for the maximum credit amount.... GAO also found that the cost and complexity involved in claiming the tax credit was significant, deterring small employers from claiming it. Many small businesses have also reported that they were unaware of the credit.... Amending the eligibility requirements or increasing the amount of the credit may allow more businesses to claim the credit. However, these changes would increase its cost to the federal government." (U.S. Government Accountability Office [GAO])  


Webinar: ACA Potluck Guidance, Understanding IRS Notice 2015-87

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Trends in Employer-Sponsored Health Insurance Offer and Coverage Rates, 1999-2014
"In 2014, 66% of nonelderly workers received an offer of coverage from their employer; less than the 71% offer rate in 1999 ... In 2014, 56% of nonelderly people were covered by [employer-sponsored insurance (ESI)] ... a decline from the 67% covered by ESI in 1999.... In addition to changes in the labor market, employer coverage may also be less prevalent because fewer employers are offering coverage; in 2014, a smaller percentage of firms offered coverage than in 1999 (55% vs. 66%),6 and a smaller percentage of workers at firms offering benefits were covered by those benefits (62% vs. 66%)" (Henry J. Kaiser Family Foundation)  

Employers with Self-Funded Health Plans Dispute Administration's Application of ACA Nondiscrimination Provisions
"The latest dispute over the health care law may have to be resolved by the courts. The law's nondiscrimination section applies federal civil rights protections to programs under the health overhaul. The legal text refers to entities 'receiving federal financial assistance,' interpreted to include insurers, state Medicaid agencies, hospitals and other service providers. It doesn't mention major private employers that run their own health plans. A group representing big employers said its members don't have particular qualms about gender transition. But large employers do object to what they see as an overreach by the Obama administration, since their health plans don't get federal financial assistance." (ABC News)  

Gobeille v. Liberty Mutual: The Dog That Didn't Bark, and the Next Front in the Preemption War
"Applying what appeared to us as a straight-forward application of existing ERISA preemption jurisprudence, the Court determined that the Vermont law constituted plan administration and was thus preempted. Gobeille's holding is significant. The decision materially shifts the Federal/state balance of regulatory power, at the expense of the states, in instances where the states seek to regulate ERISA-covered employee benefit plans. This [article] examines an alternative approach raised in Gobeille, but not pursued, under which states might seek to regulate service providers of plans rather than the plans themselves to avoid ERISA preemption." (Mintz Levin)  

Supreme Court Limits Plan's Ability to Recoup Medical Expense Payments
"Although Montanile gives participants an incentive to quickly spend any recoveries they receive, it does not change a plan's right to recover under reimbursement provisions. Rather, the decision emphasizes the importance of monitoring participant litigation implicating a plan's right to reimbursement and following up quickly with participants about settlement and litigation developments.... [T]he decision makes clear that a participant cannot destroy an equitable lien and a plan's corresponding right to reimbursement by commingling any recovery with the participant's general assets." (Morgan Lewis)  


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Digital Diabetes Prevention and Management Solutions (PDF)
"Employers indicate that diabetes will continue to be one of their top concerns well into the future.... A spate of new digital tools in the diabetes space promises to help employers improve the effectiveness of their offerings, and employers have indicated significant interest in exploring them. However, they also say they are overwhelmed by the number and diversity of these new tools and need help evaluating which ones might be worth exploring for their employee populations." (Northeast Business Group on Health [NEBGH])  

OCR Launches Phase 2 of HIPAA Audit Program
"These audits will primarily be desk audits, although some on-site audits will be conducted.... An email is being sent to covered entities and business associates requesting that contact information be provided to OCR in a timely manner. OCR will then transmit a pre-audit questionnaire to gather data about the size, type, and operations of potential auditees; this data will be used with other information to create potential audit subject pools." (U.S. Department of Health and Human Services [HHS])  

Stolen Laptop Triggers $1.55 Million Fine for HIPAA Violation
"[The alleged violation] arose from the theft of a laptop from a locked vehicle owned by a contractor's employee. The laptop, which was password protected, contained the individually identifiable personal health information of 9,497 individuals.... There is no indication in the public record that any individual was actually damaged by the claimed data security breach.... NMHC was cited ... not having a Business Associate (BA) agreement with the contractor and not conducting an adequate analysis of security threats to the PHI maintained, accessed and transmitted across NMHC's IT network." (The Retirement Plan Blog)  

Unpacking Drug Price Spikes: Generics
"Generic drugs were originally introduced as a means to safely reduce consumer and payer overall drug spend. Ideally, new generics enter the market and almost immediately provide competitive friction to drive prices down ... But the reality is the generics market has been in turmoil -- shortages, price spikes, quality issues, compounding abuses -- since 2008.... [A] shrinking branded research and development pipeline helped to spawn a surge in generics manufacturer consolidation.... With a shortage of competitors, price spikes have become the new normal." (Health Affairs)  

Anthem Files Suit Against Pharmacy Benefit Manager to Recover Damages for Pricing and Operations Issues
"Anthem, Inc. [on Monday March 21] filed suit against Express Scripts, its vendor for pharmacy benefit management services, to recover damages for pharmacy pricing that is higher than competitive benchmark pricing. The lawsuit also seeks to recover damages related to operational issues and for a declaration of Anthem's right to terminate its contract with Express Scripts." (Anthem, Inc.)  

Maine Community Health Options, the Only Profitable CO-OP in 2014, Posts Major Losses
"The Maine Bureau of Insurance is closely monitoring Community Health Options, as the nation's only profitable co-op under the [ACA] in 2014 posted a net loss of $74 million for 2015 and 2016 this month ... In 2014, Maine Community Health Options, reported net income of $7.3 million[.]" (Healthcare Payer News)  

Why Obamacare Premiums Are Climbing All Over U.S.
"[P]lans increased rates by 25.1 percent in Kentucky, 14 percent in Ohio, and nearly 11 percent in Michigan. In Idaho, the largest insurer, Blue Cross of Idaho, had a rate increase of 23 percent. Some plans, as is in the case of New Mexico, had to pull from the exchanges due to high costs. For the country as a whole ... a premium increase of roughly 15 percent is in order for 2016.... While this year's experience with the [ACA] exchanges has been worse than expected, it is important to remember that the [ACA] had already drastically increased premiums for individual health insurance." (The Daily Signal)  


Statement of U.S. Chamber of Commerce for House Subcommittee Hearing: 'Lip Service but Little Else: Failure of the Small Business Health Insurance Tax Credit' (PDF)
"[T]he small business premium tax credit is only available to small businesses (those with 25 or fewer employees earning on average less than $50,000 per year) that purchase coverage for their employees on the SHOP. Clearly, based on my experience, this is an onerous 'hoop' in and of itself as a requirement. Unfortunately, it is not the only hoop that makes the prospect of obtaining a small business tax credit elusive. The other -- and bigger -- hurdle for small businesses is the annual average earning cap. The average annual earning threshold is simply too low." (U.S. Chamber of Commerce)  

Benefits in General

[Official Guidance]

Text of IRS Disaster Relief Announcement HOU-2016-03 for Victims of Severe Storms, Tornadoes and Flooding in Texas
"Victims of the severe storms tornadoes and flooding that took place beginning on March 7, 2016 in parts of Texas may qualify for tax relief from the [IRS].... Individuals who reside or have a business in Jasper, Newton, and Orange Counties may qualify for tax relief.... [C]ertain deadlines falling on or after March 7, and on or before July 15, 2016 have been postponed to July 15, 2016. This includes 2015 income tax returns normally due on April 18. It also includes the April 18 and June 15 deadlines for making quarterly estimated tax payments. A variety of business tax deadlines are also affected[.]" (Internal Revenue Service [IRS])  

Plan's Contractual Limitations Period Could Not Be Enforced Because Denial Letter Did Not Describe It
"[T]he plaintiff argued that the plan failed to advise him of the limitations period in the plan and therefore the plan should not be allowed to enforce the three year period set forth in the document.... Rather than resolving the issue in terms of equitable remedies, the Court concluded [that] ... 'Based on the plain language of the regulation, we hold that the correct interpretation of section 2560.503-1(g)(1)(iv) is that a denial of benefits letter must include notice of the plan-imposed time limit for filing a civil action. To repeat, the regulation states that the letter must contain a "description of the plan's review procedures and the time limits applicable to such procedures, including a statement of the claimant's right to bring a civil action." ' [Santana-Diaz v. Metropolitan Life Ins. Co., No. 15-1273 (1st Cir. Mar. 14, 2016)] (Health Plan Law)  

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BenefitsLink Health & Welfare Plans Newsletter, ISSN no. 1536-9595. Copyright 2016, 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, 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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