Health & Welfare Plans Newsletter

March 23, 2016

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Farmer & Betts
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Webcasts and Conferences

Amgen, Gobeille, Montanile and More - Supreme Court Puts ERISA Front and Center in 2016
April 4, 2016 WEBCAST
(Practising Law Institute)

HIPAA Privacy and Security Rules for Employers
April 7, 2016 WEBCAST
(Frenkel Benefits, LLC)

Pulse On Medical Plan Trends and Observations 2016
April 7, 2016 WEBCAST
(CEB)

Employee Benefits & Health Care Forum
April 19, 2016 in OH
(Schneider Downs)

Taking the Mystery Out of Retirement Planning Workshop
April 26, 2016 in IL
(Employee Benefits Security Administration [EBSA], U.S. Department of Labor)

ERISA Benefit Plans: Addressing and Preventing a Data Breach
May 10, 2016 WEBCAST
(Lorman Education Services)

Rethinking Your ESOP Plan Design and Operations
May 17, 2016 WEBCAST
(National Center for Employee Ownership [NCEO])

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[Official Guidance]

Text of CMS Bulletin: Policy-Based Payments Transition in April 2016 (PDF)
Dated Mar. 22, 2016; unnumbered. "This bulletin modifies the December 4, 2015... guidance. CMS will transition all issuers to policy-based payments for the April, 2016 payment cycle. CMS will also provide an additional month before ending adjustments to the calculated policy-based payment amount to the manual workbook submitted payment amount, ending these adjustments except in cases of extreme (>25%) variation in the May 2016 payment cycle." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])  


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[Guidance Overview]

ACA Reporting: IRS Deadline of March 31 Looms for Applicable Large Employers
"Significant penalties are associated with providing inaccurate or incomplete information and for failing to meet the established deadlines.... [T]he IRS has not provided relief for employers that fail to meet the 2016 deadlines.... If assessed a penalty for failure to meet the deadlines, an employer can seek abatement if it can show that its failure was due to 'reasonable cause and not to willful neglect.' ... Employers should be aware of a few special rules that apply to penalties." (Holland & Knight)  

[Guidance Overview]

How Does an Employer Calculate Intermittent FMLA Leave When an Employee Moves from Full-Time to Part-Time?
"[The DOL] requires us to calculate FMLA leave in workweeks. It may be easier to use hours of leave from an FMLA administration standpoint, and this approach would work just fine for an employee who works the same number of hours every week. But what about your employee who works 20 hours one week and 25 hours the next? In this situation, you should calculate his FMLA intermittent leave not in 'hours' but as a fraction of that particular workweek in which he is absent." (FMLA Insights)  

[Guidance Overview]

Revised California Pregnancy Disability Leave and Family Leave Notices to Be Posted April 1, 2016
"Beginning April 1, 2016, covered California employers are required, pursuant to the amended California Fair Employment and Housing Act regulations and the amended California Family Rights Act regulations, to post two amended workplace notices. The new postings replace the California Department of Fair Employment and Housing's 'Notice A' and 'Notice B' postings." (Winston & Strawn LLP)  

Second Circuit: HR Director Is Individually the 'Employer' for FMLA Liability
"[T]he Court found that the HR director: (a) reviewed plaintiff's FMLA paperwork; (b) determined its adequacy; (c) controlled plaintiff's ability to return to work and under what conditions; and (d) sent nearly every communication regarding her leave and employment (including the letter that ultimately communicated her termination). As such, a 'rational jury could find, under the totality of the circumstances, that [the HR director] exercised sufficient control over [plaintiff's] employment to be subject to liability under the FMLA.' " [Graziadio v. Culinary Institute of America, No. 15-888 (2d Cir. Mar. 17, 2016)] (Seyfarth Shaw LLP)  


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Second Circuit Holds That HR Director May Be Individually Liable Under the FMLA Based on 'Economic Realities' Analysis
"It may not be well-known that the [FMLA] provides for individual, as well as corporate liability.... [T]he Second Circuit recently ... joined the Third, Fifth, and Eleventh Circuits in adopting an 'economic realities' analysis to determine when an individual exercises enough authority over matters related to FMLA decision-making so as to be subject to individual liability under the law." [Graziadio v. Culinary Institute of America, No. 15-888 (2d Cir. Mar. 17, 2016)] (Proskauer's Law and the Workplace)  

SBC Changes Will Challenge Payers and Plan Administrators
"From the payers' perspective, there are several significant issues with the proposed template, instructions and timetable ... Among the issues: a prohibitively short period for implementation, and an eight-page limit on the SBC, which could be insufficient to adequately communicate all the coverage options as required by the ACA." (HighRoads)  

OCR's HIPAA Phase 2 Audits Are Here: Check Your Spam and Junk Folders
"As with the pilot audits, OCR states that the Phase 2 audits 'are primarily a compliance improvement activity.' OCR will use aggregated audit results to better understand compliance efforts, and develop appropriate technical assistance, corrective action, and industry tools and guidance. However, OCR makes clear that a 'serious compliance issue' may result in an investigation of the [covered entity (CE) or business associate (BA)].... While OCR is sending its initial confirmatory emails, CEs and BAs should [take certain steps to] prepare for the possibility that they may be selected for an audit pool[.]" (Ice Miller LLP)  

Covered Entities and Business Associates: The Audits are Coming! Is Your HIPAA House in Order?
"[E]ntities receiving communication from OCR at this point are not guaranteed an audit. OCR is currently in its selection process, and will use this initial process of communicating with entities to gather data about the size, type and scope of operations of the potential auditees to determine its pool. After OCR's pool has been determined, selected auditees will receive a document request and specific instructions on how to provide all requested materials." (Bass, Berry & Sims)  


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How Have Corporate Wellness Programs Evolved? (Infographic)
"[W]orkplace wellness programs have actually been in existence since major corporations began cropping up in the late 1800s.... Some major breakthroughs include: [1] Henry Ford introduces the 40-hour work week in 1926. [2] Employee fitness centers become popular in the 1950s and 60s. [3] Employers launch smoking-cessation programs in the 1970s. [4] Johnson & Johnson is the first company to tie wellness programs to productivity and profitability in the 1980s." (HR Benefits Alert)  

GAO Report on Healthcare.gov: Actions Needed to Enhance Information Security and Privacy Controls
"[CMS] reported 316 security-related incidents, between October 2013 and March 2015, affecting Healthcare.gov -- the web portal for the federal health insurance marketplace -- and its supporting systems.... GAO identified weaknesses in technical controls protecting the data flowing through the data hub. These included: [1] insufficiently restricted administrator privileges for data hub systems, [2] inconsistent application of security patches, and [3] insecure configuration of an administrative network. GAO also identified additional weaknesses in technical controls that could place sensitive information at risk of unauthorized disclosure, modification, or loss. In a separate report, with limited distribution, GAO recommended 27 actions to mitigate the identified weaknesses." (U.S. Government Accountability Office [GAO])  

Health Care Spending Growth and Federal Policy (PDF)
14 pages. "[This report examines] spending growth through 2014, the first year the [ACA's] coverage provisions were in effect, and 2015, where possible. [It provides] detailed cost growth trends for Medicare and the private insurance market ... [and estimates] the effect of recently introduced specialty drugs on current and future spending growth." (Assistant Secretary for Planning and Evaluation [ASPE], U.S. Department of Health and Human Services [HHS])  

HHS Marks Sixth Anniversary of ACA
"[N]ational health care spending per person increased moderately at a rate of 4.3 percent in 2014. Much of this growth was attributable to the high costs of covering the newly insured, which may in part be attributable to pent-up demand. Spending per enrollee for 2014 for previously enrolled individuals increased more slowly.... Trends in Medicare spending growth have been particularly muted since the adoption of the ACA." (Health Affairs)  

[Opinion]

Reining in Overpayments to Employer Plans in Medicare Advantage
"Insurers, with help from some employers and unions, have intensified their campaign against a proposed change to how Medicare reimburses certain Medicare Advantage plans that serve employer or union retirees. The proposal from [CMS], however, is sound. It would reduce excessive payments to plans that receive larger average reimbursements than Medicare Advantage plans overall, even though their per-enrollee costs are substantially lower, on average." (Center on Budget and Policy Priorities)  

Executive Compensation and Nonqualified Plans

[Guidance Overview]

Section 162(m): Actions That Should Be Taken by March 30, 2016, And/Or in This Year's Proxy to Avoid the $1,000,000 Deduction Limitation
"For performance-based bonuses and other compensation for 2015 to qualify as 'performance- based compensation' that is exempt from Section 162(m), the Compensation Committee must certify in writing that the performance goals have been satisfied before the bonuses or other compensation is paid. To be exempt from the Section 162(m) deduction limitations, the Compensation Committee must set the performance goals during the first 90 days of the performance period. Thus, for a performance award for calendar year 2016, the goals must be set no later than March 30, 2016." (Greenberg Traurig)  

Press Releases

DOL Sues Defunct Philadelphia Non-profit to Appoint Independent Fiduciary to Terminate 401(k) Plan
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

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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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