Health & Welfare Plans Newsletter

March 25, 2016

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Webcasts and Conferences

Pay Versus Performance: SEC Proposed Disclosure Rules
April 13, 2016 in PA
(Morgan Lewis & Bockius LLP)

State Sponsorship of IRAs or Qualified Plans for Private Sector Employees
May 10, 2016 WEBCAST
(ABA Joint Committee on Employee Benefits [JCEB])

12th National Forum on ERISA Litigation
June 27, 2016 in CA
(American Conference Institute)

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[Guidance Overview]

Text of CMS March 2016 Risk Adjustment Methodology White Paper (PDF)
130 pages. "This paper aims to provide the public with a cohesive summary of the risk adjustment methodology, including detailed explanations of the risk adjustment models and the payment transfer formula, as well as the updates to the model we have made since the initial 2014 calibration. We also explore potential modifications to the risk adjustment methodology for the 2018 benefit year and beyond.... HHS is holding a public meeting on Thursday, March 31, 2016, to discuss these potential proposals. We are requesting comments on the proposals discussed in this paper by April 22, 2016." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])  


[Advert.]

Forum on Employer Health Care Reform Strategies April 10-12

Sponsored by World Congress

Prepare for the Cadillac Tax | Navigate private exchanges | Hear EEOC updates on employer-sponsored wellness programs | Explore direct-contracting with hospital systems to reduce employee health care costs | Use code BLINK2 to attend for $195.



[Guidance Overview]

ACA Potluck: IRS Notice 2015-87 Provides Full Serving of New ACA Guidance (PDF)
29 presentation slides. Topics include: [1] More HRA integration guidance for ACA compliance; [2] Even more clarity on prohibition of individual policy reimbursement (again!); [3] ACA affordability rule clarifications (opt-out credits and flex credits, and inflation adjustments applied to affordability safe harbors); [4] New ACA pay or play penalty amounts (Section 4980H) adjusted for inflation; [5] Special HSA eligibility rules clarified for veterans with service-connected disability; [6] COBRA rights to the health FSA carryover finally explained. (ABD Insurance & Financial Services)  

[Guidance Overview]

FAQs on Correcting IRS Forms 1094-C and 1095-C
"The filings for 2015 are due in early 2016. This article includes frequently asked questions (FAQs) about correcting Forms 1094-C and 1095-C based on the current available guidance. According to the IRS, employers should correct any errors to the forms as soon as possible." (Willis Towers Watson)  

[Guidance Overview]

Excise Tax on High-Cost Employer-Sponsored Health Coverage (PDF)
11 pages. "[The ACA] includes a 40% excise tax on high-cost employer-sponsored health coverage.... [This] excise tax was to be implemented beginning in 2018; however, the Consolidated Appropriations Act of 2016 (P.L. 114-113) delays implementation until 2020.... [T]his report ... provides an overview of how the excise tax is to be implemented." [Report No. R44147, dated Mar. 24, 2016.] (Congressional Research Service [CRS])  

[Guidance Overview]

Eligibility and Determination of Health Insurance Premium Tax Credits and Cost-Sharing Subsidies (PDF)
14 pages. "To be eligible for premium tax credits and cost-sharing subsidies, individuals and families must enroll in health plans offered through health insurance exchanges and meet other criteria. Exchanges operate in every state and the District of Columbia ... Health insurance companies that participate in the individual and SHOP exchanges must comply with numerous federal and state requirements.... The dollar amount of the premium tax credit is based on a statutory formula and varies from individual to individual." [Report No. R44425, dated Mar. 23, 2016.] (Congressional Research Service [CRS])  

Text of CBO Report: Federal Subsidies for Health Insurance Coverage for People Under Age 65: 2016 to 2026 (PDF)
29 pages. "[An] average of about 244 million noninstitutionalized residents of the United States under age 65 will have health insurance in any given month in 2016. Almost two-thirds of them will obtain coverage through an employer ... [In] 2016 the federal subsidies, taxes, and penalties associated with health insurance coverage will result in a net subsidy from the federal government of $660 billion, or 3.6 percent of gross domestic product (GDP). That amount is projected to rise at an average annual rate of 5.4 percent, reaching $1.1 trillion (or 4.1 percent of GDP) in 2026. For the entire 2017-2026 period, the projected net subsidy is $8.9 trillion....[In] 2016 an average of about 155 million people (or about 57 percent of the population under age [65] will have ... employment-based coverage in any given month. This number is projected to decline to 152 million in 2019 and to stay at that level through 2026, when about 54 percent of the population under age 65 is expected to be enrolled in employment-based coverage." (Congressional Budget Office [CBO])  

Federal Court Rules HR Director May Be Individually Liable Under FMLA
"The authority to terminate an employee in this case rested with the employer's president. However, because the president did not conduct an independent investigation and instead agreed with the HR director's recommendation to terminate, the court found that the HR director played an important role in the plaintiff's termination. The court also concluded that the HR director exercised control over the employee's schedule and conditions of employment by handling the FMLA leave, including reviewing the paperwork and communicating with the employee." [Graziadio v. Culinary Institute of America, No. 15-888 (2d Cir. Mar. 17, 2016)] (The Wagner Law Group)  

Why Prescription Drugs Aren't Part of Obamacare
"After six years, the [ACA] has extended health care coverage to millions of people. But affordability problems remain, most prominently in the area of prescription drugs. Obamacare left the pharmaceutical industry largely unregulated while requiring it to pay for some of the law's increased drug coverage.... Drug spending spiked recently, hitting $457 billion in 2015. In 2014, the cost was up 12.6 percent from the year before.... Obamacare did little, if anything, to rein in the price of prescriptions." (Morning Consult)  

AHIP Tests 'One Stop' Provider Directory Model as Fines Threaten Insurer Inaccuracies
"Because more than 80 percent of consumers go to Google to find a doctor, and much of that information is inaccurate, America's Health Insurance Plans [AHIP] has initiated a first-of-its-kind provider directory ... A pilot program will start in April and run through September in three states: Indiana, California and Florida. Twelve health plans spanning the commercial, Medicaid, and Medicare Advantage markets are participating[.]" (Healthcare Payer News)  

Delaware Bans Transgender Health Insurance Limitations or Exclusions
"Delaware has become the 15th state to ban insurance companies from limiting or excluding health care coverage for transgender people. Insurance Commissioner Karen Weldin Stewart issued a bulletin Wednesday that specifically prohibits private insurers from denying, canceling, terminating, limiting, restricting or refusing to issue plans based on a person's gender identity, transgender status or if the person is undergoing a gender transition.... Companies also cannot impose different health insurance premiums or rates based on a person's gender identity." (DelawareOnline)  

Benefits in General

Ninth Circuit Won't Expand ERISA Attorney Fee Provision
"An employer that used bankruptcy law to avoid paying more than $500,000 to a group of union benefit funds can't recover attorneys' fees under ERISA, the U.S. Court of Appeals for the Ninth Circuit held. According to the court, the employer's bankruptcy proceedings -- in which its ability to discharge the debt rested on the court's conclusion that it wasn't a fiduciary under [ERISA] -- wasn't an action brought under ERISA that would allow the statute's fee-shifting provision to apply." [Bos v. Board of Trustees, No. 12-73289 (9th Cir. Mar. 24, 2016)] (Bloomberg BNA)  

Section 6110 Index of Written Determinations Requested After November 1, 1976 (PDF)
99 pages. "The index is arranged by Code section with various identifying subheadings. Each ruling, technical advice memorandum, and Chief Counsel advice issued under Code section 6110 is assigned a 9-digit reference number which appears after the heading to which the ruling refers. This number also appears on the ruling, technical advice memorandum, or Chief Counsel advice itself and is to be used when requesting copies of individual rulings, technical advice memoranda, or Chief Counsel advice." (Internal Revenue Service [IRS])  

Press Releases

NAPA Announces 401(k) Advisor Leadership Award Finalists
National Association of Plan Advisors [NAPA]

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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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