Health & Welfare Plans Newsletter

March 30, 2016

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Client Service Consultant
Nationally Recognized Firm Specializing in Retirement
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The Segal Group
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NRECA
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Webcasts and Conferences

30th Annual Ohio Employee Ownership Conference
April 29, 2016 in OH
(Ohio Employee Ownership Center)

401(k) Plan Workshop - Bloomington, IL
May 12, 2016 in IL
(FIS Relius Education)

Form 5500 Workshop - Bloomington, IL
May 13, 2016 in IL
(FIS Relius Education)

2016 Human Resources Conference
May 18, 2016 in NY
(Strategic Benefit Services)

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[Guidance Overview]

Employer Reminder: March 31 Deadline for Providing ACA Statements to Individuals
"Section 6055(a) ... requires virtually every health insurer, government agency administering a government-sponsored health program, sponsor of a self-insured health plan, and any other entity providing minimum essential coverage, to annually ... provide the IRS and corresponding individuals with Form 1095-B in order to report minimum essential coverage. Applicable Large Employers (ALEs), meaning those entities with 50 or more covered full-time (and full-time equivalent) employees during the previous year, are required under Code Section 6056 to provide the IRS and covered individuals with Form 1095-C." (Reid and Riege, P.C.)  


[Advert.]

Sign Up Today to Sponsor Top-Rated Employee Benefits Conference!

Sponsored by University Conference Services [UCS]

Las Vegas, Sept. 25-28, 2016 -- All sponsorships are all-inclusive, with both exhibiting and speaking opportunities. Attendees are senior-level HR, benefits & finance professionals with decision-making authority for plans with 250-10,000 participants.



[Guidance Overview]

Text of IRS Information Letter 2016-0021: Deductibility of Premiums for Individual Health Insurance Policies for S-Corp Shareholders and Their Employees (PDF)
"To date, the IRS has not issued any other guidance, so, as stated in Question and Answer 5, taxpayers may continue to rely on Notice 2008-1 ... for the tax treatment of the health coverage provided to a 2-percent shareholder-employee. For an employee who is not a 2-percent shareholder, this special rule does not apply. However, Question and Answer 5 of Notice 2015-17 ... does include a discussion of the application of the market reforms in the case of a health plan with fewer than two participants who are current employees." [Dated Feb. 22, 2016; published online Mar. 29, 2016.] (Internal Revenue Service [IRS])  

[Guidance Overview]

Text of IRS Information Letter 2016-0019: Employer Reimbursement of Individual Health Insurance Premiums (PDF)
"[Your constituent] also notes a product some promoters market that alleges use of the product allows employers to reimburse individual health policy premiums without violating the Departments' market reforms.... [We] have been made aware of a number of these schemes, and in looking at the information we have been presented we disagree with the promoters' claims that their product does not impose an annual limit on essential health benefits. Consequently, their product fails to meet the market reforms." [Dated Mar. 2, 2016; published online Mar. 29, 2016.] (Internal Revenue Service [IRS])  

[Guidance Overview]

Text of IRS Information Letter 2016-0014: Maximum Permissible HSA Contribution in the Year an Individual Reaches Age 65 (PDF)
"The amount of the maximum permissible HSA contribution in the year an individual attains age 65 is prorated based on the number of months the individual is an eligible individual ... If [the individual] has coverage by a HDHP and no disqualifying coverage during 2016, for the 9 months that she has HDHP coverage before enrollment in Medicare, she would be allowed an HSA contribution of either $5,062.50 if enrolled in family coverage ($6,750 x 9/12) or $2,512.50 if enrolled in self-only coverage ($3,050 x 9/12). In addition, [she] would be allowed a catch-up contribution of $750 ($1,000 x 9/12) into her HSA because she is age 55 or over." [Dated Feb. 17, 2016; published online Mar. 29, 2016.] (Internal Revenue Service [IRS])  

[Guidance Overview]

Summary of Benefits and Coverage Update: Release of New Proposed Template, Instructions and Related Materials
"The proposed instructions mandate the disclosure of 'core' limitations and exceptions not previously required, such as: [1] Exclusion from coverage of a service category or substantial part of a category, [2] When cost sharing for covered in-network services does not count toward the out-of-pocket limit, [3] Explicit limits on the number of visits or specific dollar amounts payable under the plan, and [4] Requirement of prior authorization for a service." (Troutman Sanders)  


[Advert.]

ECFC: Championing Choice in Employee Benefits Solutions

Sponsored by ECFC

ECFC is an active voice for tax-advantaged benefit programs and a recognized proponent of flexible compensation. The 35th Annual Conference is the chance to ensure your voice is heard.



[Guidance Overview]

Employer-Sponsored Health Plans: Get Ready for HIPAA Audits
"Question-and-answer guidance issued by the OCR indicates that auditors will not be looking at state-specific privacy and security rules; they will only be looking at an entity's compliance with HIPAA. However, HIPAA provides that more stringent state laws will preempt HIPAA, so it is important to confirm that the entity complies with the more stringent state laws if applicable." (Holland & Knight)  

Selfie Health Insurance Is All the Rage
"In 1999, 13% of small employers (... employers with between 3 and 199 workers) were self-insured to some extent. By 2015, the proportion had inched up to 17%.... [S]elf-insurance allows employers to tailor their benefits to their employees instead of buying an 'off the shelf' plan from an insurer.... [W]hen employers self-insure they have control and ownership of claims data. And in this day and age of powerful data analysis, having that information could yield some insights into how to best manage benefits and control health costs." (Managed Care)  

Newly Enrolled Members in the Individual Health Insurance Market After Health Care Reform: The Experience from 2014 and 2015 (PDF)
10 pages. "This report is a comprehensive, in-depth study of medical claims among those enrolled in BCBS individual coverage before and after the ACA took effect. In addition, the report also compares the newly enrolled ACA members to those who receive insurance through their employers. Because the ACA guarantees coverage for pre-existing conditions and broadens benefits available to everyone, individual policies that comply with the law now resemble those offered by employer groups. Thus, comparing the health status, use of medical services and costs of caring for members receiving coverage through the employer market with those covered through ACA-compliant individual policies is important to understanding the dynamics now at work in the health care system." (Blue Cross and Blue Shield Association)  

ACA's Newly Enrolled Are Sicker, More Expensive for Insurers
"Newer customers had higher rates of diabetes, depression and high blood pressure, among other conditions, the association said in a report released Wednesday. They also visited the emergency room much more frequently than people who had private, individual coverage before the law expanded. Researchers caution against drawing broad conclusions about the newly insured based on what amounts to a limited look at a still-evolving health care market. But the numbers show how gaining coverage is only part of a long journey toward the ACA's other key goals of improving health and slowing cost growth." (InsuranceNewsNet.com)  

More People Sought Treatment, Health Care Price Growth Slowed After Great Recession
"Overall, the findings ... show slower growth in the cost of treating diseases (price) and a simultaneous rebounding of growth in the number of treated cases in 2011 and 2012, relative to the slowdown period.... [T]he Great Recession, the ACA, and the patent cliff are all influential factors in 2011 and 2012 spending trends. Of particular note, [the authors] find a significant increase in the use of preventive services in 2011 and 2012, which corresponds to the timing of the ACA's preventive services provision that health plans cover preventive services without cost sharing." (Kaiser Family Foundation)  

CMS Examines the ACA Risk Adjustment Methodology
"The [CMS] White Paper examines proposals for improving both the risk adjustment model and the risk adjustment transfer formula.... [It considers] taking into account partial year enrollments.... adding prescription drug utilization as a factor to the risk adjustment model.... [and] the creation of a supplemental risk adjustment model that would separately consider the costs of high-cost cases." (Health Affairs)  

What Risk Adjustment Does: The Perspective of a Health Insurance Actuary Who Relies on It
"Some small insurers complained that they should be exempt from risk adjustment or have very limited assessments because they are small and new to this business.... But, the consequences of giving only some insurers a 'free pass' from this task are huge....Major questions include: whether to add prescription drugs to the model, how to account for partial year enrollment (due to enrollee churn), whether to pool very high risk enrollees separately, and what kind of recalibration of risk weights to use in 2018 and beyond." (Health Affairs)  

[Opinion]

American Benefits Council Letter to NCSL About State Legislation Mandating Provision of Paid Sick Leave by Employers
"The Council is deeply concerned about the growing number of these types of laws and the difficulties and costs that they impose on employers.... [T]he Council urges the National Conference of State Legislatures (NCSL) to take a leadership role in facilitating the adoption of a more coordinated effort by state governments with respect to these types of laws -- one that focuses on the importance of paid leave programs without unduly burdening employers and their businesses." (American Benefits Council)  

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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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