Health & Welfare Plans Newsletter

April 5, 2016

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Webcasts and Conferences

Sex Discrimination Rules in ACA
April 12, 2016 WEBCAST
(International Foundation of Employee Benefit Plans [IFEBP])

Talent Management Harnessing Choice, Personalization and Technology
April 28, 2016 WEBCAST
(International Foundation of Employee Benefit Plans [IFEBP])

401(k) Plan Workshop - Appleton
May 19, 2016 in WI
(FIS Relius Education)

Getting It Right - Know Your Fiduciary Responsibilities
May 19, 2016 in NH
(Employee Benefits Security Administration [EBSA], U.S. Department of Labor)

Form 5500 Workshop - Appleton
May 20, 2016 in WI
(FIS Relius Education)

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[Official Guidance]

Text of CMS Announcement of Calendar Year 2017 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies and Final Call Letter (PDF)
250 pages. "We are finalizing the methodology that we proposed for calculating [employer group waiver plan (EGWP)] county payment rates with two modifications. First, in order to release final EGWP county payment rates in the Rate Announcement, we will use the average bid-to-benchmark ratio for individual market plan bids from the prior payment year to calculate the Part C base payment amounts for EGWPs.... Second, to provide employers and MAOs more time to adapt to this payment change, we are providing a two-year transition to the new EGWP county payment rate methodology. More details about the final policy are discussed in Section F of Attachment III[.]" (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])  


[Advert.]

Learn how this year's election will effect ACA compliance

Sponsored by Institute for Healthcare Consumerism [IHC]

IHC FORUM & Expo Atlanta, May 24-26, the go-to conference to learn how the 2016 presidential election will affect ACA compliance and reporting. Attend FORUM & Expo for critical insights & expert outlooks on plan design, compliance and reporting.



[Guidance Overview]

CMS Announcement on Medicare Advantage Payments to Medicare Employer Retiree Plans
"Beginning in CY 2017, CMS will implement an alternative payment policy for Medicare Employer Retiree Plans (Employer Group Waiver Plans) ... CMS will establish payment amounts for Medicare Employer Retiree Plans based on non-Medicare Employer Retiree plan bids rather than establishing their payment amounts through bidding ... [T]o provide employers and plans more time to adapt to this payment change, CMS is providing a two-year transition to the new Medicare Employer Retiree Plans county payment rate methodology." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])  

[Guidance Overview]

DOL Provides Guidance on Coordinating Government Contractor Fringe Benefit Requirements with ACA
"The Wage and Hour Division (WHD) of the [DOL] finally issued All Agency Memorandum 220 (AAM) ... to provide guidance to governmental agencies on how the [ACA's] provisions regarding the employer shared responsibility provisions interact with the fringe benefit requirements of the McNamara-O'Hara Service Contract Act (SCA) and Davis-Bacon Act and the Davis-Bacon Related Acts (DBRA) (together, the 'DBA/DBRA').... The AAM underscores that the SCA, DBA/DBRA, and ACA are separate federal laws.... Thus, for example, just because an ALE satisfies SCA does not necessarily mean it satisfies ACA. None of the guidance in the AAM contradicts this principle." (Jackson Lewis P.C.)  

[Guidance Overview]

New York State Will Provide Paid Family Leave
"Beginning January 1, 2018, employees who have worked for a covered employer for 26 or more consecutive weeks will be eligible for paid family leave benefits. At the outset, employees will be entitled to eight weeks of paid leave, increasing to 12 weeks of paid leave by January 1, 2021. Eligible employees will receive pay at a schedule established by New York State[.]" (Epstein Becker Green)  

Paid Family Leave Becomes Law in New York, Funded by Employee Contributions. Will Other States Follow?
"Unlike many of these other laws, New York's version is funded not by the state or employers but by the employees themselves -- through [a weekly payroll deduction of approximately $1 per employee] that will help fund a paid family leave program.... Under the new law, after six months of employment, employees will be eligible for 12 weeks of partially paid family leave to care for a newborn or family member with a serious health condition, and to attend to family obligations after a family member has been called to active military duty." (FMLA Insights)  


[Advert.]

Interaction of Health Care Reform with Other Laws in 2016 and 2017

Sponsored by Lorman and BenefitsLink

April 19 webinar - What parts of the ACA are to be implemented in 2016 through 2020 (when the Cadillac Tax will be due)? Timelines and websites with information on future forms and filings will be provided. BenefitsLink discount.



CMS Threatens Fines as Industry Struggles to Maintain Accurate Provider Directories
"While healthcare provider directories have always been hard to maintain, new [CMS] regulations can mean costly fines if insurers fail to keep accurate, up-to-date information on the physicians who are in their health plans.... [The new regulations levy] fines against insurers of up to $25,000 per beneficiary for errors in Medicare Advantage plan directories and up to $100 per beneficiary for errors in plans sold on the federally run insurance exchanges in 37 states. Payers found in violation of the CMS rules can also be banned from new enrollment and marketing." (Healthcare Payer News)  

After Intense Lobbying, Administration Slows Retiree Health Plan Changes
"[CMS] will still decrease payments to Medicare employer retiree plans, but will implement the policy change over a two-year period rather than immediately this August. [The] announcement comes as part of the finalized 2017 payment rates for Medicare Advantage plans, and after insurers, some unions, employers and lawmakers urged the agency not to finalize the proposal. While the agency did not completely reverse course, the two-year transition will somewhat mitigate the effects on insurers[.]" (Morning Consult)  

Despite Fears, ACA Has Not Uprooted Employer Coverage
"Employers say there is less financial advantage to dropping coverage than first thought. The law penalizes large employers, about $2,000 per worker, when they do not offer health insurance. That is far less than the average cost of family coverage, now $12,600 a year ... But those calculations do not figure in the sizable tax break that comes with providing coverage. In addition, if the employers do not provide insurance, they would almost certainly be pressured -- especially in a strong labor market -- to add enough money to workers' paychecks to cover the cost of buying insurance on the marketplace." (The New York Times; subscription may be required)  

Most Americans Do Not Believe Health Care Prices Are Related to Quality of Care
"Most Americans (58-71 percent, depending on question framing) did not think that price and quality are associated, but a substantial minority did perceive an association (21-24 percent) or were unsure whether there was one (8-16 percent).... People who had compared prices were more likely than those who had not compared prices to perceive that price and quality were associated. [The authors] explore implications of these findings, including how behavioral economics can inform approaches to helping consumers use price and quality information." (Health Affairs)  

Summarized Costs, Placement of Quality Stars, and Other Online Displays Can Help Consumers Select High-Value Health Plans
"[The authors] found that consumers were much more likely to select a high-value plan when cost information was summarized instead of detailed, when quality stars were displayed adjacent to cost information, when consumers understood that quality stars signified the quality of medical care, and when high-value plans were highlighted with a check mark or blue ribbon. These approaches, which were equally effective for participants with higher and lower numeracy, can inform the development of future displays of plan information in the exchanges." (Health Affairs)  

[Opinion]

Anthem and Dignity Collude with Employers, at Employees' Expense
"Anthem and Dignity are providing a competitively priced product that will be cheaper for employers, but it will cause employees to choose between either an exclusive provider organization with severe restrictions in choice of providers or a preferred provider organization with moderate restrictions in provider choice but greater exposure to out-of-pocket spending. Either choice is worse for the employees than under more typical employer-sponsored plans of the past." (Physicians for a National Health Program [PNHP])  

Benefits in General

Claim Denial Letters: Sometimes-Forgotten Arguments to Enforce Contractual Limitations Provisions
"A recent court trend ... requires denial letters to inform the claimant of the Plan's contractual limitations provision.... Other courts have rejected arguments that ERISA regulations impose an affirmative duty to include the length of the limitation period for filing suit in claim denial letters.... The evolving 'best practice': add information regarding the contractual limitations period in the denial letter. And ... here is some good news: sometimes you can use the contractual limitations defense even if the contractual limitations period was not disclosed in the denial letter." (Lane Powell PC)  

Executive Compensation and Nonqualified Plans

Executive Severance and Change-in-Control Practices (PDF)
23 pages. "[T]he past few years have seen notable severance practice reform. The multiple of pay (base salary and/or bonus) that is commonly provided has decreased, and some lucrative benefits, such as 'single trigger' protection ... and excise tax gross-ups, have all but disappeared. This study examines severance and [change in control] practices for chief Executive Officers and chief Financial Officers at 200 large- and mid-cap public companies across multiple industries. The report focuses on the full 200-company sample and breaks out practices by company size or industry where variation in practice was evident." (Frederic W. Cook & Co., Inc.)  

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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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