Health & Welfare Plans Newsletter

April 12, 2016

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Employee Benefits Jobs

Account Manager
Corporate Synergies Group, LLC
in MD

Assistant ERISA Consultant
Retirement Plan Concepts & Services, Inc.
in IN

Business Development Representative
Envisage Information Systems
in ANY STATE

401(k) Plan Administrator
Retirement Planners
in ANY STATE, VA

Relationship Manager
Newport Group
in CA

Retirement Specialist
Nationwide
in LA

Counsel, Employee Benefits
The Hershey Company
in PA

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Webcasts and Conferences

Managing Money Stress: The Emergence of Financial Wellness
April 20, 2016 in GA
(ISCEBS - Georgia Chapter)

2016 Legislative & Regulatory Updates
May 10, 2016 WEBCAST
(ECFC [Employers Council on Flexible Compensation])

Health Benefits Laws Compliance Assistance Seminar
May 11, 2016 in MS
(Employee Benefits Security Administration [EBSA], U.S. Department of Labor)

401(k) Plan Workshop - Kansas City
June 2, 2016 in KS
(FIS Relius Education)

Form 5500 Workshop - Kansas City
June 3, 2016 in KS
(FIS Relius Education)

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[Official Guidance]

Text of IRS Rev. Proc. 2016-24: Indexing Adjustments for Minimum Essential Coverage Required Contribution Percentage Under Code Sections 36B and 5000A (PDF)
"This revenue procedure also updates the required contribution percentage ... for plan years beginning after calendar year 2016. The percentage is used to determine whether an individual is eligible for affordable employer-sponsored minimum essential coverage under Section 36B.... Additionally, this revenue procedure cross-references the required contribution percentage ... used to determine whether an individual is eligible for an exemption from the individual shared responsibility payment because of a lack of affordable minimum essential coverage.... For plan years beginning in 2017, the required contribution percentage ... is 9.69%." (Internal Revenue Service [IRS])  


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[Guidance Overview]

Employers, Insurers and TPAs: Budget Time, Money for 2017 Summary of Benefits and Coverage Updates
"In addition to the current coverage examples that address diabetes care and childbirth, the updated template for 2017 also will require a new coverage example that addresses coverage for a foot fracture so that a consumer understands what a plan covers in an emergency scenario.... [T]he 2017 templates also expand the information about cost sharing that SBCs [must] contain to include enhanced language to explain deductibles and a requirement that plans address individual and overall out-of-pocket limits in the SBC." (Solutions Law Press)  

[Guidance Overview]

DOL Issues Proposed Regs Implementing Paid Sick Leave for Federal Contractors
"The DOL estimates that about 828,200 employees will receive additional paid sick leave within five years of implementation of the proposed rule. The EO and proposed regulations may require covered employers to provide more sick leave than is required by laws that have been recently enacted in many states. Among the remedies available for violations of the EO and the proposed regulations are monetary damages, liquidated damages, and equitable relief." (McDermott Will & Emery)  

Bad COBRA Notices Can Cost You
"The plaintiffs who brought the lawsuit claimed that the COBRA notice was materially deficient in that it failed to provide the name and address of the party responsible under the plan for COBRA administration and that it failed to provide an adequate explanation of the plan's procedures for electing COBRA. Instead, the notice directed plan participants to a general human resources website and phone number.... In addition to making the changes to the COBRA notice, Sun Trust has agreed to fund a settlement fund of $290,000 which will be used to compensate class members and to pay attorneys' fees, expenses and special awards to the class representatives." (Stinson Leonard Street)  

The Power of the Patient-Centered Medical Home in Workplace Health and Wellness Centers
"By harnessing the power of the [patient-centered medical home (PCMH)] model in worksite or near-site health and wellness centers, forward-thinking employers are able to implement creative benefit structures that improve the health care delivered to employees. In the employer setting, the PCMH model can not only significantly reduce health care costs, but it can improve population health, and more importantly, sustain those improvements over time leading to long-term health care cost control and a healthier, more productive workforce." (QuadMed, via The Institute for HealthCare Consumerism [IHC])  


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Employers Scramble to Avoid Cadillac Tax in 2020
"The so-called cost of coverage includes contributions to flexible spending accounts (FSAs), health reimbursement arrangements (HRAs), and health savings accounts (HSAs), for which worker contributions are made on a pre-tax basis. Also included is coverage for on-site medical clinics, which could create a disincentive for employers who currently have on-site clinics to keep them open. The implementation of the tax, which was delayed from 2018 to 2020, is also predicted by some experts to provide an incentive for employers to switch from offering HSAs with pre-tax contributions to HSAs with after-tax contributions." (Wolters Kluwer Law & Business)  

HIPAA Audit Protocol Is Released
"For covered entities audited on privacy, OCR will focus on notice of privacy practices and an individual's right of access. For covered entities audited on security, OCR will focus on risk analysis and risk management. For covered entities audited on breach notification, OCR will focus on the timing and content of breach notifications (or, alternatively, breach risk assessments documenting that an impermissible use or disclosure was not a breach). For business associates, OCR will focus on risk analysis, risk management, and timeliness and content of breach notification to covered entities." (Davis Wright Tremaine LLP)  

The Biggest Risk Management Surprises in the 2016 OCR Audit Protocol
"Not only will the auditors be looking for policies and procedures for a risk management process, but also the details of how risk will be managed, by whom, how often and documentation of management's acceptable level of risk.... [T]hey will want evidence that security measures have been implemented as a result of that risk analysis and that those measures are sufficient to mitigate or remediate identified risks to an acceptable level according to the risk rating." (Clearwater Compliance)  

CMS Introduces New Primary Care Payment Initiative for Healthcare Providers
"In a sharp departure from the current 'fee-for-service' system, which offers reimbursements per visit or procedure, providers who volunteer to participate will received fixed monthly fees for every patient and bonuses for meeting various quality goals. When their patients stay healthier and require less-expensive care, many primary care doctors will also share in the savings to Medicare, Medicaid or private insurers.... This summer, the administration will choose 20 states and regions that will be eligible for CPC-Plus, and will partner with private insurers so that the reforms will not just apply to government payments." (Politico)  

Benefits in General

Text of Federal District Court Opinion: ERISA Did Not Preempt Action for Intentional Infliction of Emotional Distress in Handling of Disability Claim (PDF)
"Plaintiff alleges ... Defendant 'knew of his physical disabilities and weak emotional state,' yet it prolonged review of his claim to force him to 'drop his disability claim, return to work in pain, and/or accept a smaller settlement than he is rightly entitled' under the Plan.... Although the conduct occurred in connection with Plaintiff's claim, Plaintiff alleges Defendant engaged in such tortious conduct as falsely accusing him of 'lying about and exaggerating' his disability and intimidating him into attending multiple IMEs that Defendant knew would cause him pain and emotional distress. If such claims were held to be preempted by ERISA, Plaintiff would be subject to such treatment with no available recourse, and a plan administrator could investigate a claim in all manner of tortious ways with impunity." [Kresich v. Metropolitan Life Ins. Co., No. 15-cv-05801 (N.D. Cal. Apr. 4, 2016)] (U.S. District Court for the Northern District of California)  

Judge Garland's ERISA Jurisprudence Reflects His Methodical and Moderate Reputation
"While Judge Garland's oeuvre in this area of the law is limited despite his 19 years on the [U.S. Court of Appeals for the D.C. Circuit], it does nonetheless reflect his methodical and restrained reputation, and his penchant for consensus-building, as the decisions that he has been a part of were all unanimous while still peppered with both Democratic- and Republican-appointed judges.... While Judge Garland has not authored an opinion in a denial of benefits case, the decisions in which he participated as a member of the panel do not lean one way or the other, and instead reflect the reasoned, middle of the road approach for which he is known." (Seyfarth Shaw LLP)  

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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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