Health & Welfare Plans Newsletter

April 13, 2016

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Independent Retirement
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Newport Group
in CA, TX, VA, WV

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Goldleaf Partners
in MN, NC

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Webcasts and Conferences

Best Practices for Conducting an Advisor Request for Proposal (RFP)
RECORDED
(University Conference Services)

Advantages of Value-Based Prescription Drug Benefit Design for Chronic Conditions
RECORDED
(University Conference Services)

Population Health: Wellness and Employee Engagement
April 21, 2016 in GA
(Worldwide Employee Benefits Network [WEB] - Atlanta Chapter)

Defending Your ACA Decisions to the IRS
April 21, 2016 WEBCAST
(Wallace Welch & Willingham)

New Rules for Retirement Plan Advice
April 28, 2016 WEBCAST
(InvestmentNews)

ACFC Exam Preparation Session 5: Cyber Liability
June 1, 2016 WEBCAST
(ECFC [Employers Council on Flexible Compensation])

ACFC Exam Preparation Session 6: HIPAA/HITECH
June 15, 2016 WEBCAST
(ECFC [Employers Council on Flexible Compensation])

Getting It Right - Know Your Fiduciary Responsibilities
June 16, 2016 in AL
(Employee Benefits Security Administration [EBSA], U.S. Department of Labor)

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Present Law and Selected Estimates: Exclusion for Employer-Provided Health Benefits and Other Health-Related Provisions of the Internal Revenue Code
72 pages. "The House Committee on Ways and Means has scheduled a public hearing for April 14, 2016, on the tax treatment of health care. The Internal Revenue Code ... provides a broad exclusion from gross income for employer-provided health benefits. In addition, the Code includes numerous other health-related provisions applicable with respect to employer-provided health benefits, individual taxpayers, and businesses. Part One of this document ... provides a description of present-law health-related provisions throughout the Code.... Part Two presents estimates of the value of certain tax subsidies for health and the value of receipts from certain taxes enacted in the ACA." (Joint Committee on Taxation [JCT], U.S. Congress)  


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Insights on the ACA Risk Adjustment Program (PDF)
27 pages. "For the 2014 plan year, ... risk adjustment transfers increased average loss ratios among insurers with low loss ratios and reduced loss ratios for insurers with high loss ratios. This is consistent with the program operating as intended, by shifting funds from insurers with low-cost enrollees to insurers with high-cost enrollees.... Risk adjustment transfers as a percent of premium were more variable and likely to be higher for insurers with a smaller market share." (American Academy of Actuaries)  

Dueling Responses to the Court's ACA Birth Control Idea
"The government brief argued that the Court's alternative would only work for religious non-profits that use an outside insurance company for health coverage for their employees and it warned of serious complications, but the religious non-profits' brief insisted that the suggested approach could be made to work well for all of the institutions, including those who self-insure or use what are called 'self-insured church plans.' Both urged the Court to move ahead to decide the main legal question -- does the current [ACA] birth-control mandate violate the Religious Freedom Restoration Act? Obviously, they called for conflicting results." [Zubik v. Burwell, Nos. 14-1418 et al. (3d Cir. Feb. 11, 2015; cert. pet. granted Nov. 6, 2015; argued Mar. 23, 2016)] (SCOTUSblog)  

EEOC Appeals Landmark Wellness Verdict: Will This Wind Up in the Supreme Court?
"If the Seventh Circuit upholds the lower court's decision [in EEOC v. Flambeau], employer wellness programs -- especially those in states within that circuit -- will make it extremely difficult for similar ADA claims against employer-sponsored wellness programs to hold up. The EEOC would likely follow this outcome with an appeal to the Supreme Court but, without split verdicts in the circuit courts, the High Court may opt not to hear this case. On the other, if the EEOC comes out on top with this appeal, a Supreme Court hearing is a virtual guarantee." (HR Benefits Alert)  

Few Employers to Face ACA's 'Play or Pay' Penalties, But Many Still Feel the Pain
"Virtually none of the survey respondents believe they will be liable for the 'a' assessment -- meaning they all offered coverage to substantially all employees working 30 or more hours per week. And just 8% thought they might be at risk for the 'b' assessment -- meaning that some of their employees might qualify [for] -- and obtain -- subsidized coverage on the exchange because their employer's plan did not offer affordable contributions or meet minimum plan value requirements. 'This suggests that penalties are not going to amount to a huge source of revenue,' said Beth Umland, Mercer's research director for health and benefits. The CBO had estimated that employer penalties would raise $9 billion in revenue in 2016." (Mercer)  


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CBO Report on Health Coverage: The Stats Through the Employer Lens
"155 million people -- 57% of the population under age 65 -- get their health insurance from their employer.... The number of people covered by employer-sponsored plans is projected to decline to 152 million by 2019. The decline is due mostly to lower-paid workers migrating to Medicaid or qualifying for subsidized coverage in the public exchange -- and not to employers' dropping coverage.... The value of the Federal tax break for employer-based health care coverage is estimated to be $266 billion this year.... Many policymakers would like to tap some of that money to help pay for health care for those who do not have it." (Mercer/Signal)  

Reluctance to Cover Obesity Treatment Could Cost Health Insurers
"Routine policy exclusions for obesity care could cost insurance companies more than they bargained for ... [T]he move to a value-based system will help promote coverage for obesity care because it will make sense to pay for services with proven outcomes. The challenge ... comes from having to convince major employers with self-funded plans that obesity care is worth it." (FierceHealthPayer)  

Health Plans Help Providers Convert to Quality, Value Model
"Health care providers need help moving to value-based reimbursement and adopting accountable care models, and insurers and health plans often provide the best support ... Drivers forcing providers to adapt to value based reimbursement include a retail environment accelerated by the [ACA], the drive toward consumer-driven health care and the MACRA legislation of 2015." (Thompson SmartHR Manager)  

Federal Trade Commission Issues Guidance for Mobile Health App Developers
"The U.S. Federal Trade Commission (FTC) in coordination with the Food and Drug Administration (FDA), the [HHS] Office for Civil Rights (OCR) and Office of National Coordinator for Health Information Technology (ONC), have developed an interactive, web-based tool to help mobile health (mHealth) app developers better understand what federal laws and regulations might apply to their apps.... For entities subject to HIPAA, the FTC's guidance tool should be considered in conjunction with OCR's guidance, which provides examples of when mHealth app developers act 'on behalf of' covered entities[.] " (Sidley Austin LLP)  

Blue Cross Blue Shield Highlights Increase in Certain Diseases, Costs for Newly Insured
"BCBS analyzed data collected in the first nine months of 2015, which showed that the newly enrolled BCBS beneficiaries experienced higher rates of hypertension, diabetes, coronary artery disease, and depression. BCBS predicted that if it were able to collect data for the full year, the higher prevalence among the new enrollees would be even more pronounced. Further, the study found that the newly enrolled also had a higher prevalence of HIV and Hepatitis C.... BCBS identified an increase of 12 percent, or a jump from $501 to $559, when it came to the average monthly medical costs of individuals who were enrolled in BCBS plans after the ACA took effect." (Wolters Kluwer Law & Business)  

Health Insurance Marketplace Premiums After Shopping, Switching, and Premium Tax Credits, 2015-2016 (PDF)
12 pages. "For plan year 2016, early estimates based on rate filings alone suggested higher premium increases than what Marketplace consumers paid. Two-thirds (67 percent) of HealthCare.gov consumers selected a new plan in 2016 ... [T]he increase in the average premium was 8 percent between 2015 and 2016. Among the roughly 85 percent of HealthCare.gov consumers with premium tax credits, the average monthly net premium increased just $4, or 4 percent, from 2015 to 2016." (Assistant Secretary for Planning and Evaluation [ASPE], U.S. Department of Health and Human Services [HHS])  

Premiums Last Year Much Lower Than Initial Rates Suggested
"Over the next few months, insurers will file preliminary individual market rates with their states' insurance regulators. Marketplace consumers would do well to put little stock in those initial numbers.... Tax credits go up along with premiums.... The ACA Marketplaces help consumers shop around for the best deal.... Preliminary rates aren't final rates." (U.S. Department of Health and Human Services [HHS])  

Factors Impacting 2017 Premiums
"Health insurance premiums are set based on a complex set of factors that reflect the cost of providing coverage. These factors include local market dynamics, such as hospital and provider consolidation, the characteristics of the covered population, and local price and utilization trends. Many of these factors apply to both individual market and small employer market coverage, but some factors only apply to individual market coverage. In combination, these components will lead to significant variation in costs and upward pressure on premiums for 2017." (America's Health Insurance Plans [AHIP])  

[Opinion]

American Benefits Council Comment Letter to DOL on Proposed Regs Establishing Paid Sick Leave for Federal Contractors
"[M]any of the substantive requirements described in the Proposed Rule significantly depart from the requirements set forth in existing state and local paid leave laws, exacerbating an already confusing patchwork of obligations ... [T]he Department should create exemptions for workers [1] subject to a valid collective bargaining agreement that provides a sufficient amount of sick or PTO leave, [2] working under a written PTO policy that provides a sufficient amount of PTO leave, or [3] subject to a state or local leave law." (American Benefits Council)  

[Opinion]

Economic Policy Institute Comment Letter to DOL on Proposed Regs Establishing Paid Sick Leave for Federal Contractors
"Our research indicates that paid sick leave for federal contractors could improve job quality for hundreds of thousands of workers. Our estimates suggest that between 694,000 and 1,053,000 employees of Federal contractors may directly benefit with additional paid sick leave, including an estimated 450,000 to 775,000 who currently receive no paid sick leave." (Economic Policy Institute)  

Benefits in General

Text of Second Circuit Opinion: Extent of Plan's Compliance with DOL Claims Procedure Regulation Determines Court's Standard of Review (PDF)
"[We] hold that, when denying a claim for benefits, a plan's failure to comply with the [DOL]'s claims-procedure regulation, 29 C.F.R. Section 2560.503-1, will result in that claim being reviewed de novo in federal court, unless the plan has otherwise established procedures in full conformity with the regulation and can show that its failure to comply with the regulation in the processing of a particular claim was inadvertent and harmless. We further hold that civil penalties are not available to a participant or beneficiary for a plan's failure to comply with the claims ? procedure regulation. Finally, we hold that a plan's failure to comply with the claims-procedure regulation may, in the district court's discretion, constitute good cause warranting the introduction of additional evidence outside the administrative record." [Halo v. Yale Health Plan, No. 14-4055 (2d Cir. Apr. 12, 2016)] (U.S. Court of Appeals for the Second Circuit)  

Press Releases

Snapshot Survey on Student Loan Debt and Retirement
PSCA [Plan Sponsor Council of America]

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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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