Health & Welfare Plans Newsletter

April 22, 2016

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Webcasts and Conferences

2016 Pension Plan Risk Strategies Save Cost, Improve Funding, Reduce Risk
RECORDED
(University Conference Services)

Generics Anything But Generic! Understanding the Unknowns and Pricing of Generic Drugs
RECORDED
(University Conference Services)

HIPAA Privacy Audits Is HHS Coming for Your Health Plan?
May 6, 2016 WEBCAST
(Littler Mendelson)

Sal Tripodi - The Farewell Tour
June 1, 2016 in TX
(ASPPA Benefits Council [ABC] of Dallas/Fort Worth)

2016 Employee Benefits Symposium
June 9, 2016 in DC
(AFS 401[k] Retirement Services)

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[Official Guidance]

Text of CMS Bulletin: Draft Updated Federal Standard Renewal and Product Discontinuation Notices (PDF)
48 pages. Unnumbered document, dated Apr. 21, 2016. "[CMS] is releasing draft updated Federal standard notices of product discontinuation and renewal for the individual health insurance market. Once finalized, these notices will be used by individual market issuers to satisfy the requirement under the guaranteed renewability rules to provide notice of product discontinuation, coverage renewal, and non-renewal or termination based on enrollees' movement outside a product's service area. An issuer using these draft updated notices (or the final updated notices, when published) or the existing Federal standard notices would be considered to have met the Secretary's specification ... regarding the form and manner of the required notices for policy years ending before December 31, 2017, and only the final updated notices would be considered to meet the Secretary's specification ... regarding the form and manner of the required notices for policy years ending on or after December 31, 2017, until the issuance of further guidance. CMS welcomes comments on the draft notices as described in ... this Bulletin." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])  


[Advert.]

ECFC: Advancing Healthcare Consumerism

Sponsored by ECFC [Employers Council on Flexible Compensation]

In its 35th year, ECFC is the leading organization promoting choice in benefit solutions by working together through education and advocacy to put a consumer-driven account into the hands of everyone. To join, visit www.ecfc.org.



[Guidance Overview]

It's Time for ALEs to 'Do the Math' on Controlled Group Status
"A definitive answer to the question of aggregated group status is required in order to file the Form 1094-C transmittal for employee statements (Forms 1095-C), which is due in hard copy by May 31, 2016, or via e-filing by June 30, 2016.... Specifically, Part II of Form 1094-C, line 21 asks whether the 'ALE Member' filing the Form is part of an 'Aggregated ALE Group,' and if the answer is yes, the ALE Member must identify, in Part III, the name and EIN of all other ALE Members of the Aggregated ALE Group. Form 1094-C, like other IRS forms, must be signed under penalty of perjury." (E is for ERISA)  

[Guidance Overview]

Colonoscopies, Mental Health Parity, and More at Issue in Latest ACA FAQs
"The Departments' discussion of MHPAEA-related disclosures ... is notable for its expansive and potentially onerous listing of documents and plan information that must be provided on request to current or potential participants, beneficiaries, or contracting providers.... In the Departments' view, these disclosure obligations are a product of not only the MHPAEA and its final implementing regulations, but also: [1] ERISA's requirement that instruments under which the plan is established and operated be furnished to participants and beneficiaries with 30 days of request, subject to penalties ... [and] [2] The DOL claims procedure regulations and related ACA changes involving internal claims and appeals and external review." (Practical Law Company)  

[Guidance Overview]

Bonding by the Bay: San Francisco Mandates Paid Parental Leave
"Under the law, when covered employees use California paid family leave (PFL) benefits for new child bonding -- bonding with a minor child during the first year after birth or placement through foster care or adoption -- covered employers must pay 'supplemental compensation.' The new ordinance, operative on January 1, 2017, continues San Francisco's legacy of progressive employment standards." (Littler)  

Outsourcing of Appeals to a TPA Carried Discretionary Authority Despite Document's Reference to an Appeal 'Committee'
"[This Connecticut District Court's] decision stands in direct contrast to a recent decision by the Fourth Circuit in a highly similar case involving the same long-term disability plan and TPA. In that case, the Fourth Circuit held that the plan should have been formally amended to authorize the TPA to serve as the appeal committee. As a result, it used the de novo review standard to overturn the benefits denial that prompted the lawsuit. The [district] court acknowledged but rejected the Fourth Circuit's position, noting that the Second Circuit has ruled to the contrary." [Dwinnell v. Fed. Express Long Term Disability Plan, No. 3:14-cv-01439 (D. Conn. Mar. 9, 2016)] (Thomson Reuters / EBIA)  


[Advert.]

HIPAA: A Guide to Health Care Privacy and Security Law

Sponsored by Wolters Kluwer

Compliance with HIPAA's exacting standards is a tremendous challenge -- ease the burden with this comprehensive guide. Use code BENEFIT20 for 20% discount.



Paid Sick Leave Policies Require Careful Employer Review
"While the legislative framework for sick leave laws tends to be similar (they generally define eligible employees, an accrual formula, reasons for leave, carry-over requirements, employee and employer notice and documentation requirements), each law differs with respect to the application of these requirements which, in turn, poses unique challenges for multistate (and multi-city) employers.... [E]mployers would need to identify specific business needs and evaluate the laws that apply to their employees to determine if they can maintain one paid time off (PTO) policy to govern all employees across various jurisdictions, or if they will need to maintain a sick leave policy separate from their PTO policy. There are pros and cons for each option that need to be carefully considered before making a decision." (ADP)  

When Employers Receive a Marketplace Notice (PDF)
"Beginning in 2016, the Federal Marketplace will notify certain employers when an employee has enrolled in Marketplace coverage, and has qualified for and receives premium and/or cost-sharing assistance for at least one month. Employers should be mindful that these Marketplace notices may be coming ... Employers will have only one opportunity to appeal the employee's subsidy eligibility determination to the Marketplace." (Cherry Bekaert Benefits Consulting, LLC)  

Some Firms Save Money by Offering Employees Free Surgery
"Lowe's home improvement company, like a growing number of large companies nationwide, offers its employees an eye-catching benefit: certain major surgeries at prestigious hospitals at no cost to the employee. How do these firms do it? With 'bundled payments,' a way of paying that's gaining steam across the health care industry, and that Medicare is now adopting for hip and knee replacements in 67 metropolitan areas, including New York, Miami and Denver.... Lowe's comes out ahead, even after paying for the patient's travel[.]" (Kaiser Health News)  

New HIPAA Privacy and Security Audit Program Announced (PDF)
"What criteria will the OCR consider when deciding which entities to audit? ... How will the OCR notify entities selected for an audit? ... What will the OCR do with the audit results? ... New focus on electronic health apps ... What can plan sponsors do to ensure compliance? ... What else can plan sponsors do?" (Segal Consulting)  

Business Associate Rule Violations Behind $750K HIPAA Settlement
"OCR's investigation indicated that Raleigh Orthopaedic violated the Privacy Rules by releasing the x-ray films and related protected health information of 17,300 patients to an entity that promised to transfer the images to electronic media in exchange for harvesting the silver from the x-ray films. Raleigh Orthopaedic failed to execute a business associate agreement with this entity before turning over the x-rays and PHI.... OCR's announcement of the Resolution Agreement includes a strong message for other Covered Entities and business associates of the importance of ... [ensuring] that the business associate agreement requirements of the Privacy Rule are met before business associates are allowed to receive, access or use protected health information." (Solutions Law Press)  

Rewarding High Quality: Practical Models for Value-Based Physician Payment (PDF)
13 pages. "ACHP recommends these critical strategies for successful implementation of alternative payment models: [1] Introduce increasing levels of risk gradually, regularly assessing for provider and practice readiness and investing in care management capabilities. [2] Tailor measures to the performance improvement goals of physician practices. [3] Develop actionable performance data, to include patient satisfaction and clinical outcomes measures, and initiate frequent payer-provider engagement to drive improvement and share best practices. [4] Provide cost and quality information at the individual clinician level and, when possible, ensure that payment incentives go to both practices and individuals. This brief provides examples from ACHP plans for each of the four strategies." (Alliance of Community Health Plans [ACHP])  

[Opinion]

Health Plan Industry's Worst Nightmare: Employers Realizing They Are Actually the Insurance Company
"The continued hyperinflation of premiums would accelerate the employer realization that they need to take matters into their own hands and disintermediate health plans. A growing number of employers are doing exactly that. This situation begs the question, 'what do health plans do that couldn't be done better by an algorithm?' " (Dave Chase, in Forbes)  

[Opinion]

Confronting Consolidation (PDF)
"Aetna, Humana, Anthem, Cigna, they're all in merger/acquisition mode. Pharmaceutical manufacturers continue to merge ... Just two PBMs now control two thirds of the employer-sponsored prescription drug market.... So where does all this healthcare consolidation leave your corporate health plan? Probably not in a good place when it comes to patient access, provider choice, price competition and appropriateness of treatment.... [H]ow are plan sponsors going to protect themselves and their plan members from the increasing market power of the major healthcare players? ... Enter the U.S. Federal Trade Commission (FTC), whose role it is to protect consumers from anti-competitive practices." (Chelko Consulting Group)  

Executive Compensation and Nonqualified Plans

[Guidance Overview]

New FASB Rules on Equity Compensation Withholding
"The new standard permits equity classification for partial cash settlement of a share-based award for tax withholding up to the maximum statutory tax rate in the applicable jurisdictions. Although withholding typically is mandatory in most jurisdictions, the new standard appears to provide companies with greater flexibility, for financial accounting purposes, to address the preferences of the award recipients with regard to the amount to be withheld." (Morgan Lewis)  

New Proposed Rules for Incentive Compensation for 'Financial Institutions' Under Dodd-Frank Act Section 956
"[T]he most significant changes appear to be that: [1] Covered financial institutions must hold back (defer) a portion of covered employees' incentive compensation for four years, rather than the three-year period in the 2011 proposed rules. [2] The clawback period for covered institutions and covered employees is extended to seven years.... So far, only the National Credit Union Administration has voted to approve the new proposed rules, which must be approved by six separate agencies. The other five agencies, including the [SEC], have meetings to discuss the rules scheduled in the next week." (Winston & Strawn LLP)  

Federal Regulators Propose Tougher Rules Governing Wall Street Bonuses
"Top executives at the biggest Wall Street firms would have to wait four years to collect most of their bonus pay and could be forced to return the money in the event of wrongdoing, under proposed rules unveiled by federal regulators. The rules, which were released [in draft form] by the National Credit Union Administration ... say senior executives at firms worth more than $250 billion must wait to collect 60 percent of their bonus pay. Executives at firms valued at $50 billion to $250 billion would have to wait three years to receive half their bonuses. The rules cover banks, investment advisers and credit unions, as well as mortgage giants Fannie Mae and Freddie Mac." (National Public Radio)  

For Stock-Based Pay, HR Can Help with Next Year's Taxes
"Employees should be saving confirmation statements and any other substitute statements provided by their stock plan provider or employer.... Double-counting restricted stock income is one of the most common mistakes employees make today, simply because current Form 1099-Bs don't account for taxes potentially withheld already. Keeping track of additional documentation, such as previous confirmation statements, can help ensure employees don't pay taxes on amounts paid in the previous year." (Society for Human Resource Management [SHRM])  

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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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