Health & Welfare Plans Newsletter

April 25, 2016

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Webcasts and Conferences

Target Date Funds ó The Looming Liability of Misfit Risk
RECORDED
(University Conference Services)

Rising Cost and Concern: Catastrophic Medical Claimants
May 10, 2016 in GA
(ISCEBS - Georgia Chapter)

Employer Forum on Pharmacy Benefits & Specialty Drugs
June 29, 2016 in IL
(Midwest Business Group on Health)

Employer Forum on Pharmacy Benefits & Specialty Drugs
June 29, 2016 WEBCAST
(Midwest Business Group on Health)

Creative Uses of HSAs
July 13, 2016 WEBCAST
(Lorman Education Services)

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[Guidance Overview]

ACA FAQ 31 Provides New Insight for the Mental Health Parity and Addiction Equity Act and Other Group Health Plan Mandates (PDF)
"MHPAEA has several testing requirements tied to it to verify limits provided for under mental health or substance abuse can pass certain mathematical thresholds.... [S]ome vendors were testing MHPAEA against the data for their book of business. A Q&A seems to require the testing for plans at the specific plan level, not compared to the entire book of business.... In order to ensure compliance, each sub-vendor of the plan will also need to comply.... The recent Q&As also point out that medical necessity determinations tied to MHPAEA compliance can be requested from participants, potential participants or contracting provider upon request[.]" (Kinney & Larson)  


[Advert.]

Master Health Reform Guide, 2016 Edition

Sponsored by Wolters Kluwer

This concise yet authoritative guide highlights everything employers need to know about health reform, explaining complex concepts in plain English and clarifying even the most complicated requirements. Use code BENEFIT20 for 20% discount.



[Guidance Overview]

The Employer's Guide to the Family and Medical Leave Act (PDF)
76 pages. "In addition to providing eligible employees an entitlement to leave, the FMLA requires that employers maintain employees' health benefits during leave and restore employees to their same or an equivalent job after leave. The law sets requirements for notice, by both the employee and the employer, and provides employers with the right to require certification of the need for FMLA leave in certain circumstances.... The [DOL] is providing this Guide in an effort to increase public awareness of the FMLA and of the various Departmental resources and services available to the public." (Wage and Hour Division, U.S. Department of Labor [DOL])  

[Guidance Overview]

DOL Requires Employers to Use New FMLA Poster, Publishes Guide to Help Employers Administer FMLA
"The DOL has announced that employers soon will be required to post a new General FMLA Notice in its workplaces. According to the DOL, the new poster won't necessarily include a whole bunch of new information. Rather, the information in the notice will be reorganized so that it's more reader friendly." (FMLA Insights)  

Healthcare Providers, Health Plans, and Health Insurers, Take Note: HIPAA Phase 2 Audits Have Begun
"If your organization is so large that answering OCR's queries could prove burdensome to one employee, consider creating an audit team to handle different aspects of the audit. Assemble a list of all business associates, with contact information and copies of all business associate agreements. Finally, begin to gather documents likely to be requested[.]" (Reid and Riege, P.C.)  

Audit Prep: Lessons from OCR HIPAA Enforcement
"According to OCR, the most-investigated compliance issues are, in order of frequency: [1] Impermissible uses and disclosures of PHI. [2] Lack of safeguards for PHI. [3] Lack of patient access to their PHI. [4] Lack of administrative safeguards for ePHI. [5] Use or disclosure of more than the 'minimum necessary' PHI." (Ice Miller LLP)  


[Advert.]

ERISA Benefit Plans: Addressing and Preventing a Data Breach

Sponsored by Lorman and BenefitsLink

May 10 webinar. Learn how to prevent a plan data breach and what to do if one occurs. BenefitsLink discount.



District Court Rules Johnson Controls Retirees Not Entitled to Lifetime Health Benefits
"Applying the Third Circuit rule, the court then divided the CBAs into three groups. For the first group, the court held that the inclusion of the phrase 'shall have the following benefits . . . continued' did not unambiguously indicate that the benefits would vest past the expiration date of the applicable CBA. For the second group, the court held that the statement that health coverage would be continued 'until your death,' was not a promise to vest unalterable health benefits in light of the explicit durational clauses and other language in the CBAs indicating that the parties intended that the health benefits would terminate. Instead, 'until your death' indicated that the retirees were entitled to benefits during the term of the CBA but the benefits terminated if a retiree died before the CBA' s expiration. And, for the final group, there was a clear and unambiguous reservation of rights." [Grove v. Johnson Controls, Inc., No. 12-cv-2622 (M.D. Pa. Mar. 31, 2016)] (Proskauer's ERISA Practice Center)  

For First Time, Employer-Provided Coverage Less Costly Than Individual Coverage
"A new report from S&P Dow Jones Indices found the average per member per month cost for individual plans has rapidly increased since 2013 and is now around 10 percent higher than the cost of employer plans.... The report questions whether the ACA rules are strong enough to entice the majority of the healthy population to maintain or add coverage in the individual market." (HR Policy Association)  

Impacts of the Affordable Care Act on Health Insurance Coverage in Medicaid Expansion and Non-Expansion States
"[At] the average pre-treatment uninsured rate, the full ACA increased the proportion of residents with insurance by 5.9 percentage points compared to 3.0 percentage points in states that did not expand Medicaid. Private insurance expansions from the ACA were due to increases in both employer-provided and non-group coverage. The coverage gains from the full ACA were largest for those with incomes below the Medicaid eligibility threshold, non-whites, young adults, and unmarried individuals." (National Bureau of Economic Research [NBER])  

Health Care Access and Affordability Among Low- and Moderate-Income Insured and Uninsured Adults Under the ACA
"Low- and moderate-income adults with Marketplace coverage are no more likely to report problems paying medical bills or have high out-of-pocket costs than those with employer-sponsored insurance (ESI). Low- and moderate-income adults with Marketplace coverage are as satisfied with their health plans as those with ESI in terms of premiums charged, but are less satisfied with their choice of providers and the protection their plans provide against high medical bills." (Urban Institute Health Policy Center)  

More Marketplace Health Plans Ease Access to Some Expensive Drugs
"[F]or five classes of drugs -- two used to treat cancer, two for HIV and one class of multiple sclerosis drugs -- fewer plans in 2016 placed all the drugs in the class in the top specialty drug tier with the highest patient cost-sharing requirements or charged patients more than 40 percent of the cost for every covered drug in the class." (National Public Radio)  

Telemedicine: A Game Changer for Senior Healthcare
"While healthcare for retirees once meant repeated trips to the doctor's office, many are now able to receive high-quality medical services without leaving the comfort of home. And it's all because of telemedicine. This high-tech patient care model is quickly gaining traction as a means for lowering costs while improving healthcare quality -- particularly among aging populations." (American Journal of Managed Care)  

FTC Releases 'Cheat Sheet' for Developing a Secure Mobile Health Application
"The FTC ... released its own business guidance aimed at helping developers design privacy and security features into their apps. The FTC's business guidance describes best practices with respect to: minimizing data collection and retention; limiting access to data to avoid unnecessary risks of breach; and understanding third-party interactions with mobile data and how to approach designing practical, and legally required security functions in a mobile app." (Ballard Spahr LLP)  

[Opinion]

Should We Change the Tax Break for Employer-Sponsored Health Insurance?
"The tax break results in an estimated $250 billion less tax paid to the government for fiscal 2016. Fifty-seven percent of the U.S. population under the age of 65 receive coverage through an employer, but many economists have long argued that the third-party payer system has contributed to high health-care costs in this country. In addition, the tax break is not enjoyed by many people who have to buy their own health insurance." (Bloomberg BNA)  

[Opinion]

The End of Employer-Based Healthcare?
"[What Mark Bertolini, CEO of Aetna, is saying] is that health insurance is going to become a direct to consumer retail purchase. The provider systems will be the risk takers not the insurance companies. And there is a movement in Washington to eliminate the health insurance deduction at the employer level in exchange for lowering the corporate tax rate." (Joe Markland)  

[Opinion]

Are Prescription Drug Prices Becoming as Meaningless as Hospital Charges?
"After decades of being dominated by third-party payers, hospital charges are meaningless. On average, hospitals charge Medicare 3.77 times more than what Medicare pays, with a range of 0.42 times to 16.23 times. In other words, if a hospital sends a claim to Medicare for $10,000, the hospital is most likely to be paid $2,653, but they payment could be as little as $616 or as much as $23,810. This has evolved over the years as a kind of symbiosis: It allows insurers to assert they are negotiating impressive discounts from hospitals; and allows hospitals to complain they are being pinned to the mat by insurers." (National Center for Policy Analysis Health Policy Blog)  

[Opinion]

American Academy of Actuaries Comments to CMS on HHS-Operated Risk Adjustment Methodology Discussion Paper (PDF)
"[T]here is reason to question whether the market characteristics that underpin the MarketScan data accurately reflect the characteristics of enrollees in the reformed individual and small group markets. We note several individual market dynamics that are not present in commercial large group markets and could impact partial year enrollee costs ... However, at this time, it may be more important to focus on revising the risk adjustment methodology to address partial year enrollment based on the data available. If EDGE data can be used at a later date to calibrate HCC weights, then further adjustments to the partial year enrollment approach could be considered." (American Academy of Actuaries)  

Benefits in General

Employee Benefit Plans and Data Security Issues
"As fiduciary standards continue to evolve and differences in privacy protection laws appear from jurisdiction to jurisdiction, there are a host of laws and regulations to keep in mind. A short list of legislation that touch on the area includes: the Health Insurance Portability and Accountability Act, the Gramm-Leach Bliley Act, the Federal Trade Commission Act, the Fair Credit Reporting Act, the Fair and Accurate Credit Transactions Act, along with numerous state laws relating to 'personally identifiable information' and 'protected health information.' ... [E]ven though the scope of a fiduciary's duty under ERISA with respect to data protection has yet to be addressed by the courts and the DOL, there are still a number of practical steps that plan sponsors and other fiduciaries can take in the hope of preventing problems." (Jackson Lewis P.C.)  

Cybersecurity Concerns for ERISA Fiduciaries
"When establishing cybersecurity procedures, plan fiduciaries and plan sponsors should consider the type of data they store along with plan assets, and impose privacy and security measures on all third party vendors that have access to or access the plan's data. They also should consider educating and training all personnel who access or have access to plan data.... [If] the DOL does not act in this area, ERISA plan fiduciaries may be required to implement cybersecurity initiatives as a result of SEC regulations on investment managers." (Morgan Lewis)  

Executive Compensation and Nonqualified Plans

[Guidance Overview]

FASB Simplifies Accounting Rules for Stock-Based Compensation
"Current accounting standards provide that an equity award will qualify for equity classification (i.e., resulting in fixed accounting treatment) if the fair market value of shares withheld to cover an employer's withholding obligations upon settlement of the award do not exceed the minimum statutory withholding requirement. If an equity plan permits share withholding in excess of this withholding requirement, equity awards granted under the plan currently would be subject to mark-to-fair value accounting (i.e., variable accounting).... Under the Amendment, an equity plan may now allow share withholding up to the maximum statutory withholding requirement while still avoiding variable accounting." (Meridian Compensation Partners, LLC)  

[Guidance Overview]

New FASB Rules on Equity Compensation Withholding: Issues
"Most equity compensation plans have the minimum statutory tax rate withholding requirement 'hardwired' into the plan, thus requiring a plan amendment to effect this change. Whether such an amendment will require shareholder approval for public companies under NYSE or NASDAQ rules is unclear, however, previous interpretive guidance suggests that shareholder approval may not be required ... Company officers and directors subject to section 16 under the Securities Exchange Act would not appear to experience an issue with the adoption of an increased withholding rate for tax purposes." (Morgan Lewis)  

New Proposed Rules for Incentive Compensation Under Dodd-Frank Act Section 956, Part 2
"If you are a lawyer, compensation committee member, or other executive compensation professional, you may need to learn a new language, as the proposed rules create a series of new definitions -- many of which do not match with professionals' common understanding of the meaning of those terms. For example, the new definition of 'significant risk-taker' in the proposed rules is 20 pages long." (Winston & Strawn 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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