Health & Welfare Plans Newsletter

April 27, 2016

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Employee Benefits Jobs

Assistant Retirement Plan Administrator
Compensation Systems, Inc.
in IN

Sr. Pension Administrator III
Lafayette Life Insurance Company
in OH

Employee Benefits Compliance Counsel
Arthur J. Gallagher & Co
in LA

Managing Consultant
Securian Financial Group
in MN

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Webcasts and Conferences

Department of Labor’s New Fiduciary Rule: What do Retirement Plan Sponsors and Fiduciaries Need to Know Now?
May 10, 2016 WEBCAST
(King & Spalding LLP)

Special Delivery: Providing Participant Materials for Group Health Plans
May 10, 2016 WEBCAST
(Cowden Associates, Inc.)

New DOL Fiduciary Rule and Your 401(k) Plan: Cutting the Chase – What You Need to Know
May 12, 2016 WEBCAST
(ABD Insurance & Financial Services)

Health Benefits Laws Compliance Assistance Seminar
June 7, 2016 in KS
(Employee Benefits Security Administration [EBSA], U.S. Department of Labor)

2016 Wellness Program: More Than Meets the ROI
June 22, 2016 in MA
(New England Employee Benefits Council)

IRA Hard-to-Value Assets and Prohibited Transactions
June 23, 2016 WEBCAST
(Ascensus)

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[Official Guidance]

Text of IRS Publication 5165: Guide for Electronically Filing ACA Information Returns for Software Developers and Transmitters, Processing Year 2016 (PDF)
52 pages; updated April 2016. "[This publication] outlines the communication procedures, transmission formats, business rules and validation procedures for returns transmitted electronically through the AIR system.... The procedures in this publication should be used when the following information returns are transmitted electronically: [1] Form 1094-B, Transmittal of Health Coverage Information Returns; [2] Form 1095-B, Health Coverage; [3] Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns; [4] Form 1095-C, Employer-Provided Health Insurance Offer and Coverage." (Internal Revenue Service [IRS])  


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[Guidance Overview]

ACA Information Returns (AIR) Working Group Meeting, April 26, 2016 (PDF)
33 presentation slides. Topics covered: [1] General AIR Information; [2] General AIR Mailbox Information; [3] Help Desk; [4] ACA Nontechnical Questions; and [5] Questions from March Webinar. (Internal Revenue Service [IRS])  

[Guidance Overview]

Departments Issue New Summary of Benefits and Coverage Templates and Accompanying Documents (PDF)
"[T]he revised template [1] Adds a description of the SBC to the first page; [2] Shortens the definition box from the top of the second page; [3] Changes the 'Limitations & Exceptions' column to a 'Limitations, Exceptions, & Other Important Information' column; [4] Adds disclosure language about minimum essential coverage, minimum value, and language access services; [5] Adds a third coverage example.... [T]he Departments also made changes to the instructions for the templates and the Uniform Glossary." (Groom Law Group)  

[Guidance Overview]

HHS Sets New Requirements to Limit Surprise Medical Bills from Out-of-Network Providers
"[C]ertain QHP enrollees' cost-sharing amounts for essential health benefit services provided by out-of-network providers in an in-network setting will count toward an enrollee's in-network annual limitation on cost sharing. However, this requirement [1] will not apply if the QHP gives appropriate notice to the enrollee, [2] is slated to take effect in the 2018 benefit year but may see further modifications before then, and [3] is not intended to preempt any state laws on this issue." (Epstein Becker Green)  

[Guidance Overview]

New York Adopts Paid Family Leave (PDF)
"Unlike the federal Family and Medical Leave Act (FMLA), which applies to businesses with 50 or more employees, New York's paid family leave law will apply to all private employers, regardless of size.... Also unlike under the FMLA, all full- and part-time employees who have worked for a covered employer for at least six consecutive months -- rather than 12 months in total -- will be eligible for the new benefit, regardless of how many hours they have worked or whether they work at a location where the employer has 50 or more employees within 75 miles." (Xerox HR Services)  


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So You've Filed Your 1095-C -- Now What?
"[T]he Federally-Facilitated Marketplace will begin sending batches of notifications to certain employers whose employees received premium subsidies when purchasing health insurance on the marketplace exchange.... Whether obtained by fraud or mistake, when an eligible employee receives subsidies, it brings risk to the employer.... Employers should carefully consider how to proceed in light of the ACA retaliation rules[.]" (Jackson Lewis P.C.)  

ACA Update: Three Things You Need to Know
"[1] Whether you should be paying the PCORI fee on your self-insured arrangement.... [2] Whether you have an employer payment plan and why it matters.... [3] Whether you must provide a Summary of Benefits and Coverage and what you should include." (Liebert Cassidy Whitmore)  

Electronic Prior Authorization and Payers: Lessons from BCBS
"Although the cost of implementation has been in the millions, the benefit cost savings quickly exceeded the initial investments. Provider acceptance, development of web-based prior auth algorithms and interconnections of claims systems presented challenges at different phases of the program." (Managed Healthcare Executive)  

Proposals for Change in Prescription Drug Pricing: Transparency, Competition and Innovation (PDF)
"Pricing transparency reports ... Continued assessment of direct-to-consumer advertising requirements ... Reduce backlog of generic applications ... Foster competition for branded drugs ... Target exclusivity protections to truly innovative products ... Increase oversight of 'pay for delay' settlements ... Shorten the exclusivity period for biologics and promote policies to increase the uptake of biosimilars ... Expand research on treatment effectiveness and value ... [Require] drug manufacturers ... to conduct comparisons of new products to existing products ... Expand the availability of value -- based pricing." (The Campaign for Sustainable Rx Pricing)  

The ACA in 2014: Significant Insurer Losses Despite Substantial Subsidies (PDF)
31 pages. "[I]nsurers incurred substantial losses despite receiving much larger reinsurance payments per enrollee than they expected when they set their premiums for the 2014 plan year.... The larger than expected reinsurance payments were the result of HHS revising the payment formula twice after premiums had been set. Those revisions made the program about 40 percent more generous than the original specifications that insurers relied on when setting premiums.... Under the original reinsurance program parameters (those at the time insurers set 2014 premiums), premiums would have needed to be nearly a third higher in the aggregate, again assuming no additional selection effects." (Mercatus Center, George Mason University)  

ACA Exchange Plan Losses Point to Requests for Big Premium Hikes in 2017
"BlueCross BlueShield plans had pretax operating losses of about $2.4 billion in 2015 and $1.7 billion in 2014 on their exchange plans, according to Goldman Sachs. Blue Cross and Blue Shield of North Carolina, which lost more than $400 million on its exchange plans in 2014 and 2015, is contemplating whether it should pull back from some of the 100 North Carolina counties in which it sells exchange plans." (Bloomberg BNA)  

Benefits in General

[Official Guidance]

Text of IRS IR-2016-67: IRS Provides Tax Relief to Houston Area Storm Victims; Tax Deadline Extended to Sept. 1 (PDF)
"The tax relief postpones various tax filing and payment deadlines that occurred starting on April 17, 201 [6] As a result, affected individuals and businesses will have until Sept. 1, 2016 to file their returns and pay any taxes due. This includes 2015 income tax returns normally due on April 18.... A variety of business tax deadlines are also affected including the May 2 and Aug. 1 deadlines for quarterly payroll and excise tax returns." (Internal Revenue Service [IRS])  

Cybersecurity and Employee Benefit Plan Fiduciary Duties: Going Beyond HIPAA
"Health plan sponsors also should consider including references to state data breach notification laws and cyber liability insurance in business associate agreements (or related services agreements) in addition to the HIPAA minimums. Although HIPAA does not extend to retirement plans, ... ERISA's fiduciary duties nonetheless likely apply.... [R]etirement plan sponsors should consider including both 'HIPAA-like' and expanded cybersecurity provisions in contracts with TPAs that govern the privacy and security of participants' PII and plan assets." (Bond Schoeneck & King)  

Executive Compensation and Nonqualified Plans

[Guidance Overview]

You Can Bank On Your Incentive Pay Eventually: Proposed Regulations Would Require Sweeping Changes
"The preambles recognize that post-crisis, the largest banking institutions have refined their incentive-based compensation arrangements to reflect risk adjustments, to penalize adverse outcomes, to require more pay to be deferred, and to subject a larger percentage of deferred pay to reduction based on failure to meet performance targets or on account of adverse outcomes triggering forfeiture and clawback reviews. Despite these recognized improvements, the Regulators assert more oversight is necessary.... The 2016 Proposed Regulations impose different and increasingly onerous standards on financial institutions, depending on their size[.]" (Paul Hastings LLP)  

[Guidance Overview]

Regulators Release Revised Proposed Executive Compensation Rule
"So far, four of the Agencies (OCC, FDIC, SEC, and NCUA) have approved the proposed rule, and the Board and the FHFA are expected to approve the Proposed Rule shortly. The Proposed Rule is actually a reproposal of an April 2011 proposed rule that was never issued in final form, and according to the draft release, reflects the numerous comments on the 2011 proposal as well as experience that the Agencies have gained in applying prior guidance on incentive-based compensation. The Proposed Rule has an effective date of at least 18 months after the final rule is published, and as proposed, would not apply to any incentive-based compensation plan with a performance period that begins before the effective date." (Morgan Lewis)  

[Guidance Overview]

Are You a 'Significant Risk-Taker' Under Dodd-Frank?
"[B]eing labeled a 'significant risk-taker' in the new proposed rules under Dodd-Frank Act Section 956 just means you are subject to a mandatory compensation 'deferral' period during which up to 50% of your incentive-based compensation is subject to forfeiture or 'downward adjustment' (and after that, the compensation is subject to a clawback!). The definition of 'significant risk-taker' in the proposed rule is 20 pages long. It is intended to include 'covered persons' ... who are not 'senior executive officers' ... but are in the position to put a Level 1 or Level 2 covered institution at risk of material financial loss." (Winston & Strawn LLP)  

[Guidance Overview]

Compensation Practices at Financial Institutions Targeted: Proposed Incentive Compensation Rules Aim to Curb Excessive Risk-Taking (PDF)
10 pages. "[T]he proposed rules include ... [1] a new tiered framework that tailors prohibitions to the size of a CFI ... with more stringent requirements applying to the largest CFIs; ... [2] a new requirement to take into account both financial and nonfinancial risk-based measures in determining incentive-based compensation for all employees; [3] new recordkeeping and disclosure requirements, as well as corporate governance procedures; and [4] reduced reporting obligations as compared to the 2011 proposal." (Debevoise & Plimpton 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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