Health & Welfare Plans Newsletter

May 17, 2016

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[Guidance Overview]

HHS Finalizes Regs on ACA Nondiscrimination in Health Programs and Activities (PDF)
"The guidance, among other things, clarifies that although an issuer receiving federal financial assistance through participation in an ACA marketplace is subject to the rules even when acting as a TPA to a self-funded group health plan, the rules do not apply to the employer sponsoring the group health plan -- unless the employer is itself a covered entity. Where the employer is not a covered entity, HHS's Office of Civil Rights typically will refer the matter to the appropriate federal agency." (Xerox HR Services)  


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[Guidance Overview]

Highlights of the HHS Health Plan Nondiscrimination Final Rule
25 pages. "This issue brief provides an initial analysis of the [HHS] final rule implementing Section 1557 of the [ACA], the ACA's nondiscrimination provision." (National Health Law Program [NHeLP])  

[Guidance Overview]

All Is Now Well? EEOC Finalizes Workplace Wellness Rules
"The new ADA rule does not change any of the confidentiality provisions in the EEOC's existing ADA regulations. It does, however, add two new requirements.... [E]mployers may only receive information collected by wellness programs in aggregate form that does not disclose, and is not likely to disclose, the identity of the employees participating in it, except as may be necessary to administer the plan.... [E]mployers may not require their employees to agree to the disclosure of their medical information or to waive the ADA's confidentiality protections as a condition for participating in a wellness program or receiving an incentive." (Fisher & Phillips LLP)  

[Guidance Overview]

EEOC Issues Final Workplace Wellness Regulations (PDF)
"The EEOC reaffirms its position that the bona fide benefit plan safe harbor does not apply to a wellness program that includes disability-related inquiries or medical examinations.... Despite this position, also stated in the preamble of the proposed regulations, a federal district court in Wisconsin (and the 11th Circuit Court of Appeals) found that the bona fide benefit plan safe harbor applied to an employer's wellness program incentive provided as a condition of participation in the group health plan.... This issue is likely to continue to play out in the courts." (Xerox HR Services)  

Final EEOC Rule Sets Limits for Financial Incentives on Workplace Wellness Programs
"[C]onsumer and disability-rights advocates, who had sought broad changes when the draft rules were unveiled last year, were clearly disappointed. The regulations don't provide enough privacy protections, they said, and the programs can't be considered voluntary with the level of incentives and penalties that were approved by the EEOC." (Kaiser Health News)  

Employers Turn Towards Freelance Gigs to Avoid ACA Penalties
"60 percent of surveyed companies will hire more freelance workers by 2020.... 29 percent of companies reported the ACA is having a very high impact on their plans to hire freelancers and 39 percent reported the health reform law is having a high impact.... [W]hile 89 percent of surveyed companies indicated that health care benefits are key to attracting and retaining talent, almost one-third of surveyed companies expressed an intention to eliminate health care benefits because of the ACA." (Wolters Kluwer Law & Business)  

State OPEB Funding Has Improved
"States' other post-employment benefit (OPEB) liabilities decreased 10%, to $627 billion, between 2010 and 2013, after adjusting for inflation ... This drop resulted from lower rates of growth in health care costs and changes states made to their OPEB funding policies and retiree health plan provisions ... State-funded ratios increased from 5% in 2010 to 6% in 2013.... [T]he funded ratio of eight states decreased, and Oregon increased its funded ratio by 25 percentage points." (PLANSPONSOR)  

Three Firms Vie to Run Drug Benefits for California Public Retirement System
"Express Scripts and UnitedHealth Group's OptumRx unit are each trying to unseat the current pharmacy-benefits contractor, CVS Health.... The agency's medical costs are closely watched as a harbinger of what big employers and their workers might be facing across the country. CalPERS spends more than $8 billion annually on medical care for 1.4 million state and local government employees, retirees and dependents. About a quarter of that, or $1.8 billion, goes to prescription drugs." (Kaiser Health News)  

Three States Are Down to One Obamacare Insurer. What If They Fall to Zero?
"An Obamacare market with no sellers would leave thousands of enrollees unable to use tax subsidies to buy insurance coverage. And the government doesn't have any particular legal power to cajole carriers into setting up shop in the markets they find undesirable. The most they can do, it turns out, is ask really nicely." (Vox)  

A Compromise, with Real Impact, on Contraceptive Requirements
"There are existing [HHS] regulations ... on ways to implement the birth-control mandate. Those regulations, in their present form, depend upon the government working out with the insurance companies that have created health plans for the religious non-profits to provide access to the actual contraceptive benefits.... [T]he Supreme Court's action ... does clear the way for the government to move ahead to do what it would need to do to assure access as a practical matter. " [Zubik v. Burwell, Nos. 14-1418 et al. (3d Cir. Feb. 11, 2015; cert. pet. granted Nov. 6, 2015; argued Mar. 23, 2016)] (SCOTUSblog)  

Seeking Compromise, Supreme Court Remands Contraceptive Coverage Cases to Lower Courts
"[T]he opinion does not resolve the merits of the case -- the substantial burden, compelling governmental interest, and least restrictive alternative issues. The Court's opinion suggests that, at minimum, the least restrictive alternative issue needs a second look.... [T]he Court's order ignores the intractable question of how to provide contraceptive coverage to employees of employers that offer coverage through self-insured plans." (Timothy Jost, in Health Affairs)  

Cigna's Disclosure Signals Trouble Ahead for Insurer Mergers
"Cigna executives are probably looking with increasing nervousness at the feds' recent spate of antitrust victories ... [F]ederal regulators' treatment of hospital and physician group deals speaks to their increasing concern about the healthcare industry's consolidation arms race.... It all adds up to a regulatory landscape that perhaps isn't quite what Cigna bargained for." (FierceHealthPayer)  

[Opinion]

U.S. Chamber Comments on EEOC Rules for Workplace Wellness Programs
"EEOC -- which has no health care expertise and extremely limited jurisdiction over wellness programs -- has created rules that layer complicated, confusing, and contradictory requirements over an area which is already heavily regulated. As a result ... EEOC's final rules will have a chilling effect on the development, implementation, and innovation of workplace wellness programs, which Congress intended to be used as tools to improve employees' health and lower health care costs." (U.S. Chamber of Commerce)  

[Opinion]

National Business Group on Health Comments on EEOC Final Rules on Workplace Wellness Programs
" 'For most large employer wellness programs, it's business as usual.... [T]he rules are very much in line with what the EEOC proposed last year.... [T]he rules do what the EEOC was asked to do -- clarify for employers where their wellness plan incentives stand with respect to ADA and GINA compliance." (National Business Group on Health [NBGH])  

Benefits in General

2016 ERISA Advisory Council Issue Statement: Cybersecurity Considerations for Benefit Plans (PDF)
"The 2016 Council will complement the work of the 2011 and 2015 Councils by focusing specifically on outlining the scalable elements of cyber risk management strategies for benefit plans. The goal of the 2016 Council is to offer the [DOL] draft materials that will help plan sponsors understand, evaluate and protect benefit plan data and assets from cybersecurity risks. While the 2011 Council focused solely on retirement plan privacy and security issues, the 2016 Council will examine the issues that may be common to retirement and health and welfare plans, especially in light of the growing similarities and inter-relationships between the two types of plans, and the proliferation of asset based health care accounts such as health savings accounts." (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])  

Executive Compensation and Nonqualified Plans

Agencies Invite Comment on Proposed Rule to Prohibit Incentive-Based Pay That Encourages Inappropriate Risk-Taking in Financial Institutions
"Six federal agencies are inviting public comment on a proposed rule to prohibit incentive-based compensation arrangements that encourage inappropriate risks at covered financial institutions. The deadline for comments on the proposed rule ... is July 22, 2016.... Much of the proposed rules would address requirements for senior executive officers and employees who are significant risk-takers at Level 1 and Level 2 institutions. All institutions that would be covered by the proposed rules would be required to annually document the structure of incentive-based compensation arrangements and retain those records for seven years." (U.S. Securities and Exchange Commission [SEC])  

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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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