Health & Welfare Plans Newsletter

May 23, 2016

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[Guidance Overview]

EEOC Rules on Wellness Programs
"Up until now, what constituted compliance with the ADA and GINA was subject to debate. The [EEOC] sought to end that debate with the publication of final wellness program regulations under the ADA and GINA[.]" [Article includes charts comparing ADA and GINA requirements.] (Vorys, Sater, Seymour and Pease LLP)  


[Advert.]

Employer's Guide to Health Care Reform, 2016 Edition

Sponsored by Wolters Kluwer

This practical guide helps you design your employee health plans to satisfy ACA requirements; minimize penalty exposure; achieve significant cost-savings; understand new notice requirements; meet deadlines and more! Use code BENEFIT20 for 20% discount.



[Guidance Overview]

EEOC Doubles Down: Final Wellness Program Rules Under ADA and GINA
"In the view of the EEOC, an employer's use of a wellness program to improve employee health and reduce health care costs does not constitute protected 'underwriting' or 'risk classification' contemplated under the safe harbor.... [T]he EEOC explains that it views the safe harbor as limited to insurer underwriting and rate-making practices in effect prior to the [ACA] and dismisses the federal court decisions, stating that both cases were wrongly decided. Because the EEOC claims that neither court held that the safe harbor unambiguously extended to wellness programs the EEOC asserts that it has the authority to provide its own statutory analysis and interpretation." (Verrill Dana LLP)  

[Guidance Overview]

EEOC Issues Final Rules on Wellness Programs
"The EEOC rejected calls to align the EEOC's ADA regulations with those under the ACA, explaining that, because the ADA's prohibitions on discrimination apply only to applicants and employees, not to their spouses and other dependents, the ADA wellness rule does not address the incentives wellness programs may offer in connection with dependent or spousal participation (although the GINA rule does). The EEOC's explanation still leaves employers in the difficult situation of complying with multiple standards." (Littler)  

[Guidance Overview]

EEOC Issues Wellness Program Final Rules Under ADA and GINA
"HIPAA allows programs to offer up to a 50% incentive tied to tobacco use. The ADA allows a 50% level, but only if tobacco use is proven through a questionnaire (since in this event, the ADA incentive rule would not apply). Blood or saliva tests for the presence of nicotine are considered a medical exam, and therefore subject to the 30% ADA incentive limit." (Findley Davies)  

[Guidance Overview]

HHS Issues Final Rule on ACA Section 1557 Nondiscrimination Rules, Affecting Certain Employer-Sponsored Plans
"There was some concern under the proposed rule that, while an employer ... may not be directly liable for a self-insured plan design ... employers that use a TPA that is subject to the rule would also be effectively subjecting themselves or their plan design to Section 1557. The final rule clarifies that although Section 1557 may apply to the TPA, it does not necessarily mean that Section 1557 extends to the benefits administered by the TPA." (ADP)  


[Advert.]

12th Annual Medicare & Medicare Advantage Summit - July 12-13 - Tysons Corner, VA

Sponsored by World Congress

Evaluate best practices for encountering the shockwaves from proposed changes to Medicare / Medicare Advantage programs. Promo Code BLINK2 takes $200 off your registration (May not combine w any other offer. Invalid twd Govt Rate/Workshop Only/Webcast



Coming Soon to Your Inbox! Phase 2 of OCR's Audit Program for HIPAA Compliance
"OCR has not announced how it plans to compile the list of contact points for the initial emails. As it combs through its list of covered entities and business associates, OCR may use the contact information to target other entities, resulting in the contact point for smaller organizations being any person within the organization who has contact with another organization that has provided data to OCR. This means it is critical that all staff of every organization know there may be an email contact from OCR." (Poyner Spruill LLP)  

HHS Testimony at Senate Committee Hearing: Impact of the ACA on Small Businesses (PDF)
"The ACA has helped small businesses and their employees in a number of ways. These include coverage expansions, small employer tax credits, and the creation of the Small Business Health Options Program (SHOP).... Overall the ACA has significantly improved coverage of people that work for small businesses. It created new markets for insurance and expanded demand for medical care and health services." (Assistant Secretary for Planning and Evaluation [ASPE], U.S. Department of Health and Human Services [HHS])  

Office Depot Ruling Spells Trouble for Big Health Care Mergers
"Staples recently joined Sysco, ProMedica Health System and a handful of other would-be acquirers that saw deals shot down by the courts and regulators because their merger plans would hurt a specific cluster of customers rather than a wider spectrum of their shoppers and patients.... The most important takeaway from [Federal District Judge Emmett Sullivan's Staples/Office Depot] ruling was it provided another judicial endorsement for the notion that a merger can harm competition to a group of customers that comprises only a part of the merging parties' business[.]" (TheStreet.com)  

HSAs Under Attack in Obamacare Exchanges
"[New HHS rules for plans offered on the exchanges] mean that [1] the specified deductibles for the plans and out-of-pocket limits to be offered in the exchanges will be outside the requirements for HSA-qualifying plans, and [2] plans will have to cover services below the deductible which are not allowed under the legal definition of HSAs." (Galen Institute)  

The Impact of Health Insurance on Preventive Care and Health Behaviors: Evidence from the 2014 ACA Medicaid Expansions
"[The authors] examine the impact of the expansions on preventive care ... and risky health behaviors ... [They] find evidence consistent with increased use of certain forms of preventive care such as dental visits and cancer screenings but little evidence of changes in health behaviors ... The Medicaid expansions also resulted in modest improvements in self-assessed health and decreases in the number of work days missed due to poor health." (National Bureau of Economic Research [NBER])  

Uninsurance Rates and the ACA
"While reducing the number of uninsured people is just one measure of the ACA's effect, it is arguably the most important metric. Several government surveys can be used to study the number uninsured in the US population, including the Current Population Survey, the National Health Interview Survey, the American Community Survey, and the Medical Expenditure Panel Survey. The various surveys have different survey designs, field periods, health insurance coverage questions, reference periods, and survey modes, making the uninsurance estimates slightly different among each of the sources." (Health Affairs)  

Survey of Non-Group Health Insurance Enrollees, Wave 3
"This survey, conducted ... after the close of the law's third open enrollment period, focuses on individuals who purchased ACA-compliant coverage, whether inside or outside of a Marketplace.... This report details findings ... and draws trends and comparisons using data from the first and second surveys in the series, conducted at the end of each of the previous enrollment periods in 2014 and 2015. It also draws some comparisons to the experiences and opinions of people with employer-sponsored insurance[.]" (Henry J. Kaiser Family Foundation)  

[Opinion]

The Domino Effect of House v. Burwell
"It could take up to two years if House v. Burwell ends up being decided by SCOTUS.... [U]ncertainty about [the ultimate outcome] will have immediate and significant impact regardless of the judicial process. It creates a domino effect that industry stakeholders will feel immediately: [1] Health insurers will raise premiums or exit the marketplaces altogether.... [2] Bad debt for hospitals will increase.... [3] The politics of the ACA, and Supreme Court appointments of the next President, will become big topics in Campaign 2016." (Paul Keckley)  

Benefits in General

Why Should You Care About Employee Communication Design?
"Getting employees engaged in the decisions they need to make is critical to how managers can put more productive processes in place, help people make more responsible choices, and drive more predictable outcomes. But the content of your message is often not enough to get that level of engagement, to create the deeper personal 'meaning' that triggers acceptance and response. How you design and deliver the message can make a huge difference in how effective you are." (Xerox HR Insights)  

Executive Compensation and Nonqualified Plans

Why Is It So Difficult to Get Equity Amounts Right?
"The main selling point of equity compensation is that it provides unequaled compensatory upside through its extreme variability, while allowing a predictable and fixed compensation expense. This can be frustrating when things don't go as planned.... The reason equity is so hard to value is that all of the methods provide inaccurate results at some point. Given the uncertainty in the markets, [this article discusses] some of the ways people assign value to equity." (Performensation)  

Mandatory Deferral of Financial Institution Bonuses and Impact on Nonqualified Deferred Compensation Plans (PDF)
"As a result of the required delay in payment under the proposed rules well beyond the date the substantial risk of forfeiture lapses, most of the mandatorily deferred awards will be subject to Section 409A and must have a compliant time and form of payment.... Due to the restrictions on accelerated payment in the proposed rule, covered institutions will be unable to take advantage of [certain] plan termination rules under Code section 409A.... [A] prohibition on accelerations means a company should not satisfy its clawback obligation under the proposed rule by deducting the amount to be recovered from an executive's nonqualified plan account (or any other amount subject to Section 409A), as such a practice would expose the executive to Code section 409A's tax penalties." (Groom Law Group)  

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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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