Health & Welfare Plans Newsletter

May 24, 2016

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[Guidance Overview]

How to Handle Special Leave Under the Lookback Method
"Generally, an employee does not have to be credited with hours of service for any period in which they are on an unpaid leave. However, a special rule applies for employees who are on FMLA leave, USERRA leave or jury duty ... The ALE can disregard the period of special leave and only measure the hours of service during the period prior and after the leave. Alternatively, the ALE can credit the employee with the average hours worked, prior to the leave, over the period of the special leave." (Graydon Head & Ritchey LLP)  


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[Guidance Overview]

Understanding New York's New Paid Family Leave Law
"New York Governor Andrew Cuomo executed sweeping legislation on April 4, 2016, that will ... provide a phased-in system of paid family leave benefits providing covered employees up to 12 weeks of paid family leave -- currently the most comprehensive paid family leave program in the nation. This [article] discusses the leave provisions, benefits schedule, coverage and other essential details of the new paid family leave law[.]" (Littler)  

Federal Court Strikes Down ACA Cost Sharing Reduction Payments
"The court rejected the administration's argument that the ACA's permanent appropriation for the Advance Premium Tax Credits (APTC) also extended to CSRs, concluding that the law only appropriated funds for APTCs. Reviewing principles of appropriations law, the court held that although the statute permanently authorized CSRs as a benefit plan, it made payments 'dependent on non-permanent appropriations,' which Congress had refused to provide." [U.S. House of Representatives v. Burwell, No. 14-1967 (D.D.C. May 12, 2016) (McDermott Will & Emery)  

2016 Milliman Medical Index: Who Cooked Up This Expensive Recipe? (PDF)
"The cost of care for the typical American family of four has more than tripled since its value of $8,414 in 2001.... [E]ven at 4.7%, which is the lowest annual increase since ... 2001, the rate of increase is still well above growth in the consumer price index (CPI) for medical services, and far surpasses the average 2% annual increase in median household income between 2004 and 2014.... At $11,033, the employee's total cost increased by 5.3% from 2015, while the employer's cost increased 4.2%.... Prescription drugs, the most rapidly growing MMI component, are nearly 17% of total healthcare spend." (Milliman)  

Breakthrough Drug Prices Are Blowing Insurers' Budgets, But Some Say The Drugs Are Worth It
"The Blue Cross Blue Shield Association recently highlighted the issue in a report finding that spending on specialty drugs increased 26 percent -- $87 per member -- between 2013 and 2014. Specialty drug spending was 17 percent higher in the individual market, which includes plans sold in the [ACA] health insurance marketplaces, than it was in the employer market in 2014 ... The $87 billion spent in 2012 on specialty drugs could quadruple by 2020, reaching about $350 billion[.]" (Bloomberg BNA)  


[Advert.]

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Compliance Issues for Wellness Plans (PDF)
"This [article] provides updates and clarifies the latest wellness plan issues: [1] Latest benchmarks; [2] Compliance issues -- Health Insurance Portability and Accountability Act (HIPAA) non-discrimination rules; [3] Americans with Disabilities Act (ADA); [4] Genetic Information Non-discrimination Act (GINA); [5] State law." (Marsh & McLennan Agency LLC)  

Understanding Notices to Employers from the ACA Marketplaces
"For the first time, in 2016 some employers will receive a notice from a Marketplace indicating that one of their employees signed up for health coverage through the Marketplace and received advanced premium subsidies. Given the exposure for tax liability under the ACA to the employer and the employee, employers should review the Marketplace notice and their internal records and consider taking action." (Holland & Knight)  

ACA Information Returns (AIR) Working Group Meeting, May 24, 2016 (PDF)
44 presentation slides. Topics: [1] General AIR information; [2] IRS support -- AIR mailbox and help desk; [3] Common portal issues and resolutions; [4] Corrections and other non-technical questions; and [5] Technical questions from April webinar. (Internal Revenue Service [IRS])  

GOP Bill Would Allow States to Shift from Obamacare to Automatic Coverage
"The Cassidy/Sessions measure would give states an opportunity to back away from the law on their own, shifting to a system that would cover everyone automatically, rather than have people sign up for insurance. If states choose to go with this bill's opt-out coverage ... the United States would have close to universal health coverage, Cassidy said." (Morning Consult)  

How UnitedHealth Group Grew Into a Healthcare Industry Behemoth
"UnitedHealth sold its [pharmacy benefit manager (PBM) unit] in 1994 for $1.65 billion, which provided the capital buy up regional insurers and emerge as a national payer. Four years after the company sold the PBM, UnitedHealth split into five units that focused on small to midsize employers; national employers; Medicare; technology; and health and wellness services." (FierceHealthPayer)  

[Opinion]

Semper Vigilo (PDF)
"[M]utual fund executives from Fidelity Investments, T. Rowe Price Group Inc., Wellington Management Co., and others [recently met] with senior biotech and pharmaceutical manufacturer leaders and their lobbyists.... [The mutual fund executives] encouraged them to [use] new pricing models such as 'pay-for-performance' contracts.... If a PBM or insurance carrier approaches [group health plan managers] with a value-based drug deal, we should listen, inspect and inquire with special vigilance. When we see drug manufacturers and PBMs willing to use 'value' in their pricing models, should we wonder if we're being co-opted?" (Chelko Consulting Group)  

Benefits in General

Spokeo and the Future of ERISA Litigation?
"The Supreme Court's Spokeo decision is sure to impact ERISA litigation. Expect ERISA plaintiffs to focus more on alleging a 'concrete' injury, and ERISA defendants to argue more often that the claim cannot proceed in federal court because its alleged injury, while it may allege a breach of ERISA, does not rise above a purely technical violation." (Seyfarth Shaw)  

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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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