Health & Welfare Plans Newsletter

June 15, 2016

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Employee Benefits Jobs

Retirement Plan Administrator
Hawkins Retirement
in UT, Telecommute

Manager of Retirement Administration
Georgia Municipal Association
in GA

Account Manager 403(b)-457 Markets
Aspire Financial Services LLC
in FL

Business Relationship Consultant
Aspire Financial Services LLC
in FL

Account Executive
Aspire Financial Services LLC
in FL

Relationship Manager
John Hancock
in CO

Assistant Retirement Plan Administrator
Saltmarsh, Cleaveland & Gund
in FL

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Webcasts and Conferences

Fresh Perspectives on Assumption Setting
June 22, 2016 WEBCAST
(ASPPA College of Pension Actuaries [ACOPA])

NAPA Connect - A Unique Experience for Women Advisors
June 26, 2016 in MA
(National Association of Plan Advisors [NAPA])

Nightmare on TPA Street
June 28, 2016 WEBCAST
(ASPPA [American Society of Pension Professionals & Actuaries])

2016 Annual Conference - celebrating 50 years!
October 23, 2016 in DC
(ASPPA [American Society of Pension Professionals & Actuaries])

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[Official Guidance]

Text of CMS User Fee Adjustment FAQ (PDF)
Unnumbered document, dated June 14, 2016. "CMS cannot directly reduce the amount of the [federally-facilitated market (FFM)] user fee collected for an issuer that no longer operates on the FFM because that issuer has no current obligation to pay the FFM user fee. However, any FFM issuer that qualified for a reduction to its FFM user fee for the 2014 benefit year, irrespective of whether it is currently on the FFM, may direct CMS to apply a reduction equal to any outstanding adjustment amount to another issuer that currently operates on the FFM." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])  


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[Guidance Overview]

Hospital and Fixed Indemnity and Disease-Specific Policies in the Crosshairs: Tri-Agency Proposed Rule Portends Some Disruption
"The proposed regulations establish a rule under which coverage for only a specified disease or illness (for example, cancer-only policies) or hospital indemnity or other fixed indemnity insurance is excepted only if the coverage meets [certain] conditions ... [The agencies] request comments regarding whether to limit the number of diseases or illnesses that may be covered under a policy as well as whether issuers should be required to disclose that policies are not Minimum Essential Coverage." (Mintz Levin)  

[Guidance Overview]

City of Los Angeles Doubles Employees' Sick Leave Entitlement Effective July 1, 2016
"The Los Angeles Ordinance will provide employees working in the City of Los Angeles with the ability to accrue and use up to 48 hours of sick leave, twice the amount provided by state law. Enacted as an urgency matter, the new sick leave obligations become effective for employers on July 1, 2016 ... Los Angeles' law does not have a lower cap for small employers.... [E]mployers may provide the entire 48 hours of sick leave in a lump sum, or the employer may use an accrual method." (Littler)  

Private Exchange Implementation: Ten Best Practices
"Choose your advisory partner wisely.... Perform comprehensive due diligence.... Get the right players on the team -- HR, payroll, IT, HRIS, legal, security, etc.... Set expectations at the outset.... Start early -- when it comes to implementation, the early bird gets the worm.... Be aware of system constraints.... Demand performance guarantees.... Train the private exchange enrollment team on your culture.... Deploy a robust employee communications campaign.... Take a long-term view." (The Institute for HealthCare Consumerism [IHCC])  

Tech Entrepreneur Raises $25M for Health IT Startup to Support Employer Insurance Choices
"League, a health IT startup that developed an app to ease the job of employers to locate providers and services for employees ... [joins] the likes of Oscar, Bright Health and others.... The company claims that its business fills a gap in insurance market products for employers by providing health spending accounts, wellness accounts, and group insurance plans from a mobile platform." (MedCity News)  


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FMLA Allotment Calculation Should Have Included Overtime That Started Voluntary, Became Mandatory
"Although an employee had the choice of whether to put his name on a list as available for certain overtime shifts, once he did that and was selected, the overtime shift became mandatory and should have been included by his employer when it calculated his allotment of FMLA leave for the year, ruled the Eighth Circuit U.S. Court of Appeals." [Hernandez v. Bridgestone Americas Tire Operations, LLC, Nos. 15-2042 and 15-2428, (8th Cir. May 13, 2016)] (Wolters Kluwer Law & Business)  

Paid Time Off (PTO) Programs and Practices
42 pages. "88% of organizations believe it is necessary to offer some type of paid time off program to be competitive in the labor market.... On average, organizations offer 10 to 22 days of vacation time and seven to 11 days of sick leave annually.... The structure of these programs with extensive rules applied to their use may not meet the needs of individual employees. 26% of organizations are considering rolling various types of leave together to offer employees a PTO bank-type system that they can use for a variety of needs." (WorldatWork)  

Analysis of 2017 Premium Changes and Insurer Participation in the ACA Marketplaces
"[In] most of these population centers, the costs for the lowest and second-lowest silver plans are, in fact, increasing faster in 2017 than they have in previous years. Based on insurer rate requests, the cost of the second-lowest silver plan in these cities will increase by a weighted average of 10% in 2017. Last year, premiums for the second-lowest silver plans in these areas increased 5% following review by state insurance departments. There is substantial variation across markets, with premium changes for second-lowest silver plans ranging from a drop of 13% to an increase of 18%. Premiums for 2017 are still preliminary and could be raised or lowered through these states' rate review processes." (Henry J. Kaiser Family Foundation)  

[Opinion]

Legislation Would Dramatically Expand HSAs
"[Proposed] legislation from Ways and Means member Rep. Erik Paulsen ... would nearly double the maximum annual HSA contribution starting next year. If it were in effect in tax year 2016, taxpayers could contribute up to $6,550 for individual coverage and up to $13,100 for family coverage." (Center on Budget and Policy Priorities)  

[Opinion]

Small Business Health Care Bill Raises Questions
"A bipartisan bill that the House Ways and Means Committee will consider today would let small employers use a health reimbursement arrangement (HRA) ... to help their workers buy individual-market coverage, rather than offer health insurance directly.... Among the unanswered questions: How will small employers respond? ... What will happen to health insurance market risk pools? ... How will small business HRAs affect workers' coverage?" (Center on Budget and Policy Priorities)  

Benefits in General

The Next 401(k)? Why Student Loan Repayment May Soon Be a Standard Benefit
"The average tenure of Millennials is around 16 months, and the bulk of these workers are saddled with a tremendous amount of student loan debt ... That revolving door mentality among younger workers hurts employers' retention rates and costs a fortune in extra recruiting and training costs. Plus, because student loan debt makes contributing to a 401(k) a low priority, employers' 401(k) participation rates suffer as well." (HR Benefits Alert)  

Executive Compensation and Nonqualified Plans

[Guidance Overview]

Agencies Release New Proposed Rules for Incentive-Based Compensation at Financial Institutions
"The proposed rules replace the proposed rules issued by the agencies in 2011. The new rules will likely not be effective until at least January 2019 ... However, these rules introduce new concepts and rules that Covered Institutions should begin to address sooner, rather than later, to ensure compliance when the rules ultimately become effective.... Generally, the Proposed Rules prohibit Covered Institutions from providing incentive-based compensation arrangements that encourage inappropriate risk-taking by providing a Covered Person with excessive compensation, fees, or benefits; or that could lead to material financial loss to a Covered Institution." (Ballard Spahr LLP)  

ERISA Does Not Apply -- Bonus! (PDF)
"Recognizing that Congress never intended to equate incentive compensation arrangements with pension plans, the [DOL] adopted a regulation that specifically excludes bonus plans. But the exclusion does not apply if payments under the bonus plan are 'systematically deferred' until the termination of covered employment or beyond or to provide retirement income. Thus, a critical inquiry for employers who sponsor bonus plans is whether payments under the plan are 'systematically deferred' to the termination of employment." (Groom Law Group, via Bloomberg Pension & Benefits Daily)  

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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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