Health & Welfare Plans Newsletter

June 16, 2016

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Senior Counsel - Contracts
Great-West Financial
in CO

Senior Retirement Compliance Analyst
National Rural Electric Cooperative Association [NRECA]
in VA

Director of Benefits
Teamsters Joint Council No. 83 of Virginia Funds
in VA

Senior Actuarial Analyst
The Segal Group
in IL

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Webcasts and Conferences

DOL Fiduciary Rule Litigation Impacts
June 16, 2016 WEBCAST
(Sutherland Asbill & Brennan LLP)

Behavioral Finance: Why Participants Sometimes Make Irrational Decisions
June 29, 2016 WEBCAST
(ASPPA [American Society of Pension Professionals & Actuaries])

Western Benefits Conference
July 19, 2016 in WA
(ASPPA and Western Pension & Benefits Council [WP&BC])

Personalized Communication Trends and Technologies
July 21, 2016 in GA
(Worldwide Employee Benefits Network [WEB] - Atlanta Chapter)

2016 Retirement Research Consortium Meeting
August 4, 2016 in DC
(Center for Retirement Research at Boston College)

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[Official Guidance]

Text of EEOC Sample ADA Wellness Program Notice
"New rules published on May 17, 2016, under the Americans with Disabilities Act (ADA) require employers that offer wellness programs that collect employee health information to provide a notice to employees informing them what information will be collected, how it will be used, who will receive it, and what will be done to keep it confidential. The EEOC has published [this sample notice] to help employers comply with the ADA[.]" (U.S. Equal Employment Opportunity Commission [EEOC])  


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[Official Guidance]

Text of EEOC FAQs on the Sample ADA Wellness Program Notice
"[1] If wellness program participants already get a notice under the Health Insurance Portability and Accountability Act (HIPAA), do they need to get a separate ADA notice? ... [2] Who must provide the notice? ... [3] Does the notice have to include the exact words in the EEOC sample notice? ... [4] When should employees get the notice? ... [5] Is an employee's signed authorization required? ... [6] In what format should the notice be provided? ... [7] What notice must employers provide for spouses participating in an employer's wellness program?" (U.S. Equal Employment Opportunity Commission [EEOC])  

[Guidance Overview]

EEOC Releases Final Rules on Wellness Programs (PDF)
"[W]ellness programs that do not include disability-related inquiries or medical examinations are not subject to this final rule, although such programs must be available to all employees and must provide reasonable accommodations to employees with disabilities.... [T]he final regulations are not entirely clear on how the financial limits are to be determined where multiple plans are offered, all of which allow for wellness program participation, or where an employer sponsors multiple benefit packages within a given group health plan." (Groom Law Group)  

[Guidance Overview]

Proposed Rules for Expatriate Health Plans and Certain Excepted Benefits under ACA
"It is important to remember that expatriates may still be subject to the individual mandate (but these plans may qualify as minimum essential coverage), employers still need to comply with the employer penalty rules, and the health plan reporting obligations through Forms 1094/1095 continue to apply to those covered by these plans." (Kilpatrick Townsend)  

New Datasets: Offer and Take-Up of Employer-Sponsored Health Insurance Coverage
"These research files on offer and take-up of employer-sponsored health insurance coverage are based on new questions asked as part of the 2014 and 2015 Current Population Survey Annual Social and Economic Supplement (CPS ASEC). The questions refer to current coverage at the time of interview, covering February through April of the survey year." (U.S. Census Bureau)  


[Advert.]

Register for NBCH's 21st Annual Conference, Sept. 26-28 in Orlando

Sponsored by National Business Coalition on Health [NBCH]

This must-attend event convenes employers, health plans, providers, business health coalitions and other key stakeholders focused on the future of health care and benefits. Free admission for employers that are members of an NBCH coalition. Join us.



A Rising Interest in Outsourcing Benefits Administration (PDF)
"Nearly half [of surveyed financial executives] (46%) report either that they have already outsourced reporting and regulatory compliance for the ACA to their insurance carriers or to other vendors (26%), or that they are at least considering it (20%).... Similar numbers currently outsource [FMLA] requirements (25%) or are considering doing so (13%). Although fewer respondents report outsourcing local or state leave mandates (17%), equally as many (17%) would consider it." (Prudential)  

Medical Network and Payment Reform Strategies to Increase Health Care Value (PDF)
17 pages. "To date, employers have relied on relatively blunt instruments for managing health care costs -- selecting health plans based on network discounts and provider access, and increasing consumer cost-sharing to mitigate cost trends.... Many large employers recognize a need to change the current dynamic of volume-based incentives to value-based contracting strategies that better reward quality care and efficiency in resource management. But employers no longer believe that the key differentiation is among health insurance plans; it's about the differentiation of their provider networks and the underlying provider contracting arrangements." (American Health Policy Institute)  

Ways and Means Advances Bills to Improve Access to Health Care, Provide Targeted Relief from Obamacare
"The bills include: ... The Small Business Health Care Relief Act (H.R. 5447) ... which allows employers to provide innovative employer payment arrangements; ... The Health Care Security Act of 2016 (H.R. 5445) ... which makes several commonsense reforms to expand access to HSAs, including increasing the annual contribution limits, allowing for catch-up contributions to the same account, and allowing for more flexibility between incurring expenses and actually setting up an account.... The Tribal Employment and Jobs Protection Act (H.R. 3080) ... which eliminates Obamacare's employer mandate for tribally owned businesses; [and] The Student Worker Exemption Act of 2015 (H.R. 210) ... which provides universities relief from the employer mandate for hours worked by student workers." (Committee on Ways and Means, U.S. House of Representatives)  

Sizing Up ACA Risk Adjustment Volatility: How the Interplay Between Risk Adjustment and Issuer Size Influences Profitability Under the ACA
"In this study, [the authors] set out to explain how risk adjustment might influence profitability patterns in a more typical year and whether those patterns change with the size of a health plan. What [they] discovered is a paradigm that does not seem to meaningfully reduce the volatility of financial outcomes and may not have the pinpoint accuracy needed to adequately compensate all plans for the risks they are prohibited from pricing into their premium rates. [They] also explore the consequences of some mainstream proposals to modify risk adjustment long term, recognizing some of these ideas may be directly in reaction to the early 2014 results." (Milliman)  

Ten Things Employers Can Learn from Recent FMLA Lawsuits
"When calculating FMLA entitlement, include overtime and 'working lunches.' ... In calculating amount of leave used -- don't include days an employee is not scheduled.... Neither a medical emergency nor a request using the word 'FMLA' is required.... Give employees a chance to provide certification.... Communicate with employees.... You can require the use of customary notice procedures for absences, but with caveats.... Avoid derogatory remarks about those who take leave.... Be consistent in your treatment of employees before and after leave.... Adjust goals downward for employees who take FMLA leave.... Not every deviation from what you expect of a seriously ill person suggests FMLA abuse." (Wolters Kluwer Law & Business)  

U.S. Department of Justice Sues North Carolina Hospital System for Insisting on Anti-Steering Provisions in Insurance Reimbursement Contracts
"[T]he complaint is attacking a type of widely used contracting provision in which acute care hospital systems seek to prohibit insurance company payors from using 'steering' restrictions, which would otherwise be used to steer their insured patients to lower cost health care providers, including lower-cost hospitals, in exchange for lower premiums in so-called 'narrow network' insurance plans. The complaint then alleges that CHS has an approximately 50% share of the market for acute inpatient hospital care in the Charlotte metropolitan area, allegedly conferring market power on CHS." (Sheppard Mullin)  

How Much Financial Protection Do Marketplace Plans Provide in States Not Expanding Medicaid?
"This brief analyzes a sample of silver plans offered in the largest markets in 18 states that use the federal website for marketplace enrollment and have not expanded Medicaid eligibility. It finds that marketplace enrollees at this income level in most plans analyzed are at risk of incurring premium and out-of-pocket costs that are higher than what they would pay under Medicaid. For people with significant health needs, costs are estimated to be much higher in marketplace plans than what they would be under Medicaid." (The Commonwealth Fund)  

Report to Congress on Medicare and the Health Care Delivery System (PDF)
347 pages. "This report fulfills the Commission's legislative mandate to evaluate Medicare payment issues and to make recommendations to the Congress... [Issues considered include:] [1] Using competitive pricing to set beneficiary premiums in Medicare. [2] Medicare's new framework for paying clinicians. [3] Developing a unified payment system for post-acute care. [4] The broader context for Medicare drug spending. [5] Medicare Part B drug and oncology payment issues. [6] Improving the Medicare Part D prescription drug program. [7] Improving efficiency and preserving access to emergency care in rural areas. [8] Telehealth services and the Medicare program. [9] Issues affecting dual-eligible beneficiaries -- CMS's financial alignment demonstration and the Medicare Savings Programs." (Medicare Payment Advisory Commission)  

Distribution of Medicare Taxes and Spending by Lifetime Household Earnings
"This [22-slide] presentation describes an analysis of the distribution of Medicare taxes and spending using a unique dataset with information on beneficiaries' lifetime earnings and Medicare spending.... Almost all of the variation in lifetime Medicare spending net of premiums by lifetime household earnings can be explained by the variation in life expectancy. Medicare is projected to become more progressive for later cohorts because lifetime earnings are expected to grow faster for those with higher earnings." (Congressional Budget Office [CBO])  

[Opinion]

Retiree Health Costs: California Gets Some Bad News and Some Not-So-Bad News
"[California's] unfunded retiree health obligation (well in excess of $65 billion) has now surpassed its unfunded pension obligations -- and, more importantly, there is no statutory or administrative construct in place (like CalPERS) to force State agencies, cities and local governments to properly fund for these growing obligations." (Chang Ruthenberg & Long PC)  

Benefits in General

District Court Provides Short Checklist to Reduce Plaintiff/Claimant Attorney Fees
"Attorney fees in ERISA cases continue to be a challenge. What happens when both sides can claim wins during a case? What is a reasonable hourly rate for Plaintiff's attorneys? ... The case also highlights additional considerations when addressing the attorney fee issue." [Barboza v. Calif. Assoc. of Prof. Firefighters, No. 08-519 (E.D. Cal. June 3, 2016)] (Lane Powell PC)  

The Spokeo Decision: New Hope for Defending Against ERISA Claims?
"It is easy to imagine circumstances under which a participant or beneficiary suffers no actual harm because of a plan administrator's failure to comply with a request for a plan document ... The Spokeo opinion at least raises the question whether, despite the language of ERISA section 502(a)(1)(A) authorizing such a lawsuit, a plaintiff might lack standing to seek the penalty under ERISA section 502(c) if the plaintiff fails to allege and prove a 'concrete' injury-in-fact other than and in addition to nonreceipt of the requested documents." (Ogletree Deakins)  

Social Security Disability Insurance: Participation and Spending
"Under current law, CBO projects, the number of DI beneficiaries would rise by 0.8 percent per year over the next decade; excluding the effects of inflation, the average benefit would rise by 0.9 percent per year and total spending on benefits would rise by 1.9 percent per year, on average.... [U]nder current law spending would exceed income after 2018, and the trust fund would be exhausted in 2022[.]" (Congressional Budget Office [CBO])  

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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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