Health & Welfare Plans Newsletter

June 22, 2016

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Employee Benefits Jobs

Plan Administrator
Newport Group
in CA, TX

Enrolled Actuary
TPA Firm
in AZ

Defined Contribution Administrator
TPA Firm
in AZ

Defined Benefit Administrator
TPA Firm
in AZ, TX

401(k) Plan Administrator
Alliance Pension Consultants, LLC
in IL

Key Relationship Manager
Nova 401(k) Associates
Telecommute

Defined Contribution Manager
Nova 401(k) Associates
Telecommute

Special Project Account Manager
Nova 401(k) Associates
Telecommute

Software Support Specialist -DC/401(k) & 5500
Actuarial Systems Corporation
Telecommute

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Webcasts and Conferences

Rural ACOs in 2016: Challenges, Opportunities, Insights and Experiences
June 23, 2016 WEBCAST
(Healthcare Web Summit)

EBIA’s 18th Annual Advanced Cafeteria Plans and Benefits Conference
July 13, 2016 in WA
(Thomson Reuters)

CEO Pay Trends: Looking Beyond Reported Pay Figures
July 23, 2016 WEBCAST
(Equilar)

Advanced Pension Conference
September 7, 2016 in IL
(FIS Relius Education)

National Conferences on Medicare, Medicaid & Duals
October 23, 2016 in DC
(America’s Health Insurance Plans [AHIP])

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[Guidance Overview]

IRS Health Care Tax Tip 2016-57: Deadline Reminder for Employers and Providers: Electronically File Information Returns with IRS by June 30
"Self-insured employers, applicable large employers and health coverage providers are reminded that the June 30 deadline to electronically file information returns with the IRS is approaching. The deadline to provide information returns to employees or responsible individuals was March 31. While the deadline to file paper information returns with the IRS was May 31, electronic filers have more time." (Internal Revenue Service [IRS])  


[Advert.]

Trending…. Employer Sponsored Telemedicine Programs!

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Explore telemedicine and the compliance issues employers may face at the state and federal levels. Mercer Select, keeping you informed about regulatory developments and market trends affecting health & welfare plans! Contact us at select@mercer.com.



[Guidance Overview]

IRS Wellness Program Etiquette -- Don't Double Dip (PDF)
"[IRS Chief Counsel memorandum 201622031] addresses program designs that recently have been marketed to employers as a way to provide tax -free benefits to employees by reimbursing (on a tax-free basis) wellness program premiums paid with (pretax) salary reduction dollars. This kind of 'double dipping' offers a benefit scheme that might be too good to be true." (Xerox HR Services)  

[Guidance Overview]

HHS Final Rule Addresses Categorical Exclusions for Health Services Related to Gender Transition
"The Final Rule [states] that all health-related insurance plans or other health-related coverage ... that currently have explicit categorical or automatic exclusions of coverage for all health services or care related to gender dysphoria or associated with a gender transition are unlawful on their face; in sum, by singling out the entire category of gender transition-related services, such an exclusion or limitation systematically denies services and treatments for transgender individuals and is, by definition, prohibited discrimination[.]" (Littler)  

Text of the 2016 Annual Report of the Board of Trustees of the Medicare Trust Funds (PDF)
267 pages. "Notwithstanding recent favorable developments, current-law projections indicate that Medicare still faces a substantial financial shortfall that will need to be addressed with further legislation. Such legislation should be enacted sooner rather than later to minimize the impact on beneficiaries, providers, and taxpayers.... Medicare's costs under current law rise from their current level of 3.6 percent of GDP to 5.6 percent in 2040 and to 6.0 percent in 20 90. Under the illustrative alternative, in which adherence to the MACRA and ACA cost-reducing measures erodes, projected costs would rise to 6.2 percent of GDP in 2040 and to 9.1 percent in 2090." (The Boards of Trustees, Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Fund)  

Text of Congressional Republican Proposals for Health Care Reform (PDF)
37 pages. "[This] plan advances a series of proposals that not only protects the health insurance Americans receive through their job, but also moves toward a fairer system that ensures access to coverage for all Americans. It allows for more choices, not top-down mandates, so that Americans can pick the benefits that work best for them. Recommendations: [1] Expanding Consumer-Directed Health Care Options; [2] Expanding Opportunities for Pooling; [3] Making Support for Coverage Portable; [4] Preserving Employee Wellness Programs; [5] Preserving Employer-Sponsored Insurance; [6] Protecting Employers' Flexibility to Self-Insure; [7] Purchasing Across State Lines; [8] Medical Liability Reform." (U.S. House Republicans)  


[Advert.]

ECFC's 29th Annual Administration Symposium Coming This August – Sign Up Now!

Sponsored by ECFC [Employers Council on Flexible Compensation]

ECFC's Flexible Benefit Administrators' Symposium is the premier networking and professional development event for the consumer-directed benefits industry: get advice, technical education, and Congressional and regulatory updates from industry leaders.



House GOP Health Plan, Unsurprisingly, Is Market-Based
"[As] part of a full repeal of the [ACA], the current law's mandates for individuals and insurers would disappear under the GOP plan. It would overhaul Medicare by transitioning to a premium support system under which beneficiaries would receive a set amount to pay for coverage.... People who do not receive health insurance through their employer, Medicare, or Medicaid would receive an advanceable, refundable flat tax credit.... Although the white paper gives no specific value, it says the tax credit 'would be large enough to purchase the typical pre-Obamacare health insurance plan.'" (Morning Consult)  

Boeing Contracts Directly with California Health System for Employee Benefits
"The move ... marks the expansion of Boeing's direct-contracting approach, which it has already implemented in recent years in Seattle, St. Louis and Charleston, S.C. Other large employers are also pursuing this idea in regions where they have big concentrations of workers. In some cases, they refer employees to nationally top-performing hospitals for select surgeries." (Kaiser Health News)  

Macys, Another Cigna-Administered ERISA Health Plan, Sued for Embezzlement, Issuing 'Secret Checks'
"According to the court documents, Macys, through Cigna, sent EOBs telling the hospital that it would not get paid until it provided proof the patient paid their entire out-of-pocket costs, at the same time, according to the complaint, Macys, through Cigna, sent a different EOB to its member patients telling them they owed nothing!... The Macys lawsuit, which was filed on June 21, 2016, comes on the heels of two other recent lawsuits involving Cigna and Cigna Administered ERISA health plans[.]" [REDOAK Hospital, LLC v. Macys Inc., Welfare Benefits Plan, No. 4:16-cv-01783 (S.D. Tex. filed June 21, 2016.] (AVYM Healthcare Revenue Consultants)  

Supreme Court Ruling Deals a Blow to Pharma, Win for Generics
"Brand-name pharmaceutical companies were backing the plaintiff in the case, while generic drug companies and health insurance plans supported the new rule and argued that the patent system was being exploited by the drug industry in order to keep prices high. The new rule could help lower drug prices." [Cuozzo Speed Technologies, LLC v. Lee, No. 15-446 (S. Ct. June 20, 2016)] (American Journal of Managed Care)  

Here's Why HR Pros Can Be Personally Liable for FMLA Blunders
"[Because] the FMLA was initially adopted as an amendment to the FLSA ... the court applied the FLSA's control or 'economic reality' test to the claim [the employer's] director of HR was [herself] an employer and found two key reasons to support that claim: [1] The director of HR controlled [the employee's] schedule and conditions of employment, and [2] She had the power to fire [the employee].... Therefore, she could be personally liable for FMLA violations." [Graziadio v. Culinary Institute of America, No. 15-888 (2d Cir. Mar. 17, 2016)] (HR Benefits Alert)  

CBO Cost Estimate for H.R. 5447, Small Business Health Care Relief Act of 2016
"H.R. 5447 would amend the Internal Revenue Code to define a qualified small employer health reimbursement arrangement (QSEHRA) as an arrangement where an employer pays directly for or reimburses medical expenses of an employee and his or her dependents.... The staff of the Joint Committee on Taxation (JCT) estimates that enacting H.R. 5447 would raise both revenues and outlays by $363 million over the 2016-2026 period. JCT therefore estimates that enacting the bill would have no effect on federal budget deficits over the 2016-2026 period." (Congressional Budget Office [CBO])  

HHS Targets Young Adults in Efforts to Improve Marketplace Risk Pool
"The [CMS] fact sheet focuses on efforts to improve coverage for young adults. Although ... the uninsured rate among young adults has fallen by more than half, young adults are still more likely than the general population to remain uninsured.... [This] undermines the individual market risk pool, as younger individuals tend to be healthier and, under the ACA's limited age rating, to cost less to cover in proportion to the premiums they pay than older enrollees" (Timothy Jost, in Health Affairs)  

Impacts of the ACA's Medicaid Expansion on Insurance Coverage and Access to Care (PDF)
12 pages. "[Medicaid] Expansion states realized a 9.2 percentage point reduction in the number of uninsured adults (a 49.5 percent decline in the uninsured rate). Non-expansion states realized a 7.9 percentage point reduction in the uninsured rate among uninsured adults (a 33.8 percent decline in the uninsured rate)." (Assistant Secretary for Planning and Evaluation [ASPE], U.S. Department of Health and Human Services [HHS])  

[Opinion]

ERIC Statement About New Health Care Tax Proposed by House GOP
" 'We are concerned that the Task Force paper proposes creating a new tax on benefits, and justifies this by suggesting that taxing health insurance will make health insurance cost less,' said James Gelfand, Senior Vice President of Health Policy, ERIC.... 'The policy rests on the myth that employer-sponsored health insurance is overly generous -- that working families' benefits need to be reduced, and that more costs need to be shifted to employees.' " (The ERISA Industry Committee [ERIC])  

Benefits in General

Fact Sheet: Social Security and Medicare Trustees Report
"Taken in combination, Social Security's retirement and disability programs have dedicated resources sufficient to cover benefits for nearly two decades, until 2034. The Medicare Hospital Insurance Trust Fund will have sufficient funds to cover its obligations until 2028, two years earlier than was projected last year, but still 11 years later than was projected in the last report issued prior to passage of the Affordable Care Act." (U.S. Department of the Treasury)  

Executive Compensation and Nonqualified Plans

[Guidance Overview]

IRS Proposes Rules Clarifying and Modifying Section 409A Final Regs, and Withdrawing and Replacing a Provision of the Proposed Income Inclusion Regs
"[Among other items, the proposed regs:] [1] Clarify that Section 409A's rules apply separately and in addition to the rules under Code Section 457A ... [2] Modify the short-term deferral rule ... Modify the definition of 'eligible issuer of service recipient stock' ... [3] Modify the rules regarding recurring part-year compensation ... [4] Create a rule for determining when a payment has been made under Section 409A." (Practical Law Company)  

2016 CEO Pay Trends (PDF)
22 pages. "The data in this report examines CEO pay for S&P 500 companies ... over the last five fiscal years. In that time, the U.S. stock markets have recovered from previous lows during the financial crisis, and in tandem with the recovery, reported CEO pay increased every year -- the largest period of growth coming between 2012 and 2013 when reported pay was 10.5% larger at the median. This report also visualizes shifts in how companies award CEO pay." (Meridian Compensation Partners, LLC)  

Press Releases

Intac Continues To Build Its Team Of Actuaries
Intac Actuarial Services, Inc.

Randall McGeorge Newly Elected as Partner
Morgan Lewis & Bockius LLP

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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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