Health & Welfare Plans Newsletter

June 27, 2016

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[Official Guidance]

Text of CMS FAQs: Auto Re-Enrollment for QHPs No Longer Available in the Marketplace (PDF)
"[Beginning in Plan Year 2017, if] the enrollee's current QHP is not available through the Marketplace and no QHPs from the original issuer are available for auto re-enrollment in the Marketplace that cover a service area that includes the enrollee's location, and no direction is provided by the State's regulatory authority, CMS, if feasible, will auto re-enroll affected enrollees in another QHP available through the Marketplace with a service area that covers the enrollee's location, taking into account the issuer's ability to absorb new enrollment and the lowest premium plan, according to the following hierarchy ..." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])  


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[Guidance Overview]

Summer Interns and the ACA Pay-or-Play Penalties
"A summer intern is not classified as a Full-time Employee during his or her initial measurement period. Rather, the summer intern is in a 'limited non-assessment period' during which no penalties are assessed. The summer intern never becomes an Full-time Employee if he or she terminates employment at the end of the summer (and before the end of the initial measurement period).... If you are using the monthly measurement method, it is likely that a summer intern may need to be offered coverage under your group health plan if your plan does not impose a waiting period, or if the summer intern's employment extends beyond the plan's waiting period." (Vorys, Sater, Seymour and Pease LLP)  

[Guidance Overview]

Chicago to Become Second Midwestern City to Mandate Paid Sick Leave
"The Ordinance will take effect on July 1, 2017 ... With limited exceptions, the Ordinance applies to all employers that employ at least one 'covered employee' in Chicago and: [1] maintain a business facility within the geographic boundaries of the city; or [2] are subject to at least one of the city's license requirements. A covered employee includes any part-time or full-time employee, including a domestic worker, who works within Chicago's city limits at least two hours in any two-week period." (Littler)  

[Guidance Overview]

City of Chicago and State of Illinois Legislate Paid Sick Leave
"Chicago will become the 28th city to enact legislation regarding paid sick time.... Additionally, both houses in Illinois recently passed the Employee Sick Leave Act (House Bill 6162), which requires employers who have voluntarily provided sick days to their employees to expand the benefit so that employees can take the time to care for other family members." (Winston & Strawn LLP)  

Administration Threads the Needle in Risk Corridor Case Brief
"On June 24, 2016, the administration filed its first pleading in one of these cases, a motion to dismiss a class action filed by Health Republic Insurance Company. Instead of arguing that the insurer has no claim on the merits, however, it simply argued the claim is premature.... The administration also argues that the plaintiff's claim is not yet ripe for adjudication, as the administration has not yet set risk corridor payments for 2015 or 2016 and thus the total amount due Republic and other insurers cannot yet be known. Finally, the administration's brief notes that the Court of Claims lacks jurisdiction in this case to award injunctive or declaratory relief, interest, or other damages the plaintiffs are seeking." (Health Affairs)  


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Three Pharmacy Trends to Watch in Marketplace Plans
"Utilization (especially for traditional medications), not increasing unit costs, was a primary driver of the exchange's 14.6% spending increase in 2015.... HIV and hepatitis C are the most costly specialty medication categories.... The fastest-growing prescription plan over the past 2 years was the silver plan." (American Journal of Managed Care)  

Responses to Top Wellness Myths
"Corporate wellness results in a range of beneficial outcomes, including (and going well beyond) lower healthcare costs.... Targeting high-risk employees misses the counterintuitive fact: The best way to reach the sickest and highest-cost people is by not singling them out.... Well-being doesn't have to come at a high cost.... Measuring participation with sign-up sheets or assessments (or their online equivalents) is a good start, but employers also need to gauge ongoing participation." (Human Resource Executive Online)  

Employers and Wellness -- Pulling Back or Pushing On?
"[A recent survey] found that certain wellness program elements have decreased in prevalence, notably onsite seasonal flu vaccinations and 24-hour nurse lines. But ... more employers are increasing wellness offerings (45%) than decreasing them (19%).... [E]mployers are becoming more strategic in their program offerings; if employers are taking a 'step back', they're doing so to take stock of their current offerings and evaluate what works best for their workforce." (Mercer/Signal)  

Medicare's Financial Condition: Beyond Actuarial Balance (PDF)
"The longer corrective measures are delayed, the worse the financial challenges will become and the greater the burden that might be imposed on beneficiaries and taxpayers. This issue brief more closely examines the findings of the Medicare Trustees Report with respect to program solvency and sustainability." (Medicare Subcommittee, American Academy of Actuaries)  

Minnesota's Largest Health Insurer to Drop Individual Health Policies
"Blue Cross and Blue Shield of Minnesota will retreat from the sale of health plans to individuals and families in the state starting next year. The insurer, Minnesota's largest, said extraordinary financial losses drove the decision.... The Blues reported a loss of $265 million on insurance operations from individual market plans in 2015. The insurer said claims for medical care far exceeded premium revenue for those plans." (National Public Radio)  

[Opinion]

The Pandemic in Healthcare: Ignorance
"There are five things we can do if we're serious about an informed electorate for healthcare: [1] We can build into our elementary, secondary and post-secondary educational curricula required courses so students get more than one chapter on healthcare that's optional. [2] We can accelerate access to our personal medical records and online tools that equip us to understand our risks, options and costs. [3] We can require our elected officials to know the industry sans teleprompters and party messaging tip-sheets. [4] We can watch and read networks and periodicals that offer a consistent, substantive coverage on healthcare that connects the dots between our one-day stories. [5] And we can dedicate more resources in our organizations and trade groups to public education. This is not the time to shy from public relations efforts and informational campaigns." (Paul Keckley)  

Benefits in General

[Guidance Overview]

GASB 74/75: Depletion Date Projections by Public Pension Plans (PDF)
"Required implementation is imminent, with GASB 74 effective for plan fiscal years beginning after June 15, 2016, and GASB 75 effective for employer fiscal years beginning after June 15, 2017.... This article ... focuses on the determination of a plan's depletion date, which is the projected point in the future (if any) when plan assets are no longer sufficient to satisfy benefit obligations. It also looks at the impact on liability calculations that will result from a conclusion that a depletion date exists. Unlike pension plans, many other postemployment benefits (OPEB) plans are not pre-funded through a dedicated trust. These plans, and pension plans that fall under GASB 73, will not have to prepare depletion date analyses. However, GASB 75 (or GASB 73 for pension plans that are not pre-funded) will impact the selection of the discount rate." (Milliman)  

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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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