Health & Welfare Plans Newsletter

July 7, 2016

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Third Party Administration Firm
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The Benefit Practice
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Webcasts and Conferences

You Have a Business, But Do You Have a Brand?
July 13, 2016 WEBCAST
(TPA Resources, LLC)

Trends in Coverage and Affordability on the ACA Marketplaces
July 15, 2016 in DC
(Alliance for Health Reform)

Useful Innovations in Healthcare Technology
August 18, 2016 in GA
(Worldwide Employee Benefits Network [WEB] - Atlanta Chapter)

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[Official Guidance]

Text of CMS Memo: Extension of Time to Request Flexibility on Payment Schedule for Reconciliation of the Cost-Sharing Reduction Portion of Advance Payments (PDF)
Dated July 6, 2016; issuers must take action today (July 7) to be eligible to request special treatment. "CMS will consider providing flexibility on the payment schedule for reconciliation of the cost-sharing reduction component of advance payments to assist issuers with cash flow constraints, to ensure they may continue to provide coverage to enrollees through the end of the benefit year.... We will extend the deadline to request such flexibility by emailing CSRrepayment@cms.hhs.gov to no later than 11:59 p.m. ET on Thursday, July 7, 2016.... Although we are providing a two-day extension to request the payment plan flexibility, CMS will still require that issuers enter into [the] payment agreement no later than 11:59 p.m. ET on Tuesday, July 12, 2016." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])  


[Advert.]

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Turn to the new 2016 Health Savings Accounts Facts to obtain vital HSA questions and answers right at your fingertips. Updated to include current fiduciary standards; impact of Obergefell v. Hodges; and recent IRS releases on the Cadillac Tax and HSAs.



[Guidance Overview]

IRS Proposed Rules Address Premium Tax Credits, Benchmark Premiums, and Pediatric Dental Plans
"Some of these changes incorporate into rules earlier guidance, but others are in fact changes in current practice. Most are quite technical, and none seem fundamental to the program... [T]he proposed rules would clarify that if an individual declines an opportunity to enroll in affordable minimum value employer coverage for a year (and thus is ineligible for PTCs) but is not given an opportunity to enroll in employer coverage for one or more succeeding years, the individual is not disqualified from PTCs for the succeeding year or years (and a large employer may be treated as not having offered coverage for those years for purposes of the employer mandate).... [An]individual offered only excepted benefit coverage by an employer is not considered to have been offered minimum essential coverage that would disqualify the individual from PTC eligibility." (Health Affairs)  

[Guidance Overview]

Proposed Regs Broadly Impact Insurance Issuers of Travel and Short Term Medical Insurance
"The proposed regulation focuses primarily on the medical component of travel insurance ... Travel insurance is not a major medical plan. However, travel insurance plans offer health coverage, as well as other vital benefits, to many travelers with trips longer than six months.... The proposed regulation radically changes the definition of short-term medical insurance requiring that 'coverage must be less than three months in duration, including any period for which the policyholder renews or has the option to renew with or without the issuer's consent.' " (Frost Brown Todd LLC)  

[Guidance Overview]

Final Regs on ACA Nondiscrimination in Health Programs
"Covered plans, programs and activities must treat men and women equally in providing health coverage and services. Covered entities must make reasonable changes to policies, practices and procedures that deny equal access to people with disabilities.... Eliminating some earlier confusion, the final regulations clarify that Section 1557 does not apply directly to sponsors of self-insured group health plans that do not receive [federal financial assistance (FFA)]. Third-party administrators (TPAs) that receive FFA are subject to the rules as they relate to plan administration." (Willis Towers Watson)  

[Guidance Overview]

Chicago's Paid Sick Leave Ordinance Takes Effect Next Year
"The City of Chicago will require employers to provide paid sick leave to their employees effective July 1, 2017. A 'covered employee' is an employee who performs at least two hours of work for his or her employer in any two-week period while physically inside of the geographic boundaries of Chicago. A 'covered employer' is any entity or person that employs at least one 'covered employee' while maintaining a business facility within the geographic boundaries of the city and being subjected to city license requirements." (Holland & Knight)  


[Advert.]

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Sponsored by Institute for Healthcare Consumerism [IHC]

Learn the latest compliance and regulatory issues around the private exchange market at the IHC's Private Exchange FORUM Baltimore. PEX Baltimore will be held at the Renaissance Harborplace hotel in Baltimore, MD Sept. 8-9. Register here for free.



[Guidance Overview]

San Diego Sick Leave Ordinance to Take Effect Soon
"The Ordinance will take effect immediately upon approval by the City Council, which will likely occur by mid-July.... The Ordinance specifically highlights different reasons for which the earned sick leave may be used, including for the employee's own medical condition or for a covered family member's medical condition. In addition, employees may use earned sick leave if a public health emergency causes an employee's workplace or a child's school or child care provider to close. For an absence of more than three consecutive work days, an employer may require reasonable documentation that the use of earned sick leave was for a reason permitted under the Ordinance." (Ford & Harrison LLP)  

When an Employer Needs to File a Corrected Form 1095-C
"The process for filing a corrected Form 1095-C is not all that complicated. However, there are plenty of unanswered questions. For instance, what are the employer's obligations if it follows the solicitation procedures after receiving an 'accepted with errors' message for an incorrect TIN and the solicitation provides a TIN that is obviously incorrect.... Furthermore, an employer is unlikely to know if its line 14, 15, and 16 code combinations are impossible if its software provider is not telling the employer of that fact." (Health Care Attorneys P.C.)  

Managing Marketplace Notices: Action Required by Employers
"Rumor has it that nearly 500,000 Marketplace Notices dated June 21, 2016 were sent to employers from [HHS].... [1] determine if any of the information contained in the notice is incorrect ... [2] determine if an appeal is necessary.... [3] if filing an appeal, be sure to provide only the information necessary to demonstrate the information contained in the notice is incorrect.... [4] be careful not to include personally sensitive information.... [5] be sure you have a well-defined process for managing these notices." (Hill, Chesson & Woody)  

The Perils of Self-Funding
"Understanding the many variables that come into play during a self-funding conversion is important. Some are known (reduction in administrative costs), some are somewhat known (changes in provider discounts and utilization patterns), and some are unknown (the ability to manage risk). The variability can have a significant impact on the conversion's success." (HCTrends)  

Michigan Health Claims Tax Law Survives ERISA Preemption Challenge, Once Again
"The Sixth Circuit rejected the trade association's arguments that the Michigan law related to ERISA plans ... Employer/plan sponsors of self-insured health plans may have been optimistic for a different outcome in this case, following the Supreme Court's ruling earlier this year in Gobeille. Under this latest decision involving the Michigan tax on health claims paid, however, plan sponsors should prepare to comply with the law's tax and reporting requirements." [Self-Insurance Inst. of America v. Snyder, No. 12-2264 (6th Cir. July 1, 2016)] (Practical Law Company)  

Joint Congressional Investigative Report Into the Source of Funding for the ACA's Cost Sharing Reduction Program (PDF)
158 pages. "The Administration knew it could not use the permanent appropriation to fund the CSR program ... The Administration requested an annual appropriation for the CSR program, but shortly thereafter, informally withdrew the request.... The Administration developed a new -- albeit illegal -- path forward to pay for the CSR program.... High-level IRS officials raised concerns about this plan, but the decision had already been made.... When Congress started asking questions about the source of funding, the Administration refused to provide answers ... [T]he committees are left with no choice but to conclude that the Administration has intentionally obstructed this investigation. The Administration did so because it broke the law and violated the Constitution in funding the CSR program through the permanent appropriation for tax refunds and credits." (Committee on Ways and Means, U.S. House of Representatives)  

Administration Officials, Constitutional Experts to Testify on Unlawful Cost Sharing Reduction Payments
"After an 18-month-long investigation, the Ways and Means Oversight Subcommittee and the Energy and Commerce Oversight and Investigations Subcommittee will hold hearings this week on the Obama Administration's unlawful funding of the cost sharing reduction (CSR) program, which was established under the [ACA]." (Committee on Ways and Means, U.S. House of Representatives)  

Subsidies for Lower-Income Enrollees Make Insurance Premium and Deductible Costs Comparable to Employer Coverage
"Sixty-six percent of marketplace enrollees with annual incomes under $30,000 reported paying either nothing or less than $125 a month for individual coverage, compared to 60 percent of people in employer plans.... Fifty-eight percent of marketplace enrollees with incomes above $30,000 paid more than $125 in monthly premiums compared to 34 percent of people with employer coverage, most of whom receive premium contributions from their companies regardless of income level." (The Commonwealth Fund)  

Passed in the House: Jenkins Bill to Protect Taxpayer Dollars, Empower Patients with Access and Choice
"[On July 6] the House voted to pass H.R. 1270, the Restoring Access to Medication and Improving Health Savings Act of 2016. This legislation ... will eliminate a harmful Obamacare regulation dictating which medications Americans can purchase without a prescription using their own medical savings account. The proposal also contains provisions to protect taxpayer dollars and make it easier for Americans to save and manage their health dollars by improving access to Health Savings Accounts (HSAs)." (Committee on Ways and Means, U.S. House of Representatives)  

[Opinion]

More Evidence Against Health Insurance
"If a new insurer entered the market with a plan that processed no claims below the deductible, but just let its beneficiaries pay cash, their annual out-of-pocket spending would be a fraction of out-of-pocket spending by beneficiaries who have traditional so-called 'consumer-driven' plans wherein insurers process claims and patients get billed prices that appear to be negotiated but are actually inflated." (National Center for Policy Analysis Health Policy Blog)  

Benefits in General

[Official Guidance]

Text of EBSA Request for Nominations: Advisory Council on Employee Welfare and Pension Benefit Plans (PDF)
"The terms of five members of the Council expire at the end of this year. The groups or fields they represent are as follows: [1] employee organizations; [2] employers; [3] insurance; [4] accounting; and [5] the general public.... [N]ominations [may be submitted] to Larry Good, Council Executive Secretary, Frances Perkins Building, U.S. [DOL], 200 Constitution Avenue, NW., Suite N-5623, Washington, DC 20210, or as e-mail attachments to good.larry@dol.gov. Nominations (including supporting nominations) must be received on or before August 1, 2016." (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])  

[Guidance Overview]

Federal Agencies Ratchet Up Employer Penalties, Effective Later This Summer
"A number of the penalty increases for ERISA violations are for failures to provide information to participants and beneficiaries. While some of these increases do not appear significant, they can compound rapidly because each day that this information is late to each participant can result in an additional penalty." (Fisher Phillips)  

Executive Compensation and Nonqualified Plans

[Guidance Overview]

Good News! New 409A Regulations, Part 1
"Severance Safe Harbor Available for Bad Hires.... Reimbursement of Legal Fees for Bona Fide Employment Claims is Exempt.... Employees Becoming Contractors Can Have a Separation from Service." (Benefits Bryan Cave)  

Press Releases

President Obama Names Joyce M. St. Clair to PBGC Advisory Committee
PBGC [Pension Benefit Guaranty Corporation]

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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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