Health & Welfare Plans Newsletter

July 11, 2016

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[Guidance Overview]

ACA Form 1095-C: IRS Underscores Importance of Corrections
"In order to rely upon the waiver of penalties, the IRS stated that 'error correction is part of the good faith effort to file accurate and complete information returns.' ... [E]rrors in Form 1095-C must be corrected by filing a corrected Form 1095-C 'as soon as possible' after the discovery that inaccurate information was submitted and the employer obtains correct information, although such corrected filing does not need to occur before the due dates for furnishing Form 1095-C to individuals and to the IRS.... [C]orrections will be able to be submitted as late as 2017 if the original Forms 1095-C were filed electronically." (Sherman & Howard)  


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[Guidance Overview]

Takeaways from the ACA Nondiscrimination Final Regs
"If the employer (non-health care provider) sponsors a self-insured health plan, the regulations do not apply directly to the group health plan. If the self-insured employer uses a third-party administrator (TPA) or administrative-services-only (ASO) provider that is also an insurance company, the TPA/ASO is subject to the regulations and must administer the employer's plan in a nondiscriminatory manner or risk enforcement action by OCR." (Hill, Chesson & Woody)  

[Guidance Overview]

Overview of Health Insurance Exchanges (PDF)
15 pages. "The report includes summary information about how exchanges are structured, the intended consumers for health insurance exchange plans, and consumer assistance available in the exchanges, as specified in the ACA. The report also describes the availability of financial assistance for certain exchange consumers and small businesses and outlines the range of plans offered through exchanges. Moreover, the report provides a brief summary of the implementation and operation of exchanges since 2014." [Report No. R44065, dated July 1, 2016.] (Congressional Research Service [CRS])  

Sixth Circuit Again Says Michigan Tax Not Preempted by ERISA
"The court's analysis holds state tax laws in a privileged status vis-a-vis the preemption analysis.... The Sixth Circuit had relatively little trouble finding that the Michigan tax did not 'directly regulate' primary administrative functions of the affected ERISA plans. Instead, the administrative burdens resulting from the Michigan tax regime were found to be ancillary to the state tax function." [Self-Insurance Inst. of America v. Snyder, No. 12-2264 (6th Cir. July 1, 2016)] (Morgan Lewis)  

Top Ten Compliance Issues for 2017 Health Benefit Planning
"[1] Wellness.... [2] Essential health benefits and ACA nondiscrimination rules.... [3] Mental health parity.... [4] Employer shared-responsibility (ESR) strategy and reporting ... [5] Preventive care.... [6] SBC model documents.... [7] FLSA final overtime rules' impact on employee benefit plans.... [8] Expatriate group health plans.... [9] HIPAA privacy, security, and electronic transactions.... [10] DOL fiduciary rule." (Mercer)  

Another CIGNA-Administered ERISA Health Plan, DHL Express, Sued for Embezzlement
"This latest case seems to be another brick in the wall of ongoing cases, alleging similar violations, against CIGNA-administered health plans across multiple sectors of the economy. Among top companies ensnared in litigation by CIGNA's practices ... [are] Macys, JP Morgan Chase and Chevron. These practices may be endemic to the industry as a whole as evidenced by other large UnitedHealth administered health plans, such as GAP and AT&T that have also faced lawsuits alleging similar violations." (AVYM Healthcare Revenue Consultants)  

2016 Marketplace Health Plan Selections, Grouped by County
"The Office of Enterprise Data and Analytics (OEDA), within the Centers for Medicare & Medicaid Services (CMS), has prepared public data sets with the total number of health plan selections by county for the 38 states that use the HealthCare.gov platform, including the Federally-facilitated Marketplace, State Partnership Marketplaces, and supported State-based Marketplaces. These tables include county-level plan selection information by age, race/ethnicity, Federal Poverty Level (FPL), consumer type, metal level, Cost-Sharing Reduction (CSR), and Applied Premium Tax Credit (APTC)." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])  

Surprise Medical Bills Fuel Fight Between Providers, Insurers
"The growth of insurance plans built around small networks of health-care providers is fueling new fights over surprise medical bills, when patients inadvertently get care from out-of-network doctors. Providers and insurers are blaming each other for sticking patients with higher bills in such cases, and nearly two dozen states have passed or are considering legislation to protect consumers." (The Wall Street Journal; subscription may be required)  

Access to Providers and Network Accuracy Lacking for Those in Marketplace and Commercial Plans
"[O]btaining access to primary care providers was generally equally challenging both inside and outside insurance Marketplaces. In less than 30 percent of cases were consumers able to schedule an appointment with an initially selected physician provider. Information about provider networks was often inaccurate. Problems accessing services for patients with acute conditions were particularly troubling." (Health Affairs)  

Health Spending for Low-, Middle-, and High-Income Americans, 1963-2012
"Before the 1965 passage of legislation creating Medicare and Medicaid, the lowest income quintile had the lowest expenditures, despite their worse health compared to other income groups. By 1977 the unadjusted expenditures for the lowest quintile exceeded those for all other income groups. This pattern persisted until 2004. Thereafter, expenditures fell for the lowest quintile, while rising more than 10 percent for the middle three quintiles and close to 20 percent for the highest income quintile, which had the highest expenditures in 2012. The post-2004 divergence of expenditure trends for the wealthy, middle class, and poor occurred only among the nonelderly." (Health Affairs)  

[Opinion]

Seven Reasons to Say No to the Aetna-Humana Merger
"[1] Health insurance markets are already competitively fragile at best.... [2] Competition between Aetna and Humana makes a big difference.... [3] A billion in divestitures is a drop in the bucket to what conceivably might be necessary.... [4] A divestiture is unlikely to be worth more than the paper it is printed on.... [5] The group Medicare Advantage market poses unique problems that are almost impossible to cure.... [6] It is awfully hard to find any buyers with sufficient scope and expertise to meet the obligation under the law to fully restore competition.... [7] The costs of the divestitures in disrupted service, higher premiums, uncertainty, and inferior service will be borne by consumers." (The Hill)  

Benefits in General

[Guidance Overview]

Penalty Amounts Get Adjusted -- Upward, of Course
"These new penalty amounts apply to penalties assessed after August 1, 2016 for violations that occurred after November 2, 2015 ... [W]hile the penalty amounts aren't effective yet, they will be very soon and they will apply to violations that may have already occurred.... For a failure to file a 5500, the penalty will be $2,063 per day (up from $1,100).... A failure to provide participants a notice of benefit restrictions under an underfunded pension plan under [section] 436 of the tax code will cost $1,632 per day (up from $1,000).... A failure of a multiemployer plan to provide plan documents and other information or to provide an estimate of withdrawal liability will be $1,632 per day (up from $1,000).... Failure to provide the [ACA]'s Summary of Benefits and Coverage is now $1,087 per failure (up from $1000)." (Benefits Bryan Cave)  

Benefits Interference Claims Against Allstate Move Forward
"Sixteen years-worth of litigation against the insurance company has been consolidated into one complaint. After Allstate terminated employment contracts of approximately 6,200 employee-agents and offered four alternative post-Allstate futures in 1999, 499 individual lawsuits have been filed." (planadviser)  

Executive Compensation and Nonqualified Plans

[Guidance Overview]

Deferred No Longer: Treasury and IRS Issue Long-Awaited 409A Guidance
"The proposed regulations consist of 19 technical clarifications, most of which do not impact the core rules under the section 409A regulations. However, several of the technical clarifications are important in specific circumstances, including additional flexibility on the timing of payment following an employee's death and clarifications and new limitations regarding the ability to correct document errors with respect to unvested deferred compensation." (Sutherland Asbill & Brennan 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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