Health & Welfare Plans Newsletter

July 21, 2016

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[Official Guidance]

Text of Agency Request for Information: Coverage for Contraceptive Services
19 pages. "This document is a request for information on whether there are alternative ways (other than those offered in current regulations) for eligible organizations that object to providing coverage for contraceptive services on religious grounds to obtain an accommodation, while still ensuring that women enrolled in the organizations' health plans have access to seamless coverage of the full range of Food and Drug Administration-approved contraceptives without cost sharing. This information is being solicited in light of the Supreme Court's opinion in Zubik v. Burwell ... [HHS, DOL] and the Treasury invite public comments via this request for information." (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]; U.S. Department of Health and Human Services [HHS]; and Internal Revenue Service [IRS])  


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[Official Guidance]

Text of CMS FAQ: Annual Income Threshold Adjustment (PDF)
Undated and unnumbered document; published online July 21, 2016. "Annual household income data matching issues are currently created whenever an applicant's annual household income attestation is more than 10% less than the income data received from trusted data sources shows, or if no household income data is available from those sources.... HHS has determined that it is a reasonable threshold to generate an annual income data matching issue for a consumer if their attested income is more than 25% or $6,000 (whichever is greater) lower than data from our trusted data sources; we maintain the policy that a data matching issue is generated if no data is available from our trusted data sources. This threshold change ... will be in place in the FFM prior to the start of open enrollment for plan year 2017." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])  

[Guidance Overview]

Nondiscrimination and Chronic Conditions: The Final Section 1557 Regulation
"The broad disability definition is a positive development for those with serious or chronic conditions, because Section 1557 provides robust enforcement mechanisms, including a private cause of action. In other words, persons with conditions that qualify as a 'disability,' or other protected classes, can challenge discriminatory insurance practices in court." (Health Affairs)  

[Guidance Overview]

CMS Releases 2017 Enrollment Manual for Individual and Small Business Marketplaces
"The manual does not plough any new ground.... It does, however, set out comprehensively in one place all of the rules and procedures governing the FFM and FF-SHOP and the individuals and entities to which they relate. It describes exhaustively, in flow charts and tables as well as text, the technical details of the transactions in which the FFM and FF-SHOP engage." (Timothy Jost, in Health Affairs)  

Justice Department and State Attorneys General Sue to Block Anthem's Acquisition of Cigna, Aetna's Acquisition of Humana
"The U.S. Department of Justice and attorneys general from multiple states and the District of Columbia sued today to block Anthem's proposed acquisition of Cigna and Aetna's proposed acquisition of Humana, alleging that the transactions would increase concentration and harm competition across the country, reducing from five to three the number of large, national health insurers in the nation.... The complaints allege that the two mergers -- valued at $54 billion and $37 billion -- would harm seniors, working families and individuals, employers and doctors and other healthcare providers by limiting price competition, reducing benefits, decreasing incentives to provide innovative wellness programs and lowering the quality of care." (Office of the Solicitor, U.S. Department of Labor)  

Telemedicine Arrangements: Beware of Inadvertently Dialing Up an Excise Tax
"The preventive services mandate is particularly problematic for telemedicine plans.... if a plan doesn't have an in-network provider that can provide such services, then the plan can't impose any cost sharing for the services to be performed out-of-network. It is difficult to see how any telemedicine arrangement can comply with this mandate on its own.... The fact that the employer is offering to its employees some other fully compliant major medical plan doesn't, in and of itself, negate the telemedicine plan's obligation to meet all the ACA's market reform requirements." (Bloomberg BNA)  

Cancer Tops Stop-Loss Reimbursements
"Sun Life paid out $618 million in stop-loss reimbursements between 2012 and 2015 -- 26.6% of total stop-loss claims -- for cancers ... Cancer claims reimbursement rose to 28% of total stop-loss claims reimbursements in 2015 from 24.3% in 2012 ... 45% of the 20 highest cost intravenous medications in 2015 were used to treat cancer." (Benefit Revolution)  

Employee Satisfaction with Health and Well-Being Programs Is High, But More Personalization Is Needed
"Most participants (81%) saw a positive impact on their physical well-being and more than 60% agreed or strongly agreed that including family in such programs would likely increase their participation. For those that did not participate, 37% did not find them personally relevant and 20% didn't know they were available, a strong indication that greater personalization and awareness is needed to drive employee engagement." (National Business Group on Health [NBGH])  

Benefits in General

[Guidance Overview]

Significant Changes Proposed for Form 5500
"Comments, which are due by October 4, 2016, are specifically sought on a variety of issues, such as the cost and feasibility of providing the detailed group health plan data required under the proposal. Comments are also requested on the feasibility of treating the filing of Form 5500 (including Schedule J) as compliance with health care reform's transparency in coverage and quality of coverage reporting requirements.... Because [certain IRS-only] questions do not apply to welfare plans, the IRS seeks comments on whether to add the questions to the various forms and schedules based on subject matter or collect them on a single IRS-only schedule." (Thomson Reuters / EBIA)  

Executive Compensation and Nonqualified Plans

[Guidance Overview]

409A and 457 Updates (PDF)
21 pages. "The Section 409A modifications affect almost every company that defers a portion of executive pay to a future year. The Section 457 regulations apply to the deferred compensation plans of state and local governments and tax-exempt organizations.... The regulations revise a specific provision ... regarding the calculation of amounts includible as income under Section 409A(a)(1) and clarify the interaction of Section 457 with Section 409A. Additionally, the proposed regulations provide guidance relating to the definitions of a bona fide severance pay plan under section 457(e)(11) ... and substantial risk of forfeiture under section 457(f)(1)(B)." (Fulcrum Partners, LLC)  

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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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