Health & Welfare Plans Newsletter

July 28, 2016

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Webcasts and Conferences

11th Annual Ohio Employee Health & Wellness Conference
August 23, 2016 in OH
Manufacturers' Education Council

Employee Plans Compliance Unit (EPCU) 2016 Updates
August 25, 2016 WEBCAST
IRS [Internal Revenue Service]

11th Executive Forum on On-site and Near-Site Employee Health Clinics
September 12, 2016 in FL
World Congress

Employer Level SIMPLE Plans
September 13, 2016 WEBCAST
Ascensus

Handling IRA Trust Issues
September 15, 2016 WEBCAST
Ascensus

Pension Plan Termination: A Step-by-Step Process
September 15, 2016 WEBCAST
Findley Davies, Inc.

Healthcare Risk Adjusters: Medicare, Medicaid and the ACA
September 28, 2016 WEBCAST
Conference of Consulting Actuaries

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[Guidance Overview]

OCR Releases Guidance Documents for Phase 2 Audits
"To ... help regulated entities prepare for future audits and improve their overall compliance programs, OCR released three targeted guidance documents to further clarify the Phase 2 Audit process: [1] a comprehensive question-and-answer set addressing questions from auditees; [2] a chart placing OCR's desk audit document requests in context with HIPAA requirements, associated protocol audit inquiries, and questions from auditees; and [3] slides used in OCR's July 13, 2016 webinar for the selected auditees. These documents supplement the Phase 2 audit protocol released earlier this year."  Ice Miller LLP


[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.



[Guidance Overview]

DOL Increases Penalties for Health Plan Violations (PDF)
"The Rule increases numerous civil penalty amounts relating to ERISA disclosure and reporting requirements, including: [1] failing to file an annual Form 5500; [2] failing to provide the annual notice regarding premium assistance under the Children's Health Insurance Program (CHIP); and [3] failing to provide the Summary of Benefits and Coverage (SBC)[.]"  EPIC

[Guidance Overview]

CMS Starts Implementing ACA Transparency Requirements
"Health insurance issuers will need to submit data on coverage denials, appeals and grievances, and plan decisions overturned by an external reviewer. They will also have to provide links to the member information they provide on several important topics: out-of-network liability, grace periods, medical necessity and prior authorization, and drug formulary exceptions.... While CMS has not yet mentioned its intentions for the transparency data, it is probable that the agency will use this data to inform its oversight activities at some point."  Faegre Baker Daniels LLP

Fewer Small Employers Offering Health Coverage; Large Employers Holding Steady
"Among larger employers, health insurance offer rates -- the percentage of employers offering health coverage to their workers -- have been steady: (a) for employers with 1,000 or more employees, around 99 percent, and (b) for employers with 100-999 employees, in the 92.5 percent to 95.1 percent range. Offer rates among smaller employers have been falling since 2009: (a) for employers with fewer than 10 employees, from 35.6 percent in 2008 to 22.7 percent in 2015 (a 36 percent decrease), (b) for employers with 10-24 employees, from 66.1 percent in 2008 to 48.9 percent in 2015 (a 26 percent decline), and (c) for employers with 25-99 employees, from 81.3 percent in 2008 to 73.5 percent in 2015 (a 10 percent decline)."  Employee Benefit Research Institute [EBRI]

District Court: Internal Quality Assurance Discussion About Plan Interpretation Error Is Not Evidence of Conflict
"Though obviously it makes sense to have an internal procedure to prohibit internal reversals of appeals analysts, it also makes sense to try to catch mistakes and instruct employees. But it is important that a mistake in the file, and the correction, is well-documented in the administrative record." [Curran v. Aetna Life Ins. Co., No. 13-cv-289 (S.D.N.Y. July 11, 2016)]  Begos Brown & Green LLP


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15 Tactics to Prevent FMLA Abuse
"[1] Train your managers.... [2] Use the rolling method for tracking leave.... [3] Require concurrent leaves.... [4] Treat people consistently.... [5] Require annual certification.... [6] Request more information ... [7] Watch for patterns.... [and eight more]."  HR Daily Advisor

The Partisan Divide on Health Care
"Now that the party platforms for the 2016 campaign are written and posted online, we can see that Republicans and Democrats are as far apart on health care as they have been for quite some time. Platforms are never implemented as written, and not all candidates endorse every plank in them. However, they signal which issues are important to the parties and, broadly speaking, what candidates aim to do about them."  JAMA Forum

Anthem Projecting Losses on ACA Plans This Year
"Anthem said it now believed it would see a 'mid-single-digit' operating margin loss on its ACA plans in 2016, due to higher-than-expected medical costs. It expects better results next year, because it is seeking substantial premium increases. Anthem's financial performance on ACA plans had previously been a relative bright spot among major insurers, many of which continue to struggle. The second-largest insurer's worsening results on that business highlight continued instability in the marketplaces that are at the heart of the Obama administration's signature health law."  The Wall Street Journal; subscription may be required

Benefits in General

[Official Guidance]

Text of FASB Proposed ASU: Employee Benefit Plan Master Trust Reporting
25 pages; covers Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965). "This proposed Update relates primarily to the reporting by an employee benefit plan for its interest in a master trust. A master trust is a trust for which a regulated financial institution ... serves as a trustee or custodian and in which assets of more than one plan sponsored by a single employer or by a group of employers under common control are held.... The amendments in this proposed Update would clarify presentation requirements for a plan's interest in a master trust and require more detailed disclosures of the plan's interest in the master trust. The proposed amendments also would eliminate a redundancy relating to 401(h) account disclosures."  Financial Accounting Standards Board [FASB]

District Court Says Trustee, Legal Counsel Retaliated Against DOL Whistle-Blower
"In assessing whether [a trustee and legal counsel] had retaliated against [the trust fund's employee], the court noted that neither the U.S. Supreme Court nor the U.S. Court of Appeals for the Ninth Circuit had addressed which causation test should apply in an ERISA retaliation case -- the more lenient 'motivating factor' or the 'but for' test. The court applied the 'but for' test. In doing so, the court concluded that Robbins was placed on administrative leave because of her protected activity. [The trustee and legal counsel] 'set in motion' the trustees' decision to put Robbins on leave, the court said." [Perez v. Brain, No. 14-03911, (C.D. Cal. July 25, 2016)]  Bloomberg BNA

Executive Compensation and Nonqualified Plans

[Guidance Overview]

Section 409A: Top 10 Rules for Compliant Nonqualified Deferred Compensation
"[1] Broad impact on executive compensation arrangements.... [2] Elections of time and form of payment.... [3] Limited distribution events.... [4] Acceleration of NQDC is generally prohibited.... [5] Section 409A has unique definitions for common terms.... [6] Plans of the same type are treated as a single plan.... [7] Short-term deferrals.... [8] Separation pay.... [9] Six-month delay for publicly traded companies.... [10] Substitutions will be scrutinized."  Thompson Coburn

[Guidance Overview]

IRS Proposes Additional Guidance for Nonqualified Deferred Compensation Under 409A (PDF)
"This [article] focuses on four key areas that may have the broadest application to NDCP sponsors.... [1] Employee vs. independent contractor separation from service... [2] Payments following the death of a participant or beneficiary... [3] Accelerated payments to beneficiaries... [4] Plan terminations and accelerated payments."  Milliman

Federal Circuit Court of Appeals Addresses Tax Effect of Compensation Clawback
"The majority of future clawback cases are not likely to involve a determination of willful criminal conduct by the executive. However, the IRS could attempt to apply the broad reasoning of the Federal Circuit's decision to more routine compensation clawback cases, which would make a bad situation worse." [Nacchio v. U.S., Nos. 2015-5114, 2015-5115 (Fed. Cir. June 10, 2016)]  Winston & Strawn LLP

Press Releases

DOL Obtains Judgment, Order to Remove Fiduciary from $2.2M Employee Savings Plan and Trust in Ashland, Kentucky
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

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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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