Health & Welfare Plans Newsletter

July 29, 2016

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[Official Guidance]

Text of IRS Proposed Regs: Information Reporting of Catastrophic Health Coverage and Other Issues Under Section 6055
36 pages. "This document contains proposed regulations relating to information reporting of minimum essential coverage under section 6055 of the Internal Revenue Code. Health insurance issuers, certain employers, and others that provide minimum essential coverage to individuals must report to the IRS information about the type and period of coverage and furnish related statements to covered individuals.... These proposed regulations provide guidance under section 6055 only, which relates to Form 1095-B and Form 1095-C, Part III. These proposed regulations do not affect information reporting under section 6056 on Form 1095-C, Parts I and II."  Internal Revenue Service [IRS]

[Advert.]

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[Guidance Overview]

Medicare-Enrolled Employees' Impact on the ACA Employer Mandate Penalty
"[E]mployers with 50 or more full-time equivalent employees are subject to one of two penalties if they fail to comply with the ACA's employer shared responsibility provisions.... The IRS confirmed that for purposes of determining whether an employer is liable for the first penalty all full-time employees are counted, regardless of whether they are enrolled in Medicare or another type of coverage. Conversely, the IRS noted that an employer is liable for the second penalty only for employees who enroll in Marketplace coverage and receive a premium tax credit subsidy."  The Wagner Law Group

Regulation of Health Plan Provider Networks
"Plans with limited networks are not new and are not confined to the Marketplaces. Yet there is reason to believe that they have grown in prevalence partly because of the ACA.... Limited network plans might offer value to consumers.... But these plans also pose risks.... Surveys show that many consumers are open to trading network breadth for a lower premium."  Health Affairs

Health Plans and Other HIPAA Entities Should Learn From $2.75M UMMC HIPAA Settlement
"UMMC's breach notification disclosed that UMMC's privacy officer had discovered a password-protected laptop containing ePHI of thousands of UMMC patients missing from UMMC's Medical Intensive Care Unit (MICU). UMMC additionally reported that based on its investigation, UMMC believed that the missing laptop likely was stolen by a visitor to the MICU who had inquired about borrowing one of the laptops."  Solutions Law Press

State-Run SHOPs: An Update Three Years Post-ACA Implementation
"There is limited public information about the cost of operating the SHOPs, as well as the number of small employers taking advantage of the federal small-business health insurance tax credit available through SHOP. The federal government has yet to release state enrollment data for the federally facilitated SHOP.... [S]tate-reported data show that enrollment in SHOP continues to lag expectations, following low enrollment trends in 2014 and 2015. At the high end, New York and California have each enrolled over 3,600 groups, with over 42,000 covered lives combined. However, a handful of states have each enrolled fewer than 200 employer groups to date."  The Commonwealth Fund

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DOJ's Challenge to Anthem/Cigna and Aetna/Humana (PDF)
"In challenging the proposed Aetna/Humana transaction, DOJ focused principally on the Medicare Advantage (MA) space, alleging that the merger would combine two of the largest MA payers in the country.... In MA, DOJ alleged that the transaction would result in a loss of competition in at least 364 counties across the country, and would create a 'merger to monopoly' in at least 70 of those counties."  Squire Patton Boggs

[Opinion]

House Republican Health Plan Could Disrupt Employer-Based Coverage
"The plan's supporters argue that by repealing health reform's 'Cadillac tax' and replacing it with a cap on the amount of employer premium contributions that can be excluded from workers' taxable income, the plan would be better for employer-sponsored insurance than health reform. In fact, both similarly discourage employers from offering costly, overly generous plans. Moreover, two other key features of the House Republican plan could prompt many employers that now offer health coverage to their workers to drop it."  Center on Budget and Policy Priorities

[Opinion]

First, Do No Digital Harm: Regulating Telemedicine
"Seeking to encourage faster uptake of telemedicine, many well-intentioned parties are prodding Congress to take actions which will likely have harmful unintended consequences.... Two of the most important areas of risk are federal interference in the practice of medicine and how Medicare pays for telemedicine."  National Center for Policy Analysis Health Policy Blog

Benefits in General

Form 5500 Proposal: Deadline for Comments is Monday, August 1 (PDF)
"The 2016 IRS changes could affect your business in 3 ways -- all of which will cost YOU money and time: [1] Your client list will become available to anyone [2] You'll likely need to retool your processes, workflow ... for Form 5500 for 2016 [3] You'll have to retool again when the DOL changes are unleashed upon us for 2019.... [P]lease submit a comment letter.... [A] sample comment letter [is provided] ... OMB takes comments very seriously -- especially well -- crafted and reasoned ones. Their primary concern is BURDEN -- so if your message focuses on burden and cost/benefit it will probably resonate with them."  Indiana Benefits

District Court Finds Forum Selection Clause Unenforceable in ERISA Action
"ERISA provides that an action 'may be brought in the district where the plan is administered, where the breach took place, or where a defendant resides or may be found.' ... [The court] determined that the word 'may,' as used in this context, could be read as either allowing a plaintiff to file suit in multiple districts or 'as providing a right to ERISA plaintiffs to file their action in the most suitable of these locations.' The court ... identified ERISA's public policy of providing plaintiffs 'ready access to the Federal courts' as a guide for determining the enforceability of the forum section clause.... [T]he court held that ... the most persuasive interpretation protects plaintiffs' option of bringing suit in a convenient forum and determined that the forum selection clause was unenforceable." [Harris v. BP Corp. North America Inc., No. 15-10299 (N.D. Ill. July 8, 2016)]  Proskauer's ERISA Practice Center

Employment Cost Index, June 2016
"The increase in the cost of benefits [for private industry workers] was 1.7 percent for the 12-month period ending in June 2016, and in June 2015 the increase was 1.4 percent.... Employer costs for health benefits increased 2.8 percent for the 12-month period ending in June 2016."  U.S. Bureau of Labor Statistics [BLS]

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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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