Health & Welfare Plans Newsletter

August 12, 2016

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Webcasts and Conferences

Department of Labor 401(k) Audits - How Not to Get Selected and How to Survive if you Do
August 24, 2016 WEBCAST
Mullen & Henzell L.L.P.

Voluntary Fiduciary Correction Program
August 29, 2016 in NV
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

Voluntary Fiduciary Correction Program
August 30, 2016 in NV
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

Election 2016: What's at Stake for Group Health Plans?
August 30, 2016 in NC
Hill, Chesson & Woody

Learn How to Keep Wellness Thriving and Complying
September 8, 2016 WEBCAST
Bond, Schoeneck & King, PLLC

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[Official Guidance]

Text of IRS Instructions for 2016 Forms 1094-B and 1095-B (PDF)
9 pages, dated Aug. 10, 2016. "What's new ... Form 1095-B, Part I, lines 2 and 3, and Part IV, columns (b) and (c) were updated to reflect the rule that a taxpayer identification number (TIN) may be entered. Form 1095-B, line 9 is now reserved. The heading to Part II was revised to read 'Information about Certain Employer-Sponsored Coverage' to clarify that Part II will be blank for some individuals with employer-sponsored coverage."
Internal Revenue Service [IRS]

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[Official Guidance]

Text of IRS Instructions for 2016 Forms 1094-C and 1095-C (PDF)
20 pages, dated Aug. 1, 2016. "What's new ...In Part III, column (b), 'Section 4980H' was inserted before 'Full-Time Employee Count for ALE Member' to remind filers that the section 4980H definition of 'full-time employee' applies for purposes of this column, not any other definition that an ALE Member may use for other purposes.... Code 1I for Form 1095-C, line 14, and code 2I for Form 1095-C, line 16, are no longer applicable and have been reserved. New codes 1J and 1K have been added for Form 1095-C, line 14.... Several forms of transition relief were available to employers for 2015 under sections 4980H and 6056, but only limited transition relief continues to apply in 2016."
Internal Revenue Service [IRS]

[Guidance Overview]

Building on Premium Stabilization for the Future
"[CMS is] are exploring options to modify the ACA's permanent risk adjustment program to better adjust for the highest-cost enrollees and their actuarial risk, which would achieve some of the same risk-sharing benefits as the reinsurance program.... In future rulemaking, [CMS plans] to propose modifying the risk adjustment program to absorb some of the cost for claims above a certain threshold (e.g. $2 million), funded by a small payment from all issuers. This type of risk sharing would reduce uncertainty for issuers who are not yet able to reliably predict the prevalence and nature of high-cost cases in their Marketplace business, while also protecting access to robust coverage options for people with very high-cost conditions."
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

[Guidance Overview]

Exposure Draft for NAIC ERISA Handbook: Key United States Supreme Court Opinions on ERISA's Preemption Provisions (PDF)
22 pages. "The interplay between ERISA's preemption, saving and deemer clauses and the impact of these clauses on state regulatory authority has been the subject of a multitude of cases presented before the judiciary. The Supreme Court established tests to be used when evaluating whether a state law is preempted because it 'relates to' an employee benefit plan or because the state law 'deems' an employee benefit plan to be an insurer or to be engaged in the business of insurance. The Court also established tests to be used when evaluating if a state law is 'saved' because it regulates 'the business of insurance'."
ERISA (B) Working Group, National Association of Insurance Commissioners [NAIC]

[Guidance Overview]

Exposure Draft for Update to NAIC ERISA Handbook: Can States Prohibit the Use of Discretionary Clauses in Insurance Policies That Provide ERISA Benefits? (PDF)
"After the Supreme Court suggested in Firestone that ERISA plan administrators could avoid de novo judicial review if the plan documents grant them discretionary powers, many insurers responded by adding clauses to their policies that purported to give them discretionary authority to interpret the terms of the policy and to pay or deny claims. Many states, through regulatory action or legislation, refused to permit such clauses, and the NAIC has adopted the Prohibition on the Use of Discretionary Clauses Model Act, which prohibits the use of discretionary clauses in disability income and medical insurance policies."
ERISA (B) Working Group, National Association of Insurance Commissioners [NAIC]

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[Guidance Overview]

Exposure Draft for Update of NAIC ERISA Handbook: Multiple Employer Welfare Arrangements (PDF)
"[Most multiple employer welfare arrangements (MEWAs)] are not ERISA-covered plans since they are usually not established or maintained by an employer or employee organization. Significantly, states may regulate MEWAs whether or not they are employee welfare benefit plans or covered by ERISA."
ERISA (B) Working Group, National Association of Insurance Commissioners [NAIC]

[Guidance Overview]

Illinois Law Now Mandates Unpaid Child Bereavement Leave
"Illinois employers with at least 50 employees must provide employees who suffered the loss of a child with up to two weeks (10 work days) of unpaid leave under the new Child Bereavement Leave Act. The new law took effect immediately upon Governor Bruce Rauner's signature on July 29, 2016."
Jackson Lewis P.C.

More Small, Midsized Firms Choose Health Plan Self-Funding
"Between 2013 and 2015, the proportion of midsized companies with 100 to 499 employees that were self-insured increased 19 percent, to 30.1 percent ... The percentage of small firms with fewer than 100 employees that self-funded their health plans grew 7 percent, to 14.2 percent ... Meanwhile, self-funding by large companies declined slightly, to 80.4 percent."
Healthcare Finance News

More Companies Funding Professional Credentials for Employees
"Of the more than 2,200 CFOs the staffing firm polled in the largest U.S. metro areas this year, 38% said their companies fully covered costs employees incurred to maintain professional certifications, and another 38% said they paid part of the costs.... 76% of respondents said they paid all or part of the costs their employees incurred to receive professional certifications."
Journal of Accountancy

CMS Report Cites Flat Per-Enrollee Costs In ACA Marketplaces
"The fact that claims cost growth was essentially flat from 2014 to 2015 strongly suggests that the health of the risk pool is improving as enrollment grows. This hypothesis is supported by the fact that cost growth was lower in states that saw greater growth in individual market enrollment."
Timothy Jost, in Health Affairs

Why Marilyn Tavenner Is Worried About Obamacare This Fall
"[Marilyn Tavenner, head of America's Health Insurance Plans,] rattled off her wish list for the Obamacare exchanges, including the need to market to more young, healthy Americans. She also noted that two of the '3Rs' -- risk corridors and reinsurance, meant to help health plans through the first difficult stages of the ACA -- are scheduled to be phased out. That places more of a burden on the last 'R' -- the risk-adjustment program, which has been frustrating for insurers."
Politico

[Opinion]

An Obamacare Offer Small Businesses Can't, and Shouldn't, Refuse
"Whatever you may think about the health exchanges for individuals or the Medicaid expansions, they have unquestionably expanded coverage.... In the case of coverage for small businesses, the ACA's SHOP exchanges have fizzled. To be more precise, fewer than 1/3 of 1 percent of employees in businesses with 50 of fewer employees are insured through SHOP exchanges. And that is a pity, because the ACA SHOP eases the purchase of insurance for employers and broadens choice for their employees."
RealClearMarkets

Benefits in General

Insights for Optimizing Your Employee Benefit Programs (PDF)
12 pages. "Nearly two-thirds (65%) of surveyed finance executives said that employee benefits are critical to attracting and retaining employees, and 63% indicated employee satisfaction with benefits is important for their company's success.... [S]everal trends are challenging employers to think more holistically about their benefit offerings and the outcomes they wish to achieve through these offerings."
Prudential

Executive Compensation and Nonqualified Plans

Equity Compensation Trend: Extending the Time to Exercise Vested Stock Options
"Providing an extended period to exercise vested stock options is not a new idea. In the past, employers have considered this approach, typically on a case-by-case basis, if the employee was in good standing and unique circumstances were present upon termination or if the employee has some degree of leverage in negotiating his or her departure. What is new is the trending consideration to provide an extended post-termination exercise period to employee option holders generally."
DLA Piper

Press Releases

DOL Obtains Default Judgment Against Former Fiduciary of Sommet Group Employee Benefit Plan in Tennessee
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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