Health & Welfare Plans Newsletter

August 16, 2016

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How to Form an Effective Retirement Plan Committee
August 24, 2016 WEBCAST
Pension Consultants, Inc.

The Affordable Care Act and Mental Health Parity and Addiction Equity Act
September 14, 2016 WEBCAST
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

New Parental Leave Laws in Washington D.C.
October 11, 2016 WEBCAST
Lorman Education Services

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[Guidance Overview]

IRS Releases Draft of 2016 Instructions for ACA Reporting
"[The draft clarifies] that the full-time employee count in Part III, column (b) should be based on the Section 4980H definition of full-time employee either under the monthly measurement method or the look-back measurement method, and no other definition of the term full-time employee may be used ... [and emphasizes] that there is a difference in the definition of limited non-assessment period for purposes of reporting whether the employer offered coverage to at least 95% of its full-time employees on Form 1094-C and the Line 16 Code(2D) on Form 1095-C."
ADP

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[Guidance Overview]

New IRS Guidance on Collection of TINs for ACA Information Reporting
"For 2016, the proposed regulations provide that for individuals already enrolled in coverage July 29, 2016 is used as the initial solicitation date, as long as the TIN was requested as part of the application for health coverage or at any time before July 29, 2016, and the second request is required by October 12, 2016."
Poyner Spruill LLP

[Guidance Overview]

Group Health Plan Sponsors Should Review Gender Transition Benefits
"While each set of rules clearly prohibits 'categorical exclusions' based on gender identity or transgender status, it might be permissible to exclude coverage for a service that applies broadly to all participants but may impact transgender employees and those undergoing a gender transition, as long as the exclusion has a legitimate, nondiscriminatory basis."
Willis Towers Watson

Taking the EDGE Off: Minimize Stress While Maximizing ACA Risk Adjustment Through EDGE Server Best Practices
"[R]isk scores are all too commonly understated by 10 percentage points or more. Considering each 0.01 change in risk score for a modestly sized health plan can affect revenue by as much as $2 to $3 per member per month (PMPM), such large understatements in risk score can easily be a $2 million to $3 million hit to the bottom line of an issuer with just 10,000 lives.... In this paper, [the authors] outline action steps health plans should consider as part of their annual EDGE server submission cycle.... [S]traightforward steps can go a long way toward maximizing risk adjustment results."
Milliman

Telehealth Parity Laws: Lack of Uniformity Creates Obstacles for Expected Cost Savings
"[T]elehealth implementation varies from state to state in terms of what services providers will be reimbursed for delivering, as well as what sort of 'parity' ... is expected between in-person health services reimbursements and telehealth reimbursements. This variation affects providers' ability to implement telehealth options ... Consequently, telehealth faces significant obstacles in becoming an accepted and used health care option for individuals, and states and the nation as a whole cannot fully realize the cost savings of telehealth."
Health Affairs

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Why Cashing Out PTO Next Year Doesn't Work
"One of the newer 'variations' ... gives employees that have already accrued a certain amount of PTO the right to make an irrevocable election in calendar year 1 to receive a cash-out of a portion of their already accrued PTO as of the beginning of calendar year 2.... [T]he fact that they cannot receive the cash-out this year will prevent the money from being taxed this year, but it will not keep the amount subject to the election from being taxable in year 2. Therefore, all employees who are given the election will have additional taxable income in year 2 even though they do not elect to cash out anything."
Chang Ruthenberg & Long PC

Key Evidence Needed to Prove the Intoxication Exclusion
"[M]any insurance policies and ERISA-governed plans exclude from coverage disabilities 'resulting from, or related to ... any accident related to the voluntary influence of any drug, narcotic, intoxicant or chemical' ... To investigate the exclusion, the insurer should obtain a blood test and a list of physical symptoms expected at a certain blood alcohol level ... 'The Court concludes that Defendant failed to conduct a sufficient investigation that would allow the administrator to reasonably find a causal link between Plaintiff's alcohol consumption and his fall.' " [Prelutsky v. Greater Georgia Life Insurance Co., No. 15-628 (N.D. Ga. Aug. 8, 2016)]
Lane Powell PC

Private Health Exchanges: Coming to Your Employer?
"Although the number of employers adopting private exchanges jumped 35 percent in the 2016 plan year (on top of a 100 percent jump in 2015) only 3 percent of all U.S. employers use an exchange. Employers may be slow to jump on the bandwagon because they don't know about this new structure, or they may not be convinced it will lower costs."
CBS MoneyWatch

Golden Years for Retiree Health Benefits
"With an increase in doctors scorning Medicare, an explosion in prescription drug costs, the ACA closing of the Part D 'donut hole', the emergence of a new trend in retiree products, (i.e. EGWP, Medicare Advantage, RRAs) and the advent of healthcare exchanges offering affordable protection to young retirees, a new shift is firmly underway. Even the most paternalistic employers are reexamining their retiree product portfolios and the overall justification for staying in the retiree market."
Frenkel Benefits

Federal District Judge Denies Preliminary Injunction in ACA Premium Stabilization Program Case
"Judge Ebinger did not resolve the question of which party was most likely to prevail in the lawsuit ... Rather, in rejecting the motion for a preliminary injunction, she relied heavily on the lack of irreparable injury. She noted that the liquidators were merely seeking money from the federal government and that they had an adequate remedy in a lawsuit in the federal Court of Claims for what they were owed." [Gerhart v. HHS, No. 16-151 (S.D. Ia. Aug. 12, 2016)]
Health Affairs

Aetna Cuts ACA Exchange Participation to 4 States in 2017
"Aetna Inc. will withdraw from 11 of the 15 states where it currently offers plans through the [ACA] exchanges ... Aetna will reduce the number of counties where it sells exchange plans next year to 242 from 778 ... Aetna has been a major player in ACA business, with about 1.1 million individual enrollees, roughly 838,000 of whom purchased their coverage on the exchanges.... Aetna's move comes after UnitedHealth Group Inc. and Humana Inc. already unveiled major reductions in their ACA-plan offerings, and as more nonprofit cooperative insurers have said they will fold."
The Wall Street Journal; subscription may be required

Strategies to Stabilize the ACA Marketplaces: Lessons from Medicare
16 pages. "In implementing and managing the Medicare Advantage and Part D programs, policymakers have used a range of approaches intended to guarantee the markets' viability and long-term success. These include policies and strategies to encourage participation by insurance companies, keep premiums stable, and enhance enrollment. In this paper, the authors consider whether any of these policies or strategies could also be used to help stabilize the ACA marketplaces, and if so, what the pros and cons of doing so would be."
Robert Wood Johnson Foundation

[Opinion]

Is Medical Mutual of Ohio Losing or Winning?
"Limiting network choice and limiting where to do business is bound to reduce the unhealthy risk while also eliminating providers who are unwilling to lower their reimbursement rates. Instead of Medical Mutual rolling out 45% increases to members they will send them cancellation notices.... Obamacare supporters will point to the rate reductions as a product of the law working. Never mind the fact that it is only 'working' by limiting the providers of care that are essential to the health of those Obamacare was supposed to protect the most."
InsureBlog

[Opinion]

Tri-Agency Proposed Regs Change Excepted Benefit Conditions for Hospital Indemnity, Fixed Indemnity, and Specified Disease Insurance (PDF)
"[T]he proposed new federal regulatory restrictions add new 'conditions' for several types of 'excepted benefits' coverage that are not expressly included in the statutory language that was adopted in HIPAA and that remained unchanged by the ACA.... [T]he proposals in the NPRM exceed the text of the statutory standards and as a result exceed the authority of these Departments."
Council for Affordable Health Coverage [CAHC]

Benefits in General

[Official Guidance]

Text of IRS Disaster Relief Notice 2016-20: Tax Relief for Victims of Severe Storms, Flooding in Louisiana
"[C]ertain deadlines falling on or after August 11, 2016, and before January 17, 2017, are granted additional time to file through January 17, 2017.... This includes individual returns on extension to October 17 ... [and] the 2015 corporate and partnership returns on extension through September 15 ... Individuals who reside or have a business in the parishes of East Baton Rouge, Livingston, St. Helena, and Tangipahoa may qualify for tax relief.... This relief also includes the filing of Form 5500 series returns[.]"
Internal Revenue Service [IRS]

Retirees Need $130,000 Just to Cover Health Care
"The average single 65-year-old woman can expect to need $135,000 to spend on health care in retirement, while a man will spend $125,000 ... (The difference is because the woman is expected to live longer -- an additional 22 years, vs. 20 years more for the man.) ... For a while, it looked as if health care costs were holding steady, but Fidelity this year says couples need to set aside a record $260,000 for Medicare premiums and all other out-of-pocket medical costs -- up 6 percent from last year and 18 percent from 2014."
Bloomberg

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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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