Health & Welfare Plans Newsletter

September 21, 2016

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[Guidance Overview]

Paid Sick Leave Comes to Morristown NJ
"Morristown's ordinance will require private employers with ten or more employees to provide 40 hours of paid sick leave during a calendar year. Employers with nine or fewer employees will only need to provide at least 24 hours of paid sick leave during a calendar year. However, if an employer operates in the areas of childcare, home healthcare, or food service, it must provide up to 40 hours of paid sick time per calendar year regardless of the number of employees employed."
Fisher Phillips

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EEOC Loses Again in Wellness Litigation
"On the question of whether ADA safe harbor immunity applies to medical exams under a wellness program, the EEOC may take some consolation in this court's unwillingness to adopt the holdings of the Seff and Flambeau decisions ... However, the EEOC suffered another litigation defeat regarding its central challenge to this employer's wellness program financial incentives. Addressing the voluntariness of this arrangement, the court had little difficulty concluding that even a strong wellness incentive (100% of monthly premiums in this case) is not enough to render the program involuntary under the ADA." [EEOC v. Orion Energy Systems, Inc., No. 14-1019 (E.D. Wis. Sept. 19, 2016)]
Practical Law Company

Maintaining an ERISA Exemption for HSAs
"Generally, the [DOL] does not view HSAs as benefit plans subject to ERISA. However, the ERISA exemption is dependent on the employer playing a limited role in the HSA program. Employers should be aware of the following restrictions to avoid compromising the ERISA-exempt status of their HSA arrangements: [1] Allow voluntary participation.... [2] Avoid endorsement of a single HSA provider.... [3] Refuse employer compensation.... [4] Maintain employee control of funds."
Marsh Consulting Group

ACA Information Reporting: Be Sure Your Big Data Analyses Won't Lead to Big Penalties
"[I]ssues that employers should consider when getting ready for 2017 ACA information reporting: [1] Understand the big data environment.... [K]now where the data resides, how to extract it, and confirm that it is consistent with unique employee identifiers (e.g. SSN).... [2] Ensure proper worker classifications.... [3] Monitor changes in the applicable guidance.... [4] Ensure accurate names and Social Security Numbers.... [5] Record retention.... [6] Corporate transactions.... [7] Fiduciary responsibility and governance.... [8] Establish an ACA information reporting team."
Epstein Becker & Green, P.C.

Five Guidelines for Open Enrollment Communications
"[1] Develop a plan and start early.... [2] Consider what has worked/not worked in the past.... [3] Do not underestimate the value of professional writing and design.... [4] Focus on the open enrollment process only.... [5] Take advantage of new technology for the 'wow' factor."
Willis Towers Watson

Reducing Low-Value Health Care
"[T]here was a profound lack of consensus on how to incorporate clinical nuance, patient preferences and priorities, and cost-benefit tradeoffs into provider and consumer-facing initiatives to reduce low-value care. One employee benefits executive commenting on competing risks stated, 'I think this starts to tread into some really difficult ... ethical territory.... If it's benefit's decision to say somebody in this situation doesn't get access to the service, I don't think we would ever do that.' However, a clinical professional from oncology was in favor of using competing risks in decision making and commented 'A treatment that might be considered as appropriate treatment for [one] patient ... might be considered to be a very poor choice for a patient who's got significant competing risk.' "
Health Affairs

Student Loan Help Could Be Coming From Your Employer Soon
"The growth of the sector and [the entry of Social Finance (SoFi), a loan refinancing firm,] into the market is just the latest sign that student loan debt is becoming a nearly universal American experience. Firms are increasingly using offers of student loan help ... as a way to compete for top talent. SoFi officials say roughly 600 companies have signed on to use the [Sofi at Work platform], including seven of the top 10 tech firms in the Fortune 500."
MarketWatch

New AMA Analyses Support Blocking the Anthem-Cigna and Aetna-Humana Mergers
"Left unopposed, Anthem's acquisition of Cigna and Aetna's takeover of Humana would collectively quash competition in insurance markets across 24 states ... The prospect of reducing five national health insurance carriers to just three should be viewed in the context of the unprecedented lack of competition that already exists in most health insurance markets.... A significant absence of health insurer competition was found in 71 percent of the metropolitan areas studied.... In 40 percent of the metropolitan areas studied, a single health insurer had at least a 50-percent share of the commercial health insurance market. Fourteen states had a single health insurer with at least a 50-percent share of the commercial health insurance market[.]"
American Medical Association [AMA]

House Energy and Commerce Committee Letter to HHS on Risk Corridors Program
"During the joint hearing, U.S. Rep. Morgan Griffith asked Mr. Slavitt if CMS takes the position that insurance plans are entitled to be made whole on risk corridors payments, even if there is no congressional appropriation to do so. Mr. Slavitt responded under oath: 'Yes, it is an obligation of the federal government.' ... Since Congress acted twice to protect taxpayer dollars by prohibiting the use of federal funds to make up for any shortfall in risk corridors payments, the Committee is concerned about the Administration's intent to use any federal funds to settle the suits brought by the insurance companies."
Energy and Commerce Committee, U.S. House of Representatives

Benefits in General

[Official Guidance]

DOL Announces Two-Month Extension for Public Comments on Proposed Form 5500 Revisions
"The [DOL], IRS and PBGC decided to extend the public comment period on the proposed forms revisions and regulatory amendments from the original Oct. 4, 2016 deadline to the new Dec. 5, 2016 deadline. The result will be a total of almost five months for interested persons to prepare and submit comments. This step is intended to facilitate robust and thoughtful public input on the proposals while respecting the need to keep the rulemaking aspects of the project moving forward and on pace with procurement and system development objectives to recompete the contract acquisition plan."
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

Text of Ninth Circuit Denial of Rehearing of Benefit Claim Decision Shifting Burden of Proof to Plan Sponsor (PDF)
Excerpt, from the dissenting judges: "A party may petition for rehearing en banc when 'the panel decision conflicts with a decision of the United States Supreme Court or of the court to which the petition is addressed ... and consideration by the full court is therefore necessary to secure and maintain uniformity of the court's decisions.' ... In this case, the majority ignores United States Supreme Court precedent and our own [ERISA] precedent ... In Metropolitan Life Insurance Co. v. Glenn, the Supreme Court applied Firestone's deferential standard, even where the plan administrator had a conflict of interest arising from her dual role of both evaluating and paying benefits claims.... The Court refused to create special burden-of-proof rules, or other special procedural or evidentiary rules, as an exception to Firestone deference." [Estate of Barton v. ADT Security Serv. Pension Plan, No. 13-56379 (9th Cir. rehearing en banc denied Sept. 20, 2016)]
U.S. Court of Appeals for the Ninth Circuit

Press Releases

DOL Seeks Independent Fiduciary for Terminated Homestead Physicians P.A. 401(k) Plan in Florida
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

DOL Sues Bridgeport Health Care Center Inc., Executive for Diverting Nursing Home Retirement Plan Assets Improperly
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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