Health & Welfare Plans Newsletter

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Pension Plan Annuity Purchases: The Time is Now!
November 3, 2016 WEBCAST
University Conference Services

How to Impact Employee Health
December 1, 2016 WEBCAST
New England Employee Benefits Council

Phased Retirement Programs: Exploring the Issues
December 5, 2016 WEBCAST
Lorman Education Services

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[Guidance Overview]

2016 Welfare Plan Disclosure Checklist
6 pages. Designed for use during open enrollment as well as during the plan year.
Bass, Berry & Sims


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[Guidance Overview]

ACA Section 1557 Notice Requirements: What Are 'Significant Publications and Significant Communications'? (PDF)
"There is no definitive list or list of examples of documents that would be considered 'significant publications and significant communications'.... The scope of included documents is broad.... OCR intends the scope ... to include not only documents intended for the public ... but also written notices requiring a response from an individual and written notices to an individual, such as those pertaining to rights or benefits.... OCR intended that documents that constitute 'vital documents' under HHS Limited English Proficiency (LEP) guidance are a subset of 'significant communications and significant publications' for Section 1557[.]"
United Actuarial Services, Inc.

[Guidance Overview]

IRS Releases Final 2016 ACA Reporting Forms and Instructions
"There is no good faith compliance relief in the instructions for 2016, and there may be penalties for failing to comply with the requirements. The IRS removed forms of transition relief that no longer apply and identified the months to which remaining transition relief applies. The filings for 2016 are due to employees by January 31, 2017, and to the IRS by March 31, 2017."
Willis Towers Watson

[Guidance Overview]

A New Primer on Voting Leave Requirements: Are You Ready for the Elections?
"[V]oter participation in [this year's] elections may be higher than expected. If so, employers may receive more requests for voting leave than they have in prior years. [This] overview of state voting leave laws will arm employers with a basic knowledge of voting leave rights and prepare them for a potential onslaught of leave requests[.]"
Ogletree Deakins

[Guidance Overview]

Illinois Employees Hit the Sick Leave Trifecta: Important Changes to Take Effect in 2017
"Three recently enacted laws expanding sick leave benefits within the state of Illinois will soon impact employers with operations in Illinois: the Illinois Employee Sick Leave Act (effective in January of 2017); the Chicago Paid Sick Leave Ordinance (effective in July of 2017); and the Cook County Earned Paid Sick Leave Ordinance (effective in July of 2017).... [B]ecause the language in the Chicago and Cook County ordinances are ambiguous as to whether policies that provide for the accrual of paid time off and parallel paid sick leave requirements under the ordinances (like paid vacation policies) will pass muster, Chicago and Cook County employers may want to convert their vacation policies to PTO policies that are consistent with the applicable ordinance or ordinance." [Includes a chart comparing specific provisions of the three laws.]
Ogletree Deakins

Courts' FMLA Decisions Make 2016 the 'Year of the Employer'
"To prove retaliation, plaintiffs typically point to being terminated shortly after they return from FMLA leave. That may not work anymore though, as courts this year said that close timing between the leave and termination isn't enough alone. Instead, employees need to show that retaliation happened soon after employers knew of the need for FMLA -- a tougher standard."
Society for Human Resource Management [SHRM]

Outdated HIPAA Agreement Costs Business Associate Big Bucks
"An out-of-date business associate agreement and its potential [HIPAA] violations came with a $400,000 price tag for business associate Care New England Health System.... The business associate agreement, which was updated as a result of the OCR investigation in August 2015, failed to include revisions required under the January 2013 HIPAA Omnibus final rule."
Bloomberg BNA

Enrollment in Consumer-Directed Health Plans Jumps 22 Percent Despite Increase in Plan Costs
"26.4 percent of all U.S. employees are now enrolled in CDHP plans, an increase of 21.7 percent from last year and nearly 70 percent from five years ago. Conversely, CDHP plan costs have risen 2 percent from last year ... So while they are still 3.5 percent less costly than the average plan, they offered more savings in 2015 when they were 5.6 percent less than the average plan."
United Benefit Advisors

eHealth Health Insurance Price Index Report for the 2016 Open Enrollment Period (PDF)
23 pages. "[This report] is an in-depth analysis of the cost of individual and family health insurance plans selected by unsubsidized eHealth shoppers during the [ACA]'s nationwide open enrollment period for 2016 coverage. The open enrollment period began on November 1, 2015 and ended January 31, 2016.... The intent of this report is to present a nationwide snapshot of consumer behavior in the individual health insurance market by looking at the cost of health plans actually selected by consumers shopping outside government marketplaces through eHealth.... It does not offer a comprehensive view of costs for all plans available outside government-run marketplaces or through government marketplaces or through private marketplaces other than eHealth."

Benefits in General

[Guidance Overview]

ERISA Violations Cost More Now
"The new method will adjust penalties for inflation, though the amount of the increase is capped at 150 percent of the existing penalty amount. The baseline is the last increase other than for inflation. [A] chart shows the new civil penalty amounts assessable by EBSA after August 1, 2016 for post-November 2, 2015 ERISA violations."
Solutions Law Press

Fifth Circuit Rule on Availability of Equitable Relief May Be In Doubt
"In the past the Fifth Circuit was of the opinion that the assertion of a 502(a)(1)(B) claim (claim for benefits) foreclosed the use of Section 502(a)(3) (equitable relief).... Based on its interpretation of Amara, the district court held that a plaintiff can alternatively plead a Section 502(a)(1)(B) claim and a Section 502(a)(3) claim, 'at least where there is a possibility that equitable relief may be necessary to make the plaintiff whole.' " [Currier v. Entergy Corp. Employee Benefits Comm., No. 16-2793 (E.D. La. Oct. 14, 2016)]
Harmon on Health Plan Law

Xerox Asked to Disclose What It Pays ERISA Lawyers
"After being ordered to recalculate workers' benefits in January, Xerox objected to the workers' request for attorneys' fees based on hourly rates between $250 and $675, arguing that an hourly rate of more than $300 would be unreasonable. On Oct. 19, Judge David G. Larimer of the U.S. District Court for the Western District of New York ordered Xerox to disclose the billing rates charged by its own attorneys, which Larimer said would provide the 'best evidence' for determining whether the workers' requested fees were reasonable[.]" [Frommert v. Conkright, No. 00-6311 (W.D.N.Y. Oct. 19, 2016]
Bloomberg BNA

Executive Compensation and Nonqualified Plans

[Guidance Overview]

SEC Staff Provides Guidance on CEO Pay Ratio Disclosure Rule (PDF)
"Although the rule provides companies with considerable latitude regarding how to identify the median employee, compliance is burdensome, particularly for large or multinational companies. The new [Compliance & Disclosure Interpretations (C&DI)] resolve a number of important questions and provide some clarity to companies as they prepare for compliance with the rule. Nevertheless, the scope of the C&DIs is limited and a significant number of open questions remain."
Sidley Austin LLP

[Guidance Overview]

Ten Challenging Areas of NQDC Plan Administration (PDF)
"[1] Payments to former employees -- overuse of the 25% optional federal tax withholding rate ... [2] Lost year-end bonus deferral elections ... [3] NQDC plans and [FICA] tax issues ... [4] Last payroll period vs. First payroll period ... [5] 401(k) hardship withdrawal suspensions ... [6] Requested employee deferrals not timely deducted from the participant's wages can be accelerated distribution violations under 409A ... [7] Evergreen enrollment elections -- new and improved -- proceed with caution ... [8] The beneficiary's payout elections ... [9] Non-qualified employee indicative data and indicative data changes ... [10] The 6-month delay for the specified employee group."
Russell Morgan NQDCSolutions, LLC

IRS Restricts Salary Deferrals for NQDC Plans
"IRS had indicated that its new rules would not respect salary deferral elections, as no rational employee would subject to a risk of forfeiture an amount he could elect to receive currently. The proposed regulations also backtrack on this threat, which would have limited contributions made by employers to 457(f) plans."

Press Releases

Josh Cohen is EBRI's New Research Committee Chair
EBRI [Employee Benefit Research Institute]

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BenefitsLink Health & Welfare Plans Newsletter, ISSN no. 1536-9595. Copyright 2016, 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, 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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