Health & Welfare Plans Newsletter

November 29, 2016

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HHS Alert: Phishing Email Disguised as Official OCR Audit Communication
"[A] phishing email is being circulated on mock HHS Departmental letterhead under the signature of OCR's Director, Jocelyn Samuels. This email appears to be an official government communication, and targets employees of HIPAA covered entities and their business associates. The email prompts recipients to click a link regarding possible inclusion in the HIPAA Privacy, Security, and Breach Rules Audit Program. The link directs individuals to a non-governmental website marketing a firm's cybersecurity services. In no way is this firm associated with [HHS] or the Office for Civil Rights."
U.S. Department of Health and Human Services [HHS]

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Rising Drug Costs Lead to PBM Scrutiny
"Profits have risen as PBM consolidation has occurred. They have also become more aggressive with contracting as pharmaceutical companies have found new ways to increase their own profits. When new areas of spend develop, so too can a program from the PBM to manage that trend, but not all programs may actually save money for the employer."
The Alliance

Don't Close the Book on Open Enrollment Yet
"Enrollment is the beginning -- not the end -- of your 2017 benefits communication. Now is the time for reminders about what employees need to do next -- whether that's tips on using their benefits or how to access carrier tools. Make sure your employees know how to search online provider directories and drug formularies to get maximum value from their benefits."
Frenkel Benefits

Employers Create More Flexible, Less Traditional Workplaces
"[D]espite their focus on time off, many employees do not use all of the days available to them: 44% of participants report that their employees take less than 80% of their allotted PTO time. And for the growing number of employees who work remotely, time off may not truly be time away from work. Employers are rethinking time-off program design to take into account all of these dynamics and help employees to achieve a healthier work/life balance."
Mercer U.S. Health News

Health Savings Account Balances, Contributions, Distributions, and Other Vital Statistics, 2015 (PDF)
"Enrollment in high-deductible, HSA-eligible health plans is estimated to be between 20-22 million policyholders and their dependents. Over 4 in 5 HSAs (85 percent) have been opened since the beginning of 2011. As of the end of 2015, the average HSA balance was $1,844, up from $1,332 at the beginning of the year. Average account balances increased with the age of the owner of the account.... About 3 percent of HSAs had invested assets (beyond cash)."
Employee Benefit Research Institute [EBRI]

The Future of the ACA, Part 1: Assessing the New Normal
"Even before the new administration takes office, there is at least one thing that seems certain: there will be no going back to the status quo ante. While the law was the subject of withering criticism by candidate Trump and his proxies, their mantra was and remains 'repeal and replace.' At the end of the process, it is unlikely that we be back at March 23, 2010 (the date of the ACA's enactment). We will instead be somewhere else. What remains to be seen is the extent to which the replacement resembles the ACA."
Mintz Levin

Donald Trump Chooses Tom Price as HHS Secretary, Seema Verma to Head CMS
"President-elect Donald Trump has chosen top officials for health-care policy, picking House Budget Committee Chairman Tom Price (R. Ga.) as secretary of [HHS], the sprawling agency that will likely dismantle Democrats' 2010 health-care overhaul. Mr. Trump ... also named Seema Verma, a consultant who helped Vice president elect Mike Pence negotiate a groundbreaking Medicaid deal with the Obama administration, as the head of [CMS]."
The Wall Street Journal; subscription may be required

Testimony Shows Anthem and Cigna at Odds Over Proposed Merger
"Anthem and Cigna have quarreled for months behind the scenes even as their push to combine has moved forward, with each company accusing the other of violating their $48 billion agreement.... The newly unsealed testimony showed that, among other things, Cigna officials have questioned Anthem's plans for their company postmerger, while Anthem executives have tried to move forward unilaterally after Cigna ceased cooperating with them on various deal-related issues."
The Wall Street Journal; subscription may be required

Wisconsin Employment Relations Commission Clarifies Scope of Health Insurance Components
"On November 16, 2016, the [State of Wisconsin Employment Relations Commission] reaffirmed the Legislature's intention to broadly limit an employer's duty to bargain over proposals related to the provision of health insurance plans ... [The city of Monona] ... successfully argued that incentive payments to bargaining unit members who choose not to be covered by a health insurance plan operated by the City are prohibited subjects of bargaining under Wis. Stat. Section 111.70(4)(mc)6, as such incentive payments are 'costs and payments associated with health care coverage plans' and not 'employee premium contributions.' "
von Briesen & Roper, s.c.

[Opinion]

The Post-Election State of Our Health
"Repealing Obamacare is not as simple, however, as getting rid of the marketplaces and rolling back Medicaid eligibility to 2010 levels. A lot of Obamacare's changes are now entwined in the fabric of the provision of health insurance and may be harder to repeal. Think about policies providing free preventive care including contraception, allowing children up to age 26 to remain on their parents' health insurance plans, prohibiting annual and lifetime limits, capping yearly out-of-pocket costs, and prohibiting the denial of insurance due to pre-existing conditions."
National Health Law Program [NHeLP]

[Opinion]

A Bipartisan Approach to Amending the ACA
"[F]our principles for redesign and meaningful improvement of the ACA that should be supported by members of both parties[:] First, we must acknowledge that a successful individual marketplace relies, first and foremost, on a viable public-private partnership.... Second, it must be acknowledged that the current system of enrollment is unsustainable.... Third, too many young and healthy people are not participating.... Fourth, it is essential that policymakers understand that it is not just the individual health insurance market that needs repair, it is our entire health care sector."
Former U.S. Sen. Tom Daschle, via Morning Consult

Benefits in General

CBO Cost Estimate for S. 3470, the Miners Protection Act of 2016
"S. 3470 would authorize payments for health and pension benefits for certain retired or disabled coal miners and their eligible dependents.... CBO and the staff of the Joint Committee on Taxation (JCT) estimate that enacting the bill would reduce direct spending, on net, by $7 million and increase federal revenues by $67 million over the 2017-2026 period. Considering both the direct spending and revenue effects, we estimate that enacting S. 3470 would reduce budget deficits, on net, by $74 million over the 2017-2026 period."
Congressional Budget Office [CBO]

Efficient Compensation Design (PDF)
"The decline of the private pension system in the United States results from mismanagement of total compensation costs rather than from the benefit plans. Insufficient employer resources remain after Form W-2 direct compensation costs to fund pension and welfare benefits.... [H]ow to design an efficient compensation program [is] summarized [in this article]."
H.C. Foster & Company

[Opinion]

AICPA Urges Changes to Employee Benefit Reporting Proposal
"In two comment letters sent to the DOL, the AICPA expressed support for many of the proposed changes but said some of them would create inconsistencies and confusion about the reporting requirements.... [T]he AICPA is concerned that plan sponsors may: [1] Pass on the additional expenses to plan participants. [2] Attempt to save costs by preparing forms on their own or choosing providers who have little or no experience. [3] Discontinue plan sponsorship or reduce the level of benefits provided."
Journal of Accountancy

Executive Compensation and Nonqualified Plans

Nasdaq and NYSE Provide Clarity for Equity Plan Amendments Increasing Share Withholding
"Employers that wish to implement increased share withholding will need to address some practical considerations. First, because share withholding is effectively a cash settlement of a portion of an equity award (with the cash being remitted directly to the applicable taxing authorities), any increase in share withholding will impose a greater demand on the employer's cash resources.... Second, employers that want to implement increased share withholding will need to revise their payroll processes."
Pepper Hamilton LLP

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Centre for Fiduciary Excellence [CEFEX]

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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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