Health & Welfare Plans Newsletter

December 14, 2016

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[Official Guidance]

Text of CMS Interim Final Rule: Conditions for Third-Party Payment of Individual Health Plan Premiums by Medicare-Certified Dialysis Facilities
63 pages. "Dialysis facilities subject to the new standard will be required to make patients aware of potential coverage options and educate them about the benefits of each to improve transparency for consumers.... [F]acilities must ensure that issuers are informed of and have agreed to accept the payments.... [CMS is] considering whether it would be appropriate to prohibit third party premium payments for individual market coverage completely for people with alternative public coverage." [Fact Sheet also available.]
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

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[Official Guidance]

Text of CMS Fact Sheet: Pre-Enrollment Verification for Special Enrollment Periods (PDF)
"CMS will pilot pre-enrollment verification in all states and all counties served by the HealthCare.gov platform. All special enrollment period types will be subject to enhanced verification in some form ... In particular, applications based on loss of minimum essential coverage will be included in the pilot. The pilot will begin in June 2017[.]" [Unnumbered and undated document, published online Dec. 12, 2016.]
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

[Guidance Overview]

How Are Employee Benefits Affected by the 21st Century Cures Act?
"[W]hen a group health plan or insurer is found to have violated the mental health parity rules five times, the secretaries are directed to audit the plan's or insurer's documents the following year to 'help improve compliance' with the rules. By including such specific compliance measures directly within the act, Congress appears to be encouraging increased enforcement of the mental health parity rules in the coming months and years."
Ogletree Deakins

[Guidance Overview]

Mental Health Parity, Eating Disorders, HIPAA, and HRAs for Small Employers Addressed in 21st Century Cures Act
"The legislation [signed into law by President Obama on December 13] includes several provisions intended to simplify disclosure tools for information provided to participants, beneficiaries, and others regarding mental health parity compliance.... [A] plan or insurer that provides coverage for eating disorder benefits (including residential treatment) must provide these benefits consistent with the parity requirements for mental health and substance use disorder benefits ... The legislation instructs HHS to ensure availability of resources regarding appropriate uses and disclosures of PHI."
Practical Law Company

[Guidance Overview]

New Law Permits Individual Premium Reimbursement HRAs for Small Employers
"[The 21st Century Cures Act] offers small employers the opportunity to reevaluate this benefits approach. However, it does not give employers free rein to reimburse all manner of individual health insurance premiums. Numerous limitations appear in the law that did not apply prior to 2013[.]"
Hill, Chesson & Woody

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[Guidance Overview]

CMS Acts on Premium Payments by Dialysis Facilities, Special Enrollment Period Eligibility
"Comments [received by CMS] suggested that facilities are paid four times as much by commercial than by public payers, allowing them to make as much as $100,000 to $200,000 more per year per patient. But premiums for individual market coverage only cost $4,200 per year; thus, there is an incentive for the providers to steer their patients to commercial coverage and pay the full premium.... CMS has concluded that this practice can be harmful to consumers."
Timothy Jost, in Health Affairs

Narrow Provider Networks for Employer Plans
"[In] 2016, only 7 percent of employers with health plans offered a narrow network. Also, in 2014, employers ranked narrow networks the least effective among several strategies to manage health insurance costs.... More than one-third of employers with health plans that have 5,000 or more workers now offer some type of alternative network, including tiered or 'high-performance' networks.... Where narrow networks are offered, their adoption could be increased by giving workers stronger financial incentives to consider them."
Employee Benefit Research Institute [EBRI]

Non-Compliant COBRA Election Notices May Be Costly
"Earlier this year, an employer was sued in a class action ... for violating the notice provisions ... with respect to its COBRA election notice.... After failing to convince the court that the case should be dismissed, the employer agreed to establish a settlement fund for the affected employees and to correct the alleged deficiencies in its COBRA election notice. Since then, two similar lawsuits have been filed in Florida courts by employees who claim that the election notices provided by their respective employers were deficient and non-compliant with COBRA."
Benefits Bryan Cave

American Express Pushes Paid Parental Leave to 20 Weeks for Moms and Dads
"American Express, a global financial services firm, said that its parental leave policy covers employees who become parents by birth, adoption and surrogacy. In addition to the 20 weeks of paid parental leave, birthing mothers will be eligible to receive paid, medically necessary leave related to the birth of their child, generally six to eight additional weeks."
Society for Human Resource Management [SHRM]

Health Insurance Costs: 7.6 Percent of Total Compensation for Private Employers in September 2016
"In September 2016, health insurance for employees cost private industry employers $2.44 per hour worked, representing 7.6 percent of total compensation costs. For establishments with fewer than 50 employees, health insurance costs amounted to $1.59 per hour worked, or 6.0 percent of total employee compensation costs. Health insurance costs for establishments with 50-99 workers were $1.94 per hour worked, or 7.0 percent of total compensation costs."
U.S. Bureau of Labor Statistics [BLS]

The Costs and Benefits of Health Spending in 2015
"[H]ealth expenditure growth has increased relative to prior years, [and] the health care share of [GDP] hit a high of 17.8 percent in 2015. The annual estimates tell us a lot about growth in spending, sources of funding, and broad categories of use. They don't, however, tell us much about the level and allocation of benefits from additional spending. Another way to consider the growth in national health expenditures is to see who has benefited from it and how."
Health Affairs

New HHS Report Details Impact of the ACA
"[HHS has] released an extensive compilation of national and state-level data illustrating the substantial improvements in health care for all Americans in the last six years. The uninsured rate has fallen to the lowest level on record, and 20 million Americans have gained coverage thanks to the [ACA]. But beyond those people who would otherwise be uninsured, millions of Americans with employer, Medicaid, Medicare, or individual market coverage have benefited from new protections as a result of the law." [The compilation published by HHS seems to contain only state-level data, not national, contrary to the language in the press release. -- Ed.]
U.S. Department of Health and Human Services [HHS]

Benefits in General

2017 Reporting and Disclosure Calendar for Multiemployer Health and Retirement Plans
"[This chart] summarizes compliance requirements for multiemployer health and retirement plans.... [It includes] a list of requirements ... a brief description of each, as well as the plan(s) affected, filing requirements and due dates."
Segal Consulting

Executive Compensation and Nonqualified Plans

Portlandia: A Surcharge on CEO Pay Imposed by Local Jurisdiction
"[T]he city council in Portland, Ore., voted last week to impose a surtax on companies whose chief executives earn more than 100 times the median pay of their rank-and-file workers beginning next year.... As companies look to address the mechanics of the [Dodd-Frank] pay-ratio rules and prepare early disclosure models ... it's important to understand that the SEC has given companies broad leeway in calculating these ratios. If Portland or other jurisdictions decide they are going to impose a penalty based on ratios, we can expect that companies will take a hard look at the available alternatives and likely will become more aggressive with their method of calculation."
HRE Daily

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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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