Health & Welfare Plans Newsletter

March 13, 2017

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[Guidance Overview]

Start Now to Prepare to Use the New SBC Template, Due to Additional Work Required and Approaching Deadline
"Plan sponsors that have an annual open enrollment period must use the new SBC template beginning on the first day of the first open enrollment period that begins on or after April 1, 2017. For plans without open enrollment, the new template must be used for the plan year beginning on or after April 1, 2017. The new SBC template includes significant changes from the old template. The SBC must include an addendum with a nondiscrimination notice and 15 language-assistance taglines."
Segal Consulting

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[Guidance Overview]

21st Century Cures Act Overrules IRS Guidance on HRAs, Enhances Enforcement of Mental Health Parity Act
"[The 21st Century Cures Act (CCA) authorizes] employers that don't qualify as applicable large employers, i.e., employers with less than 50 full-time employees and full-time equivalents, to maintain certain reimbursement arrangements without incurring the $100 per day per employee penalty for failing to comply with the ACA.... The CCA directs the Departments of [HHS], Labor, and Treasury to issue a compliance guidance document with the goal of improving compliance with the MHPAEA.... Within six months after the enactment of the CCA, the Secretary of [HHS] must convene a public meeting that includes the Departments of Health and Human Services, Treasury, Labor and Justice, as well as representatives from the States, to develop an action plan for MHPAEA compliance."
Thompson Coburn

[Guidance Overview]

IRS Takes Aim at Latest Wellness Program Scheme, But Overly Broad Language Can Be Taken Too Far as Applied to Traditional Coverage (PDF)
"Whereas most health indemnity policies are fully insured, ... benefits under the self-funded health indemnity plan lacked economic substance in that payments could be made for merely completing a health risk assessment or calling a health coach. The IRS issued a Chief Counsel Memorandum (CCM) on this arrangement in early 2016, and in a recent follow-up CCM, the IRS exposed the fatal defects under the self-insured program. As discussed herein, however, some overly broad statements in the most recent CCM appear to be contrary to established law with regard to more traditional fully insured health indemnity plans."
Employers Council on Flexible Compensation [ECFC]

Are You Prepared for a HIPAA Audit?
"In some cases, the covered entity selected for audit may have only ten days and one opportunity to provide the OCR with documentation of compliance policies, procedures, and day-to-day practices. Therefore, it is in covered entities' best interests to prepare for a successful audit in advance.... [S]elf-funded plan sponsors [can] prepare now by taking the time to shore up their PHI privacy and security practices as well as compile the documentation necessary to demonstrate their compliance efforts. [This article includes] a checklist to help you get started[.]"
Marsh Consulting Group

Employers Should Beware of the COBRA Bite
"[R]ecent lawsuits for COBRA administrative failures have resulted in court-approved settlements of up to $1 million. Periodic self-audits and consistent documentation efforts will help your company avoid costly COBRA mistakes. The foundation for successful COBRA administration lies in the proper distribution of the Initial COBRA notice, or 'General Notice', which informs health plan participants of their COBRA rights and responsibilities."
Marsh Consulting Group

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Administration Details Three-Pronged Approach to Repeal and Replace Obamacare (PDF)
"[1] Repeal and replace disastrous Obamacare ... [2] Provide essential regulatory relief ... [3] Reform healthcare through additional legislation."
The White House

Oregon's Options to Overhaul Health Care Financing: Health Care Reform 2.0?
"[1] The state could cover all residents under a Single Payer option with little change in overall health care costs, but doing so would require cuts to provider payment rates that could worsen access to care, and implementation hurdles may be insurmountable. [2] A state-managed plan (the Health Care Ingenuity Plan) featuring competition among private plans would also achieve universal coverage and would sever the employer-health insurance link, but the provider payment rates would likely be set too high, so health care costs would increase. [3] Adding a state-run option to the [ACA] Marketplace (the Public Option) would be the easiest of the three options to implement, but because it would not affect many people, it would be an incremental improvement to the Status Quo."
RAND Corporation

The Sad State of Parental Leave
"[O]ver the past 11 years, the number of organizations offering at least some replacement pay for women on maternity leave has increased from 46 percent to 58 percent. But ... among employers offering any replacement pay, the percentage offering full pay has continued to decline, from 17 percent in 2005 to 10 percent in 2016. In fact, of all employers with 50 or more employees, only 6 percent offer full pay. In addition, daily flexibility, the kind needed for emergencies, has gone down actually, from 87 percent in 2012 to 81 percent in 2016[.]"
HRE Daily

[Opinion]

Myths vs. Facts on Pharmacy Benefit Management Arguments Against Bipartisan Legislation to Control Drug Costs
"[On] March 6, 2017, the trade group for PBMs unleashed an array of misleading and false statements to protest H.R. 1316, The Prescription Drug Price Transparency Act introduced by Reps. Doug Collins (R-Ga.) and Dave Loebsack (D-Iowa). Here is an examination and rebuttal to their critique."
National Community Pharmacists Association [NCPA]

[Opinion]

U.S. Chamber of Commerce Comment Letter to HHS Regarding the Proposed Rule on Market Stabilization
"[E]ven if these important steps and proposed changes are finalized and implemented, additional relief and financial assistance is necessary. The need to provide additional funding to businesses selling coverage in the individual and small group market is paramount to offset the unbalanced risk pools which include many very sick individuals in need of very expensive services and treatments."
U.S. Chamber of Commerce

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Lois Baker, J.D., President  loisbaker@benefitslink.com
David Rhett Baker, J.D., Editor and Publisher  davebaker@benefitslink.com
Holly Horton, Business Manager  hollyhorton@benefitslink.com

BenefitsLink Health & Welfare Plans Newsletter, ISSN no. 1536-9595. Copyright 2017 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 those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.

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