Health & Welfare Plans Newsletter

April 24, 2017

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Lockton Insurance Brokers - Pacific Series
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Voluntary Fiduciary Correction Program Workshop
May 17, 2017 WEBCAST
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

Capital Forum on Pensions 2017
May 24, 2017 in CA
Western Pension & Benefits Conference - Sacramento Chapter

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[Guidance Overview]

Final Market Stabilization Rules: How Stable Is Stable?
"The Final Rule ... [1] [allows] insurers to deny enrollment to any consumer who has outstanding debt for coverage under any of its products (or that of its affiliates) during the previous twelve-month period.... [2] shortens the open enrollment period for 2017 to 45 days ... [3] imposes additional restrictions on special enrollment periods ... [4] increases the allowable [actuarial value] de minimis variations effective for 2018 to -4 to +5 percent for bronze plans and -4 to +2 percentage points for all other plan levels ... [5] shifts the [network adequacy] authority to state regulators and, where a state does not have such a function under applicable state law, the insurer's accreditation body to establish network adequacy rules and monitor compliance with those rules."
Sheppard Mullin

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[Guidance Overview]

Government Contractor Paid Leave Accrual: Does It Apply to Your Employees? If So, What Does It Require?
"While it remains to be seen whether the Trump Administration will withdraw or modify the Executive Order and its implementing regulations, it has been in effect now for more than three months.... [This article examines] what contracts/subcontracts are not covered. For those that are covered, [the authors] look at which employees are subject to the accrual and use requirement, and what are the parameters of accrual and use of leave."
Fisher Phillips

[Guidance Overview]

District of Columbia Enacts the Universal Paid Leave Act
"After making it through the congressional review period, the Universal Paid Leave Act of 2015 became effective on April 7, 2017. The Act provides covered employees with 8 weeks of paid parental leave, 6 weeks of paid family leave, and 2 weeks of paid personal medical leave. The paid leave will be funded by a 0.62% increase in DC employer payroll taxes."
Littler

Sixth Circuit: Cat's Paw Theory Applies to FMLA Retaliation Claims
"[A] divided Sixth Circuit found the court below erred in granting summary judgment against the FMLA and ADA retaliation claims of an employee demoted and then fired after taking time off for mental health issues. Fact issues existed as to whether her supervisors influenced an intermediate decisionmaker's demotion decision and as to whether the supervisors influenced the intermediate decisionmaker, who then influenced the company owner's decision to fire the employee." [Marshall v. The Rawlings Co. LLC, No. 16-5614 (6th Cir. Apr. 20, 2017)]
Wolters Kluwer

Measuring Temporal Proximity from Last (Not First) Day of Leave Revives FMLA Retaliation Claim
"An employee who was given extended medical leave when he was unable to return without medical restrictions at the expiration of his 12-week FMLA leave and then fired upon his return -- after management discovered he had posted Facebook photos of himself on the beach and at a theme park while he was out -- revived his FMLA retaliation claim. Reversing summary judgment, the Eleventh Circuit announced that the temporal proximity analysis begins on the last day of the employee's leave, and that the one-month period here suggested a retaliatory motive." [Jones v. Gulf Coast Health Care of Delaware, LLC, No. 16-11142 (11th Cir. Apr. 19, 2017)]
Wolters Kluwer

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IRS Spotlights Employer Shared Responsibility Payments
"The fact sheet [1] describes which payment applies when employers fail to offer minimum essential coverage and how the payment is calculated.... [2] describes the second type of payment, which applies when an employer fails to offer affordable minimum essential coverage that provides minimum value.... [3] defines the meaning of the term 'offer of coverage' and describes how the assessment and collection of the employer shared responsibility payment will be handled by the IRS."
Wolters Kluwer Law & Business

Employer Mandate Provisions Implemented But Need Improvement, TIGTA Finds
"TIGTA made seven recommendations ... to improve the processing of Forms 1094-C and 1095-C, which included ensuring that paper Forms 1094-C and 1095-C are timely transferred to the ACA Information Returns system for Processing Year 2017. IRS officials agreed with six of the seven recommendations but did not agree that it should establish a time frame for employers to correct errors identified on Forms 1094-C and 1095-C."
Wolters Kluwer

Health Care in America: An Employment Bonanza and a Runaway-Cost Crisis
"Neither the ACA nor the latest Republican attempt at an overhaul tackle what some industry experts and economists see as a serious underlying reason for high health care costs: a system bloated by redundancy, inefficiency and a growing number of jobs far removed from patient care. Labor accounts for more than half of the $3.4 trillion spent on U.S. health care, and medical professionals from health aides to nurse practitioners are in high demand. But the sheer complexity of the system also has spawned jobs for legions of data-entry clerks, revenue-cycle analysts and medical billing coders who must decipher arcane rules to mine money from human ills."
Kaiser Health News

Steps Toward a More Sustainable Individual Health Insurance Market (PDF)
"Continued uncertainty could lead to additional insurers exiting the market, leaving consumers with fewer insurance choices -- or none at all. Improving the market would entail policymakers funding cost-sharing reduction (CSR) reimbursements, enforcing the individual mandate, directing external funding to offset premiums, and avoiding destabilizing action."
American Academy of Actuaries

Insurer Financial Performance in the Early Years of the ACA
"The individual market is where just 7% of the U.S. population gets their insurance (and thus also represents a small share of most health insurers' business), but the stability of the market and willingness of insurers to continue to participate is essential to the ACA's success.... This [article] looks at trends in insurer financial performance in the individual market over the past few years, finding that the market is showing signs of stabilizing."
Henry J. Kaiser Family Foundation

Insurer Financial Indicators Show Signs of Stabilizing After Transition to ACA Marketplaces
"[I]ndividual market insurer financial performance worsened in 2014 and 2015, with the transition to the marketplaces and adjustment to other changes under the health law. It is unlikely insurers can be profitable when medical loss ratios exceed 85-90 percent; in 2015, the average individual market medical loss ratio grew to 103 percent. Average gross margins per member per month fell from $37.20 in 2013 to $6.54 in 2014, and dropped further to -$10.17 in 2015."
Henry J. Kaiser Family Foundation

Affordable Care Act: A Tale of Two Red States
"Only one health insurer in Oklahoma is left selling coverage through the federal marketplace, and the hospital in [one] city of 36,000 is not in the network. Premiums are among the highest in the country, and while most marketplace customers qualify for the [ACA's] income-based subsidies that lower the cost, many ... middle-class clients do not.... In neighboring New Mexico ... [m]arketplace customers can still choose among four insurers, and the state has one of the lowest average premium costs.... But now both states are worried that political maneuvering at the federal level may deeply destabilize the marketplaces."
The New York Times; subscription may be required

[Opinion]

Chamber Letter Encourages Congressional Action on Health Care Legislation
"The reimposition of the health insurance tax is already increasing premiums for individuals, small business and seniors. Individuals, families, and employers will bear 60% of the burden of the tax ... The lack of certainty regarding cost-sharing reduction (CSR) payments is threatening to destabilize the marketplace at the very moment that insurers are trying to price plans for 2018.... The 'Cadillac Tax' ... is already affecting the decisions and offerings of employers ... [as] businesses are now evaluating ways to reduce their health care coverage offerings for their employees."
U.S. Chamber of Commerce

[Opinion]

Trump's Dealmaking Model Doesn't Fit Health Care Policy
"The partisan divide in health policy is grounded in deeply felt differences on both sides over policy and principle. It's hard to see Trump's approach to deal making working very often in health. This was why Trump couldn't force a deal with the Freedom Caucus to pass the American Health Care Act in the House; the bill was not conservative enough for the caucus, and in their eyes, it violated their principles and political promises they had made. It is also why using Obamacare's marketplace cost sharing subsidies as a bargaining chip to try to force the Democrats to the table is unlikely to work."
Drew Altman, Kaiser Family Foundation, via Axios

[Opinion]

Health Insurance: Is It Time to Reset?
"[T]he fundamentals of the private insurance market are changing. Notwithstanding the political noise about what constitutes accessible, affordable coverage, two trends stand out: [1] The core market, employers, is shrinking. [2] ... consumers are disenchanted with health insurance.... Provider-sponsored health insurance plans that are part of regional, fully integrated systems of health are likely the future for private insurance."
Paul Keckley

Benefits in General

[Official Guidance]

Text of IRS Notice 2017-28: Public Comment Invited on Recommendations for 2017-2018 Priority Guidance Plan (PDF)
"The Treasury Department's Office of Tax Policy and the [IRS] use the Priority Guidance Plan each year to identify and prioritize the tax issues that should be addressed through regulations, revenue rulings, revenue procedures, notices, and other published administrative guidance. The 2017-2018 Priority Guidance Plan will identify guidance projects that the Treasury Department and the Service intend to work on as priorities during the period from July 1, 2017, through June 30, 2018.... Please submit recommendations by June 1, 2017, for possible inclusion on the original 2017-2018 Priority Guidance Plan."
Internal Revenue Service [IRS]

Electronic Distribution Rules for Benefit Plan Notices (PDF)
"The government does not have one set of electronic delivery rules for all required benefit plan notices.... For some notices, it is fairly easy to meet the electronic delivery requirements. For others, it is easier to just send paper copies. This [article] will recap various required notices. It details the general delivery requirements and spells out electronic delivery rules."
Marsh & McLennan Agency LLC

Why Would Congress Bail Out Miners' Pensions?
"If legislators don't act by the end of April, miners will lose their health-care benefits. They may soon lose their retirement benefits, too.... The miners argue that Congress has an obligation to step in because of a deal signed between the federal government and the United Mine Workers in 1946 to end a nationwide strike.... But Congress is in a tight spot. If it bails out the miners, why stop there? Why not bail out all of the other pension funds, private and public, that are on the brink of insolvency?"
The Atlantic

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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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