Health & Welfare Plans Newsletter

June 8, 2017

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Webcasts and Conferences

Contemporary SERP Design
June 21, 2017 WEBCAST
Executive Benefit Solutions

CEO Compensation Study
June 22, 2017 WEBCAST
Korn Ferry

Executive Compensation Tax Issues in M&A: Navigating IRS Rules for Stock Options, Deferred and Equity Comp, Golden Parachutes
July 6, 2017 WEBCAST
Strafford

Navigating DOL Investigations - Strategies from the Trenches in a Changing World
July 11, 2017 WEBCAST
ABA Joint Committee on Employee Benefits [JCEB]

ERISA Revenue Sharing Arrangements: Avoiding Plan Asset Status, Complying With Due Diligence Requirements
July 18, 2017 WEBCAST
Strafford

Managing the Generation Gap When Designing Benefit Programs
July 31, 2017 WEBCAST
Lorman Education Services

Advanced Investments Management
September 25, 2017 in PA
International Foundation of Employee Benefit Plans [IFEBP]

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[Guidance Overview]

Cook County, Illinois Publishes Final Rules for Sick Leave Ordinance
"On July 1, 2017, the Cook County Earned Sick Leave Ordinance goes into effect.... Employers with at least one covered employee and who have at least one place of business within Cook County are covered by the Ordinance ... The Ordinance covers employees who work within Cook County for at least 2 hours within any two-week period ... The Ordinance is not limited to full-time employees, but also covers part-time, temporary, seasonal, occasional, or long-term employees, and covered existing, new, and re-hired employees."
Littler

[Advert.]

Online Learning Course: Family and Medical Leave Act (FMLA)

Sponsored by International Foundation of Employee Benefit Plans [IFEBP]

This course identifies coverage and eligibility requirements of employees and responsibilities of employers, and describes how to avoid common administration mistakes, implement best practices and be aware of interactions with other laws.


Healthcare Reform Makes HSA Education Imperative
"401(k)s shifted retirement savings responsibility to the consumer, and Republicans hope to do the same for healthcare via HSAs. The shift from pensions to 401(k)s, however, was far from smooth sailing.... How do we avoid the same fate as we prepare for a widespread move to HSAs? Education will be critical from the outset. It is our industry's fiduciary and moral responsibility to educate consumers on the cost of healthcare, and how HSAs can lessen their burden."
Manning & Napier

Telemedicine Missteps: Don't Overlook HSA Eligibility and Other Compliance Concerns
"Employers who adopt a telemedicine program alongside a high-deductible health plan (HDHP) need to be sure they do not inadvertently disqualify their covered employees from HSA eligibility.... Employers offering access to a telemedicine program to all employees regardless of group health plan enrollment could inadvertently create a separate ERISA group health plan."
Society for Human Resource Management [SHRM]

The Advantages of Employer-Sponsored Debit Cards
"As consumer-driven healthcare continues to grow, so does the need for employees to have convenient access to funds to pay for their medical expenses. Employer-sponsored debit cards offer a safe, secure solution that provides tremendous value to TPAs, employers, and employees[.]"
DataPath

Health Insurance Coverage: Early Release of Estimates from the National Health Interview Survey, 2013 (PDF)
11 pages. "The percentage of adults aged 18-64 with employment-based coverage enrolled in a high-deductible health plan (HDHP) increased, from 26.3% in 2011 to 39.3% in 2016.... In 2016, among privately insured adults aged 18-64 with employment-based coverage, the percentage of those in families having problems paying medical bills was significantly higher for those with an HDHP (15.4%) than those with a traditional plan (9.0%)."
National Center for Health Statistics, Centers for Disease Control and Prevention, U.S. Department of Health and Human Services [HHS]

[Advert.]

2017 Health Savings Accounts Facts

Sponsored by The National Underwriter Company

Turn to the new 2017 Health Savings Accounts Facts to obtain vital HSA questions and answers right at your fingertips. Use code BENLINK for 10% discount.


Growth in Use of CDHPs Slows
"Among the large employers, 61% offered [CDHPs] -- a small incremental gain from 59% in 2015, following a big increase from 48% a year earlier. The prevalence actually dipped last year among the 852 participating employers with 500 or fewer workers, to 25%, from 28% in 2015. On the other hand, among the nation's largest organizations the plans are becoming almost universal, with 80% of those with at least 20,000 employees offering a CDHP in 2016, up from 73% the previous year."
CFO

Senate Sets Timeline to Take up Repeal and Replace Legislation on ACA
"Senate Republican Leader Mitch McConnell (R-KY) ... would like the chamber to vote on a bill before the July 4th recess and use the rest of July to reconcile the House and Senate versions, leading to a final vote before the August recess.... [T]he Senate parliamentarian is still in the process of reviewing the House-passed bill to make sure it does not violate Senate rules. Therefore, the legislative vehicle has still not officially been delivered to the Senate from the House. A ruling is expected this week."
Foley & Lardner LLP

Can Congress Get to 'Yes' on Replacing the ACA?
"[T]he ACA and AHCA are 'apples and oranges' in their approaches to reforming the healthcare system.... [To] achieve the GOP's publicly stated policy objectives, and faced with the constraints imposed by the budget reconciliation rules ... Senate Republicans will be forced to address essentially the same questions as their colleagues in the House -- and their solutions likely will differ from those of the House mostly in degree."
Mintz Levin

Reinventing Claims Payment for a Value-Based World
"Despite billions invested in achieving efficient claims payment, more than 7 percent of claims are not paid correctly the first time, the second time, and sometimes even the third time. The remediation process costs health plans more than $43 billion annually.... Payment automation processes have not kept pace with the plurality of payment models, contractual agreements, and provider networks."
Morning Consult

Auto Demos Provided to Employees for Personal Use Are Taxable Fringe Benefits
"Personal use of a demo by an employee is considered a fringe benefit and is taxable as compensation.... If an employee does not qualify for the full exclusion method, the amount of the personal use benefit should be added to an employee's Form W-2.... In addition to the federal tax treatment of this benefit, you also need to consider the state tax treatment, since it varies by state."
Schneider Downs

[Opinion]

Confronting the Trade-Offs in Health Reform: What We Learned from the ACA
"Regardless of the form of financing or benefits, health care coverage is expensive because health care is expensive. Ultimately, the key to affordable coverage for all remains cost containment.... The AHCA has no provisions that address the high cost of health care; instead; it converts Medicaid into a block grant to limit federal obligations, leaving the states holding the cost containment bag for Medicaid. Similarly, the AHCA allows states to request waivers from many of the ACA's benefit provisions but does not help states containing costs other than by reducing coverage. The challenge of 'bending the cost curve' remains."
Clifford Marks, Janet Weiner, and Daniel Polsky, in Health Affairs

[Opinion]

ERIC Testimony to ERISA Advisory Council on Mandated Disclosures for Employment-Based Health Benefit Plans in the Private Sector
"[It] would be in the best interests of both plan sponsors and plan beneficiaries for DOL to do a comprehensive review of all DOL's exclusive as well as multi‐agency beneficiary disclosure requirements ... and ask a number of questions, including ... [1] Is this information specifically required by statute to be furnished? Would this information be useful to most beneficiaries? ... [2] Is this the only requirement that asks for this information, or is the same information required to be furnished multiple times, in multiple ways, every year? ... [3] Can this information be combined with other information elsewhere, or be eliminated due to repetition or lack of practical use to plan beneficiaries? [4] Does this information serve to inform of the obvious, or to restate a legal requirement that is already posted on a government website? "
The ERISA Industry Committee [ERIC]

Benefits in General

[Guidance Overview]

AICPA Proposal Would Require Auditors to Perform More Tests and Provide More Information in Reports on ERISA Plans (PDF)
"[T]his requirement could result in the auditor reporting information that the plan sponsor has no obligation to report in the financial statements or the annual Form 5500 the plan files with the DOL. Because the auditor's report is attached to the Form 5500, plan participants and regulators would have access to it. As a result, regulators could learn about plan errors before the plan administrator has a chance to correct them ... This requirement could result in more work for the auditor, the plan sponsor and the plan's ERISA counsel ... If this requirement is included in any final standard, plan sponsors may want to consider performing internal compliance reviews to prepare for their annual financial statement audits."
EY

Benefits Enrollment Communication Errors to Avoid
"Underestimating the value of a strong visual identity, including a benefit program name ... Using long emails with multiple attachments to share benefit information ... Communicating with employees only before, during and immediately after the open enrollment window ... Sending enrollment packets that include contract-like carrier materials and legal notices ... Relying on a single communication channel to convey benefit information."
Willis Towers Watson

Executive Compensation
and Nonqualified Plans

CEO Pay Disclosure: Preparing for Compliance or Hoping for a Delay?
"The final Pay Ratio Disclosure rule requires public companies in the U.S. to disclose the ratio of CEO pay to median employee pay with their 2018 proxy statements, with reporting based on fiscal year 2017 pay.... As companies consider their approach to pay ratio calculations, it's time to think through an overall strategy.... Employees generally question their pay appropriateness, so it's important for you to be prepared if they react strongly to the pay ratio and the median employee pay figure used to calculate it."
Willis Towers Watson

Discussions on
the BenefitsLink Message Boards

95% Safe Harbor: How Does It Apply to This Large Employer?
"Large group (4,000+) has been avoiding ACA penalties and will become unaffordable under 9.5% rule at renewal. MEC offered; coverage offered to 95% of employees/ dependents; minimum value offered. I know the employer can measure 9.5% unaffordability against three separate safe harbor amounts (the worker's Form W-2 wages, the worker's hourly rate of pay as of the first day of the coverage period, or the federal poverty line for a single individual). Question: Is the 9.5% measurement amount based upon each separate individual, or is there a '95% safe harbor' that is applied to the unaffordability piece?"
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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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