Health & Welfare Plans Newsletter

June 23, 2017

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Executive Director
State-Wide Schools Cooperative Health Plan
in NY

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Webcasts and Conferences

Individual and Small Group Markets: An Actuarial Perspective on the Proposed Market Changes
RECORDED
Society of Actuaries

The Individual Market at a Crossroads: Health Insurance in 2017 and Beyond
RECORDED
Alliance for Health Reform

Capitol Hill Briefing — Multiemployer Pension Plans: Potential Paths Forward
June 27, 2017 in DC
American Academy of Actuaries

2017 Federal Group Health Plan Mental Health Rules Update
June 27, 2017 WEBCAST
Solutions Law Press, Inc.

Qualified Separate Line of Business (QSLOB)
July 6, 2017 WEBCAST
FIS Relius Education

Basics of Traditional IRAs - Establishing / Contributions
July 11, 2017 WEBCAST
Collin W. Fritz & Associates, Ltd.

Basics of Traditional IRAs - Distributions
July 11, 2017 WEBCAST
Collin W. Fritz & Associates, Ltd.

Church Plans After Advocate Health Care Network: Future Implications for Religiously-Affiliated Employers
July 12, 2017 WEBCAST
American Law Institute Continuing Legal Education Group [ALI CLE]

ERISA Breach of Fiduciary Duty Class Actions: Avoiding and Defending Claims Against Companies and Fiduciaries
July 25, 2017 WEBCAST
Strafford

401(k) Fiduciary Rules: What’s New and What’s Next?
July 26, 2017 WEBCAST
Thomson Reuters / EBIA

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Discussions

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New Comments and Topics

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[Guidance Overview]

A Close Look at New York's New Paid Family Leave Law
"Which employers are covered? ... Which employees are eligible for PFL? ... What can PFL be used for? ... How are payroll deductions calculated? ... Are employees required to provide notice before taking PFL?.... Can PFL benefits be coordinated with other leave laws? ... Can PFL benefits be coordinated with an employers' existing policies? ... Does PFL leave require the employer to hold the employee's job? ... What should employers in NY do now? ... What must employers do once the NYPFL Law takes effect?"
Davis Wright Tremaine LLP

[Advert.]

Online Learning Course: COBRA

Sponsored by International Foundation of Employee Benefit Plans [IFEBP]

Even with ACA coverage easier for individuals to obtain, group health plans must continue to offer COBRA coverage. This course explains technicalities of COBRA, including who is entitled and how to administer. Code BL2017 for 15% discount, through July 31.


[Guidance Overview]

Chicago and Cook County Paid Sick Leave Ordinances Revised (PDF)
"Chicago's draft rules provide that if an employer's benefit year begins after an employee's start date, the employer shall allow the employee to carry over all of the accrued paid sick leave, up to 20 hours, to the benefit year. Cook County's rules provide two possible ways to move an employee to a different accrual period than based on an anniversary.... Employers in both jurisdictions who already provide time off for employees may not have to provide separate PSL in certain circumstances."
Ford & Harrison LLP

Fourth Circuit Finds City, Not Staffing Agency, to Be Employer for FMLA Purposes
"The court commented that the employee's allegations showed that the city exercised significant control over her employment and, as such, that it could be her primary employer.... The court also noted that, even if the city were found to be the employee's secondary employer, it could still be liable for FMLA violations." [Quintana v. City of Alexandria, No. 16-1630 (4th Cir., June 6, 2017)]
The Wagner Law Group

There's No Crying at Work! But If an Employee Does Cry, Is That Sufficient Notice of the Need for FMLA Leave?j
"Noting that that the FMLA notice requirement for employees is 'not demanding,' the court found that the employee herself may not even be aware she is suffering from a serious health condition.... The 'notice' here is not just the crying.... If all she did was cry, as strange as that might have been, it would have difficult for Noemi to establish that she put the employer on notice of the need for FMLA leave. However, she didn't stop there. She also made clear that she was 'confused and overwhelmed, had not slept or eaten in weeks, and was losing weight.' " [Valdivia v. Township High School Dist. 214, No. 16-10333 (N.D. Ill. May 15, 2017)]
FMLA Insights

ERISA Plan Choice-of-Law Provisions: Disability Claim Reviewed Under Abuse of Discretion Standard of Review
"The Court rejected Plaintiff's argument that de novo review should apply because Indiana law disfavors discretionary review.... Courts are not consistent on what effect choice-of-law provisions have on the standard of review. Many courts have determined, for example, that state law prohibitions of discretionary clauses fall within ERISA's savings clause and are not preempted by ERISA." [Kalnajs v. The Lilly Extended Disability Plan, No. 16-62 (W.D. Wis. June 14, 2017)]
Lane Powell PC

[Advert.]

Save $200 – use promo code BLINK2 (not valid for webcast)

Sponsored by World Congress

Innovations in Wellness and Population Health Management. Convening health plan executives to discuss implementation and sustainability of wellness programs while examining ways to engage consumers, incorporate incentives, and address issues of privacy


Exclusive Agreement Between Hospital and Insurance Plan Does Not Violate Sherman Act
"Judge Posner, writing for a unanimous panel, held that the procompetitive benefits of the exclusive deal arguably outweighed the anticompetitive effects, finding the vertical exclusivity agreement to be economically efficient. An insurance company or plan can get better rates from a hospital in exchange for exclusive contracts, benefiting the plan and its customers. The court took considerable comfort in the short duration of the agreement as well." [Methodist Health Serv. Corp. v. OSF Healthcare System d/b/a Saint Francis Medical Center, No. 16-3791 (7th Cir. June 9, 2017)]
Sheppard Mullin

Senate Republicans Release Bill to 'Repeal and Replace' ACA
"The Senate bill would effectively eliminate the employer mandate on a retroactive basis, effective January 1, 2016, by reducing to zero the penalties for failing to offer such health coverage. The Senate draft bill, like its House counterpart, includes provisions to promote the use of health savings accounts."
Littler

Comparing Major ACA Provisions to the House and Senate Replacement Proposals
"The Senate absolutely did not 'start over' but simply made a few tweaks to the Obamacare Lite bill passed by the House.... If you didn't think the House bill went far enough to repeal Obamacare, you will really hate the Senate bill because, on the whole, it backtracks a few steps toward Obamacare." [Includes a detailed chart comparing provisions of the ACA, the House bill, and the Senate bill.]
Benefit Revolution

[Opinion]

Senate Republicans Offer Bill to Preserve and Expand Obamacare
"The Senate bill would preserve ObamaCare's community-rating price controls.... The Senate bill, like ObamaCare, would simply throw taxpayer dollars at unaffordable care, rather than make health care more affordable.... [T]he Senate bill would forbid the 19 states that haven't implemented ObamaCare's Medicaid expansion from doing so.... The bill would also repeal the Medicaid expansion in 2024.... the forthcoming CBO score will make it look like the Senate bill increases the uninsured more than it actually does.... [T]he bill does almost nothing to address the fundamental flaws and instability in ObamaCare's architecture."
Cato Institute

[Opinion]

Senate Health Care Bill Will Reduce Costs for Employers and Employees
"Most importantly, the Senate's health care bill lays out a path to fully repeal the 40 percent 'Cadillac' excise tax on employer-sponsored health insurance. The 'Cadillac' tax ... forces employers to scale back benefits and increasingly shift rising health care costs to employees. Full and final repeal of the Cadillac tax is essential to ensuring a healthy future for the employer-sponsored health insurance system."
The ERISA Industry Committee [ERIC]

[Opinion]

The Senate Healthcare Bill: Implications for Employers
"We are wary of changes that could induce states to opt out of major parts of the ACA ... The bill continues CSR payments through 2019.... [Z]eroing out the individual mandate penalty and not including a continuous coverage requirement ... may further destabilize the individual market.... Repeal of Medicaid expansion along with funding cuts still signals potential cost shifting to private payors.... HSA expansion in 2018.... Excise Tax delayed; many other ACA taxes repealed."
Mercer

Benefits in General

[Official Guidance]

IRS Reopening Preparer Tax Identification Number (PTIN) System, Waiving Charges
"On June 1, 2017, the United States District Court for the District of Columbia upheld the [IRS]'s authority to require the use of a Preparer Tax Identification Number (PTIN), but enjoined the IRS from charging a user fee for the issuance and renewal of PTINs. As a result of this order, PTIN registration and renewal was suspended on June 2. The IRS, working with the Department of Justice, is still considering how to proceed, but will make PTINs available while deciding how to address the court order. The IRS is resuming the issuance of PTINs, without charge, on June 21, 2017."
Internal Revenue Service [IRS]

Ninth Circuit: ERISA Does Not Preempt California Law Voiding Discretionary Clauses
"The court's conclusion that the law reaches discretionary clauses in plan documents -- not just insurance contracts -- might seem problematic for self-insured plans. But because this case involved an insured plan, the court did not discuss the 'deemer' clause of ERISA's preemption provision, under which an ERISA plan cannot be deemed to be an insurer for purposes of state insurance laws. Accordingly, the law's applicability to self-insured plans remains an open issue." [Orzechowski v. The Boeing Co. Non-Union Long-Term Disability Plan, No. 14-55919 (9th Cir. May 11, 2017)]
Thomson Reuters / EBIA

Let's Make an 'I-Deal'? When Employees Want Special Benefit Arrangements
"Employees often try to negotiate with their employers arrangements that take into account their individual needs -- such as asking for more-flexible work hours, a reduced workload, more pay or special training. These arrangements ... are sometimes in the interest of both the employee and employer, especially if such deals make employees more motivated and committed to their jobs.... [Co-workers] are more likely to understand when a company grants nonfinancial benefits because of an employee's personal needs ... Justifying financial rewards, however, is more difficult[.]"
Society for Human Resource Management [SHRM]

Executive Compensation
and Nonqualified Plans

[Official Guidance]

Text of IRS Chief Counsel Memorandum: Application of Section 409A to Back-to-Back Arrangement (PDF)
10 pages. "Treas. Reg. Section 1.409A-3(i)(6) provides that the amount of the payment under the ultimate service recipient plan may not exceed the amount of the payment under the intermediate service recipient plan. Therefore, the USR Plan fails to meet the requirements of section 409A because the USR Plan provision providing for a payment to Taxpayer in the event of a Participant's separation from service before vesting is an impermissible payment event." [CCM 201725027, Mar. 6, 2017, published online June 23, 2017.]
Internal Revenue Service [IRS]

Proposed Changes to Section 409A Regs: Greater Clarity and Better Planning Alternatives (PDF)
"Since its inception, the IRS has issued significant guidance under Section 409A, including close to 400 pages of final regulations and a number of other notices. However, the law in this area continues to evolve, and the most recent proposed regulations provided under Section 409A are intended to clarify and modify certain issues that posed problems for employers."
McDermott Will & Emery, via The Practical Tax Lawyer

Discussions on
the BenefitsLink Message Boards

Form 5500 Needed for Association-Sponsored Health Plan?
"Any reason a health plan offered through a non-profit (non-governmental, non-religious) association would not be considered a Plan Sponsor and therefore be required to file an annual Form 5500? The association in question is unhappy about paying a $4,000 DFVC penalty and would rather do nothing. Yes, the potential consequences have been explained."
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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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