Health & Welfare Plans Newsletter

June 30, 2017

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[Guidance Overview]

Chicago Issues Final Paid Sick Leave Rules While Suburbs Continue to Opt Out of Cook County Sick Leave Ordinance
"Employers should also be aware of the growing list of municipalities in Cook County -- at last count, some 93 out of the 134 in Cook County -- that have affirmatively opted out of the County's sick leave ordinance, ostensibly due to the fact that the ordinance increases the cost of doing business within the County's boundaries. Like the Chicago Paid Sick Leave Ordinance, the Cook County Earned Sick Leave Ordinance takes effect on July 1."
Ogletree Deakins

[Advert.]

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Sponsored by International Foundation of Employee Benefit Plans [IFEBP]

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Radical Transparency in Healthcare Benefits
"[Janet McNichol, HR director at the American Speech-Language-Hearing Association (ASHA)] elected to use a deliberative group process to work with employees on the new design. She created -- and is piloting -- an interactive game where teams of 12 to 24 employees consider their individual needs and preferences, and weigh them against the wants and desires of the overall staff. Ultimately, as a group, the employees and HR team will decide together throughout the summer what should be included in ASHA's network-only health plan."
Human Resource Executive Online

Take Advantage of Health Insurer Cherry Picking
"Health insurers are increasingly focusing on two methods that allow them to cherry pick the most favorable employee populations from the small group market and provide them with large group benefits and risk-adjusted premiums. The first method [uses] Professional Employer Organizations (PEOs) ... The second method ... is less common and isn't permitted in some states (i.e. New York), but viable nonetheless. This approach uses self-funding to free a small employer from the community-rated market."
Frenkel Benefits

Wellness Buyer Beware: Too-Good-To-Be-True Plan Designs (PDF)
"Employers offering wellness programs with cash rewards should be wary of certain marketers recommending arrangements that allegedly provide significant tax advantages. The IRS's Office of Chief Counsel has repeatedly opined that these program designs fail to comply with applicable law. Employers that administer plans that are not aligned with relevant IRS guidance can be subject to hefty fines for neglecting to properly collect and pay employment taxes. Employers should understand whether a contemplated plan design is too good to be true."
EPIC

HRA Plan Primer: Facts About Qualified Expenses, Taxes and More
"If your employer offers an HRA plan, here are some important things to know about the accounts: HRA plan specifics can vary widely.... HRAs are not portable.... HRA plans may restrict which expenses are covered.... Most HRAs cannot reimburse for insurance premiums.... Once reimbursed by an HRA, expenses are no longer tax-deductible.... HRA reimbursements are not taxable under most plan designs."
DataPath

[Advert.]

Using Mobile, On-Site and Remote Medical Providers to Reduce Health Care Costs

Sponsored by Lorman and BenefitsLink

July 18 webinar. On-site medical clinics are one of the fastest growing trends in health care. Learn how to reduce legal risk and ensure compliance while giving employees the health care services they want. Discount for BenefitsLink readers.


Obamacare Premiums Will Be Officially 'Unaffordable' for Many in 2018
"eHealth's analysis shows that projected costs for 2018 health insurance plans would be officially unaffordable for 29% of individuals and 54% of families who bought their health insurance at eHealth during the 2017 open enrollment period. The ACA deems health insurance to be unaffordable if it costs more than 8.13% of a person's modified adjusted gross income (MAGI or household income) to pay for the lowest cost plan available."
eHealth

CBO Report: Longer-Term Effects of the Better Care Reconciliation Act of 2017 on Medicaid Spending
"In CBO's assessment, Medicaid spending under the Better Care Reconciliation Act of 2017 would be 26 percent lower in 2026 than it would be under the agency's extended baseline, and the gap would widen to about 35 percent in 2036 ... [O]verall Medicaid spending would grow 5.1 percent per year during the next two decades, in part because prices for medical services would increase. Under this legislation, such spending would increase at a rate of 1.9 percent per year through 2026 and about 3.5 percent per year in the decade after that."
Congressional Budget Office [CBO]

[Opinion]

N.J. Governor Must Veto Paid Family Leave Expansion
"Assembly Bill 4927 would alter the state's paid family leave laws that have been in effect since 2009. The current law allows employees to receive paid leave benefits to care for a child, parent, or spouse, mirroring the definition of 'family member' under FMLA, which has been applied uniformly and consistently to all 50 states. The proposed bill would add siblings, parents-in-law, grandparents, and grandchildren to the state's definition of a 'family member.' "
The ERISA Industry Committee [ERIC]

[Opinion]

The Republican Health Plan: Good, Bad, and Ugly
"In the longer term, the BCRA makes it far more likely that Obamacare's section 1332 'innovation waivers' can become effective tools for state-based experimentation and reforms to improve insurance coverage....The BCRA ends ACA restrictions that have inhibited waiver applications. It also streamlines the application process and creates a $2 billion fund to motivate states to apply for waivers."
City Journal

[Opinion]

There's Only One Grocery Store in Most Rural Areas, So Should We Expect Two Health Insurers?
"Republicans say a big reason the [ACA] needs to go is that it fosters weak competition and limited choice in insurance marketplaces. But their replacement bill could actually make the problem worse in the rural counties that are struggling the most."
Reed Abelson and Margot Sanger-Katz in the New York Times; subscription may be required

Benefits in General

Claim for Benefits Did Not Preclude Additional ERISA Fiduciary Breach Claim
"Plan administrators should heed this reminder that the timeframes in the claims procedure regulations are maximums, and the available extensions are not automatic entitlements. And from a litigation perspective, the court's conclusion that pursuing a claim for benefits does not necessarily preclude a simultaneous fiduciary breach claim is instructive." [Hancock v Aetna Life Ins. Co., No. 16-1697 (W.D. Wash. May 3, 2017)]
Thomson Reuters / EBIA

Retiree Health Costs Demand Financial Wellness
"The value of HSAs has become increasingly apparent as employers come to align them more closely with 401(k) plans, through efforts such as unified education, integrated dashboards, and similar investment menus. The result is that employees are starting to use HSAs for what they were initially designed: for long-term savings."
CFO

Separation Agreement Drafting Error Corrected by Michigan Appeals Court
"The agreement provided that the employee, who was then earning approximately $125 thousand per year, was to receive $80,805.97 per week for 34 weeks!.... The trial court found that a unilateral mistake had clearly occurred, supported by both the testimony of the company's director of human resources (who stated that she mistakenly inserted the total amount to be received over the 34-week payment period, or $80,805.97, as the weekly payment amount) and the reference to certain separation pay guidelines in the agreement ... [T]he Court did not ascribe much credence to the employee's affidavit, in which he stated his belief that severance pay in excess of $80 thousand per week was 'fair based on my 28 years of service.' " [El-Hayek v. Trico Products Corp., No. 331283 (Mich. App. June 27, 2017; unpub.)]
Jackson Lewis P.C.

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David Rhett Baker, J.D., Editor and Publisher  davebaker@benefitslink.com
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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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