Health & Welfare Plans Newsletter

August 3, 2017

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Senior Pension Administrator
Primark Benefits
in CA

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Transamerica
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Webcasts and Conferences

Employee Benefits and ERISA Year-End Review
RECORDED
Ohio State Bar Association

Benefit Plan Best Practices: Error Correction & EPCRS
August 22, 2017 in TN
KraftCPAs PLLC

Health Plan Eligibility and Enrollment Issues
August 24, 2017 WEBCAST
Cowden Associates, Inc.

Creative Approaches for Handling ADA and FMLA Issues in the Workplace: Actions You May Not Know You Can Take
September 12, 2017 in NY
Littler Mendelson

ABCs of ESOPs
September 14, 2017 WEBCAST
Menke Group

Fundamentals Series 04: Coverage test (Ratio Percentage Only) [2017]
October 3, 2017 WEBCAST
FIS Relius Education

Fundamentals Series 05: Elective Deferrals [2017]
October 5, 2017 WEBCAST
FIS Relius Education

63rd Annual Employee Benefits Conference
October 22, 2017 in NV
International Foundation of Employee Benefit Plans [IFEBP]

ADA & FMLA Compliance Update
April 12, 2018 in CA
National Employment Law Institute

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Discussions

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New Comments and Topics

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[Official Guidance]

Medicare Projects Decrease in Drug Premiums for 2018
"[CMS has] announced that the average basic premium for a Medicare Part D prescription drug plan in 2018 is projected to decline to an estimated $33.50 per month. This represents a decrease of approximately $1.20 below the actual average premium of $34.70 in 2017.... The decline in the average premium comes despite the fact that spending for the Part D program continues to increase faster than spending for other parts of Medicare, largely driven by spending on high-cost specialty drugs."
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

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Ninth Circuit Opinion: SPD Alone Can Constitute Plan Document (PDF)
"[N]either the Trust Agreement nor the SPD meets ERISA's requirements for constituting a plan. But by clear design reflected in provisions of both documents, the two documents together constitute a plan. Accordingly, we conclude that the ERISA plan is the Trust Agreement plus the SPD." [Mull v. Motion Picture Industry Health Plan, No. 15-56246 (9th Cir. Aug. 1, 2017)]
U.S. Court of Appeals for the Ninth Circuit

Ninth Circuit: An SPD and Trust Agreement Together a Plan Make
"Although it is not uncommon, especially in the self-funded health plan context, for a single document to function as both an SPD and plan document, this case illustrates some of the pitfalls of that approach. The SPD in this case (though purporting, by its terms, to serve as both the SPD and plan document) fell short in satisfying ERISA's requirements for a plan document. Only by coupling the SPD with the plan's trust agreement was the Ninth Circuit able to conclude that an ERISA plan existed." [Mull v. Motion Picture Ind. Health Plan, No. 15-56246 (9th Cir. Aug. 1, 2017)]
Thomson Reuters Practical Law

FMLA: Not Just a Large Employer Concern
"[A] smaller employer's failure to accurately communicate [FMLA] rights could lead to unintended coverage for the employee.... While not all federal appellate courts have weighed in on the application of equitable estoppel in FMLA cases, the doctrine is being argued at the district court level in every circuit. Employers should be aware of the potential for such claims and take steps to avoid them. [Some] examples illustrate scenarios where eligibility for FMLA leave may be misrepresented."
von Briesen & Roper, s.c.

The 5 A's of Access for Employer-Sponsored Healthcare
"Acceptability is the critical element of access and drives many of the disparities in healthcare and health outcomes we experience in the US today. Yet this dimension of the access conversation rarely gets attention."
Mercer

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Loss of COBRA Subsidies: A Marketplace Conundrum
"Healthcare.gov currently provides in a couple of different spots that loss of an employer-provided COBRA subsidy does entitle an individual to a [special enrollment period (SEP)].... [No] change has occurred to the underlying regulations, nor has there been any formal communication from any of the agencies that are responsible for administering the ACA acknowledging or explaining this change.... [R]epresentatives at [HHS] ... indicated confusion over the change on the website and stated that their enrollment system is still not set up to provide a SEP to an individual in such circumstances."
Jackson Lewis P.C.

Obamacare Death Spiral? Off-Exchange Enrollment Down 29 Percent
"As of March 2017, the individual insurance market totaled 17.6 people. That is down from 20.2 million one year prior. This is a decrease of 2.6 million people, a 13 percent drop in the size of the overall individual-health-insurance market. 12.2 million bought their health insurance on the state- and federally run Obamacare exchanges. 5.4 million people bought their insurance off of the Obamacare exchanges."
National Review

2018 Projected Health Insurance Exchange Coverage Map, Updated Aug. 2, 2017
"[CMS] has posted an update to the to the Health Insurance Exchanges Issuer County Map. This map is of projected issuer participation on the Health Insurance Exchanges in 2018 based on the known issuer public announcements through August 2, 2017. Participation is expected to fluctuate and does not represent actual Exchange application submissions."
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

What Happens If the Administration Stops Cost-Sharing Reduction Payments to Insurers?
"Some insurers might well decide that the government is an unreliable partner and give up on the exchanges for 2018.... The individual market makes up a small part of the business of large insurers; even though it has become more profitable in the recent past, some insurers might conclude that the premium increases that would be needed to make up for the loss of the CSRs would drive healthy enrollees out of the individual market. Rather than deal with a deteriorating risk pool, they might leave the individual market entirely[.]"
Timothy Jost, in Health Affairs

The Future of Healthcare Reform: Republican Efforts Stall in the Senate (PDF)
"Senate Republicans are now essentially out of options in the near-term, and shortly after the defeat of the bill Majority Leader McConnell conceded on the Senate floor that they would not be able to repeal the ACA. However, ... the dynamics around the healthcare debate in Washington are volatile, with a variety of proposals being floated by different factions in Congress, and President Trump continuing to make passage of an ACA repeal/replace bill a top priority, threatening a defunding of the ACA's cost sharing reductions to spur action[.]"
Groom Law Group

Text of Inspector General's Report on Implementation of the Notification Requirement for Individual Filers Not Enrolled in Health Insurance (PDF)
26 pages; July 31, 2017. "TIGTA's review identified that the IRS did not send notifications to approximately 3.3 million taxpayers who did not report full-year Minimum Essential Coverage, an exemption from Minimum Essential Coverage or a Shared Responsibility Payment, and are not claimed as an exemption on someone else's tax return. In addition, the IRS did not send letters to 1.9 million individuals who reported an exemption from Minimum Essential Coverage or a Shared Responsibility Payment because they were selected to be part of a control group used to measure the effectiveness of the letters."
U.S. Department of the Treasury

PET Scans Show Many Alzheimer's Patients May Not Actually Have the Disease
"The findings could change the way doctors treat people in these hard-to-diagnose groups and save money being spent on inappropriate medication.... Among 4,000 people tested so far ... [researchers found] that just 54.3 percent of MCI patients and 70.5 percent of dementia patients had the plaques."
The Washington Post; subscription may be required

Benefits in General

Exhaustion of Plan Administrative Remedies: Important Considerations for Plan Fiduciaries
"[T]he Sixth Circuit joined the majority of circuit courts in holding that claims alleging statutory violations of ERISA do not impose the same administrative exhaustion requirements that are applicable to claims seeking to enforce contractual rights under the terms of a plan. By deepening the current split on this issue among the circuit courts, the ruling could have a significant impact ... To address this concern, plan fiduciaries should consider taking several steps[.]" [Hitchcock v. Cumberland Univ. 403(b) DC Plan, No. 16-5942 (6th Cir. Mar. 14, 2017)]
Proskauer's ERISA Practice Center

Executive Compensation
and Nonqualified Plans

Developments in Tax Withholding for Equity Awards Under Employer Stock Plans
"When an employee exercises or settles an award such as a stock option or restricted stock unit, there is often a measure of value that must be included in the employee's compensation income. Consequently, employers are required to withhold and remit payroll and income taxes with respect to that compensation, and employers will typically require employees to satisfy their portion of those taxes.... Two recent developments -- one in the accounting arena and the second in securities law -- affect how this withholding can be handled."
Holland & Hart LLP

[Opinion]

Business Roundtable Comments to SEC on Reconsideration of CEO Pay Ratio Rule
"[We] believe the rule should be changed to exclude employees located outside of the United States in determining the median employee. Doing so would create a more consistent common denominator in the many variables that exist in formulating the ratio. In addition, we suggest that non-full time employees be exempt from the rule to provide some protection against distorted results."
Business Roundtable [BRT]

Discussions on
the BenefitsLink Message Boards

Purported Letter from IRS Wants Resubmission of Forms 1095-C
"I work with a company that just received a 'Dear Taxpayer' letter purporting to be from the IRS, asking them to re-submit all Form 1095-Cs because they were incomplete, or not in the required format. Has anyone else seen a letter like this? I haven't seen any chatter online and am curious about its legitimacy. This appears to be a Form '1865C' (which I can't find any reference to online), and directs us to send the 1095-Cs to a particular IRS stop in Kansas City (which I've also never seen referenced online). Anybody seen anything about this?"
BenefitsLink Message Boards

Press Releases

PSCA Announces 2017 Board of Directors
PSCA [Plan Sponsor Council of America]

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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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