Health & Welfare Plans Newsletter

August 21, 2017

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[Official Guidance]

Text of IRS Rev. Proc. 2017-48: Monthly National Average Premium for Bronze Level QHPs, for Purposes of Determining Maximum Individual Shared Responsibility Payment (PDF)
"This revenue procedure provides the monthly national average premium for qualified health plans that have a bronze level of coverage and are offered through Exchanges for taxpayers to use in determining their maximum individual shared responsibility payment ... For purposes of Section 5000A(c)(1)(B) and Section 1.5000A-4, the monthly national average premium for qualified health plans that have a bronze level of coverage and are offered through Exchanges is $272 per individual ... For purposes of Section 5000A(c)(1)(B) and Section 1.5000A-4, the maximum monthly national average premium for qualified health plans that have a bronze level of coverage and are offered through Exchanges is $1,360 for a shared responsibility family with five or more members."
Internal Revenue Service [IRS]

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[Guidance Overview]

The Individual Mandate for Health Insurance Coverage: In Brief (PDF)
11 pages. "This report provides an overview of the individual mandate, its associated penalty, and the exemptions from the mandate. It discusses the ACA reporting requirements designed, in part, to assist individuals in providing evidence of having met the mandate. The report includes some national -- and state -- level data on the application of the mandate's penalty in tax year (TY) 2014 and TY2015." [Report R44438, Aug. 14, 2017]
Congressional Research Service

Ninth Circuit Weighs in on ERISA's Plan Document and SPD Requirements
"There are no specific penalties under ERISA for failing to adopt a written plan or to timely provide a summary plan description. But in instances involving disputes with participants and beneficiaries over the right to benefits ... an employer without comprehensive, compliant documents is likely to find itself at a disadvantage on two fronts: first, the material terms of the plan will need to be established by parole evidence (such as past practice); and second, the employer forfeits certain advantages that can only be claimed in a properly drafted plan document." [Mull v. Motion Picture Ind. Health Plan, No. 15-56246 (9th Cir. Aug. 1, 2017)]
Mintz Levin

Dispute Over Injured Employee's 'Resignation' Advances His FMLA Claims
"Reasoning that it was clearly disputed whether an employee voluntarily resigned while he was restricted from working due to an injured knee, a federal district court in Michigan refused to dismiss his FMLA interference and retaliation claims on summary judgment. The employee's request for time off work, coupled with a doctor's note from an occupational health physician to whom he was sent, he claimed, by his employer, were enough to create an issue of fact as to adequate notice of his request for FMLA leave." [Morrow v. AI-Cares, LLC, No. 17-10057 (E.D. Mich. July 28, 2017)]
Wolters Kluwer Law & Business

Too Few Patients Shop Around
"In a survey of nearly 3,000 adults younger than 65, about half of the roughly 1,900 who said they spent money on medical care in the previous year reported that they knew in advance what their costs would be.... More than 90 percent said they believed that prices vary greatly among providers, and 71 percent said that the amount they spent out-of-pocket was important or very important when choosing a doctor. Yet most respondents said they didn't comparison shop or even ask how much they would owe in copayments or other cost-sharing expenses before they turned up for an appointment."
Kaiser Health News

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How to Keep HSAs Exempt from ERISA
"Employers should not: [1] Make employees' contributions to an HSA involuntary. [2] Limit employees' ability to move funds to another HSA. [3] Impose conditions on the use of HSA funds.... [4] Influence HSA investment decisions. [5] Represent that the HSA is subject to ERISA. [6] Receive payment in connection with the HSA."
Society for Human Resource Management [SHRM]

Effects of ACA Dependent Coverage Provision on Geographic Mobility and Living Arrangements Among Young Adults
"Findings indicate that the [ACA dependent coverage provision] provision is associated with a 3.0 percentage point increase in young adults' living with parents during the period in which the ACA had been passed but the provision was not effective, and a 6.0 percentage point increase during the time between the provision becoming effective and the end of 2013."
National Bureau of Economic Research [NBER]

Senator Reignites Discussion of Obamacare Exemption for Congress
"Just weeks after the Republican effort to roll back the 2010 [ACA] failed on the Senate floor, one GOP lawmaker is reviving the debate over a regulation allowing members of Congress and their staff to purchase health insurance on an exchange meant for small businesses and receive an employer subsidy for their plans."
Government Executive

Does the Trump Administration Control the Fate of the ACA?
"[HHS has] announced that it would make September cost-sharing reduction payments ('CSR Payments') to health insurance carriers that offer eligible plans on the public insurance exchanges.... It remains unclear whether HHS will cease making these CSR Payments after September, a move that would have major ramifications for insurance markets as well as the federal deficit."
Trucker Huss

The 'Rxisk' of Adjustments in 2018 ACA Risk Adjustment (PDF)
11 pages. "[CMS] is adding a new prescription drug category classification system to the 2018 risk adjustment model. Starting in 2018, a condition will be identified through a Hierarchical Condition Category with associated medical diagnosis codes, a prescribed medication, or both -- each one affecting the final risk member score differently. This paper approximates the likely CMS mapping based on the publicly available information to date."
Milliman

Impact of CSR De-Funding on Market Stability (PDF)
14 pages. "[M]embers receiving subsidies (premium tax credits and/or CSRs) or members in non-Silver plans will be largely unaffected by the premium changes due to the CSR de-funding. However, members in standard Silver plans and not receiving subsidies may experience a large rate increase if they stay in their current plans in 2018. These members may buy down to Bronze, drop coverage, or purchase a Silver plan off-exchange ... [T]he incentives for healthy members to buy Bronze and unhealthy members to buy Gold/Platinum may be increased.... The CSR load may vary by issuer based on their CSR market share and the morbidity of that CSR membership relative to the market."
Wakely Consulting Group

What Does Formal Health Insurance Do, and for Whom?
"Health insurance confers benefits to the previously uninsured, including improvements in health, reductions in out-of-pocket spending, and reduced medical debt. But because the nominally uninsured pay only a small share of their medical expenses, health insurance also provides substantial transfers to non-recipient parties who would otherwise bear the costs of providing uncompensated care to the uninsured. The prevalence of uncompensated care helps explain the limited take-up of heavily-subsidized public health insurance and the evidence that many recipients value formal health insurance at substantially less than the cost to insurers of providing that coverage."
National Bureau of Economic Research [NBER]

Press Releases

DOL Extends Nominations Period for 2018 ERISA Advisory Council
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

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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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