Health & Welfare Plans Newsletter

September 15, 2017

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Regional Territory Director (South / Southeast)
PenChecks Trust
in AL, AR, FL, GA, KY, LA, MO, MS, NC, OK, SC, TN, VA, WV

Retirement Plan Consultant
First American Bank
in IL

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Webcasts, Conferences

ERISA Reporting and Disclosure Requirements
RECORDED
Cowden Associates, Inc.

ERISA Plan Vendor Contracting - Traps to Avoid
September 19, 2017 WEBCAST
Vorys, Sater, Seymour and Pease LLP

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[Official Guidance]

Text of IRS Notice 2017-52: Treatment of Amounts Paid to Section 170(c) Organizations Under Employer Leave-Based Donation Programs to Aid Victims of Hurricane and Tropical Storm Irma (PDF)
"The [IRS] will not assert that cash payments an employer makes to Section 170(c) organizations in exchange for vacation, sick, or personal leave that its employees elect to forgo constitute gross income or wages of the employees if the payments are: [1] made to the Section 170(c) organizations for the relief of victims of Hurricane and Tropical Storm Irma; and [2] paid to the Section 170(c) organizations before January 1, 2019. Similarly, the Service will not assert that the opportunity to make such an election results in constructive receipt of gross income or wages for employees."
Internal Revenue Service [IRS]

[Advert.]

Online Learning Course: HSA and HRA Basics

Sponsored by International Foundation of Employee Benefit Plans [IFEBP]

This e-learning course will provide an in-depth look at HSA and HRA programs as well as how these programs interact with an HCFSA.


[Guidance Overview]

New York's Paid Family Leave Law Becomes Effective January 2018
"An employer may apply to the chair of the New York State Workers' Compensation Board for approval as a self-insured employer by September 30, 2017. To be approved as a self-insured employer, an employer must: [1] provide PFL benefits at least as favorable as required by the PFLL; [2] demonstrate the ability to make PFL payments; [3] submit certain financial information; [4] file with the chair an agreement to pay disability and PFL benefits; [5] assume all liability for PFL benefits that exceed the funds collected in excess of the maximum contribution amount; [6] post a surety bond; [7] allow the chair to examine its operations and records; and [8] file annual reports."
Vorys, Sater, Seymour and Pease LLP

Indefinite Decision Date in Extension Notice Does Not Meet Claims Procedure Requirements
"[The participant received] a letter from the claims administrator indicating that an extension was needed because the plan had not received information requested from the participant's health care provider. The participant sued, and the claims administrator asked the court to dismiss the case because the participant had not exhausted the plan's claims and appeals process. The court allowed the case to proceed, however, concluding that the plan's claims procedures could be deemed exhausted because the claims administrator had failed to adhere to ERISA-compliant claims procedures." [McFarlane v. First Unum Life Ins. Co., No. 16-7806 (S.D.N.Y. Aug. 15, 2017)]
Thomson Reuters / EBIA

Court Rejects Hospital's Attempt to Elect COBRA for Patient Years After His Period of Incapacity
"The patient, who had been covered under his employer's group health plan prior to his termination of employment, was hospitalized for 10 days toward the end of his 60-day COBRA election period. The medical center (to whom the patient had assigned all insurance rights upon admission) contended that the 10-day hospitalization was grounds for equitable tolling of his election period and asked the plan's COBRA administrator -- almost two years after the patient's termination of employment -- to issue a new COBRA notice with a new 60-day election period.... The court dismissed the lawsuit, however, concluding that, even if the patient's election period had been tolled for the 10 days he was hospitalized (making the election period, at most, 70 days), the medical center did not attempt to elect coverage on the patient's behalf until almost two years after the patient received his election notice." [Regents of the Univ. of Cal. v. Stidham Trucking, Inc., No. 16-2835 (E.D. Cal. Sept. 1, 2017)]
Thomson Reuters / EBIA

Reminder: Medical Loss Rebates to Employers Must Be Handled Properly
"[Certain] insurers must send rebates to individuals and employers by September 30.... Employers will need to determine how much, if any, of the rebate they can retain, use for plan operations or return to plan participants. Employers are plan fiduciaries and therefore must make prudent determinations in the best interests of the plan participants and beneficiaries. Many employers will take a conservative view and distribute the rebates to plan participants in proportion to the amount that they paid for their coverage, and some may even choose to distribute the entire rebate to plan participants, even if that is not mandated."
Willis Towers Watson

[Advert.]

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Sponsored by WEB - Worldwide Employee Benefits Network

WEB members represent more than 25 professions and 30 areas of expertise within the pension and benefits industry -- administrators, consultants, attorneys, accountants, investment managers, communications experts and benefits managers. Join today.


Employers Pull Back on Popular Life Insurance Benefits
"As many as 108 million Americans have life insurance coverage through the workplace, compared with 102 million covered by individual life insurance ... It is the first time that more people are covered by workplace life insurance than by individual policies since LIMRA began tracking data in 1960, LIMRA researchers said.... Meanwhile, companies are cutting back on group life as rising health care costs erode budget allocations for other benefits, Potter said. Another reason for the retreat is that employers do not think their employees value this benefit, which analysts say is a misread."
InsuranceNewsNet.com

Medicare and HSA Eligibility
"Simply gaining eligibility for Medicare doesn't disqualify employees from staying on your high deductible plan or from contributing into an HSA.... Enrollment in Medicare (Parts A, B, C, or D), versus becoming eligible for Medicare, disqualifies an employee from making or receiving contributions to an HSA. However, enrollment in Medicare does not impact their eligibility to enroll in the HDHP, as HSAs are independent offerings from a HDHP, or request reimbursement from their HSA.... To avoid penalties, older workers should be advised to stop contributing to their HSA account six months before applying for their Social Security benefits."
HUB International

Impact of CSR De-Funding on Market Stability (PDF)
14 pages. "Colorado is requiring issuers to apply the CSR load to all metal levels instead of just the Silver plans.... New York is largely unaffected by these changes as the populations that would qualify for the CSR 87% and 94% plans are covered under the state's Basic Health Plan.... Oregon has proposed to allow all issuers to increase their on- and off-exchange Silver rates by the same 7.1% in the event that CSRs are de-funded.... States such as Vermont and Massachusetts have merged individual and small group markets. The impact of CSR de-funding may extend to the small group market in addition to the individual market."
Wakely Consulting Group

Modeling the Effect of the Individual Mandate on Health Insurance Coverage
17 presentation slides. "This presentation provides a discussion of the theoretical and empirical basis for CBO's estimates of the effect on health insurance coverage of repealing the individual mandate -- which requires most people to have insurance or pay a penalty. CBO highlights and interprets new empirical evidence that may inform the size of that effect. CBO also poses unanswered questions for which the agency would like the discussants' and health panel members' insights."
Congressional Budget Office [CBO]

Federal Subsidies for Health Insurance Coverage for People Under Age 65: 2017 to 2027 (PDF)
23 pages. "According to CBO and JCT's estimates, a monthly average of about 244 million noninstitutionalized civilians under age 65 will have health insurance in 2017. Almost two-thirds of them will have coverage through an employer ... On average, about 28 million people -- 10 percent of all noninstitutionalized civilians younger than 65 -- will be uninsured in 2017, CBO and JCT estimate. Between 2017 and 2018, the number of uninsured people rises by 2 million in the agencies' projections, mainly because premiums in the nongroup market are expected to be higher."
Congressional Budget Office [CBO]

[Opinion]

Private Employers Should Demand and Share Evidence from Payment Reforms
"Employers face a collective action problem in which they seek shared evidence about which payment reforms are working, but may not individually generate it or be in a position to share it.... Employers should seek rigorous and comprehensive evidence for the impact of payment reforms to facilitate comparison across alternatives and support good decision-making. If enough employers make these demands, plans will respond by better evaluating the payment reforms they administer and better communicating the results of those evaluations."
Suzanne Delbanco, Andrew Olson, and Mark McClellan, via Health Affairs

Benefits in General

[Official Guidance]

DOL Extends Hurricane Harvey Compliance Guidance and Relief to Employee Benefit Plans Impacted by Hurricane Irma
"The Department understands that plan fiduciaries, employers, labor organizations, service providers, and participants and beneficiaries may encounter issues complying with [ERISA] over the next few months as the implications of Hurricanes Irma and Harvey unfold. The guidance provided in this statement generally applies to employee benefit plans, plan sponsors, employers and employees, and service providers to such employers who were located in a county identified for individual assistance by the Federal Emergency Management Agency (FEMA) because of the devastation caused by Hurricane Irma or Hurricane Harvey."
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

Staying Out of Trouble: How to Avoid IRS and DOL Audits (PDF)
48 presentation slides. Topics include: [1] Overview of benefit plan audits; [2] IRS audit triggers and process; [3] DOL audit triggers and process; [4] If your plan is audited; [5] Avoiding audits and compliance issues; [6] Common retirement plan compliance issues; and [7] Common welfare plan compliance issues.
McDermott Will & Emery

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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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