Health & Welfare Plans Newsletter

September 26, 2017

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Jobs

Senior Pension Administrator
Primark Benefits
in CA

Retirement Plan Administrator
Bronfman Rothschild
in WI

Retirement Plan Administrator
Premier Plan Consultants
in CA

Retirement Plan Administrator
Armanino, LLP
in TX

Relationship Manager - Retirement Plan Services
John Hancock Retirement Plan Services
in OK

Daily Valuation / Balance Forward Retirement Plan Administrator
Ingham Retirement Group
in FL

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[Guidance Overview]

Contacting Employees on FMLA Leave
"[1] Can an employer contact an employee or ask him or her to return to work while he or she is on FMLA leave? ... [2] Is it lawful for an employer to ask an employee who is out on leave to come in to work -- or to call or email the employee -- to discuss the possibility of a promotion or to encourage the employee to apply for a new position? ... [3] If a workplace investigation requires or would be aided by the participation of an employee on FMLA leave, may the employer require the employee's participation? ... [4] May an employer communicate with an employee on FMLA leave to discuss his or her return to work?"
Ogletree Deakins

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ERISA Does Not Preempt Montana's Mental Health Parity Law
"A federal district court in Montana has ruled that ERISA did not preempt Montana's mental health parity law, as applied to an ERISA group disability income plan, and that the Montana law required the plan to provide a participant the same benefits for a mental health illness that it would apply if the disability had been physical." [Sand-Smith v. Liberty Life Assurance Co. of Boston, No. 17-0004 (D. Mont. Sept. 20, 2017)]
Thomson Reuters Practical Law

Long Term Leave of Absence Is Not a Reasonable Accommodation Under the ADA
"The Seventh Circuit sent shockwaves through the EEOC and through the employer community by concluding that multi-month leaves of absence, even those that are definite in term and sought in advance, are not required by the ADA." [Severson v. Heartland Woodcraft, Inc., No. 15-3754 (7th Cir. Sept. 20, 2017)]
Seyfarth Shaw LLP

Macy's Lawsuit: Reasonable Alternative Standards for Wellness Programs
"[M]any employers are still not clear on some of the nondiscrimination rules that apply when offering wellness program incentives -- or when levying health plan surcharges (typically for tobacco users).... Macy's and their [TPAs] ... are currently being sued by the [DOL]. Among the allegations: they failed to properly apply the Reasonable Alternative Standard (RAS) rules allowing their smokers to avoid a health insurance surcharge.... Macy's did in fact offer their smokers a tobacco cessation program that would allow them to qualify for the tobacco-free health insurance rates."
SelfHelpWorks

For 2018, Expect Steeper Health Plan Premium Increases
"Employers will see a 4.3 percent increase in health benefit costs next year after they make planned changes such as raising deductibles or switching carriers ... the highest since 2011, when costs rose 6.1 percent. The increase employers would expect if they made no changes to their medical plans is 6 percent.... 46 percent of employers will take steps to reduce cost growth in 2018, such as offering lower-cost, high-deductible health plans."
Society for Human Resource Management [SHRM]

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Cadillac Tax: What Next?
"Our objectives for the meeting with Treasury -- which now must move quickly to write implementing regulations for the tax -- were to share our POV on how complicated the tax is and what it means for business and workers. From the conversation, it was clear that Treasury officials realize the complexity of the law and the difficulties they face in crafting rules.... It doesn't appear that draft regulations are imminent and in fact, officials are contemplating another notice for comment."
Mercer

The Role of the States in Reforming Health Care
"[T]he Graham-Cassidy bill ... highlights a major political and policy flashpoint in the fight to repeal, replace, or repair the law: the degree to which states should be free to innovate and experiment by adopting non-standard health insurance product designs in their individual and small group markets. Under current law, there is little flexibility. Proposals abound to change this, but to do so invites consequences ... involving complex economic and actuarial issues and fundamental questions regarding the role of the federal government and the states in health care."
Mintz Levin

Preliminary Analysis of Legislation That Would Replace Subsidies for Health Care with Block Grants
"Over the 2017-2026 period, CBO and JCT estimate, the legislation would reduce the on-budget deficit by at least $133 billion ... The number of people with comprehensive health insurance ... would be reduced by millions compared with the baseline projections for each year during the decade ... That number could vary widely depending on how states implemented the legislation, although the direction of the effect is clear.... The decrease in the number of insured people would be particularly large starting in 2020, when the legislation would make major changes to federal funding for Medicaid and the nongroup market."
Congressional Budget Office [CBO]

Health Bill Appears Dead as Pivotal GOP Senator Declares Opposition
"Senator Susan Collins of Maine said on Monday that she would oppose the latest plan to repeal and replace the [ACA], leaving Republican leaders clearly short of the votes they need for passage."
The New York Times; subscription may be required

Healthcare.gov to Shut Down for Maintenance Every Week During Enrollment Period
"The outages, which the administration says are needed for maintenance, will occur from midnight through noon on every Sunday other than Dec. 10. This year's enrollment season -- which the administration has shortened from three months to six weeks -- will run from Nov. 1 through Dec. 15 for the 38 states that use the federal online marketplace."
The Wall Street Journal; subscription may be required

Benefits in General

[Official Guidance]

Text of IRS Notice 2017-54: 2017-2018 Special Per Diem Rates (PDF)
"This annual notice provides the 2017-2018 special per diem rates for taxpayers to use in substantiating the amount of ordinary and necessary business expenses incurred while traveling away from home, specifically [1] the special transportation industry meal and incidental expenses (M&IE) rates, [2] the rate for the incidental expenses only deduction, and [3] the rates and list of high-cost localities for purposes of the high-low substantiation method."
Internal Revenue Service [IRS]

[Guidance Overview]

When Disaster Strikes: IRS Guidance Gives Employers Additional Options for Assisting Employees Hit by Hurricanes Harvey and Irma
"[T]he new guidance permits employers to waive the restrictive rules usually imposed by the Internal Revenue Code on loans and hardship distributions from tax-favored retirement plans. The guidance also permits employers to adopt leave-based donation programs to facilitate contributions to charities assisting victims of the disasters.... [E]mployers may also make 'qualified disaster relief payments' directly to employees under certain circumstances.... In addition to the tax relief provided by the IRS, the U.S. House of Representatives is expected to consider legislative relief for individuals affected by Hurricanes Harvey and Irma (and also Hurricane Maria)."
Foley & Lardner LLP

EBSA Sees Slower Start in Trump Era
"President Trump's EBSA is off to a slower start than President Obama's on at least two metrics: new cases filed and confirmation of key players. And while the agency's workforce is about the same size as it was in the early days of the Obama administration, total staffing numbers have declined more than 9 percent since their Obama-era peak in September 2012. Even so, the Trump-led EBSA isn't wildly out of line with those of other recent administrations."
Bloomberg BNA

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

SEC Issues Additional Guidance on CEO Pay Ratio Rule
"The additional guidance confirmed that the SEC does not plan to postpone the effective date of the Rule. This means that calendar-year public companies must be ready to disclose their pay ratio in their 2018 proxy statements as has been contemplated. However, the new guidance should simplify a public company's ability to comply with the Rule in a more cost effective way by permitting the exclusion of independent contractors from such calculation, the use of records already generated by the public company in identifying the median employee and the expanded use of estimates and statistical sampling."
Foley & Lardner LLP

ISS Survey Results Reveal That Investors Intend to Use Pay Ratio Disclosures
"[N]early 75 percent of the 131 investor respondents indicated that they intend to use pay ratio disclosures as one factor in their analysis of compensation issues. Those respondents indicated they would analyze a company's pay ratio by comparing it to that of other companies in its industry, by assessing year-over-year changes in the company's ratio, or both."
Skadden

Discussions
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HRA Assets Can Be Split on Divorce?
"Can assets from an HRA be transferred to a former spouse upon divorce?"
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David Rhett Baker, J.D., Editor and Publisher
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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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