Health & Welfare Plans Newsletter

September 29, 2017

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[Official Guidance]

Text of CMS Memo on 2017 Hurricane Disasters: Special Enrollment Periods, Termination of Coverage, and Grace Period Flexibilities (PDF)
Unnumbered document, Sept. 28, 2017. "[A]ll individuals who experience(d) an SEP-qualifying event between 60-days prior to the start date of the incident period designated by [FEMA] and December 31, 2017, but were unable to complete the application and plan selection process because they were affected by a hurricane-related weather event in 2017, will be eligible for an additional 60-day Exceptional Circumstances [Special Enrollment Period (SEP)].... Enrollees who terminate their coverage due to hardship from a hurricane may be exempted from associated tax penalties.... CMS will consider refraining from taking compliance actions in instances where a QHP issuer's failure to comply was the direct result of the conditions created by recent storms, and the issuer could not have taken reasonable steps in advance to prevent the compliance failure."
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

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[Official Guidance]

Text of 2017 IRS Form 1095-B: Health Coverage (PDF)
"This Form 1095-B provides information needed to report on your income tax return that you, your spouse (if you file a joint return), and individuals you claim as dependents had qualifying health coverage (referred to as 'minimum essential coverage') for some or all months during the year. Individuals who don't have minimum essential coverage and don't qualify for an exemption from this requirement may be liable for the individual shared responsibility payment."
Internal Revenue Service [IRS]

[Guidance Overview]

CMS Announces Special Enrollment Periods for Americans Impacted by Recent Hurricanes
"As a result of Hurricanes Harvey, Irma, and Maria, the Centers for Medicare & Medicaid Services (CMS) will make available special enrollment periods for all Medicare beneficiaries and certain individuals seeking health plans offered through the Federal Health Insurance Exchange.... In addition to the special enrollment periods for the 2017, individuals who reside in or move from areas affected by a hurricane in 2017 will be eligible for a special enrollment period that extends the 2018 Annual Open Enrollment Period through December 31, 2017."
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

Lifetime Dollar Limit Was Permitted Under Retiree-Only Plan, But Was Not Adequately Disclosed in SPD
"A participant in a self-insured retiree-only plan challenged the plan's imposition of a lifetime dollar limit on benefits, asserting that health care reform prohibited such limits for essential health benefits and that the limit had not been adequately disclosed to participants, in violation of ERISA's requirements. The trial court held that the prohibition against lifetime dollar limits did not apply to retiree-only plans and rejected the participant's fiduciary breach claims against the employer, plan, and claims administrator but did not address the participant's ERISA disclosure argument." [King v. Blue Cross and Blue Shield of Ill., No. 15-55880 (9th Cir. Sept. 8, 2017)]
Thomson Reuters / EBIA

Hospital Employee's Agreement to Six-Month Limitations Period Can't Bar FMLA Claim
"Refusing to reconsider the denial of a hospital's motion to dismiss a fired employee's FMLA claim as untimely under a six-month contractual limitations period, a federal court in Michigan reiterated that the FMLA and its regulations provide a two-year limitations period and forbid an employer from interfering with or restraining any right under the Act, which includes the right to file suit within two years." [White v. Detroit Medical Center, No. 15-13829, (E.D. Mich. Aug. 9, 2017)]
Wolters Kluwer Law & Business

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Insurer Owes Disability Benefits Despite LinkedIn Posts
"Principal was wrong to conclude that it didn't owe benefits to the truck driver, who had an associate's degree in media design and had some experience with video production, the judge said ... Principal said the truck driver was capable of earning between $49,525 and $65,395 in public relations and sales jobs based on his experience. The judge sided with the truck driver, who said that all of his video work was done on an amateur basis and that he couldn't be reasonably expected to break into such competitive fields." [Flaaen v. Principal Life Ins. Co., No. 15-5899 (W.D. Wash. Sept. 27, 2017)]
Bloomberg BNA

Transamerica, FCE Nix Fraud Claims in ERISA Lawsuit
"Transamerica Life Insurance Co. and FCE Benefit Administrators Inc. convinced a federal judge to toss out state-law claims of fraud by a South Dakota nonprofit accusing them of mismanaging its welfare benefit plan ... The claims of fraudulent inducement and unjust enrichment by BH Services Inc. are expressly pre-empted by [ERISA, the judge held]." [BH Services Inc. v. FCE Benefit Adm'rs Inc., No. 16-5045 (D.S.D. Sept. 27, 2017)]
Bloomberg BNA

Hospitals, Health Insurers Biggest Sources of Rising Health Costs
"Of the $240 billion increase in private health insurance spending between 2009 and 2015, hospitals accounted for 50 percent and health insurance administration and profit accounted for 12 percent (a 30 percent increase over that period) ... The U.S. is spending as much on insurance administration as on drugs[.]"
Bloomberg BNA

Potential Impacts of Uncertainty Regarding ACA Cost-Sharing Reduction Payments (PDF)
"The continuation of CSR payments has come into question, and insurers warn that they may leave the market or raise premiums without a commitment to sustained funding. To understand the concern about funding CSR payments, it is important to understand the context in which CSRs are provided, beginning with insurance premiums."
Congressional Research Service [CRS]

[Opinion]

Stabilizing and Strengthening ACA Nongroup Markets (PDF)
"[T]argeted policies could fix the ACA's problems without sacrificing its gains in coverage, affordability, and access to care. These policies would stabilize the nongroup insurance markets, encourage insurer participation, improve affordability, and rein in premium growth. [The authors] divide these policies into two categories: those that should be implemented immediately to stabilize the markets and those that would strengthen the ACA for the long term."
Urban Institute

Benefits in General

[Official Guidance]

Text of IRS Disaster Relief Notice FL-2017-06, for Victims of Hurricane Maria in Seminole Tribe of Florida
"Individuals who reside or have a business in the Seminole Tribe of Florida and associated lands may qualify for tax relief.... [C]ertain deadlines falling on or after Sept. 4, 2017 and before Jan. 31, 2018, are granted additional time to file through Jan. 31, 2018."
Internal Revenue Service [IRS]

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

Pay Ratio: The Time Has Come (PDF)
"The new guidance makes clear that issuers have a variety of options on how to approach the required determinations and calculations, but, even with the level of flexibility allowed, there is a substantial process that must be undertaken, which needs to start sooner rather than later to ensure that there is enough time to make appropriate decisions and complete the implementation of the chosen methodology."
Fried Frank

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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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