Health & Welfare Plans Newsletter

October 12, 2017

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[Official Guidance]

President Takes Action to Improve Access, Increase Choices, and Lower Costs for Healthcare
"The order directs the Secretary of Labor to consider expanding access to Association Health Plans (AHPs), which could potentially allow American employers to form groups across State lines.... The order directs the Departments of the Treasury, Labor, and [HHS] to consider expanding coverage through low cost short-term limited duration insurance (STLDI).... The order directs the Departments of the Treasury, Labor, and [HHS] to consider changes to Health Reimbursement Arrangements (HRAs) so employers can make better use of them for their employees."
The White House

[Advert.]

Online Learning Course: COBRA

Sponsored by International Foundation of Employee Benefit Plans [IFEBP]

Even with ACA coverage easier for individuals to obtain, group health plans must continue to offer COBRA coverage. This course explains technicalities of COBRA, including who is entitled and how to administer.


[Official Guidance]

Text of DOL Proposed Extension of Information Collection Request Submitted for Public Comment; Coverage of Certain Preventive Services Under the ACA -- Private Sector (PDF)
"The [July 2015] final regulations require each organization seeking accommodation to self-certify that it meets the definition of an eligible organization.... The form that is used by eligible organizations for their self-certification is EBSA Form 700.... The 2017 interim final rules amend the Departments' July 2015 final regulations to expand the exemption ... by making the accommodation compliance process optional for eligible organizations instead of mandatory.... Employers that under the previous rules had used the accommodation process, but can now be exempt may now choose to revoke their use of the accommodation process, but in order to do so they must provide participants and beneficiaries written notice of such revocation as soon as possible ... This notice requests public comment pertaining to the Department's request for extension of OMB's approval of its revision to EBSA Form 700."
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

[Guidance Overview]

ACA Numbers and Limits: Reference Guide (PDF)
One-page chart lists numerous dollar limits for 2014-2018, including: [1] 4980H Large Employer Shared Responsibility Penalty; [2] 5000A Individual Shared Responsibility Penalty; [3] 36B Marketplace Subsidies/Premium Tax Credits (PTC); [4] Health Insurance Reforms; and [5] Health Savings Accounts.
Kaufman & Canoles, P.C.

[Guidance Overview]

Administration Narrows ACA Contraceptive Mandate
"Objecting employers do not need to take any action to utilize the exemption. Objecting employers may use an optional 'accommodation' process to cede the administration of contraceptive coverage to a third party."
Husch Blackwell

[Guidance Overview]

New York Paid Family Leave Law -- a Comprehensive Breakdown for Employers
"[W]hat does this law do again? ... What are my obligations to secure PFL insurance overage? ... Why does the law permit me to take deductions before January 1, 2018?... What are my obligations to inform employees of their PFL rights?... What do employees have to do to claim paid family leave?... How does the employee receive payment?... When an employee goes out on PFL, what are my obligations? ... How does PFL intersect with other types of leave?"
Mintz Levin

[Advert.]

New Parental Leave Laws in Washington D.C.

Sponsored by Lorman and BenefitsLink

Oct. 25 webinar. What you need to know about D.C. Paid Family Leave, from leave, notice and recordkeeping obligations to the consequences of noncompliance -- practical advice to help avoid costly penalties and litigation. Discount for BenefitsLink readers.


President Trump's Executive Order Advances GOP Go-To Ideas to Broaden Insurance Choices, Curb Costs
"The Trump administration Thursday advanced a wide-ranging executive order aimed at expanding lower-cost insurance options, allowing employers to give workers money to buy their own coverage and slowing consolidation in the insurance and hospital industries.... President Donald Trump's action, which will not take effect in time to affect the upcoming open enrollment for coverage in 2018, signals a shift in the administration's strategy, which relied on Congress to repeal the [ACA]. Trump is now using the force of his executive rule-making authority to implement long-favored GOP policy alternatives."
Kaiser Health News

Can Employees Pay for Cord Blood Storage with an HRA, FSA or HSA?
"[If] the storage is merely precautionary, then the storage wouldn't be a qualified medical expense. If there's a current need (for example, the baby or a sibling or parent is actually sick and could benefit from the cord blood in the short term) then there's an argument to count the cord blood storage as a qualified medical expense and allow reimbursement of the costs through an HRA, FSA or HSA."
Mintz Levin

Eight States with Sick Leave Laws: What Employers Should Know
"Paid sick leave laws ... typically grant employees a minimum number of paid sick hours or days each year, and govern the permissible reasons for employees to take such leave. [This article includes] a snapshot of the states that have passed paid sick-leave laws and what you should know about them."
Polsinelli PC

Does Your Paid Leave Policy Deter Midcareer Hires?
"Nearly 37% of respondent organizations reported that no special consideration is given to midcareer hires. But take heart, Baby Boomers and Generation X-ers, the news isn't all bad if you are looking to make a career change: 33.9% are offered additional paid time off (PTO) on a case-by-case basis.Talking Benefits Podcast 20.1% are offered the option to take unpaid days. 10.3% are provided additional paid time off based on position. 8.7% are offered additional paid time off based on relevant experience and skill level. 2% are offered the option to purchase additional time off."
International Foundation of Employee Benefit Plans [IFEBP]

Employers Still Favor Traditional Paid Leave Menu
"[A] majority of employers continue to offer paid leave benefits to employees through traditional plans, but a sizable portion of the surveyed organizations have opted instead for paid time off plans.... [T]he median amount of paid sick leave workers can expect during their first year on the job is nine days ... [A] majority of employers' sick leave policies extend beyond personal illness to cover such events as medical appointments, disability leave, and care of a family member."
Bloomberg BNA

2018 Premium Tax Credit Quick Reference Chart (Based on 2017 Federal Poverty Lines) (PDF)
"[1] Locate line where estimated 2018 household income & household size intersect. [2] First column shows household percentage of Federal Poverty Line -- if between 100% and 400% continue. [3] Second column shows percentage of household income required [to] purchase 2nd lowest cost Silver coverage in Marketplace. [4] 'CSR AV' column shows resulting Actuarial Value after Cost Sharing Reductions applied (otherwise standard 70%). [5] 'Monthly contribution' = contribution percentage x household income divided by 12."
Kaufman & Canoles, P.C.

California Slaps Surcharge on ACA Plans
"The decision to impose a 12.4 percent surcharge on silver-level health plans in 2018 means the total premium increase for them will average nearly 25 percent, according to Covered California. Taxpayers, not consumers, will bear the brunt of the extra rate hike because federal premium assistance for policyholders, which is pegged to the cost of coverage, will also increase."
Kaiser Health News

Association Health Plans: Can the Administration Expand Access Without Congress?
"While the Secretary of Labor's powers are not without limit, [ERISA section 514(b)(6)(B)] does appear to be sufficiently robust to enable a class of self-funded association health plans that would be generally immune from state law. Applying current law rules to determine whether a MEWA is ERISA-covered would constrain membership in the class based on the bona fide association and control requirements ... These requirements are also the product of [DOL] guidance, so the [DOL] presumably could enlarge the class of self-funded MEWAs by adopting a more liberal reading of these requirements. This would, however, require the Department to upend decades of guidance[.]"
Mintz Levin

Benefits in General

[Guidance Overview]

What to Do -- or Not Do -- with the Disability Claims Rules?
"At this point, it is unclear what, if any, modifications might be considered to the final rules. Because ERISA-governed plans are already required to include adequate claims procedures, following existing procedures should be sufficient during this interim review."
Holland & Hart LLP

Getting Through the 5500 Season Without Xanax
"Always start to fill out your questionnaires early.... Check every line of your vendor's draft.... Cooperate with your auditor to get the audit finished on time.... Still having problems? Consider a new auditor."
Cohen & Buckmann, P.C.

Executive Compensation
and Nonqualified Plans

Stock Compensation: 2017 Assumption and Disclosure Study (PDF)
38 pages. "When valuing stock options, companies continue to rely heavily on the Black-Scholes option pricing model, with 82% of Large companies disclose relying solely on the use of that model in valuing their stock compensation awards.... [In] 2012 the number of stock options granted compared to the number of restricted stock awards was almost 1.4 to 1, while by 2016 it had dropped to about 1.2 to 1."
PricewaterhouseCoopers

Ohio Supreme Court: SERP Excluded from Municipal Income Tax
"After years of litigation, a former National City executive has prevailed in a hard fought tax dispute with the city of Cleveland.... The case provides that a Supplemental Executive Retirement Plan (SERP) must be excluded from the Cleveland municipal income tax as a 'pension' benefit. The ruling buttresses a 2014 Franklin County Court of Appeals decision that reached the same result in a dispute between the same taxpayer and the city of Shaker Heights. The cases could have implications for taxpayers with SERP income across the state." [MacDonald v. Cleveland Income Tax Bd. of Review, No. 2016-0778 (Ohio Sept. 26, 2017; unpub.)
McDonald Hopkins

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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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