Health & Welfare Plans Newsletter

October 16, 2017

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[Guidance Overview]

Exemption to ACA Contraceptive Mandate Extended to Objecting For-Profit Entities and Individuals
"For employers, the temporary and proposed regulations issued by the administration extend use of the religious exemption to for-profit, non-governmental plan sponsors of group health plans, including closely-held and publicly held for-profit entities, non-religious non-profit organizations, and institutions of higher education in their arrangements of student health insurance coverage."
Jackson Lewis P.C.

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[Guidance Overview]

California Expands Parental Leave to Smaller Employers
"The New Parent Leave Act significantly expands required parental leave, which previously only applied to businesses with at least 50 employees. Interpretation of the new law should be consistent with the California Family Rights Act. Employers may now participate in a temporary parental leave mediation program if sued by an employee.... On October 13, 2017, California Governor Jerry Brown signed into law Senate Bill 63 (SB 63), which extends certain leave requirements to businesses that employ at least 20 people who work within a 75-mile radius of a worksite."
Latham & Watkins

D.C. Considering Changes to Its Generous Paid Leave Law
"[C]ity council members who support the leave law have introduced five bills that would alter the structure and funding of the program. One bill would lower the payroll tax and allow businesses with existing leave programs to opt out of the city-run program. Other bills would set a legal requirement that leave be offered, but let employers find their own ways to pay for it."
HR Policy Association

Combatting the Prescription Drug Abuse Crisis
"Despite the widespread nature of the problem, 'a lot of employers don't have the information they need to address this issue,' says Don Teater, medical advisor to the National Safety Council. For example, 80 percent of 200 Indiana employers surveyed in 2015 said they have been affected by prescription drug abuse in their workplaces, yet only 53 percent said they have a written policy on using these types of medications at work[.]"
Society for Human Resource Management [SHRM]

How Might Trump Health-Care Order Affect Group Plans?
"An obvious step that would help accomplish the president's goals with respect to HRAs would be allowing employers to fund the accounts for the purpose of providing workers with tax-free cash to buy their own health insurance policies. But would employers welcome that change?"
CFO

[Advert.]

New York State Paid Family Leave Benefits Law (PFL)

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A Fateful Thursday for the ACA: Likely Effects and Legal Reactions
"[A]bout ten states instructed their insurers to assume that the CSRs would be paid in setting their 2018 rates.... [In] five states, insurers are loading the cost of the CSR repeal onto all metal levels.... [A]bout half the states have instructed their insurers to load all the increased cost onto the premiums of silver plans.... [A] few states, apparently including the states where CMS directly enforced the ACA, have given no instructions to insurers, allowing each to pursue its own strategy.... Insurers will not be able to simply stop reducing cost sharing. The cost-sharing reductions are clearly required by federal law.... [T]he attorneys general of 18 states and the District of Columbia ... filed on October 13 a separate action in the Northern District of California ... asking the court to enjoin and declare illegal the CSR funding cutoff."
Timothy Jost, in Health Affairs

What Can Health Plans Do Now That the Federal Government Has Stopped Making CSR Payments?
"The decision to stop paying CSRs arrives just after products were 'locked down' for 2018. Insurers and states that assumed CSR payment may wish to raise rates, but doing so this late in the year raises operational challenges in states served by the federal government's healthcare.gov. Some insurers may now want to exit the ACA Marketplace in 2018, but regulators might block an exit.... The confluence of business, operational and policy problems that the non-payment of CSRs creates at this point in the year is without precedent for both insurers and regulators."
Faegre Baker Daniels LLP

[Opinion]

Premiums in Obamacare Exchanges Now Up 10% to 20% More After Administration Ends Unlawful Insurance Bailouts/subsidies
"In California, for example, Exchange plans were to increase by 12.5% in 2018, without these additional payments to reduce the cost of Silver plans (the most common Exchange plan, where about 60% of enrollees end up) will go up 25% instead."
Benefit Revolution

[Opinion]

Halting ACA Subsidies Hurts Employer Plans, Too
"Employers rely on a healthy and viable individual health insurance marketplace, since an unstable market could result in further cost-shifting from health care providers to large employer plans. Additionally, erosion of the ACA exchanges would make individual market coverage a less viable option for part time workers, early retirees, and those who would otherwise elect to secure coverage through the individual market rather than sign up for, or remain on, COBRA."
American Benefits Council

[Opinion]

Sorry Everybody, But Trump Hasn't Instigated the Obamacare Apocalypse
"The Trump executive order claims to legalize association health plans, but in reality is much more limited. The order allows small businesses -- but not voluntary associations -- to pool together to buy insurance in bulk.... [T]he likely policy impact of this part of the executive order is minimal to zero.... Short-term, limited duration health insurance plans, or STLDIs, used to be an afterthought in the health insurance market.... Trump's executive order simply reverts back to the pre-2016 rules."
Avik Roy, in Forbes

[Opinion]

Texas Medical Board Moves Forward with Implementing Telemedicine
"ERIC suggested the Board amend the rules to: [1] Retain portions of the rule that provide requirements for written protocols that address the prevention of fraud and abuse. [2] Keep provisions related to patient notice requirements, including the need to inform patients about the limitations of telemedicine, especially what steps to take if they need in-person follow up care. [3] Clarify that an initial in-person visit is not required to establish the patient-provider relationship under any circumstance. [4] Maintain provisions for the evaluation and treatment of the patient via telemedicine, as well as discussion of in-person follow up care, should the need arise."
The ERISA Industry Committee [ERIC]

Benefits in General

[Official Guidance]

Text of IRS Instructions for Form W-12: Paid Preparer Tax Identification Number (PTIN) Application and Renewal (PDF)
Rev. Oct. 2017. "What's New: ... You will be prompted to submit supporting documentation online. Once you have uploaded your identity proofing documentation, IRS will review it and make a determination.... The address for submitting your application by mail has changed." [Also available: Form W-12, rev. Oct. 2017]
Internal Revenue Service [IRS]

Eleventh Circuit Opinion: ERISA's Six-Year Statute of Limitations is Subject to Express Waiver (PDF)
"In particular, this interlocutory appeal requires us to determine whether a defendant is capable of expressly waiving the six-year statute of repose contained in ERISA Section 413(1) -- or whether instead, the protection provided by [that section] is so essential, so fundamental, that it (seemingly almost alone among personal rights) is inherently indefeasible and unwaivable. We won't bury the lede. In response to the district court's certified question, we answer yes -- [that section's] statute of repose is subject to express waiver." [Sec'y, U.S. Dept of Labor v. Preston, No. 17-10833 (11th Cir. Oct. 12, 2017)]
U.S. Court of Appeals for the Eleventh Circuit

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

How the New CEO Pay Ratio Guidance Should Relieve Uncertainty, and Save You Time and Money
"Companies and their counsel, previously wary of using reasonable estimates and statistical sampling, should be comforted by an acknowledgment that the burden of proof in SEC enforcement actions is extremely high.... By not having to 'audit' the accuracy of pay data when they believe in good faith it is an accurate representation of their pay demographics, companies will reduce compliance costs and concern that their systems might not have precise and accurate pay data for all employees.... The guidance on statistical sampling and reasonable estimates may open the eyes of companies that have been reluctant to use these approaches before the guidance was issued."
Willis Towers Watson

Fifth Circuit Court of Appeals Finds Severance Plan Administrator Abused Discretion
"The Court found that the administrator's interpretation of a severance plan, which resulted in denying the former executive's claim for severance pay, was an abuse of discretion because it directly contradicted the terms of the severance plan." [Langley v. Howard Hughes Mgmt. Co., L.L.C. Separation Benefits Plan, No. 16-20724 and 17-20217 (5th Cir. June 1, 2017; unpub.)]
Baker McKenzie

Treasury Report Recommends Repeal of Pay Ratio Rule
"A Treasury Department report providing recommendations on how to reform the regulation of U.S. capital markets urged Congress to repeal the Dodd-Frank pay ratio rule in discussing elimination of non-material disclosures ... The report also recommended that if Congress determined the disclosure was worthwhile, the regulatory responsibility for pay ratio be moved from the SEC to the Labor Department."
HR Policy Association

Press Releases

NARPP Introduces New Retirement Program Called Icon
National Association of Retirement Plan Participants [NARPP]

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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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