Health & Welfare Plans Newsletter

October 24, 2017

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Jobs

DC Plan Administrator
Pelion Benefits, Inc.
in NC

Quality Control Specialist
My Benefits, LLC
in GA, Telecommute

DC Plan Administrator
The Benefit Advantage
Telecommute

401(k) Plan Administrator
Retirement Planners
in VA, Telecommute

401(k) Administrator
Blue Ridge ESOP Associates
in VA, Telecommute

ESOP Administrator
Blue Ridge ESOP Associates
in VA, Telecommute

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[Guidance Overview]

IRS Draws Line in the Sand, Won't Accept Individual Tax Returns Without ACA Information
"[F]or the first time, an individual must complete line 61 (as shown in previous iterations) of the Form 1040 when filing his/her tax return.... It is reasonable to assume that an employee is more likely to inquire as to the whereabouts of the [ACA] information necessary to complete his/her 2017 tax return. Therefore, the possibility of word getting back to the IRS that an employer is not furnishing the Form 1095-C statements to employees is also likely greater in 2017 compared to past years. Remember, an employer can be penalized $260 if it fails to furnish a Form 1095-C that is accurate by January 31, 2018 to the requisite employees."
Accord

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[Guidance Overview]

New York State Issues Forms for Implementing Paid Family Leave Benefits Law (PDF)
"New York State recently released several forms for use by employers and employees under the Paid Family Leave Benefits Law, which becomes effective on January 1, 2018. The forms include [1] a waiver for employees who are ineligible to receive benefits under the Law to opt out of contributions, [2] a leave request form, and [3] certification forms for various circumstances under which leave can be taken. In addition, the state released two forms for employers that are exempt from providing mandatory coverage under the Law but wish to voluntarily provide coverage[.]"
Epstein Becker Green

Text of Ninth Circuit Opinion Attributing Employer's Actions to Insurer in Award of Life Insurance Benefits (PDF)
"Because Providence [as the employer] was acting as MetLife's agent for purposes of collecting, tracking, and identifying inconsistencies with the evidence of insurability requirement, Providence's knowledge and conduct with regard to those matters are attributed to MetLife.... The deductions of premiums, MetLife and Providence's failure to ask for a statement of health over a period of months, and Providence's representation to Salyers that she had $250,000 in coverage were collectively 'so inconsistent with an intent to enforce' the evidence of insurability requirement as to 'induce a reasonable belief that [it had] been relinquished.' " [Salyers v. Metropolitan Life Ins. Co., No. 15-56371 (9th Cir. Sept. 20, 2017)]
U.S. Court of Appeals for the 9th Circuit

Court Allows FMLA Claim by Veteran Fired Just Days After Receiving 70 Percent Disability Rating
"A veteran fired from his job at a car dealership just days after he received a letter from the VA rating his post-traumatic stress disorder as 70 percent disabling can proceed to trial on his FMLA interference and retaliation claims ... Citing evidence he was told '[W]e're going to have to part ways ... due to you not being a hundred percent while you're here, being on the medications that you're on and missing work for appointments at the VA, we need to let you go,' a federal district court in Illinois denied his employer's summary judgment motion in large part." [Carlson v. Sexton Ford Sales, Inc., No. 15-4227 (C.D. Ill. Sept. 26, 2017)]
Wolters Kluwer Law & Business

Get on Top of Nondiscrimination Testing
"While there are different schools of thought on when to test your cafeteria plans, the bottom line is the IRS requires that your plans have passed all testing by the last day of the plan year. Many employers wait until final quarter to perform their initial testing -- so if you haven't done so already, now is the time."
Frenkel Benefits

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Lower Rx Cost Trend Increases Projected for 2018
"The rising criticism over soaring drug prices may have caught the attention of some drug manufacturers, as the increase in prescription drug benefit cost trends will be lower in 2018 than in 2017 ... Medical plan cost trend increases are projected to be slightly higher than 2017 projections, a change in direction that may concern plan sponsors given that medical coverage represents the lion's share of their health care costs. Price inflation -- not utilization -- is the leading driver of trend. Rx cost-management strategies and improved vendor contracting are plan sponsors' top priorities."
Segal Consulting

Employer Tools to Support Working Caregivers
"Already, nearly 1 in 6 employees in the US also provides care to parents, siblings, children, relatives, or friends. Half of today's working caregivers are Millennials and GenXers. Further, these numbers are projected to grow, with far more people needing care than those available to provide the care. We've learned that caregiving benefits can be powerful retention tools for employers, and supporting working caregivers doesn't have to be expensive."
Northeast Business Group on Health [NEBGH]

CSR Cuts Don't Pose Immediate Threat, Judge Says
"California and other states have protected consumers from the Trump administration's decision to cut off 'Obamacare' health care subsidies, a federal judge said Monday, so people don't face an immediate threat of higher costs that would lead him to order the payments resumed. U.S. District Judge Vince Chhabria did not issue a ruling yet on a request by California and 18 other states to force the government to keep making the payments while the case works its way through the courts[.]"
InsuranceNewsNet.com

Section 1332 Reinsurance Waivers Revisited: Could Oregon's Approval Beget an Oklahoma Do-Over?
"It took the agency nine months to approve Alaska's pioneering reinsurance waiver, three months to partially approve Minnesota's waiver, and just 40 days to approve Oregon's proposal.... Were the Oklahoma and Minnesota decisions the new norm and Oregon an aberration? Or does the Oregon decision represent a return to the consistent support that CMS had provided to states on reinsurance waivers? Most importantly, can states rely on the checklist published in May 2017?"
Health Affairs

The Domino Effect in Health Insurance Premiums
"[It] is becoming increasingly clear the markets are reacting in a big way to any level of uncertainty in the market. This uncertainty and subsequent pricing policy extends to both 'on-exchange' and 'off-Exchange' (unsubsidized individual plans) as well as the small group market.... Even if the Alexander Murray bill gets signed into law we will still encounter difficulty in predicting risk based on ... factors [which] include lack of funding for enrollers, reduced open enrollment period, introduction of association plans through Executive Order and general lack of stability Washington over health care policy."
HealthCostManager

[Opinion]

Strengthening the ACA for the Long Term
"The problems with the nongroup market, though significant, are fixable, and correcting them does not necessitate disruption of coverage for the remaining 94% of the population.... [The authors] propose two sets of policies -- the first is needed to stabilize nongroup insurance markets as quickly as possible and the second to improve consumers' buying power, increase the size of nongroup markets, and thereby make the markets more attractive for insurers."
New England Journal of Medicine

Benefits in General

DOL Proposes 90-Day Delay of Disability Claims Regs
"[T]he 2016 final claims regulations might be delayed, modified or even withdrawn altogether. Given the uncertainty, employers that provide disability benefits impacted by the 2016 claims regulations ... should consider delaying the implementation of any changes until the DOL's plan with respect to these rules becomes clearer."
Willis Towers Watson

4 in 10 Retirees Encounter Higher Than Expected Health Care Expenses in Retirement
"[M]ore than 40 percent of retirees find their health care and long-term care costs in retirement are higher than they planned or estimated. This is true across all demographics, income and asset levels. About a quarter experienced higher than anticipated basic living expenses, and 23 percent had higher than planned discretionary expenses. Additionally, 15 percent of retirees who had higher than expected basic living expenses also gave health care cost as their reason for having higher than expected basic living expenses."
LIMRA

Executive Compensation
and Nonqualified Plans

Executive Comp Nuggets from the Annual NASPP Conference
"[1] Prepare for impact of accounting rules changes on financial performance measures.... [2] Don't overlook death and disability benefits in the payments upon termination of employment or change in control.... [3] Ensure that the summary of key provisions of your incentive plan in your proxy statement matches the plan language exactly.... [4] Consider automatic exercise of in-the-money stock options.... [5] Verify that all plans and agreements provide for clawback and the clawback policy will work.... [6] Verify that your tax withholding on equity awards is updated ... [7] Be sure your equity incentive plan has a meaningful limit on directors equity awards and total compensation.... [8] Consider whether your compensation risk assessment efforts have been thorough and red flags addressed."
Winston & Strawn LLP

Discussions
on the BenefitsLink Message Boards

Pro Rata HRA Contributions
If I work 0.6 FTE, for example, can an employer limit my HRA reimbursement to 0.6 of what a full-time employee would receive? Several sources say that one can provide different levels of HRA benefits for, for example, full-time vs. part-time employees, but I haven't seen citations to official guidance.
BenefitsLink Message Boards

New Wrap Plan. Termination Amendments Required for Prior 'Plans'?
Company files its 5500s appropriately for 5 different benefits on separate 5500's. They are consolidating and creating a "wrap plan document" effective as of the beginning of the current year, which has a brand-new plan number. None of the current 'plans' have an existing ERISA plan document. In addition to the resolution adopting the new plan and wrap plan document, do other plans which will be filing 'Final' 5500's need plan termination resolutions, given that there has never been a plan document to begin with?
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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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