Health & Welfare Plans Newsletter

October 30, 2017

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Pension Compliance Administrator
Associated Pension Consultants
in CA, Telecommute

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Associated Pension Consultants
in CA

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Ascensus
in CA

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Moran Knobel
in CA, WA, Telecommute

Associate Attorney Position
Ferenczy Benefits Law Center
in GA

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[Official Guidance]

Text of CMS Proposed Regs: Benefit and Payment Parameters for 2019
365 pages. "This proposed rule sets forth payment parameters and provisions related to the risk adjustment and risk adjustment data validation programs; cost-sharing parameters and cost-sharing reductions; and user fees for Federally-facilitated Exchanges and State-based Exchanges on the Federal platform. It proposes changes that would enhance the role of States as related to essential health benefits (EHB) and qualified health plan (QHP) certification; and would provide States with additional flexibility in the operation and establishment of Exchanges, including the Small Business Health Options Program (SHOP) Exchanges. It includes proposed changes to standards related to Exchanges; the required functions of the SHOPs; actuarial value for stand-alone dental plans; the rate review program; the medical loss ratio program; eligibility and enrollment; exemptions; and other related topics."
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

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[Official Guidance]

Text of FAQs for Federally-Facilitated Marketplace (FFM) User Fee Adjustment Submission Requirements (PDF)
"For the 2016 benefit year, [CMS] is releasing a web-based form through which Third-Party Administrators (TPAs), including Pharmacy Benefit Managers (PBMs) that provide services to a self-insured group health plan offered by an eligible organization, and Federally-facilitated Exchange (FFE) issuers that have entered into an agreement with these TPAs (including PBMs) can report contraceptive claims costs incurred by plan participants and beneficiaries.... [These FAQs] are intended to assist issuers and TPAs (including PBMs) with navigating the submission requirements and understanding the mechanism through which CMS will apply the FFE user fee adjustment to FFE issuers." [Unnumbered document; Oct. 27, 2017]
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

[Official Guidance]

Text of CMS Draft 2019 Actuarial Value Calculator Methodology (PDF)
25 pages. "The AV Calculator represents an empirical estimate of the [actuarial value (AV)] calculated in a manner that provides a close approximation to the actual average spending by a wide range of consumers in a standard population. This document is meant to detail the specific methodologies used in the AV calculation. This document is revised from the 2018 version to incorporate updates in the draft 2019 version."
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

[Guidance Overview]

CMS to Allow Small Businesses and Issuers New Flexibilities in the Small Business Health Options Program (SHOP) for Plan Year 2018 (PDF)
"These proposals, if finalized, could change how small employers and employees enroll in SHOP plans for plan years beginning on or after January 1, 2018. If finalized, these changes would become effective as of the effective date of the final rule but would be applicable to all 2018 plans, regardless of whether they began after or before the effective date of the rule.... HHS will permit FF-SHOPs and SBE-FPs for SHOP, QHP issuers, SHOP-registered agents and brokers, and employers to begin operating in accordance with the approach for SHOP enrollment proposed in the rule, starting on the first date on which employers can complete a group enrollment for a plan year that would take effect in 2018." [Unnumbered document; Oct. 27, 2017]
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

[Guidance Overview]

Text of CMS Fact Sheet: Proposed HHS Notice of Benefit and Payment Parameters for 2019 (PDF)
"The rule includes proposals that would provide states with more options in how the essential health benefits (EHBs) are defined for their state, enhance the role of states related to qualified health plan (QHP) certification, and provide states with additional flexibility in the operation and establishment of Exchanges, particularly the Small Business Health Options Program (SHOP) Exchanges.... In addition to the elements described [in this Fact Sheet, CMS also seeks] comment on other proposals to reduce regulatory burdens, streamline state and issuer requirements, and simplify eligibility and enrollment processes for consumers, such as by providing greater flexibility to agents, brokers, and allowing issuers to select their own third-party entities for conducting direct enrollment operational readiness reviews, and removing the actuarial value standard for stand-alone dental plans."
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

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[Guidance Overview]

The 2019 Proposed Payment Notice, Part 1: Insurer and Exchange Provisions
"The preface to the rule also states that its intent is to enhance the role of the states in the regulatory process and provide them with increased flexibility.... This post discusses the changes the NPRM would make in the SHOP program, the risk adjustment program, rate review, and the medical loss ratio requirement, as well as other provisions of the rule that govern the exchanges and insurers."
Timothy Jost and Katie Keith, in Health Affairs

[Guidance Overview]

The 2019 Proposed Payment Notice, Part 2: Consumer-Facing Provisions
"Beginning with 2019 plan year, the proposed rule would give states additional flexibility to define their EHB benchmark plan and do so on an annual basis.... HHS outlines four proposed options for states to select an EHB-benchmark plan ... HHS is considering a 'federal default definition of EHB.' ... Using methodology outlined in previous federal rules, HHS proposes a maximum annual out-of-pocket limit on cost-sharing for 2019 of $7,900 for self-only coverage and $15,800 for other than self-only coverage.... HHS continues to transfer more regulatory review and oversight responsibility to state insurance regulators and state standards."
Katie Keith and Timothy Jost, in Health Affairs

CMS Proposes Giving States Control Over Essential Health Benefits, Other ACA Elements
"The proposal contains elements that could attract support from the insurers, such as provisions to extend the period for distributing funds under risk adjustment formulas, which were designed to compensate insurers who take on costlier enrollees. And, the proposal would change the formulas for these fund transfers to reflect high-cost specialty drugs these patients take."
American Journal of Managed Care

'Cadillac Tax' Will Hit Majority of Employer Plans
"The threshold amounts for 2020, unless Congress further delays or repeals the tax, are expected to be $10,900 for employee-only coverage and $29,400 for all other coverage, including family coverage ... [T]here are many possible ways to reduce aggregate group health plan costs to avoid the Cadillac tax, such as by scaling back major medical coverage, subject to the ACA's limitations[.]"
Society for Human Resource Management [SHRM]

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Health Plan Choice and Premiums in the 2018 Federal Health Insurance Exchange
"This issue brief presents analysis of Qualified Health Plan (QHP) data in the individual market Exchanges for plan year 2018 for states that use the HealthCare.gov platform. It examines issuer participation, plan options and premiums for individuals enrolling in coverage through the Exchanges."
Assistant Secretary for Planning and Evaluation [ASPE], U.S. Department of Health and Human Services [HHS]

Discretionary Clauses in ERISA Health and Disability Plans: Are They Still Viable? (PDF)
"As of 2015 ... nearly 25 states either have or are in the process of banning discretionary clauses in insurance policies subject to ERISA.... The Firestone decision made it clear that in the absence of an effective discretionary clause, a court deciding a benefit disputes utilizes the de novo standard of adjudication that favors neither party.... Plan insurers ... are expected to continue their opposition to the laws and argue that states run afoul of ERISA when they attempt to regulate the language in ERISA plans; however, the Supreme Court's refusal to hear an appeal from the Morrison ruling suggests that such efforts are unlikely to succeed."
DeBofsky & Associates, P.C., via Bloomberg BNA

Update on New York State's Paid Family Benefits Leave Law
"With a little over two months until the law takes effect, employers should ensure that their leave policies and benefit claims procedures conform with the new PFL and that written policies are updated to include PFL information. Those responsible for administering leave should be trained on compliance and coordination with other policies. Payroll managers should be prepared to deduct the modest employee contribution ... that will fund PFL. Finally, employers should confirm that they have secured insurance coverage for PFL."
Olshan

Employee Fired While on Leave, Not Allowed to Telecommute, Advances FMLA and ADA Claims
"[A] federal court in Missouri found triable issues existed as to whether the employee was denied FMLA leave and fired for exercising her FMLA rights, whether being at the office was an essential function of her job that she could not perform due to her disability, and whether telecommuting would have been a reasonable accommodation." [Teetor v. Rock-Tenn Services, Inc., No. 15-1002 (E.D. Mo. Oct. 2, 2017)]
Wolters Kluwer Law & Business

Leave Employees Alone During FMLA Time Off
"FMLA interference claims can be harder for an employer to defend than retaliation claims under the law due to the differing legal proof requirements ... An employee does not have to prove 'malicious intent' by the employer for an interference claim but must for a retaliation claim.... By addressing any misconduct when the employee returns from leave, the employer avoids the possibility of an interference claim[.]"
Society for Human Resource Management [SHRM]

Benefits in General

Taxing Employer-Provided Benefits: Congressional Discussions Continue
"[1] Some limit on 401(k) plans is still on the table, possibly coupled with other saving incentives, such as increasing investments in Roth retirement plans where tax exclusions are shifted to post-retirement years; [2] Some cap on the tax exclusion for short-term disability benefits is possible, which could impact generous leave benefits; ... [3] [At] least for now, there are no plans to change the tax exclusion for employment-based health benefits; and [4] While the Cadillac tax is not currently in the mix, amendments to repeal or delay it are expected."
HR Policy Association

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Lois Baker, J.D., President  loisbaker@benefitslink.com
David Rhett Baker, J.D., Editor and Publisher  davebaker@benefitslink.com
Holly Horton, Business Manager  hollyhorton@benefitslink.com

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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