Health & Welfare Plans Newsletter

November 15, 2017

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[Official Guidance]

Risk Corridors Payment Charges for the 2016 Benefit Year (PDF)
21 pages. "HHS is announcing issuer-level risk corridors payments and charges for the 2016 benefit year. Because 2015 benefit year collections were insufficient to pay 2014 benefit year payment balances in full, HHS will use 2016 benefit year risk corridors collections to make additional payments toward 2014 benefit year payment balances. [A table] shows risk corridors payments and charges calculated for the 2016 benefit year, by State and issuer, and the amount of anticipated 2016 risk corridors collections that HHS expects to pay for issuers that have 2014 benefit year payment balances."
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

[Advert.]

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[Guidance Overview]

Healthcare Reform: Questions and Answers for Employers (PDF)
165-page compilation of Q&As covering all aspects of the ACA. Updated through Nov. 14, 2017.
Arthur J. Gallagher & Co.

[Guidance Overview]

Answers to Employer Questions on New York Paid Family Leave
"How do employers calculate employee contributions? ... How are employee contributions and PFL benefits taxed? ... Are small employers exempt from this law? ... How does the PFL define a 'domestic partner?' ... Is there any time limit during which employees must satisfy the PFL eligibility requirements? ... Do employees who are not yet eligible for PFL benefits need to make contributions? ... How about employees who have children in 2017 -- is there any waiting period for them to start using PFL benefits in 2018?"
Nixon Peabody LLP

Proper FMLA Notice Is Not a Mere Technicality
"Canigiani had neither conceded that she had no damages or remedy under the FMLA, nor had she had an opportunity to prove damages but failed to do so.... Considering that Canigiani pleaded that she was damaged as a result of the defendant's failure to notify her of her FMLA rights and that she demanded in her pleadings, among other relief, 'actual damages suffered, including back pay, front pay, loss of benefits, future pecuniary loss and lost future earnings capacity,' the district court found her allegations sufficient to survive BOA's motion to dismiss." [Canigiani v. Banc of America Merchant Services LLC, No. 17-61270 (S.D. Fla. Oct. 3, 2017)]
Society for Human Resource Management [SHRM]

Tax Bills Put Fringe Benefits on the Firing Line
"A broad range of commonly offered benefits would no longer be excludable from an employee's taxable wages ... In turn, certain popular employer deductions for employee benefits would be eliminated (even though the benefits themselves may remain excludable)."
Morgan Lewis

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Senate GOP Tax Bill to Include Individual Mandate Repeal; Healthcare Groups Urge Congress to Reconsider
"Including a repeal of the mandate in tax legislation could help pay for some of the tax cuts Republicans want. [CBO] estimates the savings will total $338 billion over 10 years."
FierceHealthcare

Modeling the Effects of the Individual Mandate on Health Insurance Coverage
17 presentation slides. "CBO discusses the theoretical and empirical basis for its estimates of the effect on health insurance coverage of repealing the individual mandate ... These slides reprise material presented to CBO's Panel of Health Advisers in September 2017, with the addition of updated estimates published [in Nov. 2017]."
Congressional Budget Office [CBO]

While Litigation Proceeds, Outstanding Risk Corridor Payments Mount
"According to [one source], 2016 has added $3.978 billion to the debt owed to insurers and yielded only $27 million more in payments from insurers, which will be used for payments toward the amounts owed for 2014.... The insurer losses were thus less in 2016 than in 2015, although more than 2014. Among the biggest losers for 2016 were Humana of Georgia ($104 million); Blue Cross/Blue Shield Illinois ($116 million); Oscar of New York ($107 million); Blue Cross/Blue Shield of Texas ($168 million); and Select Health of Utah ($144 million)."
Health Affairs

Healthcare Economist Uwe Reinhardt Has Died
"Uwe Ernst Reinhardt (September 24, 1937 - November 14, 2017) was a professor of political economy at Princeton University and held several positions in the healthcare industry. Reinhardt was a prominent scholar in health care economics.... Reinhardt's research focused on hospital pricing, systems of health care around the world, Medicare reform, and health care spending." [BenefitsLink has been pleased to link our readers to articles about Reinhardt's research since 2003.]
Wikipedia

Benefits in General

Description of the Chairman's Modification to the Chairman's Mark of the Tax Cuts and Jobs Act
103 pages. "Scheduled for markup before the Senate Committee on Finance on November 15, 2017 ... The Chairman's modification strikes the following proposals: [1] Item III.H.1, Nonqualified deferred compensation, [2] Item III.K, Determination of worker classification and information reporting requirements, [3] Item III.M.2, Application of 10-percent early withdrawal tax to governmental section 457(b) plans, and [4] Item III.M.3, Elimination of catch-up contributions for high-wage employees." [Also available: Estimated revenue effects of these modifications.]
Joint Committee on Taxation [JCT], U.S. Congress

Executive Compensation
and Nonqualified Plans

Analysis of Executive Change in Control Arrangements of the Top 200 Companies (PDF)
24 pages. "[T]his study analyzes the benefits received by the CEOs and other named executive officers ('Other NEOs') at the 20 largest public companies in 10 different industries, based on market capitalization.... The prevalence of a three times or higher severance multiple for CEOs has fallen from 37% in 2015 to 33% in 2017 ... 67.5% of the average 2017 total [change in control] amounts for CEOs and Other NEOs is made up of equity awards. This is down slightly from 70.4% in 2015.... 90% Percent of companies that currently provide an excise tax gross-up or modified gross-up payment have indicated that they intend to phase out or completely eliminate excise tax gross-up provisions in the future."
Alvarez & Marsal

Executive Comp Enters Uncertain Territory with Tax Overhaul and Other Changes Pending
"In addition to pending tax changes that could reshape the executive comp landscape, the GOP's deregulatory agenda has placed various Dodd-Frank Act requirements on the chopping block.... Legislation isn't the only avenue available for taking down unwanted Dodd-Frank requirements, however, as evidenced by recent regulatory shifts coming out of the [SEC]."
Bloomberg BNA

[Opinion]

Tax Reform Would Put Your Retirement at Risk, Change Rules for Deferred Comp
"Although the House Ways and Means Committee announced ... it has removed from its version of the bill Section 3801, which would have dismantled and destroyed nonqualified deferred compensation, the Senate has yet to follow suit. As the proposed changes currently stand, the Senate's Tax Reform bill will increase taxes on employee savings, radically change compensation policies and reduce the capability of U.S. employers to compete for talented workers....Changing 409A will change how people save, how executives are paid, and how businesses compensate workers, not just executives."
Fulcrum Partners, LLC

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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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