Health & Welfare Plans Newsletter

November 27, 2017

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[Guidance Overview]

Final Pieces of Employer Mandate Assessment: IRS Issues Sample Forms 14764 and 14765
"Form 14765 will be partially completed by the IRS, but also will serve as the place an ALE member disputes and makes corrections for the assessable full-time employees.... The IRS will complete the first row for the appropriate columns using the line 14 and 16 code combinations the ALE member entered for the assessable full-time employee for the tax year in question.... [T]he sample Letter 226J instructs that if more than one code combination for lines 14 and 16 could apply, the ALE member is required to list the employee's name, the applicable months, and the additional code combinations that could apply for each month in a signed statement. This is a departure from the Form 1095-C instructions"
Accord

[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.


[Guidance Overview]

Summary of HHS' Proposed 2019 Notice of Benefit and Payment Parameters (PDF)
"HHS is proposing several updates to the risk adjustment model for the 2018 and 2019 benefit years.... The proposed maximum out of pocket for 2019 will be $7,900 for self-only coverage and $15,800 for family coverage ... The rate review threshold is increased from 10% to 15% and states will have greater flexibility in setting filing deadlines for non-QHP plans.... States will be given greater flexibility in selecting EHB benchmarks and issuers greater flexibility in substituting benefits."
Wakely Consulting Group

No Penalties for COBRA Violation Absent Proof of Employee's Harm or Employer's Bad Faith
"Following the employee's termination, the employer provided him with free health coverage for almost a year. But after the coverage expired, the employee filed suit, seeking compensation for emotional distress and uncovered medical expenses due to the employer's failure to provide a COBRA notice.... The court concluded that the lack of prejudice to the employee and the lack of bad faith on the part of the employer weighed heavily against imposing a statutory penalty." [Sanders v. Temenos USA, Inc., No. 16-63040 (S.D. Fla. Oct. 13, 2017)]
Thomson Reuters / EBIA

May Terminating Employees Elect COBRA Coverage for Domestic Partners?
"[D]omestic partners -- unlike spouses -- do not qualify as qualified beneficiaries under COBRA and, therefore, do not have independent COBRA rights. But if you wish to provide continuation coverage rights like those provided to spouses, you may do so through plan design."
Thomson Reuters / EBIA

Impact of the Mental Health Parity and Addiction Equity Act (PDF)
"[P]rior to MHPAEA members paid approximately 35% of benefit costs out of pocket for professional behavioral healthcare services, compared to only 21% for professional physical healthcare services.... [A]nalysis of a large nationwide claims database ... show a greater change in benefit richness for behavioral health (BH) services than non-behavioral health (non-BH) services, as measured by paid-to-allowed benefit ratios, for PPO plans between 2008 and 2013. This is particularly true for outpatient facility and professional services."
Milliman

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How Would End of DACA Affect Employees' Health and Welfare Benefits?
"Nothing in the law or regulations would cause a qualified beneficiary to lose the right to COBRA coverage by being deported.... [S]ponsors of health care FSAs are required to offer continuation coverage through the end of the year of the termination.... Sponsors of HRAs must offer COBRA upon termination and so would face the same issues that arise in other COBRA-covered plans.... In both funded and unfunded long-term disability plans, a terminated DACA recipient might continue to receive payments, although it's less clear whether the payments would continue following deportation."
Willis Towers Watson

Companies Add New Twists to Parental Leave
"Two large U.S. corporations -- Cisco Systems and Whirlpool Corp. -- have significantly increased their paid time off benefits for family members following the arrival of a new child, and where they've gone others may choose to follow."
Society for Human Resource Management [SHRM]

As Health Care Changes, Insurers, Hospitals and Drugstores Team Up
"Former adversaries are banding together, girding against upheaval in a rapidly changing health care environment. They are also bracing for the threats posed by interlopers like Amazon eyeing a foray into the pharmacy business or tech companies offering virtual medical care via a computer or cellphone."
The New York Times; subscription may be required

Industry Advocates Offer Checklist to Improve Value-Based Payment Models
"CMS recently requested feedback on its efforts to promote value-based care. Advocacy groups have some concrete recommendations as the agency juggles various stakeholders' priorities."
FierceHealthcare

[Advert.]

New COBRA Audit Guidelines

Sponsored by Lorman and BenefitsLink

Nov. 28 webinar. In addition to general COBRA compliance, we'll review the IRS Audit guidelines, to help you identify and prepare for the areas of focus in an IRS COBRA audit. Discount for BenefitsLink readers.


CMS Updates Medicare Advantage Value-Based Insurance Design Model for 2019
"Beginning in 2019, the VBID model will expand to an additional fifteen new states for a total of 25 states, allow Chronic Condition Special Needs Plans to participate, and allow participants to propose their own systems or methods for identifying eligible enrollees. This change will afford participants with the opportunity to include Medicare beneficiaries with different chronic conditions than those previously established by CMS[.]"
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

Executive Compensation
and Nonqualified Plans

[Official Guidance]

Text of Preliminary FAQs from ISS on U.S. Compensation Issues (PDF)
7 pages. "ISS has received several questions regarding upcoming changes to the quantitative pay-for-performance screening methodology and the Equity Plan Scorecard.... [These] Preliminary FAQs address some of the most commonly received questions to date."
Institutional Shareholder Services [ISS]

[Guidance Overview]

ISS Releases Preliminary U.S. Compensation FAQs for 2018 (PDF)
"ISS released preliminary U.S. Compensation FAQs for 2018 that cover the Quantitative Pay-for-Performance (P4P) tests and the Equity Plan Scorecard (EPSC) policy. These FAQs make some significant changes to the existing ISS policies and it appears that they will apply to shareholder meetings on and after February 1, 2018, even though they were not released as part of ISS's Policy Updates for 2018."
ExeQuity

Another Day, Another Important Dollop of Information from ISS
"ISS published nine 'Preliminary Frequently Asked Questions,' five announcing changes to its Equity Plan Scorecard and four changes to its Quantitative Pay-for-Performance Screens."
Winston & Strawn LLP

Third Circuit Holds That Plan Participant Bargaining Power Is Not a Substantive Element of a Top-Hat Plan
"The Third Circuit agreed with the First Circuit's approach, finding that [DOL Opinion Letter 90-14A] does not require that participants in a top-hat plan possess bargaining power. Although the Second, Sixth, and Ninth Circuits have inquired into plan participants' bargaining power, they do not clearly adopt bargaining power as an additional requirement. The Third Circuit affirmed the District Court and concluded that participants' bargaining power is not a substantive element of a top-hat plan." [Sikora v. UPMC, No. 17-1288 (3d Cir. Nov. 24, 2017)]
Roberts Bartolic

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Lois Baker, J.D., President  loisbaker@benefitslink.com
David Rhett Baker, J.D., Editor and Publisher  davebaker@benefitslink.com
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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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