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[Official Guidance]

Text of CMS 2019 Actuarial Value Calculator Methodology (PDF)
25 pages. "The [Actuarial Value (AV) Calculator (XLSM)] represents an empirical estimate of the 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 2019 version."
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]


Online Learning Course: Family and Medical Leave Act (FMLA)

Sponsored by International Foundation of Employee Benefit Plans [IFEBP]

Learn how to avoid common administration mistakes, implement best practices and be aware of interactions with other laws.

[Guidance Overview]

Tax Bill Includes Employer Tax Credit for Family and Medical Leave
"The new law creates a credit for employers who provide paid family and medical leave for eligible employees. It allows for a minimum credit of 12.5 percent of wages paid to qualified employees if the employer meets the minimum payment requirement, with potential increases to the credit for each percentage point above the minimum that employers pay to their employees who have taken leave."
Fox Rothschild LLP

CMS Summary of 2016 Medical Loss Ratio Results (PDF)
"This report summarizes the results of the Medical Loss Ratio (MLR) data submitted by health insurance companies to CMS for group and individual market health insurance coverage in 2016.... [T]hese health insurance companies paid approximately $447 million in rebates for 2016.... Employers received approximately $153 million in rebates in the small group market and $191 million in rebates in the large group market ... Rebates paid for 2016 will benefit approximately 3.9 million consumers across [all] markets."
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

CMS Announces Marketplace Enrollment, Actuarial Value Calculator, and Medical Loss Ratios
"Despite all of the changes that [HHS] has proposed in its 2018 payment notice, HHS decided not to make major changes in the actuarial value calculator for 2019. It will increase claims costs projections for 2019, with a 5.4 percent increase for medical costs and an 11.5 percent increase for drug costs. The calculator also reflects increased out-of-pocket limits for 2019, which will be set finally by the payment notice but are projected for purposes of the calculator to be $8,000."
Timothy Jost, in Health Affairs

Will Medical Marijuana Have a Place in Employee Health Plans?
"With 29 states and the District of Columbia now allowing the use of medical marijuana, it's conceivable that the drug could be covered under an employee health plan... [T]he federal government still classifies marijuana as a Schedule I drug that ... carries the harshest range of criminal penalties ... It may be difficult to find an insurance carrier that is willing to offer health insurance ... that cover[s] medical marijuana unless compelled to by law. Therefore, only employers with self-insured plans are likely to see this coverage as an option."
Society for Human Resource Management [SHRM]


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Failure to Protect the Health Records of Millions of Persons Costs Entity Millions of Dollars
"21st Century Oncology, Inc. (21CO) has agreed to pay $2.3 million in lieu of potential civil money penalties to the [HHS] Office for Civil Rights (OCR) ... to settle potential violations of the [HIPAA] Privacy and Security Rules. 21CO is a provider of cancer care services and radiation oncology. With their headquarters located in Fort Myers, Florida, 21CO operates and manages 179 treatment centers, including 143 centers located in 17 states and 36 centers located in seven countries in Latin America."
U.S. Department of Health and Human Services [HHS]

ACA Enrollment Declines Slightly, to 8.7 Million
"The number represented a slight decline from the 2017 enrollment figure when about 9.2 million people signed up for health insurance policies from private insurers on the platform."


A Carrier's Economist's Take on the ACA
"Between 2010 and the actual ACA launch, [one Blue Cross plan] spent over $100,000,000 in new spending just on compliance work and building the systems to allow us to participate. This is money that could have bought actual health care. Pre-ACA we served an individual market with the following characteristics: 125,000 people, Average age 36 years, 51% female ... Fast forward to 2017: 165,000 people, Average age 46 years old [... 30% increase; older,sicker], 58% female [... more expensive claims] ... Only 40% of policyholders keep their plan for 12 premium payments in a row."

Benefits in General

[Official Guidance]

Text of DOL Inflation-Adjusted Civil Penalties for 2018, Including Those Under ERISA and FMLA
"[T]his final rule sets forth the Department's 2018 annual adjustments for inflation to its civil monetary penalties.... This final rule is effective on [the date of publication in the Federal Register, scheduled to be Jan. 2, 2018]. As provided by the Inflation Adjustment Act, the increased penalty levels apply to any penalties assessed after [such date]." [BenefitsLink note: 2017 and 2018 dollar amounts have been summarized by EBSA in an appendix to the rule, which will not be published in the Federal Register. EBSA penalties under ERISA begin on page 31; penalties under FMLA are on page 35.]
U.S. Department of Labor [DOL]

[Guidance Overview]

The New Tax Rules for Executive Compensation and Employee Benefits
"Compensation discussion and analysis sections (CD&As) for 2018 proxy statements should be reviewed to determine if any changes are advisable related to the Section 162(m) discussion. Companies should catalog grandfathered arrangements and implement processes to ensure that such arrangements are not unintentionally materially modified.... Employers that sponsor [retirement] plans allowing for loans should consider whether plan participant communications should be revised early next year to alert participants to the greater flexibility allowable for rollover of loan offset amounts."

Noteworthy Federal Cases in 2017 Relating to Employee Benefit Plans
"Here is a round up of cases decided by the U.S. Supreme Court and the First and Second Circuit Courts of Appeals in 2017 involving ERISA employee benefit plans."
Verrill Dana LLP

Executive Compensation
and Nonqualified Plans

[Official Guidance]

Text of IRS CCM 201752008: Allocating Deduction Limitation Under Section 162(m)(6) (PDF)
"Corporation Y is a tax -exempt hospital and is part of an aggregated group with Corporation X, a covered health insurance provider. Both Corporations X and Y paid applicable individual remuneration to Employee A. The regulations under Section 162(m)(6) provide that the Section 162(m)(6) deduction limitation must be allocated among members of an aggregated group. Is remuneration paid by Corporation Y otherwise deductible and taken into account for purposes of applying the deduction limitation even though Corporation Y is a tax -exempt entity? ... Yes, remuneration paid by Corporation Y is otherwise deductible and is taken into account in applying the deduction limitation under Section 162(m)(6)."
Internal Revenue Service [IRS]

Pay Ratio Disclosure: How to Tackle the SEC Rule
"[This article presents] a framework and proposed approach to pay ratio disclosure that might greatly simplify your analysis and work plan. [The authors] encourage you to conduct a trial run soon to increase your chance of success for next proxy season. One benefit of a trial run is that you can see how results vary by exercising discretion with respect to the varying methods. There is a key concept driving the whole analysis: determining the median employee."
Wilson Sonsini Goodrich & Rosati, via Corporate Secretary

Selected Discussions
on the BenefitsLink Message Boards

Indicating Transition Relief on 2015 Form 1094-C
One of the common mistakes resulting in erroneous IRS 2015 ESRP assertions is failure to properly report eligibility for 50-99 or 100+ transition relief on the 2015 Form 1094-C. I know that box C in line 22 (Section 4980H Transition Relief) needed to be checked along with either code A or B entered in line 23 column (e). What I'm questioning is whether the Yes or No box (MEC Offer Indicator) was supposed to be checked in line 23 column (a)? Page 8 of the 2015 instructions could be interpreted either way. What are others doing?
BenefitsLink Message Boards

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BenefitsLink Health & Welfare Plans Newsletter, ISSN no. 1536-9595. Copyright 2017, 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, 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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