Health & Welfare Plans Newsletter

February 12, 2018

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Retirement Policy Manager
University of California Office of the President
in CA

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Swerdlin & Company
in GA

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FM International
in NY

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[Official Guidance]

Text of IRS Q&As on Information Reporting by Health Coverage Providers (Section 6055)
Updated Feb. 9, 2018 with the addition of questions 30-35, which address Extended Due Dates and Transition Relief.
Internal Revenue Service [IRS]

[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.


Still Standing After the New Tax Law: Employee Commuter Tax Benefits
"Section 132 of the Internal Revenue Code allows employers to offer employees the opportunity pay for certain transportation expenses on a pre-tax basis.... Unlike Section 125 Plans, a Commuter Benefit Plan does not include a 'use it or lose it penalty'. A Plan document is not required, but a written description is recommended. Form 5500 is not required."
The Retirement Plan Blog

Are You Smarter Than Your Smart Phone?
"Employers can play a role in promoting smart use of smart devices to help enhance their employees' health: [1] Analyze data to identify the top health challenges in the workforce ... [2] Conduct an inventory of existing partners' available applications and available alternatives, with a 'mobile first' priority. [3] Validate effectiveness and identify mobile solutions that will overcome classic barriers to healthy behaviors change ... [4] Provide periodic communication to promote opportunities ... using technology and partner/provider support for confidentiality."
Conduent

Paid Family Leave Proposals Gaining Attention at Federal Level, Possibly Momentum
"[The Workflex in the 21st Century Act (H.R. 4219)] would create a qualified flexible work arrangement under [ERISA]. Because the plan would be tied to ERISA, participating employers would be shielded from varying state and local paid leave laws.... [An] employer would have to offer all employees, including both full- and part-time workers, a minimum threshold of paid leave ... and at least one flexible work arrangement[.]"
HR Daily Advisor

New Bill Would Mean More Flexibility for High-Deductible Health Plans
"[T]he Chronic Disease Management Act of 2018 [H.R. 4978], would amend the IRS tax code so that high-deductible health plans paired with health savings accounts could cover chronic disease prevention and treatment on a pre-deductible basis.... The existing IRS regulations ... permit a 'safe harbor' that allows for the coverage of preventive services prior to satisfaction of the plan deductible. But that exception doesn't include clinical services meant to treat an existing illness or condition, which narrows plan options and can stifle consumers' ability to benefit from the financial advantages of a tax-free health savings account."
FierceHealthcare

[Advert.]

New Parental Leave Laws in New Jersey

Sponsored by Lorman and BenefitsLink

February 16 webinar. Learn how to identify any needed changes to your company policies to meet all current New Jersey parental leave law requirements. BenefitsLink discount.


New Budget Bill Eliminates ACA's Independent Payment Advisory Board
"The bill does not include broader ACA market stabilization measures -- such as payments for cost-sharing reductions or reinsurance funds -- that have received bipartisan support.... [This article] focuses on the repeal of the [Independent Payment Advisory Board (IPAB)], cuts to the Prevention and Public Health Fund, and the delay of Medicaid cuts to disproportionate share hospitals."
Katie Keith, in Health Affairs

Understanding Short-Term Limited Duration Health Insurance
"[S]hort-term policies are generally considered to be 'major medical' coverage; however short-term policies are distinguished from other comprehensive major medical policies because they only provide coverage for a limited term, typically less than 365 days.... Late last year, Congress repealed the individual mandate penalty under the [ACA] ... It is possible this change could lead more consumers to consider purchasing short-term policies."
Henry J. Kaiser Family Foundation

[Opinion]

American Academy of Actuaries Comment Letter to EBSA: Modeling the Potential Impact of Association Health Plans (PDF)
"[The Committee's] comments offer considerations that should be made when analyzing the potential impacts of these more broadly defined AHPs on individuals, employer groups, and the individual and small group health insurance markets. Different stakeholders will be affected differently, depending on allowable rating factors, plan design flexibility, and strategic considerations."
Individual and Small Group Markets Committee of the American Academy of Actuaries

[Opinion]

Association Health Plans: Self-Funded vs. Fully Insured
"[The DOL] invites comments on whether the standards that govern fully-insured AHPs should be extended to self-funded AHPs. Such an extension would be a step into unchartered regulatory territory ... If groups and associations have the option to self-fund, it is a safe bet that they will flock to self-funded arrangements. The savings are too big to pass up. There are consequences, however, which cut both ways: [1] Who is the primary regulator? ... [2] State mandated benefits ... [3] State insurance protections ... [4] Options for State policy-makers and regulators."
Mintz Levin

Benefits in General

[Guidance Overview]

No Further Delays for Enhanced Disability Claims Procedures
"For plans where the administrator will retain the discretion to make disability determinations, the plan sponsor should, prior to April 1, [1] ensure that plan administrators and benefits staff are aware of, and will follow, the new rules in practice; [2] update plan documents and SPDs to reflect the new procedures; and [3] update ABD letters, disability claims forms, communications, notices, company intranet, and employee handbooks[.]"
McCarter & English

Plan Limitations Period That Was Not Disclosed in Benefit Denial Letter Is Unenforceable
"The court observed that although the Fourth Circuit has not decided this question, the First, Third, and Sixth Circuits have concluded that a benefit denial must state a plan-imposed time limit for filing suit in order for the limit to be enforced against a participant[.]" [Starnes v. Universal Fidelity Administrators Co., No. 17-3073 (D.S.C. Feb. 5, 2018)]
Thomson Reuters Practical Law

The Educated Fiduciary: How to Up Your Game
"Read at least one newsletter regularly.... Schedule an on-site fiduciary training session.... Subscribe to blogs.... Sign up for webinars.... Attend a formal education program.... Familiarize yourself with materials on the DOL's website.... Develop written policies with your advisers.... Prepare a checklist of things to do each year.... Read up on your own."
Cohen & Buckmann, P.C.

Budget Brings Pension and Health Care Relief (PDF)
"The bill includes some helpful relief for plan sponsors and participants of qualified plans: [1] Expanded hardship relief.... [2] California wildfire relief.... [3] Relief for improper federal tax levy.... [4] Joint Select Committee on multiemployer plans.... [The bill] makes no changes to the [ACA] tax provisions nor does it include provisions related to market stabilization. It does, however, make keys changes to Medicare and provide funding for a number of popular domestic health programs."
Groom Law Group

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

Clarifying the Use of Nonqualified Plans to Mitigate Lost Deduction Under the New 162(m) Regime
"After a covered employee's retirement or other termination of employment, the company still will be able to pay and deduct up to $1 million in benefits each year, even under the 'once a covered employee always a covered employee' rule.... If an employee defers compensation ... the company will be replacing current, non-deductible cash payments with a promise to pay cash in the future. If the future payouts amount to less than $1 million per year, the payouts will then be fully deductible[.]"
Winston & Strawn LLP

Selected Discussions
on the BenefitsLink Message Boards

Combined Plan Document and SPD
I've encountered several law firms that are preparing a single document that they represent is BOTH the ERISA welfare plan document and Summary Plan Description. (Maybe the law firms are using the same 3rd party welfare document vendor?) Seems to me that ERISA requires two separate documents. In the qualified plan arena I can't imagine trying to use the plan document as the SPD or vice versa. Interested in what others think of this approach.
BenefitsLink Message Boards

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Press Releases

DOL Investigations Help Retirement Plans Recover Nearly $16 Million After Losses from Fraudulent Loans
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

DOL Investigation Results in Sentencing Of Former Connecticut Resident for Theft of Benefit Checks
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

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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 2018 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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