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[Official Guidance]

Text of IRS CCM 201810007: Tax Treatment of Employer-Provided Tax Preparation Services as Part of Employer's International Tax Equalization Program (PDF)
"The tax preparation services provided by Taxpayer for the benefit of its employees working in foreign countries are includable in the employees' gross income. [2] The amount includable in the employees' gross income is the fair market value of the tax preparation services. [3] The fair market value of the tax preparation services constitutes wages for FICA tax purposes. [4] The fair market value of the tax preparation services constitutes wages for purposes of FITW, unless Taxpayer had a reasonable belief that such value would be excludable from the employees' gross income under Section 911 or Taxpayer was required by the law of a foreign country to withhold income taxes on such value."
Internal Revenue Service [IRS]


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]

Male Contraceptive Laws May Create HSA Problems for Employers in Certain States
"Illinois, Maryland, and Oregon have each enacted laws that require insurers to cover male sterilization or male contraceptives without a deductible.... [A]ny plan that complies with those state law mandates regarding male contraception would fail to be an HDHP and any individual covered by such a plan would not be eligible to make or receive tax-favored HSA contributions.... Notice 2018-12 allows for transition relief."
Ogletree Deakins

IRS Issues Transition Rule for HSA-Incompatible Vasectomies
"When a Maryland statute took effect Jan. 1 requiring all state-regulated health plans to pay for men's vasectomies regardless of any deductible, it left Marylanders' high-deductible health plans (HDHPs) incompatible with IRS rules for [HSAs]. The IRS has now provided two years of temporary relief to Maryland's HSA holders and those who might be similarly situated elsewhere[.]"
Society for Human Resource Management [SHRM]

Employers Push HSA Reforms as Lawmakers Mull Spending Bill Riders
"Introduced on March 1, the bill includes ... revisions to the rules governing HSAs and high-deductible health plans [which would]: [1] Clarify that enrollment in 'excepted benefits' does not jeopardize eligibility to contribute to an HSA; [2] Provide greater flexibility to offer first-dollar or lower-deductible coverage of health services at onsite medical or retail health clinics; ... [3] Allow conversion from a health FSA or [HRA] to an HSA ... [4] Provide greater flexibility to offer first-dollar coverage of services and medications for certain chronic diseases; [5] Allow an annually capped amount of HSA dollars to pay for qualified sports and fitness expenses."

New Employer Coalition Aims to Ease Reporting Requirements
"Dubbed the Partnership for Employer-Sponsored Coverage, the group is planning a formal launch in the spring. P4ESC seeks to promote legislative and regulatory amendments to the [ACA], such as reducing the reporting requirements within the employer shared-responsibility provision."
Employee Benefit News


Employer Health Care Cost & Quality Congress | Washington DC

Sponsored by World Congress

4/29-5/2/2018 in Washington DC. This event brings together Employers, Brokers, and TPAs. Qualified HR & Benefits Professionals may attend as our guest See website for details/restrictions & to apply.

Vertical Integration Continues with Cigna/Express Scripts Announcement
"Historically, large employers have carved pharmacy benefits out of the medical plan and gone directly to a PBM for more favorable pricing and a greater share of rebates than the carriers were usually willing to share. The big question is whether the alliances between the medical plans and PBMs bring greater cost efficiencies, or whether they limit competition, choice and employers' leverage in the market."

Successful Challenge to ACA Risk Adjustment Formula in New Mexico
"In holding that the formula was arbitrary and capricious, the district court rejected HHS's argument that the formula was justified because the ACA requires risk adjustment to be budget neutral. The court agreed ... that the statute includes no such requirement. and vacated all HHS risk adjustment regulations dating back to 2014." [New Mexico Health Connections v. HHS, No. 16-878 (D.N.M. Feb. 28, 2018)]
Pepper Hamilton LLP

Text of Letter from CMS Administrator to Idaho Governor About Potential Sale of Non-Compliant Health Plans (PDF)
"Based on our review of Idaho Bulletin No. 18-01 ... we have reason to believe that Idaho may not be substantially enforcing provisions of the PPACA. If a state fails to substantially enforce the law, [CMS] has a responsibility to enforce these provisions on behalf of the State.... [We] believe that Idaho has options within the law to meaningfully implement many of the policy proposals contained in the Bulletin, to address the crisis facing the state's individual health insurance market. I outline a few of those options below."
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

CMS Administrator Statement on Enforcement Letter to Idaho
"CMS appreciates the Governor's concern for his citizens and his efforts to address their increasing premiums, an increase of 91.4% over the last four years alone. CMS looks forward to continuing to work with Idaho on their 1332 and 1115 waiver applications."
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

HHS May Step in to Enforce the ACA in Idaho
"Idaho has 30 days to respond to CMS which will then make a preliminary determination of substantial enforcement (or not).... The letter explicitly identifies a conflict between the bulletin and the ACA's ban on preexisting condition exclusions, community rating standards, guaranteed renewability requirements, ban on lifetime and annual dollar limits on essential health benefits, ban on discrimination based on health status, coverage of preventive services without cost-sharing, and coverage of the entire essential health benefits package (including prescription drugs and the annual out-of-pocket maximum)."
Katie Keith, in Health Affairs

Without Federal ACA Insurance Mandate, Some States Try to Create Their Own
"The GOP tax plan approved by Congress in the last days of 2017 repealed ... the individual mandate. But before that federal change happens next year, some states are working to preserve the effects of the mandate by creating their own versions of it. Maryland is on the cutting edge with legislation moving through both chambers of the Statehouse."
National Public Radio

ACA Premiums Could Rise As Much as 32% Next Year Unless Feds Step In
"The nationwide analysis, released [March 8] by California's insurance exchange, said repeal of the [ACA]'s 'individual mandate' to hold insurance is the main driver, jacking up rates by 7 percent to 15 percent in 2019 and up to 10 percent in the following two years, as younger and/or healthier people decide not to get coverage."


CIGNA/Express Scripts Merger: So Much for Price Transparency and Competition
"The new 2018 health care policy and market buzzword is 'price transparency.' ... [T]he big black box of pharmaceutical pricing opacity is about to get bigger and darker. The three biggest PBMs -- OptumRx, CVS Caremark, and Express Scripts -- already control 72% of the U.S. market. Now, they will be controlled by aggregators UnitedHealth, Aetna CVS, and CIGNA.... This is sort of like the fox buying the hen house."
Bob Laszewski's Health Care Policy and Marketplace Review

Benefits in General

[Guidance Overview]

DOL Says New Disability Claim Regs to Apply April 1
"The 2016 amendments add a new requirement applicable during the claim appeal phase: a plan must give a claimant reasonable time to review and respond to 'new or additional evidence' or a 'new or additional rationale' for denying his or her claim.... [The DOL] places no limits on the amount of back-and-forth required. Nor is there any adjustment in the time allowed for rendering a decision in order to accommodate this additional procedure.... [T]he preamble also suggests that when the claimant does respond, if the response prompts further review by a medical professional, which is likely (and may be required by the regulations), the plan may need to send the matter to the claimant for another response, and so on."
Ogletree Deakins

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

Implications of Tax Cuts and Jobs Act for Public Company Executive Compensation Programs
"Before making any changes to existing covered employee compensation arrangements, consider whether such changes are material modifications that will make the transition relief unavailable. Revise the standard tax discussion that appears in proxy statements and other securities filings to reference the changes to Section 162(m) and the impact of such changes on existing executive compensation programs and future compensation decisions. In new compensation plans, consider omitting language that was previously intended to comply with the old 'performance-based compensation' exception."
Snell & Wilmer

Walt Disney Shareholders Reject Executive Compensation in Non-Binding Vote
"Fifty-two percent of shareholders rejected the compensation package of CEO Robert A. Iger and four other executives, including [CalPERS] ... [CalSTRS] ... Texas Teacher Retirement System ... [and] Florida State Board of Administration ... Disney said ... after the meeting that it would take the non-binding vote 'under advisement for future CEO compensation.' "
Pensions & Investments

Selected Discussions
on the BenefitsLink Message Boards

Are Governmental Employer-Sponsored HSAs Treated as 414(d) Plans?
I'm trying to figure out whether the 4975(g)(2) exception for 414(d) plans would apply to HSAs offered in connection with a health plan sponsored by a governmental employer. Assume that the HSA arrangement is treated as employer-sponsored for ERISA purposes. Or does 414(d) refer only to 401(a) qualified plans?
BenefitsLink Message Boards

Can 'Unrelated' Employers Participate in the Same 409A Plan?
We have two companies that are only a little bit related -- in the 10-20% range. So they definitely wouldn't be considered a single employer under 409A. However, when certain employees leave company A to go to company B, they continue to participate in company A's nonqualified plan. I can't find any reason why this is a problem -- is there anything I might be missing?
BenefitsLink Message Boards

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BenefitsLink Health & Welfare Plans Newsletter, ISSN no. 1536-9595. Copyright 2018, 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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