Health & Welfare Plans Newsletter

March 13, 2018

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Jobs

Retirement Plan Administrator
Northeast Professional Planning Group, Inc.
in NJ, NY

Senior DC Plan Administrator
Heritage Pension Advisors, Inc.
in NY

Account Manager
Nolan Financial
in MD

Senior Compliance Analyst
Insperity
in TX

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Employer Innovations in Health Coverage (PDF)
36 pages. "Employers have pioneered strategies that directly address the biggest cost drivers in the US healthcare system: the relatively small number of high-cost claims that drive such a large percentage of spending, increasing unit prices resulting from marketplace consolidation, misplaced incentives, waste, inefficiency, uneven quality of care and lack of transparency. Many of these experiments have met with startling success and -- if scaled and encouraged -- have the potential to fundamentally improve healthcare for all Americans."
Mercer and American Benefits Council

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Health Plan Participation: Is It a Good Thing or a Bad Thing?
"The average employer's health plan attracts the enrollment of about 80-85% of its employees.... So what happens when an employer only attracts 50% (or less) of the population to enroll? ... From a total cost perspective, employers with low participation are actually saving a massive amount on their healthcare spend. The per-enrollee costs may be 20%+ higher but that is more than neutralized in the aggregate by the reduced headcount."
Frenkel Benefits

Effective Strategies to Restrain Health Costs
"[B]est-performing companies are more proactive with their health-plan designs and policies for subsidizing the cost of workers' coverage.... 'Total Rewards' looks at all of an employer's spending on employees: base salary, incentive compensation, 401(k) match, health-plan subsidy, and the cost of providing vacations and disability coverage.... [B]est-performing employers also do more to encourage and improve workforce well-being, using a variety of approaches: ..."
CFO

Overpaying for Prescription Drugs: The Co-pay Clawback Phenomenon
"In 2013, almost one quarter of filled pharmacy prescriptions (23%) involved a patient copayment that exceeded the average reimbursement paid by the insurer by more than $2.00.... Overpayments are more likely on claims for generic versus brand drugs (28% vs. 6%), but the average size of the overpayment on generic claims is smaller ($7.32 vs. $13.46).... With over 200 million Americans commercially insured in 2013, these findings suggest the practice of overpayments may account for a non-negligible share of overall drug spending and patient out-of-pocket costs."
USC Schaeffer Center

30 Percent of Health Plan Participants Don't Understand What an EOB Is
"[P]art of the problem is a lack of industry standards with regard to creating an EOB. Without a confident understanding of what the codes or procedure names mean, patients are unsure how to read the bill, which, in turn, leads to apathy ... [O]ne out of 10 consumers surveyed admitting that they typically throw out the EOB."
BenefitsPro

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Only Half of Americans Feel Knowledgeable About Health Savings Accounts
"[M]any Americans are unaware that they can use their HSA assets -- accumulated in their working years -- to pay for health care and long-term care expenses in retirement.... 2 in 5 Americans mistakenly believe that balances must be spent by the end of the year, or forfeited.... Nine in ten advisors surveyed say they typically discuss healthcare or long-term care with clients but only 7 in 10 have specifically addressed the use of an HSA."
LIMRA

Vertically Integrated Healthcare Is Making a Comeback
"All of the recently unveiled mergers follow the vertical-integration model -- the combination of plans and providers with segmented focuses ... Backers of the latest deals contend the agreements will drive down prices as well as enable better health outcomes because of centralized services.... [E]mployers could see pharmacy costs rise slightly -- in part as those chronic-condition patients become more adherent to their medications -- but, as a result of better care, medical costs could lower, and at a higher rate than the pharmacy increases."
Human Resource Executive

Potential ERISA Violation: Employee Fired After Switching to Employer's Health Plan
"An employee who ran one of a staffing agency's offices for years but was fired less than four months after he switched from his wife's health insurance plan to his employer's plan, and after four recent hospitalizations, avoided summary judgment on his ADA discrimination and ERISA retaliation claims. The federal district court in Ohio explained that enrolling in the health plan was protected activity under ERISA and the timing of his termination, which the employer said was for cost-cutting reasons, was evidence of a causal link." [Feldmeyer v. BarryStaff, Inc., No. 16-954 (S.D. Ohio Mar. 5, 2018)]
Wolters Kluwer; free registration may be required

Uber Wants DOL's Association Health Plan Rule to Consider Gig Workers
"Uber Inc. and its health-care partner, Stride Health, ... asked the DOL in separate letters to allow workers with multiple jobs and varied hours to be eligible to participate in association health plans. Uber, which has long fought for portable benefits legislation for its independent contractor drivers, also said it wants clarification on worker classification under the plan."
Bloomberg BNA

CMS Thwarts Idaho's Attempts to Skirt ACA, But Provides a Path Forward
"[CMS] outlined a path for Idaho to still allow its state-based plans within the bounds of the law. It explained that ... HHS [has] proposed a rule that would expand the availability of short-term, limited duration health insurance, by allowing consumers to buy these plans for any period less than 12 months, rather than the current maximum period of less than three months.... In stopping Idaho's current plan, CMS may very well have given other states the green light to adopt more creative ways to skirt the requirements of the ACA."
Pepper Hamilton LLP

Benefits in General

[Guidance Overview]

New ERISA Disability Benefit Claims and Appeals Rules Take Effect April 2, 2018
"The new rules will apply to disability benefit claims under both pension and welfare plans, but only if the plan's claims adjudicator must make a determination of disability in order to decide the claim. If a plan conditions eligibility for benefits on a finding of disability by a third party, such as the Social Security Administration (SSA) or an employer's long-term disability plan, the plan is not subject to the new rules. Plans may be amended to condition eligibility on a determination of disability made by the SSA or the employer's long-term disability plan to avoid the application of the new rules[.]"
Hanson Bridgett LLP

Issues for Plan Sponsors and Fiduciaries to Follow
"Fiduciary regulation may be substantially on hold, but other regulators are on the move ... Tax reform's impact on Schedule C reporting for expenses in 2018 ... DOJ memo to U.S. Attorneys regarding guidance policy in litigation has implications for health and retirement plans ... SCOTUS again considers claim of lifetime retiree medical benefits ... Short term limited duration insurance proposal ... Vasectomy or male contraception benefit disqualifies from HDHP status ... HSA contribution limit dropped for 2018."
Winstead PC

Bipartisan Budget Act Affects Retirement and Health Care Plans
"The act increases Medicare premiums for some and closes the Medicare Part D coverage gap a year ahead of schedule. Recipients of retirement plan distributions due to the California wildfires are now eligible for the same tax relief provided last year for distributions due to major hurricanes. The act repeals the Independent Payment Advisory Board, which was created under the ACA to curb the growth in Medicare spending."
Willis Towers Watson

Executive Compensation
and Nonqualified Plans

CEO Pay Ratio Checklist (PDF)
"Consider identifying a date that best reflects the demographics of the company.... Confirm with local counsel if there are any data privacy laws in that country that would prohibit collection of information.... The de minimis exemption may be useful where it impacts the median.... Annualizing the compensation of full-time and permanent full time and part-time employees is probably not worth the time and effort.... Using estimates or statistical sampling may be overly burdensome for many companies and not actually save any time.... In drafting the disclosure, consider impact on investor and employee relations."
Orrick

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Lois Baker, J.D., President  loisbaker@benefitslink.com
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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