Health & Welfare Plans Newsletter

March 20, 2018

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Did the New Tax Law Accidentally Eliminate Employer-Provided Education Benefits?
"[M]any employer-provided education benefits are directly tied to the employee's right to claim a deduction under Section 162. These include tax-free employer payments and reimbursements for college courses and continuing education, as well as an employer's in-kind provision of such education. If no individual deduction is available for such expenses under Section 162, can the employer still provide, pay for, or reimburse employees for education without it being taxable to the employee?"
Greensfelder

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Health Reform and Changes in Health Insurance Coverage in 2017
"More than 20 percent of the gains in health insurance under the [ACA] disappeared by the end of 2017. The uninsured rate for nonelderly adults increased by 1.3 percentage points in 2017, after decreasing by 6.3 percentage points between 2013-2016, after the full implementation of the ACA.... Continued monitoring of changes in coverage levels, utilization of health care services, and population health are needed to fully understand the effects of policy changes on the ACA's impact."
Robert Wood Johnson Foundation

Chairman's Opening Statement at House HELP Subcommittee Hearing: 'Expanding Affordable Health Care Options: Examining the DOL's Proposed Rule on Association Health Plans'
"By granting small businesses the ability to join together through AHPs, small businesses would be able to strengthen their bargaining power in the health insurance market in order to secure health coverage options on par with that of larger companies and unions."
Committee on Education and the Workforce, U.S. House of Representatives

CBO Cost Estimate for Bipartisan Health Care Stabilization Act of 2018
"The Bipartisan Health Care Stabilization Act of 2018 (BHCSA) would ... [1] Change the state innovation waiver process established by the [ACA]; [2] Appropriate a total of $30.5 billion for reinsurance programs or invisible high-risk pools in the nongroup insurance market; [3] Appropriate funds for the direct payment for cost-sharing reductions (CSRs) through 2021; [4] Allow any enrollee in the nongroup market to purchase a catastrophic plan; and [5] Require some existing funding for operations in the health insurance marketplaces to be used specifically for outreach and enrollment activities in 2019 and 2020.... CBO and the staff of the Joint Committee on Taxation (JCT) estimate that enacting the legislation would increase the deficit by $19.1 billion over the 2018-2027 period relative to CBO's baseline."
Congressional Budget Office [CBO]

CBO's Response to Sen. Alexander's Request for Alternative Estimate of Section 602(b) of the Bipartisan Health Care Stabilization Act of 2018
"[Y]ou asked that CBO and JCT provide an alternative estimate that reflects the fact that insurers are not being separately reimbursed through an appropriation for the costs of CSRs. Under such a scenario, CBO and JCT estimate that enacting section 602(b) of the BHCSA would result in a net reduction in the deficit of $29 billion over the 2018-2027 period, as opposed to having no effect when estimated relative to CBO's baseline. That net deficit reduction of $29 billion would stem mainly from smaller federal subsidies for health insurance purchased through the marketplaces by people with income between 200 percent and 400 percent of the FPL."
Congressional Budget Office [CBO]

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[Opinion]

Myth: Drug Prices Accurately Reflect Their Costs for Development
"[T]he assumption that drug prices accurately represent their cost is not completely plausible.... [T]he industry sets its prices on its own terms because it can. Patent laws, data exclusivity and its fiercely competitive and fast-consolidating marketplace lend to transparency avoidance. Drug manufacturers, their distributors and pharmacy benefits managers operate in virtual obscurity, protecting their intellectual properties, business processes and costs of operating from public scrutiny."
Paul Keckley

Benefits in General

What Must Be in a Summary Plan Description for the 'Average Plan Participant'?
"The SPD did not 'minimize[], render[] obscure,' or otherwise make the Work Incentive Benefit offset to be 'unimportant.' ... The SPD described the Benefit and its offset in 'the same style, typeface, and type size as the rest of the SPD and [those descriptions] are located 'in close conjunction with' the description of the plan's benefits.' ... ERISA does not require that the Benefit be given 'special emphasis or [be] mentioned more than once in the SPD.' " [Abrams v. Life Ins. Co. of North America, No. 16-55858 (9th Cir. Mar. 7, 2018; unpub.)]
Lane Powell PC

Executive Compensation
and Nonqualified Plans

Using Executive Benefit Plans to Attract Reward and Retain Top Talent (PDF)
"Since nonqualified plans are not subject to the same regulatory requirements that apply to qualified plans, employers can provide benefits through nonqualified plans to recruit and retain key employees who cannot be fully compensated through a combination of salary and qualified plans due to the cost and compliance burdens that arise when similar benefits are provided to all employees."
Pentegra, via Plan Consultant

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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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