Health & Welfare Plans Newsletter

August 8, 2018

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[Guidance Overview]

CMS Takes Action to Lower Drug Prices Paid by Medicare Advantage Plans

"In a memo sent to Medicare Advantage plans, CMS is giving them the option -- starting January 1, 2019 -- of ensuring that patients receive the most preferred drug therapy first and progress to other therapies only if necessary, as part of broader part of care coordination activities.... CMS is allowing Medicare Advantage plans to take advantage of step therapy for Part B drugs, which constitute around $12 billion per year in spending by plans."
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

Marriott Worker Wins Class Status in Health Plan Notice Lawsuit

"A former Marriott International Inc. housekeeper won class status in her lawsuit accusing the hotel chain of violating federal benefits law by providing deficient notices of continued health-care coverage. The worker, who filed the lawsuit a year ago, will represent more than 15,000 individuals who were sent the notices and elected not to continue coverage. One of her main claims is that the international hotel chain failed to provide her the notice of continued health-care coverage in Spanish." [Vazquez v. Marriott Int'l, Inc., No. 17-116 (M.D. Fla. Aug. 7, 2018)]
Bloomberg BNA

Medicare and ERISA Preempt Arkansas Pharmacy Benefits Manager Law

"In 2015, Arkansas passed legislation that sought to prevent pharmacies from being forced to sell generic prescription drugs at a loss by requiring that PBMs reimburse the pharmacies at a price equal to the cost of acquiring the drugs from wholesalers.... The [Eighth Circuit] ruled that the statute was preempted by ERISA because it had a prohibited 'reference to' ERISA, and because, contrary to Congressional intent, it interfered with national uniform administration of employee benefit plans." [Pharmaceutical Care Mgmt. Assoc. v. Rutledge, Nos. 17-1609 and 17-1629 (8th Cir. June 8, 2018)]
The Wagner Law Group

Ask These Questions Before Hiring a TPA to Administer Your Health Plan

"[1] What is their claims administration platform? ... [2] What PPOs and other cost savings tools do they offer? ... [3] Do they offer and/or manage other plan financing options to impact health plan and member costs including captives, HRAs, HSAs, MEC (minimum essential coverage) plans and concierge services? ... [4] Is their reporting detailed and flexible? ... [5] What vendor partners can they offer to enhance your plan savings, employee health and employee satisfaction?"
Employee Benefit News

Medication Adherence Improves Productivity for Employees with Diabetes and Other Conditions

"[E]mployees who had antidiabetic medications such as insulin, sulfonylureas, meglitinides, and biguanides on hand at least 80% of the time experienced between 2.8 and 9.0 fewer STD days per year than employees with diabetes who possessed medication less often--an average of 3.7 days across four studies that examined this relationship. Assuming average compensation costs in the US, the annual productivity savings to employers is estimated at $794 per employee with diabetes taking medications as prescribed."
Integrated Benefits Institute

This Is the 'Disruption' Large Employers Are Hoping Amazon Brings to Healthcare

"[If] it actually takes advantage of the breadth of Amazon's connection with consumers? That could stand to truly ... 'disrupt' healthcare for employers, said National Business Group on Health President and CEO Brian Marcotte. 'If they begin to leverage Amazon's footprint within the home, their relationship with the consumer, their customer obsession ... the customer loyalty they have, and begin to leverage their ability,' Marcotte said, it could change everything."
FierceHealthcare

Benefits in General

'Windfall' Recovery No Defense Under ERISA to Funds' Claim for Unpaid Contributions

"The employer ... had maintained health insurance and a 401(k) plan for its nonunion employees [outside the funds to which it had not made contributions]. These alternative benefits should offset the total award to the funds, the employer said. Otherwise, the employer reasoned, the funds would receive an unjust windfall recovery of contributions on behalf of employees for whom they had provided no benefits. The appellate court rejected this argument and affirmed the lower court's judgment in favor of the funds." [Kelly v. Gas Field Specialists, Inc., No. 17-2654 (3d Cir. June 19, 2018)]
Wolters Kluwer Law & Business

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

SEC Doubles Disclosure Obligation Threshold, Seeks to Modernize Compensatory Securities Offerings (PDF)

"Issuers relying on the Rule 701 exemption to offer securities under a compensatory arrangement are required to deliver additional disclosures ... to investors if the amounts offered exceed a set threshold.... Congress mandated the recent change to address concerns that the prior $5 million threshold increased the costs associated with using company stock to compensate employees and put non-reporting companies at risk of having to disclose confidential financial information."
Debevoise & Plimpton LLP

Selected Discussions
on the BenefitsLink Message Boards

WARN Benefit Can Reduce Severance Benefit?

If a company has a severance plan in place that is outlined in the employee handbook, and the WARN act is initiated, can the employer reduce the amount of an employee's severance benefit by the amount of the WARN benefit?
BenefitsLink Message Boards

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Press Releases

ECFC Kicks Off 2018 Annual Symposium with New Website
Employers Council on Flexible Compensation

TRA Hires a Texas Regional Sales Consultant
The Retirement Advantage [TRA]

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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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