Health & Welfare Plans Newsletter

August 10, 2018

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401(k) Pension Administrator
Delaware Valley Retirement Inc.
in PA

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Warren Averett Benefits Consulting
in AL, FL, GA

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Nixon Peabody
in CA

Employee Benefits Associate
Shipman & Goodwin LLP
in CT

Marketing Associate
Johnson & Dugan
in CA

Retirement Plan Document Specialist
Ascensus
in CA, Telecommute

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[Official Guidance]

Special Enrollment Periods (SEPs), Termination of Coverage, and Payment Deadline Flexibilities for Persons Affected by FEMA Emergency and Major Disaster Declarations (PDF)

"Individuals will be considered 'affected by a FEMA-declared emergency or major disaster' and eligible for an Exceptional Circumstances SEP ... if they were unable to enroll in an enrollment period for which they were eligible due to a FEMA-declared emergency or major disaster.... FEMA-emergency affected individuals will have up to 60 days from the end of the FEMA-designated incident period to select a new QHP through the FFE or make changes to their existing QHP enrollment. " Unnumbered document, Aug. 9, 2018.
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

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[Guidance Overview]

Potential Repeal of the Michigan Health Insurance Claim Assessment (PDF)

"These proposed changes would benefit self-funded employer group health plans. These plans were subject to the [Health Insurance Claim Assessment (HICA)] but will not be subject to the [Insurance Provider Assessment (IPA)]. Once the change to the IPA goes into effect, self-funded plans will no longer need to budget for the 1 percent health insurance claim assessment. Insured plans will need to start budgeting for the IPA. However, the calculation will be complicated and likely the IPA will simply be built into insured rates."
Marsh & McLennan Agency LLC

[Guidance Overview]

CMS Proposes 'Pathways to Success,' an Overhaul of Medicare's ACO Program

"CMS proposes to require that beneficiaries receive a notification at their first primary care visit of a performance year informing them that they are in an ACO and explaining what that means for their care.... CMS proposes to allow certain ACOs under performance-based risk to provide incentive payments to patients for taking steps to achieve good health.... Pathways to Success includes proposed changes ... such as allowing physicians in ACOs that take on risk to receive payment for telehealth services provided to patients regardless of the patient's location -- including at their place of residence.... Pathways to Success proposes incorporating regional spending into ACO targets earlier, starting during an ACO's first agreement period. In addition, the proposal would authorize termination of ACOs with multiple years of poor financial performance."
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

Plan's Anti-Assignment Clause Not Waived by Direct Payment to Health Care Provider

"While there seem to be valid public policy arguments in favor of allowing providers to seek payment on behalf of participants (including via legal action, if necessary), the supremacy of the ERISA plan's terms is an important counterweight. Including an anti-assignment clause in the plan document may help reduce a plan's exposure to litigation from third parties." [N.J. Spine & Orthopedics, LLC v. Schwan Cosmetics USA, Inc., No. 17-11609 (D.N.J. July 20, 2018)]
Thomson Reuters / EBIA

Administration Sinks Teeth Into Paring Down Drug Prices

"[T]he strategy falls under a handful of steps: [1] Attacking the rebates ... [2] Bringing more negotiation to Medicare ... [3] Paying for value ... [4] Tackling foreign drug costs ... [5] Increasing competition."
Kaiser Health News

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Medicare to Overhaul ACOs But Critics Fear Less Participation

"ACOs were expected to save the government nearly $5 billion by 2019, according to the Congressional Budget Office. It hasn't come anywhere close.... [The administration has] proposed an overhaul to the program, which was designed to encourage doctors and hospitals to work together to coordinate care by reducing unnecessary tests, procedures and hospitalizations. The move could dramatically scale back the number of participating health providers."
Kaiser Health News

States Initiate Litigation Challenging Final Association Health Plan Rule

"Plaintiffs' ... claim ... [1] [T]he overall goal of applying the same standards to large and small employers violates the provisions of the ACA ... by allowing AHPs to be treated as 'large employers' for some purposes, but not for purposes of the shared responsibility protection.... [2] [T]he treatment of self-employed individuals, with no other employees, as both an employer or an employee is contrary to ERISA as well as long-settled case law.... [3] [T]he new Final Rule standard is simply insufficient to meet the necessary and established commonality test under ERISA, and in effect, allows organizations with non-substantive relationships other than the sale of insurance, to meet the necessary test."
Foley & Lardner LLP

Impact of Association Health Plans on Consumers and Markets Will Depend on State Approaches

"If the courts allow the administration's new AHP policy to stand, its impact will vary, largely depending on each state's existing law and overall stance regarding the benefits and risks of these arrangements.... Past expansions of AHPs have resulted in spikes in scams and insolvencies, as well as higher premiums and fewer plan choices in the individual and small-group markets. States that choose not to proactively regulate AHPs could find that history repeating itself."
The Commonwealth Fund

Understanding the Impact of the Elimination of the Individual Mandate Penalty

"[The authors] considered 10 scenarios with alternative assumptions about how the size of the penalty, the taste for compliance, inertia in decision-making, and other mechanisms might affect consumer response.... Depending on which of these assumptions or combination of assumptions is in play ... 3 million to 13 million fewer people would have health insurance in 2020 due to the penalty's elimination, [and] premiums for most individual market plans would increase by 3 to 13 percent."
The Commonwealth Fund

[Opinion]

Health Savings Accounts: What's the Problem? What's the Solution? Part 2

"Congress might also consider: ... [1] Amend Section 401(h) so that individual account retirement savings plans ... can add a tax-preferred 'sidecar' retiree medical account to accept employer contributions ... [2] Allow workers who have qualified for non-contributory Medicare Part A coverage the same opt out option for Medicare's Hospital Insurance coverage that is offered to workers who paid less taxes and did not qualify for non-contributory Medicare Part A coverage.... [3] Confirm that Congress' use of different language was intended to exclude all contributions to Health Savings Accounts, whether made through a cafeteria plan or directly, from the calculation of cost for Cadillac Tax purposes.... [4] Clarify/confirm that ERISA does not apply where employers increase HSA participation and contributions by adopting cafeteria plans and automatic enrollment features."
Plan Sponsor Council of America [PSCA]

Benefits in General

Selecting Benefits Technology: Keys to Making the Right Choice

"Start with a benefits program audit ... [A]sking the right questions can help you uncover the insight you need to determine if the vendor is/will be a true partner in your success.... Be sure to request resources from the benefits technology provider to streamline your investigation."
Shortlister

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

Understanding and Planning for the Excise Tax on Executive Compensation Paid by Tax-Exempt Employers

"[1] Certain state universities, colleges, and hospitals may wish to explore whether to give up their 501(c)(3) exemptions and, instead, rely on their status as a 'political subdivision' or as 'an integral part of a state or local government' in order to remain exempt from both federal income tax and this new excise tax. [2] Tax-exempt organizations may seek to utilize 'split dollar loan arrangements' ... because the loans utilized to provide the employee with a deferred benefit do not constitute 'remuneration' for purposes of the $1 million threshold. [3] If portions of an employee's compensation could appropriately be paid by an affiliate which is not a related organization for this purpose, such as an unrelated management company, tax-exempt organizations may consider bifurcating that compensation between those entities in order to reduce or avoid the excise tax."
Seyfarth Shaw LLP

Yesterday's Most Popular News Items

CMS Updates Marketplace Notice
Winston & Strawn LLP

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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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