Health & Welfare Plans Newsletter

December 5, 2018

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[Official Guidance]

Text of CMS Instructions for 2018 Benefit Year Risk Adjustment: Updated HHS-Developed Risk Adjustment Model Algorithm 'Do It Yourself' Software (PDF)

Dec. 4, 2018 update. "The HHS risk adjustment methodology consists of concurrent risk adjustment models, one for each combination of metal level ... and age group ... This document provides the detailed information needed to simulate the calculation of risk scores given individual diagnoses.... This software is being issued only as a supplemental tool for issuers of risk adjustment covered plans to better understand and simulate the calculation of plan liability risk scores for their enrollees." [Also available: Technical Details (XLSX) and SAS Version of HHS-Developed Risk Adjustment Model Algorithm Software (ZIP)]
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

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[Guidance Overview]

New IRS and Treasury Guidance on Safe Harbors for HRAs

"As proposed, the new rule would allow HRAs to be used to fund premiums and out-of-pocket costs for individual health insurance coverage for plans beginning on or after January 1, 2020. Notice 2018‑88 is complex but designed to make it easier for employers to offer an individual HRA under the proposed HRA rule ... Notice 2018‑88 -- and the positions taken by the IRS and Treasury Department in the guidance -- could have significant consequences for whether employers opt to move forward with offering individual HRAs to employees."
Katie Keith, in Health Affairs

[Guidance Overview]

IRS Begins Discussing HRAs, the ACA Employer Mandate, and Nondiscrimination

"The new proposed rules allowing employers to reimburse for individual insurance policies ... included some options that could, or would, violate existing nondiscrimination rules that apply to [HRAs] and other self-insured health plans. The IRS is now starting to address those concerns with the release of Notice 2018‑88.... [T]he Notice is just an expression of where the IRS expects to go. While it is a helpful breadcrumb in that process, employers cannot start implementing this now."
HUB International

Ineligible Dependents + Your Health Insurance = Lost $$

"[N]early 10% of dependents enrolled in employee health & welfare plans are not eligible to be in the program.... The most logical time to conduct an audit is during benefit enrollment. Employees are already considering options for the next plan year, and they likely won't be confused by the need to submit verifying documents.... If an employer has already processed insurance claims for an ineligible dependent, they can ... seek back payment of claims payouts."
Corporate Synergies

It's Deja Vu for ACA Reporting: 2018 Due Date Extension

"[D]ue to the extension, a taxpayer may not receive his or her Form 1095-B or 1095-C by the time they file their 2018 tax return.... [In] such case, the taxpayer may rely on other information received from his or her employer or coverage provider for purposes of filing his or her return.... [Because] the individual responsibility payment (tax) has been reduced to zero for the months beginning after December 31, 2018 ... Treasury and IRS are studying whether and how the reporting requirements should change (if at all) in the future."
Findley

CVS Offers 'Guaranteed Net Cost' for Pharmacy Benefit Clients

"CVS Health Corp ... said as of Jan. 1 it will offer a new prescription benefit option guaranteeing its health plan clients 100 percent of any rebates, discounts or other fees paid by drugmakers.... The 'guaranteed net cost' option [could] deflect growing criticism that pharmacy benefit managers (PBMs) reap gains off the widening gap between pharmaceutical list prices and their lower net cost after hefty rebates paid by drugmakers to secure coverage and access to their products."
U.S. News & World Report

From Dental Coverage to Parental Leave: Benefit Trends for Part-Time Employees

"For part-time employees working fewer than 30 hours per week, the most popular health care-related benefits provided include: Health care insurance -- 54%; Prescription drug coverage -- 53%; Dental and vision care -- 52%; Flexible spending accounts (FSAs) -- 47%; Health savings accounts (HSAs) -- 33%."
International Foundation of Employee Benefit Plans [IFEBP]

New Threat to Payroll and Personal Information

"The FBI's [Internet Crime Complaint Center] issued warning I‑091818‑PSA ... to alert employers to a scam that [is] being used to obtain employees' login and passwords to access their on-line payroll accounts.... Employers contracting with vendors receiving employee personal information should be certain the vendors are contractually bound to protect the information they receive from both internal and external threats and keep such information appropriately secured. At least one state court has ruled on an employer's duty to protect the personal information of its employees."
Winstead PC

Handicapping the Legal Challenge by State Attorneys General to the Final DOL Association Health Plan Regs

"The states assert that the final regulations are inconsistent with prior DOL advisory opinions and case law.... But the DOL's prior legal position was fashioned entirely from advisory opinions, ... generically referred to as 'sub-regulatory' guidance.... A preponderance of the states that are parties to the litigation have enacted laws, or issued guidance, prohibiting the formation of large-group AHPs.... [T]he possible upheaval in their small group markets caused by widespread adoption of large-group AHPs is somewhere between worrisome and unthinkable to these states." [State of New York v. U.S. Dept. of Labor, No. 18-1747 (D.D.C. complaint filed July 26, 2018; plaintiffs' brief filed Aug. 23, 2018)]
Mintz

[Opinion]

Administration Encourages States to Use Waivers to Restructure Health Coverage Despite Technical and Legal Hurdles

"The discussion paper describes in detail thorny problems states would have to resolve to build the considerable and potentially costly infrastructure necessary to make these options work.... It is also far from clear how waiver proposals embodying the concepts could possibly comply with section 1332's 'guardrails' ... [T]he concepts are intended to implement the October guidance, which itself is arguably illegal because it makes significant substantive changes in the 1332 program without going through notice and comment rulemaking as required by the federal Administrative Procedures Act."
Timothy Jost, via The Commonwealth Fund

Press Releases

Most Popular Items in the Previous Issue

Reforming America's Healthcare System Through Choice and Competition (PDF)
U.S. Department of Health and Human Services [HHS], U.S. Department of the Treasury, and U.S. Department of Labor [DOL]

Limitations Periods in Benefit Plans: Guidance from the Courts (PDF)
benefits magazine, a publication of the International Foundation of Employee Benefit Plans [IFEBP]

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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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