Health & Welfare Plans Newsletter

January 17, 2019

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Long-Awaited 'Cross-Plan Offsetting' Case Increases Risk for Employers, Insurers

"[To recover disputed overpayments from an out-of-network provider,] an alleged overpayment relating to one health plan from one employer is 'offset' by modifying the amount which is paid by a different health plan of a different employer.... The court noted that nothing in the plan documents allowed UHC to conduct cross-plan offsetting.... Then, the court strongly hinted that the practice violated ERISA's fiduciary duty rules, including the requirement that plan assets of one plan be used for the 'exclusive purpose' of benefiting individuals covered by that plan." [Peterson v. UnitedHealth Group Inc., No. 17-1744 (8th Cir. Jan. 15, 2019)]
Quarles & Brady LLP

[Advert.]

Now is the time to become a member of ECFC

Sponsored by ECFC [Employers Council on Flexible Compensation]

ECFC is dedicated to maintaining and expanding employee benefit programs on a tax-advantaged basis. Members include employers, TPAs, health plan providers, brokers, payers, providers, payment networks, processors, and financial institutions.


Is the New Association Health Plan (AHP) Rule Providing New Opportunities for Employers?

"The range of responses and feasibility to this new rule hinges on the state, the insurance carriers, and each association itself. The summary [in this article] shows the opportunities and challenges for the various stakeholders[.]"
OneDigital Health and Benefits

Michigan Repeals HICA Tax and Adds New Insurance Provider Assessment Tax

"Sponsors of self-insured plans will want to confirm with their TPAs that [Health Insurance Claims Assessment (HICA)] taxes are not included in any claims incurred on or after October 1, 2018, and discuss how to recoup any HICA taxes withheld after that date. They should also verify that the TPAs have complied with the final HICA tax payments and reporting obligations. The final quarterly return was due October 31, 2018, and the 2018 annual return filing deadline is February 28, 2019."
Willis Towers Watson

Trends in Disability and Leaves of Absence: New Solutions to Old Problems (PDF)

"Three key areas of development should give employers hope: ... [1] Employers have more and better administration options than ever before.... [2] As complex as the leave landscape is getting, new technology is helping to change some of the rules of the road.... [3] Employers are experimenting with new and innovative types of leave that can have a real impact on the lives of their employees."
Benefits Quarterly, published by the International Society of Certified Employee Benefit Specialists [ISCEBS]

New Hampshire, Vermont Governors Pitch Two-State, Voluntary Paid Family-Leave Plan

"The Republican governors of New Hampshire and Vermont proposed teaming up Wednesday to create a joint paid family- and medical-leave program, pitching it as a way to help two small states with aging populations. New Hampshire Gov. Chris Sununu and Vermont Gov. Phil Scott said the program would be voluntary and administered through a private insurance carrier."
The Wall Street Journal; subscription may be required

Stats That Could Make You Re-Evaluate Your Benefit Administration Strategy

"[1] Benefits account for 31.7% of total compensation costs, on average.... [2] Four out of five employees enroll in the wrong health plan.... [3] Nearly 90% of employees feel technology improves their understanding of benefits.... [4] 26% of employees report having left a job or rejecting a job offer due to the benefits offered.... [5] 37% of employers say the ability to integrate benefits technology with HR functions is the most valuable outcome of implementing a benefits administration platform."
Benefitfocus

Denial of Pay Premium Due to FMLA-Related Absences Does Not Violate FMLA

"This decision reaffirms decisions reached by other courts by finding that an employer may discontinue a pay differential for FMLA absences, provided the employer acts similarly in response to non-FMLA absences. As with many facets of employment law, consistency is key." [Flowers v. McCartney, No. 17-604 (E.D. Ark. Jan. 8, 2019)]
Ogletree Deakins

[Opinion]

Is the Drug Industry an Existential Threat to the Private Health Insurance Business?

"Because of the impact health insurance costs are having on take home income, we are at risk that the historical attractiveness employees and their families have had for employer-based health insurance will be lost. If the health insurance industry loses the support of employer-plan participants it will have lost the firewall that has made voters reluctant to support government-run health care.... [T]he primary villain in the multi-year erosion of the value of the employer-provided health benefit, and private insurance generally, has been drug costs."
Bob Laszewski's Health Care Policy and Marketplace Review

Benefits in General

[Guidance Overview]

Implications for Employee Benefit Plans of California Consumer Privacy Act of 2018

"Even if the [California Consumer Privacy Act of 2018 (CCPA)] is ultimately determined to be preempted in the context of ERISA plans, it will still apply to data collection by an employer in its capacity as an employer, as well as data related to benefits and policies not covered by ERISA. This includes information collected by an employer in connection with administering vacation, sick leave, paid time off or leaves of absence. Other benefits that are generally not subject to ERISA include health savings accounts, dependent care flexible spending accounts, many short-term disability plans and certain voluntary benefits."
Hunton Andrews Kurth, via Lexology

Rising Penalties for Non-Compliant Employee Benefit Plans

"2019 penalties for the following violations reflect the increase from 2018: [1] Failure to file an annual report (Form 5500).... [2] Failure to provide blackout notices.... [3] MEWA's failure to file required report (M-1).... [4] Employer's failure to tell employees about Medicaid/CHIP coverage.... [5] Failure to furnish reports (e.g., pension benefit statements) to certain former participants and beneficiaries or to maintain records.... [6] Failing to comply with the Genetic Information Nondisclosure Act (GINA)."
Hall Benefits Law

Form 5500 Schedule C Questionnaire Process

"Create a standard template questionnaire that will apply to most vendors.... Create a template for indirect compensation only that will be sent to plan trustees and plan employees.... Coordinate the service provider list with the Form 5500 preparer to verify its accuracy.... Review returned questionnaires to make sure they are fully completed by responders and if any questions need to be resolved."
Lindquist LLP

Selected Discussions
on the BenefitsLink Message Boards

Nondiscrimination Testing for Cafeteria Plans

I've run across a block of cafeteria plans, where eligibility for the cafeteria plan is identical to the eligibility for the health plans. There has been no eligibility testing on the cafeteria plans, because the TPA says that since eligibility is the same for all participants, they automatically pass. I would not have said this was true, depending upon the eligibility requirements for the health insurance. All 4 HCE/Key Employees are eligible for the health insurance, but many employees are working less than 30 hours per week and therefore ineligible. Isn't this a potential problem?
BenefitsLink Message Boards

Conflict Between New AHP Rule and VEBA Rule

Lots of interest in plans under the new Association Health Plan guidance, but some groups do not meet same line of business requirement under VEBA regulations. Any thoughts or ideas on any way to receive favorable tax treatment and avoid K-1 when do not meet VEBA requirements?
BenefitsLink Message Boards

Press Releases

Most Popular Items in the Previous Issue

Text of DOL Annual Adjustments to Civil Penalties for 2019 (PDF)
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

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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 2019 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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