Health & Welfare Plans Newsletter

April 30, 2019

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Jobs

Director - Transactions (Pension Risk Transfer)
Metlife
in New York NY

Relationship Manager / Consultant
The Retirement Plan Company [TRPC]
in TN

Defined Benefit Actuarial Analyst
TRA, Inc.
in Port Washington WI / Telecommute

Employee Benefits Compliance Associate
Slevin & Hart, P.C.
in Washington DC

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[Official Guidance]

Text of DOL Statement on Association Health Plans After U.S. District Court Ruling in State of New York v. DOL

"The Department disagrees with the district court's ruling and on April 26, 2019 the Department of Justice filed a notice of appeal. The policy reflected in this Statement will remain in effect for existing AHPs until their current plan year or contract term expires.... Employers participating in insured AHPs can generally maintain that coverage through the end of the plan year or, if later, the contract term. This means their employees generally can keep their coverage in force. [HHS] has advised the Department that employer members of an insured AHP have an independent right under the guaranteed renewability provision of the Public Health Service Act (PHS Act) to continue insurance coverage (including maintaining all out-of-pocket accumulators for employees and their families) through the end of the applicable plan year, unless an exception applies.... [T]he Department will work with affected parties, HHS, and the States to mitigate any disruptions or hardships that result from confusion regarding the status of the AHP rule and legal compliance requirements. The focus of the Department's efforts will be on ensuring that participants and beneficiaries get their health benefits claims paid as promised, and on reducing the risk of adverse consequences to affected employer associations, and their employer members, that relied in good faith on the rule."
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

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[Guidance Overview]

Massachusetts Department of Family and Medical Leave Releases Updated Proposed Regulations, Provides Tools for Employers, Employees, and Covered Individuals

"The Updated Regulations provide a new filing requirement for employers, covered entities, and self-employed individuals who self-cover ... The first quarterly report and contribution to the Trust Fund will be due on October 31, 2019, and must be paid through MassTaxConnect.... [S]tarting July 1, 2019, all Massachusetts employers must begin making payroll deductions from employee wages in order to fund quarterly contributions to the PFML Trust Fund."
Epstein Becker Green

DOJ Appeals AHP Decision, CMS Posts Final 1332 Funding for 2019

"Generally speaking, the DOL's position will allow those who have already enrolled in AHPs under the final rule to maintain that coverage until the end of their plan year or contract term. Entities must continue to pay claims and otherwise meet their responsibilities to association members. Upon renewal, coverage must comply with insurance rules based on each employer's size (rather than the size of the association)."
Katie Keith, in Health Affairs

CVS to Judge: Please Don't Let Those 7 Witnesses Testify in Aetna Merger Case

"The seven witnesses put forward by three groups of amici curiae include health policy professors and economists from major universities, but CVS argued in a court filing Friday that [U.S. District Judge Richard Leon] should decline altogether to hold a hearing with live witnesses. The planned testimony, as outlined in court filings, includes irrelevant arguments that could turn the hearing 'into a forum for airing competitors' grievances about the CVS-Aetna merger and about the healthcare industry more generally,' attorneys for CVS wrote."
HealthLeaders Media

IRS Reiterates S-Corporation Tax Treatment for Employer-Provided Medical Benefits

"Overall, [IRS Chief Counsel Memorandum 201912001] appears to reiterate existing tax rules applicable to both direct and indirect 2% shareholders of S-corps. As such, no changes should be required by S-corps or their 2% shareholders, provided they have properly reported taxable compensation related to corporate-provided medical insurance."
Lockton

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Deciding 'Own Occupation' Disability Claims: When an Attorney's Headaches Are Not Disabling

"Practicing law can create real headaches. But do headaches constitute a disabling condition justifying ERISA-governed long term disability benefits? This new case explains the correct process in assessing 'job duties' in the 'Own Occupation' analysis." [Foster v. Principal Life Ins. Co., No. 17-30997 (5th Cir. Apr. 4, 2019)]
Lane Powell PC

New York Employees Now Eligible for Paid Voting Leave

"[T]he new law ... [allows] employees to request up to three hours of paid time off to vote, regardless of their work schedule. Previously, the law provided that an employee was entitled to time off only if the employee did not have four consecutive hours in which to vote between the opening of polls and the beginning of the employee's work shift, or the end of the employee's work shift and the close of polls.... The new law also relaxes employees' notice requirement."
Proskauer

Editor's Pick A New Way to Calculate Retirement Health Care Costs (PDF)

11 pages. "[V]iewing retirement health care costs as an annual expense, instead of as a lump sum, makes it easier for retirees to plan for and pay for them.... [The authors] discuss ... why it is important to use annual costs, type of health insurance coverage, and separation of premiums and out-of-pocket expenses for a basic framing of retiree health care costs. Then, using this framework, [they] present health care cost estimates based on data from the Health and Retirement Study (HRS) and projected 2019 Medicare premiums [and] provide some guidelines on how individuals can plan to meet these expenses."
T. Rowe Price

HealthEquity Makes Bid for WageWorks

"The merger would combine HSAs and consumer-directed benefits, including flexible spending and health reimbursement arrangements, COBRA and commuter accounts. HealthEquity manages $8.1 billion in assets for 4 million HSA members nationwide."
The Wall Street Journal; subscription may be required

[Opinion]

Universal Health Care Might Cost You Less Than You Think

"Unlike workers in many other countries, the vast majority of American employees have private health insurance premiums deducted from their paychecks. If we reimagine these premiums as taxes, we'd realize that Americans pay some of the highest and least progressive labor taxes in the developed world."
Physicians for a National Health Program [PNHP]

Benefits in General

[Guidance Overview]

New DOL Opinion Letter Says Certain Gig Workers Are Contractors

"While this letter can only be used as an authoritative legal defense by the specific (unnamed) gig economy business that requested the letter, this publication still provides the federal government's official interpretation on whether a certain business model or practice complies with the law. We now have a solid understanding of how the current [DOL] views the misclassification question and will approach it from an enforcement perspective, and the news is all good for gig businesses." [DOL Opinion Letter FLSA2019-6, issued Apr. 29, 2019]
Fisher Phillips

[Guidance Overview]

DOL Validates Independent Contractor Relationships in the On-Demand Marketplace

"[DOL Opinion Letter FLSA2019-6] is a breath of fresh air for businesses in the on-demand marketplace. It validates the fundamental notion that not every working relationship between an individual and a business is intended to confer employment status under the FLSA."
Proskauer

District Court Holds That Public Library's Disability Plan Is Not a Governmental Plan

"The decision ... contains some analysis that could raise additional questions for other entities that maintain they are agencies or instrumentalities of a state or political subdivision of a state, and the plans they sponsor or retirement systems they participate in. Notably, this decision follows on the heels of a complaint filed by a prominent plaintiffs' law firm that a North Carolina county hospital system was not an agency or instrumentality of a county[.]" [Skornick v. Principal Financial Group, No. 18-4324 (S.D.N.Y. Apr. 18, 2019]
Groom Law Group

Selected Discussions
on the BenefitsLink Message Boards

Cafeteria Plan Becomes Covered by a 'Wrap' Document

Say a client has had 3 welfare plans under their cafeteria plan, filing separate forms. Then for 2018 they change to a "wrap" document, so only one 5500 will be required. Do you go back and amend the previously filed 2017 forms for the welfare plans to show them as "final" forms? Seems like if you just file the one new wrap plan, you'll get a DOL inquiry as to why you didn't file forms for the plans that get wrapped.
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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 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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