Health & Welfare Plans Newsletter

June 17, 2019

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Retirement Contribution Analyst
Alerus Financial
in Arden Hills MN

Experienced Plan Consultant
Randall + Hurley
in Helena MT

Retirement Plan Administrator
Benefit Equity, Inc.
in Santa Ana CA

Auditor (Pathways Intern)
Pension Benefit Guaranty Corporation
in Washington DC / Telecommute

Employee Benefits Law Specialist (Group Health Plans)
Employee Benefits Security Administration, U.S. Department of Labor
in Washington DC / Telecommute

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Webcasts, Conferences

Telemedicine and How It Is Being Offered as an Employee Benefit by Employers
June 17, 2019 WEBCAST
Winston & Strawn

Are You Ready for Connecticut's Paid Family and Medical Leave Act, Expanded Sexual Harassment Training Obligations, and Other Employment-Related Legislation?
July 8, 2019 WEBCAST
Littler

Voluntary Fiduciary Correction Program
July 11, 2019 WEBCAST
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

2019 GAHU Convention
July 17, 2019 in GA
Georgia Associations of Health Underwriters [GAHU]

►See 137 Upcoming Webcasts and Conferences

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[Guidance Overview]

JCT Overview of Section 512(a)(7): Unrelated Business Taxable Income Increased by Disallowed Fringe Benefits

21 pages. "The Subcommittee on Oversight of the House Committee on Ways and Means has scheduled a hearing for June 19, 2019, relating to section 512(a)(7), which generally requires a tax-exempt organization to increase its unrelated business taxable income by reason of providing certain transportation-related fringe benefits to its employees. This document ... provides an overview of this provision."
Joint Committee on Taxation [JCT], U.S. Congress

[Guidance Overview]

Paid Family Leave Taxes Start July 1 for District of Columbia Employers

"Starting on July 1, 2019, the District of Columbia will begin collecting taxes from most of the District's private sector employers and non-profit organizations to fund a new Paid Family Leave (PFL) benefit. This tax will equate to 0.62% (0.0062) of all quarterly wages for each employee who is also covered under the D.C. Unemployment Act.... [T]he cost cannot be deducted from employee pay.... Employees cannot start receiving PFL benefits until July 1, 2020."
Jackson Lewis P.C.

Texas Paid Sick Leave: What Do Employers Do Now?

"The only pending lawsuit against a sick leave ordinance in Texas is against the Austin ordinance. This ordinance has been enjoined from taking effect since November of last year ... [The authors] anticipate similar lawsuits will be filed against San Antonio and Dallas within the next 30 days, seeking to enjoin those cities' ordinances from taking effect. It is questionable, however, whether there will be sufficient time for the courts to rule on any motions seeking preliminary injunctions before the August 1, 2019, effective date."
Littler

District Court Finds Independent Review Organization to Be Functional Fiduciary

"Judge Rogers concluded that Maximus acted as a functional fiduciary ... Maximus's role was to decide the medical necessity of treatment. The plan guaranteed coverage for medically necessary treatment, but it did not define 'medical necessity.' ... The court also concluded that Maximus had control over plan assets because, if Maximus concluded the treatment was medically necessary, the claim would be paid or the services provided." [Josef K. v. California Physicians' Service, No. 18-6385 (N.D. Cal. June 3, 2019)]
Ogletree Deakins

HHS Final HRA Rule: Similar to the Proposed But Some Notable Changes

"The final rule newly limits the extent to which employers are permitted to vary individual coverage HRA contributions by age.... Two of the changes will make it harder for employers to shift sicker workers into the individual market.... [T]he final rule retains a January 1, 2020 effective date and thus will be relevant for consumers making decisions at the beginning of open enrollment on November 1, 2019.... [T]he attestation process may be quite a bit more porous than other situations that rely on attestation."
The Brookings Institution

Final Rule on Health Reimbursement Arrangements Could Shake Up Markets

"The Trump administration is trying to make this an attractive option to employers, especially small businesses. They expect employers to take them up on this offer, resulting in a significant increase in the size of the individual market.... [D]espite requests for a delay, the rule will go into effect beginning on January 1, 2020.... This post offers background information on HRAs; summarizes the final rule; and briefly discusses the rule's potential implications for employers, employees, and the individual insurance market."
Katie Keith, in Health Affairs

Final Rules Ease Restrictions on Health Reimbursement Arrangements

"The changes aim to ease mostly small and mid-size employers' ability to subsidize health coverage and include guardrails to protect the individual market. For larger employers, the rules create interesting opportunities to subsidize on a tax-favored basis individual health insurance for certain cohorts of employees -- such as part-timers -- who may not currently be eligible for their employer's group health plan."
Mercer

[Opinion]

Trump Administration Gets Smart on Pre-Existing Conditions

"The final rule ... enhances portability by allowing employers to give their workers a (tax-free) contribution to an HRA, so employees can buy the plan that works best for them. If there's any difference between the employer's contribution and the total premium -- for instance, an employer contributes $300 per month, and the worker selects a plan with a $350 monthly premium -- the worker can pay the difference on a pre-tax basis, so long as he purchases the plan outside of the Obamacare exchanges. Best of all, because employees own the plans and not the employer, they can keep their coverage when they change jobs."
The Federalist

[Opinion]

Trump's Expansion of Health Reimbursement Accounts Improves Health Care Choices

"The new health reimbursement accounts rule has the potential to ... expand employees' choices well beyond the limited options they have today. With this change, the Trump administration expects the individual health insurance market to grow significantly, and become more robust as an arena for health plan participation and competition. This, of course, would partially reverse the disastrous decline in health plan choice and competition that has marked the last six years."
The Heritage Foundation

[Opinion]

The Trump Administration's Newest Health Care Rule

"A broad shift to HRAs could resemble the movement in retirement benefits from defined benefit pensions to 401(k) plans, where employers make fixed contributions instead of promising a set benefit for years in the future. A similar change in health coverage would give businesses more predictable costs while shifting the risk of higher healthcare expenses onto workers. It's all about money and determining or deflecting risk."
Business Forward

Benefits in General

Supreme Court Fills Docket with ERISA Cases

"After more than two years since ... its last decision in a case involving [ERISA], the court's next term looks to be flush with ERISA issues.... The Supreme Court has granted certiorari in two ERISA cases in as many weeks, and it seems likely the court may grant review in at least one other case."
Greensfelder

District Court Finds Plan Trustees May Be 'Surcharged' to Remedy Breach That Caused Loss of Benefits Under Unrelated Plan

"The court considered and rejected the Welfare Fund's arguments that [the plaintiff] is not entitled to equitable relief. First, it found that surcharge does not require traceability. The court explained that the Welfare Fund confused restitution with surcharge which does not require unjust enrichment nor the loss of particular plan funds. Amara extended the surcharge remedy to a breach of trust committed by a fiduciary encompassing any violation of a fiduciary duty." [DeRogatis v. Bd. of Trustees of the Welfare Fund of the Int'l Union of Operating Engineers Local 15, 15A, 15C & 15D, AFL-CIO, No. 14-8863 (S.D.N.Y. June 13, 2019)]
Kantor & Kantor

Press Releases

OneDigital Acquires Ironview Employee Benefits
OneDigital Health and Benefits

Most Popular Items in the Previous Issue

New Final Rule Lets Employees Use HRAs to Buy Health Insurance
Society for Human Resource Management [SHRM]; membership may be required to view article

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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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