Health & Welfare Plans Newsletter

July 3, 2019

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Senior Pension Administrator
Scholz & Friends Enlightened Retirement Group, Inc.
in San Antonio TX

Retirement Plan Administrator
Pension Consultants, Inc.
in Minneapolis MN

Outside Actuary
Midwest TPA Firm
Telecommute

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[Guidance Overview]

California Enacts Individual Health Insurance Mandate and Expands Paid Family Leave

"California now joins Massachusetts and New Jersey with a state-based individual mandate requiring residents to maintain health coverage.... [It] is likely that employers will have a reporting requirement similar to the requirement imposed on New Jersey employers.... California's current six-week maximum period of PFL ... will increase to eight weeks as of July 2020.... The stated goal in the bill is to eventually increase PFL to a 12-week maximum in 2021-22. That would provide for a total paid family leave period of six months where utilized by two parents."
ABD Insurance & Financial Services

[Advert.]

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Paid Family and Medical Leave Updates: California, Connecticut, Massachusetts and District of Columbia

"Connecticut Governor Ned Lamont signed a paid Family and Medical Leave Insurance law ... [California] SB 83 extends the duration of the state's current Paid Family Leave Program from 6 weeks to 8 weeks beginning July 1, 2020.... [T]he state agencies of the District of Columbia and Massachusetts recently issued final regulations and guidance relating to their existing state paid medical and family leave laws."
CBIZ

Will Hospitals and Insurers Be Required to Disclose Their Contracted Rates to Consumers?

"[T]he constitutionality of such disclosures is being called into question by some constitutional scholars.... [T]he American Hospital Association has observed that 'publicly posting privately negotiated rates could, in fact, undermine competitive forces of private market dynamics.' ... Congress, in a bipartisan way, has taken up the importance of addressing the issue for consumers.... If current proposals come to fruition, the issue of narrow networks or surprise billing will no longer be the consumers' problem."
Morgan Lewis

Gauging the Risk & Rewards of a Benefits Captive Plan

"A captive pools self-funded employers together to save on stop-loss insurance.... Employers in captives often share common traits with one another.... Members of a captive may also be like-minded when it comes to plan design, wellness programs and healthcare management.... The ideal company is between 50 and 200 lives, financially stable with a strategy for health risk management and wellness."
Watko Benefit Group

Fifth Circuit Defers to Plan Administrator's Choice of Competing Medical Opinions

"[T[he documents and other information which the participant had submitted to the Plan's administrator in support of her appeal contained competing opinions regarding her medical condition by various medical providers ... [T]he court determined that, when faced with two competing medical opinions, a plan administrator to whom discretion has been granted may exercise that discretion and choose one medical opinion over another." [Rittinger v. Healthy Alliance Life Ins. Co., No. 17-20646 (5th Cir. Jan. 31, 2019)]
Haynes and Boone, LLP

Court Declines to Enforce Indemnification Provision Against Allegedly Negligent PBM

"After reviewing the specific contractual language and applying the applicable state contract construction laws required by the agreement, even viewing the situation in the light most favorable to the plan sponsor, the court held that the PBM's interpretation was objectively plausible, as compared to the overly broad reading argued by the plan sponsor.... [T]he court concluded that [the plan sponsor's] interpretation would have required it to read in a missing comma after '(Costs)' and to reach an unreasonable conclusion: Total indemnification by the PBM." [Bon Secours Health System, Inc. v. Express Scripts, Inc., No. 18-1545 (D. Md. Mar. 28, 2019)]
Thomson Reuters / EBIA

Ransomware Calls HIPAA Into Play (PDF)

"The Office of Civil Rights (OCR) ... takes the position that a ransomware attack rises to the level of a 'security incident' under the HIPAA security rule.... In addition to the security incident analysis, the organization must determine whether the ransomware attack constitutes a breach of protected health information (PHI)."
Brouse McDowell

Fifth Circuit Rejects Request to Delay Oral Arguments in ACA Case

"The panel of three appellate judges set to hear oral arguments ... on the constitutionality of the [ACA] rejected a request ... to delay the hearing. The judges had asked the parties ... to file supplemental briefs by [July 3] on whether the California-led coalition of states and the U.S. House of Representatives have legal standing to intervene in the appeal[.]" [Texas v. Azar, No. 19-10011 (5th Cir. oral arg. sched. Jul. 9, 2019)]
HealthLeaders Media

Five States Seek to Join Hearing to Determine Fate of CVS-Aetna Merger

"The Department of Justice alongside the companies will try to convince federal Judge Richard Leon at a July 17 hearing to approve the merger. A group of five states -- California, Florida, Hawaii, Mississippi and Washington -- who support the merger wrote to the U.S. District Court for the District of Columbia on [June 28] reiterating an earlier request to address the court ... during oral arguments."
FierceHealthcare

Benefits in General

Editor's Pick Tips and Strategies for Successful IRS and DOL Plan Audits (PDF)

50 presentation slides. Topics: [1] Background on benefit plan audits; [2] IRS audit triggers and process; [3] DOL audit triggers and process; [4] If your plan is audited; [5] Avoiding audits and compliance issues; [6] Common retirement plan compliance issues; and [7] Common welfare plan compliance issues.
McDermott Will & Emery, for Plan Sponsor Council of America [PSCA]

Supreme Court Keeps Auer But Dilutes Its Power

"The Kisor decision gives federal judges many justifications to decline to extend Auer deference to an agency interpretation of a regulation. But what's the difference between ambiguous and genuinely ambiguous? What are the benchmarks for an 'authoritative' or 'official position?' Does an agency letter of interpretation count? Must such 'positions' appear in the Federal Register? ... Justice Gorsuch's prediction will likely come true; we will see Auer deference pay another visit to the Supreme Court sometime in the future." [Kisor v. Wilkie, No. 18-15 (S. Ct. Jun. 26, 2019)]
Ogletree Deakins

Tackling Your Employees' Student Loan Debt

"[R]oughly one-third of employers reported offering or planning to offer some student loan debt program, such as a student loan debt consolidation or refinancing service.... [T]he recently reintroduced Retirement Enhancement and Savings Act of 2019 ... includes a provision ... which allows plan sponsors to match an employee's student loan payment in the form of a contribution to their workplace retirement plan."
ORBA

Postal Service Floats Big Cuts to Employee Pay, Leave and Benefits

"USPS included a hike to the employee contribution level for pensions in a first draft of a 10-year business plan presented to lawmakers and stakeholders... as well as phasing out pensions altogether for new hires in favor of a defined-contribution system only. The Postal Service is looking to cut the amount of paid time off employees receive by merging annual and sick leave and pitched a popular proposal ... to require all postal retirees to enroll in Medicare as their primary insurance provider."
Government Executive

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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

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. The BenefitsLink Health & Welfare Plans Newsletter is ISSN no. 1536-9595.

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