Health & Welfare Plans Newsletter

July 12, 2019

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[Guidance Overview]

Editor's Pick Individual Coverage HRA: A New Tool to Contain Employer Healthcare Costs

"The ICHRA does not move the responsibility back fully to the employee alone, but instead provides an employer established account which the employee may access for medical expenses, including health insurance premiums, provided the individual provides proof they have purchased health insurance. If considered just as an account without consideration of all of the governing laws, it sounds like a way to place a dollar limit on healthcare costs for each employee; however, ... the preamble to the final regulations demonstrate the complex rules ... and the guidance still needed."
Jackson Walker

[Guidance Overview]

Are Individual Coverage HRAs a Potential Alternative to Traditional Group Health Plan Coverage?

"Individual coverage HRAs may be more cost-effective and may also provide employers with predictability and control because employers set the approximate maximum expense for the HRA amount each year. And, if the employer completely eliminates the traditional group health plan, the employer would no longer be required to administer a complicated group health plan."
Porter Wright Morris & Arthur LLP

Correcting a Failure to Distribute Health and Welfare Plan SARs to Participants

"If a [summary annual report (SAR)] has been prepared but not provided to participants, the current-year SAR should be distributed promptly to covered participants. It may not be necessary to distribute prior-year SARs -- doing so could confuse participants ... If a SAR has not been prepared, you should prepare and distribute the current-year SAR as soon as possible. If SARs for prior years are missing, you should consider preparing them also."
Thomson Reuters / EBIA

House Subcommittee Advances Legislation on Surprise Medical Bills

"A House panel unanimously advanced a bipartisan measure to tackle surprise medical bills that would use a benchmark to solve billing disputes -- an approach favored by payers -- despite calls from providers to use arbitration."
FierceHealthcare

How Many Employers Could Be Affected by the Cadillac Tax?

"When the [High-Cost Plan Tax (HCPT)] takes effect in 2022, an estimated 21% of employers offering health benefits will have at least one plan whose premium and account contributions would exceed the HCPT threshold. When potential FSA contributions are included, the percentage climbs to 31%.... The percentage of employers with a plan reaching the threshold is projected to grow fairly rapidly over time, to 28% in 2025 and 37% in 2030 without including potential FSA contributions, and to 38% in 2025 and 46% in 2030 when they are included."
Henry J. Kaiser Family Foundation

How Blockchain Technology Will Disrupt the PBM-Payer-Pharmacy Relationship

"Blockchain could potentially transform the relationship between payers, pharmaceutical manufacturers, wholesalers, and pharmacies by offering an alternative, transparent mechanism for processing, pricing, and validating prescription transactions. This approach could lead to less waste, reduced pricing variations between pharmacies, and a better app-based purchasing experience for consumers, through transparency of the true cost of prescription drugs."
Milliman

Paid Leave Policies and Practices

"Absences may involve ... one or more of the following laws: paid sick; federal FMLA and ADA and their state or local counterparts; kin care; and paid family-medical.... To ensure compliance, employers must reconcile federal, state, and local requirements in daily practice and policy development."
Littler

District Court Says Cause of Disability Not Necessary to Claim Benefits

"The court made two key points ... First, the nonphysical aspects of a claimant's occupation have to be taken into consideration; and second, a claimant is not required to prove the etiology of his or her impairment." [Lesser v. Reliance Standard Life Ins. Co., No. 18-824 (N.D. Ga. Jun. 4, 2019)]
DeBofsky, Sherman & Casciari, P.C.

Supreme Court Will Hear Arguments on Risk Corridors Program Payments, Lack of Funds

"The U.S. Supreme Court has granted petitions to determine the validity of the suspension of risk corridors program payments to insurers of qualified health plans under the [ACA] if Congress failed to appropriate funding for the programs. In consolidating three separate appeals from the Federal Circuit involving the ACA's risk corridors program, the Supreme Court will address whether Congress' failure to include appropriations for the programs absolved the federal government's liability from making these payments." [Maine Community Health Options v. U.S., No. 2017-2395 (Fed. Cir. Jul. 9, 2018; cert. granted Jun. 24, 2019)]
Wolters Kluwer; free registration required

How Employers Can Support Employees During the Cost-Shifting Crisis

"[1] [F]unding employees' health savings accounts can have a significant impact on not only how they perceive HDHPs, but also how prepared they feel for future unexpected healthcare expenses.... [2] Actively guide employees to high-value providers and care settings.... [3] Take a holistic view of financial wellness as it relates to healthcare."
Voya

[Opinion]

Congress' Current Approach to Surprise Medical Billing Could Have Unintended Consequences

"The bipartisan measures would compel physicians and others not in the patient's network to accept an insurer's median network payment rate when they provide care in an emergency department or at a network facility. The legislation also would prohibit balance billing for emergency treatment and for care provided in network facilities. In short, the federal government would bind doctors and hospitals to the terms of contracts they haven't signed."
The Heritage Foundation

[Opinion]

Does the United States Already Ration Health Care?

"While other countries may ration because of national budget constraints and supply-side factors, the United States' lack of access to comprehensive insurance and affordable care represent a de facto form of rationing that leads people to delay getting care or going without it entirely."
The Commonwealth Fund

Benefits in General

[Guidance Overview]

2018 Disability Claims Regs Apply to More Than Just Disability Plans

"They also apply to any plan that conditions a benefit upon a showing of disability, such as a: [1] 401(k) plan that allows a distribution upon the participant's disability; [2] Defined benefit pension plan that provides an immediate benefit, rather than a benefit deferred until normal retirement age, if the participant has a disability retirement; and [3] Nonqualified deferred compensation plan that provides for 100% vesting and a distribution upon a participant's disability under Code section 409A."
Employee Benefits Law Group

Seventh Circuit Says Substantial Compliance Doctrine Inapplicable to Missed Claim Deadlines

"After a plan administrator failed to issue a final decision on a participant's disability claim within the deadline set forth in DOL regulations, the participant sued. Eight days after the suit was filed, the plan administrator issued its final decision denying the participant's claim.... According to the [Seventh Circuit], the regulatory deadline imposes a 'hard stop,' providing that 'in no event' may the deadline be extended beyond a specified number of days." [Fessenden v. Reliance Standard Life Ins. Co., No. 18-1346 (7th Cir. Jun. 25, 2019)]
Thomson Reuters / EBIA

Selected Discussions
on the BenefitsLink Message Boards

Lawsuit for Health Benefits Under a Self-Funded ERISA Plan

I'm a lawyer in South Florida desperately trying to obtain an approval for medical treatment needed by my son. The insurance company is refusing to authorize for reimbursement, and they're saying the insurance is pursuant to a self-funded ERISA plan. The denial was totally ambiguous. I appealed the decision, which was denied. Who would be the defendant in a lawsuit seeking reimbursement? The insurance company? The self-funding employer headquartered in Virginia? Could I file the lawsuit in Florida where I live? Would it need to be in federal district court? So many questions.
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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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