Health & Welfare Plans Newsletter

December 9, 2019

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[Official Guidance]

Text of 2019 Instructions for IRS Forms 1094-C and 1095-C (PDF)

17 pages; Dec. 5, 2019. "What's New ... [1] The due date for furnishing Form 1095-C to employees is extended from January 31, 2020, to March 2, 2020.... [2] The IRS will not impose a penalty for failure to furnish Form 1095-C to any employee enrolled in an ALE member's self-insured health plan who is not a full-time employee for any month of 2019 if certain conditions are met.... [3] The IRS will not impose a penalty for failure to file Form 1095-C with the IRS or failure to furnish Form 1095-C to employees if you make a good faith effort to comply with the information reporting requirements."

Internal Revenue Service [IRS]

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[Official Guidance]

Text of Draft Instructions for 2019 IRS Forms 1094-B and 1095-B (PDF)

9 pages; Dec. 6, 2019. "What's New ... [1] The due date for furnishing Form 1095-B to individuals is extended from January 31, 2020, to March 2, 2020.... [2] The IRS will not impose a penalty for failure to furnish Form 1095-B to individuals if certain conditions are met.... [3] The IRS will not impose a penalty for failure to file Form 1095-B with the IRS or failure to furnish Form 1095-B to individuals if you make a good faith effort to comply with the information reporting requirements.... [4] Health insurance issuers and carriers are encouraged (but not required) to report coverage in catastrophic health plans enrolled in through the Marketplace for months in 2019."

Internal Revenue Service [IRS]

[Official Guidance]

Text of Draft Instructions for 2019 IRS Form 8963: Report of Health Insurance Provider Information (PDF)

Dec. 6, 2019. "What's New: Forms 8963 reporting more than $25 million in net premiums written must be filed electronically.... File Form 8963 during each fee year (year the annual health insurance provider fee is due) to report net premiums written for U.S. health risks during the data year (calendar year immediately preceding the fee year). The IRS will use that information when figuring the annual fee imposed by [ACA] section 9010."

Internal Revenue Service [IRS]

[Official Guidance]

Text of IRS Final Regs: Calculation of Unrelated Business Taxable Income for Certain Exempt Organizations

21 pages. "[S]section 512(a)(3)(E) generally limits the amount that a VEBA or SUB may set aside as exempt function income to an amount that does not result in an amount of total assets in the VEBA or SUB at the end of the taxable year that exceeds the section 419A account limit for the taxable year.... This final regulation adopts the provisions of the 2014 proposed regulation with no modifications other than the following changes: [1] a change in the applicability date ... [2] the addition of a clause modifying the definition of covered entity to include certain corporations described in section 501(c)(2), as provided in section 512(a)(3)(C); [and] [3] the addition of a clause which refers to the provision in section 512(a)(3)(D) addressing nonrecognition of gain in the case of sales of certain property[.]"

Internal Revenue Service [IRS]

[Guidance Overview]

ACA Individual Statement Deadline and Good-Faith Relief Extended Again

"The penalty relief has no effect on a fully insured ALE's obligation under Section 6056 to furnish Form 1095-C to full-time employees and submit those statements with a 1094-C transmittal form to IRS.... Any failure by ALE members to furnish Form 1095-C, including Part III, to full-time employees enrolled in self-insured health plans will continue to trigger a penalty. But if a self-insured health plan covers part-time staff or COBRA enrollees, the relief does extend to an ALE's failure to furnish Form 1095-C to any enrollees in the plan who did not qualify as full-time for any month of 2019."

Mercer

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[Guidance Overview]

Editor's Pick Resource Guide for Health and Welfare Plan Nondiscrimination Testing

"Although the various tests include common elements, they can differ in significant respects. This [article] discusses the general principles behind the nondiscrimination tests as well as the specific tests applicable to particular benefits. It's intended to be a consolidated easy-reference document and contains an overview of health and welfare benefit discrimination tests in a summary table."

Buck

'Medical Necessity' Isn't Well-Defined Unless It Is Well-Defined

"[If] a plan incorporates an industry-wide phrase into its policy, such a phrase should be so well-defined within the boundaries of the policy so as to clearly articulate the exact parameter covered, leaving the courts with no reason to seek clarification as to the meaning of a certain phrase from outside of the policy itself. But not sufficiently defining 'medically necessary' leads to an ambiguity that, like many ambiguities, might create uncertainty." [S.B. v. Oxford Health Insurance, Inc., No. 17-1485 (D. Conn. Nov. 5, 2019)]

Littler

Bipartisan House and Senate Committee Leaders Announce Agreement on Legislation to Lower Health Care Costs

"The Lower Health Care Costs Act of 2019 will reduce what Americans pay out of their own pockets for health care. It would end surprise billing of patients and include a new system for independent dispute resolution often called arbitration. The legislation also increases prescription drug competition and creates price transparency, funds critical public health programs, including Community Health Centers for five years, and increases the purchasing age of tobacco to 21."

Energy & Commerce Committee, U.S. House of Representatives

Ban on Surprise Medical Bills May Pass After All

"The proposal would prevent doctors from sending unexpected bills to patients when they are treated in a hospital that accepts their insurance, and would establish a system for resolving related billing disputes between those doctors and insurance companies."

The New York Times; subscription may be required

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Improving HSA Engagement (PDF)

"[1] Establish employer HSA goals to drive long-term savings ... [2] Consider HSA design ... [3] Empower employees with education, advice and guidance ... [4] Provide integrated planning tools ... [5] Minimize disruption for employees."

Voya

Are Health Care Rates Too Complicated to Be 'Consumer Friendly'?

"[A detailed example] is offered to provide a glimpse into the complexity of health care pricing and reimbursement. The example also demonstrates that even complete rate transparency by hospitals may not be enough to affect a health care consumer's spending practices because [1] the issue is too complicated to generate a reliable cost estimate for the patient; [2] even if such an estimate could be generated, obtaining and understanding it may be too burdensome for consumers; and [3] it's too difficult to estimate the value that a consumer places on continuing his or her care with his or her physician and reliance on his or her physician's medical advice."

Epstein Becker Green

ACA Back at the High Court -- with Billions for Insurers on the Line

"More than $12 billion is at stake for the nation's health insurers [on December 10] when the Supreme Court hears another [ACA] case. For the federal government, the potential damages could be far greater, as its reputation as a reliable partner to private businesses is on the line.... The case revolves around a temporary Obamacare provision -- called the 'risk-corridor' program -- that was designed to help health plans recover some losses in the first three years of the health law marketplaces."

Kaiser Health News

House Bill Could Lower Patients' Prescription Drug Spending by Thousands of Dollars

"At the heart of H.R. 3 are measures granting Medicare new powers to negotiate with drug companies, using international prices as a backstop.... Under the process laid out in the bill, the secretary of health and human services would negotiate as many as 250 drugs each year. The negotiation process would prioritize drugs with the greatest savings potential -- those that rank highest by spending, have no generic or biosimilar competitor, and have a large pricing gap between the United States and peer nations."

Center for American Progress

Health Insurance and Mortality: Experimental Evidence from Taxpayer Outreach

"[The authors] evaluate a randomized pilot study in which the IRS sent informational letters to 3.9 million taxpayers who paid a tax penalty for lacking health insurance coverage under the [ACA] ... [and] study the effect of the intervention on taxpayers' subsequent health insurance enrollment and mortality.... [T]he intervention led to increased coverage in the two years following treatment and that this additional coverage reduced mortality among middle-aged adults over the same time period. [These] results provide the first experimental evidence that health insurance reduces mortality."

National Bureau of Economic Research [NBER]; purchase required for full document

Forget Free Beer and Unlimited Vacation: Defining the Employee Experience in the Age of the 'Perk War'

"Today, we're seeing perks like beer on tap, dog-friendly offices, and catered meals become a standard across the American workforce, with some companies taking this a step further by offering ax-throwing workshops, an in-house barbershop, and free pilot lessons.... Perks have their place, but when they're not in alignment with employee engagement, productivity, and business success, they ultimately don't positively impact the employee experience or help retain talent."

HR Daily Advisor

Benefits in General

Best Practices in Administering Benefit Claims: Litigation Aspects

"Strategically, of course, the plan administrator's goal is to find the quickest means to get the case dismissed. And, putting the administrative record in the hands of the participant prior to the participant commencing an action often helps put the plan administrator in a better position to try to get the case dismissed ... [A] good administrative record is key to setting up the possibility of an early resolution of a benefit claim dispute."

Proskauer

Multiemployer Health and Welfare Fund Statistics, Fall 2019 (PDF)

"The average plan could pay for approximately one year and one month of benefits and expenses with its net assets. There was an aggregate increase in net assets from 2016 to 2017 of approximately 0.7 months of total expenses. Total income exceeded total expenses by approximately 10.6%, an increase of 1.4 percentage points over the prior year. Administrative expenses represented 5.6% of total expenses on average, a decrease of 0.3 percentage points over the prior year."

Milliman

Press Releases

Most Popular Items in the Previous Issue

Text of White Paper from HHS: Risk Adjustment Data Validation (HHS-RADV)
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

BenefitsLink.com, Inc.
1298 Minnesota Avenue, Suite H
Winter Park, Florida 32789
(407) 644-4146

Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

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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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