Health & Welfare Plans Newsletter

July 22, 2020

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[Guidance Overview]

Affordability Threshold to Rise Slightly in 2021

"In 2021 the affordability threshold will be 9.83 percent which is up slightly from the 2020 affordability threshold of 9.78 percent.... When planning for the 2021 plan year every employer should check to make sure at least one of its plans that provides minimum value meets one of the affordability safe harbors discussed above for each of its full-time employees. It would not be surprising if individuals were more scrupulous with their healthcare choices in 2021 which could leave noncompliant employers exposed to section 4980H(b) penalties."

Accord

[Guidance Overview]

Editor's Pick How the ACA Affordability Increase to 9.83% Affects Employers

"When designing 2021 employee contribution levels, consider these affordability safe harbors to avoid potential ACA employer mandate 'B Penalty' liability. Where possible and within budgetary constraints, employers should consider offering at least one medical plan option to full-time employees in all regions with an employee-share of the premium not exceeding $104/month for employee-only coverage."

ABD Insurance & Financial Services

[Guidance Overview]

Section 1557 and Title VII: What Happens Now?

"While the Supreme Court has clarified that Title VII protects employees on the basis of sexual orientation and transgender status, the revised Section 1557 take the exact opposite view.... What is clear under Title VII is that employers may not charge homosexual or transgender employees more than other employees for the same coverage. It is less clear is whether employers need to update their policies and schedules of benefits to ensure that coverage is not excluded or denied for services on the basis of an employee's sexual orientation and/or transgender status (among other protected classes)." [Bostock v. Clayton County, Ga., No. 17-1618 (S. Ct. Jun. 15, 2020)]

HUB International

[Guidance Overview]

DOL Issues Return-to-Work Guidance Under the FFCRA

"[T]he DOL makes clear that the period of time that the employee was on furlough did not count against their FFCRA/FMLA leave entitlement. The new guidance also provides direction to employers that have employees returning to work after caring for a family member exposed to COVID-19."

Littler

[Guidance Overview]

New FMLA Forms Available from DOL

"One overarching revision is that each form now includes more 'explanatory' language relating to FMLA rights and obligations.... Another broad change involves a new section on the Designation Notice relating to 'Incomplete or Insufficient' medical certifications.... The medical certification forms have been significantly overhauled, and will require health care providers to more clearly identify the type of medical condition at issue and the type and amount of leave needed."

Bryan Cave Leighton Paisner LLP

Editor's Pick FMLA Changes That Could Be On the Horizon

"DOL published a request for information seeking public input about the way it interprets and implements the federal leave law ... [F]ive changes that could be on the horizon: [1] 'Serious health condition' definition ... [2] Intermittent and unplanned leave ... [3] Leave request process ... [4] Medical certification process ... [5] Formal guidance on specific opinion letters."

Fisher Phillips

Editor's Pick Compliance Issues for Health and Leave Benefits in 2021

"[1] COVID-19 issues for group health plans.... [2] Transition back to a safe, healthy workplace.... [3] Paid leave.... [4] State activity.... [5] Prescription drug costs and coverage.... [6] Transparency rules.... [7] Data privacy and security.... [8] HSA, HRA and FSA developments.... [9] Preventive services.... [10] Other ongoing ACA concerns."

Mercer

Ninth Circuit Gives ACA Section 1557 Plaintiffs Another Chance to Challenge Health Plan's Exclusion for Hearing Loss Treatment

"The [court] held that hearing disabled participants failed to state a plausible discrimination claim in a lawsuit alleging violations of Section 1557 of the [ACA] by a health plan insurer. The case involved a health plan that permitted coverage for cochlear implants but excluded coverage for other hearing loss treatments." [Schmitt v. Kaiser Foundation Health Plan of Wash., No. 18-35846 (9th Cir. Jul. 14, 2020)]

Thomson Reuters Practical Law

Finding No ERISA Preemption, Third Circuit Revives Out-of-Network Provider Claims Against Aetna

"[At issue was the] remedy an out-of-network medical care provider has when an insurer ... [agrees] to pay reasonable rates for services that are not covered in the ERISA benefit plan ... only to later refuse to pay the provider's invoices.... The Third Circuit determined that the Surgery Center's causes of action for breach of contract and equitable estoppel did not 'reference' an ERISA plan because the side agreement does not require interpretation or analysis of the plan terms.... The Surgery Center's claims for breach of contract and equitable estoppel were also found not to have a 'connection' to any ERISA plan." [Plastic Surgery Ctr., P.A. v. Aetna Life Ins. Co., No. 18-3381 (3d Cir. July 17, 2020)]

Kantor & Kantor

ACA Litigation Round-Up, Part 2

"This post covers a decision from ... the Second Circuit holding that New York is preempted from making changes to ACA-governed risk adjustment transfers and a decision from ... the Ninth Circuit holding that the ACA prohibits discrimination in plan benefit design under Section 1557 of the ACA. Additional decisions could be issued any day on a Trump-era rule on association health plans, whether insurers are entitled to unpaid cost-sharing reductions, and how the health insurance tax applies to Medicaid managed care organizations." [UnitedHealthcare of New York v. Lacewell, No. 18-2583 (2d Cir. Jul. 20, 2020); Schmitt v. Kaiser Foundation Health Plan of Washington, No. 18-35846 (9th Cir. Jul. 14, 2020)]

Katie Keith, in Health Affairs

Using Voluntary Benefits to Help Employees During the Economic Downturn

"[K]ey areas to consider when building a financial wellbeing strategy. [1] Help manage higher healthcare costs ... [2] Provide support for short-term financial stressors ... [3] Offer guidance and support for employees struggling with student debt."

Buck

Briggs & Stratton Scraps Retiree Medical Benefits in Bankruptcy

"[T]he day before the [company] filed for chapter 11 bankruptcy protection, Briggs & Stratton's board voted to terminate health benefits for 450 former workers and end life-insurance protection for 4,000 former workers, effective as of the end of August.... The company is seeking a court order saying it was justified in terminating the benefits, despite bankruptcy-code provisions that limit the rights of troubled companies to strip retirees of benefits."

The Wall Street Journal; subscription may be required

Practice Note: ASOP No. 6 Exposure Draft -- Development of Age-Specific Retiree Health Cost Assumptions for Pooled Health Plans (PDF)

48 pages. "This practice note provides information regarding current and emerging practices of actuaries in the development of age-specific claims cost assumptions. Various standards-setting boards call upon actuaries to use age-specific retiree per-capita claims costs for retiree group health benefit valuations, unless the actuary discloses and supports one of the exceptions listed in ASOP No. 6 ... In particular, GASB Statement No. 75 states that any deviation from an ASOP is not in compliance with that accounting standard."

ASOP No. 6 Practice Note Work Group, American Academy of Actuaries

Supporting Employment Among Lower-Income Mothers: Paid Family Leave and Child Care Arrangements

"This brief focuses on the role of [state paid family leave (PFL)] in facilitating child care arrangements of a sample of mothers.... [1] PFL assisted mothers in making care arrangements by providing time to find care and address logistics and to let babies acclimate to care, and by providing funds. [2] PFL was not central to all mothers' child care arrangements; it was less important for those who arranged care prior to childbirth or who left the workforce voluntarily. [3] While PFL eased some difficulties mothers faced, tensions around child care accessibility, cost, and quality remained for many, beyond the scope of PFL to address."

Assistant Secretary for Planning and Evaluation [ASPE], U.S. Department of Health and Human Services [HHS]

Benefits in General

Limits to ERISA's Equitable Remedies: What the Supreme Court's Latest Securities Act Decision Tells Us

"The Court observed that disgorgement can be seen as imposing a constructive trust or an accounting, and is equitable in nature even if not specifically mentioned in a statute. The Court added that disgorgement is not joint and several, and is not limited to cases involving fiduciary breaches. The Court held that district courts thus may enter disgorgement awards as part of equitable relief, as long as they target net profits, after deducting legitimate expenses." [Liu v. SEC, No. 18-1501 (S. Ct. Jun. 22, 2020)]

Seyfarth

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BenefitsLink Health & Welfare Plans Newsletter, ISSN no. 1536-9595. Copyright 2020 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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