Health & Welfare Plans Newsletter

July 27, 2020

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View COVID-19 News and Resources

[Guidance Overview]

Massachusetts Releases Amended Paid Family and Medical Leave Regs

"The law provides for 12 weeks of paid family leave per benefit year, 20 weeks of paid medical leave for the worker's own serious health condition, and up to 26 weeks of paid leave to care for a family member who is a covered service member.... In May 2020, the Department issued proposed amendments to the regulations, and the Department anticipates these will be finalized ... [S]ome of the key provisions of the amendments are noted [in this article]."

Constangy, Brooks, Smith & Prophete LLP

Third Circuit: Provider's Out-of-Network Claims Not Preempted by ERISA

"In an issue of first impression, the Third Circuit addressed the question of what remedies are available to an out-of-network provider when an insurer initially agrees to pay for the provision of out-of-network services, and then breaches that agreement.... The panel reasoned that state law claims were not related or connected to the patients' ERISA benefit plans because the Plastic Surgery Center did not participate in Aetna's provider network." [The Plastic Surgery Center, P.A. v. Aetna Life Ins. Co., No. 18-3381 (3d Cir. Jul. 17, 2020)]

Health Law Advisor, Epstein Becker Green

When Mid-Year Coverage Changes Create a Mini-Open Enrollment for Section 125 Plan Participants

"If the employer adds a new plan option mid-year, or significantly improves an existing plan option mid-year, the employees eligible for that new or significantly improved plan option experience a Section 125 permitted election change event [a 'mini-open enrollment' (mini-OE)].... [T]his event does not permit employees to change their election for other lines of coverage for which there is no new or significantly improved plan option. Furthermore, this event does not permit a participating employee to drop coverage entirely."

ABD Insurance & Financial Services

Editor's Pick Use of HSAs Among Adults Enrolled in High-Deductible Health Plans

"In this national survey of 1637 respondents, approximately 1 in 3 adults enrolled in a high-deductible health plan did not have a health savings account. Among those with a health savings account, most had not contributed money into it in the last year ... These findings suggest that ... targeted interventions could enhance uptake of and contributions to health savings accounts."

JAMA Network

How to Assess Potential Employee Benefit Advisers

"Focus on what the candidates do, how they do it and how they get paid (fee for service or commission). Most important, though, stay attuned to the nuances. Here are five things to look for: [1] A vision to help shape your future workforce.... [2] Clear, jargon-free communications.... [3] A strong backup team.... [4] No ties that might bind.... [5] Data helps drive insights."

HUB International

Shifts for Group Benefits Business in a COVID-19 Landscape

"Group carriers and group technology partners continue to cast their vision around the need for digital transformation from a customer-centric viewpoint.... Technology has the potential to engage the decision-making process on a whole new level, and it seems clear that now is the time to embrace the opportunity.... [B]oth employers and employees -- especially those in small businesses -- will ask more and more online enrollment experiences. Online has become the norm for every other service they sign up for."

InsuranceNewsNet.com

Rhode Island Health Insurers Request Significant Rates Hikes for 2021

"The requested rate increases range from 3.7% to 5.8% in the individual market, 1.5% to 4.3% for small groups and -0.3% to 10.7% for the large group market.... [K]ey factors behind the 2021 rate requests [include] increases in the cost of healthcare services, including prescription drug cost trends driven by new drug treatments and price increases.... [T]he rate requests also reflect the indefinite suspension of the federal health insurance tax, which has helped restrain overall rate increases."

Golocalprov

[Opinion]

American Benefits Council Letter to IRS on Application of Section 4976 to Repurposing of Surplus Welfare Plan Assets

"[The Council recommends] that Treasury and the IRS publish official guidance affirming that the 100% excise tax under Internal Revenue Code Section 4976 does not apply to an employer's reallocation or repurposing of surplus welfare benefit fund assets to provide other health and welfare benefits to employees.... [T]he IRS' position has a particularly adverse impact on employers and employees during the pandemic when many employers and employees are struggling financially or exploring ways to use assets most efficiently."

American Benefits Council

Benefits in General

[Official Guidance]

IRS Announces Tax Relief for Michigan Severe Storm Victims

"Individuals and households who reside or have a business in Arenac, Gladwin, Iosco, Midland and Saginaw counties qualify for tax relief.... [C]ertain deadlines falling on or after May 16, 2020, and before Oct. 15, 2020, are postponed to October 15, 2020. This includes 2019 individual and business returns that, due to COVID-19, were due on July 15.... [T]his also means that affected taxpayers will have until Oct. 15 to make 2019 IRA contributions."

Internal Revenue Service [IRS]

[Official Guidance]

IRS Announces Tax Relief for Utah Earthquake Victims

"Individuals and households who reside or have a business in Davis and Salt Lake counties qualify for tax relief.... [C]ertain deadlines falling on or after March 18, 2020, and before July 31, 2020, are postponed to July 31, 2020. This includes 2019 individual and business returns that, due to COVID-19, were due on July 15.... [T]his also means that affected taxpayers will have until July 31 to make 2019 IRA contributions."

Internal Revenue Service [IRS]

What Freelancers Should Look for in Benefits: A Checklist

"[S]ome professional groups are setting up systems ... offering group health insurance and, in some cases, retirement funds. Similarly, the Freelancer's Union has arranged health, dental, disability and liability insurances for members. And various popular workforce management services offers health insurance options as well."

MassMutual

[Opinion]

ERIC Letter to U.S. Senate Suggesting Employee Benefits Provisions for Potential COVID-19 Legislation (PDF)

"ERIC urges that the following provisions be included in potential COVID-19 legislation: [1] Prevent abusive 'stock drop' lawsuits, if the plaintiff cannot prove that the volatility of the investment was due to a cause other than COVID-19; [2] Prevent abusive 'imprudent investment' lawsuits, if the plaintiff cannot prove that the volatility of the investment was due to a cause other than COVID-19; [3] Prevent abusive COBRA lawsuits, by clarifying that it is the responsibility of a plan participant to disclose to providers the source of their health insurance coverage; [4] Prevent abusive ERISA disclosure lawsuits, by requiring plaintiffs to demonstrate actual harm in a case based on failure to provide an ERISA-required disclosure or respond to a document request in a timely manner; and [5] Protect employers from excessive HIPAA liability, by permitting employers to collect and use information related to COVID-19 infections among their worker population."

The ERISA Industry Committee [ERIC]

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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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