Health & Welfare Plans Newsletter

October 1, 2020

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[Official Guidance]

Text of Executive Order: An America-First Healthcare Plan

"The Secretary of the Treasury, the Secretary of Labor, and the Secretary of Health and Human Services shall maintain and build upon existing actions to expand access to and options for affordable healthcare.... The Secretary of Health and Human Services, in coordination with the Commissioner of Food and Drugs, shall maintain and build upon existing actions to expand access to affordable medicines, including accelerating the approvals of new generic and biosimilar drugs and facilitating the safe importation of affordable prescription drugs from abroad.... The Secretary of the Treasury, the Secretary of Labor, and the Secretary of Health and Human Services shall maintain and build upon existing actions to ensure consumers have access to meaningful price and quality information prior to the delivery of care.... The Secretary of Health and Human Services, in coordination with the Administrator of CMS, shall maintain and build upon existing actions to reduce waste, fraud, and abuse in the healthcare system." Icon to read more

Executive Office of the President

[Guidance Overview]

Exceptional Usefulness and Quality iconUpcoming Deadline iconOctober 15 Deadline for Medicare Part D Notice of Creditable Coverage

"Technically, employers must provide the Notice only to 'Part D eligible individuals' who are enrolled or seeking to enroll in the employer's prescription drug coverage. This includes all individuals enrolled in Medicare Part A or Part B who live in the service area of a Part D plan. As a practical matter, employers will not know which employees, spouses, or dependents are enrolled in Part A or Part B, and they will not know which individuals are seeking to enroll in the employer's plan. Therefore, employers generally provide the Notice to all employees." Icon to read more

ABD Insurance & Financial Services

[Guidance Overview]

Paid Sick Leave Mandate Arrives for New York State Employers and New York City Amends Its Own Paid Sick Leave Law

"The NYC amendments generally seek to align the pre-existing City leave law with the recently enacted State leave law, including by aligning the accrual and usage purposes, by expanding the amount of sick and safe leave employers with 100+ employees must provide from 40 hours to 56 hours annually, and by requiring some smaller employers ... to provide paid leave to employees ... NYC employers that are now subject to expanded leave obligations under the State leave law still have until January 1, 2021 to institute these expanded benefits." Icon to read more

Mintz

[Guidance Overview]

California Governor Signs SB 855, Increasing Coverage for Mental Health and Substance Abuse Disorders

"Senate Bill (SB) 855 expands mental health parity by extending its application to all medically necessary mental health and substance abuse addiction treatment. The law also provides new medical necessity standards and mandates criteria for clinical guidelines for assessing medical necessity." Icon to read more

Morgan Lewis

[Guidance Overview]

CMS Memo: Treatment of Risk Corridors Recovery Payments in the Medical Loss Ratio and Rebate Calculation (PDF)

13 pages. "The purpose of this draft guidance is to describe how issuers must treat the [risk corridor (RC)] payment amounts recovered as a result of the Supreme Court decision in their MLR and rebate calculations. The contents of this document do not have the force and effect of law and are not meant to bind the public in any way ... This document is intended only to provide clarity regarding existing requirements under the law." [Unnumbered document, Sep. 30, 2020] Icon to read more

Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

[Guidance Overview]

Exceptional Usefulness and Quality iconChecklist of Key Requirements in 2021 for Health and Welfare Benefit Plan Sponsors (PDF)

"Complying with the many rules that govern health and welfare benefits can be a challenge for benefits administrators. EPIC has prepared this compliance checklist to help administrators manage their 2021 benefits compliance efforts." Icon to read more

EPIC

Considering Authorized Generics in Pharmacy Benefits Design (PDF)

"The FTC reports that [authorized generics (AGs)] can bring down [costs compared to] similar retail generics by 4-8%. When offered without a retail generic there is a 7-14% savings compared to brand price. This savings can be significant given the cost of some brand drugs.... Here are steps employers can take now to improve use of Authorized Generics." Icon to read more

Mid-American Coalition on Healthcare [MACHC] and Midwest Business Group on Health [MBGH]

Health Benefit Costs Expected to Grow 4.4% in 2021 as Employers Face Continued Economic Uncertainty

"Employers expect moderate health benefit cost growth for 2021 of 4.4% on average compared to 2020 ... The increase ... is largely in line with the average annual cost growth over the past six years.... [O]nly 18% of employers responding to the survey say they will take cost-savings measures for 2021 that shift more healthcare expense to employees ... In fact, the majority of survey respondents (57%) will make no changes whatsoever to reduce cost in their medical plans in 2021. That compares to 47% making no changes last year, and just 44% in 2018." Icon to read more

Mercer

Strategies to Successfully Roll Out Benefit Programs

"[1] Position your program as an extension of the employee's healthcare plan ... [2] Use medical claims to target your communications ... [3] Develop a communication plan for employees to learn and engage ... [4] Communicate to employees early and often ... [5] Develop and leverage Health & Wellness Ambassadors ... [6] Find reasons to connect outside of open enrollment ... [7] Reward employees for getting involved ... [8] Inspire a grassroots campaign." Icon to read more

Tango Health

Who Went Without Health Insurance in 2019, and Why?

"In 2019, about 12 percent of people under 65 were not enrolled in a health insurance plan or a government program that provides financial protection from major medical risks.... About two-thirds of uninsured people were eligible for some form of subsidized coverage ... A smaller number of uninsured people had no option for coverage except a private plan purchased at full cost." Icon to read more

Congressional Budget Office [CBO]

New Laws Keep California at Forefront of Health Policy Innovation

"Lawmakers made significant changes to mental health coverage, and perhaps the most consequential is a mental health parity bill.... Newsom gave nurse practitioners, who are nurses with advanced training and degrees, the power to practice independently, ... California will enter the highly competitive generic drug market as a result of SB-852, a first-in-the-nation law that will put the state government in direct competition with private drug manufacturers.... [L]awmakers approved a suite of bills in response to the pandemic, largely intended to protect essential workers." Icon to read more

Kaiser Health News

[Opinion]

ERISA Preemption: A Vital Protection for Health Coverage

"As the American workforce becomes increasingly diverse, today's employees need and benefit from ERISA's preemption of inconsistent and overlapping state laws more than ever. By mitigating the harmful cost and health consequences of a patchwork of state regulation, ERISA preemption prevents disparities in coverage and benefits that would otherwise disadvantage employees in certain states." Icon to read more

U.S. Chamber of Commerce

Benefits in General

[Official Guidance]

Text of IRS Final Regs: Meals and Entertainment Expenses Under Section 274 (PDF)

"[T]he final regulations address the elimination of the deduction under section 274 for expenditures related to entertainment, amusement, or recreation activities, and provide guidance to determine whether an activity is of a type generally considered to be entertainment. The final regulations also address the limitation on the deduction of food and beverage expenses under section 274(k) and (n), including the applicability of the exceptions under section 274(e)(2), (3), (4), (7), (8), and (9). " Icon to read more

Internal Revenue Service [IRS]

Employees Are Stressed About Their Financial Future, But Very Satisfied with Employment-Based Benefits (PDF)

"Nearly half of employees are concerned with their household's financial wellbeing ... 42 percent of employees are satisfied with their financial wellness benefits and would not trade them with their wages; an equal share would be willing to have fewer financial wellness benefits for higher wages.... [N]early half of employees, 47 percent, are extremely/very satisfied with their benefits package, with 58 percent stating that they are satisfied with their employment-based retirement savings plan and 54 percent being satisfied with their current health insurance plan." Icon to read more

Employee Benefit Research Institute [EBRI]

Plan Participants Must Be Informed of Plan Documents and Standards of Review

"[T]he court determined: [1] that the plan administrator did not adequately notify the participant about its reservation of discretionary authority in deciding benefit claims; and [2] the Plan Instrument does not affect the standard for reviewing the plan administrator's decision in this case. Accordingly, the court concluded that the participant could not be bound to terms contained in a policy about which she had no notice or knowledge." [Lyn M. v. Premera Blue Cross, No. 18-4098 (10th Cir. Jul. 24, 2020)] Icon to read more

The Wagner Law Group

Exceptional Usefulness and Quality iconEmployee Benefits in the Supreme Court (PDF)

35 pages, Oct. 2020. "As of this writing, the Court has one employee benefit case scheduled for argument during its October 2020 term, although other interesting petitions for certiorari are pending." Icon to read more

Eversheds Sutherland

Selected Discussions
on the BenefitsLink Message Boards

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Companies within a Controlled Group Have Different Welfare Benefit Programs; Permitted by Section 125?

"A controlled group has at least 2 different companies set up and with different welfare benefits at the different companies. The same health plan and 401(k) plan is provided by the different companies but the company with all the execs also had group life insurance, vision, disability, etc., some of which was partially paid through a cafeteria plan. Assuming the medical plan passes ACA muster, surely these arrangements don't pass the Section 125 tests, do they?" Icon to read more

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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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