Health & Welfare Plans Newsletter

October 6, 2020

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[Guidance Overview]

IRS Provides Final 30-Day Extension for 2020 ACA Reporting Forms Furnished in 2021

"[Notice 2020-76] mirrors the same 30-day extensions for the past four years of ACA reporting. However, the IRS added this year that unless it receives 'comments that explain why this relief continues to be necessary,' the 30-day extension will not be available in future years." Icon to read more

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[Guidance Overview]

CMS Proposes Reopening MLR Filings to Account for Risk Corridor Payouts

"CMS proposes that the late-arriving risk corridor receivables will be retroactively applied to issuers' original MLR filings for the years that include plan years 2014 to 2016 (MLR years 2015 to 2018). Retroactively applying the risk corridor payments mitigates the massive MLR rebates that would result if risk corridor receivables were treated as a lump sum payment for benefit year 2020. By retroactively applying the receivables to past years when most issuers lost money, smaller rebates or no rebates will result for most issuers." Icon to read
more

Faegre Drinker

Supreme Court to Hear ERISA Preemption Dispute

"On October 6, 2020, the U.S. Supreme Court will hear argument on ERISA's preemptive effect on a state law regulating pharmacy benefit managers' (PBMs) generic drug reimbursement rates ... The case considers regulation of PBMs under Arkansas law, but because a majority of states have enacted similar laws, the decision in Rutledge will extend beyond Arkansas." [Rutledge v. Pharmaceutical Care Mgmt. Assoc., Nos. 17-1609 and 17-1629 (8th Cir. Jun. 8, 2018; cert. pet. granted Jan. 13, 2020)] Icon to read more

Jackson Lewis

Third Circuit Rules State Law Reimbursement Claims Brought by Out-of-Network Medical Provider Are Not Precluded by ERISA

"[An] out-of-network medical provider's state law claims against an insurer were not precluded by ERISA where the insurer agreed to pay for procedures before they were performed, but, after the procedures were completed, determined that it would not reimburse the provider for the full billed amount. The Third Circuit determined that the out-of-network provider's state law causes of action for breach of contract and promissory estoppel were not pre-empted by ERISA and were permitted to go forward, potentially requiring the insurer to pay higher rates than those provided for in the insureds' ERISA plans." [The Plastic Surgery Center, P.A. v. Aetna Life Ins. Co., No. 18-3381 (3d Cir. Jul. 17, 2020)] Icon to read more

Hinshaw & Culbertson LLP

Exceptional Usefulness and Quality icon2020 ERISA Welfare Plan Checklist for Participant Disclosures

"[Many employers] sponsor ERISA welfare benefit plans and are currently undergoing their open enrollment process and issuing related participant communications.... [This] Participant Disclosures Checklist [can be used] during open enrollment and throughout the plan year." Icon to read more

Bass, Berry & Sims PLC

Tenth Circuit Finds District Court Applied Wrong Standard of Review in Evaluating Plan Administrator's Medical Necessity Determination

"Although the Plan published its reservation of discretionary authority in a document called the 'Plan Instrument,' according to the court, it failed to give participants sufficient notice that the document existed. Plan participants received a Summary Plan Description which did not mention discretionary authority or disclose the existence of the Plan Instrument. The Summary Plan Description did state that participants may ask to examine Plan documents that were relevant to their claim. However, the Tenth Circuit found that this statement 'did not suggest the existence of another document affecting judicial review.' " [Lyn M. v. Premera Blue Cross, No. 18-4098 (10th Cir. Jul. 24, 2020)] Icon to read more

Hinshaw & Culbertson LLP

Managing Health & Welfare Plans During Business Restructuring

"Employers across the country are restructuring business operations to mitigate the continuing impact of the COVID-19 pandemic. Restructuring business operations -- whether by complete shutdown, sale, or bankruptcy -- implicates several employer-sponsored health and welfare plan issues. This article provides a high-level overview of common health and welfare plan scenarios that plan sponsors may encounter[.]" Icon to read more

Proskauer, via Bloomberg Law

Global Health Care Benefit Costs Expected to Jump by More Than 8% in 2021

"[M]edical insurers globally project health care benefit costs will take a sudden drop in 2020 before rebounding to 8.1% in 2021, up from 5.9% this year and 7.2% in 2019. Average increases in the five regions next year will range from 5.8% in Europe to 13.6% in Latin America. Health care benefit cost increases in the U.S. are expected to remain stable at 7.3% next year[.]" Icon to read more

Willis Towers Watson

Comparing Insulin Prices in the United States to Other Countries: Results from a Price Index Analysis

"Although the ratio of U.S. to other-country prices varied depending on the comparison country and insulin category, U.S. prices were always higher (often five to ten times higher) than those in other countries.... The United States was unusual among comparison countries in permitting distribution of several types of insulin over the counter. However, U.S. manufacturer prices were still much higher than those in comparison countries even in categories in which U.S. distribution is entirely over the counter." Icon to read more

RAND Corporation

Benefits in General

[Guidance Overview]

DOL Proposes to Simplify Worker Classification Test Under FLSA

"The proposed rule would relax the parameters for determining independent contractor status under the FLSA, so employers and business lobbies will likely welcome the new test. However, different standards may apply for identifying independent contractors under other laws[.]" Icon to read more

Mercer

Cybersecurity More Effective If Regularly Reinforced

"[R]esearchers who studied 409 employees found that they were able to identify which emails were legitimate and which were phishing immediately after a security awareness and education program was conducted, and even four months after. But after half a year had elapsed, that was not the case.... The researchers then developed 'reminder measures' to refresh employees' knowledge and awareness.... [T]he interactive reminder measure and the one entailing a video were the most effective[.]" Icon to read more

American Retirement Association [ARA]

Press Releases

DOL Obtains Consent Order and Judgment to Restore $6,545,454 to Union Short Term Disability Fund
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

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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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