Health & Welfare Plans Newsletter

November 13, 2020

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[Guidance Overview]

Sunlight on Drug Prices Negotiated by Health Plans: The 'Transparency in Coverage' Final Rule

"The Final Rule imposes two requirements on Payors relating to drug pricing. First, Payors must make certain drug pricing information publicly available through machine-readable files. Second, upon the request of a participant, a Payor must make available certain pricing disclosures to the individual participant at the participant's request." Icon to read more

Ropes & Gray LLP

[Guidance Overview]

HHS Finalizes the Transparency in Coverage Rule

"This information includes seven content elements for disclosure: [1] Estimated cost-sharing liability ... [2] Accumulated accounts ... [3] In-network rates ... [4] Out-of-network allowed amounts ... [5] Items and services content list ... [6] Notice of prerequisites to coverage ... [7] Disclosure notice." Icon to read more

Sheppard Mullin

[Guidance Overview]

Employers Prepare for Changes Following California Family Rights Act Expansion

"This new law, which becomes effective January 1, 2021, makes several significant changes to ... the California Family Rights Act (CFRA).... [1] CFRA leave now covers all private sector employers with five or more employees ... [2] CFRA leave expands the types of leaves available ... [3] CFRA leave eliminates prior restrictions ... [4] Small employer family leave mediation program." Icon to read more

Goldberg Segalla

[Guidance Overview]

Questions and Answers About Paid Family and Medical Leave in Colorado

"Proposition 118 provides for 12 weeks of paid family and medical leave funded through a payroll tax paid 50/50 by employers and employees. An additional four weeks of paid leave are available for pregnancy or childbirth complications, bringing the maximum potential amount of paid leave to 16 weeks. Having passed as a ballot initiative, Proposition 118 will now become law.... [B]enefits under the program do not begin until 2024." Icon to read more

Littler

[Guidance Overview]

New York City Updates Its Paid Safe and Sick Leave Law to Align with Statewide Requirements

"New York City recently amended its own Paid Safe and Sick Leave Law (NYC PSSL) to be more consistent with the accrual and usage requirements imposed by the newly-implemented New York State Paid Sick Leave Law (NYS PSL). This memorandum details the pertinent changes to NYC PSSL, which took effect on September 30, 2020." Icon to read more

Clifton Budd & DeMaria, LLP

California Employees Hold the Sole Right to Designate Kin Care Leave

"A slight change to California Labor Code Section 233 grants employees the sole discretion to designate the type of sick leave they are taking. This aims to prevent an employer's intentional or erroneous designation of an employee's usage of sick days as 'kin care'. Any employee aggrieved by a violation of this labor code remains entitled reinstatement and actual damages or one day's pay and to appropriate equitable relief." Icon to read more

Goldberg Segalla

How Long Does Your CBA Obligate You to Pay for Retiree Health Insurance Coverage?

"If you are a municipal employer in New York State struggling to find the answer to that question, you are not alone. In the absence of express language in your collective bargaining agreement, a definitive response is elusive. So elusive that the Second Circuit Court of Appeals has reached out to New York's Court of Appeals for guidance. Whatever answer the Court of Appeals returns, if any, the value of a carefully negotiated and precisely drafted collective bargaining agreement cannot be overstated." [Donohue v. Cuomo, No. 18-3193 (2d Cir. Nov. 6, 2020)] Icon to read more

Bond, Schoeneck & King

Worker Satisfaction with Health Benefits Has Increased During COVID-19 Pandemic (PDF)

"The percentage of workers reporting that they were extremely or very satisfied with health benefits increased from 49 percent in 2018 to 55 percent in 2020 ... Those extremely satisfied with the cost of health insurance increased from 9 percent in 2018 to 16 percent in 2020; those very satisfied jumped from 13 percent to 24 percent in 2020. Workers reporting that they were extremely satisfied with the costs of health care services not covered by insurance doubled from 7 percent to 14 percent between 2018 and 2020; the percentage reporting that they were very satisfied increased from 14 percent to 24 percent over that same time period. " Icon to
read more

Employee Benefit Research Institute [EBRI]

Trends in Health Savings Account Balances, Contributions, Distributions, and Investments, 2011-2019

"Between 2011 and 2019, end-of-year account balances increased but remained low -- going from $1,990 in 2011 to $3,221 in 2019.... Average total contributions -- combined individual and employer contributions -- increased from $2,348 to $2,959 between 2011 and 2019.... Overall, 60 percent of accountholders withdrew funds. The average annual amount distributed was $1,897 in 2019, implying an average rollover of $1,062." Icon to read more

Employee Benefit Research Institute [EBRI]

Catastrophic Health Expenditures Across Insurance Types and Incomes Before and After the ACA

"ACA implementation was associated with 2 million fewer US adults with catastrophic expenditures each year.... However, improvements were not observed in higher income quartiles or among the privately insured, who represent an increasing share of those experiencing catastrophic expenditures.... Despite large coverage gains, 11 million US adults, including 6 million with private insurance, continue to experience catastrophic health expenditures annually." Icon to read more

JAMA Network

Private Health Insurance: Markets Remained Concentrated through 2018, with Increases in the Individual and Small Group Markets

"Enrollment in private health insurance plans in the individual, small group, and large group markets has historically been highly concentrated among a small number of issuers. GAO found that this pattern continued in 2017 and 2018.... Overall individual and small group markets have become more concentrated in recent years. The national median market share of the top three issuers increased by approximately 8 and 5 percentage points, respectively, from 2015 through 2018. With these increases, the median concentration was at least 94 percent in both markets in 2018." [GAO-21-34, Nov. 13, 2020] Icon to read more

U.S. Government Accountability Office [GAO]

[Opinion]

American Academy of Actuaries Comment Letter to CMS on Actuarial Value Calculator (PDF)

"[T]he 2021 AV Calculator did not maintain the same relationships among metal levels that existed in prior years.... It is important that a single standard population be used for all metal levels ... in particular to ensure morbidity differences are not reflected across the metal levels' AVs. It appears that CMS is reflecting morbidity differences in the continuance tables, or otherwise using inconsistent populations for the determination of actuarial values across different metal tiers." Icon to read more

American Academy of Actuaries

Benefits in General

Employee Benefit Developments in 2020 (PDF)

"PEPs ... Lifetime income demonstrations ... Expanded access to 401(k) plans for part-time workers ... Optional distributions for qualified birth or adoption expenses ... Determination letters and opinion letter 'cycles'... Fiduciary duties of retirement plan investments ... COBRA penalties." Icon to read more

Holland & Hart LLP, via Tax Executive

Court Concludes Plan Administrator Failed to Properly Delegate Discretionary Authority to Service Representative

"[T]he court noted that the plan set forth a procedure for delegating discretionary authority, and provided that when the plan and SPD conflict, the plan controls. Because the committee was 'bound to follow the plan's procedures,' and failed to do so, the court concluded there was no effective delegation of authority. Therefore, the court held that the adverse benefit determination was subject to the nondeferential (de novo) standard of review." [Hampton v. Nat’l Union Fire Ins. Co., No. 18-6725 (N.D. Ill. Oct. 7, 2020)] Icon to
read more

Thomson Reuters / EBIA

Plan Sponsors Will Be Affected by New Audit Standard for Large ERISA Plan Financial Audits

"Here are five key changes: [1] A new name and new type of audit opinion! ... [2] Maintaining a current plan instrument.... [3] Properly administering the Plan and verifying that the ERISA financial statements are in accordance with the Plan's provisions, including maintaining sufficient participant records.... [4] The plan sponsor is required to determine whether an ERISA Section 103(a)(3)(c) audit is permissible, if the certification is appropriate, and if the certified information is correctly measured, presented, and disclosed in accordance with the applicable financial reporting framework.... [5] Providing the auditor with a substantially complete draft of the Form 5500 prior to the date of the auditor's report." Icon to read more

Bradley J. Bartells, CPA, via LinkedIn

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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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