Health & Welfare Plans Newsletter

March 9, 2016

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Webcasts and Conferences

2016 Legislative & Regulatory Updates
April 12, 2016 WEBCAST
(ECFC [Employers Council on Flexible Compensation])

Deferring Taxation Using the Section 1042 "Rollover"
May 3, 2016 WEBCAST
(National Center for Employee Ownership [NCEO])

IHC FORUM & Expo
May 24, 2016 in GA
(Institute for HealthCare Consumerism)

Advanced Trustees and Administrators Institute
June 27, 2016 in NV
(International Foundation of Employee Benefit Plans [IFEBP])

Accounting and Auditing Institute for Employee Benefit Plans
June 27, 2016 in NV
(International Foundation of Employee Benefit Plans [IFEBP])

View All Webcasts and Conferences


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[Guidance Overview]

New Mandatory Paid Sick Leave Rules Could Ensnare Unwary Federal Contractors
"[T]he rules require that the employer make and maintain during the course of the covered contract and for a three year period thereafter several records, including copies of 'balance' notifications sent to employees (at least monthly); copies of employees' requests to use paid sick leave, if in writing, or other documents reflecting such a request; dates and amounts of paid sick leave used by employees ... any records relating to required certification and documentation; or any other records showing any tracking of or calculations related to an employee's accrual and/or use of paid sick leave." (Bass, Berry & Sims)


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[Guidance Overview]

Required Paid Sick Leave Will Weigh Heavily on Government Contractors Under DOL Proposal
"The process for requesting and taking leave under the NPRM has some similarities to the process under the Family and Medical Leave Act. However, some important distinctions exist. While PSL can run concurrently with FMLA leave, there will be many situations in which PSL will be available when FMLA is not, and even when FMLA certification is not timely returned, PSL may be available in some cases, allowing employees to gain an extra seven days of protected leave. Like FMLA, PSL can be taken intermittently and can be used in hour increments." (Jackson Lewis P.C.)

[Guidance Overview]

Health Apps and HIPAA: OCR Publishes Guidance for Health App Developers
"[T]he Health App Guidance sets forth various factual scenarios involving mobile health apps and whether OCR believes that HIPAA would apply to the app developer in each scenario. While the Health App Guidance is consistent with previous general guidance from OCR on HIPAA business associate relationships, it does provide helpful clarity regarding the application of those rules to mobile apps." (Morgan Lewis)

[Guidance Overview]

Santa Monica Joins Patchwork of Paid Sick Leave Laws
"California's City of Santa Monica's City Council has adopted an ordinance that enacts minimum ... paid sick leave requirements for covered employees ... Ordinance Number 2509 became effective on February 25, 2016, although its provisions will not be implemented until July 1, 2016.... In general, the Ordinance covers all workers who, in a particular week, perform at least two hours of work within the geographic boundaries of Santa Monica for an employer." (Jackson Lewis P.C.)

Observations on Trends in Prescription Drug Spending (PDF)
16 pages. "Expenditures on prescription drugs are rising and are projected to continue to rise faster than overall health spending ... [P]rescription drug spending in the United States was about $457 billion in 2015, or 16.7 percent of overall personal health care services.... 10 percent of that rise was due to population growth; 30 percent to an increase in prescriptions per person; 30 percent to overall, economy-wide inflation; and 30 percent to either changes in the composition of drugs prescribed toward higher price products or price increases for drugs that together drove average price increases in excess of general inflation. Expenditures on specialty drugs generally appear to be rising more rapidly than expenditures on other drugs, though estimates of specialty drug expenditures are highly sensitive to which drugs are considered 'specialty' products." (Assistant Secretary for Planning and Evaluation [ASPE], U.S. Department of Health and Human Services [HHS])


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Medicare Part B Drugs: Pricing and Incentives (PDF)
10 pages. "The Part B payment method provides weak incentives for physicians to consider value -- that is, choose the lowest cost therapy to effectively treat a patient. The Medicare program has not implemented various value based practices typically used by commercial insurers and Part D sponsors for self-administered drugs." (Assistant Secretary for Planning and Evaluation [ASPE], U.S. Department of Health and Human Services [HHS])

Medicare to Test New Payment Approaches for Some Prescription Medications
"The targeted drugs would generally be intravenous medications, such as many cancer treatments, injectable drugs, including some antibiotics, and certain eye treatments.... Currently, Medicare Part B pays the average sales price of the drug, plus 6 percent. Under the proposal that would start later this year, doctors and hospital outpatient centers would get the average price plus 2.5 percent, along with a flat fee of $16.80 per drug per day." (Kaiser Health News)

Health Care Consumerism: Can the Tail Wag the Dog?
"Less than 7 percent of our health care spending is actually paid by consumers on shoppable services. That means that for the vast majority of health care spending, consumer-targeted activities -- such as providing incentives or information in an effort to direct their spending -- are unlikely to improve the value we get for our health care dollars. Instead, payers, employers, and other stakeholders need to consider a broader approach, including engaging providers directly." (Health Affairs)

Court Rules Employer Cannot Escape Claims that it Cut Employee Hours to Avoid ACA Requirements (PDF)
"Employers contemplating cutting employee hours, managing employee hours under 30 hours a week, changing employee classifications or break-in-service rules, or taking other actions that could adversely affect employees' eligibility for health coverage or options should be mindful of [ Marin v. Dave & Buster's, Inc. ] ... Employers should expect that employee communications (both oral and written) about such workforce changes, as well as with SEC filings, could be used to support a Section 510 claim.... It is possible that an employer's decision to outsource or shift work from its employees to employees of a staffing agency as a way to reduce its ACA shared responsibility liability could be subject to a Section 510 claim." (Xerox HR Consulting)

Collecting Another Supreme Win for ERISA Preemption
"For those that continue to believe that data-collection of the type sought by Vermont has value, the Breyer concurrence suggests a way forward. Justice Breyer noted that ERISA pre-emption 'does not necessarily prevent Vermont or other States from obtaining the self-insured, ERISA-based health-plan information that they need.' He suggested that States wishing to obtain such information could ask federal agencies to provide for such collection, raising the possibility that the [DOL] could 'develop reporting requirements that satisfy the States' needs' and even 'delegate to a particular State the authority to obtain data related to that State." [ Gobeille v. Liberty Mutual Ins. Co. , No. 14-181 (U.S. Mar. 1, 2016)] (Dechert LLP)

Executive Compensation and Nonqualified Plans

The Year of Top Hat Plan Litigation
"Former employees who terminate employment after having satisfied the minimal vesting requirements of ERISA, but before satisfied the more restrictive vesting requirements of their former employers' non-qualified plans, have figured out (actually, their lawyers have figured out) that challenging a non-qualified plan's status as a top hat plan can be an effective way to collect additional dollars. And some federal courts, including Texas, of all places, have been sympathetic to these challenges. Unfortunately, these types of allegations have become fairly common in recent years." (Winston & Strawn LLP)

Former CEO's State Law Claims Against Bank Are ERISA-Preempted
"[T]he court noted that some courts engage in an analysis of the stated purpose of the plan as determined by its plain language to determine whether it qualifies as an excess benefit plan. A stated purpose in general doesn't suffice, there must be a specific reference to Section 415 in the plan's language for the plan to be exempted from ERISA, the court noted." [ Shepherd v. Community First Bank , No. 8:2015cv04337 (D. S.C. Mar. 7, 2016)] (Bloomberg BNA)

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BenefitsLink Health & Welfare Plans Newsletter, ISSN no. 1536-9595. Copyright 2016 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 that content. You may not alter or remove any trademark, copyright or other notice from copies of the content.

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