Health & Welfare Plans Newsletter

January 5, 2018

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[Guidance Overview]

ACA Reporting Relief: Deadline for Written Statement to Covered Individuals Extended
"[T]his extension eliminates an employer's ability to request a 30-day extension for furnishing information to individuals. Thus, the new deadline is inflexible. In addition, the extension does NOT apply to those forms an employer is required to file with the IRS. This means that Form 1094 (B or C) and Form 1095 (B or C) will still be due to the IRS on or before February 28th (or March 31st if filing electronically), unless the employer applies for an extension of time under normal extension rules."
Liebert Cassidy Whitmore

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[Guidance Overview]

Temporary Changes to Massachusetts Employer Medical Assistance Contribution (EMAC)
"EMAC applies to employers with more than five employees in Massachusetts, and applies regardless of whether the employer offers health coverage to its employees.... For wages paid in the years 2018 and 2019, the EMAC contribution will increase to 0.51% up to the annual wage cap of $15,000, which increases the potential maximum cost per employee to $77 per employee per year."
Winston & Strawn LLP

[Guidance Overview]

The Proposed Rule for Association Health Plans: What It Says and What It Would Do
"One repeated consideration that characterizes the rule is the Department's effort to ensure that a group or association has a 'sufficiently close economic or representational nexus to the employers and employees that participate in the plan.' Where an employment relationship to the association does not exist, the only connection between a member employer and the association is the health coverage itself. When that is the case, courts have held that the relationship is more similar to a relationship between an employer and a state-regulated private insurer, which would be subject to many more consumer protections. The Department asserts throughout the rule that it has adequately addressed concerns about these types of arrangements masquerading as AHPs."
Katie Keith, in Health Affairs

DOL Proposed Rule Paves Way for Association Health Plans
"State authority over such plans would vary depending on whether the plans were self-insured, which exempts them from some state coverage and benefit rules, or fully insured, which means they must meet state mandates. No matter how plans are funded, states would retain oversight of their solvency ... But the proposal asks for additional comments on state regulatory authority."
Kaiser Health News

DOL Proposes New Health Plan Options for Small Businesses
"The proposal would allow small business owners, their employees, sole proprietors and other self-employed people to join together as a single group to buy insurance in the large-group market. The new health plans could be exempt from some requirements of the [ACA]. They would, for example, not have to provide certain 'essential health benefits' like mental health care, emergency services, maternity and newborn care and prescription drugs.... Marc I. Machiz, who investigated insurance fraud as a Labor Department lawyer for more than 20 years, said the proposed rules were an invitation to more scams."
The New York Times; subscription may be required

[Advert.]

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4/29-5/2/2018 in Washington DC. This event brings together Employers, Brokers, and TPAs. Qualified HR & Benefits Professionals may attend as our guest ? See website for details/restrictions & to apply.


Drug Companies, Under Attack for High Prices, Have Started Industry War with PBMs
"[A] 'drug price' is not one number. Drugs do carry published list prices, but few pay them. Instead, drug companies and pharmacy benefit managers, working on behalf of different employers and insurers, establish an agreed price through negotiations that are hidden from consumers. How much the patient pays at the pharmacy counter depends on their insurance plan."
The Washington Post; subscription may be required

$2.3M Penalty is Only a Small Part of Oncology Firm's Data Breach Fallout
"While the financial burden of paying the $2.3 million resolution amount and other costs required to respond to OCR's investigation and comply with the resulting corrective action plan are significant in their own right, other businesses and business leaders should realize that these settlement costs represent only a small portion of the fallout that often follows a large data breach.... [The] resolution agreement [with 21st Century Oncology, a now-bankrupt radiation oncology and cancer care provider,] is the first of what almost certainly will be a multitude of HIPAA resolution agreements with OCR that require bankruptcy court approval to release the necessary funds to pay the required $2.3 million resolution payment."
Solutions Law Press

Leading ACA Columnist Passes Baton to New Author
"[Timothy Jost, in the Health Affairs Blog, chronicled] the development and eventual passage of the ACA. Then, he began doing [hundreds of] posts on the seemingly endless stream of rules, guidances, and other documents necessary to put the new law into action.... Tim will continue to write the monthly 'Eye on Health Reform' [column in] Health Affairs.... Katie Keith will [take over for Jost on the ACA column]."
Health Affairs

[Opinion]

A Call to End Drug Rebates
"Drug rebates, which have grown to astronomic levels, are payments made to [PBMs] that encourage dispensing of one brand over another within a diagnostic category. In insured plans these rebates are shared between the PBM and the health plan that covers the patient. In a self-funded arrangement, the employer is also cut into the pricing scheme. So, with all of this side-pocket profit, there is little incentive to shift patients to the lower-cost drug."
Frenkel Benefits

Executive Compensationand Nonqualified Plans

[Guidance Overview]

Section 162(m) After the Tax Cuts and Jobs Act: What to Do Now
"Companies will have more freedom to design executive compensation programs that address pay for performance without complying with the strict rules of the qualified performance-based compensation exception under Code Section 162(m).... Companies may consider implementing longer vesting schedules for equity awards or extending the timing for cash payouts of awards or other compensation ... by spreading the payments over multiple years in an attempt to fit within the annual $1 million threshold[.]"
Skadden

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BenefitsLink Health & Welfare Plans Newsletter, ISSN no. 1536-9595. Copyright 2018 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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