Health & Welfare Plans Newsletter

January 24, 2018

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Jobs

Consultant
Howard Simon & Associates, Inc.
Telecommute

Director, Retirement Field Services
Georgia Municipal Association
in GA

DC Account Manager for retirement plans
Benefit Administration, Inc.
in WI, Telecommute

New Membership Team Manager
UNITE HERE HEALTH
in IL

Education Consultant
Pentegra
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[Official Guidance]

Text of OPM FEHB Program Carrier Letter 2018-01: Federal Employees Health Benefits Program Call Letter (PDF)
"This is our annual call for benefit and rate proposals from Federal Employees Health Benefits (FEHB) Program carriers. This letter sets forth the policy goals and initiatives for the FEHB Program for 2019. You must submit your benefit and rate proposals for the contract term beginning January 1, 2019 by May 31, 2018."
U.S. Office of Personnel Management [OPM]

[Advert.]

Now is the time to become a member of ECFC

Sponsored by ECFC [Employers Council on Flexible Compensation]

ECFC is dedicated to maintaining and expanding employee benefit programs on a tax-advantaged basis. Members include employers, TPAs, health plan providers, brokers, payers, providers, payment networks, processors, and financial institutions.


[Guidance Overview]

Good News for Employers: Continuing Resolution Provisions That Will Affect Employer-Sponsored Group Health Plans
"[1] A two-year delay of the 'Cadillac tax' (the 40% excise tax on high-cost employer-sponsored group health plans). The tax ... now will be effective in 2022.... With another delay, it's unlikely the IRS will issue regulations soon.... [2] A one-year suspension of the tax on health insurers. The tax is in effect for 2018, but suspended for 2019. The tax had previously been suspended for 2017."
Conduent

Cadillac Tax Delayed to 2022 in Budget Deal
"There continues to be wide bipartisan support for repealing the Cadillac Tax. However, there is no consensus approach to replacing the lost revenue from full repeal. While it remains unlikely that the tax will ever fully take effect, the long planning process required to prepare for its effect will continue to make employers nervous each time the effective date closes in."
ABD Insurance & Financial Services

Consumer Directed Health Plans Aren't Always Consumeristic
"[In] order to empower consumers to take control of their health care finances, benefit plans must be designed to do more than shift costs. They must be designed to supply real support to participants, both financially and in terms of choice architecture."
PLANSPONSOR

Delay Proposed for Maryland Paid Sick Leave
"An emergency bill was introduced [Jan. 22] to delay the implementation of that Act for 60 days, which would give employers some breathing room to revise and implement their policies.... [A] vote has been scheduled for ... January 24."
Miles & Stockbridge

[Advert.]

Online Learning Course: Family and Medical Leave Act (FMLA)

Sponsored by International Foundation of Employee Benefit Plans [IFEBP]

Learn how to avoid common administration mistakes, implement best practices and be aware of interactions with other laws.


First Sick Leave Settlement Reached in Minneapolis
"The Minneapolis Department of Civil Rights has settled its first case of retaliation under the paid sick-leave ordinance that went into effect on July 1, 2017.... Three months after the employee's complaint was initiated, the Minneapolis Department of Civil Rights reached a settlement with the gas station employer in which the gas station agreed to pay the employee $11,000 in lost wages."
Gray Plant Mooty

When Is an Employer Required to Check for FMLA Eligibility? The Answer May Surprise You!
"Some employers base the 12-month FMLA period on a 'look forward' period measured forward from the date any employee's first FMLA leave. Testing for eligibility is the same as the 'rolling year' ... You check eligibility for the first instance of FMLA leave for a particular reason, at which point they are eligible for that reason for the following 12-month period. Upon the first instance of FMLA leave for this condition in the next FMLA year, eligibility should be checked again."
FMLA Insights

GAO Analysis of Plan Year 2015 ACA Application, Enrollment, and Eligibility-Verification Process
"A small percentage -- about 1 percent -- of plan year 2015 enrollments were potentially improper or fraudulent. These applicants had unresolved inconsistencies related to citizenship, status as a national, lawful presence, or Social Security number, or received coverage while reportedly deceased, according to GAO's analysis of federally facilitated marketplace (FFM) eligibility and enrollment data." [GAO-18-69, published Dec. 21, 2017, released Jan. 23, 2018]
U.S. Government Accountability Office [GAO]

Benefits in General

Will Work for No Benefits: The Challenges of Being in the New Contract Workforce
"[C]ontract work is booming, with 32 million Americans currently making their living that way. That trend is expected to accelerate over the next decade ... But that also raises big questions about the future of the safety net ... 51 percent of freelance and contract workers do not receive benefits common to many full-time jobs -- sick leave, unemployment insurance or retirement savings."
National Public Radio

Implications of the New Tax Law for Employee Benefit Plan Sponsors
"[1] The new tax law effectively eliminates the [ACA] individual shared responsibility penalty, but not until 2019. [2] Some changes were made to retirement plan rules, but many changes that were initially proposed did not make it into the final law. [3] The new tax law suspends from 2018 through 2025 the ability of an employer to deduct, and in some cases the employee to exclude from income, a number of fringe benefits. [4] A new employer tax credit was created for certain employers who provide paid leave under the [FMLA]."
Sibson Consulting

Executive Compensationand Nonqualified Plans

[Guidance Overview]

How the Tax Act Upsets the Dynamic Between the Board of Directors and the Executive Compensation Committee (PDF)
"From a corporate governance perspective, the significance of these new provisions carries the potential for recalibrating the relationship between the board and its executive compensation committee.... This is due not only to the new taxes being applied, but also due to ... the fact that [these provisions] are specifically targeted at executives of tax-exempt hospitals and health systems[.]"
McDermott Will & Emery, via BNA's Health Law Reporter

[Guidance Overview]

Tax Cuts and Jobs Act: New Executive Compensation Rules
"Programs that were in place on November 2, 2017, and which therefore may be entitled to grandfathered treatment, cannot be 'materially' modified without losing that protection and becoming subject to the new rules. Until the IRS issues guidance concerning what constitutes a 'material' change, employers should approach such changes cautiously.... [E]xtending an option's exercise period, or altering the parameters of an incentive award, might be considered material changes."
Spencer Fane

Delaware Supreme Court Revives Lawsuits Over Directors' Compensation
"[W]hen stockholders have approved an equity incentive plan that gives the directors discretion to grant themselves awards within general parameters, and a stockholder properly alleges that the directors inequitably exercised that discretion, then the ratification defense is unavailable to dismiss the suit, and the directors will be required to prove the fairness of the awards to the corporation." [ In Re Investors Bancorp, Inc. Stockholder Litigation , No. 169, 2017 (Del. Dec. 13, 2017, revised Dec. 19, 2017)]
Winston & Strawn LLP

Selected Discussionson the BenefitsLink Message Boards

Eligibility to Sponsor a Section 125 Plan
The employer (a non-profit religious organization) pays 100% of the health & dental insurance premiums for the full-time employees, and offers coverage for spouse and dependents but at the employee's expense. Part-time employees must pay 25% to 50% of their health and dental insurance premiums, depending on how many hours they work. The employer offers a pre-tax Flexible Spending account for paying eligible medical, dental, eyeglasses and day care expenses. Insurance premiums aren't eligible. A consultant says the employer can't have a Section 125 plan because the employer pays 100% of the FT employees' health and dental premiums. Another consultant says the employer is indeed eligible to have a Section 125 plan, because some employees pay for spouse/dependent insurance premiums and most employees participate in the Flex plan. Who wins this shoot-out?
BenefitsLink Message Boards

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Press Releases

Renaissance and Security Mutual Expand Insurance Product Lines Through Joint Agreement Renaissance Life and Health Insurance Company of America

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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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