Health & Welfare Plans Newsletter

March 23, 2018

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Consumer Engagement in Health Care Among Millennials, Baby Boomers, and Generation X (PDF)
"More than other generational cohorts, Millennials are satisfied with their health coverage, out-of-pocket costs, and health plan choices.... Baby Boomers are more likely than Gen Xers and Millennials to have a primary care provider.... Both Millennials and Generation X are more likely than Baby Boomers to report that they have used a walk-in clinic.... Millennials are nearly across the board more likely than Baby Boomers to participate in various aspects of wellness programs."
Employee Benefit Research Institute [EBRI]

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Trend Favors Employers in Retiree Medical Litigation
" CNH and Cooper should put to rest any dispute that M&G Polymers dramatically changed the framework for assessing retiree medical claims in the CBA context. Absent explicit language to the contrary, general durational clauses govern the duration of retiree medical benefits, and the obligation to provide such benefits expires with the applicable CBA."
Morgan Lewis

Employer-Sought Health Policy Changes Left Out of Spending Bill
"[A] package of individual health care market stabilization reforms has been left out of the fiscal 2018 omnibus spending bill set to become law. That omission also ended chances for other potential health care add-ons sought by employers, including a new bipartisan package of HSA improvements and retroactive relief from ACA employer mandate penalties.... The stabilization reforms could still come up as a stand-alone bill for a vote in the Senate this year, but it's hard to see the parties getting past their current differences."
Mercer

The Profitability of Health Insurance Companies (PDF)
"Stable year-over-year enrollment, despite large premium increases, suggests a distorted market that involves large transfers from taxpayers to insurers. Large insurers, many of whom left the individual market, are profiting from the Medicaid expansion, which is largely provided through private managed care and paid for by the federal government. All health insurers can expect to become more profitable this coming year due to the recent tax reform."
The White House Council of Economic Advisers

Obamacare Insurers Had a Good Year; That Could Be a Problem
"[O]ne profitable year won't be enough to make insurers forget the billions in losses over the last three years.... While the government may have escaped paying cost-sharing subsidies, it's paying much higher premium subsidies.... When insurance companies raise rates, the bottom line is a bigger bill for the government."
Mercer

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Health Insurance Decision Support Tools Improved in 2018 but Vary Across States
"Most of the few remaining [state-based marketplaces (SBMs)] that didn't have out-of-pocket cost calculators added them in 2018.... The presence of provider and formulary lookup tools have become nearly universal.... But opportunities for consumer decision support extend far beyond the SBMs."
Robert Wood Johnson Foundation

Omnibus Bill Leaves Out Market Stabilization Provisions
"Despite previous bipartisan support, market stabilization provisions -- such as funding for reinsurance programs or cost-sharing reductions -- are not included in the compromise bill, which could depress insurer participation and raise premiums for consumers in 2019."
Katie Keith, in Health Affairs

GAO Comparative Effectiveness Research Report: Activities Funded by the Patient-Centered Outcomes Research Trust Fund (PDF)
42 pages. "To fund [comparative effectiveness research (CER)] activities, PPACA established the Trust Fund from which [the Patient-Centered Outcomes Research Institute (PCORI)] and HHS are expected to receive an estimated $4.0 billion from fiscal years 2010 through 2019.... This report examines [1] PCORI's use of the Trust Fund for CER activities, including the dissemination and use of research findings; and [2] HHS's use of the Trust Fund for these activities." [GAO-18-311, March 2018]
U.S. Government Accountability Office [GAO]

Benefits in General

[Guidance Overview]

Prepare to Address Disability Claims Under All Types of Benefit Plans Differently, Starting April 1, 2018
"Does a third party (external) reviewer determine if disability exists? If so, either the plan document, insurance contract or service agreement needs to require that that third party comply with the new DOL rules.... Many benefit plans detail claims procedures only in the SPD; in that case, the plan document might not need to be updated, but a summary of material modifications should be provided to plan participants outlining the disability claims procedure changes."
Frost Brown Todd LLC

Executive Compensationand Nonqualified Plans

Don't Amend Executive Comp Plans Yet for New Disability Claims Rules
"It is likely that all or a portion of the benefits earned or accrued before 2018 under non-qualified deferred compensation, executive retirement, and severance plans will be exempt from the $1 million deductibility limits of Code Section 162(m) under the grandfathering provisions of the transition rule.... Do not amend your non-qualified deferred compensation, executive retirement, and severance plans now in order to preserve the exemption."
Winston & Strawn LLP

Companies Show No Love for Hard-Won Exemption to Pay Ratio Rule
"Business advocates pressed the SEC as it drafted the rule to include a way for companies to avert potential privacy violations when collecting information on non-U.S. workers.... But the extra legwork and added disclosure required has turned off most companies to its use."
Bloomberg BNA

Restricted Stock/RSUs and Tax Returns: Eight Costly Mistakes to Avoid
"[1] After selling any or all of the shares at vesting, you still need to report this sale on Form 8949 and Schedule D even though you are also including it as part of your compensation income.... [2] [Y]our tax basis for reporting the stock sale in column (e) on Form 8949 is the amount of compensation income at vesting that appeared on your W-2 ... [3] You will also mistakenly double-report income if you do not realize that your W-2 income in Box 1 already includes stock compensation income."
myStockOptions.com

[Opinion]

Does Tax Deductibility Affect CEO Pay? the Case of the Health Insurance Industry
"The failure of reduced deductibility to slow growth in CEO pay in the health insurance sector ... means that the TCJA provisions are unlikely to significantly affect CEO pay more widely.... To restrain growth in CEO pay we need reforms to improve corporate governance and give shareholders more power over corporate executives."
Economic Policy Institute

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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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