Looking Forward: Health Reform in 2015 – a Webcast

Posted by on December 2, 2014 | Be the First to Comment

Mark your calendar: the Lockton Benefit Group Compliance Services Practice is hosting a affordable care actcomplimentary webcast at 2 p.m. CT on Thursday, January 22, 2015. Employers hoping to stay abreast of the latest health reform developments (and take a look at what lies ahead) will want to join the event.

Continuing education credits are available. Please click for registration details.



EEOC Criticized by Senate Committee for Wellness Litigation

Posted by on November 14, 2014 | Be the First to Comment

workplace wellness guy on a fitness ballSome of you have expressed dismay at recent EEOC litigation challenging routine (and ACA/HIPAA-compliant) wellness programs for alleged violations of the Americans with Disabilities Act (ADA).

Turns out Congress is a bit dismayed too.   At a hearing yesterday of the Senate Committee on Health, Education, Labor & Pensions, the agency was taken to task by the ranking Republican, Senator Lamar Alexander.

Here’s the press release and the Senator’s remarks.

I am also concerned that EEOC has not offered any guidance on voluntary employer wellness plans to encourage healthy lifestyle choices, yet is filing lawsuits against employers who offer these plans to employees on the basis of disability discrimination.

Wellness plans with premium discounts were specifically authorized in the healthcare law with strong bipartisan support—one of the few provisions of the Affordable Care Act with both Republican and Democrat buy in.

EEOC was scheduled to publish two proposed rules on wellness plans last June and invite comments on the proposals – but there has been no action.

These wellness plan lawsuits are sending a confusing message to employers – reliance on the healthcare law’s authorization of wellness plans does not mean you won’t get sued.

The Congressional sentiment probably only bodes well for employers…an EEOC victory in any such litigation might well inspire Congress to pass legislation providing that ACA- and HIPAA-compliant wellness programs receive a free pass under the ADA.

More States Recognize Same-Sex Marriages: No Mandate Yet that Self-Funded ERISA Plans Extend Coverage to Same-Sex Spouses

Posted by on October 22, 2014 | Be the First to Comment

According to the National Conference of State Legislatures, 31 states and the wedding ringsDistrict of Columbia now recognize same-sex marriages. Earlier this month, the United States Supreme Court refused to hear appeals challenging same-sex unions. The Supreme Court’s decision resulted in several states moving forward with permitting same-sex marriages. These states include Alaska, Arizona, Colorado, Idaho, Indiana, Nevada, North Carolina, Oklahoma, Utah, Virginia, West Virginia, and Wisconsin.

Does this mean that self-funded, ERISA plans must extend coverage to an employee’s same-sex spouse? Although the trend is clearly toward doing so, we think the answer is “no,” until the federal agencies or case law dictate otherwise. Although states may have insurance, domestic relations, and nondiscrimination laws that require recognition of same-sex marriages, ERISA preemption appears to invalidate those requirements as they would apply to a self-funded ERISA plan. Plan sponsors choosing an insured plan might not have a choice, because of the way these laws impact insurers.
While ERISA preempts state laws that relate to a self-funded plan, there is no preemption for plans not subject to ERISA (e.g., governmental and church plans), and there is no preemption of other federal law. So here’s the next question: Does federal law mandate that a self-funded plan offer coverage to an employee’s same-sex spouse if it offers coverage to opposite-sex spouses?

While the Department of Labor (DOL) and other agencies have indicated that some other federal laws apply to an employee’s same-sex spouse (e.g., FMLA), there has been no mandate from the DOL requiring an offer of health coverage to a same-sex spouse under a self-funded plan. Similarly, the Equal Opportunity Employment Commission, the agency with jurisdiction over federal employment nondiscrimination laws, has not concluded that discrimination based on sexual orientation violates Title VII of the Civil Rights Act of 1964.

Whatever path an employer chooses to take, the terms of the plan documents must be clear, and the rules should be communicated to employees. For example, if an employer wants to allow for coverage of same-sex spouses, it should state that coverage is available to the employee’s legal spouse, including a same-sex spouse. If an employer does not want to offer the coverage, then same-sex spouses should be specifically excluded from the class eligible for coverage.

Deadlines and Reminders for 4th Quarter 2014

Posted by on October 13, 2014 | Be the First to Comment

In the world of employee benefits, one of the sure signs that fall has arrived is a flurry of articles regarding compliance deadlines to be met before the end of the year. To help you get a jump on next year’s issues, we have also included some of the compliance deadlines that apply early in 2015. If you have any questions about these items or wish to get additional information on them, please contact your Lockton account team.

Oct. 15, 2014

  • Deadline for employers with calendar-year plans to file Form 5500 if they obtained an extended due date.
  • Deadline for Medicare Part D Notices of creditable or non-creditable prescription drug coverage to Medicare Part D-eligible participants and beneficiaries (unless provided in preceding 12 months).

Nov. 5, 2014

  • Deadline for “controlling health plans” with more than $5 million in annual receipts to obtain health plan identifiers.

Nov. 15, 2014

  • Open enrollment begins for individuals to obtain coverage for 2015 via the Health Insurance Marketplace.

Nov. 17, 2014

  • Deadline for employers, on behalf of their self-insured major medical plans, to report annual enrollment count, and arrange for payment of the transitional reinsurance fee based on that count, using online process available on pay.gov.

Dec. 15, 2014

  • Deadline for supplying summary annual reports to participants, for calendar-year plans whose Forms 5500 filing deadlines were extended to Oct. 15, 2014.
  • Deadline by which individuals obtaining new Marketplace coverage must complete enrollment in order for that coverage to be in effect on Jan. 1, 2015.

Dec. 31, 2014

  • Deadline to amend health FSA plan documents to reflect addition of an up to $500 carryover provision for the 2013 or 2014 plan year (calendar year health FSAs).
  • Deadline to amend health FSA plan documents to limit salary reduction contributions during a plan year to $2,500 or less.
  • Deadline to amend plan documents of non-calendar year cafeteria plans to reflect addition of one-time midyear election change to enroll in or drop accident or health plan coverage during the plan year beginning in 2013.
  • Deadline to distribute Notice of Grandfathered Status (grandfathered, calendar year group health plans); this notice is typically included in plan summaries.
  • Deadline to provide notice of patients’ rights regarding selection of network providers (non-grandfathered, calendar year group health plans); this notice is typically included in plan summaries.
  • Deadline for supplying Women’s Health and Cancer Rights Act notice (calendar year group health plans).
  • Deadline for self-insured state and local government health plans to submit an optional opt-out election to CMS and provide opt-out notice to participants (calendar year group health plans).
  • Deadline to provide notices of premium assistance under Medicaid or the Children’s Health Insurance Program (calendar year group health plans).
  • Last date on which provision of certificates of creditable coverage is required (currently required under HIPAA portability rules).

Jan. 1, 2015

  • Begin providing health coverage to prevent play or pay penalties (subject to various transition rules, including those that apply to employers with non-calendar year plans and employers with fewer than 100 full-time employees).
  • Begin tracking reportable health plan values for purposes of reporting on Forms W-2 for the 2015 taxable year (generally due by Jan. 31, 2016).
  • Begin tracking individuals provided minimum essential coverage (MEC) during each calendar month under an employer-sponsored self-insured plan for section 6055 reporting for the 2015 calendar year (generally due at the same time as Forms W-2).
  • Begin tracking coverage offers made to full-time employees with respect to each calendar month for section 6056 reporting for the 2015 calendar year (generally due at the same time as Forms W-2).
  • Non-grandfathered group health plans must begin covering medications to reduce breast cancer risk for women at an increased risk for breast cancer, without cost-sharing (calendar year group health plans).
  • Non-grandfathered, calendar year group health plans that are not high-deductible health plans offered in connection with health savings accounts must limit in-network out-of-pocket expenses for essential health benefits to no more than $6,600 for self-only coverage and $13,200 for other coverage.
    • Such plans may, however, apply separate limits on out-of-pocket expenses for two or more types of essential health benefits so long as all limits on out-of-pocket expenses for in-network essential health benefits total no more than the $6,600/$13,200 overall limits.
    • For example, such a plan may limit out-of-pocket expenses for prescription drugs that are essential health benefits to $2,600/$5,200 and apply separate limits of $4,000/$8,000 on out-of-pocket expenses for all other essential health benefits.
    • Calendar year high-deductible health plans offered in connection with health savings accounts must limit in-network out-of-pocket expenses to no more than $6,450 for self-only coverage and $12,900 for other coverage.
  • Electronic submission through the Health Insurance Oversight System becomes the only means for making the opt-out election permitted for self-funded, non-federal governmental plans.

Jan. 31, 2015

  • Deadline to report on Forms W-2 for the 2014 taxable year:
    • Taxable income for coverage provided during 2014 (e.g., life insurance in excess of $50,000 for which the employee did not pay the full Table I rate on an after-tax basis).
    • Reportable health plan values during 2014 as required by the ACA.
    • Employer health savings account (HSA) contributions (including employees’ pre-tax HSA contributions) for the 2014 taxable year.

Feb. 15, 2015

  • Last day of Health Insurance Marketplace open enrollment period for coverage during 2015.

March 1, 2015

  • Deadline to provide Medicare Part D Creditable and/or Noncreditable Coverage Notices to CMS (calendar year group health plans).
  • Deadline for filing annual Form M-1 on behalf of multiple employer welfare arrangements (MEWAs) providing health coverage.

California Does Us All a Favor, Repeals 60-Day Waiting Period Rule

Posted by on September 2, 2014 | Be the First to Comment

California has repealed its recent 60-day maximum health plan waiting period rule, thus restoring some equilibrium to the health plan waiting period universe.

Picture1 The Patient Protection and Affordable Care Act (PPACA, or ACA for short), the federal healthcare reform law, limits the length of a waiting period a health plan may impose on an eligible employee. This federal limit is 90 days, although under recently finalized regulations, plan sponsors may precede the start of the 90-day clock with a one-month “orientation period.” There are other exceptions, too, such as a special rule for employees with variable work hours, and employees whose eligibility depends on them working a specific number (up to 1,200) hours of service, or satisfying other substantive criteria (like earning a certification), in order to gain eligibility for coverage. We’ve most recently addressed the federal rule in the Spring 2014 edition of Compliance News.

Not to be outdone, in 2012 California leapt into the fray and required health insurers and HMOs covering California residents to impose no waiting period greater than 60 days, beginning this year. The California law, Assembly Bill 1083, thus created a disconnect between how health insurers and HMOs were required to administer waiting periods in California, and how insurers and HMOs were operating elsewhere. It also created inconsistency between the way insured plans covering Californians, and self-insured plans (in California and elsewhere), could administer waiting periods, as  the ACA’s waiting period rule applies to self-insured health plans, and  AB 1083 did not.

These inconsistencies were not extraordinary; health insurance laws vary wildly from state to state, and self-insured ERISA plans have always been permitted to ignore state insurance mandates. Yet, given the 90-day federal rule, AB 1083’s 60-day limit simply seemed largely unnecessary.

The real issue with AB 1083 was that it confused insurers and their employer customers about precisely to what extent the California law could affect the waiting period that the employer/group contract holder wanted to apply. ERISA shields employers from the application of state insurance law against them, meaning that while AB 1083 could apply to insurers and HMOs insuring Californians, it could not apply to the employer/group contract holder.

This left insurers and HMOs operating in California unclear as to what they could allow the employer/group contract holder to do. Some insurers concluded that the employer/group contract holder remained free to impose a waiting period of up to 90 days (the ACA limit), even though the insurer could not reflect such a 90-day waiting period in its group contract.

Ultimately, the California legislature recognized the angst it had created, and repealed the 60-day waiting period limit. The bill repealing the limit, Senate Bill 1034, prohibits insurers and HMOs from imposing any waiting period over and above whatever the plan sponsor imposes, and permits insurers and HMOs to administer a waiting period selected by the employer/group contract holder, as long as the waiting period complies with the ACA.

SB 1034 is effective for policies issued or renewed on or after Jan. 1, 2015. As for 2014, recall that AB 1083 applies to insurers and HMOs, not employers. Some insurers might require the employer to limit any waiting period for 2014 to 60 days, at least for employees in California (and their dependents), by reflecting a maximum 60-day waiting period in the group contract. Other insurers are allowing the employer/group contract holder to decide on the length of the waiting period, and simply not referring in the group contract to any waiting period. The employer must nevertheless comply, of course, with the ACA’s 90-day waiting period maximum.