Spencer Benefits Reports NetNews – July 10, 2015


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New Reports




July 10, 2015


Employers may steer pre-Medicare-eligible retirees to public exchanges in light of King ruling

Forty-five percent of employers that currently offer health coverage to pre-Medicare-eligible retirees are considering steering those employees to coverage on a public exchange in light of the Supreme Court’s decision in King v. Burwell, according to a poll of 600 employers from consultant Mercer. The King v. Burwell ruling upheld premium subsidies for all individuals purchasing coverage on the public Exchanges. According to Mercer, it is easy to see why steering retirees to the public Exchange would be an attractive option—retiree coverage costs more and retirees also could potentially benefit, by receiving subsidies for coverage and having more options for enrollment…

        (Read Intelliconnect) »

Business group urges agencies to withdraw ACA cost-sharing rule

The ERISA Industry Committee (ERIC) has sent a letter to three federal agencies calling for the immediate withdrawal of a newly proposed Patient Protection and Affordable Care Act (ACA) cost-sharing rule…

        (Read Intelliconnect) »

Denial of benefits claim filed too late for valid contractual two-year deadline

An insured employee brought her claim for denial of benefits too late under the terms of her self-funded multiple employer benefit plan, the Eighth Circuit U.S. Court of Appeals found, affirming summary judgment in favor of the plan on her ERISA suit. The plan specified that an action for denial of benefits must be brought within two years of the date of final denial. Because the plaintiff brought her claim two and a half years later, it was time-barred, the appeals court found, rejecting her contention that the contractual two-year statute of limitations was invalid under Missouri law…

        (Read Intelliconnect) »

July 9, 2015


Over 10,000 small businesses providing coverage through SHOP Exchanges

As of May 2015, approximately 10,700 small employers are providing coverage to workers through the Small Business Health Options Program (SHOP) Exchanges, according to recently released numbers from Kevin Counihan, CEO of the Health Insurance Marketplaces. About 85,000 small business employees now receive health coverage through the SHOP Exchanges. This figure does not include data from Vermont or Idaho, as these states have not yet reported 2015 enrollment data to the Centers for Medicare and Medicaid Services (CMS)…

        (Read Intelliconnect) »

Employers are shifting resources toward wellness benefits to counter increasing health care costs

With health care costs rising, employers are turning toward wellness programs to counter some of the financial strain, according to the 2015 SHRM Employee Benefits Survey from the Society for Human Resource Management (SHRM). In another recent study, SHRM found that 77 percent of organizations saw increases in their costs and, of those organizations, nearly one-quarter (24 percent) had an increase of 16 percent or more in their overall health care coverage costs…

        (Read Intelliconnect) »

Supreme Court to decide whether ERISA preempts health care reporting law

The Supreme Court has granted a petition for writ of certiorari in a case involving a dispute over whether ERISA preempts a Vermont law that requires the submission of health care claims data by self-funded insurers. The Supreme Court announced that it will hear the case, which some argue that could threaten the future of health care databases across the country…

        (Read Intelliconnect) »

July 8, 2015


IRS practitioner highlights transition relief from shared responsibility payments

Timothy Berger, Tax Law Specialist, Office of Tax Exempt and Government Entities for the IRS, provided information on transition relief from the Patient Protection and Affordable Care Act’s (ACA’s) employer shared responsibility payment (ESRP) provisions, at a recent IRS webinar, entitled, Affordable Care Act: Employer Shared Responsibility and Information Reporting. He began his presentation by explaining that certain ACA provisions only apply to applicable large employers (ALEs), which are employers with, for a current year, more than 50 employees (including full-time equivalent employees), based on employment information from the prior year. Code Sec. 4980H shared responsibility provisions apply only to ALEs, and Berger remarked that the vast majority of businesses fall outside these parameters, and so, are not ALEs. The ALE information reporting provisions of Code Sec. 6056 also only apply to ALEs. (ACA provisions), but, whether or not an employer is an ALE, if the employer provides self-insured health coverage, Code Sec. 6055 provisions (health coverage information reporting) do apply…

        (Read Intelliconnect) »


IRS issues draft ACA Forms 1094-C, 1095-B and 1095-C

The IRS has posted on its website three draft 2015 forms for use by employers under the Patient Protection and Affordable Care Act (ACA): (1) Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns; (2) Form 1095-C, Employer- Provided Health Insurance Offer and Coverage, to be provided to employees and the IRS; and (3) Form 1095-B, Health Coverage, to be used by employers report certain information to the IRS and to taxpayers about individuals who are covered by minimum essential coverage and therefore are not liable for the individual shared responsibility payment…

        (Read Intelliconnect) »

HR organization criticizes EEOC’s proposed wellness rule

The HR Policy Association submitted comments recently urging the Equal Employment Opportunity Commission to significantly modify its proposed wellness rule. The Association sought clarification from the EEOC that employers can offer financial incentives up to 30 percent for family coverage and up to 50 percent for smoking cessation programs that screen for tobacco use, and to remove what it has characterized as subjective and ill-defined requirements that will discourage wellness program innovation and increase litigation…

        (Read Intelliconnect) »


EBSA schedules hearing on definition of fiduciary proposed regs/proposed class PTEs, extends comment period

The Employee Benefits Security Administration (EBSA) has scheduled a public hearing on August 10, 11, and 12, and, if necessary, August 13, 2015 to consider issues arising from proposed regulations redefining the term “fiduciary” to include a broad range of retirement and investment advisors who would be subject to ERISA’s fiduciary requirements and related proposed class prohibited transaction exemptions (PTEs). EBSA is also extending the comment period on the proposals to July 21, 2015…

        (Read Intelliconnect) »


July 7, 2015


Interim transition relief continues for expatriate health plans, IRS says

The IRS has issued interim guidance on the application of certain provisions of the Patient Protection and Affordable Care Act (ACA) to expatriate health insurance issuers, expatriate health plans, and employers in their capacity as plan sponsors of expatriate health plans, as defined in the Expatriate Health Coverage Clarification Act of 2014 (EHCCA) (P.L. 113-235 ). Under the guidance, pending the issuance of proposed regulations, employers and plan sponsors may apply the requirements of the EHCCA using a reasonable good faith interpretation…

        (Read Intelliconnect) »

Companies turn focus to excise tax; pre-65 retiree strategies in wake of King v. Burwell ruling

The Supreme Court handed down a decision on the King v. Burwell case on June 25, which ruled that individuals can continue to receive subsidies to purchase health care insurance on the Patient Protection and Affordable Care Act (ACA)-created federal Exchange. According to health care experts from Aon Hewitt, with the decision made, many companies will turn their focus to three key areas: reporting compliance, the excise tax, and pre-65 retiree health care strategies…

        (Read Intelliconnect) »


PBGC interim final regs specify application process, notice requirements for partitions of multiemployer DB plans under MPRA

The Pension Benefit Guaranty Corporation (PBGC) has issued interim final regulations that specify the application process and notice requirements for partitions of eligible multiemployer defined benefit (DB) plans under ERISA Title IV, as amended by the Multiemployer Pension Reform Act of 2014 (MPRA), Division O of the Consolidated and Further Continuing Appropriations Act (P.L. 113-235). The PBGC interim final regulations are effective June 19, 2015 and applicable to applications for partition submitted to the PBGC on or after June 19, 2015. The PBGC is seeking comments, which must be submitted on or before August 18, 2015…

        (Read Intelliconnect) »

July 6, 2015


Supreme Court upholds ACA subsidies

The Supreme Court has issued a 6-3 ruling in King v. Burwell, holding that Section 36B of the IRS Code’s tax credits are available to individuals in states that have a federal Health Insurance Exchange. The Court determined that, based on the broader structure of the Patient Protection and Affordable Care Act (ACA), Congress did not intend to limit tax credits to state Exchanges. Chief Justice Roberts wrote the majority opinion, joined by Justices Kennedy, Ginsburg, Breyer, Sotomayor, and Kagan; Justice Scalia dissented, joined by Justices Thomas and Alito…

        (Read Intelliconnect) »

IRS issues temporary, proposed regs, application procedures for reduction of multiemployer DB plan benefits

The IRS has issued temporary and proposed regulations governing the suspension of benefits by multiemployer defined benefit (DB) plans under Code Sec. 432(e)(9), which was added by the Multiemployer Pension Reform Act of 2014 (MPRA), Division O of the Consolidated and Further Continuing Appropriations Act (P.L. 113-235). The proposed regulations and the temporary regulations together provide guidance in implementing the statutory provisions of MPRA, according to the IRS. The IRS has also issued a revenue procedure outlining the application process for a plan seeking approval of a reduction of benefits. A Special Master has been appointed…

        (Read Intelliconnect) »


Domestic partner benefits likely to decline in wake of Supreme Court decision on same-sex marriage, Aon Hewitt says

In light of the Supreme Court’s decision legalizing same-sex marriage across the country, Aon Hewitt anticipates the number of companies offering domestic partner health care coverage may decline as employers look to streamline benefits. According to Aon Hewitt data, 77 percent of employers currently offer same-sex domestic partner health care coverage…

        (Read Intelliconnect) »

ACA contraceptive mandate withstands religious challenge

Finding that the Religious Freedom Restoration Act (RFRA) “confers no right to challenge the independent conduct of third parties,” the Fifth Circuit U.S. Court of Appeals ruled that the accommodation provided for the contraceptive mandate under the Patient Protection and Affordable Care Act (ACA) did not substantially burden the religious exercise of several religious universities. Specifically, the EBSA Form 700 accommodation to the contraceptive did not require religious organizations to provide or facilitate access to contraceptives. The court held that several religious organizations, which did not qualify for the ACA’s religious exemption, were not burdened by the accommodation because the accommodation only imposed burdens on third parties…

        (Read Intelliconnect) »