Spencers and Benefits NetNews – January 10, 2014


About this Newsletter

The Spencer’s Benefits Reports is a summary of the week’s news items posted
in the WHAT’S NEW pages of Spencer’s Benefits Reports
For questions regarding this email service, contact Customer Service at (800)449-9525.

NetNews Subscription

Want to receive these Newsletters via E-mail?

hr.cch.com Resources

About Links in this Newsletter

To access the IntelliConnect™ full text documents you must be a subscriber
to the Spencer’s Benefits Reports IntelliConnect product
(depending on the link*).

Links within news stories display full text documents including legislation, regulations,
court decisions, rulings and government reports.

The first time you click on a link you will be taken to the IntelliConnect login page, where you will need to enter your ID and password. Subsequent links will take you directly to the desired document.


If you aren’t a subscriber call 800-449-9525, or let us contact you about,

Email Us

Contact us by sending an e-mail to


Featured This Week

New Reports

  • Analysis: Final Qualified Transportation Benefit Rules, 12/13 (355.-5)

(Read Intelliconnect) »

  • Analysis: Medicare Part D, 12/13 (324.4.-9)


(Read Intelliconnect) »

  • Analysis: Correct Plan Failures Under IRS’s EPCRS, 12/13 (179.-1)


(Read Intelliconnect) »

  • Analysis: The Uninsured In 2012, 12/13 (422.2.-1)


(Read Intelliconnect) »


January 10, 2014

National Health Spending Rose Only 3.7 Percent In 2012

Health care spending in the United Statues rose on 3.7 percent in 2012, up to $2.8 trillion, according to research from the Centers for Medicare and Medicaid Service’s (CMS) Office of the Actuary. According to the research, the 3.7 percent growth is similar to spending growth rates since 2009, which increased between 3.6 percent and 3.8 percent annually. This means that growth during all four years has occurred at the slowest rates ever recorded in the fifty-three-year history of the National Health Expenditure Accounts…

(Read Intelliconnect) »

Options Exist For Employees Who Do Not Like Their Employers’ Health Insurance Coverage

What can an employee who gets employer-sponsored coverage at work, but does not like it, do? Now that the health insurance marketplace is up and running, can these employees obtain coverage via a state health insurance exchange? Can they go without insurance altogether and just pay the individual mandate penalty for failing to have insurance…

(Read Intelliconnect) »

Failure To Request Leave Extension Or Reasonable Accommodation Ends Discharged Employee’s ADA Claims

Where an employee neither requested an extension of his six-month medical leave nor proposed a reasonable accommodation, and never reapplied for employment—all of which he was on notice were possibilities—the Sixth Circuit U.S. Court of Appeals affirmed summary judgment for the employer on his disability discrimination and failure-to-accommodate claims in
Cash v. Seigel-Robert, Inc…

(Read Intelliconnect) »

January 9, 2014

Text: IRS, Final Regulations, Computation Of, And Rules Relating To, Medical Loss Ratio

(Read Intelliconnect) »

IRS Issues Medical Loss Ratio Computation Rules

The Internal Revenue Service has released final regulations that provide guidance to Blue Cross and Blue Shield organizations, and certain other qualifying health care organizations, on computing and applying the medical loss ratio (MLR) under Code Sec. 833(c)(5). These regulations are effective on Jan. 7, 2014, and apply to tax years beginning after Dec. 31, 2013. These rules adopt the provisions as originally proposed with some modifications, and were published in the January 7
Federal Register

(Read Intelliconnect) »

Wellness Programs Lower Costs For Workers With Chronic Conditions

Wellness programs can lower health care costs for workers with chronic conditions, but components of the programs that encourage workers to adopt healthier lifestyles may not reduce health costs or lead to lower net savings, according to recent research from the nonprofit RAND Corporation. The study is based on a seven-year examination of a PepsiCo’s Health Living wellness program, which includes numerous components, including health risk assessments, on-site wellness events, lifestyle management, disease management, complex care management, and a nurse advice phone line. The study evaluated the experiences of more than 67,000 workers who were eligible for the disease management or lifestyle management programs…

(Read Intelliconnect) »

January 8, 2014

Acceptable Cost Controls Must Be Implemented, Despite Slowdown In Health Care Spending Growth

In 2012, health care spending increased only 0.8 percent, slightly less than the rise in gross domestic product (GDP) per capita. This is a big deal—since 1969, health spending growth had increased an average of 2.3 percentage points more than GDP growth. The reasons for this slowdown are unclear: some cite the recession as the reason, while others believe that recent efforts to control health spending, including some features of the Patient Protection and Affordable Care Act (ACA), may be working. However, a new study from The Commonwealth Fund noted that regardless of the cause of the recent slowdown in U.S. health care cost growth, the U.S. needs to continue to try to control health spending…

(Read Intelliconnect) »

Enrollment In PCIP Program Drops to 85,000; Program Extended Through End Of January

According to the Center for Consumer Information and Insurance Oversight, 85,798 individuals were enrolled in the Pre-Existing Condition Insurance Plan (PCIP) as of Oct. 31, 2013, the temporary high risk health insurance pool established under the Patient Protection and Affordable Care Act…

(Read Intelliconnect) »

Supreme Court Asked Whether “Satisfactory To Us” Language In ERISA Plans Is Sufficiently “Clear” To Confer Discretionary Authority

Consistent with the U.S. Supreme Court’s ruling in Firestone Tire & Rubber Co. v. Bruch, does a phrase requiring the submission of “satisfactory proof” or similar language clearly grant an ERISA plan administrator discretionary authority over benefits determinations such that it alters the standard of judicial review from de novo to arbitrary and capricious? This question was presented to the High Court for consideration. The case is
Frazier v. Life Insurance Co of North America (Dkt. No. 13-759, Dec. 20, 2013)…

(Read Intelliconnect) »

January 7, 2014

Marketplaces Can Survive Low Enrollment And Adverse Selection In 2014, Argues Urban Institute

Some experts claim that HealthCare.gov’s highly-publicized problems since the beginning of October 2013 will lead to low enrollment levels in the health insurance marketplaces. Low enrollment, in turn, could increase the likelihood of adverse selection, where a disproportionate number of high cost individuals will enroll in the marketplace—and ultimately lead to higher premiums, higher government spending, and the long-term destabilization of the marketplace. However, a December 2013 paper from the Urban Institute argues that Patient Protection and Affordable Care Act (ACA)-created health insurance marketplaces can survive low enrollment and adverse selection in the first year of operation…

(Read Intelliconnect) »

Health Insurance Remains Key Job-Choice Factor

Most workers are satisfied with the health benefits they have now and express little interest in changing the current mix of benefits and wages offered by their employers, according to recent research from the Employee Benefit Research Institute (EBRI). And even though enactment of the Patient Protection and Affordable Care Act (ACA) has raised questions about whether employers will continue to offer health coverage to their workers in the future, the importance of benefits in choosing a job—especially health insurance—remains high…

(Read Intelliconnect) »

January 6, 2014

Issuers May Defer Portion Of Premiums In 2013 MLR And Rebate Calculations

In CCIIO Technical Guidance (CCIIO 2013—004), the Center for Consumer Information and Insurance Oversight (CCIIO) has provided guidance on when a health insurance issuer may defer including premiums collected for Patient Protection and Affordable Care Act (ACA) fees on non-calendar year policies in its medical loss ratio (MLR) and rebate calculations. The guidance was issued as part of the CCIIO’s Insurance Standards Bulletin Series…

(Read Intelliconnect) »

Trade Group Requests HHS Implement Transitional Reinsurance Fee On Fair And Impartial Basis

The ERISA Industry Committee (ERIC) has submitted comments to the Department of Health and Human Services (HHS) urging the agency to ensure that the method for computing the transitional reinsurance fee under the Patient Protection and Affordable Care Act (ACA) not impose unnecessary administrative burdens or costs on employers and that the fee be applied on a fair and impartial basis…

(Read Intelliconnect) »

Flexible Work Arrangements And Wellness Programs Continue To Gain In Popularity As Employers Focus On “Total Rewards”

With wages stagnant since the recession, benefits have taken on new importance as employers emphasize total rewards as a way to recruit and retain talented employees, according to recent research from the Society for Human Resource Management (SHRM). However, the
State of Employee Benefits in the Workplace Survey found that the use of benefits as a retention tool was not a widespread practice among human resource (HR) professionals. Just 19 percent of employers said they included benefits in their efforts to retain high-performing employees. The majority of respondents (80 percent) said their employees were knowledgeable about the benefits available to them. But only 3 percent used social media to communicate about benefits…

(Read Intelliconnect) »