Spencer’s and Benefits NetNews – May 23, 2014

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Featured This Week

New Reports

  • Analysis: Estimated ACA Costs Lower Than Expected, 5/14 (510.-1)

(Read Intelliconnect) »

  • Analysis: Tracking Health Care Cost Trends, 5/14 (422.1.-1)


(Read Intelliconnect) »

  • Analysis: Domestic Partner Benefits, 5/14 (327.4.-1)


(Read Intelliconnect) »

  • Analysis: Safe Harbor Rules Avoid ADP/ACP Testing, 5/14 (226.-1)


(Read Intelliconnect) »


May 23, 2014

Text: CMS, Final Rule, Exchange And Insurance Market Standards For 2015 And Beyond

(Read Intelliconnect) »

CMS Issues Final Rule Governing Exchanges, Qualified Health Plans For 2015

The Centers for Medicare and Medicaid Services (CMS) has issued a final rule establishing standards related to health insurance exchanges and insurance market standards under the Patient Protection and Affordable Care Act (ACA). The final rule is scheduled to be published in the May 27
Federal Register

(Read Intelliconnect) »

PPO Plans Will Experience Increases Of 8.7 Percent In 2014

The projected cost for preferred provider organization (PPO) plans will be 8.7 percent in 2014, down from 9.0 percent in 2013 and 9.2 percent in 2012, according to recent research from Buck Consultants. In fact, Buck Consultants found that projected cost increases for all types of medical plans are anticipated to be down by between 0.1 and 0.5 percent in 2014. This continues the favorable trend of slow, steady declines generally experienced since 2010…

(Read Intelliconnect) »

May 22, 2014

Penalties Apply To Employer Payment Plans That Do Not Comply With ACA’s Market Reforms

The Internal Revenue Service has issued new Questions and Answers for Affordable Care Act Tax Provisions that address the consequences to an employer if the employer does not establish a health insurance plan for its own employees, but reimburses those employees for premiums they pay for health insurance (either through a qualified health plan in the health insurance marketplace or outside the marketplace)…

(Read Intelliconnect) »

Global Health Care Benefits Costs Stabilize, But Larger Hikes Loom: Towers Watson

The cost of providing employee health care benefits has stabilized around the globe, although a new round of increases may be on the horizon for employers, according to recent research from Towers Watson. The survey also found that health promotion and wellness programs are becoming more widespread in all regions as employers look to supplement traditional cost management tactics to contain rising costs…

(Read Intelliconnect) »

Terms Of Will Not Sufficient To Effectuate Beneficiary Change, Eighth Circuit Rules

The wife of an insured under an employer-sponsored group benefit plan was not entitled to the death benefit because the will executed by the insured just before his death did not comply with the terms of the plan for beneficiary changes, the Eighth Circuit U.S. Court of Appeals has ruled, affirming the lower court. The Eighth Circuit also held that the substantial-compliance doctrine did not apply to preclude the plan administrator from strict enforcement of the plan requirements. The case is
Hall v. Metropolitan Life Insurance Company (No. 13-1332)…

(Read Intelliconnect) »

May 21, 2014

CMS Provides Guidance On Transitional Policy Extensions For Midsize Employers

The Centers for Medicare and Medicaid Services (CMS) has released a set of frequently-asked-questions (FAQs) regarding implementation of certain health insurance market reforms and health insurance marketplace standards established in the Patient Protection and Affordable Care Act (ACA). Specifically, the FAQs include guidance for midsize employers (those with 51 to 100 employees) on the transitional policy extensions provided in March 2014…

(Read Intelliconnect) »

ACA Mandate Penalties May Not Be Necessary, After All

Getting rid of the Patient Protection and Affordable Care Act’s (ACA) employer mandate would have little effect on Americans’ health coverage, and would eliminate labor market distortions and lessen employer opposition to the ACA, according to a brief recently issued by the Urban Institute. The downside would come with a loss of federal revenue that is currently expected from employer penalties…

(Read Intelliconnect) »

Employers Should Focus On Managing Specialty Drug Benefits

While almost 75 percent of employers incentivize for employee use of a specialty pharmacy, there are minimal or no incentives offered for lower cost site-of-care settings such as home-based infusion or employer onsite clinics, according to recent research from the Midwest Business Group on Health (MBGH)…

(Read Intelliconnect) »

May 20, 2014

IRS Amplifies Guidance For Midyear Plan Amendments Reflecting Windsor Decision

In Notice 2014-37, the Internal Revenue Service has amplified previously released guidance on midyear plan amendments reflecting the Supreme Court’s decision in
U.S. v. Windsor, to a 401(k) safe harbor plan pursuant to Q&A-8 of Notice 2014-19. Notice 2014-19 provides guidance on the application (including the retroactive application) of the
Windsor decision and the holdings of Rev. Rul. 2013-17 to qualified retirement plans…

(Read Intelliconnect) »

Employers May Find Future Health Plan Savings On The Marketplace

It may surprise employers to learn that premiums in the 2014 marketplace are comparable to premiums in employer plans, and that in some states they are significantly lower, according to research from PricewaterhouseCooper’s Health Research Institute (HRI). According to HRI, the actuarial value of employer sponsored plans typically falls between Gold and Platinum plans found on the state exchanges, since employer-sponsored health plans usually pay about 85 percent of health care costs, including deductibles and other cost-sharing. As dictated by the Patient Protection and Affordable Care Act (ACA), gold plans in the marketplace pay 80 percent of costs and platinum plans pay 90 percent of costs…

(Read Intelliconnect) »

ERISA Advisory Council To Meet June 17-19

The Advisory Council on Employee Welfare and Pension Benefit Plans, also known as the ERISA Advisory Council, will hold a meeting on June 17-19, in Washington, D.C., at the U.S. Department of Labor, 200 Constitution Avenue NW. The notice of the meeting was published in the May 16
Federal Register

(Read Intelliconnect) »

May 19, 2014

PBGC Issues June 2014 Interest Rates For Valuing Terminating Pension Plans

For single-employer pension plans terminating April through June 2014, and for multiemployer plans involved in a mass withdrawal, the interest rate established by the PBGC for calculating immediate annuities is 3.47 percent, up from the 3.35 percent rate that applied in January through March 2014. The interest rate for calculating immediate lump sums in June 2014 is 1.25 percent, lower than the 1.50 percent that applied in May 2014…

(Read Intelliconnect) »

Consumer Benefits Related To MLR Provision Amounts To More Than $3 Billion Over Two Years

According to Public Health Service Act Sec. 2718, as added by the Patient Protection and Affordable Care Act (ACA), insurers offering group or individual health insurance must maintain certain minimum medical loss ratios (MLRs). If minimums are not maintained, rebates must be provided to health plan participants. A recent Commonwealth Fund report,
The Federal Medical Loss Ratio Rule: Implications for Consumers in Year 2, finds that in the first two years of implementation, total consumer benefits related to the ACA’s MLR provision, both rebates and reduced overhead, amounted to more than $3 billion…

(Read Intelliconnect) »

Maryland Parental Leave Bill Signed By Governor

Maryland Governor Martin O’Malley has approved legislation (SB 737/HB 1026) that provides up to six weeks of unpaid parental leave to employees in a 12-month period for the birth or adoption of a child. Employers, however, may deny the leave if “necessary to prevent substantial and grievous economic injury to the operations of the employer” and the employer gives notice of the denial to the employee prior to the commencement of the leave…

(Read Intelliconnect) »