Spencer’s Benefits Reports NetNews – July 1, 2016

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News

July 1, 2016

 

A brief break at Spencer’s Benefits Reports

Spencer’s Benefits Reports is taking a brief break. Spencer’s news and reports will not be issued July 4 through July 8. Publication will resume on July 11, 2016. Happy Independence Day to all of our subscribers.

(Read Intelliconnect) »

Millennials may use nontraditional approaches to health expenses, but underestimate cost

Millennials (aged 18-36) are more likely than those of older generations to embrace a nontraditional approach to paying their medical expenses, but they are also more likely than non-millennials to regularly underestimate the total cost of health care issues, according to a report recently released by Aflac. The report was based on an online study of both benefits decision-makers and employees of small, medium, and large companies….

(Read Intelliconnect) »

ACA addresses women’s unique health needs, boosting coverage, affordability

Since the enactment of the Patient Protection and Affordable Care Act (ACA), women have greatly benefitted from coverage gains and lower out-of-pocket costs, according to an issue brief from the Office of the Assistant Secretary for Planning and Evaluation. The ACA addresses directly the unique health needs of women, resulting in improvements in access, affordability, and quality of coverage and care….

(Read Intelliconnect) »

Answers provided for questions about re-enrollment in no-longer-available QHPs

Beginning in plan year 2017, if a person enrolled in a marketplace qualified health plan (QHP) is otherwise eligible for automatic re-enrollment, the marketplace can automatically re-enroll him or her, even if the QHP in which he or she is enrolled is no longer available in the marketplace. In recent frequently asked questions, the CMS’ Center for Consumer Information and Insurance Oversight addressed automatic re-enrollment for QHPs that are no longer available in the marketplace (CCIIO) under the 2017 Notice of Benefits and Payment Parameters….

(Read Intelliconnect) »

June 30, 2016

 

ACA pushing companies toward outsourcing benefit administration

Many companies are turning to outsourcing for a variety of benefits programs, according to recent research from CFO Research and Prudential. According to the sixth annual survey of financial executives, companies express the strongest interest in outsourcing management of the Patient Protection and Affordable Care Act (ACA). Forty-six percent report either that they have already outsourced reporting and regulatory compliance for the ACA to their insurance carries or to other vendors (26 percent). An additional 20 percent are considering outsourcing it….

(Read Intelliconnect) »

IRS issues guidance on phased retirement payments

The IRS has provided guidance on the recovery of the investment in the contract from payments received from a qualified defined benefit plan by an employee during phased retirement. Notice 2016-39 provides that if certain conditions are met, these payments are not treated as received from an annuity. Rev. Proc. 2016-36 provides that these rules apply only to annuities under a qualified plan, and do not apply to nonqualified contracts. The above guidance applies to taxable years beginning on or after January 1, 2016. Taxpayers may, however, apply the guidance to taxable years beginning before that date….

(Read Intelliconnect) »

Post-ACA health care spending projections continue to decline

Projected national health spending for 2014 to 2019 has dropped by about $2.6 trillion since the 2010 Patient Protection and Affordable Care Act (ACA) baseline forecast, according to an Urban Institute report. This projected drop in spending is reflected in large projected declines in Medicare ($455 billion), Medicaid ($1050 billion), private insurance ($664 billion), and other health spending projections ($456 billion). The Urban Institute attributes these declines to the 2012 U.S. Supreme Court decision making the Medicaid expansion under section 2001 of the ACA optional for the states, the Budget Control Act of 2011 (BCA) (P.L. 112-25) (i.e., sequestration), and the sluggish economic recovery after the recession….

(Read Intelliconnect) »

June 29, 2016

ERIC concerned about new health care tax proposed by House GOP

The ERISA Industry Committee (ERIC) has expressed serious concern with a major provision in the health policy paper released by the U.S. House of Representatives’ Republican Task Force on Health Care Reform. ERIC members support changes to the health care system to promote quality, affordable health insurance for Americans, but a major provision within the paper would threaten the employer-sponsored health insurance currently enjoyed by over 175 million Americans….

(Read Intelliconnect) »

After design changes, health care costs will increase 5.5 percent in 2017

In 2017, health care costs will increase 6.5 percent, but after likely changes in benefit plan design, such as higher deductibles and co-pays, the net growth is expected to be 5.5 percent, according to recent research from PricewaterhouseCooper’s (PwC) Health Research Institute (HRI). The report,
Medical Cost Trend: Behind the Numbers 2017, noted that while cost increases are low, medical inflation still outpaces general economic inflation. In addition, PwC notes that there are signs that the decade’s slowing medical cost growth rate could start to climb again as new health care access points increase utilization….

(Read Intelliconnect) »

Competitive labor markets and employee expectations continue to push paid leave benefits at U.S. organizations

The majority (88 percent) of organizations believe it is necessary to offer some type of paid time off program to attract top talent and drive organizational success, according to the survey,
Paid Time Off Programs and Practices, from WorldatWork. Employee paid time off programs remain an important benefit in the total rewards tool kit, with companies reporting the following top three reasons for offering paid time off programs to employees: encouraging employees to rest and rejuvenate, improving employee attraction and satisfying employee paid time off expectations….

(Read Intelliconnect) »

June 28, 2016

 

IRS lists North American areas for convention expense limitation

The IRS has listed areas that are considered to be within the “North American area” for purposes of the limitation under Code Sec. 274(h) on deductions for convention expenses. The limitation applies to expenses incurred in connection with a convention, seminar, or similar meeting held outside the North American area. This area is defined by Code Sec. 274(h)(3)(A) as the United States, its possessions, the Trust Territory of the Pacific Islands, Canada and Mexico….

(Read Intelliconnect) »

Eight million taxpayers pay $1.7 billion in shared responsibility payments in 2014

In 2014, more taxpayers were required to have health care coverage, qualify for a health coverage exemption, or make a shared responsibility payment with their tax return. The IRS reported that more than eight million taxpayers were responsible for a total of $1.7 billion in health care responsibility payments. In 2014, the maximum shared responsibility payment was $95 for each adult and $47.50 for each child, up to a maximum of $285 or 1 percent of household income, whichever was higher….

(Read Intelliconnect) »

Multiemployer program to run out of funds by 2025, PBGC reports

EThe Pension Benefit Guaranty Corporation issued two reports on the prospects of the DOL’s pension insurance programs, telling Congress that the agency’s single-employer pension program is likely (but not certain) to improve, and the multiemployer program is in dire straits and will go insolvent by 2025—or sooner—without a substantial influx of revenue. “Substantial increases in premium revenue will be needed to avoid cuts in multiemployer insurance program guarantees,” the PBGC reported….

(Read Intelliconnect) »

June 27, 2016

Additional Marketplace information is okay to include in COBRA notices

In addition to information required to be sent to qualified COBRA beneficiaries, other information may also be sent about the ACA Marketplaces, according to a recently-issued Frequently Asked Question (FAQ) from the Labor Department (DOL), the HHS, and the IRS. Because qualified beneficiaries may want to consider health coverage alternatives that are available through the Marketplaces and compare them to their COBRA continuation coverage options, especially if they are eligible for premium tax credits, the DOL has a model election notice available at www.dol.gov/ebsa/modelelectionnotice.doc with that information, that plans may use to satisfy the current COBRA notice requirements….

(Read Intelliconnect) »

Limits being set for specialty and biotech drugs

While health care costs have generally slowed for employer-sponsored health plans, prescription drug prices have not. Drug prices spiked in 2014 and this trend is continuing, according to recent research from the International Foundation of Employee Benefit Plans (IFEBP). The Employee Benefits Survey 2016 found that 18 percent of organizations are setting limits for specialty and biotech drugs to help combat prescription drug prices….

(Read Intelliconnect) »

Beneficiaries forfeited failure to monitor claim by failing to raise it at trial or on appeal

Plan beneficiaries forfeited a claim, validated by the United States Supreme Court, that plan fiduciaries breached a continuing duty to monitor and remove imprudent plan investments, by failing to raise the claim before the trial court or in the initial appeal, according to the Ninth Circuit U.S. Court of Appeals.…

(Read Intelliconnect) »