Spencer’s Benefit’s Reports NetNews – March 25, 2016

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March 25, 2016


Limited use of small employer tax credit continues

Government Accountability Office testimony before a House subcommittee indicated that claims for the Small Employer Health Tax Credit continue to be lower than the number of employers thought eligible for the credit by government agencies and small business groups, limiting the effect of the credit on the expansion of health insurance coverage through small employers. For instance, in 2014, only 181,004 employers claimed the credit, down from 188,303 in 2010. The GAO reports that the actual number of small employers eligible for the tax credit ranges from 1.4 million to 4 million….

(Read Intelliconnect) »

Employee fired after taking contested leave revives FMLA lawsuit but associational disability claims put to rest

An employer that took issue with an employee’s FMLA paperwork and refused to allow her to return to work until she provided new documentation, and ultimately fired her for job abandonment after a breakdown in communication, will face a jury on her FMLA interference and retaliation claims, the Second Circuit U.S. Court of Appeals ruled in reversing summary judgment against the employee. The court also reinstated her FMLA claims against the HR director since she could be liable as her “employer” under the FLSA’s economic realities test, but refused to revive the employee’s ADA associational bias claim….

(Read Intelliconnect) »

March 24, 2016


IRS clarifies employment tax treatment of retroactive transit benefits

The IRS Office of Chief Counsel has issued a memorandum clarifying the employment tax treatment of retroactive transit benefits. Several employers provided employees with transit benefits that that did not exceed the statutory limit in Code Sec. 132(f) at the time. However, Congress retroactively raised the transit limit over the years three different times (2012, 2014, and 2015)….

(Read Intelliconnect) »

IRS issues April 2016 AFRs

The April 2016 short-term, mid-term, and long-term applicable federal interest rates (AFRs) have been issued by the IRS. The April mid-term 175 percent AFR (Annual) rate, used to calculate interest charged to the funding standard account for underpayments of quarterly contributions under Code Sec. 412(m), is 2.54 percent….

(Read Intelliconnect) »

IRS needs to improve controls over financial accounting for premium tax credit

The controls over financial accounting for the Internal Revenue Code Sec. 36B premium tax credit (PTC) should be improved, according to a report by the Treasury Inspector General for Tax Administration (TIGTA). Individuals who obtain health insurance through the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) marketplace may be eligible for the PTC. The PTC may be paid in advance to the health insurance issuer….

(Read Intelliconnect) »

March 23, 2016


Future Cadillac tax may be to blame for employers’ shrinking HSA contributions

Enrollment in health savings accounts (HSAs) is increasing, while employer contributions, on average, are stagnant or decreasing. That’s according to a survey of more than 10,000 employer-sponsored health plans conducted by United Benefit Advisors (UBA)….

(Read Intelliconnect) »


Church affiliated healthcare system denied exemption from ERISA for plan not established by church

A pension plan established by a non-profit health care corporation that was associated with the Roman Catholic Church could not qualify for ERISA’s church plan exemption, according to the U.S. Court of Appeals in Philadelphia (CA-3), because the plan was not established by a church. The court stressed that the church plan exemption authorized under ERISA, by its explicit terms, does not apply to a plan maintained by a church agency unless that plan has been established by a church….

(Read Intelliconnect) »

March 22, 2016


HIPAA compliance is no longer enough; cybersecurity requires more

The Health Information Portability and Accountability Act (HIPAA) Security Rule predated the iPhone and complying with its outdated requirements is no longer enough to protect health care organizations from hackers. Mac McMillan, Co-founder & CEO of CynergisTek, Inc., and Jay Adams, Director of Information Security at Tallahassee Memorial Healthcare, warned an audience at the Healthcare Information Management Systems Society (HIMSS) annual conference in Las Vegas that HIPAA was never intended to be a standard for complete data protection and that the 2001 Security Rule did not envision common technologies such as cloud computing, mobile devices, and networkable medical device technology. The speakers recommended various security technologies to attendees and made suggestions for training the workforce….

(Read Intelliconnect) »

Tight management squeezes out high drug prices, Express Scripts claims

Prescription drug spending in the United States rose 5.2 percent in 2015, which is half of the increases noted in years prior. This includes the impact of rebates, driven by an 18 percent increase in specialty drugs, according to a report by Express Scripts, which is a pharmacy benefit manager of drug plans for approximately 85 million Americans. Since 2011, the average price of brand-name drugs rose 98.2 percent, and 16.2 percent in 2015 alone. Also in 2015, prices for one-third of all brand-name medicines increased more than 20 percent. By tightly managing pharmacy benefits, Express Scripts believes it was able to keep its costs down….

(Read Intelliconnect) »


March 21, 2016


Out-of-pocket costs vary widely by plan for those eligible for cost-sharing reductions

Out-of-pocket costs for people who qualify for the cost-sharing reductions set forth in Section 1402 of the Patient Protection and Affordable Care Act’s (ACA’s) (P.L. 111-148) vary widely by plan, according to a new study from the Commonwealth Fund, a nonprofit foundation that supports health policy reform research. The study examined plans available in the largest markets in 38 states using the federal marketplace….

(Read Intelliconnect) »

2016 marketplace enrollment comes in at 12.7M, downward readjustment likely

At the end of the 2016 annual enrollment period 12.7 million people have signed up for health care coverage in the marketplaces, up from 11.7 million in 2015 and 8 million in 2014, according to a March 2016 Kaiser Family foundation (KFF) issue brief. KFF cautions, however, that the actual 2016 enrollment will be lower because as in prior years some enrollees will not pay their premiums, some will have their coverage terminated because of inconsistencies on their applications, and some will drop out as they get jobs offering health insurance benefits….

(Read Intelliconnect) »