Spencer’s Benefits Reports NetNews – March 31, 2017

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Featured This Week


New Reports




March 31, 2017


More choice in employer plan offerings raises risk of adverse selection

When workers are offered more than one health plan, who switches their plans, and does it lead to adverse selection, causing healthy workers to leave certain health plans saddled with only high-cost sick workers? Evidence suggests it is mostly younger workers or higher-income workers without family coverage who switch—which does indeed raise the risk of adverse selection, according to a recent analysis by the Employee Benefit Research Institute (EBRI).…

(Read Intelliconnect) »

HHS OIG to review decision to pull outreach for ACA open enrollment

The Department of Health and Human Services Office of Inspector General (OIG) confirmed that it has initiated a review of HHS’ decision to halt advertisements and suspend e-mail and social media outreach in the final days of the 2017 Patient Protection and Affordable Care Act (ACA) open enrollment season. The review was requested by Sens. Elizabeth Warren (D-Mass.) and Patty Murray (D-Wash.) The OIG said the review will include “the timeline, decision-making process, and factors considered by HHS, including any analyses of implications for enrollment and/or expected costs or savings….”

(Read Intelliconnect) »

Standing question when ERISA fiduciary breach does not directly impact benefits is left open

The Supreme Court has declined to take up the question of whether a participant in an ERISA defined benefit plan, who has not first suffered a loss of monthly benefits, has Article III standing to seek equitable relief from the pension plan following an ERISA breach activity. On March 27, the Justices denied a petition for certiorari asking the Court to review the Fifth Circuit’s determination below, in Lee v. Verizon Communications, Inc. (the petition was filed by Pundt), that the Verizon retirees lacked standing to bring an action in this case….

(Read Intelliconnect) »

March 30, 2017


Text: IRS Announcement 2017-4, non-applicability of excise taxes under Sec. 4875 to conform with DOL temporary enforcement policy on fiduciary duty rule

(Read Intelliconnect) »

Bill to establish small business association health plans clears the House

On March 22, the House gave the green light to the Small Business Health Fairness Act of 2017, which would amend ERISA to provide for the establishment and governance of association health plans (AHPs)—group health plans sponsored by business associations. The 236-175 vote fell mostly along party lines, with four Democratic lawmakers joining Republican colleagues to vote in favor of the bill. Considerable controversy surrounds the proposal, which some say will level the health insurance playing field for small businesses, while others warn that it will shift costs to workers and undermine important protections….

(Read Intelliconnect) »

Temporary excise tax policy for fiduciary rule issued

The IRS has adopted a temporary excise tax nonapplicability policy that conforms to the Department of Labor’s temporary enforcement policy regarding the fiduciary rule described in Field Assistance Bulletin 2017-1. The IRS will not apply Code Sec. 4975 and related reporting obligations with respect to any transactions or agreement to which the DOL’s temporary enforcement policy, or other subsequent related enforcement guidance, would apply….

(Read Intelliconnect) »

ERISA church plan question aired before the Justices

On March 27, the Supreme Court Justices heard argument on the question of whether the exemption from ERISA that applies to pension plans originally established by a church also applies to plans of employers that are religiously affiliated—like nonprofit religious schools and hospitals, and the like. Three cases were consolidated for one hour of oral argument before the Court: Advocate Health Care v. Stapleton, St. Peter’s Healthcare v. Kaplan, and Dignity Health v. Rollins. The ruling is expected to resolve a circuit split that purportedly upended 30 years of well-settled law holding that pension plans maintained by otherwise qualifying church-affiliated organizations are exempt from ERISA, regardless of whether the church itself established the plan or not….

(Read Intelliconnect) »

March 29, 2017

Court lacked jurisdiction to hear failed CO-OP’s claim under ACA’s ‘3Rs’ program

The U.S. District Court for the Southern District of Iowa did not have jurisdiction over claims against HHS brought by the liquidators of a failed insurance cooperative because their requested damages were purely monetary in nature and could be adequately addressed in the Court of Federal Claims. The court also found while the Court of Federal Claims could not decide the liquidators’ choice-of-law claim—because it was non-monetary in nature—it also could not decide the matter because issuing a decision on it without having jurisdiction over the other substantive claims would be tantamount to issuing an advisory opinion….

(Read Intelliconnect) »

EBSA highlights results of enforcement and compliance activity in FY 2016

The Employee Benefits Security Administration (EBSA) has issued the results of its enforcement and compliance activity for employee benefit plans and participants in fiscal year (FY) 2016. EBSA’s oversight authority extends to nearly 681,000 retirement plans, approximately 2.3 million health plans, and a similar number of other welfare benefit plans, such as those providing life or disability insurance. As of October 2, 2015, these plans covered about 143 million workers and their dependents and included assets of over $8.7 trillion….

(Read Intelliconnect) »

March 28, 2017


Health care bill pulled from House vote

House leadership on March 24 pulled the proposed America Health Care Act (AHCA) (H.R. 1628) from the House floor in what appears to be its death knell. The health care bill would have repealed a handful of taxes as well as other provisions first enacted in the Patient Protection and Affordable Care Act (ACA). The first scheduled vote on the bill was canceled the day before….

(Read Intelliconnect) »

State grades improve after ACA coverage expansions, more work needed

Two years after the Patient Protection and Affordable Care Act’s (ACA) major coverage expansions, fewer Americans lacked health insurance in every state and people benefitted from better quality and safer health care, according to recent research from the Commonwealth Fund. The State Health System Scorecard found that the states that expanded Medicaid, such as Arkansas, California, Kentucky, and Washington, made some of the biggest strides between 2013 and 2015 in covering people and ensuring they are able to get the care they need….

(Read Intelliconnect) »

March 27, 2017


Telehealth may drive medical spending up, not down

Direct-to-consumer telehealth services—touted as a convenient and less-expensive way to get care for minor ailments—appear to prompt new use of medical services and thus may drive up medical spending rather than trim costs, according to a new RAND Corporation study….

(Read Intelliconnect) »

Benefits were 31.6 percent of total compensation in December 2016, BLS finds

Employer-provided benefits costs for civilian workers in private industry and state and local governments in December 2016 averaged $11.03 per hour worked, accounting for 31.6 percent of total compensation costs, which averaged $34.90 per hour worked. The cost of benefits as a percentage of compensation has risen over the past several years from 27.4 percent of total compensation. These are among the findings of the December 2016 Employer Costs for Employee Compensation report, produced quarterly by the Bureau of Labor Statistics (BLS)….

(Read Intelliconnect) »