Benefits Update – April 2011

From the editors of CCH’s BENE and BAN products, here are hot topics from recent Employee Benefits Management Directions newsletters as well as recent explanatory updates in Employee Benefits Management. Also included are recent explanatory updates to the Benefits Answers Now product.

If you have any comments/suggestions concerning the information provided or the format used, we’d like to hear from you. Please contact Tulay.Turan@wolterskluwer.com.

 

Hot Topics in Employee Benefits Management:

Affordable Care Act sets nation on right course for health reform, experts say, Employee Benefits Management Directions newsletter, Issue No. 487, March 8, 2011 – Ninety-one percent of leaders in health and health care policy believe the Affordable Care Act sets the right course for health reform, according to the latest Commonwealth Fund/Modern Healthcare Health Care Opinion Leaders Survey.

Health and welfare benefit plan expert clears up some confusion regarding new state exchanges, Employee Benefits Management Directions newsletter, Issue No. 488, March 22, 2011 — Deadlines for implementing health care reform on exchanges are coming up soon, and attorney Charles K. (Chip) Kerby III, of Liberte’ Group LLC pointed out some of the challenges employers, states, and consumers are likely to face between now and 2016 in a March 10 webcast, “Looking Ahead to the Health Insurance Exchanges: What You Need to Know Now,” sponsored by the International Foundation of Employee Benefit Plans (IFEBP).

Third court rules health reform law is constitutional, Employee Benefits Management Directions newsletter, Issue No. 487, March 8, 2011 – The individual mandate in Sec. 1501 of the Patient Protection and Affordable Care Act does not place a substantial burden on the exercise of individuals’ Christian faith, and even if it were a substantial burden, the mandate “is the least restrictive means of serving a compelling government interest,” the District Court for the District of Columbia has ruled, finding the ACA is constitutional.

Proposed rule outlines state waiver process under health reform, Employee Benefits Management Directions newsletter, Issue No. 488, March 22, 2011 – The content of state waiver applications and how such proposals may be disclosed, monitored, and evaluated are explained in a new proposed rule that provides guidance to states that want to establish their own strategies for complying with the exchange, individual mandate, and other provisions of the Patient Protection and Affordable Care Act (ACA).

What’s New in Employee Benefits Management:

Inadequate FMLA notice – An employee who had to take time off to take care of a family medical emergency but failed to give his employer an estimate of how many days off he would need could not proceed with his FMLA interference claim, the Court of Appeals for the Seventh Circuit has ruled. The decision in Righi v. SMC Corporation of America is discussed at ¶68,063.

HHS proposed regulations – A new proposed regulation announced by the Department of Health and Human Services (HHS) would ensure students enrolled in health insurance coverage through their college or university benefit from the consumer protections created by the Affordable Care Act. The regulations are at ¶700,075A.

Reimbursable medical expenses – The IRS has concluded that breast pumps and supplies that assist lactation constitute “medical care” under Code Sec. 213(d), based on its determination that, like obstetric care, they are for the purpose of affecting a bodily structure or function of a lactating woman. The chart at ¶2040 has been updated.

State laws – Health care portability rules have been updated at ¶10,725.

Domestic partners – Hawaii has enacted a law extending the same rights, benefits and protections of married couples to partners in civil union. For details, see ¶10,110.

What’s New in Benefits Answers Now (BAN):

Health and welfare benefit plan expert clears up some confusion regarding new state exchanges. Deadlines for implementing health care reform rules on exchanges are coming up soon, and attorney Charles K. (Chip) Kerby III, of Liberté Group LLC pointed out some of the challenges employers, states, and consumers are likely to face between now and 2016 in a webcast, “Looking Ahead to the Health Insurance Exchanges: What You Need to Know Now,” sponsored by the International Foundation of Employee Benefit Plans (IFEBP). Kerby likened the complexity of establishing an exchange to each state putting a person in orbit. Even though the exchanges are not due to be implemented until 2014, the intermediate timelines are tight, and will require the cooperation and coordination of federal and state agencies, intrastate health care agencies, and various stakeholders, such as insurers, employers, brokers, consumers, and navigators, he said.  To learn more about the requirements of the health reform rules on exchanges, see the information at ¶20,010.

Affordable Care Act controls costs for early retiree coverage, HHS report finds. Health and Human Services Secretary Kathleen Sebelius has released a new report showing that the Early Retiree Reinsurance Program (ERRP) created by the Affordable Care Act is reducing health care costs for early retirees. As of December 31, 2010, more than 5,000 employers had been accepted into ERRP, more than $535 million in health benefit costs have been reimbursed through the program, and those payments have helped benefit more than 4.5 million Americans.  The largest share of 2010 reimbursements went to governments, including state and local governments, school districts and other local agencies.  Find out more about the ERRP provisions of health care reform at ¶22,875.

Michigan court rules employer can’t alter or reduce retirees’ vested health care benefits without bargaining with union. In a decision on remand from the Sixth Circuit Court of Appeals, a federal district court in Michigan determined that an employer could not unilaterally impose changes to the vested health care benefits of retirees. Absent a negotiated agreement, the benefits could not be modified regardless of how reasonable the proposed changes appear. There was no evidence that the employer and union had ever negotiated a reduction in the retirees’ health benefits.  Agreements made by the parties demonstrated that, even if the parties viewed retiree health care benefits as capable of being reset, the only circumstance under which they allowed this to occur was through a collectively bargained agreement.  More information about employer obligations regarding retiree health benefits can be found at ¶22,920.

Failure to notify employer of estimated time needed for leave forecloses FMLA interference claim. An employee who had to take time off to take care of a family medical emergency but failed to give his employer an estimate of how many days off he would need could not proceed with his FMLA interference claim, the Court of Appeals for the Seventh Circuit (CA-7) has ruled.  The employee’s e-mail was too ambiguous, said the court, to trigger an affirmative duty on the employer’s part to provide written FMLA materials, but it was sufficient to require the employer to make further inquiry. The employee’s failure to return his supervisor’s phone calls doomed his FMLA claim, the court held, and his termination was consistent with the employer’s written policy stating that unapproved absences of two or more consecutive days was grounds for termination. To learn more about what is required of employees under the FMLA, see ¶31,070.

Health management drops as a priority for employees amid competing pressures, survey finds. As employers try to engage employees in health management programs to slow health care cost inflation, fewer employees are placing a high priority on managing and improving their health, according to a recent survey of more than 9,000 employees at large and midsize employers conducted by Towers Watson.  “As employees cope with a period of high financial and personal stress, the focus on improving health has taken a back seat,” said Jeff Levin-Scherz, a physician and senior health care consultant at Towers Watson. “Chronic diseases such as diabetes and heart disease are the number one driver of health care costs, and employers are increasingly committed to offering programs that can empower employees to manage their health and prevent the risks that lead to these diseases. Our findings reveal that this strategy faces an uphill battle in the current economic environment, but we believe employers that creatively use incentives to more fully engage employees in wellness efforts have a head start on their competitors.” Find out more about the survey results at ¶81,560.