Benefits Update – April 2016

From the editors of Wolters Kluwer’s benefits 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 and Spencer’s Research Reports.

 

Hot Topics in Employee Benefits Management:

Claim that hours were cut to dodge ACA mandate plausible under ERISA, Employee Benefits Management Directions, Issue No. 607, March 1, 2016 — A former Dave & Buster’s employee may proceed with a putative class action alleging that her work hours were cut so that the restaurant chain could avoid paying the looming increase in health insurance costs brought on by Obamacare, a federal district court in New York held.

Delay in Cadillac tax doesn’t deter interest in private exchanges, Employee Benefits Management Directions, Issue No. 607, March 1, 2016 — Forty-six percent of employers have implemented or are continuing to look at private health insurance exchanges to offer health benefits for their covered populations, according to a survey of employers conducted by the Private Exchange Evaluation Collaborative (PEEC).

Consumer-friendly changes coming to marketplace plans, Employee Benefits Management Directions, Issue No. 608, March 15, 2016 — Changes are coming to the health insurance marketplaces for the 2017 enrollment period. In addition to the annual update to cost sharing limitations and the parameters for risk adjustment, risk corridors, and reinsurance, CMS announced plans to make the information displayed on the marketplace more useful to consumers and easier to understand and expanded the types of assistance that navigators must offer to consumers.

ERISA preempts Vermont’s health insurance reporting law, Employee Benefits Management Directions, Issue No. 608, March 15, 2016 — A Vermont statute that requires health insurers and other entities to report payments related to health care claims so that the information can be included in an all-inclusive healthcare database was preempted by ERISA, the U.S. Supreme Court has ruled in a 6-2 opinion.

                                                                               

What’s New in Employee Benefits Management:

Contraceptive coverage — The Eleventh Circuit Court of Appeals determined that the accommodation to the contraception mandate requiring religious nonprofits to notify HHS directly or via health plans or third party administrators that they object to the mandate does not violate the RFRA because it does not substantially burden religious exercise and is the least restrictive means of furthering a compelling government interest. The case, Eternal Word Television Network, Inc. v. Secretary, U.S. Department of Health and Human Services, is discussed at ¶10,140.

Summary of Benefits and Coverage — The Department of Labor (DOL) and the Department of the Treasury are requesting comments on revisions to the Summary of Benefits and Coverage (SBC) template and associated documents. See ¶226,145 through ¶226,155 for the template and documents.

Glossary — The glossary of benefit terms has been updated at ¶2120.

Transit benefits — The transit benefit amounts for 2016, pursuant to the PATH Act, have been updated at ¶150,790, ¶150,825, and ¶154,200.

SIFL rates  — The standard industry fare level (SIFL) rates for the second half of 2016 have been updated at ¶150,086.

 

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

Claim that hours were cut to dodge ACA mandate plausible under ERISA. A former Dave & Buster’s employee may proceed with a putative class action alleging that her work hours were cut so that the restaurant chain could avoid paying the looming increase in health insurance costs brought on by Patient Protection and Affordable Care Act, a federal district court in New York held. Denying the employer’s motion to dismiss her claim for lost wages and salary incidental to the reinstatement of benefits, the district court found the employee stated a plausible claim under ERISA Sec. 510 and rejected the notion that her theory of liability failed as a matter of law. More information about the case can be found at ¶20,032.

Final rule adds “vertical choice” to SHOP marketplaces. Under a final rule issued in March 2016, SHOPs that use the federally facilitated marketplace will be permitted to offer a “vertical choice” of plans at all metal levels from the same issuer. The vertical choice option in the Federally-facilitated SHOPs (FF-SHOPs) will be available in plan years beginning on or after January 1, 2017. An overview of SHOP can be found at ¶20,065.

HSAs surpass $33 billion. HSAs have grown to an estimated $30.2 billion in assets and 16.7 million accounts at year-end 2015, according to Devenir. The 2015 Year-End HSA Survey also noted that HSAs have grown to over $33 billion in assets during the month of January. To find out more about HSAs, see ¶23,760.

Employees don’t understand benefits because most aren’t reading communication materials, says IFEBP. Only 19 percent of employers report that their employees have a high level of understanding their benefits, according to recent research from the International Foundation of Employee Benefit Plans (IFEBP). According to the IFEBP’s Benefits Communication Survey Results, the reason employers say benefits understanding is so low is because most participants do not open/read communication materials (80 percent of employers reported this), almost half do not understand the materials, and participants do not perceive value in their benefits (31 percent). Find out more about communicating health benefits at ¶40,200.

 

What’s New in Spencer’s Benefits Reports:

Taxation of health benefits. This report summarizes the basic rules governing the taxation of employer-provided health care benefits, as well as the nondiscrimination provisions of Sec. 105(h) (Report 340.-1).

Dependent coverage. The ACA requires health plans that provide dependent coverage to continue to make health coverage available for an adult child until the child turns 26 years old. This report reviews the ACA’s requirements (Report 512.1.-1).

Health coverage tax credit. The HCTC was created by the Trade Act of 2002 to help pay for private health coverage for displaced workers. The HCTC has been extended to 2020. This report describes the HCTC (Report 329.2.-27).

Claims appeals. Final rules implement the internal claims appeals and external review requirements of the ACA. This report reviews highlights o these rules (Report 521.1.-1).

SIMPLE IRAs. This report covers the rules governing IRA-based SIMPLE plans (Report 105.3.-1).