Benefits Update - October 2012

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.

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States continue to address health care coverage, implement federal reform, Employee Benefits Management Directions, Issue No. 523, September 4, 2012 — For the last few years, states have been leading the way toward more comprehensive coverage to ensure that more people have or can obtain health insurance. With the passage of health care reform, states will have increasing responsibilities in regard to employer-provided health insurance benefits. This article contains a summary of the latest state activities.

CCIIO issues updated guidance on contraceptive coverage requirement safe harbor, Employee Benefits Management Directions, Issue No. 523, September 4, 2012 – The Center for Consumer Information and Oversight (CCIIO) has issued updated guidance on the temporary enforcement safe harbor for plans requesting an additional year to comply with the Patient Protection and Affordable Care Act (ACA) provision requiring group health plans to provide no-cost contraceptive services to women.

Guidance issued on ACA shared responsibility for employers, waiting period, Employee Benefits Management Directions, Issue No. 524, September 18, 2012 – The Internal Revenue Service, and the Departments of the Treasury, Labor (DOL), and Health and Human Services (the Departments), simultaneously, but separately, have issued two notices, Notice 2012-58 and Notice 2012-59, providing guidance on two provisions of the Patient Protection and Affordable Care Act (ACA).

Health reform provisions prompt retiree medical plan sponsors to retool, Aon Hewitt reports, Employee Benefits Management Directions, Issue No. 524, September 18, 2012 — The Patient Protection and Affordable Care Act (ACA) is affecting long-term retiree medical benefits strategies, even as fewer workers have access to these benefits, a new survey by Aon Hewitt determined.

FMLA — An employee who was terminated from his job as a result of supposedly abusing his employer’s leave policy could not proceed with his suit under the Family and Medical Leave Act (FMLA) because the employer had an “honest suspicion” that the abuse had taken place, the Seventh Circuit Court of Appeals (CA-7) has ruled. The case, Scruggs v. Carrier Corporation, is discussed at ¶68,062.

Adverse benefit notices — HHS has established an enforcement safe harbor with respect to the content of the adverse benefit determinations and final internal adverse benefit determinations issued by non-federal governmental plans. See ¶132,660 for more information.

Contraceptive coverage — Additional guidance on the contraceptive coverage requirement safe harbor (see story above) is discussed at ¶10,140.

Waiting period limitation — Notice 2012-59, which provides guidance on ACA’s 90-day waiting period limitation (see story above), is discussed at ¶10,100.

SIFL rates for second half of 2012 — The Standard Industry Fare Level (SIFL) rates for the second half of 2012 can be found at ¶150,086.

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

Guidance issued on ACA shared responsibility for employers, waiting periods. The Internal Revenue Service, and the Departments of the Treasury, Labor, and Health and Human Services (the Departments), simultaneously, but separately, have issued two notices, Notice 2012-58 and Notice 2012-59, providing guidance on two provisions of the Patient Protection and Affordable Care Act (ACA). The guidance provides two ways to determine if an employee is a full-time employee and therefore must be offered health insurance after Jan. 1, 2014, or the employer will face a penalty. More information about this guidance can be found at ¶20,030.

CCIIO issues updated guidance on contraceptive coverage requirement safe harbor. The Center for Consumer Information and Oversight (CCIIO) has issued updated guidance on the temporary enforcement safe harbor for plans requesting an additional year to comply with the Patient Protection and Affordable Care Act (ACA) provision requiring group health plans to provide no-cost contraceptive services to women. The original guidance was issued on Feb. 10, 2012, and the updated version has clarified that the temporary safe harbor is available to nonprofit organizations with religious objections to some but not all contraceptive coverage. To find out more about this safe harbor, see ¶20,051.

Health reform provisions prompt retiree medical plan sponsors to retool. The Patient Protection and Affordable Care Act (ACA) is affecting long-term retiree medical benefits strategies, even as fewer workers have access to these benefits, a recent survey by Aon Hewitt determined. The Aon Hewitt data shows the continued trend toward reducing or eliminating retiree health care coverage, which generally began with the introduction of retiree welfare accounting standards in the early 1990s for private employers, the consultant noted. See the discussion at ¶22,879 for more information about how employers plan to revise retiree medical plans due to the ACA.

Use of flexible benefits continues to rise. Use of flexible benefits plans is both widespread and on the rise, with 62 percent of employers currently offering flexible benefits packages and a further 21 percent planning to do so in the future, according to Aon Hewitt’s Benefits Administration Survey 2012. The survey examined the views of over 320 respondents from across the range of pensions and employee benefits managers, representing around one million employees. See the discussions at ¶50,480 and ¶72,950 for more information about the administration of flexible benefits plans.

Satisfaction levels rising among CDHP enrollees, traditional plans still preferred. Although satisfaction levels are rising among people enrolled in consumer-driven health plans (CDHP), traditional-health plan enrollees remained more likely than CDHP or high deductible health plan (HDHP) enrollees to be extremely or very satisfied with their overall plan, according to a recent report from the Employee Benefit Research Institute (EBRI). At the same time, satisfaction levels are declining among traditional health plan enrollees, EBRI found. The EBRI report noted that dissatisfaction with out-of-pocket costs may be driving these more recent satisfaction trends. The findings are from the 2011 EBRI/MGA Consumer Engagement in Health Care Survey. Find out more about the CDHP satisfaction rates at ¶21,085.

What's New in Spencer’s Benefits Reports:

Health Reform: Mandated Preventive Services. This report summarizes the preventive care provisions in the ACA that affect employer plans (Report 514.-1).

Pensions Plans: Minimum Funding. The provisions of the Pension Protection Act-established 80 percent funding threshold below which defined benefit pension plans must increase the amount of their minimum funding contributions and impose benefit limitations are reviewed in this report (Report 131.-1).

Retiree Medical Benefits: Court Cases. This report summarizes significant court decisions to date in the area of postretirement health care benefits (Report 328.05.-1).

San Francisco Health Insurance Mandate. This report has been updated to reflect the Employer Health Care Expenditure Rate for 2013 (Report 509.-15).

Retirement Benefits In Bankruptcy. The applicable Bankruptcy Code provision changes enacted in 2005 that extend creditor protection to tax-qualified plans, including IRAs, has led to a number of pertinent court cases, reviewed in this report (Report 407.-1).

New Pension/Benefits Titles Added:

Cash Balance Plan Answer Book, 2013 Supplement to the Second Edition
Employee Benefit Plan Review (October 2012)
401(k) Advisor (October 2012)
401(k) Answer Book, 2013 Edition
Governmental Plans Answer Book, 2013 Cumulative Supplement to the Second Edition
Insider’s Guide to DOL Audits, 2013 Supplement (Online only)
Pension Benefits (October 2012)
Pension Distribution Answer Book, 2013 Edition
Roth IRA Answer Book, 2013 Cumulative Supplement to the Sixth Edition