Welfare Benefit Plan ERISA News
January 2017

Small Employer Healthcare Relief Act Soon a Reality

"Starting January 1, 2017, small employers that do not offer group health insurance to their employees will have a tool to provide a tax-favored reimbursement to their employees. And more good news: there's transition relief retroactive for all plan years beginning on or before December 31, 2016 that the onerous penalties announced by the IRS in Notice 2015-17 are no longer in effect." (Kushner & Company)

Reference-Based Pricing: The New Frontier of Cost Control?
"The largest entity using [reference-based pricing (RBP)] is Medicare, which uses bottom-up pricing based on providers' costs of doing business ... Medicare determines a base rate for each service and then makes adjustments based on patient complications, geographic cost differences, and other factors. Employers who use RBP often pay providers the Medicare rate plus 20-50%. In contrast, PPOs provide a top-down discount off of billed charges for their in-network providers. With RBP, employers are shifting from discount-based to cost-based payments to providers." (Marsh Consulting Group)

HSA vs FSA: Which is Better?

"The Health Savings Account is like an IRA. You get to fund it with pre-tax dollars and it's typically administered by a financial institution. But unlike an IRA, you get to use the funds when you need them (not just in retirement) towards qualifying medical costs.... The Flexible Spending Account is a pre-tax-dollars savings account your company administers where you're allowed to save up a year's worth of health care costs. Most people use it to pay for deductibles, co-pays, and household health care items." [A comparison chart is included.] (PTMoney)

Narrow Provider Networks for Employer Plans

"In 2016, only 7 percent of employers with health plans offered a narrow network. Also, in 2014, employers ranked narrow networks the least effective among several strategies to manage health insurance costs.... More than one-third of employers with health plans that have 5,000 or more workers now offer some type of alternative network, including tiered or 'high-performance' networks.... Where narrow networks are offered, their adoption could be increased by giving workers stronger financial incentives to consider them." (Employee Benefit Research Institute [EBRI])

DOL Ramps Up Mental Health Parity Investigations

"MHPAEA violations can result in a breach of fiduciary duty under ERISA and an IRS excise tax of $100 per covered individual per day.... The final regulations specify that parity analysis should be performed within each of six classifications of benefits: [1] Inpatient, in-network. [2] Inpatient, out-of-network. [3] Outpatient, in-network. [4] Outpatient, out-of-network. [5] Emergency care. [6] Prescription drugs." (Society for Human Resource Management [SHRM])

DOL Releases Final Regulations for Disability Benefit Claims Procedures

The DOL has issued final regulations governing the claims procedures requirement for ERISA-covered plans that provide disability benefits. In particular, the final regulations require applicable plans to satisfy additional procedural and notice requirements for disability claims. The regulations apply to disability claims filed on or after January 1, 2018. (The Wagner Law Group)

Lawmakers Interested in Student Loan Repayment as Employee Benefit

"The average debt per borrower has nearly doubled since 2004, increasing from roughly $18,000 to more than $35,000 for a 2015 graduate. As millennials become a larger share of the workforce, the student loan debt dilemma is attracting more attention from employers. Legislative proposals would allow employers to establish a variety of tax-preferred student loan repayment assistance programs." (Society for Human Resource Management [SHRM])
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© 2017 ERISAPros, LLC, All rights reserved. Information on ERISAPros' website, its newsletter, “News & Views,” and its blog, “ERISA Wonk,” is published as a general informational source. Information and articles are general in nature and are not intended to constitute legal or tax advice in any particular matter. Blog posts and comments reflect the personal views of their respective authors - not those of ERISAPros. Transmission of this information does not create an attorney-client relationship. ERISAPros, LLC is not a law firm and is not giving legal or tax advice. It does not warrant and is not responsible for errors or omissions in the content on its website or in its newsletters. ERISA is a complicated and confusing law. Summary Plan Descriptions (SPDs), Wrap Plan Documents, and Form 5500s require review and updating by qualified ERISA compliance professionals.


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