Buck Bond Group

Recent Health and Welfare Developments 2017 – Fall Edition

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Volume 40 | Issue 120

Download this FYI Roundup as a printable PDF

This FYI Roundup highlights developments affecting health and welfare benefits. In this edition, we look at recent ACA guidance, mental health parity, fixed indemnity and wellness programs, expanding HDHP pre-deductible coverage, the projected 2018 health FSA contribution limit, Medicare Part D creditable/non-creditable coverage notices, and hurricane relief.

Affordable Care Act: HHS to Reconsider Prohibiting Gender Identity, Pregnancy Termination Discrimination

A federal trial court in Texas put a hold (i.e., stay) on provisions of the Obama-era HHS regulation that prohibits certain health programs and activities from discriminating based on gender identity and pregnancy termination while HHS reconsiders these rules. The timeframe for agency review is not clear. In the interim, employers and plans that are covered entities should work with legal counsel to discuss how HHS reconsideration may affect risks associated with any coverage gaps for transgender health and abortion services. (See our August 18, 2017 For Your Information.)

Mental Health Parity: Proposed Disclosure Forms, Status of Eating Disorder Treatments

The DOL, IRS and HHS issued FAQs soliciting additional feedback on improving the content of mental health and substance use disorder (MH/SUD) disclosures – including a request for comments on a proposed model form that participants and beneficiaries could use to get information about nonquantitative treatment limits under a health plan. MHPAEA regulations set forth group health plan disclosure requirements, designed to help participants and beneficiaries evaluate MH/SUD parity. The FAQs also clarified that treatment for eating disorders is a mental health benefit. Group health plan sponsors should consider potential changes to administrative processes in order to respond to requests under the model forms as proposed, and make sure that coverage for eating disorder treatment complies with parity rules. (See our July 5, 2017 For Your Information.)

Fixed Indemnity and Wellness Programs – Double Dip Take 3

The IRS released a Chief Counsel Advice memorandum that addressed an arrangement referred to as a “fixed indemnity health plan and wellness plan” that promoters claim will provide significant tax savings for employers and employees. Concluding that the tax principles necessary for the exclusion do not apply to payments received through this type of arrangement, the IRS warns employers to steer clear. The IRS also clarified open questions about the exclusion of medical benefits paid under a fixed indemnity health plan. Employers that have implemented or are considering these kinds of arrangements should seek advice from counsel and trusted advisors. (See our July 21, 2017 For Your Information.)

Administration Eyes Expanding HDHP Pre-Deductible Coverage to Chronic Disease Management

A draft executive order would direct the IRS to expand the list of preventive care services that an HDHP plan can cover before the participant or beneficiary has met the plan’s deductible. Specifically, it would update the preventive care rules for HDHPs to include services or benefits, including medications, relating to care for chronic disease management. If finalized as proposed, this provision may address some plan sponsors’ concerns about offering HDHP plans as the sole – or even a – coverage option because of the limited definition of the preventive services available for pre-deductible coverage. The timing for finalization of this draft executive order is not clear. (See our August 2, 2017 For Your Information.)

Health FSA Contribution Limit Projected to Remain at $2,600

The ACA amended the Internal Revenue Code to impose an annual limit on salary reduction contributions to health flexible spending accounts (FSAs). The annual limit on health FSA contributions is subject to indexing each year based on the CPI-U. Although not all the data is yet available, based on current information, we are projecting that the limit will remain at $2,600 for 2018. (See our August 23, 2017 For Your Information.)

Medicare Part D Creditable/Non-Creditable Coverage Notices Deadline Nears

Plan sponsors that offer prescription drug coverage must provide notices of creditable or non-creditable coverage to Medicare-eligible individuals before each year’s Medicare Part D annual enrollment period – this year, by October 14, 2017. The notice obligation is not limited to retirees and their dependents, but also includes Medicare-eligible active employees and their dependents and Medicare-eligible COBRA participants and their dependents. (See our August 31, 2017 For Your Information.)

Agencies Relax Rules for Hurricane Harvey and Irma Victims

Recent hurricanes Harvey and Irma devastated parts of Texas, Florida, Puerto Rico and the U.S. Virgin Islands. The DOL released an announcement acknowledging health plan administrative delays that participants, beneficiaries and plan administrators may face when a disaster strikes. The DOL suggests that plan fiduciaries make reasonable accommodations to prevent the loss of benefits and minimize loss of coverage for individuals affected by a hurricane. They also suggest that employers may want to provide affected employees additional time for making COBRA elections and paying premiums so that they are not adversely affected. The DOL also encourages granting additional time for filing benefit claims. (See our September 6, 2017 and September 19, 2017 issues of For Your Information.)