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Mercer

Final disability and genetic nondiscrimination rules issued May 16 by the Equal Employment Opportunity Commission (EEOC) clarify how employer-sponsored wellness programs can condition incentives on an employee's or a spouse's undergoing a medical exam or disclosing details about current or past health status in response to disability-related inquiries. The rules, effective as of the first day of the plan year beginning in 2017, retain largely the same requirements as the original proposals, but the EEOC has clarified that the new rules apply to all employer-sponsored wellness programs — whether tied to or independent of any group health plan — that include medical exams or disability-related inquiries. EEOC continues to assert that employer wellness programs must satisfy these rules and cannot rely on the Americans with Disability Act’s statutory safe harbor for insurance underwriting and risk practices of benefit plans.

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A group of employers urged White House officials at a recent meeting to alter HHS's proposed insurance nondiscrimination rules under ACA Section 1557 as it undergoes final review. Section 1557 prohibits age, race, sex, disability, and national origin discrimination in any health program or activity that receives federal financial assistance. However, the proposed rules suggest that all operations -- not just ones receiving federal funds -- of any covered organization must comply with these nondiscrimination standards. This could subject some employer health plans and their third-party administrators to the rules.

 

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The latest set of ACA implementation FAQs tackle a variety of coverage, cost-sharing, and disclosure issues and give new details on parity testing under the Mental Health Parity and Addiction Equity Act.

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The current employee tax exclusion for employer-provided health benefits came under scrutiny by lawmakers at an April 14 hearing held by the House Ways and Means Committee. Hearing witnesses included experts who argued that capping the employee income tax exclusion and providing universal tax credits would help to raise workforce wages, among other advantages. But a third witness warned that capping or ending the tax exclusion would undermine employer-sponsored coverage by removing a key incentive for employers to offer health plans, and break up employer risk pools that now include participation by younger, healthier workers.

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Just-released Department of Labor final regulations treat a wider range of investment recommendations -- including HSAs, Archer MSAs, and Coverdell education savings accounts -- as  fiduciary investment advice. The regulations exempt health, disability, and term life insurance policies that do not include an investment component. The new rule sets aside 40-year-old regulations that DOL believes fail to protect participants from investment advice skewed by undisclosed conflicts of interest.

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In a recent report to Congress on the Mental Health Parity and Addiction Equity Act, the Department of Labor summarizes the law’s requirements, its impact, and plan compliance issues. The report also outlines common violations of the law involving mental health and substance use disorder benefits that aren’t imposed for medical/surgical benefits. The ACA broadened the scope of the Act, requiring individual and small-group plans to provide essential health benefits in compliance with its provisions.

 

In addition, lawmakers are considering how to improve access to and broaden the scope of mental health and substance use disorder services and benefits. Congress is now debating legislation to improve the behavioral health care delivery system and better integrate it with the provision of medical care. While this legislation does not include new coverage mandates for employer-sponsored health plans, a leading bipartisan Senate bill would increase pressure on federal agencies to enforce mental health parity requirements and provide more useful guidance on nonquantitative treatment limits and other topics.

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The Expatriate Health Coverage Clarification Act (EHCCA) and certain transition guidance excuse qualifying expatriate plans and their sponsoring employers from many Affordable Care Act (ACA) requirements. However, as reported last year, neither EHCCA nor the transition guidance exempt expatriate plans or policies from the ACA's minimum essential coverage (MEC) or employer shared-responsibility (ESR) reporting obligations.

 

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To provide the Affordable Care Act's summary of benefits and coverage (SBC), health plans will have an updated final template and related materials to use beginning with open-enrollment periods after March 31, 2017, according to a new triagency FAQ. This means calendar-year group health plans will use the new SBC materials during fall 2017 open enrollment for the 2018 plan year.

 

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The Department of Health and Human Services (HHS) issued wide-ranging final marketplace rules on Monday that set key guidelines for 2017 exchange health plans and contain some changes affecting large-employer plans. These changes include 2017 cost-sharing limits, new rules regarding HHS audits of reinsurance fee payments, updated essential health benefit standards, and clarification of the public exchange process for notifying employers if a worker is eligible for a federal subsidy.

 

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New IRS guidance on health flexible spending arrangements (FSAs) addresses what COBRA rights and employer constraints may apply to carryovers. The Q&As are effective for plan years starting after Dec. 16, 2015 (Jan. 1, 2016, for calendar-year plans), although employers may rely on this guidance for earlier periods. Employers that permit health FSA carryovers should work with vendors to consider compliance issues, and some also may want to take advantage of the new permitted carryover restrictions.

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Federal agencies released several notable pieces of guidance impacting employers in the last days of 2015. The ACA’s upcoming deadlines are now delayed for reporting minimum essential coverage and employer shared responsibility; the new due dates give employers nearly two extra months -- until March 31 -- to distribute information statements to individuals and three extra months -- until June 30 for many employers -- to submit transmittals to IRS with related data.

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Long-awaited 2016 spending and tax bills teed up for final House and Senate votes within days would postpone the Affordable Care Act’s (ACA) “Cadillac” tax on high-cost health plans to 2020, make this levy deductible to employers, and mandate a study of suitable benchmarks to use for age and gender adjustments to the limits triggering the tax. Other changes would provide a one-year moratorium on ACA’s annual fee on health insurers' net premiums (for US risks) and a two-year halt to the tax on sales of medical devices.

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