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Technical Fact Sheet on HHS Notice of Benefit and Payment Parameters for 2014
On March 12, the Centers for Medicare and Medicaid Services released a Technical Fact Sheet summarizing provisions of the Notice of Benefit and Payment Parameters final rule (the “Payment Rule”) recently issued by the Department of Health and Human Services (“HHS”). Among other things, the Payment Rule (1) expanded on standards defined in prior rules regarding certain risk-shifting programs under PPACA and (2) set standards and provided additional information regarding PPACA’s medical loss ratios. See our previous blog post on the Payment Rule, available here. A copy of the Technical Fact Sheet is available here
FAQ Regarding Expatriate Health Plans under PPACA
In an FAQ released jointly by the Departments of Labor, Treasury, and Health and Human Services (collectively, the “Departments”), expatriate health plans are granted temporary transitional relief from compliance with the requirements of subtitles A and C of Title I of the Patient Protection and Affordable Care Act (“PPACA”), including the group health mandates and market reforms such as coverage of preventive care and the restrictions on lifetime and annual limits, for plan years ending on or before December 31, 2015. For purposes of this transitional relief, an “expatriate health plan” is an insured group health plan with respect to which enrollment is limited to primary-insured individuals who reside outside of their home country for at least six months of the plan year and any covered dependents of such expatriates. In order to qualify for the transitional relief, expatriate health plans must comply with the pre-PPACA version of Title XXVII… Continue Reading
State Court Order to Turn Over ERISA Plan Benefits Not Preempted by ERISA
A participant in two employer-sponsored ERISA plans divorced her husband. In the marital settlement agreement, her husband waived his interest and future rights in the plans. The participant neglected to update the plans’ beneficiary designation forms. They still designated her ex-husband as beneficiary when she died. The plan administrators for each plan initially determined that her benefit under the plans should be paid to the ex-husband. The participant’s parents, as administrators of her estate, appealed the decisions. After the claims appeal process, the ex-husband filed for declaratory relief in federal district court, which stayed its decision pending the outcome of the estate’s state court suit. The state court found the ex-husband in contempt of the marital settlement agreement and ordered him to waive his interest in the benefits. The federal district court then ordered the plan administrators to pay the funds to the ex-husband and the ex-husband to then waive… Continue Reading
DOL Issues Final Rules on Multiple Employer Welfare Arrangements
The U.S. Department of Labor (“DOL”) recently released final rules intended to curb abuses of some multiple employer welfare arrangements (“MEWAs”) by imposing additional reporting requirements on MEWAs and by enhancing DOL’s enforcement authority. Under the final rules, all MEWAs that provide medical benefits, even if not a group health plan, must electronically file a Form M-1 annually, which now requires more extensive financial information than the prior version. Additionally, all employee welfare plans that file a Form M-1 must also file a Form 5500, even if the plan would otherwise be exempt, to demonstrate the plan’s compliance with the Form M-1 filing requirement. Failure to answer the Form M-1 compliance question will cause the Form 5500 to be rejected as incomplete, which may subject the filer to civil penalties. The deadline for filing this year’s Form M-1 has been extended to May 1, 2013. The final rules also enhance… Continue Reading
HHS Final Rule Regarding Notice of Benefit and Payment Parameters for 2014
The U.S. Department of Health and Human Services (“HHS”) recently issued the Notice of Benefit and Payment Parameters, a final rule which (1) expands on standards defined in prior rules regarding the permanent risk adjustment, transitional reinsurance, and temporary risk corridors programs under the Patient Protection and Affordable Care Act (“PPACA”) (collectively, the “Risk Programs”) and (2) sets out payment parameters for the Risk Programs. The Risk Programs become effective in 2014 and are intended to reduce the incentives for health insurance issuers to avoid enrolling higher-risk individuals, such as those with pre-existing medical conditions, by transferring funds from insurers with lower-risk enrollees to insurers who cover higher-risk populations. Notably for group health plan sponsors, this final rule (i) confirms which types of health insurance coverage and self-funded health plans are excluded from making contributions under the transitional reinsurance program (the “TRP”) (which is effective only for 2014, 2015, and… Continue Reading
State Supreme Court Decision Offers First Amendment Guidance for Attorney-Bloggers
A February 28, 2013 decision issued by the Virginia Supreme Court, which arose out of a disciplinary action instituted by the Virginia State Bar, contains a groundbreaking discussion of the application of First Amendment protections to attorney-generated blogs. Horace Hunter, an attorney with the Richmond firm Hunter & Lipton, authors the blog in question, “This Week in Richmond Criminal Defense.” At the time of the state bar’s disciplinary hearing, the blog included 30 posts written by Hunter, 25 of which discussed cases and were scrutinized in this matter. Of the 25 posts: 22 discussed cases in which Hunter represented either a criminal defendant or a plaintiff in a wrongful death action. Hunter referred to his law firm in 19 posts. Most posts relayed some measure of victory for Hunter and his firm. No post contained a disclaimer stating that the results discussed did not guarantee or predict similar results in… Continue Reading
Second Circuit Reaffirms that Moench Presumption Applies Only When Plan Terms Require Investment in Employer Stock
The U.S. Court of Appeals for the Second Circuit affirmed, in part, and vacated, in part, a fiduciary breach lawsuit against the investment committees of two eligible individual account plans. Participants sued the investment committees claiming that the decision to offer an employer stock fund was imprudent. The Second Circuit recognizes the Moench presumption—the presumption of prudence when a plan fiduciary retains employer securities as an investment option as required by the terms of the plan document. Although the district court applied the Moench presumption to both plans, the terms of only one plan required investment in employer stock; the other plan merely permitted investment in employer stock. Thus, with respect to the second plan, the Second Circuit vacated the dismissal and reinstated the claims and the derivative claims against the investment committee. McKevitt v. UBS AG, No. 12-1662 (2d Cir. Feb. 27, 2013).
Standardized Workers’ Compensation Release Agreement Did Not Extend to ERISA Claims
“An employee had been receiving long-term disability (“LTD”) income replacement benefits under her employer’s ERISA-governed LTD plan for nearly five years. The employee then settled a workers’ compensation claim against the employer and executed a standardized form compromise and release agreement (the “Release”), which only covered claims under California’s workers’ compensation laws, and an “Informed Consent to Compromise and Release” (the “Consent”). The employer subsequently terminated the employee’s disability benefits, arguing she waived her right to those benefits when she executed the Release and the Consent. The trial court, however, disagreed, reasoning that because neither the Release nor the Consent mentioned ERISA or ERISA claims, or the LTD plan by name, neither document could release the employer from its obligations under the plan. This case is a reminder to employers to include explicit language in a settlement agreement that clearly references any ERISA claims to ensure that such claims are… Continue Reading
U.S. Supreme Court Declines Review of Ruling in Fifth Circuit ERISA Preemption Case
The U.S. Supreme Court recently denied a petition for writ of certiorari by United Healthcare Insurance Company (“UHC”), which had requested judicial review of a ruling by the U.S. Court of Appeals for the Fifth Circuit, whose jurisdiction includes the State of Texas. The Fifth Circuit’s opinion had held that ERISA did not preempt state claims brought by Access Mediquip (“Access”), a medical device provider, against UHC for negligent misrepresentation, promissory estoppel, and violations of the Texas Insurance Code (see Access Mediquip L.L.C. v. UnitedHealthcare Insurance Co., No. 10-20868 (5th Cir. Oct. 5, 2012), a decision that overturned existing law in the Fifth Circuit. Access had sued UHC in 2009, claiming that UHC refused to provide reimbursement for medical devices that Access had procured and provided to covered persons based on a coverage authorization for such devices that Access previously received from UHC. The Supreme Court’s denial of UHC’s petition… Continue Reading
Interim Final Rules Regarding Whistleblower Complaints under PPACA
The Occupational Safety and Health Administration (“OSHA”) recently issued interim final regulations governing the employee protection (i.e., “whistleblower”) provisions of PPACA. PPACA amended the Fair Labor Standards Act to provide protection to an employee against retaliation by an employer for engaging in certain protected activities, including (1) receiving a premium tax credit or cost-sharing subsidy for health insurance coverage that the employee obtained through a healthcare exchange; (2) providing information to the employer or the government related to a violation, or an act reasonably believed to be a violation, of the requirements of PPACA (such as the prohibition on lifetime dollar limits on coverage or preventive care coverage requirements); (3) testifying in, or assisting with, a proceeding concerning such a violation; or (4) objecting to, or refusing to participate in, an activity that may be in violation of PPACA. The interim final regulations, which were effective on February 27, 2013,… Continue Reading
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