Agencies Issue New FAQs Regarding Preventive Services under the ACA and Implementation of the Mental Health Parity and Addiction Equity Act
The federal Departments of Health and Human Services, Labor, and the Treasury (the “Agencies“) recently issued a set of Frequently Asked Questions, Part 34 (the “FAQs“), regarding the coverage of certain preventive services under the ACA and the implementation of requirements under the Mental Health Parity and Addiction Equity Act, as amended by the ACA (the “MHPAEA“). With respect to preventive services, the FAQs (i) highlight updated recommendations issued in 2015 by the U.S. Preventive Services Task Force (which form the basis, in part, of the ACA preventive services requirements) regarding tobacco cessation and (ii) request comments on several questions about items and services that must be provided without cost-sharing by health plans and health insurance issuers for compliance with the updated recommendations. The updated recommendations become effective the first day of the plan/policy year beginning on or after September 22, 2016 (i.e., January 1, 2017 for calendar year plans/policies). The… Continue Reading
On Friday, October 25, the IRS released Revenue Procedure 2016-55, which increases the maximum amount an employee may contribute toward a health care flexible spending account through salary reduction to $2,600 for 2017. Rev. Proc. 2016-55 is available here.
The federal Departments of Health and Human Services, Labor, and the Treasury (the “Agencies“) recently issued final regulations which provide criteria for travel insurance and supplemental health insurance coverage to be considered “excepted benefits” and thus exempt from many requirements under the Affordable Care Act (the “ACA“). Generally, travel insurance must offer health benefits incidental to other coverage. Supplemental health insurance must cover cost-sharing gaps (such as deductibles) and/or provide benefits for services that are not “essential health benefits” and not covered by primary coverage, and not be supplemental due to coordination of benefits provisions. The final regulations apply to group health plans on the first day of the first plan year beginning on or after January 1, 2017, and are available here.
Employers are increasingly looking toward alternatives like telemedicine and onsite clinics to help lower the cost of their group health plans, particularly those employers that feel they are running out of room to further pare down medical plan design(s) or shift cost sharing to employees. Telemedicine is relatively easier to implement than an onsite clinic which requires a sufficient concentration of participants (which can include employees and their dependents) in a given location to be effective. This is less of an issue for health care systems which also have the advantage of being able to operate an onsite clinic as an own-use facility. Note: It is possible for multiple employers to share an onsite clinic with clever separate accounting and administration, but that is beyond the scope of this article. For all of their advantages, HSAs do not easily co-exist with many other benefits. This article focuses on the HSA… Continue Reading
The IRS recently announced cost-of-living adjustments for 2017. Below is a list of some of the key annual limits that will apply to qualified retirement plans in 2017: Compensation limit in calculating a participant’s benefit accruals: increased to $270,000. Elective deferrals to 401(k) and 403(b) plans: remains unchanged at $18,000. Annual additions to a defined contribution plan: increased to $54,000. Catch-up contributions for employees aged 50 and over to 401(k) and 403(b) plans: remains unchanged at $6,000. Annual benefit limit for a defined benefit plan: increased to $215,000. Compensation dollar limit for defining a “key employee” in a top heavy plan: increased to $175,000. Compensation dollar limit for defining a “highly compensated employee”: remains unchanged at $120,000. The full list of 2017 plan limits can be found in IRS Notice 2016-62.
The DOL has issued the first of several FAQs addressing the DOL’s new fiduciary rule, which was finalized in April 2016 (the “Rule”). The Rule, which will generally become effective on April 10, 2017, prohibits parties that provide fiduciary investment advice to plan sponsors, plan participants, and IRA owners from receiving payments that create conflicts of interest, unless the parties comply with a prohibited transaction exemption (“PTE”). The FAQs generally address how the Rule will be implemented and clarify a number of issues related to the new “best interest contract” and “principal transactions” PTEs. View the FAQs. View the DOL’s announcement of the FAQs.
While exploration and production bankruptcies have slowed, nearly two-dozen North American oilfield service companies commenced Chapter 7, Chapter 11 or Chapter 15 bankruptcy since August 1, 2016, involving over $4.8 billion in cumulative secured and unsecured debt, including Tervita Corporation ($2 billion), Key Energy Services, Inc. ($1 billion), and Basic Energy Services, Inc. ($1.1 billion). As of October 25, 2016, 70 oilfield service companies have filed bankruptcy so far this year, totaling over $13.3 billion in cumulative debt. Despite the recent spike in oil prices and increase in active drilling rigs, all indications suggest the uptick in oilfield service bankruptcies will continue in 2016 and into 2017. View the Haynes and Boone Oilfield Services Bankruptcy Tracker here.
Since April 2015, Haynes and Boone, LLP has conducted four borrowing base redetermination surveys, including one most recently in September 2016. The objective is to get a better idea of what lenders, borrowers (producers) and others are expecting regarding upcoming borrowing base redeterminations in light of the price uncertainty in the commodity market. The survey shows that respondents on average overall expect 41 percent of oil and gas borrowers to see a decrease in their borrowing base during the fall 2016 borrowing base redetermination season. For companies that will see a borrowing base decrease, survey participants expect borrowing bases to decrease an average of 20 percent. If you break out respondents by category, the Haynes and Boone survey shows that lenders are expecting a 16 percent decrease, while oil and gas companies are anticipating a 29 percent decrease. This difference may be the result of lenders attempting to decrease borrowing… Continue Reading
Haynes and Boone has tracked 105 North American oil and gas producers that have filed for bankruptcy since the beginning of 2015. These bankruptcies, including Chapter 7, Chapter 11, Chapter 15, and Canadian cases, involve approximately $67.9 billion in cumulative secured and unsecured debt. As of October 19, 2016, 61 producers have filed bankruptcy so far this year, representing approximately $50.6 billion in cumulative secured and unsecured debt. Despite the recent spike in oil prices, all indications suggest more producer bankruptcy filings will occur during 2016. The latest Oil Patch Bankruptcy Monitor is available here.
The SEC recently published Compliance and Disclosure Interpretations (“C&DIs“) relating to the CEO pay ratio disclosure rule. This disclosure rule under Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act requires a public company to disclose the ratio between its CEO’s annual compensation and the median annual compensation of all other employees. The new C&DIs include guidance on the selection of an appropriate alternative compensation measure and clarify that if an alternative compensation measure is utilized to determine the median employee, the time period utilized does not have to be a full annual period. Moreover, the time period utilized does not have to include the date on which the employee population was determined. View our prior post on the SEC’s adoption of the CEO pay ratio disclosure rule here. View the full text of the C&DIs here.