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Federal Departments Issue New FAQ and Model Disclosure Request Form under Mental Health Parity and Addiction Equity Act

On June 16, 2017, a new FAQ, Part 38, was jointly issued by the federal Departments of Labor, Health and Human Services, and the Treasury (collectively, the “Departments”) regarding the application of certain requirements under the Mental Health Parity and Addiction Equity Act (“MHPAEA”), as amended by the Affordable Care Act and the 21st Century Cures Act. In particular, this new FAQ addresses the question of whether the MHPAEA applies to benefits that a group health plan or health insurance issuer may offer for treatment of an eating disorder. Generally, the MHPAEA prohibits plans and issuers from imposing financial requirements or treatment limitations on “mental health benefits” and “substance use disorder benefits” (collectively, “MH/SUD Benefits”) that are more restrictive than the predominant financial requirements and treatment limitations that apply to substantially all medical and surgical benefits. The FAQ clarifies that eating disorders are mental health conditions; therefore, treatment of an… Continue Reading

Stop-Lost: Common Issues That May Cause Gaps in Your Stop-Loss Coverage

Once an employer is comfortable it can handle some exposure to fluctuating claims costs, it may opt to self-insure its group health plan in order to save money in the long run by avoiding paying the profit margin insurance carriers build into the premiums of fully-insured coverage. Some employers will forego some of the expected savings and purchase stop-loss coverage from an insurance carrier to help limit claims cost volatility. Under a stop-loss insurance policy, the insurance carrier will reimburse claims costs that exceed an agreed-upon dollar threshold. The employer is usually the insured on the stop-loss policy, although sometimes the group health plan itself is the insured under the policy instead. There are two primary types of stop-loss coverage: (i) individual; and (ii) aggregate. Stop-loss coverage will always include individual stop-loss and frequently includes aggregate coverage. (i) Individual stop-loss – Also referred to as specific stop-loss, individual stop-loss coverage… Continue Reading

Upcoming Deadline for Annual Reporting and Payment of PCORI Fee Under the Affordable Care Act

The deadline for plan sponsors of self-insured health plans to report and remit the Patient-Centered Outcomes Research Institute fee (“PCORI Fee”) due under the Affordable Care Act with respect to the 2016 plan year is July 31, 2017. For this purpose, a plan year that ended during 2016 is considered a 2016 plan year. The PCORI Fee is assessed to fund the Patient-Centered Outcomes Research Institute and applies to plan years ending on or after October 1, 2012, and before October 1, 2019. Plans should report and remit the PCORI Fee, which is based on a flat dollar amount multiplied by the average number of lives covered under the plan for the applicable plan year, via a second quarter IRS Form 720.The applicable covered lives fee amount for plan years that ended after December 31, 2015, and before October 1, 2016 is $2.17. The applicable covered lives fee amount for… Continue Reading

TC Heartland: What’s the Big Deal?

If you haven’t yet heard about the Supreme Court’s decision in TC Heartland v. Kraft Food Groups Brands LLC, you’re probably not a patent litigator.  The case has been dominating legal industry headlines for months, and now that a decision has been issued, it is being hailed as the single most important case for patent litigators this side of Markman v. Westview Instruments, Inc. But is TC Heartland really a sea change for patent litigation?  A review of Federal Circuit cases applying the portion of the patent venue statute not addressed by TC Heartland – what constitutes “a regular and established place of business” – indicates that the change may not be as sweeping as some have suggested. Briefly, the TC Heartland decision addressed the test for proper venue in patent infringement suits for corporations.  Until 1990, courts held 35 U.S.C. § 1400(b) to be the sole statute governing venue for… Continue Reading

Texas’ New Hailstorm Law: Five Things That Every Corporate Policyholder Should Know About Chapter 542A of The Texas Insurance Code

On Saturday, May 27th, Governor Greg Abbott signed into law what has become known as the Texas “Hailstorm Bill.” Since a variant of this legislation was first introduced in 2015, reforming Texas’ “Prompt Payment of Claims” statute (Chapter 542 of the Texas Insurance Code) and its “Bad Faith” insurance law (Chapter 541 of the Texas Insurance Code) have been the focus of heated debate and intense lobbying by insurers and consumer and business interests alike. Proponents of the bill argued, under the banner of “tort reform,” that reducing statutory penalties against insurers was necessary to curb abusive “hailstorm” claims, which, by some reports, insurers have spent $340 million fighting since 2012. Haynes and Boone, LLP insurance partner, Ernest Martin, organized opposition from Texas businesses and provided testimony to legislative committee members warning that weakening statutory penalties will remove crucial incentives for insurers to pay first-party claims for property damage, business interruption and… Continue Reading

The Supreme Court Resolves Key Sections of the Biosimilars Act in Sandoz v. Amgen

On June 12, 2017, in a unanimous decision authored by Justice Thomas, the Supreme Court issued its much-awaited decision in Sandoz Inc. v. Amgen Inc. et al., No 15-1039, considering two critical questions in the biosimilar approval mechanisms adopted in the Biologics Price Competition and Innovation Act of 2009 (“BPCIA” or “Biosimilars Act”).  Specifically, the Court considered:  (1) whether a federal injunction is available to enforce the BPCIA requirement that a biosimilar applicant (“applicant,” i.e., a company seeking approval to market a biosimilar) engage in the “patent dance” by providing the reference product sponsor (“sponsor,” i.e., the company that markets the original biologic drug) a copy of its biologics license application and certain related manufacturing information, and (2) whether the BPCIA’s 180 days’ pre-marketing notice requirement must be satisfied after the U.S. Food & Drug Administration (“FDA”) has approved the applicant’s biosimilar application.  The short answer to both is no.… Continue Reading

Fifth Circuit Confirms a Summary Plan Description May Also Act as the Plan Document under ERISA

The U.S. Court of Appeals for the Fifth Circuit reiterated its prior determination that a Summary Plan Description (“SPD”) for an employer-sponsored, group medical plan subject to ERISA could also serve as the plan document, provided it contains all of ERISA’s written plan document requirements. The court further held that in this case the SPD’s reference to a non-existent plan document was not material or detrimental to the participant under the plan. Historically, “plan booklets” for medical plans have contained the relevant SPD provisions regarding the benefits payable and the procedures for filing claims for benefits. However, many of those booklets did not contain all of ERISA’s requirements for an SPD or for the written plan document, including claims appeals procedures and certain other provisions, such as funding sources, amendment and termination provisions, and other required details. As a result, we have consistently recommended that the plan booklet be carefully… Continue Reading

Supreme Court Holds that Church Plan Exemption Applies to Church-Affiliated Hospital Retirement Plans

In an eight to zero decision, the U.S. Supreme Court held that ERISA’s church plan exemption applies to plans maintained by a church-affiliated organization whose principal purpose is the administration or funding of a retirement plan covering employees of a church or a church-affiliated organization (which the Court dubbed principal-purpose organizations), even if the retirement plan was not originally established by a church. Church plans are generally exempt from ERISA, including its fiduciary and minimum funding requirements. Multiple lower courts previously held that the church plan exemption did not apply to the retirement plans of Advocate Healthcare Network, Dignity Health, and St. Peter’s Healthcare System, which are church-affiliated healthcare systems, because their plans were not originally established by a church, but rather by the healthcare systems. Applying a plain-text reading of the statute and noting that the federal government had long agreed the exemption applied to such retirement plans, the Supreme Court… Continue Reading

Puerto Rico Tax Amendments Impact Highly Compensated Employees and Contribution Limits

A new legislative act in Puerto Rico, Act No. 9-2017 (the “Act”) amends the Puerto Rico tax code and the Trust Act of 2012, affecting qualified retirement plans and impacting highly compensated employees (“HCEs”). Among several changes, the Act fixes a new dollar threshold for HCEs at $150,000 (previously $120,000 (which is the same as in the U.S.)). The new HCE dollar threshold is fixed and now classifies corporate officers based on that threshold as well (the Act no longer requires employers to treat corporate officers as HCEs regardless of their pay). The Act also modifies the limits on per-participant contributions to defined contribution plans. The Act will limit contributions to the lesser of 25 percent of “net income” (which is currently undefined) and $75,000. This change modifies the per-participant contribution limit which is currently the same under both the Puerto Rico and U.S. tax codes (i.e., the lesser of 100… Continue Reading

Telemedicine Parity for Texas

Texas Senate Bill 1107 was signed into law on May 27, 2017, bringing welcome change to the rules governing telemedicine benefits in Texas that are comparable to those in other states. Some significant changes include: (i) a physician-patient relationship can be established without in-person contact or the presence of another healthcare provider with the patient during the telemedicine visit through the use of live or delayed audio/video, and (ii) a telemedicine provider may write prescriptions for the patient as a result of the telemedicine visit. The use of delayed audio/video (e.g., a recorded video sent via email) is permitted when the telemedicine provider reviews the patient’s medical records or other relevant material. The appropriate standard of care for a telemedicine benefit is the same as for inpatient physician visits, and telemedicine providers must inform patients about appropriate follow-up care. Senate Bill 1107 directs certain state agencies to jointly issue rules… Continue Reading

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