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Congress Takes Steps to Help Failing Multiemployer Plans

Posted on by Megan England

There has been a lot of chatter as of late about possible legislation and efforts on the Hill to provide relief to failing multiemployer pension plans. On Thursday, November 16th, House Democrats introduced a bill that would allow multiemployer pension plans to receive loans from Treasury.

While the language of the bill is not yet available, according to congress.gov, the bill is intended to create a Pension Rehabilitation Trust Fund and to establish a Pension Rehabilitation Administration (PRA) within the Department of the Treasury to make loans to multiemployer defined benefit plans, and for other purposes. The PRA would allow pension plans to take out loans at low interest rates, in order for the plans to remain solvent and continue providing full retirement benefits for current and future retirees. The money for the loans would come from the sale of Treasury-issued bonds to financial institutions. There will likely be some reporting requirements and other restrictions for plans that take out such loans, to ensure that the plans can pay back the taxpayers.

This bill is in the first stage of the legislative process. The bill is now assigned to three House committees for review and consideration. If approved, it will then be sent to the House or Senate as a whole. A bill must be passed by both the House and Senate in identical form and then be signed by the President to become law.

Mental Health Parity Rules Include Eating Disorders as Mental Health Conditions

Posted on by Megan England

On June 16, 2017, the Department of Labor (DOL) issued FAQ 38 implementing the Affordable Care Act (ACA) as it relates to the Mental Health Parity Act and Addiction Equity Act (MHPAEA) and the 21st Century Cures Act (Cures Act). The DOL is requesting comments on a draft model form for participants to use when requesting information about nonquantitative treatment limitations as well as confirming that benefits for eating disorders must comply with the MHPAEA.

The MHPAEA requires that financial requirements such as coinsurance and copayments and treatment limitations such as visit or day limits for mental health and substance use disorder benefits are no more restrictive than those placed on medical and surgical benefits. The regulations also state that a non-quantitative treatment limitation must be comparable.

The Cures Act requires that benefits for eating disorders are consistent with the requirements of MHPAEA. The DOL in this FAQ clarifies that the MHPAEA applies to any benefits a plan may offer for treatment of an eating disorder. Plans should review their plan information to ensure compliance with these regulations and guidance.

All comments regarding disclosures and eating disorders must be submitted by September 13, 2017.

Treasury Denies Application to Suspend Benefits for Automotive Industries Pension Fund

Posted on by Megan England

The U.S. Treasury Department has denied the application to suspend benefits under the Multiemployer Pension Reform Act of 2014 that was submitted by the Automotive Industries Pension Fund in September 2016. Treasury noted in its denial letter that assumptions regarding mortality, Joint and Survivor election percentage by married participants, and the probability of benefit commencement by terminated vested participants over the age of 70 were considered not reasonable.

The Automotive Industries Pension Fund is projected to become insolvent in 2030 without the suspensions.  As of January 1, 2016, the Plan had an unfunded benefit liability of over $700 million, was 60.7% funded, and covered over 25,000 participants.

As of the date of this posting, Treasury has received applications for benefit suspensions from a total of 15 multiemployer pension plans since MPRA took effect.  Five have been denied, one has been approved, three have been withdrawn, and six are pending.

Are Your QDRO Practices Costing Your Plan Money?

Posted on by Megan England

Complying with qualified domestic relations orders (QDROs) can be complicated.  This article covers the basics of QDRO administration and points out the common mistakes plans make.

Are Your QDRO Practices Costing Your Plan Money?

Jim McKeogh and Mandy Notaristefano published this article in the October 2016 issue of Benefits Magazine.

 

 

American Health Care Act Passes the House

Posted on by Megan England

The U.S. House of Representatives passed HR 1628, the American Health Care Act (AHCA), by a vote of 217-213 on May 4, 2017.  This bill is the first step in the Trump Administration’s process to repeal and replace the Affordable Care Act, also known as the ACA or Obamacare.

The AHCA, as written, eliminates the individual mandate to buy health insurance, changes subsidies from income-based to age-based, ends Medicaid expansion, lessens coverage requirements for insurance companies and eliminates taxes on high-earners.  The AHCA retains coverage for those with pre-existing conditions, but allows insurers to charge higher premiums to such individuals.

The bill will now head to the Senate.  The GOP has a much narrower majority in the Senate (52-48) than in the House (238-193) and many Senate Republicans have already stated that they will likely rewrite the legislation or start over completely.

PCORI Fees Due July 31st

Posted on by Megan England

The ACA established the Patient Centered Outcomes Research Institute (PCORI) to fund research that can help patients and those who care for them make better-informed decisions about the healthcare choices they face every day, guided by those who will use that information.  The research is funded in part by health insurers and sponsors of self-insured plans through PCORI fees.

Generally, the PCORI fees apply to group health plans (including self-insured plans).  The IRS chart found HERE describes which health plans are subject to the fee.  Those health plans are required to report and pay fees annually using IRS form 720.  Form 720 is due July 31, 2017 for plan years ending in 2016 along with payment in the following amount:

  • $2.17 per covered life for plan years ending between January 1, 2016 and September 30, 2016
  • $2.26 per covered life for plan years ending between October 1, 2016 and December 31, 2016

There are three methods for calculating the number of covered lives:

  1. Actual Count Method – Calculate the lives covered for each day of the plan year and divide by the number of days in the plan year.
  2. Snapshot Method – Add the lives covered on a date during the first, second, or third month in each quarter, or an equal number of dates for each quarter, and divide the total by the number of dates on which a count was used. There are two methods for counting family members: Count the actual lives covered on the designated date; or Count the participants on the designated date and multiply by 2.35.
  3. Form 5500 Method – Add the participants at beginning of year and end of year as reported on the Form 5500 for the plan year (this method may be used only if the Form 5500 is filed no later than the due date for the fee imposed for that plan year).

For more information, click HERE for a question and answer page provided by the IRS.

IRS Proposes Individual Mandate Regulations

Posted on by Megan England

The Internal Revenue Service (IRS) issued proposed regulations addressing the individual shared responsibility payment provisions of the Affordable Care Act. Beginning January 1, 2014, individuals are required to maintain minimum essential health coverage or pay a penalty known as a shared responsibility payment unless the individual qualifies for an exemption. Continue reading →