USA: Alliant’s Employee Benefits Compliance & Fast Facts

The following information was provided to us by Asinta Partner in the United States, Alliant.

ACA Update: GOP Proposed Amendment to the American Health Care Act (AHCA)

House Republicans have been working to bridge the gap between the moderate and conservative factions of the party in a renewed effort to repeal and replace the ACA before President Trump’s first 100 days in office, which is April 29. Yesterday a one-page summary of the proposed ‘‘MacArthur Amendment’’ was released. The amendment is not proposed legislation or an actual amendment to the AHCA. At this point, it is simply a fairly high level summary proposal of what the changes the amendment would make. The proposal notes that the amendment would:

  • Reinstate essential health benefits (‘‘EHBs) as the federal standard (revising a provision of the AHCA that would have required state to define EHBs)
    • Allow states to obtain limited waivers from those federal EHB standards. The requirements for waivers under the proposed amendment would be much less stringent than the ACA state innovation waiver requirements under section 1332
    • States could also seek waiver from the community rating rules, with the exception of rating based on gender, age (other than the 5:1 permissible under the AHCA), or health status
  • Maintain popular ACA provisions (market reforms), including:
    • Prohibition on preexisting condition exclusions
    • Prohibition on discrimination based on gender
    • Guaranteed issue and renewability requirements
    • Coverage of adult children up to age 26
    • Community rating, except as permitted by waiver

Given the current political climate, it is unclear whether the House will move forward with an amended AHCA when it returns from spring recess next week. Moreover, it also remains unclear whether the proposed amendment will garner enough votes for the bill to pass the House. We will closely watch the developments and keep you posted on the changing landscape of repeal and replace.

ACA Update: HHS Finalizes Market Stabilization Rules

On April 18, 2017, the Department of Health and Human Services (HHS) finalized ACA rules impacting the small group and individual markets, with the intent of stabilizing those markets and improving the risk pool. The final regulations are largely unchanged from the proposed regulations issued in February and are effective June 17, 2017. They provide:

  • Exchange Open Enrollment: The annual open enrollment window is shortened to November 1 through December 15, 2017 (rather than January 31st 2018).
  • Exchange Special Enrollment: Individuals seeking special enrollment (e.g., enrollment outside of the open enrollment period) must submit documentation of eligibility as part of the pre-enrollment verification process. The ‘‘exceptional circumstances’’ allowing special enrollment have also been curtailed.
  • Guaranteed Availability/Unpaid Premium: The ACA limits an insurance company’s ability to terminate or refuse coverage where an individual has fallen behind on their premium payments. The final regulations give carriers more flexibility to use payments for renewed coverage to pay a prior year’s outstanding premiums, and to refuse enrollment for individuals who owe past-due premiums. This change is in response to carrier concerns that enrolled individuals were defaulting on late calendar year premium payments (taking advantage of payment grace periods to avoid cancellation of coverage), and then re-enrolling in the new calendar year on the basis of the guaranteed availability rules.

While these final rules address the need to stabilize the individual health insurance market in the short term, both the press release for the rule and the language in the preamble convey the administration’s continued desire to repeal and replace the ACA.

Confused About Wrap Documents?

You’re Not Alone! ERISA requires that plans create and provide participants with Summary Plan Descriptions (SPDs). ERISA also requires that plans be maintained pursuant to a ‘‘plan document.’’ In spite of some debate, most agree that an SPD and plan document can be a single document if labeled as both. However, SPDs have very specific required content. Wrapping multiple ERISA benefits through the use of a ‘‘wrap’’ plan document or ‘‘wrap’’ SPD reduces the number of SPDs a plan sponsor must prepare and distribute and allows plan sponsors to file a single Form 5500 for all of their ERISA benefits (e.g. medical, dental, LTD, AD&D, life insurance). Without a wrap SPD, multiple SPDs and multiple Form 5500 filings are technically required (subject to the small plan Form 5500 filing exemption). Although carriers or TPAs for self-funded plans often provide documents that include ‘‘SPD’’ in the title, those documents seldom contain all of the ERISA required content and only apply to that particular benefit option. A wrap SPD can effectively supplement the content provided by a carrier or third party administrator and bring your plan into compliance. In short, a wrap is generally used for two purposes:

  1. To consolidate multiple component benefits into a single plan (e.g., medical, dental, vision, etc. all identified in a single SPD as plan 501); and
  2. To supplement content provided by a carrier or TPA in order to comply with ERISA disclosure requirements.

As always, please contact your dedicated Alliant account team member if you have additional questions.

FAQ of the Week

We offer voluntary benefits (e.g., AFLAC) to our employees. Should those benefits be included in the 5500 filing?

It depends on the employer’s level of involvement in the provision of the voluntary benefit. Generally an employer must include all ERISA covered benefits in its 5500 filing (per above, these plans should also be included in the Wrap SPD). DOL regulations, however, contain a safe harbor exception for certain voluntary plans for which employees pay the full premium and the employer has minimal involvement. The determination of whether a plan falls within this safe harbor is not always clear cut but generally a plan must satisfy the following conditions to be considered a voluntary plan:

  • No contributions are made by the employer (including employee pre-tax contributions through the section 125 plan)
  • Participation in the program is completely voluntary for employees or members
  • The sole functions of the employer are:
    • to permit the insurer to publicize the program to employees or members
    • to collect premiums through after-tax payroll deductions and remit them to the insurer o employer should not endorse the plan, e.g. white labeling or otherwise using the employer’s name or branding should be avoided
  • The employer receives no consideration in the form of cash or otherwise in connection with the program, other than reasonable compensation for administrative services in connection with after-tax payroll deductions.

Contact your Alliant representative with any questions about voluntary plans and 5500 filings.

Thanks to Alliant for providing us with this content. If you have any questions regarding compliance in the United States, please get in contact with Alliant via their contact page here.