American Benefits Council
Benefits Byte

2015-042

April 10, 2015

The Benefits Byte is the American Benefits Council’s regular e-mail and online newsletter for members only, providing timely reports on legislative, regulatory and judicial developments, along with updates on the Council’s activities in support of employer-sponsored benefit plans.

The Benefits Byte is published by the American Benefits Council, based on staff reports and edited by Jason Hammersla, Council director of communications. Contact information for Council staff related to specific topics can be found at the end of each story.

Click here to read past issues on the Benefits Byte Archive page.

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CMS Reverses Course on Medicare Advantage Cuts

In an April 6 press release, the U.S. Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) announced that Medicare Advantage (MA) rates would increase by 1.25 percent, avoiding a rate cut that had been predicted by the agency and that the Council (and other employer groups) had argued would be harmful to seniors and employer health plan sponsors.

In a February 20 advance notice of methodological changes, CMS had proposed a 0.9 percent cut in the 2016 payment rates for the MA program, in addition to the MA cuts in President Obama’s Fiscal Year 2016 federal budget proposal, which included $43.4 billion in MA-related cuts over the next decade. Nearly $7.2 billion of the cuts would affect MA Employer Group Waiver Plans (MA-EGWP plans). These cuts would have been in addition to the provisions in the Patient Protection and Affordable Care Act (PPACA) that are expected to reduce MA funding by $200 billion by 2019. The April 6 announcement indicates that the forthcoming MA Payment Guide will instead increase MA payment rates by 1.25 percent in 2016.

The initially predicted cuts posed significant concerns for retiree health plan sponsors, insurers, and beneficiaries. The Council joined other employer groups in a February 18 letter to CMS that stated these cuts would cause employers to face “significant challenges in building long-term strategies for effective retiree coverage .... Not only do MA cuts hurt millions of seniors through reduced benefits, narrower networks, and higher out-of-pocket costs, but employers who want to sustain group-sponsored Medicare retiree coverage are simultaneously pressured by rising health costs” (see the February 19 Benefits Byte).

The Council joined a similar group letter urging against further MA cuts in March 2014 and also filed its own letter expressing similar concerns in February 2014 (see the March 10, 2014, Benefits Byte for more information). For more information, contact Kathryn Wilber, senior counsel, health policy at (202) 289-6700.



A Bit About Your Benefits: Associate Membership

The Council is honored to have nearly 400 corporate member organizations who, collectively, have extended “associate membership” to 6,800 benefits professionals within their organizations.

This Benefits Byte is just one example of the services we provide. All Council benefits for associate members are included, without additional cost, under a corporate member’s annual dues investment.

If you have a colleague at your company who is not currently receiving Council materials and would like to be included under your company’s membership, they can sign up here. Our staff will reply back with a welcome e-mail confirming their associate membership.

Should you depart your employer for another organization, your associate membership does not transfer. However, we encourage you to join through your new employer. A full list of Council members is available and information about corporate memberships can be obtained by clicking here.

For more information, contact Deanna Johnson, director, membership; Sondra Williams, manager, member & staff engagement; or Mary Lindsay, receptionist, at (202) 289-6700. 



The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council's members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.

Notice: the information contained herein is general in nature. It is not, and should not be construed as, accounting, consulting, legal or tax advice or opinion provided by the American Benefits Council or any of its employees. As required by the IRS, we inform you that any information contained herein was not intended or written to be used or referred to, and cannot be used or referred to (i) for the purpose of avoiding penalties under the Internal Revenue Code, or (ii) in promoting, marketing or recommending to another party any transaction or matter addressed herein (and any attachment).