American Benefits Council
Benefits Byte


October 23, 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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DOL Guidance Addresses Socially Responsible Investing

In Interpretive Bulletin 2015-01, to be published on October 26, the U.S. Department of Labor is providing guidance on the selection of “economically targeted investments” (ETIs) under ERISA’s retirement plan fiduciary standard.

ETIs, also known as “socially responsible” investments, are those that are selected for the real-world benefits they create in addition to the investment return to the employee benefit plan investor. In a statement announcing the guidance, Labor Secretary Thomas E. Perez said that the DOL had been told that Interpretive Bulletin 2008-1 (IB 2008-1) unduly discouraged plan fiduciaries from considering ETIs.

In light of improved financial analysis, the DOL is clarifying its position by withdrawing Interpretive Bulletin 20 08-01 and replacing it with Interpretive Bulletin 2015-01, which reinstates the language of Interpretive Bulletin 1994-01.

This revision confirms DOL’s view that “fiduciaries may not accept lower expected returns or take on greater risks in order to secure collateral benefits, but may take such benefits into account as ‘tiebreakers’ when investments are otherwise equal with respect to their economic and financial characteristics. The guidance also acknowledges that environmental, social, and governance factors may have a direct relationship to the economic and financial value of an investment. When they do, these factors are more than just tiebreakers, but rather are proper components of the fiduciary's analysis of the economic and financial merits of competing investment choices.”

For more information, contact Jan Jacobson, senior counsel, retirement policy at (202) 289-6700.

House Approves Budget Reconciliation Measure Repealing Key Provisions of ACA

The U.S. House of Representatives, by a party-line vote of 240-189, has approved a budget reconciliation bill that repeals several elements of the Affordable Care Act.

H.R. 3762 would:

  • Repeal of the ACA individual mandate (Internal Revenue Code Section 5000A)
  • Repeal of the ACA employer “shared responsibility” mandate (Code Section 4980H)
  • Repeal of the 40 percent excise tax on high-cost plans (Code Section 4980I)
  • Repeal of the medical device tax (Code Section 4221)
  • Repeal the ACA automatic enrollment requirement (Section 18A of the Fair Labor Standards Act)
  • Repeal of the ACA Independent Payment Advisory Board
  • Repeal of the Prevention and Public Health Fund
  • Eliminate funding for Planned Parenthood

With the House’s approval, the bill will now proceed to the Senate, where it is likely to pass, although it is unclear whether amendments will be permitted.Under Senate rules, a reconciliation bill cannot be filibustered but, and only require a simple majority (rather than 60 votes) for passage.. (Republicans only have a majority of 54 seats in the Senate.)

Repeal of the 40 percent tax remains one of the Council’s highest policy priorities. As we have previously reported, the Council – as part of its own advocacy strategy and as the organizer of the broad-based Alliance to Fight the 40 coalition – has already expressed its support for bipartisan legislation in the House and Senate to eliminate the tax (see the September 17 Benefits Byte). Repeal of the 40 percent tax has been newly estimated to cost $91 billion over ten years.

The Council has also opposed the automatic enrollment provision of ACA and recommended its repeal in the Council’s 2020 Vision, strategic plan adopted last year. We have argued that the requirement is unnecessary since virtually everyone is already legally required to have coverage under the ACA. We also note that automatic enrollment couldpotentially have adverse consequences on employees' eligibility for premium tax credits and cost-sharing reductions.

Recognizing that repeal of the employer mandate is highly unlikely, the Council has focused its attention on elements of that provision that continue to present administrative challenges for employers. In a package of legislative recommendations issued earlier this year, the Council suggested modifying the employer “shared responsibility” requirements to relieve the burdens on employers that, among other implications, create disincentives for employing "full-time employees" as defined by the law.

Since President Obama has already said that he will veto H.R. 3762 as it is currently constituted, this vote is largely a political exercise. It does, however, provide support for some of the Council’s ACA priorities. For more information, contact Katy Spangler, senior vice president, health policy, at (202) 289-6700.

New ACA FAQ Guidance Addresses Preventive Care, Wellness, Mental Health

On October 23, the U.S. Departments of Labor (DOL), Health and Human Services (HHS) and Treasury issued a new Frequently Asked Questions (FAQ) document providing additional guidance on implementation of the Affordable Care Act (ACA) as well as the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), as amended by the Affordable Care Act. The 13 new questions and answers address certain preventive care requirements, the treatment of non-financial (or in-kind) incentives used in outcome-based wellness programs and disclosure requirements under the MHPAEA

Under the ACA, non-grandfathered group health plans and health insurance coverage must cover certain preventive care services without the imposition of cost-sharing. The FAQs clarify requirements related to coverage of preventive care as related to lactation services, weight management services, colonoscopy screenings, contraceptive coverage and BRCA gene breast cancer screening. As explained in the FAQs:

  • Plans and insurers are required to provide a list of lactation counseling providers within the plan network. For group health plans with provider networks that are subject to ERISA, the listing of providers can be furnished in a separate document accompanying the Summary Plan Description (SPD), as long as the SPD describes the provider network and states that provider lists are furnished automatically, without charge, as a separate document.
  • Plans and issuers are not permitted to impose cost-sharing with respect to lactation counseling services obtained outside the network, if the network does not include lactation counseling providers.
  • Lactation counseling must be covered without cost-sharing when it is performed by an provider acting with the scope of his or her license or certification under applicable state law and must be covered whether provided on an in-patient and or outpatient basis.
  • The requirement to cover the rental or purchase of breastfeeding equipment without cost sharing extends for the duration of breastfeeding, provided the individual remains continuously enrolled in the plan or coverage.
  • Group health plan or insurance coverage cannot contain a general exclusion for weight management services for adult obesity.
  • A pathology exam on a polyp performed in connection with a preventive colonoscopy must be covered without cost sharing.
  • Cost-sharing may not be imposed for a consultation by a specialist prior to a screening colonoscopy.
  • Two methods are available to effectuate the religious accommodation for qualifying non-profit or closely-held for-profit employers who hold religious objections to providing contraceptive coverage.
  • The FAQs further clarify which women must receive coverage without cost sharing for genetic counseling, and if indicated, testing for harmful BRCA mutations.

The new FAQ guidance also clarifies that if a group health plan provides rewards in the form of non-financial (or in-kind) incentives (for example, gift cards, thermoses, and sports gear) to participants who adhere to a wellness program, those non-financial incentives are subject to the wellness program regulations issued by the Departments.

Several clarifications related to disclosure requirements under the MHPAEA addressed the criteria for making medical necessity determinations. As explained in the FAQs, requests for copies of medical necessity criteria for both medical/surgical and mental health/substance use disorder benefits (including anorexia) – as well as any information regarding the processes, strategies, evidentiary standards, or other factors used in developing the medical necessity criteria and in applying them – as required by the MHPAEA may not be denied on the basis that the information is “proprietary” and/or has “commercial value.” The FAQs further state that, although they are not required to do so, group health plans and issuers can provide a document that provides a description of the medical necessity criteria in layperson’s terms. However, providing such a summary document is not a substitute for providing the actual underlying medical necessity criteria, if such documents are requested.

For more information, contact Kathryn Wilber, senior counsel, health policy, or contact Katy Spangler, senior vice president, health policy, at (202) 289-6700.

Morning Consult Profiles Council’s Katy Spangler

Katy Spangler, Council senior vice president, health policy, was the subject of an October 21 profile by Morning Consult, an online publication covering the intersection of Washington and industry.

In the article, Katy discussed her tenure as deputy health policy advisor for the Republican members of the U.S. Senate Health, , Education, Labor and Pensions Committee during development of the Affordable Care Act (ACA). While she voiced her frustration with the partisan wrangling that led to a flawed final product, she expressed herdetermination to pursue the American Benefits Council’s advocacy priorities to improve the law in order to make it more affordable and administrable for the Council’s member companies.

Katy is available to discuss the Council’s health policy priorities 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).