Health & Welfare

Court Rejects Third-Party Administrator's Cross-Plan Offsetting Practice

The Eighth Circuit Court of Appeals, in Peterson v. UnitedHealth Group Inc., has upheld a district court's decision that a third-party administrator ("TPA") cannot engage in cross-plan offsetting to recover overpayments. Background. Group health plans typically have both in-network and out-of-network providers. In administering group health plans, TPAs sometimes overpay service providers. For ...

FMLA Leave Cannot be Assessed if Employee Not Required to Report to Work

The U.S. District Court for the District of Alaska, in Acosta v. State of Alaska, has held that an employer could not count the time that a rotational employee was not scheduled to work as part of his leave entitlement under the Family and Medical Leave Act ("FMLA").

Guidance on Parking Expenses as Qualified Transportation Fringe Benefits

The IRS has released Notice 2018-99 to provide guidance to taxpayers on determining the amount of parking expenses for qualified transportation fringe benefits that is nondeductible and/or subject to unrelated business Income Tax ("UBIT"). Notice 2018-99 comes in the wake of the Tax Cuts and Jobs Act of 2017 (the "Act") which revised the law concerning deductions for expenses related to qualified ...

Insurer's Acceptance of LTD Insurance Premiums Does Not Guarantee Coverage

A federal district court has ruled, in Ward v. Aetna Life Insurance Company, that a long-term disability ("LTD") insurer's denial of the plaintiff's benefit claim was appropriate even though the plaintiff had paid the required premiums and was told in writing that he had coverage. Background. The plaintiff's employer contracted with the defendant insurer to provide its employees LTD coverage ...

2019 Medicare Part A Deductibles and Part B Premiums

The Centers for Medicare & Medicaid Services ("CMS") has announced the Medicare Part A deductibles and Part B premiums for 2019. Medicare Part A covers inpatient hospital and hospice care, while Part B covers outpatient services such as doctors' visits. The Part A deductible for inpatient hospital expenses will be $1,364 in 2019, a $24 increase over the prior year. For the 61st through 90th day ...

Federal Court Rules Affordable Care Act Unconstitutional

A federal district court, in the Northern District of Texas, has ruled, in Children's Hospital Association of Texas v. Azar et. al., that the individual mandate provision contained in the Affordable Care Act ("ACA") is unconstitutional. Furthermore, the court ruled that the individual mandate was inseverable from the ACA and, therefore, the entire law is invalid. Background. After the ACA's ...

FMLA Claim Viable Even Though Employee Not Yet Eligible for FMLA Leave

The U.S. District Court for the Eastern District of Wisconsin, in Reif v. Assisted Living by Hillcrest LLC, has confirmed that a Family and Medical Leave Act ("FMLA") claim may be triggered when an employer promised FMLA coverage before an employee's eligibility under the statute took effect. Law. Employees are not eligible for FMLA leave unless, among other things, they have worked for a covered ...

IRS Extends Deadline for ALEs to Distribute 2018 ACA Reporting Forms to Individuals

The IRS has issued Notice 2018-94, which provides a 30-day extension to the deadline for Applicable Large Employers ("ALEs") to distribute the 2018 Affordable Care Act ("ACA") reporting forms to employees and covered individuals.

IRS Issues Additional Guidance on Proposed HRA Regulations

The IRS has issued Notice 2018-88 to provide guidance on its proposed Health Reimbursement Account ("HRA") regulations and their application to two Internal Revenue Code requirements: the Affordable Care Act ("ACA") employer mandate penalties (i.e., Code Section 4980H) and the nondiscrimination rules for self-funded group health plans (i.e., Code Section 105(h)). Background. IRS, DOL and HHS have ...

IRS Releases 2019 Limits for Welfare Benefit Plans: Health FSA and HSA Limits Increase

The IRS has released the 2019 inflation-adjusted limits for certain employee welfare benefit plans and the dollar amounts used for certain discrimination tests. Health FSAs. The limit for employee salary reduction contributions for health flexible spending account coverage for 2019 is $2,700, an increase of $50 over the amount for 2018. Health Savings Accounts. The 2019 limit on contributions to ...