ERISA is a friend of mine
Whoever said employee benefits compliance can’t be fun was pretty much exactly right … until now. The bold and modestly deranged ERISA experts from Lockton Benefit Group’s Compliance Services division throw all caution to the wind and attempt to make plain the intricacies of employee benefits while laughing through it all. Nothing in this podcas
What exactly is the “lost ark” of ERISA? Ed and Scott welcome Lockton’s very own tomb raider, Jay Kirshbaum, J.D., LLM, to find out. Together they decode a recent private letter ruling (PLR) from the IRS to discover a surprise lever that may allow employers to offer employees a nontaxable choice between employer contributions to a retirement plan or to a retiree HRA. Jay leads the boys through the labyrinth of tax rules like only someone with a master’s degree in tax law can and delivers up the holy grail of tax-favored benefits. Full of exciting twists and turns, this episode dives into: Is tax law interesting and provocative? (Hint: depends on who you ask) What exactly is a PLR? Does the recent PLR change the rules for offering employees a choice between HRA and retirement plan contributions? What is constructive receipt, and why do we care? How does the PLR promote the gloriously tax-advantaged vehicle that is an HRA? Why should employers care? What is an unfunded liability? Why does the term give Ed a fever? How can he get his hands on the Social Security trust fund? Where does COLI come into play? Is it even still legal? Has an employer that buys COLI “chosen wisely?”
ERISA is a friend of mine is back! And better than ever. We kick off this season with the way-back-machine set to 2010 and the introduction of the “contraceptive mandate” in the Affordable Care Act, or ACA, or Obamacare if that’s your thing. Anyway, whatever you call that law, it guaranteed women cost-free access to all FDA-approved contraceptives through group health plan coverage … kind of. In the socially distanced Season 4 opener, Ed and Scott (both men) dive into treacherous waters to clarify the complex history – and potential future – of the ACA’s contraception mandate. Together again in (a modified) studio, the dynamic duo confer on the following: What does the ACA actually say about contraceptives? What is HRSA is and why does it matter? Who can opt-out of the contraception mandate? (Hint: It’s not just churches anymore) What’s the difference between a law and a regulation? And when does the Constitution come into play? How did the Trump Administration change the Obama Administration’s regulations on the contraception mandate? How will the upcoming election affect the future of the contraception mandate? Can Ed & Scott lead listeners to the ERISA promise land this season? (Of course!)
It’s not often the government more or less invites employers to break the rules, and simultaneously grants amnesty for past violations, but that’s just what the IRS is doing in 2020 for cafeteria plan coverage changes. Well, sort of. In this special bonus episode, Ed and Scott explore how the IRS is changing the rules in ways it would never have done but for the pandemic. They also shed a few tears over something not so helpful to employers: a tolling of the clock for several key health plan deadlines that plan enrollees would otherwise have to meet. The result creates administrative hassles and adverse selection risks. What is an outbreak period? (Surely, it’s different from what Scott had since high school.) What deadlines are the feds suspending, and for how long? Is adverse selection something Ed’s wife experienced when she said “I do,” or is it a health plan financial risk to employers? Are the IRS’s new cafeteria plan accommodations required? Can an employer, if it decides to play along, limit the cafeteria plan changes it’s willing to allow? How does a flexible spending account grace period grow from 2.5 months to 12 months?
As employers begin reopening their worksite doors to their employees, some find ACA employer mandate challenges coming through the door as well. These issues are forcing employers to revisit and reevaluate, in ways they’ve never before encountered on this scale, how that mandate operates and what it requires. In our fourth shelter in place episode, Ed and Scott discuss the ACA implications of returning to work. Find out how paid leave, furloughs, layoffs and more impact employees‘ eligibility for medical coverage, particularly where the employer’s medical plan hard wires eligibility to ACA full-time employee status. Oh – and they welcome the return of the lightning round … pew-pew-pew! Does the nature of the absence – paid or unpaid, furlough or lay off - impact eligibility status when employees return? How quickly might coverage need to offered upon return, and under what circumstances? Why does ACA full-time status determinations make Scott hungry for salted cashews? How do paid and unpaid leaves impact the current measurement period? How do they affect ACA full-time status, and eligibility, in 2021? Can employers impose a new waiting period for returning furloughed or laid off employees? When does re-imposing a waiting period for rehired employees trigger an ACA employer mandate nuclear penalty? And don’t miss answers to the CARES Act frequently asked questions in the lightning round!
The Coronavirus Aid, Relief, and Economic Security, or CARES, Act was passed to give businesses big and small, along with their employees, a package of lifelines to get through our current unprecedented times. In this shelter-in-place episode, Ed and Scott analyze the potpourri of relief the CARES Act offers employers and their group health plan enrollees, including coverage mandates, tax credits and loans – each with its own terms and conditions. What healthcare plan mandates are included in the CARES Act? What plans do they apply to? When do the mandates expire? Can plans offset the cost of the mandates by increasing cost sharing on or eliminating other benefits? (Hint: The feds are not a fan of this thinking.) If an employer amends the plan based on the mandates, do they need to provide advance notice? How do all these tax credits and loans work? And how do they benefit the employer AND the employee? Which employers are eligible for the Paycheck Protection Program (PPP)? How much can a business get? Is there even any money left? How can a business have its PPP loan forgiven? What are Main Street loans? How are they different from PPP loans? Under the payroll tax deferral provisions of CARES, can an employer simply choose to not pay its payroll taxes and not worry about it? (No – you can still go to jail for not paying your taxes!) Why aren’t you guys funny anymore? Click here to access the fantastic guide to the PPP loan basics from Scott and the Lockton Government Relations team.
In a time when we are all trying to figure out how to best care for ourselves and our families, how concerned should employers be with playing by the rules governing their benefits plans? When is it appropriate to take liberties? What are the risks? Will anyone care? This special shelter-in-place episode of ERISA is a friend of mine addresses the challenges plan sponsors are grappling with right now: What needs to be done – if anything – to continuing benefits coverage for furloughed employees? How does furlough status impact affordability under the ACA, and risk the ACA’s “nuclear penalty”? What are the notice and employee premium refund issues related to the suspension of a medical plan? How flexible can employers be in allowing employees to make benefit changes? Just how many buildings has Scott been removed from, in addition to the US Capitol building? What does the new stimulus bill include that will impact employers and their retirement and medical plans? When grappling with benefits plan rules, is it better now to ask for permission or ask for forgiveness?
In this special episode, Ed and Scott tone things down a bit but still bring their “A” game, and plenty of hand sanitizer, to take on a serious topic … the new coronavirus, or COVID-19. Joined by experts Pam Popp, President of Lockton Retirement Services, and Stacie Engelmann, Senior HR Consultant, this episode tackles some of the key elements of employee benefits plans and HR policies that COVID-19 is sure to trigger questions about. Can employers limit a health plan’s coverage of coronavirus treatment? Should they? How does HIPAA effect how and what you can communicate about an employee that has contracted or been exposed to the virus? What are some of the factors actuaries are taking in to account to estimate potential cost? How can COVID-19 impact retirement plans? How far is this going to delay Ed’s retirement timeline? What would an HR policy around COVID-19, or a similar situation, contain? What can and should an employer do to prepare for an employee having, or being exposed to, the coronavirus? What are they doing on Capitol Hill? (Scott spends a lot of time there you know.) Insurers are waiving deductibles for COVID-19 testing, but does that blow up HSA plans? If this episode isn’t legal, medical or investment advice, then what the heck is it? NOTE: After recording this episode, and shortly before its release, the U.S. House of Representatives passed legislation that would expand paid sick and family leave to employees of governmental entities, and private employers with fewer than 500 employees. The bill would also require health plans (including self-insured plans) to cover coronavirus testing at no cost. The Senate is working on passing the measure this week.
Depending on who you are the CORBA law could be as scary as an actual cobra (or Cobra Kai). If you’re not careful, COBRA can strike and be deadly. Okay, maybe not deadly but at the very least costly. In this episode, Edward “Venom” Fensholt and Scott “The Snake Charmer” Behrens, show you some mercy with the basics of COBRA and detail all of its nuances. [Insert continuing Karate Kid reference here.] Is every employer subject to COBRA? Are there any exemptions? Does COBRA only apply to medical plans? When and who gets an initial COBRA notice? What happens if it doesn’t go out? When does COBRA apply? (HINT: It’s AND not OR.) What exactly goes into a COBRA election notice? Who gets one? When is it sent? What can an employer do if they lose track of an employee (wait, what?) and leave them on active coverage? How long can COBRA coverage last? How much can an employer charge for COBRA coverage? What do you call a lightning round that moves more like a sloth?
There is a lot of talk about "Medicare for All," but what about Medicare as we know it today? You’re probably thinking, “How hard can it be?” Well, you’re about to not only find out just how challenging it can be, but also contemplate questions like, “How long do pay the Parts B and D late enrollment penalties if you’re immortal?” In this episode, Ed and Scott discuss the intricacies of the current state of Medicare eligibility and coverage, a topic soon to be near and dear to (old man) Ed’s heart. The guys are joined by Mark Holloway, J.D., also of Lockton’s Compliance Services division, who gives the low down on: What is Medicare and who qualifies? What are the four main parts of Medicare? What’s the difference between them all? (Who is up for Medicare lasagna?) Do I automatically get my Medicare card in the mail when I turn 65? Is Medicare free? (As if it were that simple.) Can you just pay people over 65 to leave your employer plan and tell them to get Medicare instead? (No, duh. Even Priya knows that one.) Can an employee have dual coverage – both Medicare and an employer plan? If so, when does it makes sense? (Hint: Do not elect COBRA if you retire at 65 or later.) Can an employee on Medicare still make HSA contributions? Are there any penalties for not enrolling in Medicare when you’re first eligible? What the exceptions, and why are they traps for the unwary, like Ed?
Can employers provide one set of benefits to one group of employees and a different set to another? Short answer: in most cases, yes indeed. We have all sorts of laws preventing discrimination, but there are many ways employers can permissibly discriminate. Wait, what? In this titanic episode, Ed and Scott jump into discrimination in the benefits world, and how employers can and cannot legally “discriminate” in their benefits offerings. How are regulations around self-insured healthcare benefits and fully insured healthcare benefits different? What does the IRS have to say about it? Who is considered a highly compensated individual and why are they suspect? (Hint: Scott’s not one, but he is suspect in other ways.) Can the same plan treat different groups of employees differently, and how would the plan be tested? Who bears the consequence of impermissible discrimination? Are there any easy ways to negate the problem? How do HRAs, FSAs, HSAs and cafeteria plans play into this? And what about dependent care? HIPAA? GINA? Why does Scott keep talking about crab cakes?
We’ve come a long way from the days of itinerant purveyors of elixirs like “Dr. Good’s Cough Syrup and Hair Loss Tonic,” riddled with ingredients like mercury and opium. But how much more discerning are we today? In the first episode of the new decade (and new season), Ed and Scott discuss the latest medical miracle cure: stem cell therapy. The guys are joined by Dr. Shealynn Buck, Chief Medical Officer of Lockton Dunning Benefits, and Karen Amato, RN, Clinical Consultant in Lockton’s Northeast Series, and answer the key questions: What are stem cells and what do they do? Are they like the magic seeds Scott just sold to Ed? Who are stem cell purveyors marketing to, and what aren't they telling the buyer? Are stem cell treatments FDA approved? Can they be dangerous? How did stem cell treatments fare in the Mayo Clinic placebo test? Are stem cell treatments a cost-saving option for musculoskeletal conditions? What ERISA issues does medical plan coverage of stem cell therapies create?
The crew returns to the studio for a special holiday bonus episode! Ed and Scott breakdown the employee benefit implications of Congress’ year-end budget bill, what it includes and what’s missing, and what it all means for employers. This special episode walks listeners quickly through the package – complete with a little bonus song, from us to America – while Priya wonders when that department transfer request is going to come through.
It’s the final countdown! In part two of the last episode of the season, the guys really take flight on determining whether an employee is considered full-time under the ACA employer mandate. They explore measurement periods, who should get a coverage offer for the next plan year, and how long employers have to offer it before IRS penalties kick in. How’s the new dog, Jimmy? (Don’t ask Ed’s wife.) How can employers determine which employees have ACA full-time status? Do paid vacation and leave count in calculating an employee’s hours of service? (Yes.) Can Ed pronounce “extrapolates” correctly? (No.) How is earning full-time employee status like earning frequent flyer miles? What are the different measurement periods, and when should employers use them? Can we wrap this up and head to happy hour already? Remain calm - helpful charts are available through your Lockton account service team. We’ll see you again for season three, beginning in January 2020.
If you wish the Affordable Care Act’s employer mandate would just fade away, you’re not alone. But the mandate appears as entrenched as ever, and employers still struggle to understand its many requirements. Listen as Ed and Scott get into the basics of the employer mandate and its potentially nuclear penalties in the first episode of a two-parter. Is Ed’s new dog Jimmy assimilating to life outside the “big house?” Isn’t the Texas v. US case just pitting America against America? But really, what might it mean for the ACA as a whole? Ahoy there! How do you know if you’re in the employer mandate boat? What’s required in the two “tiers” of the employer mandate? (Prepare for a lot of “tears.”) Is the best way to calculate employees’ household income, for affordability purposes, with a Ouija board? (Scott would prefer to just see his psychic.) What are the penalties for not fulfilling the employer mandate, and is doing nothing a legitimate strategy?
If you’re listening to this podcast you might be a medical plan fiduciary … and there are a few things you need to know. Medical plan fiduciaries face a small, but significant, risk of litigation related to their plan’s administration, and related to what the fiduciaries should be doing but often aren’t. In this episode, we clarify who is a fiduciary and why your medical plan might need some regularly scheduled maintenance! Ethan McWilliams, who used to carry a badge at the DOL, joins Ed and Scott to talk about the role of a fiduciary, why it’s important for them to do a little medical plan “preventive maintenance,” and how a new service from Lockton, the Lockton Fiduciary Shield, can help. Are we saying goodbye to the “Cat Man?” Where are the most common fiduciary danger zones? Whoa, whoa…you’re saying fiduciaries are supposed to KNOW SOMETHING about how their plan operates? (Ed is concerned.) Why are good notes so critical to the fiduciary decision-making process? As a fiduciary, would you find a medical plan “owner’s manual” helpful? What do Scott and Stranger Things have in common? (Hint: nothing and everything!)
Jay Kirschbaum, best-selling author of ERISA in the Raw (not a real book), joins Ed and Scott to educate them on the many kinds and complexities of direct contracting. From hospital contracting to utilizing centers of excellence and even onsite clinics, each type of direct contracting has its own benefits and drawbacks. How do the different types of direct contracting benefit the plan sponsor? What control does direct contracting give the plan sponsor versus the third-party provider? Does direct contracting really save any money? (Or in Ed’s mom’s case, chickens?) How does direct contracting differ from reference-based pricing? What are the implications of direct contracting on ERISA fiduciary requirements? How can an employer determine if direct contracting is right for them?
What could be wrong with employers wanting to offer their employees a wellness program to encourage them to be healthier, happier people? According to the US government, A LOT! Over 20 years, federal agencies and Congress have passed wellness laws and issued regulations that are less than consistent with each other, making a simple idea increasingly complex for employers. In this podcast, Scott gets the scoop on wellness program regulations from Ed and Rory Akers. What did federal regulators fail to learn from the moon landing 50 years ago? What can employers do and NOT do when it comes to wellness programs? Does getting sued mean you did something wrong? (Ed hopes not.) What are the differences between the wellness regulations under the ACA, HIPAA, EEOC, ADA, GINA? Is Scott really missing part of his brain? How do employers apply wellness incentives to affordability analyses under the ACA?
In simpler times, health reimbursement arrangements, or HRAs, were furry, fluffy, friendly creatures in the benefits forest. But now … not so much. They’re multiplying like crazy, and growing fangs and claws. In this episode, Ed and Scott track the current species of HRAs, in all their varieties. How do the endlessly evolving types of HRAs differ from each other? What kind of HRAs can an employer offer, and to whom, without getting bitten? What do Tesla sedans have to do with HRAs? (Ed is slow on the take-up, and still not clear.) Can an employer offer young (tan) Scott a group plan and old (probably dying) Ed an HRA and a one-way ticket to Medicare? What advantages or “free passes” from complex ACA regulation do some of the new HRAs offer employers?
Prescription drug costs are a key concern for many plan sponsors, so much so that some are looking across the border to ease the financial burden. Ed and Scott welcome Lisa Carlson back to the podcast to discuss the legalities of bringing in drugs from another country...prescription drugs that is. Why would an employer consider offering imported prescription drugs? Are imported drugs really cheaper than what we have available in the US? Are imported drugs made in the jungle? How does one acquire these imported prescription drugs? (Ed’s eager to know.) Are there any clinical concerns with imported prescription drugs? Legal concerns? Is Lisa going to break Ed’s capitalist heart with this one? (Yes.)
After 10 episodes, Ed and Scott finally address the elephant in the room: ERISA … and why it should be your friend. We’ve discussed how it applies to everything from wilderness therapy to specialty drugs but what exactly is ERISA? Well, it’s an acronym for the Employee Retirement Income Security Act of 1974, but it applies to so much more than retirement plans. What employer-sponsored health and welfare benefits does ERISA apply to? When ERISA does apply, what does it require? (This question may or may not be a loaded one.) What on earth does ERISA have to do with Ed’s wife, bread or grilled cheese? What is the “crown jewel” of ERISA, and why should employers care? What does it take to reach your own moment of ERISA zen? What other laws are “parked in the ERISA garage?” Is Scott’s mom proud of him? And more.
In the first episode of season two, Ed and Scott welcome their retirement compliance counterpart, Sam Henson, J.D., to the podcast. Sam introduces the guys to “ERISA hell,” or the application of ERISA to 401(k) plans. This one is not for the faint of heart. What are the most common 401(k) plan mistakes? If you find a mistake, is the IRS really willing to “settle all family business?” How much can a 401(k) plan mistake cost you? Do 401(k) plan problems really go away if you “kiss the ring?” Is Ed obligated to pay Scotts 401(k) contributions if Scott “moves on?” What about those participants you want to pay out but can’t find? And more.
In our last episode of season one, Ed jumps into the conversation a bit prematurely but that doesn’t stop Scott from giving him the business about surprise medical bills. Much to Ed’s dismay, he learns that apparently, whether or not you know how much your medical bill is going to be, you are still supposed to pay it. Why do patient’s get surprise medical bills? How do you get a surprise medical bill from an in-network facility? Is Scott’s life really a dystopian hellscape? And could exposure to it trigger Ed’s heart attack? What is balance billing? And how is it currently being addressed? How is the government getting involved? (Scott knows; he’s fancy.) Are any states addressing balance billing? What about Congress? Is baseball arbitration as painful as it sounds? NOTE: Congress and the White House have continued to push solutions to surprise medical billing in between our taping and the release of our podcast. The White House held a press conference on the topic on May 9, 2019, and proposed legislation is expected before Memorial Day. We’ll provide an update in the show notes on specific policy proposals as they come available.
Drugs are expensive... especially the legal ones that keep many of us alive and in good health. With new specialty drugs in both the market and the pipeline, and mountains of cash changing hands as rebates between drug makers and pharmacy benefit managers (PBMs), an employer’s ability to understand – much less manage – its pharmacy spend is increasingly difficult. In the latest episode, Ed and Scott get the low-down from Sarah Martin on pharmacy analytics, the games played behind the PBM curtain, and what employers can do to keep their drug spend under control. Why are some drugs paid under the health plan’s medical rather than pharmacy component, and why does it matter? How can the site of a drug’s administration impact cost? Is Ed considered professional enough to “administer specialty drugs?” (No.) What is a rebate? How do they work? Who gets them? And how could new legislation change them?
As the universal healthcare rhetoric heats up on Capitol Hill, it’s time someone asks, “What does ‘Medicare for all’ actually mean?” Ed and Scott discuss how a single-payer system could impact the patient, employers, health plans and even the doctor. In this episode Ed’s “angry old man” persona makes an appearance as he and Scott run through the ups and downs of the various proposals and what it might do to health care quality and innovation in the US. And Ed might need a cardiologist after he hears what it could cost. This episode has us all wondering, is it time to finally just throw Ed off that cliff they talked about in episode one?
Is that the wilderness calling? In this episode, Ed talks wilderness therapy with Rory Kane Akers, J.D., former senior investigator for the DOL - Employee Benefits Security Administration. The two adventure deep into the backcountry of wilderness therapy and its potential impact on employer group health plans. What is wilderness therapy and who can it help? How much does it cost and do employers have pay for it? Why are there lawsuits over wilderness therapy coverage, and who is filing them? What’s MHPAEA and how does it/she/he relate to wilderness therapy? Is Sasquatch (the DOL) going to come after my business if we don’t cover it?
Employee benefit disclosure obligations were first developed when man battled dinosaurs for control of the Earth. Okay, not really, but they were first imposed when snail mail was the predominant form of employer-to-employee communication ... and the rules haven’t evolved much since then. In this episode, Ethan McWilliams, a former ERISA investigator for the DOL, joins Ed and Scott to dive into the requirements for employers to electronically distribute key benefit disclosures. Can disclosures be sent via email, posted on an intranet, transferred through Vulcan mind-melding? What determines if an employee has adequate access to the employer’s e-information system to permit e-disclosures? What constitutes an affirmative opt-in for employees without that access? Are employers responsible for knowing if the employee reads the disclosure? What’s the worst that happens if employers throw caution to the wind and make e-disclosures outside the rules?
Four years into the ACA employer mandates and employers, along with their reporting vendors, continue to struggle with the complexity of the process. Even the simplest mistakes can cost the employer millions in fines. In this episode, Scott and “the Cat Man” give listeners the Kibbles n’ Bits on the ACA’s employer mandate, digging into: The basics of the reporting structure. What makes the annual reporting process so dang complicated. How to easily avoid very unsettling letters from the IRS (hint: double check one item on one form).
Ed and Scott welcome guest Lisa Carlson to answer the burning questions surrounding the impact marijuana legalization has on employer health plans. How do things change for employers in the states with legal medical or recreational marijuana? Can a group plan cover medical marijuana? Are employers still allowed to enforce a zero-tolerance drug testing policy? What exactly is a “goomy” bear? Do the rules change for self-insured plans? Are there any precedent-setting cases? And more.
Correction: Near the 13:50 mark we refer to a 6 percent excise tax for nonqualified distributions (withdrawals other than to reimburse qualifying medical expenses) from an HSA. The reference should have been to a 20 percent excise tax. The 6 percent tax applies to excess contributions to an HSA. ------------------- No, it's not déjà vu, the HSA fun continues! Part two picks up where we left off in the last episode. Ed and Scott help you "give the karate chop to the tax man" by covering: Eligibility requirements. Contribution maximums and limitations. Employer responsibilities. Pulling money out. Prefunding and retrofunding. The Dec. 1 rule. And more. The phenomenal white paper by Scott about HSA funding mistakes is available here. All the technical details about HSAs straight from the horse’s mouth (IRS) can be found in Publication 969.
In the first episode, Ed and Scott tackle HSAs, but the fun can't be contained in 20 minutes - this a two-parter. Part one gets into the details about: What is an HSA? Who can have one? What’s this high-deductible health plan business? What determines eligibility? What exactly is disqualifying coverage? And more.