Must Read Benefit News for Practitioners and Advisers, March 26, 2015

• New HHS Regulations “Clarify” that Health Plans Covering Families Must Have “Embedded” Individual Cost-Sharing Limits. The HHS clarification is potentially unenforceable with respect to self-insured plans, employers and plans sponsors with self-insured plans should be prepared to adopt an embedded cost sharing limit once we get more guidance on the topic. We'll need to keep an eye on this. [Source: Proskauer's ERISA Practice Center Blog.] 

• Is There a Future for Employer Sponsored Health Insurance? Short answer, yes. Over the next five years, the effects of the PPACA on employer-sponsored insurance will be small. Any erosion in group coverage is likely to be limited to low-wage workers currently offered insurance in sub-50 employee groups.  That is the most likely place we'll see exchange uptake. [Source: Wharton Public Policy]. 

• Consumer Directed Health Plans (most commonly HRAs and HSAs) don't just save money in the first year, but over the next three as well.  In consumer directed plans, spending is also reduced in all three years post implementation. The reductions are characterized by spending reductions in outpatient care and pharmaceuticals, with no evidence of increases in emergency department or inpatient care. [Source: the National Bureau of Economic Research.] 

• It's Time. Employers Should Consider Cadillac Tax Issues in Their CBAs. Employers are beginning to use a variety of strategies in CBAs to deal with the tax, such as reducing plan benefits and increasing deductibles; adding language to allow the employer to unilaterally reduce benefits to avoid the the Cadillac Tax; and allowing for automatic re-openers in 2017 when we have more regulations on the tax. [Source: Winston Strawn, LLP.]