January 8, 2014 (PLANSPONSOR.com) – A new survey finds that more than one-third (36%) of military families plan to start saving more money for retirement during 2014.
The First Command Financial Behaviors Index survey suggests military families finished 2013 with a determined focus on adopting positive financial behaviors.
“Families have been spending less and cutting debt,
freeing up new dollars to help push their monthly savings rates to record
highs,” says Scott Spiker, CEO of First Command in Fort Worth, Texas. “These meaningful results are helping military families feel better about
their finances, and they appear to be inspiring them to recommit to frugal
living for the new year.”
A strong majority (85%) of
military families are confident that their financial situation will improve in
the new year. Many respondents (81%) also indicate that they feel confident in
their ability to retire comfortably.
Financial planners were found to have a positive impact on
military families, according to the results of the survey. Fifty-one percent of
those with a financial planner say they feel extremely or very confident in
their ability to retire comfortably, compared with only 30% who do not have a
financial planner.
“Families who work with a financial coach are more likely to spend less, save
more and pay down debt in their pursuit of financial security. We expect to see
a growing number of active-duty households put their trust in knowledgeable
financial professionals in 2014,” says Spiker.
When queried for the survey, military families listed their
top 10 financial resolutions for 2014 as:
Cutting back on excessive spending (42%);
Getting out of debt (38%);
Starting to save money for retirement or putting
more money into retirement savings (36%);
Keeping track of financial activities (26%);
Learning not to live beyond their means and
improving credit score (25% for each);
Using cash or debit cards more often, instead of
credit cards (22%);
Learning to budget responsibly and being
financially independent (20% for each);
Making sound investments in the stock market
(18%);
Shopping more at discount stores or for discount
brands, and buying a house (16% for each); and
Increasing charitable giving (14%).
In addition, 40% of military families feel they are better
off than they were a year ago. And another 36% say their personal financial
situation is about the same. Just 21% say they are worse off than last year.
The survey, compiled by Sentient Decision Science Inc., queried
approximately 530 U.S. consumers, ages 25 to 70, with annual household incomes
of at least $50,000. First Command Financial Services and its
subsidiaries assist families in building wealth, reducing debt and pursuing
their financial goals.
SECOND OPINIONS: Agencies Issue New HIPAA Excepted Benefits Proposed Rules
January 8, 2014 (PLANSPONSOR.com) - On Christmas Eve, the Departments of Labor (DOL) and Health and Human Services (HHS), and the Internal Revenue Service (IRS) (the Agencies) issued proposed rulemaking expanding the list of benefits that are “excepted benefits” under the HIPAA portability rules and Patient Protection and Affordable Care Act (ACA) insurance market reforms. 78 Fed. Reg. 77632 (Dec. 24, 2013).
The Agencies
say plans may rely on these proposed rules until final rulemaking, at least
through 2014, except where otherwise noted.
Comments are due February 24, 2014.
Below we
summarize the existing list of HIPAA excepted benefits and describe the new
benefits added to this list. We also highlight the requirements from which
these benefits are excepted.
The HIPAA
portability rules, which were in place prior to the ACA, included a list of
“excepted benefits.” ERISA §733; PHSA
§9832; Code §9832. This list of excepted
benefits includes an “Overall Exception” and then specific categories of
exceptions.
·
The “Overall Exception” includes accident
insurance, disability insurance, liability and liability supplement insurance,
workers’ compensation, automobile medical payment insurance, credit-only
insurance, and on-site medical clinics.
The other
current exceptions include:
·
Limited scope dental and vision
coverage either offered under a separate insurance policy or where there is a
separate election and contribution required;
·
Benefits for long-term care or
nursing home care;
·
Coverage only for specified
disease or illness, such as a cancer-only policy;
·
Hospital indemnity or other fixed
indemnity insurance offered under a separate policy;
·
Medicare supplemental health
insurance; and
·
Similar supplemental coverage
under a group health plan that is offered under a separate policy and where the
value falls below a specified amount.
From Which Laws Are HIPAA Excepted Benefits Exempt?
HIPAA
excepted benefits are exempt from the pre-ACA HIPAA portability rules, such as
requirements for pre-existing conditions, special enrollment, and most notably,
nondiscrimination and wellness, including the new HIPAA wellness rules. These benefits also are also exempt from
Title I of the Genetic Information Nondiscrimination Act (GINA), the Mental
Health Parity & Equity Act, the Women’s Health & Cancer Rights Act, and
the Newborn’s & Mother’s Health Protection Act.
The ACA’s
insurance market reforms adopted the same HIPAA excepted benefits rules. For example, HIPAA excepted benefits are not
required to comply with the annual limit prohibition, coverage to age 26 rules,
out-of-pocket limits, and preventive care mandates.
Importantly,
not all laws incorporate the HIPAA excepted benefits rule. ERISA, COBRA, the ADA, and Title II of GINA
(applicable to employers) still apply to HIPAA excepted benefits. In addition, the HIPAA privacy and security
rules apply to most HIPAA excepted benefits, unless they fall into the “Overall
Exception” category described above.
What are the New HIPAA Excepted Benefits?
The proposed
rules include three major changes from the existing rules:
·
Dental &
Vision Benefits – Under the existing rules,
dental and vision benefits only are excepted if they either are offered under a
separate insurance policy or if there is a separate election and contribution
required. For self-funded plans, this has
meant that the plan must have a separate election and premium contribution, so
benefits that are automatic or “no cost” could not qualify for the
exception. The agencies informally have
said that dental and vision plans must at least charge a “nominal” amount to
qualify for the exception, which seemed to penalize more generous employers or
unions that traditionally had offered no-cost coverage.
The proposed rule removes the requirement
that there be a separate contribution amount.
So, plans may now offer no-cost dental and vision coverage and still
meet the exception as long as there is a separate election (or opt out) for
dental and vision coverage or the coverage is offered under a separate
insurance policy.
·
Employee
Assistance Programs (EAPs) – The
proposed rules add a new category of excepted benefits for certain EAPs that do
not provide “significant benefits in the nature of medical care.” In addition to restricting the “medical care”
that may be provided, to meet the exception, (1) no contributions or cost
sharing may be required for the EAP coverage; (2) the EAP cannot be coordinated
with other group health plan coverage; (3) participants may not be required to
exhaust benefits under the EAP before being eligible for the group health plan;
(4) participation in the EAP must not be dependent on coverage under another
group health plan; and (5) benefits under the EAP cannot be financed by another
group health plan.
Many
employers offer EAPs that have at least some limited benefits, such as
counseling, that could qualify as medical care.
These EAP benefits never were intended to be stand-alone medical
coverage. However, there was no
exception for these benefits under the ACA, so it appeared that all of the ACA requirements
applied. If this was the case, it would
be virtually impossible for an employer to offer an EAP that had robust enough
benefits to meet the ACA. In addition, there
was some question about how to count EAP coverage when someone otherwise would
qualify for a premium subsidy under the Exchange. The Exchange rules require that individuals
not be enrolled in other coverage in order to qualify for a subsidy. Since most employers automatically cover
employees in their EAPs, these employees could be precluded from qualifying for
a premium subsidy under the Exchange even if they qualified based on income or
other factors.
By
allowing some EAPs to continue as HIPAA excepted benefits, the proposed rules
provide relief from the ACA requirements for many employers who are offering
traditional, limited EAPs, as well as close the loophole that would have
precluded some individuals from earning a premium subsidy on the Exchange.
·
Wraparound Coverage – The proposed rules add another new category of excepted
benefits for coverage that is specifically designed to “wrap around” individual
insurance coverage, such as that offered through the Exchange. The Preamble says that this category would be
effective for plan years starting in 2015.
The
wraparound coverage must provide coverage for non-essential benefits or out-of-network
providers (or both) and may provide benefits for cost-sharing – costs that may
not be covered under the individual policy.
To meet the exception, the employer that sponsors the wraparound
coverage also must provide a “primary” plan that meets the ACA affordability
and minimum value test, and the cost of coverage in the wraparound plan may not
exceed 15% of the cost of coverage in the primary plan. This means that, while the wraparound plan is
designed to be offered to those with individual coverage who generally would
not be in the employer’s group health plan, the employer cannot simply offer a
wraparound plan and nothing else and still fall under the exception.
There is some question as to what
type of coverage this new exception is intended to exempt. The Preamble says that some employers who
provide minimum value / affordable coverage may have some employees who still
may want to enroll in Exchange coverage to obtain a premium subsidy. These employers may want to provide some
additional wraparound coverage for this group and under the exception, would be
able to do so without having to comply with the other requirements of the ACA
or HIPAA portability rules. In addition,
this wraparound coverage would not disqualify an individual from eligibility
for the premium tax credit.
Plans should be on the look-out
for further guidance on this exception.
How Do The HIPAA Excepted Benefits Apply Under the ACA?
Both the
existing and new HIPAA excepted benefits are exempt from the insurance market
reforms under the ACA. This includes the
rules regarding pre-existing conditions, out-of-pocket and deductible limits, waiting
periods, clinical trials, annual and lifetime limits, preventive care, coverage
to age 26, SBC notices, and new appeals rules.
For other ACA
provisions, plans will need to review the specific provision. Some provisions, such as the PCORI and reinsurance
fees, incorporate the excepted benefits rule.
Others, such as the W-2 requirement, incorporate some, but not all, of
the exceptions.
For both
employers and insurers, it will be important to know if a particular benefit is
a HIPAA “excepted benefit” and from which specific laws the benefit is exempt.
Contributors:
Christy
Tinnes is a Principal in the Health & Welfare Group of Groom Law Group in
Washington, D.C. She is involved in all
aspects of health and welfare plans, including ERISA, HIPAA portability, HIPAA
privacy, COBRA, and Medicare. She
represents employers designing health plans as well as insurers designing new
products. Most recently, she has been
extensively involved in the insurance market reform and employer mandate
provisions of the health-care reform legislation.
Brigen
Winters is a Principal at Groom Law Group, Chartered, where he co-chairs the
firm's Policy and Legislation group. He counsels plan sponsors, insurers, and
other financial institutions regarding health and welfare, executive
compensation, and tax-qualified arrangements, and advises clients on
legislative and regulatory matters, with a particular focus on the recently
enacted health-reform legislation.
PLEASE
NOTE: This feature is intended to
provide general information only, does not constitute legal advice, and cannot
be used or substituted for legal or tax advice.