Human Resources

The Washington Report

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November 20, 2019


CMS Releases Rules on Health Transparency
On November 15, 2019, the Centers for Medicare and Medicaid Services (CMS) released proposed and final rules requiring price transparency from health plans and hospitals. For additional information about the proposed and final rules, please see the Aon bulletin CMS Issues Price Transparency Rules for Health Plans and Hospitals in the Publications section of this newsletter.

The news release is available here.

A “Fact Sheet on the Transparency in Coverage Proposed Rule” is available here.

The proposed health plan price transparency rule is temporarily available here. (Federal Register publication date unknown at this time.)

A “Fact Sheet on the CY 2020 Hospital Outpatient Prospective Payment System (OPPS) Policy Changes: Hospital Price Transparency Requirements” is available here.

The final hospital price transparency rule is temporarily available here.

(Federal Register publication date unknown at this time.)


PBGC Releases FY 2019 Annual Report; Shows Record Multiemployer Insurance Program Deficit
On November 18, 2019, the Pension Benefit Guaranty Corporation (PBGC) released its Fiscal Year (FY) 2019 Annual Report. The report shows the financial condition of the PBGC’s Single-Employer Insurance Program having a surplus of $8.7 billion as of September 30, 2019, which is an increase from the $2.4 billion surplus at the end of FY 2018. The improvement is primarily due to a 15% increase in premium income, investment income, and continued low level of losses from plan terminations.

In contrast to the Single-Employer Program, the Multiemployer Insurance Program shows a record deficit of $65.2 billion at the end of FY 2019. According to the PBGC, this increase from a $53.9 billion deficit at the end of FY 2018 was mostly due to interest rate changes that drove up the value of PBGC’s future payments to failed multiemployer plans. The report indicates that the Multiemployer Program, which insures the pensions of 10.8 million Americans, is highly likely to become insolvent during FY 2025. “The multiemployer pension system faces a crisis that threatens the retirement security of millions of American workers, retirees, and their families. Without reforms, PBGC’s Multiemployer Insurance Program will run out of money. That will leave about 1.5 million participants and beneficiaries in already-failing plans with much less than the PBGC’s guaranteed level of benefits. The alarm bells are ringing, and legislative changes are necessary,” stated PBGC Director Gordon Hartogensis. The Multiemployer Program is currently legally separate from the Single-Employer Program.

The news release is available here.

The PBGC Fiscal Year 2019 Annual Report is available here.

IRS Provides Additional Temporary Nondiscrimination Relief for Closed Defined Benefit Plans Through 2020
On November 13, 2019, the Internal Revenue Service (IRS) released Notice 2019-60. The Notice provides benefits, rights, and features temporary nondiscrimination relief for closed defined benefit plans (i.e., defined benefit plans that provide ongoing accruals but that have been amended to limit those accruals to those employees who participated in the plan on a specified date) that generally meet the eligibility conditions for the relief provided in Notice 2014-5, 2014-2 I.R.B. 276, as extended. Notice 2019-60 provides that such plans are deemed to have satisfied certain conditions of the nondiscrimination requirements relating to benefits, rights, and features. This temporary relief applies for plan years ending after November 13, 2019, and beginning before January 1, 2021. Please refer to the Notice for additional information.

IRS Notice 2019-60 is available here.

Other HR/Employment

IRS Updates Guidance for Deductible Business, Charitable, Medical, and Moving Expenses
On November 14, 2019, the Internal Revenue Service (IRS) released Revenue Procedure 2019-46, which provides guidance for taxpayers with certain deductible expenses to reflect changes resulting from the Tax Cuts and Jobs Act. Revenue Procedure 2019-46 updates the rules for using the optional standard mileage rates in computing the deductible costs of operating an automobile for business, charitable, medical or moving expense purposes. The guidance also provides rules to substantiate the amount of an employee's ordinary and necessary travel expenses reimbursed by an employer using the optional standard mileage rates. According to the IRS, taxpayers are not required to use a method described in the Revenue Procedure and may instead substantiate actual allowable expenses provided they maintain adequate records.

The news release is available here.

IRS Revenue Procedure 2019-46 is available here.

Aon Publications

CMS Issues Price Transparency Rules for Health Plans and Hospitals
The Centers for Medicaid and Medicare Services (CMS) issued proposed and final rules requiring price transparency from health plans and hospitals on November 15, 2019. The proposed rules issued by CMS would, if finalized, require group health plans and health insurance issuers to provide out-of-pocket cost estimates for covered individuals and publicly post online in-network contracted rates and out-of-network allowed amounts for medical services. CMS also issued final rules, effective in 2021, requiring hospitals to disclose their prices to the public.

The Aon bulletin is available here.

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