Crystal Connection: February 2018

Implications of Recent Federal Tax and Budget Legislation on Employer-Sponsored Benefit Programs

Live Webinar: Tuesday, April 17, from 2 – 2:45 pm (ET)

Join our complimentary, 45-minute webinar that will cover how recent tax and budget legislation and newly issued regulations can impact your organization’s benefits program and what your employees can do to optimize their benefits.

Last December, the President signed the Tax Cuts and Jobs Act of 2017 into law. There have also been a number of actions taken by Congress since then relating to the federal budget that impact employee benefit plans. Join us as we highlight how these and other important changes to the current legislative and regulatory landscape that can affect your employer-sponsored benefit program in 2018 and beyond, Click here to register and learn more.

Recent Moves by Insurers and Pharmacies, Changing the Health Care Industry
On March 6, 2018, UnitedHealthcare announced it will be expanding pharmacy discounts to over 7 million group health plan consumers when they fill prescriptions through their retail pharmacies or home delivery. The savings will come from manufacturer drug rebates being applied at the time of purchase, rather than through lower plan premiums.

On March 8, Cigna announced it will buy the pharmacy benefit manager (PBM) Express Scripts for about $52 billion. The deal, if approved by regulators, will create one of the biggest consolidations in the health care market. Meanwhile, last December, CVS announced its intention to purchase Aetna for $69 billion. This deal is still awaiting regulatory sign off.

In 2015, Anthem announced its intention to purchase Cigna, but the deal was blocked in 2017 by a federal court, which upheld the denial of the deal by antitrust regulators.

Many states have created transparency laws which are intended to prevent overcharging by pharmacy benefit managers. Read the article “In 2018, Efforts to Lower Medical and Drug Costs” for more on this topic.

2018 Federal Poverty Guideline Safe Harbor, for Employer Mandate Compliance

To comply with the Affordable Care Act requirement of offering affordable, minimum value coverage to its full-time employees or be subject to a payment to the IRS (or the “employer mandate”), applicable large employers must offer a health insurance plan where the employee contribution for a self-only coverage does not exceed 9.56% of the employee’s household income for the 2018 taxable year.

If an employer were to use the Federal Poverty Guideline safe harbor, they would need to offer a plan where the employee’s required monthly contribution for self-coverage does not exceed 9.56% of $12,140, divided by 12 (or $96.71 a month).

Delivering Clarity:

Need some clarity on the latest developments in health care reform? Stay up to speed with clear and concise information provided in our 2018 ACA Update Log. Read about provisions in new budget deal that affect health care, what health care taxes have been delayed, how commuter benefits have been impacted by the new tax law, and more. Go to Save the site to your “favorites” or connect with us on LinkedIn and Twitter to receive timely updates.

Maryland Healthy Working Families Act
Effective February 11, 2018, all employers with employees whose primary work location is in Maryland must begin complying with the Maryland Healthy Working Families Act. Employers with 15 or more employees are required to provide paid earned sick and safe leave. Employers with 14 or fewer employees are required to provide unpaid earned sick and safe leave. For more information, read Maryland’s FAQs document.

Austin, Texas Adopts Paid Sick Leave
Effective October 1, 2018, all private employers located within the City must provide paid sick leave to employees. Employers with 15 or fewer employees must provide up to 48 hours of paid sick leave per year. All other employers must provide up to 64 hours of paid sick leave. (Employers with 5 or less employees don’t have to implement the law until October 2020.)

Austin is the first city in Texas to adopt a paid sick leave law, which was passed on February 16, 2018. However, some lawmakers are working to overturn the new ordinance.

More State Legislative Changes
Read about recent changes to state benefit mandates, unemployment insurance, and more, affecting Alabama, Alaska, Arizona, California, District of Columbia, Georgia, Hawaii, Idaho, Illinois, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Oregon, Puerto Rico, Rhode Island, South Carolina, Tennessee, Vermont, Washington, Wisconsin and Wyoming.

In case you missed it, here’s more news from our other insurance sectors at Crystal & Company:

In the wake of last year’s horrific natural disasters, we are seeing an increase in property premiums. “How to Keep 2017 Disasters from Inflating Your Property Premiums” written by Robert DeRosa outlines useful tactics you can take to offset this rise and reduce your premiums.

Trustees for family trusts—historically sourced from the family’s inner circle—are now recruited by search firms and consultants. The new candidates are often seasoned professionals with a greater understanding of the potential liability exposures they may face, and they want protection. Our colleague Linda Bourn explores the topic in “Liability Protection for Family Enterprise Directors & Trustees: Strategies to Attract and Retain the Best.”

Check out more thought-provoking commentary at

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