News & Events

| IRS Releases Final Forms and Instructions for Affordable Care Act Reporting

SIG Alert

In February 2015, the IRS released final forms and instructions related to information reporting under the Affordable Care Act (the “ACA”). These forms include Form 1095-B, Health Coverage, Form 1094-B, Transmittal of Health Coverage Information Returns, Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, and Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage.


| FMLA Eligibility for Same-Sex Spouses Effective March 27

SIG Alert

Effective March 27, 2015, a final rule from the U.S. Department of Labor (DOL) will extend the protections of the federal Family and Medical Leave Act (FMLA) to all eligible employees in legal same-sex marriages, regardless of where they live.

Under the FMLA, an eligible employee of a covered employer (50 or more employees in at least 20 workweeks in the current or preceding calendar year) is entitled to take unpaid, job-protected leave for specified family and medical reasons, including to care for the employee’s spouse who has a serious health condition.

| Advisory on OOP Limits

SIG Alert

New HHS Regulations “Clarify” that Health Plans Covering Families Must Have “Embedded” Individual Cost-Sharing Limits

On February 27, 2015, the Department of Health and Human Services (HHS) released its final HHS Notice of Benefit and Payment Parameters for 2016.  The lengthy regulation covers a wide range of topics affecting group health plans, including minimum value, determination of the transitional reinsurance fee, and qualified health plan rates and other market reforms applicable to the group and individual insurance markets.


| IRS Releases First Guidance on ACA’s So-Called "Cadillac Tax"

 SIG Alert

March 4, 2015

Last week, the IRS released Notice 2015-16, available here, in an effort to begin developing regulatory guidance for the Affordable Care Act’s excise tax on high-cost health coverage (the “Excise Tax”), which will become effective beginning as early as 2018. The Excise Tax, which is commonly referred to as the “Cadillac Tax,” imposes a 40% nondeductible excise tax on the aggregate cost of “applicable employer-sponsored coverage” (including employer-sponsored group health plan and multiemployer plan coverage) in excess of certain statutory limits. Although the Notice does not provide any definitive answers to the many questions raised, it is still welcome news in that it identifies a number of issues that could be addressed in forthcoming guidance and, in some cases, indicates the direction in which the IRS is headed. This can help many employers and plan sponsors as they now consider steps to mitigate possible exposure to the Excise Tax. This is especially true for employers contributing to multiemployer health plans who bargain benefit levels, as they may have only one more opportunity at the bargaining table to adjust benefits before the Excise Tax applies.

| March 4- Round Three: Oral Arguments in King v. Burwell

SIG Alert

On March 4 the Supreme Court was once again the venue for the third (but probably not the last) round in the ongoing boxing match that is the Affordable Care Act (“ACA”).

The rubber match is King v. Burwell. For those few of you who are not familiar with King, click here.

For 85 minutes the attorneys-Michael Carvin for the petitioners and Solicitor General Donald Verrilli for the government-dodged and weaved as questions were thrown at them by the justices: as is de rigueur for bouts in this forum, the lawyers spent more time answering hard questions thrown at them by eight members of the Court than actually arguing their respective cases.
Clients, colleagues, reporters and even our kids ask for a prediction. But I refuse. Experience proves that you simply cannot read too much into the questions posed at oral argument.

With that in mind, here are some observations based on my review of the oral argument transcript:

    • The Questioners. Bolo punches were thrown by the four liberals (Ginsburg, Breyer, Kagan and Sotomayor) and two conservatives (Scalia and Alito), with each asking questions that revealed their political leanings. Chief Justice Roberts asked few questions and those he asked seemed simply to facilitate discussion. Not surprisingly, Justice Kennedy asked questions from both sides of the issue, but one series of questions (discussed below) has left the prognosticators atwitter with predictions of a major victory by the administration.
  • Standing. In the run up to the March 4 oral arguments, there were claims that the petitioners did not have the proper standing to bring the lawsuit. The government had never challenged standing before, but standing-a person’s right to sue-can be raised at any time, even at the Supreme Court.       Standing addresses whether the petitioners will suffer an injury from the claimed harm. Since the Supreme Court does not provide “advisory opinions” there always has to be real controversy between litigants for the Court to actually hear and decide a case. Justice Ginsburg led the charge on this one, but her roundhouses hit nothing but air. I never thought this was a serious concern. And based on the questioning by the rest of the Court, none of them did either. Oddly, Justice Ginsberg was relatively quiet after her parry into this standing issue.
  • Context.   The government’s main argument is that while the four word ACA provision at the heart of the controversy only mentions “state” run exchanges, in the context of the rest of the statute, this really means something along the lines of “exchanges at the state level run by either the state or federal government.” The questioning revealed either skepticism (Justice Scalia reminding Verrilli that Congress is quite capable of writing dumb laws but that doesn’t mean the Supreme Court should fix them) or agreement (Justice Kagan using an analogy click here) to demonstrate that the context always matters (frankly, an odd departure for her from a fairly recent case where she channeled her inner Dr. Seuss to argue basically that a fish is a tangible thing). In the end, jabs were thrown by both sides but apparently no knockout punch was delivered. Nothing surprising here.
  • Federalism.     With the reminder that no one can predict outcomes based on questions asked, Justice Kennedy, who is traditionally viewed as the potential swing vote on these issues, worked a line of attack with Justice Sotomayor that have many speculating (some hopefully) has put the petitioners on the ropes. Justice Kennedy moved away from the context issue and arguments about statutory construction and interpretation to focus on whether the petitioners’ position raises “serious constitutional problems of coercion.” If the petitioners’ reading of the statute is correct – that subsidies only apply to state-run exchanges – then, Justice Kennedy pointed out, the “states are being told either create your own exchange, or we’ll send your insurance market into a death spiral.” The betting seems to be that this could potentially prove too much for the petitioners-a majority of the court could find that if the petitioners’ reading results in a reading of the statute that raises significant Constitutional issues, they might opt to choose the reading that avoids the constitutional dilemma. Of course, it is equally true that a different majority of the Court could find this coercion intended and unconstitutional, just as they did in 2012 with Medicaid Expansion. Some may disagree, but I score this about even.

So, to summarize, the advocates went a solid twelve rounds and pound-for-pound they came out about even. Both Carvin and Verrilli are seasoned fighters at this level and no one expected either to deliver a TKO on the issue. However, the questions asked (and answers given) will provide us all with much to talk about until June. One item to note: Justice Alito may have presented a way for the Court to rule against the Administration but not disrupt the markets when he indicated that any ruling could be stayed pending an agreement between President Obama and the Congress. In other words, if the case comes out the wrong way for the government they may be saved by the bell, if only they can find a way to put down the gloves and start talking to each other.

| From Top 10 to Number 1: SIG Wellness Director Awarded Top Health Promotion Professional In The Country!


Rachel Druckenmiller, MS, INHC, CNE, Wellness Director at SIG, has been named WELCOA’s (The Wellness Council of America) Top Health Promotion Professional in the country.

The contest was an effort to identify the Top 100 Health Promotion Professionals in the country. The 210 entries were scored by an elite panel of judges who, along with peer voting, determined who should be considered one of the Top 100 Health Promotion Professionals in the country. Rachel was awarded the number one spot on the list based on her commitment to professional development, demonstrated success, innovation, leadership and compelling vision.

One judge said, “Rachel is spot on…Wellness is not something we can simply ‘do’ to people. We need to find what motivates them in order to get them to MOVE and really seek change.”

With Rachel’s leadership, SIG has created a wellness program that’s educational, interactive, entertaining and refreshing to HR professionals, leadership teams and their employees. As a leader in the field, Rachel is helping to shift the focus away from ROI and toward culture and well-being. The key is equipping people with the skills and tools they need to be well and surrounding them with a supportive environment.

To learn more about SIG’s wellness program and ways we can help you engage and energize your employees, visit

| SIG’s Wellness Director Named One of WELCOA’s Top 10 Health Promotion Professionals In the Country

Rachel Druckenmiller, MS, INHC, CNE and Wellness Director at SIG, has been named to WELCOA’s (The Wellness Council of America) Top 10 Health Promotion Professionals in the country.

From an inspiring group of 210 peer-selected nominees nationwide, 100 were selected as “the best of the best,” and Rachel was handpicked by a panel of industry experts as one of the Top 10.  The finalists were chosen based on peer voting and on the empirical review of a distinguished judging panel. It was  Rachel’s vision for the future of the wellness industry, her desire for leadership, and her innovative approach to her work that set her apart.

Rachel has led the wellness efforts at SIG since 2007, guiding both SIG and their clients to receive local and national wellness awards, including the most recent WELCOA Well Workplace Award, a designation held by no other benefits consulting firm in Maryland.

In her role, she guides SIG and their clients to “do wellness” differently with a focus on building a culture of health and teaching nutrition education and healthy cooking in a way that is refreshing, positive, interactive and fun.  With nearly a decade of experience in health and wellness and a transformational personal story, Rachel leads and teaches with enthusiasm, energy, and passion for being well in a way that is inspiring and motivating.

Rachel is certified as a Wellness Culture Coach, Integrative Nutrition Health Coach (INHC), and Culinary Nutrition Expert (CNE). She has a Master’s degree in Health Science and a Bachelor’s degree in Psychology.

Rachel writes a healthy living blog called Rachel’s Nourishing Kitchen and shares delicious, energizing and nourishing recipes, tips and tricks for healthy living, and inspirations to nudge you to be bold about what is truly possible in your life. Visit to learn more.

| SIG is named one of the Best Places to Work by Baltimore Magazine!



Every year, Baltimore Magazine rounds up the best places to work in the Baltimore region. SIG won the “Best Places to Work” honor based on a combination of factors, according to Baltimore Magazine: a positive and healthy environment, a devotion to helping employees advance in their careers, great benefits, bonuses and a generous 401K, employee-and-family-friendly policies like a R.O.W.E. work environment and an inspiring and engaged leadership.

This award is designed to identify, recognize and honor the best employers in Baltimore as the employees see it.

Employers from all over Baltimore entered their companies into the survey process to determine the Best Places to Work. The survey consisted of evaluating each nominated company’s workplace policies, practices, philosophy, systems and demographics, as well as a measure of the employee experience.

SIG’s “Best Places to Work” recognition follows a similar recognition by The Baltimore Business Journal and Business Insurance. Those publications also named SIG a best place to work in 2014. The ranking of the Best Places to Work is published in the February issue of Baltimore Magazine.

| Congress Gets to Work on Affordable Care Act Amendments

The 114th Congress with its 247 Republican Representatives and 54 Republican Senators appears to be fulfilling its promise to take a fresh look at the Affordable Care Act (ACA). Two bills introduced in the first work week in January demonstrate how quickly they want to do this.

The first is “The Hire More Heroes Act of 2015″ (Heroes Act) which was introduced to both houses of Congress on January 6. The Heroes Act would amend the ACA to provide that veterans who are eligible for health care coverage from the U.S. Department of Veterans Affairs or Tricare are not counted for purposes of determining whether an employer is an “Applicable Large Employer” (ALE) for purposes of the ACA. Only ALE’s-those with 50 or more full time equivalents-are subject to the play or pay requirements of the ACA. (In 2015, the play or pay or requirements won’t apply to most employers with between 50 and 99 full time equivalents.)

The bill is aimed at small employers and encourages them to hire veterans without risk of tripping into ALE status under the ACA.  This creates an instant advantage to veterans because many small employers have been limiting their hiring to avoid being subject to the rigorous requirements of the play or pay mandates. The Congressional Budget Office has indicated that this bill would cost the government (by reducing revenue) approximately $858M over a ten year period beginning in 2015. But less than a billion dollars over ten years might seem a small price to pay for a program that will (i) encourage smaller employers to hire new employees and (ii) make our returning veterans even more attractive hires for these employers. The former is attractive because job growth for small employers has been perceived by many to be stagnant since the passage of the ACA and anecdotal evidence abounds to support that view. The latter has the obvious appeal of better positioning those who have provided service the ability to re-enter civilian life. It also makes common sense because these new hires, by definition, are not the hires the ACA is concerned with since they are already eligible for federally-supported insurance coverage.

Not surprisingly, the Heroes Act passed easily in the House. As of January 10, 2015, it is under consideration in the Senate and should pass easily there. It appears that the President might sign this bill into law when it reaches his desk.

On Thursday, January 8, 2015, the House passed The Save American Workers Act (40 Hours Act), on a 252 to 172 vote.   The 40 Hours Act would amend the ACA to redefine the definition of a full-time employee from 30 hours a week to 40 hours a week.

The 40 Hours Act is supported broadly by business groups and associations and employers across the country as it would re-establish the traditional 40-hour workweek as the standard for American business.

The Congressional Budget Office, among others, has indicated that this provision of the ACA would result in a major shift of the American workforce to “part-time” (i.e., less than 30 hours per week), as employers over the next ten years would seek to cut costs by reducing hours below 30.

The 40 Hours Act now goes to the Senate. It appears that the bill has the Democratic votes it will need to avoid a Democratic filibuster.  Senators Joe Donnelly of Indiana and Joe Manchin III of West Virginia, both Democrats, are co-sponsors of the bill and other Democrats are on record as supporting the measure.

However, the 40 Hours Act has little real chance of being passed into law. President Obama has vowed to veto the bill. A 2/3rds vote in both chambers of Congress is needed to override a veto. It is unlikely that this bill-which would reflect a major change to the ACA and would likely even require a further delay in enforcement of the play or pay mandates because of the impact on regulations and employer and vendor systems-will receive the support it would need to override the President’s veto.  Historically, Congress has overridden fewer than ten percent of all presidential vetoes.

| Advantages and Disadvantages of Self-Funded Insurance Plans

Some businesses provide health or disability benefits to their employees through a self-funded plan, also referred to as Administrative Services Only (ASO). In this type of plan, instead of paying fixed monthly premiums for insurance coverage to an insurance company, the employer uses company funds to pay each claim as it is incurred. In essence, the employer stands in the shoes of the insurer.

This type of arrangement is not for every business, and works best for those that have more than 50 employees but more prevalent with groups over 100. Companies with fewer employees may decide it could work for them, but they must have sufficient cash flow to make a self-funded plan viable.

In order to assist employers to decide whether or not it would be in their interest to have a self-funded plan, they need to evaluate their existing plan and review past claims experience if available, specifically large claimant information. They also need to weigh the advantages and disadvantages to such a plan before making the final decision to transition from a fully insured plan to a self-funded one.

Advantages To Employers


  • Improvement of cash flow: Self-funded plans only pay submitted claims and can reserve the funds that normally would have been used to pay for a fully insured plan to accumulate interest and increase cash flow.
  • Ability to avoid state mandates: Self-funded plans are regulated by ERISA, which is federal law, and not controlled by the individual state’s insurance laws.
  • Flexibility in benefit design: Employers can choose what benefits to provide as opposed to insurance companies which must provide coverage consistent with the plan provisions they have filed with the state.
  • Flexibility with plan components: Employers can select vendors, such as plan administrators, health care providers and others with whom to contract to best serve the specific needs of their employees.
  • State tax savings: Self-funded plans save about two to three percent on every dollar since they only pay taxes on the Stop-Loss coverage they purchase, not on the total cost of a fully funded plan.
  • Savings on insurance carrier risk charges: Claims processing by employers is less expensive than the cost of fully insured plans.
  • Rebates for prescription drugs: The plan may be able to receive a portion of pharmaceutical rebates
  • Claims data access: Employers of self-funded plans have access to claims data they do not have access to under fully-insured plans due to HIPAA privacy requirements. This helps them analyze and predict future plan costs.
  • Cost of plan administration: This may be slightly less expensive than a fully-funded plan.

Disadvantages To Employers


  • Potential for higher costs: There is always the chance that the actual costs will be greater than the prediction and that could mean the self-funded plan was actually more expensive than a fully-funded one.
  • Need to purchase stop-loss insurance: In order to limit employer liability for catastrophic events, employers purchase stop-loss insurance.
  • Budgeting problems: The amount needed to pay claims varies from week to week, making it difficult to budget.
  • Employer becomes a fiduciary as plan administrator.
  • Privacy requirements of HIPAA: Employers must develop procedures for protecting the privacy of the health records of their employees.
  • Cost of drafting plan documents: Employers are responsible for all plan documents including a plan summary and description.
  • Requirement to have an appeals process: This must be in place so employees have recourse if their claims are denied.
  • Must meet IRS non-discrimination requirements: If these requirements are not met, there may be a substantial penalty imposed.

The major issue employers who are considering self-funded programs must consider is that in the self-funded plan, the employer is the one at risk for paying the claims. For companies with fewer than 50 employees, self-funded plans may not be the best option, although it is possible to reduce the risk somewhat by purchasing excess-risk coverage.

For small business employers, it is recommended they make this decision after consulting with SIG and providing the company with as much information as possible concerning the type of work force and past claims. This will make it easier for SIG to help the business owner assess whether or not to choose a fully insured or self-funded benefit plan.