"Employer groups stand to become a much bigger contributor to Medicare Advantage growth than they are now, but any big move probably won't occur until 2013 and beyond."
The extension should be welcomed by plan sponsors, many of whom have yet to get up to speed themselves when it comes to plan fees and expenses ... [according to] a recent survey ... [a]bout one in eight plan sponsors doesn't know what types of administrative fees are applied to their companies' stock funds, while 20% that have funds with revenue sharing don't know what proportion of their funds pay revenue sharing.
Of the poll participants identifying this as a top focus for 2012, nearly three-quarters (70%) said it is at least a 'high priority,' with almost half (43%) of those saying it is an 'extremely high priority."
"Karen Smith, a senior research associate at the Urban Institute's Program on Retirement Policy, talks about employer contributions to retirement savings, who benefits most, and who loses the most wages in return for retirement contributions."
"[U]ninsured lower-income adults were more likely than insured adults in the same income group to cite factors other than medical emergencies as reasons for going to the emergency room. These included needing a prescription drug, not having a regular doctor, or saying that other places cost too much. The Affordable Care Act will substantially narrow these inequities through an extensive set of affordable coverage options starting in 2014."
Final business conduct rules adopted by the Commodity Futures Trading Commission (CFTC) do not conflict with ERISA's fiduciary regulations and do not make swap dealers or major swap participants engage in fiduciary conduct, according to Phyllis Borzi.
"Congress gave American Airlines an estimated $2.1 billion in pension funding relief over the past six years, nearly double an earlier estimate, the PBGC announced [February 6]."
"Early workforce exits are publicly costly due to foregone payroll taxes and disability benefit payments, but also costly to workers, whose SSDI benefits are typically lower than their earnings, and who lose the additional contributions to retirement benefits and Social Security earnings credits associated with paid work. Despite a large literature that has shown the importance of health status and disability on work and retirement decisions of older workers, relatively little is known about the role of health care utilization in preventing or delaying workforce exit."
The California State Teachers' Retirement System is ... committing $500 million to roads, utilities and more. [T]he recent economic crisis demonstrated ... the need for greater diversification in [the fund's] investment portfolio, in areas that would also serve as a hedge against inflation[.]
"The reform law grants states considerable flexibility in designing their exchanges, such as allowing them to combine their small business and individual exchanges, limiting enrollment to companies with 50 or fewer employees or opening to firms of up to 100 employees through 2015, or reducing the ability of insurers in the exchange to charge premiums on the basis of age beyond what the law allows."
"Shouldn't the CEOs of health insurance companies like Blue Shield have to sign under penalty of perjury that their rate hikes are justified? If the first online signature gathering for a ballot petition is successful, Californians will vote on that proposition in November, and are almost sure to approve."
British companies with defined benefit pension schemes are likely to face rising pressure to plug deficits that could grow by 85 billion pounds this year against a backdrop of falling bond yields and prolonged market volatility[.]
"This situation is one of several retirement planning situations that have been addressed by a landmark effort from the Society of Actuaries (SOA) to examine the major decisions you'll encounter when planning your retirement. SOA's just-released series of online briefs, Managing Retirement Decisions, focuses on specific decisions you'll face before and during your retirement years."
Proposed rules set for publication on Wednesday lay the groundwork for a major change in the investment choices available to federal employees through the Thrift Savings Plan with the addition of a Roth alternative.
"The House Oversight and Government Reform Committee advanced . . . the largest cost-saving reform to federal employee pensions since the creation of the Federal Employee Retirement System in 1984. H.R. 3813, the Secure Annuities for Federal Employee Act, introduced by Oversight Subcommittee on Federal Workforce Chairman Dennis Ross, R-Fla., was approved by a vote of 22-16."
[I]n the view of the DOL, plan fiduciaries need the information called for in the Final Regulations in order to satisfy the fiduciary standards of ERISA when selecting and monitoring service providers.
Self-funded companies can do a lot to improve employee health through wellness programs and creating 'micro health delivery systems' ... with goals tailored to the firm's employee population.
"As pharmacy plan costs have risen and the economy has deteriorated, many employers have made significant changes in their pharmacy benefits plan designs. Two key plan design trends have emerged during the past 5 years, which were validated in the findings of our 2011 Prescription Drug Benefit Survey Report: 1. A shift from 2-tier to 3-tier cost sharing to encourage plan members to switch to lower-cost generic drugs and formulary brand drugs. 2. A shift from flat-dollar co-pays to co-insurance to minimize cost-shifting to the employer as drug costs rise."
"The Financial Industry Regulatory Authority (FINRA) issued Regulatory Notice 12-02, which states that investment-related disclosures required under Section 404(a) of [ERISA] are generally deemed to satisfy the content and filing requirements of National Association of Securities Dealers (NASD) communications rules."
"A study finds that plan sponsors offering health care benefits that include a carved-in pharmacy benefit are likely to experience significant medical cost savings over carving out the pharmacy benefit."
The White House may be open to compromising on a new rule that requires religious schools and hospitals to provide employees with access to free birth control, a senior strategist for President Obama said on Tuesday morning.
"[An industry veteran has] warned that the mutual fund industry will come back and say they are burdened with extra administration charge because the Department of Labor is now creating this 'onerous administrative task' for them that they have to put on to the 401(k) plan participants, and they are going to charge more."
"U.S. Senator Mary L. Landrieu, D-La., chair of the Senate Committee on Small Business and Entrepreneurship, and Sen. Johnny Isakson, R-Ga., have introduced S. 2068, the Access to Independent Health Insurance Advisors Act, a companion bill and a shot in the arm for a medical loss ratio bill in the House that has many supporters but has gained no traction."
"What's often missing in surveys and reporting about future retirement readiness may come as a surprise. It can be summed up in one word: optimism. Despite the looming forces of longevity, frugality and economic turbulence, the future may not be so bad after all. Insurance company The Hartford(HIG_) and the MIT AgeLab recently released a study, Age of Opportunity, measuring the opinions and concerns of Americans in and approaching retirement. It found most retirees are pleased with their life, and both pre-retirees and retirees have a positive attitude about retirement overall."
"Here's a great new case on the topic: Heimeshoff v. Hartford Life & Accident Ins. Co. and Wal-Mart . . . . [Benefit denial letter not required to specify time limitations for suit because the ERISA regulation language 'suggests that the DOL did not intend to require such a time limit notification in the benefit determination.']."
"Regardless of the outcome of [recent] cases, the moral(s) of the story for companies are as follows: (1) Address option expiration issues and blackout period in the plan or award agreement. Even Code Section 409A allows an option period to be extended during a blackout period. (2) Clearly communicate the expiration and other terms of equity awards with terminating employees. (3) Take extra care in drafting the plan and agreement terms governing employment termination, vesting, forfeiture and expiration."
"The Obama Administration has in a number of ways previously evinced its intent to facilitate lifetime income solutions in defined contribution plans. This guidance package, which Treasury announced in a press release and which was accompanied by a White House statement, a fact sheet and a report, constitutes a meaningful contribution to that effort. The fact sheet notes that Treasury and the Department of Labor expect to issue further retirement income guidance later this year."
"In November 2011, the Office for Civil Rights (OCR) began audits to assess compliance with the HIPAA Privacy, Breach Notice, and Security Rules. The OCR compliance audits will be conducted by KPMG LLP and generally will consist of an initial document request, an onsite visit by the auditors, and then negotiation of an audit report."
"The funded status of the 100 largest corporate defined benefit pension plans improved by $30 billion during January as measured by the Milliman 100 Pension Funding Index (PFI)."
The newsletter provides a summary of the previous month's legislative, regulatory, and judicial information on employee benefits and upcoming key dates.
"Employer plan sponsors with Michigan employees should discuss payment of the HICA tax with their medical, dental, vision, prescription drug and wellness TPAs. Plan sponsors may want to review their service agreements with their TPAs to determine whether the plan sponsor has any obligation to reimburse the TPAs for the tax."
"One set of rules requires each plan service provider to make certain disclosures to a responsible plan fiduciary (plan sponsor fiduciary/plan administrator with authority to contract with the service provider) and the other set of rules requires each plan administrator to make certain disclosures to plan participants."
"[The guidance] includes a list of the 2011 PR Code qualification provisions that must be included in the plan document (or appendix/supplement to the plan) in order to obtain a qualification letter under the 2011 PR Code. However, note that a plan must have been operated in compliance with all applicable 2011 PR Code provisions since January 1, 2011, even though the plan is not amended untilsometime in 2012."
"PPACA created several new reporting and compliance standards for plans and employers. The [chart in this document] lists some of those new requirements and their effective dates. Failure to meet any of these must be reported on Form 8928 starting in 2012 as of the due date of the employer's federal income tax return. In general, the penalty assessed under Code section 4980D is $100 per day, per affected participant for as long as the plan is non-compliant."
"This Notice finally answers an HSA eligibility question that was especially troubling because, as with certain veterans benefits, the right to obtain medical services from an IHS facility is determined by status (e.g., membership in a federally recognized Indian tribe), and not by choice. The IRS approach resembles the one used to determine HSA eligibility for those eligible for VA medical benefits -- a solution that some of us anticipated as the best fit."
"[What To Do After The Deadline.] Be sure to: Go through the process again for each new arrangement, for any extension or renewal of an existing arrangement, and for any changes; If a disclosure failure is discovered, follow the steps in the prohibited transaction exemption that is part of the final regulations, to include notifying the DOL if appropriate, reporting the failure on Form 5500, and deciding whether to terminate the arrangement with the covered service provider."
"The figure comes from the state's actuary and is included in reports from the KPERS Study Commission. The 13-member special commission was formed in 2011 to fix the pension for state, school and local government workers, which serves 290,000 Kansans. KPERS currently carries an actuarial deficit of $8.3 billion through 2033."
"Both CUNA and NAFCU have offered feedback to the IRS on clarification in determining the definition of 'governmental plan' as it relates to nonqualified deferred compensation plans at federal credit unions."
"On Jan. 19, 2012, in the wake of the theft of an unencrypted laptop computer containing approximately 23,500 patients' records, the Minnesota attorney general brought the first formal enforcement action against a business associate, Accretive Health, Inc., for an alleged violation under [HIPAA], using her authority under the [HITECH] Act. Additionally, the attorney general appears deeply unsettled by the amount of information that Accretive Health collected about patients without the patients' knowledge, alleging that this lack of transparency represents deceptive and fraudulent practices under Minnesota law."
"This article seeks to provide a broad overview of the crisis facing the pension and benefits system in the United States and offers some possible solutions. More importantly, the goal is to spur discourse on the urgent need to protect the benefits of all workers, public and private."
"With just a relatively short regulation and a Revenue Ruling, Treasury simply and in a very straightforward way laid out the definitive structure for defined contribution plans (like 401(k) plans) to start providing lifetime income in a market friendly manner. The two pieces of guidance dealing with DB plans which were issued at the same time are very useful, but the meat of the matter is the critical guidance given under the proposed RMD regulation and the spousal consent Revenue Ruling, 2012-3."
"Congress gave American Airlines an estimated $2.1 billion in pension funding relief over the past six years, nearly double an earlier estimate, the PBGC announced Monday."
"Federal employees, including members of Congress, would contribute 1.5% more toward their pensions under legislation to be considered . . . by the House Oversight and Government Reform Committee."
"n this pair of stories, CQ HealthBeat offers the latest news on the health law's benefts summary rule and one state insurance commissioner's views on essential benefits."
"Final business conduct rules adopted by the Commodity Futures Trading Commission (CFTC) do not conflict with ERISA's fiduciary regulations and do not make swap dealers or major swap participants engage in fiduciary conduct, according to Phyllis Borzi, Assistant Secretary for [EBSA]."
"The Principal? 10 Best Companies for Employee Financial Security is a best practices guide that uses real-world examples to illustrate how middle-market employers can maintain benefits, attract and retain employees, manage costs and much more."
Uwe Reinhardt writes: 'A second major factor accounting for high health spending per capita in the United States is the significantly higher prices Americans pay for virtually all health care services and products.My thesis on this issue . . . is that these much higher prices are the product of a deliberate strategy, hashed out in our political bazaars between the supply side of health care and state and federal legislators, always to keep the payment side of our health system fragmented and relatively weak vis ? vis the supply side of health care."
"The FINRA relief is similar to that issued earlier by the SEC. In an October 2011 No-Action letter, the SEC agreed to treat information provided by a plan administrator to participants that is 'required by and complies with' the ERISA ? 404(a) disclosure requirements as satisfying the requirements of Rule 482 under the 1933 Act. The ERISA ? 404(a) regulations include an optional Model Comparative Chart for making the required financial disclosures to plan participants."
"Our projections show that lower - and moderate-income boomers will continue to rely on Social Security for most of their retirement income. While the projections reflect some good news - women will reap the rewards of working and earning more than previous generations - they also raise alarms. Between 30 and 40 percent of boomers will not have enough income at age 70 to replace 75 percent of their preretirement earnings, a common standard for measuring retirement income adequacy."
"The public was invited to formally comment on the bulletin but in an unusual step, the bulletin comments were not collected through the typical regulations.org site. Instead stakeholders and interest groups were directed to an e-mail address."
"To attract employers, the exchanges must be able to keep costs affordable and limit the burden posed by the insurance process; perform administrative functions; manage enrollment periods; and, perhaps most important, protect against 'adverse selection,' which would lead to a disproportionate number of sicker individuals in the exchanges."
"[The survey] of U.S. Adults finds nearly three of five adults in families earning less than 133 percent of the federal poverty level were uninsured for a time in 2011; two of five were uninsured for one or more years."
"Closing a wider funding gap, the result of expecting less money from future investment earning, would require nearly doubling the current annual payments to CalSTRS if the goal is to reach full funding in the usual 30 years."
"AHIP's President and CEO Karen Ignagni gave [this] presentation on health care costs and innovation to the 9th Annual Healthcare Conference at Harvard Business School on [February 4, 2012]."
"Employers generally have been hesitant to offer annuities in their defined contribution plans due to regulatory barriers, which increased costs and were administratively burdensome. Overall, this guidance should allow retirement plans to more easily offer their participants annuity options, which will give participants a wider range of choices in how they receive their benefits. It is still unclear whether this guidance will be enough to entice employers to provide for annuities in their defined contribution plans. Comments on both sets of proposed regulations must be received by May 3, 2012."
"[According to results from the annual Employee Perceptions of Vision Benefits survey] Baby Boomers (ages 45 to 64) were only slightly more likely than younger employees to enroll in their vision benefit (79 percent vs. 75 percent)."
"Key findings show that while 81% of employers plan to update their SPDs for plan design and Affordable Care Act (ACA) changes this year, they continue to wrestle with cost containment and resource strain for the implementation and review process required to execute SPD changes."
"Pensions and fringe benefits for uniformed workers are going to cost the city more next year than their actual salaries, Mayor Bloomberg revealed . . . as he made another strong pitch for Albany to enact pension reforms."
"According to Pensions & Investments' latest annual survey, the combined assets of the top 1,000 U.S. retirement plans edged up 2.3%, or $148.6 billion, to $6.71 trillion. The largest 200 plans, meanwhile, saw their assets climb 1.7% to $4.965 trillion."
"In the 12 months ended Sept 30, investments by defined benefit plans among P&I's Top 200 grew by double digits across all of the alternative asset classes, compared to the year-earlier survey . . . ."
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2/8/2012: