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Benefits in the News

Older News | June 1, 2016

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IRS Ruling Is Obstacle to Accountable Care Organizations
The New York Times; subscription may be required
5/31/2016
"In its recent ruling, the IRS denied a tax exemption sought by an accountable care organization that coordinates care for people with commercial insurance. The tax agency said the organization did not meet the test for tax-exempt status because it was not operated exclusively for charitable purposes and it provided private benefits to some doctors in its network. The name and location of the organization, formed by a nonprofit health care system, were not disclosed. The ruling does not affect accountable care organizations formed solely to participate in Medicare, but it could affect similar entities serving privately insured patients. Many accountable care organizations coordinate care for both Medicare beneficiaries and privately insured patients."
PBGC 2014 Data Book (PDF)
Pension Benefit Guaranty Corporation [PBGC]
5/31/2016
77 pages; 70 charts. This edition of the PBGC Data Book, updated for the PBGC's 2014 fiscal year, contains financial information about the PBGC and the single-employer and multiemployer pension plans for which it provides benefit guarantees, with charts comparing the data to prior years. A new multiemployer table (M-17) includes time series data on participants in plans by zone status (as defined by PPA '06) through 2013.
Obamacare Exchange Average Premium Hike 16 Percent Next Year
National Center for Policy Analysis Health Policy Blog
[Opinion]
5/31/2016
"The lowest premium Silver plan is going up seven percent, and the second lowest 8 percent, which means most Silver plans are going up more than 16 percent. This widening of premium dispersion is not what we would expect in a functioning market."
Businesses Try to Meet Another Big Obamacare and IRS Deadline
CNBC
5/31/2016
"Delays in implementing the employer mandate created the impression in some executives' minds that the mandate -- and the form-filing requirements -- would end up being delayed yet again, killed by a Republican-controlled Congress, or somehow stopped by a Supreme Court challenge. None of those things happened."
Empower Your Employees with Health Advocacy
HealthFitness
5/31/2016
"[R]esearch shows that fewer than 20 percent of employees actually understand their health and wellness benefits.... [I]mplementing a health advocacy program offers an efficient way for you and your employees to deal with health and wellness benefit issues. Representatives known as health advocates provide education and support to help benefits program participants navigate the health care system and better understand their health and wellness benefit options."
ACA Resources for Frequently Asked Questions (PDF)
Congressional Research Service
[Guidance Overview]
5/31/2016
30 pages. "The report provides basic consumer sources, including a glossary of health coverage terms. The next sections focus on the individual mandate, private health insurance, exchanges, and employer-sponsored coverage.... The report also provides sources on the ACA's provisions on specific populations: women's health care, Indian health care, veterans' and military health care, and the treatment of noncitizens under the ACA. These are followed by sources on behavioral health (mental health and substance use disorders), public health, workforce, and quality. Finally, the report lists sources on taxes, ACA agency audits and investigations, cost estimates and spending, insurance coverage statistics, legal issues, and sources for obtaining the law's full text." [Report No. R43215, dated May 25, 2016.]
The Federal Insurance Fund Protecting Millions of Pensions Is Running Out of Cash
The Washington Post; subscription may be required
5/31/2016
"The insurance fund for single-employer plans is financially stable, but the fund for multi-employer plans is woefully underfunded.... The thinking was that multi-employer plans would be able to turn to the other companies in the pension fund if one employer fell short in contributions or went out of business ... But over the past several years, multi-employer plans have faced financial challenges similar to those of the Central States fund ... Two severe market downturns over roughly 10 years left the plan without enough money to pay expected benefits. At the same time, many companies went out of business, leaving the plan with a smaller number of employers available to pitch in and cover that shortfall."
Millennials and Healthcare: What Message Are They Sending?
Paul Keckley
5/31/2016
"They want to be treated as individuals not as patients. They use technologies that provide insight about their diagnoses and treatment options and compare notes with their social networks.... They're not passive users; they're active decision-makers.... They find health insurance unaffordable, confusing and optional. And they imagine a system of health wherein they connected to a reputable team of providers they choose who follow them through their continuing cascade of job, life, and scenery changes."
Quantifying 'Best Interest,' Reasonable Compensation and Suitability for Investment Professionals
The Prudent Investment Adviser Rules
[Opinion]
5/31/2016
"Given the abundance of evidence establishing the poor historical performance of actively managed mutual funds and the inequitable nature of the 'inverse pricing' method used by many variable annuity issuers in computing a variable annuity annual M&E fee, a strong argument can be made that the fees and other costs charged by many investment professionals are not reasonable at all[.]"
Delta Air Lines 401(k) Participants Sue Fidelity Alleging Fiduciary Breach
Pensions & Investments
5/31/2016
"The participants, who are seeking class-action status, alleged that Fidelity 'wanted a piece of the action' when Financial Engines was hired to provide investment advice for the Delta Family-Care Savings Plan, according to the complaint.... This arrangement 'inflated the price of investment advice services that are critical to the successful management of workers' retirement savings and violates (Fidelity's) fiduciary responsibility,' the complaint said."
Text of IRS Chief Counsel Advice 2016-22031: Tax Treatment of Wellness Program Benefits and Employer Reimbursement of Premiums Provided Pre-Tax Under a Section 125 Cafeteria Plan (PDF)
Internal Revenue Service [IRS]
[Official Guidance]
5/31/2016
"An employer may not exclude from an employee's gross income payments of cash rewards for participating in a wellness program. [Further, an] employer may not exclude from an employee's gross income reimbursements of premiums for participating in a wellness program if the premiums for the wellness program were originally made by salary reduction through a section 125 cafeteria plan."
ADA, GINA and Employer Sponsored Wellness Programs
Compliance Dashboard
[Guidance Overview]
5/31/2016
"Prior to the publication of the new final rule, the EEOC took the view that an employer could not offer any inducement to an employee for providing family medical history.... The final rule ... states that an employer may, in certain circumstances, offer an employee limited inducements for the employee's spouse to provide information about the spouse's manifestation of disease or disorder ... However, this exception does not extend to genetic information about a spouse or to information about manifestation of diseases or disorders in, or genetic information about, an employee's children."
The 'Partnership in Fact' Doctrine of the Sun Capital Partners Case: More Egregious Aggregation under ERISA?
Dechert LLP
5/31/2016
"[T]he First Circuit in its 2013 decision expressly rejected the Multiemployer Plan's claim ... that the Sun Funds had engaged in a transaction to evade or avoid withdrawal liability and that, therefore, the 70%/30% split should be disregarded for purposes of ERISA aggregation....By inserting a partnership-in-fact in the investment structure specifically designed to avoid the 80% threshold, the [2016 District Court decision] creates the possibility that any number of affiliated funds could be deemed to have created a partnership and effectively be subject to the ERISA liabilities of their portfolio companies." [Sun Capital Partners III, LP, et al. v. New England Teamsters & Trucking Industry Pension Fund, No. 10-10921 (D. Mass. Mar. 28, 2016)]
A Bundle of Joy? Bundled Payments for Maternity Care
American Journal of Managed Care
5/31/2016
"As a time-limited condition, maternity care may be uniquely well-suited for bundled payment models... [A] range of different stakeholders -- from health plans ... to self-insured employers ... to freestanding birth centers ... are all piloting bundled payment models for maternity care.... The innovators in maternity care bundled payments vary widely in their approaches[.]"
Companies Add Parent-Friendly Perks
National Public Radio
5/31/2016
"A handful of companies are offering parental benefits that go way beyond just paid leave, to include things like surrogacy reimbursement, egg freezing or breast milk shipping for traveling mothers.... Taking care of employees in this way costs far less than, say, health insurance, in part because the benefits are used by a minority of workers, and generally on a one-time or short-term basis."
Illinois Legislature Overrides Governor's Veto of Chicago Pension Bill
Chicago Sun-Times
5/31/2016
"[T]he Illinois House on Monday voted 72-43 to override [Gov. Bruce] Rauner's veto of the Chicago police and fire pension bill ... The action came just hours after the Illinois Senate voted 39-19 to override the bill. It will now become law.... Rauner blasted the bill, which defers city payments to the pension funds, as financially irresponsible by merely kicking the can down the road. [Chicago Mayor Rahm] Emanuel said Rauner's veto, if sustained, would have meant a $300 million property tax hike for city property owners, which Emanuel quickly dubbed the 'Rauner Tax.' "
Achieving Retirement Income Security: A Comparison of Withdrawal Strategies
TIAA Institute
5/31/2016
"With the exception of retirement income starting dates at the beginning of the Great Depression, [Guaranteed Lifetime Withdrawal Benefit (GLWB), systematic withdrawal, and partial Variable Immediate Annuity (VIA)] strategies [all] performed well in providing income throughout retired life. The partial VIA and GLWB strategies provided better 'peace of mind' retirement income products, while the systematic withdrawal strategy offered the greatest flexibility in managing retirement assets. Overall, ... a partial VIA income strategy comprised of a VIA and supplemental liquid asset account would have provided the best mixture of income generation, risk management, and estate potential for the majority of cohorts."
12 Cities Where Most Workers Don't Have a 401(k)
U.S. News & World Report
5/31/2016
"The proportion of workers with access to a retirement plan varies form 71 percent in Grand Rapids, Michigan, and Scranton, Pennsylvania, to 23 percent in McAllen, Texas. Cities with low access to retirement benefits are largely concentrated in just three states: Florida, Texas and California."
The Push for Paid Sick, Family and Medical Leave in Minnesota: Minneapolis Passes Ordinance
Faegre Baker Daniels LLP
[Guidance Overview]
5/31/2016
"Although none of the bills addressing statewide paid sick and safe time, paid family and medical leave or state pre-emption of local laws [have] passed through the Minnesota Legislature, Minneapolis passed its Sick and Safe Time Ordinance on May 27, 2016, and St. Paul continues to consider the possibility of extending paid sick and safe time to all employees in Saint Paul."
Minneapolis Becomes First City in Minnesota to Require Paid Sick Leave
Jackson Lewis P.C.
[Guidance Overview]
5/31/2016
"On May 27, 2016, the Minneapolis City Council unanimously passed a citywide sick leave ordinance, the Minneapolis Sick and Safe Time Ordinance, requiring employers with at least six employees, regardless of their location, to provide paid sick and safe time leave to employees who work in the City of Minneapolis. The Ordinance goes into effect on July 1, 2017."
Health Insurers Find Back Door to Limit Choice
USA TODAY
[Opinion]
5/27/2016
"Insurance companies ... [have] cooked up a clever way to justify exclusions from formularies by founding and funding a group called the Institute for Clinical and Economic Review, or ICER.... ICER, which holds itself out as a kind of Consumer Reports for drugs, is basically an industry-backed comparative effectiveness calculator. That ICER is industry backed isn't the problem, it's that it uses comparative effectiveness to lend an air of legitimacy to the formulary shenanigans. Different people respond differently to medications. The blue pills don't always work the same as the red pills. Individuals, it turns out, are different."
Supreme Court Hands Verizon Retirees Victory in Pension Spinoff Case
InsuranceNewsNet.com
5/27/2016
"[T]he U.S. Supreme Court vacated a lower court decision and sent the case back to be re-evaluated, giving the class action suit, advanced by the Association of BellTel Retirees Inc., a significant shot in the arm.... At issue... is whether the plaintiffs can show they suffered 'concrete harm' as a result of the company's actions. The Verizon retirees argue that the company, in selling off pension assets to Prudential Insurance Company as a group annuity, is putting all retiree pensions at risk." [Pundt v. Verizon Comm., No. 15-785 (S. Ct. cert. pet. granted May 23, 2016)]
DOL Tries to Find a More Ideal Balance in the Final 'Investment Advice' Rules (PDF)
Dechert LLP
[Guidance Overview]
5/27/2016
32 pages. "The Final Rule is arguably the most significant change to the fiduciary rules governing retirement plans since ERISA was enacted, and it has the potential to disrupt many trends and practices by which financial products are currently marketed and sold to retirement investors.... There is an important impact on certain market participants who themselves might not be fiduciaries, but whose business will be affected by those who are -- notably, registered investment companies ('funds') and their sponsors. The Final Rule could significantly impact funds' intermediary-distribution channels, and may therefore lead to changes in demand for certain types of funds, share classes and intermediary-compensation arrangements."
IRS Checklists for Retirement Plan Documents
Internal Revenue Service [IRS]
[Guidance Overview]
5/27/2016
"Listed [at this page] are IRS checklists for retirement plan documents categorized into subject matter packages that Employee Plans Specialists use when reviewing retirement plan documents.... Each package contains: [1] An Explanation that provides guidance in the law and legal citations. [2] Alert Guidelines (Worksheets) you can use to review retirement plans.... [3] Plan Deficiency Paragraphs (Checksheets) that are pre-approved wording that, if used by plan sponsors, will satisfy the applicable Internal Revenue Code requirements."
Universal Pensions: A Progressive Alternative to Retirement Savings
The Hill
[Opinion]
5/27/2016
"[The] proposed Universal Pension would simplify the system and foster participation by reducing the amount of paperwork, financial sophistication, and fees that are required to save. Participation would be voluntary, but working Americans would be encouraged to open an account with a $500 tax rebate. And contributions by workers without tax liability would be eligible for an expanded refundable credit to bolster retirement savings for lower-income families."
HHS Issues Final Rule on ACA Nondiscrimination Provisions Under Section 1557 (PDF)
Groom Law Group
[Guidance Overview]
5/27/2016
"Health insurance issuers should first determine whether they receive federal financial assistance from HHS (they most likely do, so any conclusion to the contrary should be carefully reviewed).... Issuers that are related to TPAs should consider whether the TPA is 'independent' and, if not, should take steps to ensure that benefits are administered in a nondiscriminatory manner.... Employers sponsoring group health plans should first determine whether the employer receives federal financial assistance from HHS for any purpose. Employers should also ensure that benefit design decisions made by the employer in its role as a plan settlor are adequately and appropriately documented."
It's Time to Review Your Wellness Program Under New ADA and GINA Final Rules (And HIPAA And...)
Drinker Biddle
[Guidance Overview]
5/27/2016
"A chart summarizing the applicable rules under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), the Genetic Information Nondiscrimination Act of 2008 (GINA), and the Americans with Disabilities Act of 1990 (ADA) appears at the end of this [article].... The EEOC urges employers to adopt best practices to protect confidentiality of medical information and genetic information. The EEOC suggests that such practices include adoption and communication of strong privacy policies, training for individuals who handle confidential medical information, encryption of electronic files, and policies that require prompt notification of employees whose information is compromised if data breaches occur."
New ACA Anti-Discrimination Rules: Language Assistance for Non-English Speakers
Holland & Hart LLP
[Guidance Overview]
5/27/2016
"Covered entities should immediately evaluate their policies and processes for interacting with individuals with limited English proficiency and, where necessary, modify them to comply with the new, heightened standards by July 18, 2016. Among other things, they will need to prepare the required notices and taglines by October 16, 2016, and arrange for appropriate and timely interpreter and, as appropriate, translator services."
Choosing Default Investment Alternatives for 401(k)s Requires Close Due Diligence
InvestmentNews
5/27/2016
"Brightscope reports that plan assets invested in TDFs already exceed $1.1 trillion ... and are likely to hit $2 trillion by 2020. But successfully gathering assets doesn't necessarily mean that a TDF is the right choice for every plan's QDIA. It certainly doesn't mean that TDFs are well-suited for every plan participant."
ERISA Advisory Council to Discuss Cybersecurity, Other Benefit Plan Issues at June Meeting
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]
5/27/2016
"The council's discussion includes 'Cybersecurity Considerations for Benefit Plans' on June 7, and 'Participant Plan Transfers and Account Consolidation for the Advancement of Lifetime Plan Participation' on June 8. Both topics will be discussed on June 9; however, the meetings' schedule is subject to change."
IRS Letter Addresses Readily Available Test When Bus Company Does Not Accept Debit Cards
Thomson Reuters / EBIA
[Guidance Overview]
5/27/2016
"If an employer cannot offer cash reimbursements for a particular transit provider, and more convenient vouchers like debit cards cannot be used, the employer may need to make a difficult decision: deal with the practical challenges of distributing the available vouchers for that provider, or refuse to pay benefits for that provider because the administrative burdens of dealing with the available vouchers outweigh the value of the transit benefit."
HHS, DOL and Treasury Release New Summary of Benefits and Coverage Templates and Accompanying Documents
Proskauer's ERISA Practice Center
[Guidance Overview]
5/27/2016
"The SBCs provided to consumers must follow a uniform format and contain certain information. This information includes uniform standard definitions of medical and health coverage terms, a description of the coverage, cost-sharing requirements, and information regarding any exceptions, reductions or limitations under the coverage.... The changes to the requirements and templates and all relevant effective dates are described [in this article]."
Reproposed Regs Will Significantly Change the Structure of Incentive Compensation at Financial Institutions with $1 Billion or More in Assets (PDF)
Frederic W. Cook & Co., Inc.
[Guidance Overview]
5/27/2016
12 pages. "While most commentary to date has focused on the rules applicable to entities with assets of $50 billion or more (Level 1 and Level 2 entities), the rules that affect Level 3 entities ($1 billion to $50 billion in assets) are also far reaching and will substantially affect the design and administration of their incentive compensation programs. In particular, it appears impermissible for any incentive compensation plan for any employee to provide payment based solely on quantitative criteria."
Understanding the Nuances of Your ESOP Plan Language: Forced or Involuntary Distributions
Principal Financial Group
5/27/2016
"Many plan sponsors do not realize that retired participants can also be forced out of the ESOP if they do not elect to receive a distribution when eligible. This is true regardless of their account balance and regardless of the plan document language. This provision is found in IRC 411(a)(11). Though many plan documents do not state this directly, it may be inferred[.]"
Virginia Insurer's Decision to Drop Bronze Plans Prompts Concerns
Kaiser Health News
5/27/2016
"News that a CareFirst BlueCross BlueShield subsidiary will stop selling bronze level plans on the Virginia marketplace next year prompted some speculation that it could signal a developing movement by insurers to drop that level of coverage altogether. The reality may be more complicated and interesting, some experts said, based on an analysis of plan data."
Be on the Lookout for Marketplace Notices
Frenkel Benefits
5/27/2016
"[T]he Federally-Facilitated Marketplaces (FFM) will send an employer [a notice] when one of their employees accesses marketplace coverage and receives a tax credit. These notices will be sent out to employers throughout 2016 with plans for the first notices to be sent out in the coming weeks. Employers should be on the lookout for these notices since they will have 90 days to appeal a notice or face the risk of a fine."
DOL and Treasury Update 2015-2016 Regulatory Agendas for Employee Benefits
Sutherland Asbill & Brennan LLP
5/27/2016
"The DOL's agenda and related materials include 13 pending projects related to employee benefits ... . The IRS Business Plan includes 28 pending items addressing retirement benefits and 14 pending items addressing executive compensation, health care and other benefits.... There are no new projects added to the agendas since they were last published."
The Impact of Student Loan Debt on Defined Contribution Retirement Plan Participation: The Plan Sponsor Perspective
Plan Sponsor Council of America [PSCA]
5/27/2016
11 pages. "[T]he degree to which Millennial employees cite student loan debt as creating a 'Moderate' (26.0 percent) or 'High' (8.9 percent) barrier to saving for retirement is significant. These findings are particularly noteworthy within select industries, such as in the service industry where 42.5 percent of respondents rate student loan debt as a 'Moderate ' or 'High' barrier, or in the technology or telecommunications industry where 45.5 percent of respondents rate student loan debt as a 'Moderate' or 'High' barrier."
Health Insurers Increase Borrowing Due to Impact of ACA
A.M. Best Company
5/27/2016
"U.S. health insurance carriers have increased the amount of borrowed money on their statutory balance sheets by nearly 100% over a four-year period, to approximately $6.4 billion at year-end 2015 from just under $3.3 billion in first-quarter 2011 ... [T]he financial leverage for the health industry has increased to more than 30% due to mergers & acquisitions and is expected to increase to well above 40% with the completion of two large mergers that are pending[.]"
Blue Shield 'Lifts the Veil' on Executive Pay
Kaiser Health News
5/27/2016
"In its first detailed disclosure on executive pay, nonprofit Blue Shield of California said Chief Executive Paul Markovich made $3.5 million last year -- a 40 percent increase since he took the top job in 2013. The San Francisco-based health insurer has faced criticism for years from consumer advocates about its lack of transparency on executive compensation, and the issue attracted even more scrutiny after a state audit raised questions about the insurer's big pay increases."
Your CEO Pay Ratio Will Be an Estimate Even If You Don't Use Statistical Sampling
Willis Towers Watson
[Guidance Overview]
5/27/2016
"[S]ome companies that they're reluctant to employ statistical sampling in calculating their CEO pay ratios based on the notion that their calculation will not be as accurate as if they had used actual data for their entire workforce.... [The SEC] does not require companies to calculate Summary Compensation Table (SCT) total compensation for all employees to identify the median employee. As a result, every company will be using a less-than-100%-accurate methodology to arrive at an estimate of the median pay[.]"
The Retirement Income Dilemma: An In-Plan Solution
Principal Financial Group
5/27/2016
26 pages. "Plan sponsors can help address most of the risks by offering an in-plan lifetime income solution. The plan sponsor's task in selecting the product is no greater than any other fiduciary decision, and it can provide a significant benefit to the employees. One solution that may provide the greatest overall benefit is income insurance, in the form of an in-plan deferred income annuity (DIA)."
Ohio Makes a Baker's Dozen
Energy & Commerce Committee, U.S. House of Representatives
5/27/2016
"The state of Ohio announced [on May 26] that its CO-OP would shutter, forcing its more than 20,000 participants to find new coverage within the next 60 days. The announcement marks 13 out of the original 23 Obamacare CO-OPs that have closed its doors at a total cost to taxpayers of $1.36 billion."
How to Increase Competition Under the ACA
BDO Center for Healthcare Excellence and Innovation
[Opinion]
5/27/2016
"[M]ost of the 'new' insurance plans on the exchanges are just different iterations on health plans already being offered by legacy insurance carriers. The ACA has been devoid of the kind of brisk new health plan company formation that was seen with the launch of Medicare's Part D drug benefit and its Medicare Advantage program. The question is, why? One of the big culprits, [the authors] believe, is the cap that the ACA places on the operating margins of insurance carriers."
Text of CMS FAQ on Waiting Periods for Essential Health Benefits (PDF)
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]
[Official Guidance]
5/26/2016
Unnumbered document, dated May 26, 2016. "For plans that must provide coverage of the essential health benefit package under section 1302(a) of the [ACA], if an issuer imposes a waiting period before an enrollee can access a covered benefit, is that a violation of the EHB requirements? Yes.... After further consideration of whether pediatric orthodontia should be excepted from this prohibition on waiting periods, we are revising our policy to no longer allow waiting periods for pediatric orthodontia, as we have determined that the same concerns we previously noted also apply to these benefits."
DOL Warns Broker Dealers to Prep for Fiduciary Deadline; AARP to Deploy 'Mystery Shoppers'
ThinkAdvisor
5/26/2016
"Broker-dealers should be 'nervous' if they don't have policies and procedures in place before the [DOL] fiduciary rule's first deadline hits next April, Timothy Hauser, one of the chief architects of the rule, said ... Nancy Smith, executive vice president and corporate secretary at AARP, said ... that AARP will not only continue to advocate for the fiduciary rule but plans to assemble some members to act as 'mystery shoppers' to see if advisors are complying. The retirement advice 'problem is not just a few bad actors,' Smith said. 'All financial professionals can face enormous institutional and peer pressure to act in a way that's not in the client's best interest.' "
HHS Issues Final ACA Nondiscrimination in Health Programs and Activities Regulation
McDermott Will & Emery
[Guidance Overview]
5/26/2016
"The nondiscrimination provision extends to employers who as plan sponsors receive federal financial assistance to fund their employee health benefit programs; however, an employer that otherwise receives federal financial assistance does not become subject to the rule simply by offering employee health benefits.... Third-party administrators are only liable for their own discriminatory actions based on decisions that are within the scope of their authority, such as discriminatory claims denials. A discriminatory plan design would be the liability of the self-insured group health plan, with OCR reviewing whether the third-party administrator and the self-insured group health plan are legally separate on a case-by-case basis."
DOL Backs Foot Locker Workers in Pension Case
Bloomberg BNA
5/26/2016
"The DOL has asked the U.S. Court of Appeals for the Second Circuit to rule that a group of Foot Locker Inc. workers can bring a class action against the company without having to prove that each individual worker relied on Foot Locker's misrepresentations about the effects of a 1996 pension plan change. If the Second Circuit agrees with the DOL, the ruling would make it easier for workers to file class actions under [ERISA], whereas a decision to the contrary would limit the ability to obtain class-wide relief in cases claiming that an employer misled its workers about retirement benefits."
IRS Doubted Legality of Obamacare Payments, Former Official Says
The Hill
5/26/2016
"David Fisher, who was the IRS's chief risk officer, told the House Ways and Means Committee that agency officials questioned whether the [ACA] provided the authority to make certain payments to insurers without an appropriation from Congress. Most senior IRS officials ended up concluding that the payments were legal after a meeting with the White House to hear its legal justification, and the administration eventually went ahead with disbursing the funds."
How Much of That Part-Time Income Can You Afford to Spend in Retirement?
Ken Steiner, FSA Retired
5/26/2016
"Many individuals who are retired take a part-time job to supplement their income in retirement. Frequently, these retirees believe that this income can increase their annual retirement spending budget by the net amount received during the year from such employment ... [This article] will encourage retirees who work to possibly consider taking a longer-term 'actuarial' perspective by spreading the present value of this extra income over their remaining period of retirement."
New Health Benefits Survey Shows Continued Employer Focus on Containing Costs (PDF)
Conrad Siegel Actuaries
5/26/2016
"Of employers who do offer spousal coverage, 27 percent required a surcharge to cover the spouse, compared to 16 percent in 2014. The average surcharge in 2015 was $2,288, which increased from $1,730 in 2014....The average percentage of the medical premium that employees paid for single coverage in 2015 was 15 percent, which has remained relatively constant over the past several years. The average premium share for family coverage was 20 percent in 2015.... 50 percent of employers offer a plan with either an HSA or an HRA account option. This is up significantly from last year at 41 percent."
Fiduciary Responsibilities: An Overview for Retirement Plan Sponsors
Fiduciary Plan Governance, LLC
5/26/2016
"As a plan sponsor, you should regularly receive fee disclosures that include the following information: [1] A description of the services provided; [2] The status of the service provider as an ERISA fiduciary; [3] A clear statement of compensation and fees; [4] Termination charges, if any. They should become part of your permanent due diligence file after you've reviewed them to make sure they're complete and accurate. If you aren't getting them, ask. It's up to you to make sure you have the information you need."
The ACA's Section 1332: Escape Hatch or Straightjacket for Reform?
Health Affairs
5/26/2016
"In state capitols across the country, health care lobbyists and consultants are pushing a relatively unknown provision of the [ACA] (ACA): Section 1332. According to some proponents, these waivers will 'turbocharge state innovation' and will provide states with an 'exit strategy' from the ACA. But is the hype true? Will Section 1332 waivers be as truly transformative to our health care system as suggested? ... A serious, objective examination of the new Section 1332 federal guidance sparks far more questions than answers for policymakers."
Chicago's Pension Patch Job?
Pension Pulse
[Opinion]
5/25/2016
"In Chicago, powerful public unions are going head to head with a powerful and unpopular mayor who got rebuffed by Illinois's Supreme Court when he tried cutting pension benefits. Now, they are tinkering around the edges, increasing the contribution rate for new employees of the city's smallest pension, which is not going to make a significant impact on what is truly ailing Chicago and Illinois's public pensions. All these measures are like putting a band-aid over a metastasized tumor."
Fiduciary Rule Had Support from a Surprising Contingent
Financial Planning
5/25/2016
"Over the years the [DOL] spent developing and then reworking the fiduciary rule, Assistant Secretary Phyllis Borzi and her colleagues regularly received support from a surprising quarter -- people who work for some of the companies that most vehemently fought it. 'Wherever I would go, people would come up to me, wearing name tags of companies that were wildly opposed to what we were doing, and they would say, "You go, girl" ', Borzi told an audience at an Institute for the Fiduciary Standard event this week. 'And that kept us going.' "
Taxes, Fees, and Your Health Insurance Premiums
America's Health Insurance Plans [AHIP]
[Opinion]
5/25/2016
"What determines how much you pay in health insurance premiums? That's a complicated question that involves a number of factors ... [One] factor that receives less attention is the total amount of various taxes and fees paid by health insurance companies. We must understand these costs and aim to reduce or end these taxes and fees if we are to address the affordability of coverage."
Pension Strategy in Today's Market Environment (PDF)
SEI
5/25/2016
"Given the market volatility in Q1 and industry reports highlighting an overall decrease in funded status of corporate pensions, should plan sponsors be reacting by de-risking their pension plans? ... Are there other contributing factors that make initiating a de-risking strategy not necessarily conducive to the current market environment? ... Are there certain scenarios where plans should be de-risking? ... If a plan sponsor doesn't necessarily meet the profiles mentioned above, what strategies should they be considering in the current environment?"
Will You Ever Understand Your Medical Bill?
National Center for Policy Analysis Health Policy Blog
[Opinion]
5/25/2016
"It is hard not to get carried away on a wave of outrage when reading stories of patients faced with ridiculous bills, which (even if they can understand them) they might never be prepared to pay. A new crop of entrepreneurs is hoping to solve this problem.... The Obama Administration itself is getting into the act, having just announced a competition to design 'A Bill You Can Understand,' which will give prizes of $5,000 each to two designers who meet the challenges of making bills comprehensible and improving the workflow that generates them."
Addressing Cybersecurity in Your Retirement Plan TPA Contract
von Briesen & Roper, s.c.
5/25/2016
"Plan fiduciaries clearly have an obligation to protect retirement plan assets. Given that cyber-attacks may jeopardize the safety of those assets, employers should consider cybersecurity as it relates to the safety of plan assets when making decisions to select or retain a TPA and/or trustee for its plan(s). It is less clear what the employer's exposure would be in the event an employee's identity would be stolen as a result of a cyber-attack on the retirement plan TPA if no theft of retirement plan assets occurs."
Understanding How Payment and Benefit Designs Work Together in Health Care
Health Affairs
5/25/2016
"Many of those experimenting with or interested in implementing reforms don't understand the nuances of the payment methods and or benefit designs involved: their strengths and weaknesses; how to combat potential weaknesses; what performance measures should be used to counter possible unintended consequences; and how these incentives may affect provider pricing. Having a greater understanding of the nuances inherent in provider and consumer incentives can help implementers determine where their reforms fall short and how they can address those challenges."
100-Participant 401(k) Plan Subject of New ERISA Fiduciary Breach Class Action
Nixon Peabody LLP
5/25/2016
"Proving that even modest size 401(k) plans are fair game, a fiduciary breach class action suit has been filed against the plan sponsor and fiduciaries of ... [a plan with] approximately 130 participants and $9.8 million in assets. The suit claims that ... the plan's investment options ... include mutual funds, pooled separate accounts and a guaranteed investment contract offered by Voya. Voya is also the plan's recordkeeper.... The ERISA fiduciary breach allegations are the same as those made in the cases against the giant employers and their plans[.]"
Missouri to Ban Small-Group Products of Resulting Firm If Aetna and Humana Merge
FierceHealthPayer
5/25/2016
"In a preliminary order, Missouri Department of Insurance Director John Huff writes that if Aetna and Humana's deal eventually closes, the company and its subsidiaries must 'cease and desist' from doing business throughout the state in the comprehensive individual, comprehensive small-group and group Medicare Advantage markets. In the individual MA market, Aetna-Humana would have to stop doing business in certain counties in Missouri that the state has determined would be adversely affected by competition."
Implementing a Single-Employer DB Plan Spin-Off
Milliman Retirement Town Hall
5/25/2016
"A plan sponsor in an ongoing pension plan is generally not allowed to transfer the responsibilities for the liabilities of active participants unless the plan is being terminated. If the assets and liabilities related to active participants are spun off into a new separate plan, that plan can then be terminated with the liability responsibility transferred... If 3% or more of plan assets are spun-off into a new plan, a complicated actuarial calculation must be done to determine the assets allocated to each plan, based on PBGC liability categorization rules for underfunded plan terminations."
Missouri Says Aetna-Humana Merger Is Anti-Competitive
Modern Healthcare Online; free registration required
5/25/2016
"Missouri insurance officials have issued a preliminary order against the merger of Aetna and Humana, the first state to find serious antitrust problems with the massive transaction. However, Aetna and Humana have 30 days to 'submit a plan to remedy the anti-competitive impact of the acquisition.' ... But some antitrust experts aren't convinced selling off assets to another insurer will solve all concerns.... Aetna has received approval for the Humana deal in 15 out of a necessary 20 states."
Aegon Retirement Readiness Survey 2016: A Retirement Wake-Up Call
Aegon
5/26/2016
"Improvements in planning and saving have been offset by decreases in feelings of personal responsibility related to providing sufficient income in retirement. Moreover, around the world, many workers are heavily reliant on government benefits and are not saving enough to adequately fund their retirement income needs. Inadequate attention is being given to address the costs and implications of increased life expectancy. Fundamental changes are needed for people to achieve their retirement aspirations and to support retirement systems that are affordable, inclusive, and equitable. Governments, employers, and individuals must continue to expand upon actions that are proven effective while innovating new solutions for the future."
The Cost/Benefit Analysis of Self-Funding Employee Health Benefits
Stephen Rosenberg, The Wagner Law Group
5/25/2016
"Large self-funded employers ... have the deep pockets to hire major, brand name administrators. Smaller employers sometimes end up with smaller, less sophisticated administrators, either because of cost or because they simply don't know what to look for in picking an administrator. These operational risks place a smaller employer with a self-funded plan at risk of losses, and need to be accounted for by smaller companies in, first, deciding whether to self-fund health benefits and, second, in planning how to do so."
Designing the DC Plan of the Future
BNY Mellon
5/26/2016
16 pages. "Sponsors have sought to address the limitations of DC plans by borrowing best practices from the DB arena. While stopping short of a full-scale return to the pension model, the so-called 'institutionalization' of DC plans relies on the following approaches:[1] Increased use of low-fee, institutional vehicles; [2] Greater use of alternative strategies; [3] Generating an income stream during retirement. The benefits of each of these approaches are explained in greater detail [in this article]."
Court Boots Executive's $21 Million ERISA Claim Under Stock Rights Plan
Bloomberg BNA
5/25/2016
"In affirming a federal district court's decision, the U.S. Court of Appeals for the Ninth Circuit held ... that the Booz Allen stock rights plan wasn't covered by [ERISA] because it wasn't designed or intended to provide retirement or deferred income. With this ruling, the Ninth Circuit joins the Third, Fifth and Eighth circuits in holding that to qualify as an employee pension benefit plan subject to ERISA, 'the paramount consideration is whether the primary purpose of the plan is to provide deferred compensation or other retirement benefits.' " [Rich v. Shrader, et al., No. 14-55484 (9th Cir. May 24, 2016)]
CFOs and HR Execs Face Millions in Personal Liability Due to Unmanaged Health Plans
Forbes
[Opinion]
5/26/2016
"Employers typically have extremely rigorous oversight of retirement benefits with independent investment committees, regular audits and more. Though the same fiduciary responsibility exists for health benefits, evidence suggests that the vast majority of employers have fallen short."
Best Interest Contract Exemption Permits Proprietary Products and Commissioned Sales
Mintz Levin
[Guidance Overview]
5/25/2016
"The BIC exemption broadly (though not universally) acts to preserve access to commissions provided that the advice is not conflicted and is in the 'best interest' of the investor.... The exemption permits advisors and financial institutions to continue to receive commissions for providing fiduciary advice, provided that the financial institution/advisor acts in the retirement investor's best interest, does not receive unreasonable compensation, observes anti-conflict policies, and makes certain required disclosures."

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