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Benefits in the News

Older News | April 19, 2015

Search the News

arrow icon Small Wellness Initiatives, Big Savings for North Carolina State Health Plan
FierceHealthPayer
4/17/2015

"The plan included three wellness initiatives that members could finish in order to reduce their premiums: Name a primary care physician, complete a health risk assessment and complete a smoking cessation program.... Through these three initiatives, health plan members should save about $23 million on their premiums in 2015 ... [D]ata gathered from the risk assessments ... helped the health plan develop care management plans for members with catastrophic illnesses and care coordination plans for those with chronic conditions ... Collectively, these members represent 52 percent of the health plan's total enrollment but 88 percent of its overall costs."
arrow icon Why Employers Need a Gap Analysis
The Wagner Law Group
4/17/2015

"Conducting a gap analysis helps to ensure that plans are being administered in accordance with ERISA and the Code. A gap analysis can also ensure that the plan operates more efficiently, and, as a result, can help to minimize plan costs. When a compliance problem is discovered during a gap analysis, the problem can often be 'corrected' using one of the compliance programs sponsored by the DOL or [IRS]. The cost of utilizing a government sponsored compliance programs is significantly less than correcting a compliance issue discovered by a government agency on audit."
arrow icon Memo to Industry: Get Behind Fiduciary Rule
Morningstar
4/17/2015 [Opinion]

"Leaving aside the overblown rhetoric -- really, all American savers, including people with a deposit account in a bank, will suffer if brokers adhere a fiduciary standard?--the critics of a fiduciary rule have a point. There are some protections for investors who receive poor broker-provided advice on their retirement accounts. And smart people can poke some holes in the Administration's economic arguments in favor of the fiduciary rule.... [T]he issue comes down to the harm that can and does come to individual retirement investors in the absence of the fiduciary rule."
arrow icon DOL's Expansion of the Definition of Investment Advice (or 'Fiduciary')
Benefits Bryan Cave
4/17/2015 [Guidance Overview]

"The DOL's position is that the suitability standard is not sufficient to prevent the rendering of conflicted advice that it believes costs retirees billions of dollars in inappropriate fees. The brokerage industry contends, in part, that the cost of compliance with the new rule, the enhanced risk of litigation, and the fact that fees must necessarily be higher to provide advice on an individual basis make the rule unworkable and that small plans and small investors will lose the ability to obtain investment advice and to continue to work with a trusted advisor. At a minimum, compliance with the new rule is expected to alter the way that brokerage houses do business."
arrow icon 2015 Proposed Revisions to Existing Prohibited Transaction Exemptions (PDF)
Groom Law Group
4/17/2015 [Guidance Overview]

7-page chart details the current prohibited transaction exemption and proposed changes, and provides commentary. A more detailed summary and analysis of each PTE is also available: [1] Best Interest Contract Exemption (11 pages); [2] Pre-Existing Transaction Exemption (2 pages); [3] Insurance and Annuity Exemption (2 pages); [4] Principal Transactions in Debt Securities Exemption (5 pages).
arrow icon DOL's Fiduciary Advice Definition Proposal: The Regulatory Impact Analysis (PDF)
Groom Law Group
4/17/2015

"Section 7 of the RIA discusses the regulatory alternatives that the DOL considered before settling on the 2015 Proposed Regulation. Although it appears that DOL considered a number of alternatives, some appearing more credible than others, DOL concluded that that none would protect plan and IRA investors as effectively as the 2015 Proposed Regulation."
arrow icon Proposed DOL Regs Include Major Changes to Fiduciary Advice Definition (PDF)
Groom Law Group
4/17/2015 [Guidance Overview]

6 pages. "The changes proposed by the DOL to the fiduciary definition will expand the universe of individuals and entities viewed as investment advice fiduciaries to ERISA retirement plans and IRAs. While the proposal includes some helpful exceptions to the application of the new fiduciary definition, these exceptions are relatively narrow. As a result, certain sales activities, and consulting, recordkeeping, participant education and valuation services that do not currently give rise to fiduciary status, would do so under the proposal."
arrow icon EBSA Issues Regs -- and More -- on Fiduciary Definition and Duty (PDF)
Ascensus
4/17/2015 [Guidance Overview]

"With the objective of preventing conflicts of interest from influencing the advice given to plans, participants, beneficiaries and IRA owners -- while maintaining the availability of needed investment advice -- EBSA is creating new PTEs and amending several existing ones.... EBSA indicates that the centerpiece of these exemptions is intended to allow an advisor or firm (or both) substantial freedom in maintaining existing preferred compensation practices[.]"
arrow icon New EEOC Proposed Wellness Program Regulations Finally Address ADA Concerns
ABD Insurance & Financial Services
4/17/2015

"[T]he ADA rules do not fully incorporate the increased ACA/HIPAA 50% incentive threshold for smoking cessation programs. Any incentive tied to biometric screening or medical examination that tests for the presence of nicotine or tobacco must be limited to 30% to meet the ADA requirements (even though an incentive up to 50% would be permitted under the ACA/HIPAA rules). Only a smoking cessation program that merely asks employees whether or not they use tobacco (or whether or not they ceased using tobacco upon completion of the program), without any medical examination to verify tobacco use, is permitted to reach the higher ACA/HIPAA 50% incentive limit."
arrow icon 2015 Emerging Trends in Health Care Survey
Towers Watson
4/17/2015

"Health care costs for 2015 are projected to increase by 4% after plan changes. The 2018 excise tax on high-cost health benefits has placed a time clock on optimizing health plan performance. Employers expect to make moderate to significant changes to their health care benefits to combat rising costs."
arrow icon EEOC Issues Proposed Rule Addressing ADA Compliance and Wellness Programs
Littler
4/17/2015 [Guidance Overview]

"The EEOC's proposed rule attempts to clarify what does and does not constitute a permissible wellness program in light of the ADA's protections.... The Commission stated that 'it has a responsibility to interpret the ADA in a manner that reflects both the ADA's goal of limiting employer access to medical information and HIPAA's and the Affordable Care Act's provisions promoting wellness programs.'"
arrow icon The EEOC's Proposed Wellness Plan Regulation: Some Progress, But Issues Persist
Seyfarth Shaw LLP
4/17/2015 [Guidance Overview]

"While the rule, if promulgated, would provide some clarity for employers, it would also raise some important questions related to the EEOC's power to strip employers of a statutory defense, and potentially muddy the waters if an affordability standard is included. In addition, the NPRM opens the door to uncertainty with reference to wellness program-related claims under Title VII and the ADEA as well."
arrow icon California Employers, Beware: It's Time to Rewrite Your Sick Leave and PTO Policies
Epstein Becker Green
4/17/2015 [Guidance Overview]

"The new law is clear that employers with existing PTO policies that provide for the accrual and use of time off that is at least equivalent to the requirements of AB 1522 do not need to provide additional paid sick leave. That is precisely why many employers may mistakenly assume that they do not need to make any changes to their existing policies."
arrow icon Is Your Rollover Business at Risk Under Proposed Fiduciary Plan?
On Wall Street
4/17/2015 [Guidance Overview]

"Adding rollovers and IRAs to the definition of fiduciary duties, the U.S. Department of Labor's new proposed rule could have a huge impact on firms in a fast-growing and profitable segment of the retirement savings industry. The new proposal will permit broker commissions if certain conditions are met for those advising individuals or small plans rolling over from company 401(k) plans to particular IRAs. The inclusion means that broker dealers and advisors would have to disclose, for instance, if a client would be putting their money in an investment vehicle with a higher fee[.]"
arrow icon EEOC Finally Lets the Wellness Cat Out of the Bag
Benefits Bryan Cave
4/17/2015 [Guidance Overview]

"[U]nder the HIPAA rules, the incentive can be up to 30% of the total cost of family coverage if spouses and dependents are eligible to participate in the wellness program. The EEOC's proposed rules contain no such expansion. It is not clear whether the EEOC feels it does not have jurisdiction over non-employees participating in a health plan or if it is trying to reign in the possible incentives under wellness programs."
arrow icon Guidance for the Redacted Actuarial Memorandum (PDF)
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]
4/17/2015 [Official Guidance]

"A Rate Filing Justification for single risk pool compliant plans consists of: Part I Uniform Rate Review Template (URRT), Part II Written Description Justifying the Rate Increase (only for rate increases of 10% or greater), and Part III Rating Filing Documentation (Actuarial Memorandum) ... To facilitate the release of the information ... health insurance issuers must submit two versions of the Actuarial Memorandum (AM). [if] their AM contains trade secrets or confidential commercial or financial information as defined in HHS's FOIA regulations: [1] a redacted AM that will be made available to the public (public version); and [2] an un-redacted version for regulatory review.... Issuers must not redact information unless its release would likely result in specific, reasonably foreseeable, and substantial competitive harm."
arrow icon Lessons for Public Pensions from Utah's Move to Pension Choice
Pension Research Council, Wharton School of the University of Pennsylvania; free registration required
4/17/2015

"This paper explores what happened when the state of Utah moved away from its traditional defined benefit pension. Instead, it offered new hires a choice between a conventional defined contribution plan, versus a hybrid plan option having both a guaranteed benefit component and a defined contribution plan shifting investment risk to employees. We show that some 60 percent of new hires failed to make any active choice and, as a result, they were automatically defaulted into the hybrid plan. Slightly more than half of those who made an active choice elected the hybrid plan.... [E]mployees who failed to actively elect a primary retirement plan were also far less likely to enroll in a supplemental retirement plan, compared to new hires who made an active plan choice."
arrow icon Borrowing from the Future: 401(k) Plan Loans and Loan Defaults
Pension Research Council, Wharton School of the University of Pennsylvania; free registration required
4/17/2015

"[An] administrative dataset tracks several hundred plans over 5 years, showing that 20% borrow at any given time, and almost 40% do at some point over five years. Employer policies influence borrowing behavior, in that workers are more likely to borrow and borrow more in aggregate, when a plan permits multiple loans. [The authors] estimate loan default 'leakage' at $6 billion annually, more than prior studies."
arrow icon Simplifying Choices in Defined Contribution Retirement Plan Design
Pension Research Council, Wharton School of the University of Pennsylvania; free registration required
4/17/2015

"This paper tracks how employees in a large firm altered their fund allocations when the employer streamlined its pension fund menu, tiering options in an easier-to-understand format.... [S]treamlined participants' new allocations exhibited significantly lower turnover rates and expense ratios; based on reasonable assumptions, this could lead to additional aggregate savings for these participants over a 20-year period of $20.2M, or in excess of $9,400 per participant."
arrow icon Save Our Retirement Coalition's Initial Statement on Rule Protecting Americans' Retirement Savings
Save Our Retirement Coalition, via Pension Rights Center
4/17/2015 [Opinion]

"Although some Wall Street interests are attacking the rule already, those attacks ignore numerous provisions specifically designed to accommodate their concerns.... This rule promises to be a major improvement over the status quo, which allows too many financial professionals to offer self-serving investment advice at the expense of their clients' retirement security."
arrow icon The Retirement Income Challenge: Deferred Income Annuities Before Retirement (PDF)
Northwestern Mutual
4/17/2015

"Setting assets aside before retirement to buy a DIA places a portion of the retirement portfolio into a bond-like financial vehicle and these funds should be viewed as such when evaluating the overall asset allocation ... When a retirement plan allocates a portion of its assets to a DIA, the average cost of retirement is reduced by softening the financial blow of a long lifetime or poor market returns. The purchase of a DIA before retirement is particularly valuable for clients who would have maintained a stock allocation lower than 70%.... [S]hort deferral DIAs can reduce the cost of funding retirement, provide longevity protection, and provide important behavioral benefits to clients concerned about near retirement market performance."
arrow icon CMS Presentation: FF-SHOP Development Plan for 2016 (PDF)
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]
4/17/2015

28 presentation slides. "CMS will deliver 2016 Plan Year functionality in three sprints between now and the start of issuer testing. All issuer testing of new functionality will begin prior to November 1, 2015 (when 2016 plans begin displaying) and is scheduled to last approximately three [3] weeks."
arrow icon Delaying Commencement of Social Security vs. Buying a QLAC -- Which Is the Better Strategy?
Ken Steiner, FSA Retired
4/17/2015

"Both strategies involve generation of mortality credits by virtue of mortality risk pooling that you don't get when you self-insure.... The bet inherent in both of these strategies is won only if the individual lives longer than average. The QLAC strategy is a bigger bet in this regard than the Social Security deferral strategy with a potentially bigger mortality credit payoff for those who live past age 85.... On the other hand, Social Security provides survivor benefits and inflation protection not provided by the QLAC."
arrow icon SEC Member Calls Fixed income Annuities Dangerous, Wants Fed Scrutiny
InsuranceNewsNet.com
4/17/2015

"SEC Commissioner Luis A. Augilar ... cited FIAs as among a group of complex securities that pose dangers to individual investors, even though FIAs are insurance products regulated by the state. The SEC has previously attempted to regulate FIAs as securities by enacting Rule 151A, but a federal court threw out the rule in 2010 and Congress barred the agency from regulating the products."
arrow icon EEOC Issues Proposed Rule on Application of the ADA to Employer Wellness Programs
U.S. Equal Employment Opportunity Commission [EEOC]
4/16/2015 [Guidance Overview]

"In addition to setting a limit on incentives, the NPRM, which includes interpretive guidance that will be published along with the final rule, requires that employers provide employees a notice that describes what medical information will be collected, with whom it will be shared, how it will be used, and how it will be kept confidential. The interpretive guidance also includes an extensive discussion of both legal requirements and best practices that ensure confidentiality of employee medical information."
arrow icon Text of EEOC Proposed Regs: Wellness Programs and the ADA
U.S. Equal Employment Opportunity Commission [EEOC]
4/16/2015 [Official Guidance]

"The proposed rule explains what an employee health program is, what it means for an employee health program to be voluntary, what incentives employers may offer as part of a voluntary employee health program, and what requirements apply concerning notice and confidentiality of medical information obtained as part of voluntary employee health programs. In addition, the proposed rule explains that compliance with rules concerning voluntary employee health programs does not ensure compliance with all the antidiscrimination laws EEOC enforces....

The proposed rule clarifies that an employer may offer limited incentives up to a maximum of 30 percent of the total cost of employee-only coverage, whether in the form of a reward or penalty, to promote an employee's participation in a wellness program that includes disability-related inquiries or medical examinations as long as participation is voluntary.... Voluntary means that a covered entity: [1] does not require employees to participate; [2] does not deny coverage under any of its group health plans or particular benefits packages within a group health plan for non-participation or limit the extent of such coverage (except pursuant to allowed incentives); and [3] does not take any adverse employment action or retaliate against, interfere with, coerce, intimidate, or threaten employees within the meaning of Section 503 of the ADA ...

Further, to ensure that participation in a wellness program that includes disability-related inquiries and/or medical examinations, and that is part of a group health plan, is truly voluntary, an employer must provide a notice that clearly explains what medical information will be obtained, who will receive the medical information, how the medical information will be used, the restrictions on its disclosure, and the methods the covered entity will employ to prevent improper disclosure of the medical information. Finally, the proposed rule allows the disclosure of medical information obtained by wellness programs to employers only in aggregate form, except as needed to administer the health plan[.]"

arrow icon Workplace Wellness Programs: Services Offered, Participation, and Incentives (PDF)
RAND Corporation, for Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]
4/16/2015

"The goal of this report was to leverage existing data to explore patterns of wellness program availability, employers' use of incentives, and program participation and utilization among employees. This report will be of interest to national and state policymakers, employers and wellness program vendors, employer and employee advocacy organizations, health researchers, and others with responsibilities related to designing, implementing, participating in, and monitoring workplace wellness programs."
arrow icon Text of Agency FAQs on ACA Implementation (Part XXV): Wellness Programs (PDF)
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]; Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]; and Internal Revenue Service [IRS]
4/16/2015 [Official Guidance]

"[A] health-contingent wellness program must be reasonably designed to promote health or prevent disease. A program complies with this requirement if it [1] has a reasonable chance of improving the health of, or preventing disease in, participating individuals; [2] is not overly burdensome; [3] is not a subterfuge for discrimination based on a health factor; and [4] is not highly suspect in the method chosen to promote health or prevent disease ... The fact that a wellness program that complies with the Departments' wellness program regulations does not necessarily mean it complies with any other provision of the PHS Act, the Code, ERISA, (including the COBRA continuation provisions), or any other State or Federal law, such as the Americans with Disabilities Act or the privacy and security obligations of [HIPAA] ... Satisfying the rules for wellness programs also does not determine the tax treatment of rewards provided by the wellness program[.]"
arrow icon Study Suggests Many ACA Exchange Plans Violate Federal Parity Laws
Crowell & Moring LLP
4/16/2015

"According to a new study focusing on consumer information, nearly 25 percent of group health plans provided through [ACA] exchanges may be violating federal mental-health parity laws.... [B]ecause mental-health and substance-use disorder services are often more expensive than medical/surgical services, insurers may benefit when consumers are dissuaded from joining plans with more generous mental-health and substance-use disorder benefits."
arrow icon New Jersey Cities Pass Paid-Sick-Leave Laws Despite Governor's Opposition
The Wall Street Journal; subscription may be required
4/16/2015

"Gov. Chris Christie opposes requiring businesses to give workers paid sick days, calling it another onerous regulation that deters companies from investing in New Jersey. That hasn't stopped officials in nine municipalities, including Newark, Jersey City and Montclair, from passing paid-sick-leave laws and enforcing them ... Now the business community is seeking to nullify the ordinances, saying the cities didn't have the authority to act.... Judge Mary Jacobson of State Superior Court is expected to hear a group of state business organizations argue in favor of overturning the benefit in the city of Trenton."
arrow icon Pension Plan Administration and Court Deference to the IRS: The 'Church Plan' Cases as a Case Study on the Significance of Agency Deference to Plan Administration (PDF)
Proskauer Rose LLP
4/16/2015

"Uniformity and predictability are critical protections that ERISA affords plan sponsors, and these goals have been used to justify important aspects of ERISA, such as the need for judicial deference to plan administrators.... Yet, as the recent rulings in the 'church plan' cases aptly illustrate, federal judges have sometimes become quick to second-guess the IRS and to develop their own unique pension rules, even when these new rules are a 'marked departure from past practice.' ... [T]his lack of judicial deference can, unfortunately, create balkanized and unexpected legal rules, defeating some of the very protections ERISA is supposed to provide plan sponsors."
arrow icon SEC Proposes Rules on Dodd-Frank Anti-Hedging Policies
Winston & Strawn LLP
4/16/2015 [Guidance Overview]

"A company that permits hedging transactions by some, but not all, of its employees and directors must disclose the categories of persons who are permitted to engage in hedging transactions and those who are not. If a company does not permit any hedging transactions or permits all hedging transactions, it can simply state that fact and need not describe them by category. A company must disclose the categories of hedging transactions it permits and those it prohibits. In disclosing these categories, a company may disclose that it prohibits or permits particular categories and permits or prohibits, respectively, all other hedging transactions."
arrow icon Grading Target Date Funds from a Fiduciary Perspective (PDF)
Target Date Solutions
4/16/2015

"There is no fiduciary upside to taking risk at the target date. Only downside. The next 2008 will bring class action lawsuits. There is a 'risk zone' spanning the 5 years preceding and following retirement during which lifestyles are at stake.... [A] new grading system focuses on these key differentiators: [1] Who has the broadest diversification at the long dates when risk is being taken for younger participants?.... [2] Who defends best at the target date? ... [3] Are the fees reasonable?"
arrow icon Spring Cleaning Series: Regular Monitoring and Correction of Retirement Plans Can Reduce Correction Costs
Quarles & Brady LLP
4/16/2015

"A company can correct most qualified retirement plan operational failures under EPCRS. Many plan sponsors prefer to self-correct plan failures under the Self-Correction Program of EPCRS (SCP) to avoid the time and expense of filing for IRS approval of the correction under the Voluntary Correction Program of EPCRS (VCP).... Regular retirement plan monitoring will help you ensure that SCP is available to correct any retirement plan failures your company experiences.... Regular monitoring and timely correction can also benefit a company when the company attempts to correct a fiduciary violation under the DOL's Voluntary Fiduciary Correction Program (VFCP)."
arrow icon 2015 ADP Annual Health Benefits Report
ADP
4/16/2015

"Over the five-year period studied, the percentage of full-time employees (as designated by the employer) who were eligible for employer-provided health benefits rose by 2.0%. Despite a rise in eligibility, the number of eligible employees who opted to take insurance dropped by -1.7% during the same period, keeping the overall participation rate steady at 69.3%."
arrow icon 2015 Workplace Benefits Report: Helping Employees Live Their Best Financial Lives (PDF)
Bank of America Merrill Lynch
4/16/2015

20 pages. "[F]inancial wellness has evolved from a buzzword to reality and is likely to grow in importance in the future. Meanwhile employers face a challenging environment in which the complexities of benefits offerings require greater expertise from HR professionals, and rising health care costs force hard decisions about how to spend valuable benefits dollars. This report provides a clear picture of the data, trends and new ideas related to workplace benefits today. It uncovers new insights related to financial wellness, health care, incentives, the use of total rewards portals and employers' attempts to engage a multi-generational workforce."
arrow icon American Benefits Council Statement to the U.S. Senate Finance Committee Working Group on Savings and Investment (PDF)
American Benefits Council
4/16/2015

37 pages. "Our nation's employer-based retirement saving s system is particularly vulnerable to disruption, because some of the commonly used measures of employer plan coverage are misleading and the true value of the current tax incentives for retirement savings is not widely understood, which can lead to proposals that result in more harm than good.... This statement illustrates how the vast majority of American workers are well served by the system of tax incentives that makes these plans possible. We will: [1] Describe the critical role that employers play in providing their employees with a secure vehicle for retirement savings. [2] Demonstrate the true value of tax-deferred retirement savings on personal financial security, broader economic growth and future tax revenues. Explain how retirement plan coverage and tax policy are intricately intertwined. [3] Provide targeted policy recommendations that would improve outcomes without compromising the successes of our current system. [4] Offer additional analyses regarding the way in which the tax incentives for savings in employer-sponsored retirement plans are measured and evaluated and offer some insights into how best to interpret retirement plan coverage statistics."
arrow icon Closing the Retirement Health Care Planning Gap?
Insured Retirement Institute [IRI]
4/16/2015

"While many expect Medicare to address the bulk of health related expenses in retirement, the program only covers approximately 50 percent of total health care costs. With health care cost inflation expected to return to more normalized levels of around six percent, lower Social Security COLAs, more health care cost sharing in retirement, fewer retirees with pensions and health care benefits, and longer life expectancy, future retirees will see a much greater portion of their budgets consumed by health care than previous generations have experienced.... There are a number of key steps that should be part of a modified planning process that addresses health care[.]"
arrow icon Seven Cost-Cutters You'll Need to Fight Emerging Healthcare Trends
HR Benefits Alert
4/16/2015

"[1] Only offer a CDHP.... [2] Control rising drug costs.... [3] Add a spousal surcharge.... [4] Focus on chronic conditions.... [5] Review your life and disability plans.... [6] Link disability data to your wellness strategy.... [7] Use your data."
arrow icon Public vs. Private Health Insurance on Controlling Spending
The Wall Street Journal; subscription may be required
4/16/2015

"[It] appears that public programs control per capita spending somewhat more effectively than private coverage does. That may be just the opposite of what many would presume in a country where the private market is generally expected to outperform the public sector."
arrow icon IRS Publication 5215: Understanding Reporting Requirements of the Health Care Law (April, 2015) (PDF)
Internal Revenue Service [IRS]
4/16/2015

2-page brochure. Topics: Types of minimum essential coverage; About reporting; Who is the MEC provider? What information is reported; Form 1095-B's sections.
arrow icon Health Insurers Call for Stronger Rules on Medical Devices
The Wall Street Journal; subscription may be required
4/16/2015

"Nearly all U.S. medical devices ... reach the market through an FDA system known as 510(k), which clears tools deemed substantially similar to ones already on the market. That process typically doesn't require clinical studies on people to prove safety and effectiveness.... America's Health Insurance Plans called for strengthening the 510(k) system and efforts to track devices."
arrow icon Safe-Harbor Leveraging for Small Business, Top-Heavy Retirement Plans
Retirement Management Services
4/16/2015

"Many employers are debating how to most efficiently take advantage of the defined contribution limit increase to $53,000. However, few owners of small businesses are aware of the extent to which certain types of 'leveraging' are now permitted in qualified retirement plans. The purpose of this article is to illustrate the provisions that allow owners of small businesses to get the most in return for what they are willing to contribute on behalf of their non-owner employees."
arrow icon DOL Fiduciary Rule to Revamp Regulation of Advice to Plans and IRAs
Morgan Lewis
4/16/2015 [Guidance Overview]

"The proposal includes a revised and broader definition of activities that would result in fiduciary status, a series of limited exceptions to fiduciary status, a package of new prohibited transaction exemptions, amendments to current exemptions for existing and newly covered fiduciaries (as well as nonfiduciaries), and a new regulatory impact analysis."
arrow icon DOL Re-Proposes ERISA Fiduciary Rule (PDF)
Fried, Frank, Harris, Shriver & Jacobson LLP
4/16/2015 [Guidance Overview]

"Much like the 2010 Proposed Rule, the 2015 Proposed Rule is focused more on regulating conduct between retail investors and their advisors than between institutional investors and their advisors. These distinctions appear to be drawn more sharply in the 2015 Proposed Rule."
arrow icon DOL Proposes New Regs on Fiduciary Advice
Ballard Spahr LLP
4/16/2015 [Guidance Overview]

"The basic standards of impartial conduct set forth in the new proposed exemption reflect the conduct of many advisers in dealing with their clients, and standards that already apply under ERISA to advisers that work with employee benefit plans sponsored by employers. However, by making the standards a condition of the Best Interest Contract exemption, the DOL is extending the standards of impartial conduct to IRA advisers, many of whom have not historically been subject to formal regulation."
arrow icon Recent Developments in Employee Benefits Law (PDF)
Alston & Bird LLP, via Tort Trial and Appellate Practice Law Journal
4/16/2015

"This article surveys recent developments in employee benefits law from fall 2013 through fall 2014.... The first portion of the survey reviews two important Supreme Court cases from last term, Fifth Third Bancorp v. Dudenhoeffer and Heimeshoff v. Hartford Life & Accident Insurance Co. ... The second portion of the survey reviews eight important decisions issued by the appellate courts during the last year[.]"
arrow icon Text of FASB Update 2015-04: Compensation, Retirement Benefits (Topic 715): Practical Expedient for the Measurement Date of an Employer's Defined Benefit Obligation and Plan Assets
Financial Accounting Standards Board [FASB]
4/16/2015 [Official Guidance]

"A reporting entity with a fiscal year-end that does not coincide with a month-end may incur more costs than other entities when measuring the fair value of plan assets of a defined benefit pension or other postretirement benefit plan.... [T]he amendments in this Update provide a practical expedient that permits the entity to measure defined benefit plan assets and obligations using the month-end that is closest to the entity's fiscal year-end and apply that practical expedient consistently from year to year. The practical expedient should be applied consistently to all plans if an entity has more than one plan."
arrow icon North Carolina, Maine Look at Retirement-Related Bills
National Tax-Deferred Savings Association [NTSA]
4/16/2015

"Legislation is before the North Carolina House of Representatives that would call on the Department of the State Treasurer to study the establishment of a voluntary 'work and save' retirement program for private-sector workers whose employers don't provide one.... The Maine bill, HP 715, would establish the Adjustable Pension Plan Program, a combined defined benefit and defined contribution retirement plan, to replace the State Employee and Teacher Retirement Program for state employees and teachers hired on or after July 1, 2017."
arrow icon One-Third of Plan Participants Are Giving Away Free Money ... Are You?
Slott Report
4/16/2015

"Some 55% of plan participants in auto-enrollment employer plans -- which are becoming more and more popular -- are contributing less to their employer-sponsored retirement plan than the amount they need to contribute in order to receive the maximum employer-provided matching contribution. This is strong evidence that these participants are basically 'going with the flow' and choosing the default contribution rate selected by their employer rather than actually taking the time to figure out which contribution rate will be most beneficial."
arrow icon Definition of the Term 'Fiduciary' -- DOL 'Conflict of Interest' Rule (PDF)
fi360
4/16/2015 [Guidance Overview]

"[T]he carve-outs would cover seven activities of persons who do not represent themselves as ERISA fiduciaries. [1] Seller's Carve-out....[2] Swaps.... [3] Plan Sponsor Employees.... [4] Investment Platform Providers.... [5] Objective Criteria or Financial Data.... [6] ESOP Appraisals ... [7] Investment Education."
arrow icon The Payment Reform Landscape: Impact on Consumers
Health Affairs
4/16/2015

"[As] we focus on reforming how we pay for health care, it is vital that we address key questions involving the very consumers who receive that care: How many consumers are directly touched by payment reform? How does payment reform impact employees and consumers and their experience with care? What, if anything, do consumers need to know about payment reform? As health plans implement a growing number of reforms to payment, these questions will only become more relevant."
arrow icon DOL's Fiduciary Proposal Preserves Advice -- But at What Cost?
American Retirement Association
4/16/2015 [Opinion]

"While initial concerns about preserving the ability for 401(k) participants to work with the advisor of their choice on rollovers appear to be addressed in the new proposal, the new compliance regimen looks to be significant, adding cost and complexity to the process. Among other things, this includes written contracts with multiple signatures, as well as initial and annual disclosures."
arrow icon Private Pension Funding Drops to Lowest Level in 6 Years
CNBC
4/15/2015

"Even as stock market rose last year, pension funding levels at America's biggest companies in 2014 fell to levels not seen since just after the financial crisis. One big reason: Employers cut back on contributions to their plans to the lowest amount in six years ... thanks, in part, to a break offered up by Congress last summer to bail out the Highway Trust Fund."
arrow icon IRS Chief: No Backup Plan If Obamacare Tax Subsidies Struck Down
The Hill
4/15/2015

"IRS Commissioner John Koskinen told a Senate Homeland Security Committee that he is not preparing for the high stakes case, King v. Burwell. That responsibility, he said, rests with the White House, Congress and the states. 'We basically play the hand we're dealt. The court will make a decision, and then we will respond,' Koskinen said at a hearing on the agency's challenges in implementing the Affordable Care Act."
arrow icon Using Data Analytics to Find Pieces of the Participant Outcomes Puzzle
PLANSPONSOR
4/15/2015

"Nearly every major retirement plan provider now offers a data analytics tool that purports to help plan sponsors determine how best to improve their plan design and participant outcomes. But how do data analytics work, and how can sponsors use such tools to perfect their plans?"
arrow icon 2015 Key Dates: Qualified Health Plan Certification in the Federally-Facilitated Marketplaces; Rate Review; Risk Adjustment, Reinsurance, and Risk Corridors (PDF)
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]
4/15/2015 [Official Guidance]

2 pages. Includes deadlines and timeframes applicable to [1] QHP Certification (application submission and review, QHP agreement/final certification, and open enrollment); [2] Rate Review for Single Risk Pool Compliant Plans; and [3] Risk Adjustment, Reinsurance, and Risk Corridors for PY2014.
arrow icon Sixth Circuit: Employer Breached its Fiduciary Duty by Issuing Inaccurate SPD
Haynes and Boone, LLP
4/15/2015

"The U.S. Court of Appeals for the Sixth Circuit ruled that the employer [1] functioned as an ERISA fiduciary when it prepared and distributed the SPD to participants, and [2] breached its fiduciary duty by furnishing the participant with a misleading SPD. In particular, the SPD provision describing the annual increase in benefits did not refer to the other sections of the SPD on which the employer and the insurer had relied to deny the benefits increase. Also, the insurer's self-serving interpretation of the SPD to deny increased benefits was determined to constitute a breach of the insurer's ERISA fiduciary duty." [Stiso v. Int'l Steel Group, No. 13-3503 (6th Cir. Mar. 25, 2015)]
arrow icon Testimony of IRS Commissioner Koskinen Before the Senate Homeland Security and Governmental Affairs Committee on Implementation of the ACA
Internal Revenue Service [IRS]
4/15/2015

"The IRS has been charged with implementing the numerous tax-related provisions of the ACA. This testimony will focus on two major provisions that took effect last year -- the premium tax credit and the individual shared responsibility provision. In preparation for the 2015 filing season, the IRS did substantial work to ready our business processes and systems to facilitate return filing and compliance with these two provisions, and to ensure that taxpayers would know how these two provisions would affect them at tax time.... [A]ll the work the IRS has done and continues to do to implement the major tax-related provisions of the ACA has occurred in the absence of funding that had been requested for this effort."
arrow icon Worried About Fiduciary Rule? Two Options for Brokers
Financial Planning
4/15/2015

"ERISA Section 601 exempts brokers from fiduciary status as long as they follow investment advice provided by third-party computer models -- a ruling which encompasses what we now know as robo advisors.... The other workaround is to forego a plan fee and instead be named the fiduciary advisor to participants, as also described in ERISA Section 601.... The risk is that all levels of employees may take you up on your offer for advice, since you may not exclude those with lower balances. One emerging option is to encourage the plan sponsor to add a cost-effective financial wellness or education program for those with simple investment issues or those with minimal assets and significant debt and budgetary issues."
arrow icon Watering Down the Fiduciary Standard?
Financial Planning
4/15/2015 [Opinion]

"Fiduciary advocates, in particular, will worry that the proposal, unveiled Wednesday, waters down the fiduciary standard currently applicable to fiduciaries under ERISA, and that some of the exemptions provided could be so expansively interpreted that they permit the egregious conduct that bona fide fiduciary standards are designed to constrain.... If enacted, the new proposal could dramatically change the landscape for providers of advice to retirement plan sponsors, retirement plan participants, and IRA account holders. However, enactment of a final version of the rule is far from certain, as the 2015 Proposed Rule will likely receive intense opposition from SIFMA, the American Council of Life Insurers, and many of the players associated with broker-dealer firms and life insurers."
arrow icon HHS Rejects ACA Open Enrollment for Pregnant Women
The Hill
4/15/2015

"[HHS] has denied a request from Democrats to create a special open enrollment period under the [ACA] for women when they find out they are pregnant. In a response to the March letter sent by Senate Health, Education, Labor and Pensions (HELP) Committee ranking member Sen. Patty Murray (D-Wash.) with 36 signatures, HHS Secretary Sylvia Mathews Burwell said the agency does not have 'the legal authority to establish pregnancy as an exceptional circumstance' to create a special enrollment period. Burwell said pregnant women could enroll in Medicaid and the Children's Health Insurance Program (CHIP)."
arrow icon Local Conditions Affect Wellness Program Design
Chelko Consulting Group
4/15/2015

"[An] across-the-board wellness program (beyond its many other limitations) [can] miss many needs by not addressing local conditions that could make life changes more difficult to sustain.... So, how do you find out about what life is like for your people outside of the workplace? One approach might be the Health Policy Institute of Ohio's Health Value Dashboard.... The Dashboard brings the data closer to home by allowing you to zero-in county-by-county to see local factors affecting health that you probably couldn't know otherwise.... The Dashboard can provide the same kind of data on counties across the country, allowing you to see what differences exist at your various locations, allowing you to localize your well being efforts. Got a plant north of Atlanta in Cherokee County? Take a look at the data. The well being job to do there might be completely different than in [Ohio's] Cuyahoga County."
arrow icon DOL Proposes New Fiduciary Rule for Retirement Advisors
The Wagner Law Group
4/15/2015 [Guidance Overview]

"[T]he DOL proposal would require conflicts-related disclosures from many advisors who are not currently subject to this requirement, and it would also put pressure on broker-dealers and insurance firms to more closely monitor and limit the levels of variable compensation earned by their registered representatives and agents. If adopted, the DOL proposal may significantly increase compliance costs for these firms and their retirement businesses.... [It] may be difficult for firms to determine if they have adequately mitigated the conflicts arising from the payment of differential compensation to their individual advisors ... [S]ome individual advisors may decide to become RIAs (or investment adviser representative of RIAs), on the grounds that they would be subject to the same fiduciary standard anyway. Those who switch to a RIA service model would, of course, have to forfeit their right to receive any commissions."
arrow icon Game Changer: A First Look at the DOL's 2015 Conflict of Interest Proposal (PDF)
Pentegra Retirement Services
4/15/2015 [Guidance Overview]

11 pages. "This is an ambitious proposal that makes a genuine attempt to eliminate or mitigate the effects of conflicts of interest in ALL retirement plans, including IRAs. It is too soon to tell if the proposal, in its current form, will actually accomplish this goal, or what t he intended and unintended consequences might be ... We in the retirement industry now have the obligation to find the flaws and unintended consequences in the proposal and work with our partners in government to achieve a final regulation and/or effective legislative alternatives that truly serve the country's best interests. The purpose of this article is to provide a technical, 'first glance' overview of the proposal and some early thoughts about possible ramifications."
arrow icon Average Fine for Noncompliance with Obamacare: $1,130
Forbes
4/15/2015

"An estimated 6.3 million people will be required to pay a penalty this year because they didn't buy qualifying health insurance in 2014, [Doug Holtz-Eakin, former director of the Congressional Budget Office] testified. Another 30 million people didn't buy the mandated coverage either but won't have to pay the penalty because of the myriad exemptions the Obama administration is allowing, with or without legal justification.... 'In reality, the individual mandate has been less of a mandate and more of a suggestion,' he told the House Ways and Means Health Subcommittee[.]"
arrow icon May the Era of Medicare's Doc Fix (1997-2015) Rest in Peace. Now What?
Health Affairs
4/15/2015 [Guidance Overview]

"Before we bury the SGR under spilled champagne, we should consider what Congress is actually replacing it with.... [T]he formulaic approach to setting base payment rates is gone, replaced with automatic increases for all doctors from 2015 through 2019.... Assessments will be based on four categories of metrics ... The poorest performing doctors, determined by their composite score drawn from relevant aspects of all four categories, will see their payments cut by up to nine (nine!) percent.... CMS [is required to] publish information regarding physician payments and resource utilization. This type of information was recently published stand-alone ... but must be integrated into the Physician Compare website by 2016."
arrow icon Congress Passes Bill to Fix Medicare's Doctor Payments
Kaiser Health News
4/15/2015

"The House package would scrap the old Medicare physician payment rates ... known as the 'sustainable growth rate' (SGR). Instead, it would give doctors an 0.5 percent bump in each of the next five years as Medicare transitions to a payment system designed to reward physicians based on the quality of care provided, rather than the quantity of procedures performed, as the current payment formula does.... Starting in 2018, wealthier Medicare beneficiaries (individuals with incomes above $133,500, with thresholds higher for couples), would pay more for their Medicare coverage, a provision expected to impact 2 percent of beneficiaries. In addition, starting in 2020, 'first-dollar' supplemental Medicare insurance known as 'Medigap' policies would not be able to cover the Part B deductible for new beneficiaries."
arrow icon A Smarter Way to Pay Doctors
Bloomberg View
4/15/2015 [Opinion]

"[T]he Committee for a Responsible Federal Budget is concerned that the doc fix will raise payments (without fully funding them) whereas the Medicare actuaries are concerned that the legislation will cut payments too much. They're both wrong, for different reasons."
arrow icon Health Insurance Shoppers Look to Limited Networks to Save Money
The New York Times; subscription may be required
4/15/2015

"Consumers seem increasingly comfortable trading a greater choice of hospitals or doctors for a health plan that costs significantly less money.... This year, nearly half of the plans offered on public health care exchanges are so-called narrow network options, which sharply limit the medical providers whose services will be covered ... Furthermore, nearly a fifth are considered 'ultranarrow networks,' which offer even fewer choices. At the same time, more employers are also embracing the plans for their workers, largely as a way to lower health care costs."
arrow icon IRS Eases Correction Methods for Common 401(k)/403(b) Plan Failures (PDF)
Milliman
4/15/2015 [Guidance Overview]

"Revenue Procedure 2015-28 modifies and improves the Employee Plans Compliance Resolution System (EPCRS) by providing a new safe harbor relating to automatic contribution features (including automatic enrollment and automatic escalation of elective deferrals) and a separate new special safe harbor correction method for faulty elective deferrals that occur over a period of limited duration."

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