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Benefits in the News

Older News | January 26, 2015


arrow icon Will the Illinois Payroll Deduction IRA Plan Be Pre-empted by ERISA?
Steptoe & Johnson LLP
1/23/2015 [Guidance Overview]

"[T]here is an open question whether a state law requiring employers to participate in a state-run payroll deduction IRA program is preempted by Section 514(a) of ERISA, which generally overrides state laws that 'relate' to employee benefit plans.... Section 95 of the Act requires the board to request in writing an opinion or ruling from the DOL regarding the applicability of ERISA.... [P]ayroll deduction IRAs established by employers under the program may fall under a regulatory safe harbor that applies to certain individual account plans in which an employer's participation is minimal.... There is a substantial question whether employers who establish payroll deduction IRAs in compliance with the Act can also satisfy the requirements of the Safe Harbor and thereby avoid the application of ERISA.... The Act contains some internal inconsistencies and ambiguities."
arrow icon Is There Really an Individual Health Insurance Mandate?
Healthcare Payer News
1/23/2015

"According to the Wall Street Journal, 'The instructions for completing the mandate exemption form run 12 pages, list 19 types of exemptions (with multiple codes), and include worksheets that may require individuals to go to their state exchange's Web site to find the monthly premiums that will determine whether they had access to 'affordable coverage.' For the last year we have heard that a taxpayer that got too large a subsidy will have to pay the excess back -- and a taxpayer that got too little will get a refund. How will this be reconciled? The directions for doing this fill up pages 10 to 15 in IRS Publication 5187 and explain how Form 8962 must be prepared."
arrow icon UnitedHealth's $43 Billion Exit from Fee-for-Service Medicine
Forbes
1/23/2015

"Value-based payments come in a variety of forms. They include: pay-for-performance programs, patient-centered medical homes and accountable care organizations, a rapidly emerging care delivery system that rewards doctors and hospitals for working together to improve quality and rein in costs. UnitedHealth said it is generating 1 percent to 6 percent in savings from its various value-based reimbursement approaches. Once rolled out by commercial and government insurers on a pilot basis, they are quickly becoming the norm."
arrow icon West Virginia School Employees Suing 403(b) Plan Provider
PLANSPONSOR
1/23/2015

"The lawsuit claims VALIC, a part of AIG, allegedly misled thousands of participants to invest heavily or entirely in its low-interest rate annuities in the early 1990s ... VALIC's attorneys argue the company guaranteed only a 4.5% annual return, but some employees allege they were led to believe they would receive returns of 8% or higher."
arrow icon Massachusetts Expands Parental Leave Rights
Morgan Lewis
1/23/2015 [Guidance Overview]

"This law is significant because it requires employers with six or more employees to provide gender-neutral parental leave. Although all Massachusetts employers should be aware of this change, those with fewer than 50 employees should take particular notice because their existing parental leave policies are more likely to be structured as 'maternity' leaves applicable only to female employees."
arrow icon 2014 International Pension Plan Survey Report
Towers Watson
1/23/2015

"This report outlines the results of the 2014 International Pension Plan (IPP) survey, ... focusing on specific plan design aspects, eligibility and membership criteria, as well as investment features for IPPs and International Savings Plans (ISPs).... [T]here was a 67% increase in new IPPs and ISPs reported as having been established compared to 2013, a clear reversal in the declining numbers seen in recent times.... This year the IPP Survey contains a feature article on 'The many uses for an International Pension Plan (IPP) or an International Savings Plan (ISP)' which describes the variety of employee groups employers are including within their IPP/ISPs."
arrow icon Another Freedom Endangered: Threat of Pension Mandate Looms with Proposed 'USA Retirement Funds Act' (PDF)
H.C. Foster & Company
1/23/2015 [Opinion]

"The life insurance companies and the Federal Government would control asset management, benefit payments, and other plan functions traditionally under the control of the private pension system.... The proposed USA Funds would continue to deplete employers' ability to control their compensation and benefits programs at a very high cost to both employers and their employees.... Some private pension plans are not cost effective because the employer's management ceded its investment and administrative responsibilities to Third Party Administrators and insurance companies that portend the inefficiencies of the proposed USA Funds ... . [The author believes] the ultimate effect of a USA Funds would be a 3.0% to 6.0% in crease in employers' direct compensation costs to maintain employee relationships. Once in place, Congress could easily make employer contributions to the USA Funds mandatory."
arrow icon IRS Presentation Slides: How to Transmit ACA Information Returns to the IRS in 2015 (PDF)
Internal Revenue Service [IRS]
1/23/2015 [Official Guidance]

8 slides. Topics: [1] Preparations for 1094/5 B & C; [2] Channels Available for ACA Transmissions and Acknowledgements; [3] Submitting ACA Information Returns; [4] Retrieving Acknowledgements for ACA Transmissions (Status and Error Detail); [5] Retrieving Acknowledgements for ACA Transmissions -- Status Definitions; [6] Completing the ACA Transmitter Control Code (TCC) Application.
arrow icon Harvard Professors Fall Out of the Ivory Tower with Health Care Hikes
United Benefit Advisors
1/23/2015

"The New York Times recently stirred up a media firestorm when it reported about Harvard University professors who were lambasting the health care increases they were facing this year.... While Harvard employees have an annual deductible of $250 for a single individual and $750 for a family, nationally, most workers have an in-network median deductible of $1,500 for single coverage and $4,000 for a family ... Compare $1,500 for an individual and $4,500 for a family at Harvard to the national median in-network out-of-pocket limit of $3,500 for single and $8,000 for a family."
arrow icon Illinois Supreme Court Keeps Pension Case on Fast Track
The Southern Illinoisan
1/23/2015

"[T]he Illinois Supreme Court denied a request from outside groups and individuals to file briefs in the case, saying the additional filings could put the court's plan to hear the case during its March term in jeopardy.... A spokeswoman for Attorney General Lisa Madigan, who is defending the law, said the move was disappointing.... The next key date in the case comes Feb. 16 when attorneys for the retirees file their briefs in the case. Madigan's office will respond by Feb. 27."
arrow icon HIPAA Medical Privacy Matters: Court Permits ADA Claim to Proceed
Fox Rothschild LLP
1/23/2015

"[J]ust because there is not a violation does not mean the employer can freely act on that information. Remember that one of the purposes of the HIPAA privacy rules is to [make sure that employees] do not suffer adverse employment actions as a result of their employer getting wind of their medical costs paid by the plan. Here, the employer may not have violated the 'privacy rule' but it still used that information to terminate the employee. So even though the 'medical information' may not be protected does not mean the employee is not still protected from an employer misusing that information." [Myers v. Hog Slat, Inc., No. C13-3032-LTS (N.D. Iowa Oct. 24, 2014)]
arrow icon Senate Hearing Discusses ACA Definition of 'Full-Time'
Littler
1/23/2015

"Sen. Alexander started the hearing by citing a Hoover Institution study, which found that the 30-hour standard puts 2.6 million working-age Americans at risk of losing jobs and work hours. Alexander claimed many of these employees work in the hospitality, retail, and restaurant industries, and are disproportionately women. Dr. Doug Holtz-Eakin, President of the American Action Forum, testified that this number of workers at risk of having their hours reduced on account of the 30-hour definition was as high as 9.8 million."
arrow icon Illinois District Court Holds That a Plan Maintained by a Religiously Affiliated Organization Is Not a Church Plan
Wilson Elser
1/23/2015

"[T]he Stapleton court rejected Advocate Health Care's reading of the exception in [ERISA, codified at 29 U.S.C. section 1022(33)(C)(i),] to expand the definition of church plans to include plans that were not established by a church so long as an otherwise qualifying organization simply maintained the plan. The court reasoned that Advocate Health Care's reading would render meaningless the requirement that a church plan needed to be established by a church as spelled out in 33(A).... As Advocate Health Care's plan was not established by a church (but by Advocate Health Care), it was not exempt from ERISA and the court denied the motion to dismiss." [Stapleton v. Advocate Health Care Network and Subsidiaries, No. 14-C-01873 (N.D. Ill. Dec. 31, 2014)]
arrow icon Characteristics of Those Affected by a Supreme Court Finding for the Plaintiff in King v. Burwell
Urban Institute
1/23/2015

"[T]his brief describes the characteristics of those that would be affected, particularly those who would otherwise have nongroup insurance. Of the 9.3 million people estimated to lose tax credits, two-thirds would become uninsured. Most are adults who are low and middle income but not poor, most are white, non-Hispanic, and most reside in the South. Financial burdens would increase substantially for those wishing to continue buying the same coverage they would have under current implementation of the law."
arrow icon Plaintiffs' Lawyers Continue to Press New Theories in Executive Compensation Litigation -- with Some Success
Winston & Strawn LLP
1/23/2015

"What seemed to win the executive compensation case for J&J was the investigation and report of special outside counsel appointed by the Board's special litigation committee. Obviously, boards of directors frequently create a special committee to investigate potential malfeasance or study the merits of and respond to litigation. Boards now may consider this approach for executive compensation matters as well. However, it will be unfortunate and costly if litigation developments begin to force companies facing this kind of litigation to protect themselves by retaining special executive compensation counsel." [George Leon Family Trust v. Johnson & Johnson, No. 12-cv-4401 (D.N.J. 2014)]
arrow icon IRS Limits Scope of Transit Exclusion's Retroactive Increase
Thompson SmartHR Manager
1/23/2015

"[A] limited number of entities will benefit from the retroactive allowance -- namely, companies with qualified transportation fringe benefits that provided an 'excess transit benefit' during 2014. That term refers to any amount in mass transit benefits -- either delivered to the employee through a compensation reduction agreement or funded by the employer -- in excess of the $130 monthly limit that was in place as of Jan. 1, 2014, up to the new limit applied retroactively, which is $250 per month.... The guidance, which provides a special administrative procedure for certain employers to claim refunds of employment tax overpayments, only applies to employers that administered their QTFBs by allowing an excess transit benefit while including the excess amount as taxable wages."
arrow icon Possible Window for Delivery of Participant Fee Disclosures (PDF)
Buck Consultants at Xerox
1/23/2015 [Guidance Overview]

"On January 9, the DOL submitted to the OMB a direct final amendment to their disclosure regulation that would make a technical adjustment to the timing requirement for annual disclosure by adding a window period for delivery. The amendment would provide plan administrators with flexibility in furnishing annual fee disclosures to participants and beneficiaries. The change is considered noncontroversial and therefore it likely will be approved and become effective shortly thereafter."
arrow icon Court Holds Employer Responsible under ERISA for FICA Withholding Errors
McGuireWoods LLP
1/23/2015

"The Davidson case raises the specter that any failure to properly apply tax rules to a nonqualified deferred compensation plan that then results in additional tax liability to a participant may expose the employer to an ERISA benefit claim.... [A] participant might argue that other types of tax liabilities he or she incurred as a result of the employer's failure to operate the plan in accordance with applicable tax laws impermissibly reduced the benefits he or she was entitled to receive under the plan. Of particular concern are the complex requirements imposed under Code Section 409A which, if violated, can result in significant penalties to affected employees, such as immediate taxation of their plan benefits, a 20-percent additional tax and a 'premium interest tax.' " [Davidson v. Henkel Corp., No. 12-cv-14103 (E.D. Mich. Jan. 6, 2015)]
arrow icon Cost of Retirement Income Jumped in 2014
PLANSPONSOR
1/23/2015

"A sharp rise in lifetime income costs means many workers in their 50s and early 60s are less financially prepared for retirement than they were 12 months ago, despite 11% gains in equity markets over the same time period. Even a strong 14% return for the average 55-year-old retirement investor examined by BlackRock couldn't keep pace with the relative increase in lifetime income costs."
arrow icon The New Illinois Secure Choice Savings Program: Considerations for Employers
Epstein Becker Green
1/23/2015 [Guidance Overview]

"[T]he Program's treatment of contributions to a Roth IRA as a payroll deduction implicates federal income and payroll tax obligations with respect to those funds. Contributions to Program accounts, when combined with an employee's IRA contributions outside of the Program, may not exceed the Tax Code's annual limit. The extent of an employer's responsibility, if any, in connection with an employee's compliance in this context, remains to be developed."
arrow icon UnitedHealth Group Ahead on ACA Enrollment, Forecasts Profitable 2015
Healthcare Payer News
1/23/2015

"Insurance premium revenue grew by 6 percent, with medical costs increasing by 4 percent. Its medical cost ratio, what [United CEO Stephen Hemsley] calls 'the best overall metric describing medical cost performance across UnitedHealthcare's diverse benefits businesses,' was 80.9 percent in 2014 and is expected to remain around there or just below it for the full year 2015."
arrow icon Surviving Spouses of Caterpillar Retirees Entitled to Damages for Cost of Substitute Healthcare
Wolters Kluwer Law & Business
1/23/2015

"[Caterpillar] argued that surviving spouses who terminated Caterpillar's insurance plan because of the employer's breach were not legally entitled to recover damages for the cost of obtaining substitute coverage and reimbursement for out-of-pocket healthcare costs that would have been covered had Caterpillar honored the 1988 [group insurance plan]. The court disagreed ... [and] determined that it was entirely foreseeable that imposing premiums on a group of surviving spouses would result in some individuals' being unwilling or unable to pay the premiums. Because the risk that the surviving spouses would be unable to afford to pay premiums for their insurance was created by Caterpillar's breach it must bear the costs as the defaulting party." [Kerns v. Caterpillar, Inc., No. 3:06-CV-1113 (M.D. Tenn. Jan. 6, 2015)]
arrow icon Advisors Are Missing Out by Overlooking Millennials
On Wall Street
1/23/2015

"Millennials who are already wealthy think differently.... Wealthy millennials want many communications options.... Definitions of 'financial success' vary.... Less-wealthy millennials are more optimistic.... Hard work and smart investments are top priorities.... Top retirement concerns are consistent."
arrow icon Pension Plan Funded Status Decreases Due to Decline in Assets in Q4 2014 (PDF)
Sibson Consulting
1/23/2015

"During the fourth quarter of 2014 (Q4 2014), the funded status of the model pension plan examined in each issue of Prism decreased by 3 percentage points: from 91 percent to 88 percent. This decrease was driven by a liability increase of 4 percent and an asset return of 1 percent. The Q4 change in the funded status of the model pension plan does not reflect new mortality assumptions, which typically would decrease the funded status by 6 to 8 percent."
arrow icon White House Pushes Bill Requiring Paid Sick Leave
Seyfarth Shaw LLP
1/22/2015

"[T]he Healthy Families Act's 56-hour minimum accrual requirement is more demanding than many of the existing state and municipal paid sick leave laws.... The Act expressly states that it will not 'be construed to supersede (including preempting) any provision of any State or local law that provides greater paid sick time or leave rights.' Accordingly, employers subject to an existing paid sick leave law would be required to comply with the most pro-employee aspects of both the Healthy Families Act and the applicable state or local law."
arrow icon Federal District Court: Discounted Purchase of Individual Disability Policies by Several Employees Does Not Constitute Employer Plan Entitled to ERISA Pre-emption
U.S. District Court for the Northern District of Alabama
1/22/2015

"The court well understands why Provident wants to place the ERISA fence around Rosen's state law claims. It would be well worth the effort if Provident could meet its burden of proving that ERISA affords Rosen his only remedy, that is, outside of RICO.... Although Provident asserts that the various policies were issued under the same risk number, ... Provident provides no reason to give significance to this common risk number while conceding that the policies were individually underwritten ... These [and other] facts are incompatible with Provident's characterization of the policies as part of an 'employee welfare benefit program' and instead strongly suggest that the policies were separate and individual disability policies outside the embrace of ERISA. The decisions to buy policies were voluntary, and the policies were not touted by the employer." [Rosen v. Provident Life and Accident Ins. Co., No. 2:14-cv-0922-WM (N.D. Ala. Jan. 21, 2015).] Editor's note: the opinion's author is District Judge William M. Acker Jr., who has testified to Congress about his views on ERISA's application to disability claims.]
arrow icon PBGC Ends Section 4062(e) Moratorium
Pension Benefit Guaranty Corporation [PBGC]
1/22/2015 [Guidance Overview]

"Now that Congress has addressed the cessations to which section 4062(e) should apply and the amount and manner of satisfying the liability, PBGC has decided that there is no need to continue its enforcement moratorium. Employers that had or have a cessation of operations on or after December 16, 2014, that is not exempt and that meets the 15% reduction trigger described above should report the event to PBGC. Employers that had a cessation before that date should report it to PBGC, if they have not already done so. PBGC may be contacting employers that previously reported a cessation for additional information to determine whether and how the new rules apply to that event."
arrow icon Can an Employer Require an Employee to Work During FMLA Leave?
FMLA Insights
1/22/2015

"There is no right under the FMLA 'to be left alone' or be allowed to skirt the employer's 'discrete inquiries.' But if looks like work, it's gonna be work, and an employee shouldn't be doing work while on FMLA leave.... As a general rule, an employee on leave should be fully relieved of their work and not asked to perform work while on leave. That said, ... it is unlikely to be an FMLA violation when an employer makes sporadic calls to an employee posing general questions or to wrap up a job the absent employee was working on. Similarly, the employer can contact the employee to check on return dates or possible extension of leave."
arrow icon Why Aren't More RIAs Involved in 401(k) Plan Design and Administration?
Financial Planning
1/22/2015

"Many RIAs may already be convinced of the opportunity retirement plans present, but they get stuck wondering how to incorporate the service efficiently into their existing offering. Advisors should ask themselves a few key questions: Do they have the capabilities or expertise in-house? If not, do they have the resources and relationships they need with recordkeepers and plan sponsors? In truth, there is not a defined, one-size-fits-all way to incorporate retirement plans into an existing practice. There are many levels of engagement with retirement plans."
arrow icon Increasing Defined Contribution Plan Participation: A California Pilot Project
The Journal of Retirement; subscription may be required
1/22/2015

"Three State of California agencies recently launched a campaign pilot project to evaluate the effectiveness of different outreach strategies in increasing supplemental DC enrollment and contributions. The campaign results suggest that outreach efforts are effective in increasing enrollment and existing enrollee contributions, although their effectiveness may vary depending on the intensity of outreach applied. While the campaign pilot focused on a comparatively small sample population, the results of the campaign can extend beyond California public employees, since DC plans play a major role in both the public and private retirement landscape."
arrow icon Employer Guide for Compliance with the Mental Health Parity and Addiction Equity Act
Milliman, Inc. in conjunction with the Partnership for Workplace Mental Health
1/22/2015 [Guidance Overview]

49 pages. "This Guide was developed to provide a reference for employers who offer [mental health and substance use disorder (MH/SUD)] benefits as part of their health plans, informing them of certain key requirements of MHPAEA, the Final Rules, and other federal guidance provided to the industry and offering them a reasonable approach to MHPAEA compliance. It presumes a basic familiarity with the law and regulations and directs the reader to sources where more detailed information can be obtained and reviewed."
arrow icon Supreme Court to Address Same-Sex Marriage: Effect on Employer-Sponsored Group Health Plans (PDF)
ABD Employee Benefits
1/22/2015

"In the context of employer-sponsored group health plans, such a decision by the Court would affect employees residing in a state that currently does not recognize same-sex marriage (and imposes a state income tax). In these states, the Court's decision ... would: [1] Eliminate the requirement for employers to impute state income tax in the amount of the employer's contribution toward a same-sex spouse's coverage, and [2] Allow employees to pay for the same-sex spouse's coverage on a pre-tax basis for state income tax purposes. The Court's decision may also lead to more state insurance mandates requiring fully insured plans to offer coverage to same-sex spouses on the same terms as opposite-sex spouses."
arrow icon San Francisco's 2015 Minimum Health Care Expenditure Requirements, at a Glance (PDF)
Buck Consultants at Xerox
1/22/2015 [Guidance Overview]

"The San Francisco Health Care Security Ordinance (HCSO) requires covered employers to make payments toward their San Francisco employees' healthcare costs. The requirement applies to employers with 20 or more employees in the U.S. who have at least one employee in San Francisco.... The HCSO provides that a minimum amount must be spent for each covered employee for each hour paid for work in San Francisco. As of January 1, 2015, the rates are as [shown in this article]."
arrow icon M&A Basics: Executive Compensation Issues (PDF)
Morgan Lewis
1/22/2015

53 presentation slides. Topics: M&A 101; Change in Control Arrangements; Dealing with Section 409A; Say on Golden Parachutes Vote; Golden Parachutes under Section 280G; Going Private Transactions -- Management Representations.
arrow icon Employer Violated Wisconsin FMLA When It Terminated Unauthorized Worker Who Took Medical Leave
Littler
1/22/2015

"Undocumented employees, the court reasoned, are like at-will employees: the fact they do not have a right to continued employment does not excuse employers from following the employment laws. There is also an important policy consideration. If employers could skirt liability by hiring undocumented workers, then the Immigration and Nationality Act, which places restrictions on hiring undocumented workers, and the Wisconsin FMLA, which safeguards employees' rights to take medical leave, would be frustrated." [Burlington Graphic Systems, Inc. v. Dept. of Workforce Development, Appeal No. 2014AP762 (Wis. App. Dec. 23, 2014)]
arrow icon Supreme Court Urged to Drop Review in Tibble Case
planadviser
1/22/2015

"A petition submitted by Edison International asks the Supreme Court to reverse its decision to review key parts of Tibble vs. Edison International, a potential precedent-setting case related to ERISA's limitations period and whether retirement plan fiduciaries have an ongoing duty to monitor plan investment options that is distinct from the initial duty to select. The case is currently set for oral arguments before the Supreme Court on February 25[.]" [Tibble v. Edison International, No. 13-550 (9th Cir. Aug. 1, 2013; cert. pet. granted Oct. 2, 2014)]
arrow icon 2015 Plan Selections by ZIP Code in the Health Insurance Marketplace
Assistant Secretary for Planning and Evaluation [ASPE], U.S. Department of Health and Human Services [HHS]
1/22/2015

"The dataset provides the total number of health plan selections by ZIP Code for the 37 states that use the HealthCare.gov platform, including the Federally-facilitated Marketplace, State Partnership Marketplaces and supported State-based Marketplaces. These data reflect the total number of consumers who selected a plan or were automatically re-enrolled for the 2015 coverage year as of January 16, 2015.... A total of 13,725 ZIP Codes with at least 51 plan selections per ZIP Code are included in the table. These data account for 97 percent of the total 7.16 million overall plan selections in the 37 states as of January 16, 2015."
arrow icon Text of PBGC Monthly Interest Rates for February 2015, Updated January 21, 2015
Pension Benefit Guaranty Corporation [PBGC]
1/22/2015 [Official Guidance]

"The spot first, second, and third segment rates for December 2014 are, respectively, 1.48%, 3.77%, and 4.79%. These rates are used to determine the variable rate premium for premium payment years commencing in January 2015 if (A) the plan is using the standard premium funding target and (B) the plan is not a small plan using the lookback rule[.]"
arrow icon ERISA Advisory Council Report: Outsourcing Employee Benefit Plan Services
Advisory Council on Employee Welfare and Pension Benefit Plans
1/22/2015

"The Council formulated several recommendations for the Department grouped into the following five categories: (A) educate plan sponsors on current practices with respect to outsourced services; (B) clarify the legal framework under ERISA for delegating responsibility to service providers; (C) provide additional guidance on the duty to select and monitor service providers; (D) facilitate the use of multiple employer plans and similar arrangements as a means of encouraging plan formation and easing administrative burdens; and (E) update and provide additional guidance on insurance coverage and ERISA bonding of outsourced service providers."
arrow icon ERISA Advisory Council Report: 408(b) Fee Disclosure Regs Should Be Applied to Pharmacy Benefit Manager Compensation
Advisory Council on Employee Welfare and Pension Benefit Plans
1/22/2015

"In 2012, the [DOL] issued regulations requiring providers to disclose direct and indirect compensation to pension plans (Section 408(b)(2) Regulations).... [T]he Council recommends that the Department should consider making Section 408(b)(2) Regulations applicable to welfare plan arrangements with [pharmacy benefit managers (PBMs)], and thereby deem such arrangements reasonable only where PBMs disclose direct and indirect compensation, including compensation paid among related parties such as subcontractors, in a manner consistent with current Section 408(b)(2) Regulations. The Council also recommends that the Department should consider issuing guidance to assist plan sponsors in determining whether to and how to conduct a PBM audit of direct and indirect compensation."
arrow icon ERISA Advisory Council Report: Recommendations for Facilitating Lifetime Plan Participation
Advisory Council on Employee Welfare and Pension Benefit Plans
1/22/2015

"[T]his report provides ideas for plan administrators and plan participants, including communications strategies and plan design options to facilitate lifetime retirement plan participation. The Council recommends DOL develop educational materials for Participants and Sponsors on the value of lifetime plan participation and educate Plan Sponsors on various plan features that may encourage such participation. The Council also makes recommendations with respect to plan loans and development of sample forms to simplify plan rollovers and facilitate consolidation of retirement assets within a plan."
arrow icon Outlook for 2015: Multiemployer, 4062(e) Changes Enacted; Time to See How It Shakes Out
Bloomberg BNA
1/22/2015

"Some plans will be moving as quickly as possible now that they have the legal tools to do so, such as the financially troubled Central States Pension Fund, although the fund, one of the largest in the nation, said any changes likely wouldn't take effect for at least a year.... Central States was the most aggressive in pushing for an ability to save itself, but other plans that were unwilling to admit their financial condition will now be coming forward and requesting to use the new legal tools, [said Joshua Gotbaum, a guest scholar in the economic studies program at the Brookings Institution in Washington and director of the PBGC from 2010 to August 2014]."
arrow icon Who Has Paid Sick Leave, Who Doesn't, and What's Changing
Harvard Business Review
1/22/2015 [Opinion]

"[A]ccording to the U.S. Bureau of Labor Statistics, the jump in access to paid sick leave is at least in part due to more Americans working white-collar jobs.... [F]ull-time management workers [receive] the vast majority of sick leave benefits, leaving service workers and part-timers in the dust. The more you earn, the more likely you are to have paid sick leave.... The paradox is that although white-collar workers are more likely to have paid sick leave, they balk at using it; meanwhile, a whole host of people don't have it and thus couldn't use it even if they wanted to. In the end, all of this means that millions of people are going to work sick, albeit for different reasons and with different repercussions"
arrow icon The NCPA Fact Checks Obama's Health Policy Address During the State of the Union
National Center for Policy Analysis Health Policy Blog
1/22/2015 [Opinion]

"The president didn't mention that an estimated 100 million workers who have paid sick leave likely don't get seven days annually. He also didn't mention that his own advisor Jonathan Gruber has research showing workers themselves wind up paying the cost of mandatory benefits through lower wages.... The president should have called for expanding Health Savings Accounts (HSAs) to all workers, allowing them to set aside funds for medical needs. The president could have also proposed allowing workers to use HSAs to compensate for income lost to sick days."
arrow icon Too Late to the Game: UnitedHealth Group Blocked from California Exchange
Healthcare Payer News
1/22/2015

"UnitedHealth Group left California's individual market in 2013, but kept its 3 million-plus member employer-sponsored plans in the state, and largely sat out the first year of the Affordable Care Act exchanges, selling in only five states. Now, after expanding to 23 states for 2015, United wants to sell individual plans once again in California and its public exchange, Covered California. Except that Covered California officials don't seem to want UHG there -- or any new entrant that sat out these past two years and wasn't willing to take a bet on the new subsidized market."
arrow icon Text of IRS 2010 Reference List of Changes in Qualification Requirements for Retirement Plans (PDF)
Internal Revenue Service [IRS]
1/22/2015 [Official Guidance]

For use in submitting determination letter applications. The 2010 Reference List includes those items that first appeared on the 2010 Cumulative List of Changes in Plan Qualification Requirements.
arrow icon Text of IRS 2011 Reference List of Changes in Qualification Requirements for Retirement Plans (PDF)
Internal Revenue Service [IRS]
1/22/2015 [Official Guidance]

For use in submitting determination letter applications. The 2011 Reference List includes those items that first appeared on the 2011 Cumulative List of Changes in Plan Qualification Requirements.
arrow icon Text of IRS 2012 Reference List of Changes in Qualification Requirements for Retirement Plans (PDF)
Internal Revenue Service [IRS]
1/22/2015 [Official Guidance]

For use in submitting determination letter applications. The 2012 Reference List includes those items that first appeared on the 2012 Cumulative List of Changes in Plan Qualification Requirements.
arrow icon Text of IRS 2013 Reference List of Changes in Qualification Requirements for Retirement Plans (PDF)
Internal Revenue Service [IRS]
1/22/2015 [Official Guidance]

For use in submitting determination letter applications. The 2013 Reference List includes those items that first appeared on the 2013 Cumulative List of Changes in Plan Qualification Requirements.
arrow icon Text of IRS 2014 Reference List of Changes in Qualification Requirements for Retirement Plans (PDF)
Internal Revenue Service [IRS]
1/22/2015 [Official Guidance]

For use in submitting determination letter applications. The 2014 Reference List includes those items that first appeared on the 2014 Cumulative List of Changes in Plan Qualification Requirements.
arrow icon IRS Reference Lists: Changes in Qualification Requirements for Retirement Plans
Internal Revenue Service [IRS]
1/22/2015 [Official Guidance]

"Reference lists are tools to help you ensure that your plan document incorporates all relevant mandatory and optional changes in plan qualification requirements.... Each reference list contains items that are new to the cumulative list for that year.... For an individually designed plan submitted on Form 5300, complete the five reference lists for the five years of your remedial amendment cycle (RAC). These are the years covered by the cumulative list applicable to your submission. For an employer adopting a volume submitter plan and submitting on Form 5307, complete the six reference lists for the six years in your RAC.... Although not mandatory, we encourage you to include completed reference lists with your determination letter application."
arrow icon Patent Infringement Lawsuit Reminds ERISA Fiduciaries to Monitor Service Providers
McGuireWoods LLP
1/21/2015

"Plan fiduciaries should consider the following guidelines in selecting and dealing with providers: Because plan service providers are 'parties-in-interest' under ERISA, be sure that their involvement with the plan will not result in a prohibited transaction.... An online search should be made for any reported court decisions involving any potential provider.... Even without a formal bidding process, complete details concerning the services to be provided and the fees charged must be obtained.... Thoughtfully negotiate and periodically review provider contracts, including any indemnity obligations of both the provider and the plan administrator, particularly when the provider's form agreement is used."
arrow icon Most Companies Improving Automatic Features in 401(k) Plans to Boost Worker Savings
Aon Hewitt
1/21/2015

"29 percent of employers automatically enroll participants in the plan at a savings rate that is at or above the company match threshold. Another 27 percent of employers automatically enroll individuals below the full match rate, but automatically escalate contributions over time so that workers will eventually be saving enough to receive the full company match.... 8 percent of companies automatically enroll participants below the full match threshold and have contribution escalation as an opt-in feature. 70 percent of companies responding to the survey have automatic enrollment."
arrow icon D.C. Court of Appeals: Survivor Benefit in Undistributed Benefits Irrevocably Vests Upon Retirement; ERISA Pre-empts State Law Constructive Trust Effort (PDF)
U.S. Court of Appeals for the District of Columbia Circuit
1/21/2015

"John argues that the divorce decree and this Texas statute entitle him to a declaration that he 'has equitable title' to Melissa's survivor benefit, and that upon receipt of her annuity, Melissa is bound by Texas law to deliver it to John's designee.... The conflict between ERISA and Texas law could hardly be starker -- what ERISA gives to Melissa, John argues, Texas takes away. But as the Supreme Court held ... 'in the face of this direct clash between state law and the provisions and objectives of ERISA, the state law cannot stand.' ... This case involves an effort by a plan participant to obtain an interest in undistributed plan benefits, and we hold only that absent a qualified domestic relations order and compliance with ERISA's strict waiver provisions for survivor annuities, he may not use state law for that purpose. This opinion has nothing to say about how ERISA might affect an effort by a plan participant to use state law to obtain an interest in benefits after distribution to the beneficiary." [Vanderkam v. Vanderkam, No. 13-5163 (D.C. Cir. Jan. 20, 2015)]

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