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2021 ABD Employee Benefit Plan Compliance Guides

Article provides links to a dozen compliance guides covering various aspects of health plan benefit design and administration.

Financial Wellness During COVID-19: Moving from Panic Towards Peace (PDF)

65 presentation slides addressed to plan participants. Topics: [1] Recent market volatility and perspective; [2] Financial relief programs; [3] CARES Act, federal and private-sector relief; [4] Opportunities; [5] 401(k)/retirement accounts; [6] Refinancing debt in low interest rate environment; [7] Adjusting your spending and scenario planning; [8] Tools & resources.

ACLI Written Testimony to House Financial Services Committee: Putting Investors First? Examining the SEC's Best Interest Rule

"ACLI supports rules requiring all financial profess ionals, when making a recommendation, to act in the consumer's best interest -- with care, skill, pr udence, and diligence -- based on the consumer's financial needs and objectives. ACLI also supports rules requiring financial professionals to avoid or reasonably manage conflicts of interest through inc reased transparency. This is consistent with National Association of Insurance Commissioners (NAIC) and [SEC] (SEC) initiatives underway."

Several States Order Insurers to Waive Cost-Sharing for COVID-19 Testing

"At least three states have now directed insurance carriers to waive all health plan cost-sharing associated with COVID-19 testing: California, New York [and] Washington.... More states are likely to follow in the coming weeks. Even for those states without a directive to waive COVID-19 testing cost-sharing, insurance carriers may move voluntarily to make such services available at no cost to employees and family members."

IRI Testimony at House Financial Services Committee Hearing: Putting Investors First? Examining the SEC's Best Interest Rule (PDF)

10 pages (of 165 page document). "IRI supports the SEC's proposed Reg BI because it establishes a new, clear, consistent and workable best interest standard of conduct for financial professionals that will serve as a platform to help consumers make informed decisions and preserve investor choice. To avoid unintended consequences associated with Reg BI, the SEC should provide additional guidance and clarity regarding certain provisions."

New Hampshire Optional Paid Family and Medical Leave Insurance Coming in 2023

"The intent of this law is to leverage the purchasing power and economies of scale available to the state of New Hampshire by contracting with an insurance carrier or carriers to create an insured paid family and medical leave insurance (FMLI) benefit. The state's newly created FMLI Advisory Board ... is tasked with creating an RFP to be distributed no later than March 31, 2022, with an anticipated effective date of January 1, 2023."

ERIC Comment Letter to New York Department of Financial Services on Proposed Rules for PBMs (PDF)

"ERIC commends the Department for ... removing problematic provisions that would have restricted employer plan design and administration; and establishing requirements for PBMs to track and report increased service costs stemming from state laws and regulations.... ERIC strongly encourages the Department to include an explicit exemption for ERISA self-insured health benefit plans and the PBMs that administer them when doing so on their behalf."

Survey Says: Supplemental Insurance Plans Deliver Financial Peace of Mind

"Supplemental insurance enrollees continue to be overwhelmingly satisfied with their plans and rate them highly. Consumers are particularly satisfied with the service they receive from health insurance providers.... Having supplemental insurance has prevented consumers from experiencing financial hardships or being forced to make choices between their health and their financial well-being."

Tax-Motivated Life Insurance Industry Hit by Legal, Financial Shockwaves (PDF)

8 pages. Excerpt: Ironically, a successful process of designing, marketing and implementing tax motivated insurance products may contain the seeds of its own destruction.... The history of corporate-sponsored group insurance exhibits a pattern of marketing actions, followed by Congressional and Revenue Service reactions, resulting in financial jeopardy for purchasers of the insurance programs.

Washington Long-Term Care Insurance Payroll Tax Begins in 2022

"Employees are charged a premium assessment of .58% of wages ($.58 for every $100 earned). The original cap of 1% of earnings has been removed. The payroll tax is funded exclusively by employee contributions. Unlike the WA Paid Family Medical Leave program, there is no employer contribution component to the WA Cares Fund payroll tax."

California Enacts Individual Health Insurance Mandate and Expands Paid Family Leave

"California now joins Massachusetts and New Jersey with a state-based individual mandate requiring residents to maintain health coverage.... [It] is likely that employers will have a reporting requirement similar to the requirement imposed on New Jersey employers.... California's current six-week maximum period of PFL ... will increase to eight weeks as of July 2020.... The stated goal in the bill is to eventually increase PFL to a 12-week maximum in 2021-22. That would provide for a total paid family leave period of six months where utilized by two parents."

Five Years Down, But Final ACA Implementation Phase Still Looms: Insured Plan Nondiscrimination, Automatic Enrollment, and Cadillac Tax

"[1] Health FSA: The statute specifically provides that both employer contributions (including through flex credits) and employee salary reduction contributions will count toward the Cadillac tax limit. [2] HSA: The statute states that 'employer contributions' to an HSA count toward the Cadillac tax limit. However, the IRS has determined that because employee pre-tax salary reduction contributions to an HSA are treated as employer contributions for tax purposes, both employer and employee contributions will count toward the Cadillac tax.... [3] HRA amounts -- which are funded solely by the employer -- will also count toward the Cadillac tax limit. The IRS is considering how best to determine the cost of coverage provided under an HRA, including potentially relying on the amounts made newly available to a participant each year (and not carryover amounts made available prior to 2018)."

How Fast Do Financial Service Apps Change?

"The retirement industry showed increased interest in improving their mobile offerings but few trends emerged as dominant.... Navigation and design, profile management, transactions and account information all saw similar numbers of changes ... Retirement firms made fewer changes than those in mobile finance or insurance, although when firms made changes, they tended to be more significant than those in other verticals."

New York Department of Financial Services Proposes Fiduciary Regulation

"If adopted, the Proposal would establish a New York-specific standard for insurance licensee conduct by expanding the scope and requirements of New York's suitability regulation, which currently applies to annuity contracts.... The Proposal ... will overlap in part with the DOL fiduciary rule and a soon-to-be-proposed SEC rule as well as related standards/proposals in states such as Nevada and Connecticut, raising potentially conflicting requirements, compliance challenges, and enforcement uncertainty."

EBSA Advisory Opinion 2011-02A: Guidance on Behalf of State of Florida Department of Financial Services Regarding the Applicability of Title I of ERISA to Certain Health Benefits Programs

Whether the Depawix Health Resources, Inc. employee welfare benefit plan and the Green Cross Managed Health System health benefits program are multiple employer welfare arrangements within the meaning of ERISA section 3(40), and whether ERISA section 514(a) precludes the State of Florida from applying its insurance laws and regulations to those entities and programs, or to any persons who sell or market them in Florida.

Hartford Financial Services Group Inc. Has Been Hit with Two New Stock Drop Class Action Lawsuits

Excerpt: The lawsuits allege a fiduciary breach by continuing to have company stock as a retirement plan investment option after it was no longer prudent because of the firm's subprime mortgage exposure. In the two federal court suits filed last week in Connecticut, employees Denise Jump and Joe DeSalvo claim having company stock in the plan was no longer appropriate because of the company's heavy exposure to mortgage-related assets -- including investments in the troubled Fannie Mae, Freddie Mac, Lehman Brothers Holdings, Washington Mutual, and American Insurance Group.

Text of Treasury Department Request for Information on Uses, Opportunities, and Risks of Artificial Intelligence in the Financial Services Sector

"Treasury is interested in gathering information from a broad set of stakeholders in the financial services ecosystem, including those providing, facilitating, and receiving financial products and services, as well as consumer and small business advocates, academics, nonprofits, and others.... Through this RFI, Treasury seeks to increase its understanding of how AI is being used within the financial services sector and the opportunities and risks presented by developments and applications of AI within the sector ... Treasury is interested in gaining insights into the uses of AI by financial institutions, including but not limited to ... [1] Provision of products and services ... [2] Risk management ... [3] Capital markets ... [4] Internal operations ... [5] Customer service ... [6] Regulatory compliance ... [7] Marketing."

New York Department of Financial Services’ Industry Letter: Foreshadowing Enforcement of Vendor Management?

"[T]he New York State Department of Financial Services (NYDFS) issued an industry letter ... which clarifies covered entities' responsibilities when engaging third‑party service providers (TPSPs) that access information systems or nonpublic information (NPI). Although the guidance does not add new rules to the NYDFS Cybersecurity Regulations, it clarifies regulatory requirements with respect to TPSPs, provides suggestions for best practices, and may signal increased regulatory focus on third-party risk management."

Revision of ASOP No. 11, Treatment of Reinsurance or Similar Risk Transfer Programs Involving Life Insurance, Annuities, or Health Benefit Plans in Financial Reports

"Since 2005, significant new guidelines and requirements for life insurance policies and annuity contracts have emerged ... The guidance in the standard is being updated to reflect emerging practices driven by this new environment.... The standard is effective for actuarial services performed in connection with financial reports issued on or after Dec. 1, 2022."

How Financial Advisors Actually Charge For Their Services

"[F]inancial advice has evolved with technological advancements and a greater focus on financial planning, with the Assets Under Management (AUM) fee emerging as the primary compensation model. Now, as financial advisers expand their services beyond traditional planning into more holistic, personalized advice, the very definition of financial advice continues to evolve. As a result, firms must continually reassess how they structure their fees to align with their growing range of services."