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October 24, 2012          Get Retirement News  |  Advertise  |  Unsubscribe
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Future Guidance Will Address Additional Employer Shared Responsibility Questions, Government Officials Say
"The Treasury and the Internal Revenue Service intend to issue additional guidance by early 2013 on who is subject to the Code Sec. 4980H employer shared responsibility payment, said Kevin Knopf, attorney advisor in the Treasury Office of Benefits Tax Counsel." (Wolters Kluwer Law & Business)


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Out-of-Pocket Costs Varied Greatly Among 10 Health Insurance Plans
"Consumer out-of-pocket costs under the hypothetical scenarios varied greatly: For breast cancer, patient costs ranged from $2,004 for one of the low-deductible plans to $55,250 for one of the young adult plans. For heart disease, patient costs ranged from $1,881 to $39,355. For diabetes, patient costs ranged from $507 to $4,126. Numerous factors -- some not obvious to consumers when they are choosing a plan -- affected the differences in out-of-pocket costs[.]" (Robert Wood Johnson Foundation)

Reinsurance and Other Fees Could Impact Employer Health Care Costs (PDF)
"Although the reinsurance program has received little attention, some large employers are concerned that the fee associated with this program could be unduly burdensome on self-insured plans, particularly those with a large number of covered lives, multiple plans, or that use multiple TPAs. Informally, the White House and HHS have been soliciting comments from the employer community regarding the burden imposed by the reinsurance program." (Buck Consultants)

Business Owners Report Economy, Health Care and Taxes Top Concerns
"It comes as no surprise that health care is a priority for business owners in both the political world and the business world. One-fourth (24 percent) rate their top concern for the well-being of their business as managing the cost and administrative responsibilities of health care and another 24 percent say understanding how health care reform impacts their business is their top concern." (The Principal Financial Group)

District of Columbia Health Benefits Exchange: Q&A for Residents and Small Businesses (PDF)
"The exchange does not close the commercial health insurance market, it organizes the market. Under the board's proposal, all commercial health insurance plans available to individuals and small businesses in DC will be sold in the exchange, where insurance companies will provide shoppers with complete information about health plan benefits, costs, and quality in a format that is understandable and that enables comparison shopping." (FamiliesUSA)


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How to Pick a Medicare Part D Drug Plan
"National surveys indicate that 90 percent of people on Medicare simply settle on one drug plan or health plan and just keep renewing it year after year. That could be a costly mistake." (Tampa Bay Times)

ACA Changes to Medicare Part D Drug Benefit Mean Fewer Savings Needed for Health Expenses in Retirement
"The [ACA] reduces cost sharing in the Medicare Part D 'donut hole' down to 25 percent by 2020. This year-to-year reduction in coinsurance will continue to reduce savings needed for health care expenses in retirement, all else equal, for individuals with the highest prescription drug use. EBRI analysis finds 1-2 percent reductions in needed savings among individuals with median drug use and 4-5 percent reductions in needed savings among individuals at the 90th percentile in drug use since EBRI's 2011 analysis." (EBRI)

Open Enrollment Tips for Employees
"[B]enefits offered to employees next year may be impacted by a number of factors, including rising health care costs, the declining health of the population, and phase-in of provisions under the [ACA].... 55 percent of employees default to their current benefit coverage for the coming year, instead of actively reassessing their plan options. Employers should remind workers that the old selection may not be the best option." (Wolters Kluwer Law & Business)

Court Tosses Multiemployer Health Plan's Claims for Relief Under ERISA 502(a)(3)
"A multiemployer health plan's claims against the insurers and administrator that denied reimbursement of medical expenses cannot proceed under Section 502(a)(3) of [ERISA], because the plan seeks legal relief ... unavailable under ERISA Section 502(a)(3), the [Texas District Court] said. After dismissing all the plan's ERISA claims, the court allowed it to proceed in its claim for subrogation under state insurance law." [Central States, Southeast and Southwest Areas Health and Welfare Fund v. Health Special Risk Inc., No. 3:11-cv-02910-D (N.D. Tex., 10/18/12)] (Bloomberg BNA)

Workers Aging Into Retiree Health Changes (PDF)
"A growing number of workers are realizing they will not get retiree health care from their employer after they stop working, according to a new report by the nonpartisan Employee Benefit Research Institute (EBRI). While earlier research found little impact from reductions in coverage on current retirees, EBRI finds that initial changes employers made to retiree health benefits affected future retirees as opposed to then current retirees. Over time, more and more retirees have "aged into" those program changes, resulting in the greater impact found in more recent studies." (Employee Benefits Research Institute)

Employment-Based Retiree Health Benefits: Trends in Access and Coverage, 1997.2010 (PDF)
"Very few private-sector employers currently offer retiree health benefits, and the number offering them has been declining. In 2010, 17.7 percent of workers were employed at establishments that offered health coverage to early retirees, down from 28.9 percent in 1997. Between 1997 and 2010, the percentage of non-working retirees over age 65 with retiree health benefits fell from 20 percent to 16 percent." (Employee Benefits Research Institute)

Creating Outcome-Driven Health Care Markets
"When we examine health care, we see demand falling into three segments: healthy people who have episodic needs, chronic disease patients with predictable needs, and highly complex patients with less predictable needs. Given the high variance between the three submarkets, we believe that each of these segments should be thought of as a discrete market and served by different types of insurance products, payment models, and health care providers." (HealthAffairs Blog)

Eight Things Retirees Should Know About Health Insurance Following Health Care Reform
"[R]etirees should not rely on the information in their SBC alone to make health insurance plan choices. To minimize surprises and make the most of health insurance plan options, consider these eight tips: Acquire your plan materials.... Study up.... Think about your location.... Break out the calculator.... Know if your plan is 'grandfathered'.... Don't miss the deadlines.... Determine if a Medicare exchange is an option.... Ask if your plan is subject to the health care reform law." (HighRoads)

[Opinion]

Discount Prescription Drug Coupons No Bargain
"In the past year, about 19 million Americans used these incentives to fill prescriptions. Since 2009, the health care industry has seen a nearly fivefold increase in the use of discounts. Today, drug companies offer 395 medications, up from 86 drugs in 2009, under these programs. In truth, these discounts are a good deal for the drug companies, but not so good for patients or their insurers." (USA TODAY)

Benefits in General; Executive Compensation

Deadline for Compliance with Section 409A is December 31
"Once the plan or agreement has been amended pursuant to the correction procedures in Notice 2010-80, the company must comply with certain information and reporting requirements regarding the correction. Specifically, the company is required to file an information statement regarding the correction with its federal income tax returns for the year in which the amendment was made." (Mintz Levin)

Realizable Pay and the ISS
"If ISS does add 'realizable pay' to its final policies (which are expected near the end of November), it may be advisable for every company to make this a calculation for the CEO (using the precise ISS definitions) as a part of its proxy preparation and good governance, even if the company is not a large cap company that ISS has identified as high concern. Companies also should explain this matter to their Compensation Committee (if they have not already done so) and mention it in their proxy statement." (Winston & Strawn LLP)

The Top Ten Best Practices for Equity Grants
"Recommended administrative best practices for grants include the following: (1) Make sure terms and conditions of each award (set forth in the award agreement and/or grant notice) are consistent with the plan document. (2) Have equity grants approved before communicating grants to employees. (3) Do not backdate any grants. [and six more]." (Nelson Mullins Riley & Scarborough LLP)

Institutional Shareholder Services Releases 2013 Draft Policies for Comment
"The draft policy [on management say-on-pay proposals] adds, as a new factor in the qualitative evaluation of pay-for-performance alignment, a comparison of realizable pay to grant date pay. Finally, the draft policy on say-on-pay proposals adds pledging of shares by executive officers and directors as a new factor that may lead to negative recommendations on say-on-pay votes.... The draft policy on golden parachute proposals: Includes existing change-in-control arrangements that are maintained with named executive officers [and more] closely scrutinizes multiple legacy problematic features in change-in-control agreements." (Practical Law Company)

Fewer Upper-Middle-Income Americans Express Concerns About Retirement and Health Care Costs (PDF)
"Bank of America's Merrill Edge Report is a semi-annual study that offers an in-depth look at the financial concerns, priorities and behaviors of mass affluent consumers, defined as people with $50,000-$250,000 in total household investable assets ... which consists of approximately 28 million house-holds in the United States ... Seventy-three percent of mass affluent fear that their retirement assets will not last throughout their lifetime, down from 83 percent in April 2012, and 84 percent of this group are concerned about the rising cost of health care, also down from 89 percent in the same time period." (Bank of America Merrill Lynch)

Quality Stores Update: DOJ Files Petition for Rehearing En Banc on Important Severance Pay FICA Case
"On October 18, the Department of Justice (DOJ) filed a petition for rehearing en banc in United States v. Quality Stores, Inc., No. 10-1563 (6th Cir. Sept. 7, 2012) ... [T]he Sixth Circuit [decision being appealed] held that severance payments paid to former employees pursuant to an involuntary reduction in force were SUB-Pay and not taxable 'wages' for FICA tax purposes[.]" (Morgan, Lewis & Bockius LLP via Bloomberg BNA)

Press Releases

Local Government Pension Valuation Reports Available Online Beginning November
CalPERS (California Public Employees' Retirement System)



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