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November 16, 2012          Get Retirement News  |  Advertise  |  Unsubscribe
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[Official Guidance]

Text of Letter to State Governors Providing Second Extension of Deadline for Declaration of Intent to Operate Health Exchanges (PDF)
"Under the law, [HHS is] required to certify states' plans to run their own Exchange in 2014 by January 1, 2013. While receiving a letter of intent now will help [HHS] assist states in finalizing their application, a state may submit both a letter of intent and an application to operate its own Exchange by December 14. States may also apply to operate their Exchange in partnership with the federal government by February 15, 2013." (U.S. Department of Health and Human Services)


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Obama Administration Extends Deadline for State Health Insurance Exchanges
"In a statement [the Republican Governors Association] thanked the agency for its response, but it was unclear whether the additional time would change anyone's mind. As of Thursday, only 17 states and the District of Columbia had committed to building their own exchanges -- far fewer than envisioned by the administration when the law was passed in 2010." (Kaiser Health News)

ERISA Benefit Plan Subrogation Divide Continues (PDF)
"Some ERISA plan provisions providing for plan reimbursement expressly disclaim the application of traditional equitable defenses that a court might otherwise consider when determining whether or what amount a plan may recover reimbursement.... The Ninth Circuit is the most recent circuit to tackle this question ... [joining] the Third Circuit in adopting the minority position in direct conflict with the District of Columbia, Fifth, Seventh, Eighth and Eleventh Circuits.... [T]he United States Supreme Court recently granted certiorari on this very issue." (Bender's California Labor and Employment Bulletin)

More Regs Expected Soon on Health Law
"Most of the anticipation so far has been focused on rules that determine how the new state-based insurance marketplaces called exchanges will operate. But also closely awaited are decisions about how the government will tax medical devices, allot the shrinking pool of money for hospitals that treat the uninsured, and determine how birth control insurance coverage can be guaranteed for employees of religious schools, universities and charities." (Kaiser Health News)

Election's Over: So What's Next for Employers Under Obamacare?
"[E]mployers who might have been hoping for a different result on Election Day will have a great deal of work to do in a relatively short period of time if they are to avoid the stiff monetary penalties embedded in the law.... [A] significant number of Obamacare provisions are scheduled to take effect over the course of 2013. Thus, if they have not already done so, employers should take immediate steps to comply with the ... mandates [described in this article]." (Spencer Fane)

Some Employers Providing Fixed Sum for Health Benefits, Requiring Employees to Choose Type of Coverage
"The approach, called defined contribution health insurance, contrasts to the decades-old practice by most U.S. employers of offering workers a one-size-fits-all plan with benefits they may not want. It also means American workers who've grown accustomed to having their benefits chosen for them could wind up with bigger bills and inadequate coverage if they don't choose wisely.... Until now, defined contribution health insurance plans have been largely limited to small businesses and retirees. But more employers are considering them as a way to control their rising health care costs." (The Washington Post; free registration required)

States Make Decisions on Health Insurance Exchanges
"21 states plus the District of Columbia, have already indicated they want to become involved, either by building and running their own exchanges or partnering with Washington. The 16 that want to build their own exchanges, plus the District of Columbia, face a Jan. 1 deadline for the federal government to approve their plans.... The number of partnership states could grow significantly, since the Obama administration has given states until next February to decide on that option. As of Thursday, 16 states indicated that they were weighing their options and have not made a final decision." (The New York Times; free registration required)

Importance of the Health Spending Trend (PDF)
"While the growth of health care costs is not new, the rate of increase is becoming unsustainable. Fortunately, we have seen a slowing in health spending trend increases over the last several years. Nationally, spending on health care grew at an annual rate of just 2.1% per person between 2005 and 2010, as opposed to an average of 4.3% between 2000 and 2005." (McGraw Wentworth)

Massachusetts Health Policy Commission to Begin Work
"The [Massachusetts] governor, attorney general, and state auditor announced their picks ... for a new commission that will set a health care spending goal for the state and track providers' progress in staying within the target. The 11-member board, made up of people with deep histories in health care policy in Massachusetts and nationally, will play an unprecedented role in the state's health care market." (Boston.com)

Software Issues May Complicate Launch of Health Insurance Exchanges
"State regulators learned late last week that an electronic system most insurers will use to submit their policies for state and federal approvals won't be ready for testing next month, as originally planned. The lag is being blamed on the wait for several regulations from the Obama administration that are needed to update the software." (National Public Radio)

The Growing Budget Cost of Insurance Subsidies in the Affordable Care Act
"When the ACA was first passed, the subsidies were projected to cost $462 billion between 2012 and 2019. But the March 2011 baseline spiked to $515.5 billion, an 11.6 percent increase. This assumed the cost of the program to be between $5 billion and $13 billion from 2014 to 2019. And after the Supreme Court ruling, the budget estimate increased again to $574 billion or about 24.2 percent from the initial projections. The costs were expected to be as high as $23 billion in every year of operation of the entitlement." (National Center for Policy Analysis)

Employers Must Contend With Varying State Decisions on Health Insurance Exchanges, Medicaid Spending
"Time will soon tell how many states will run health exchanges and expand Medicaid as directed in the federal health reform law. But for employer plans, the waiting game just draws out the inevitable confusion that may occur as those plans anticipate being impacted in different ways on a state-by-state basis[.]" (Thompson SmartHR Manager)

COBRA Penalties for 'Innocent Mistakes' (PDF)
"The employer did not dispute that the employee was entitled to a COBRA notice but contended that its failure was an 'innocent mistake.'... The court determined that there were too many 'contradictions and evasions and disingenuous answers' to conclude that the employer's failure to mail the notice was inadvertent. " [Tondalaya Evans v Books-a-Million, No. CV-07-S-2172-S (N.D. Ala. Oct. 29, 2012)] (Kushner & Company)

Why Employers' Reported Health Benefit Cost Growth of 4.1% Is a Fraud
"Pop the champagne corks! Businesses have held the rate of health benefit cost increases to only 4.1%! Though that is still twice the rate of inflation, it's the smallest increase in 15 years! How did they achieve this success? By moving employees into lower cost consumer-directed health plans. By increasing deductibles for the plans. By other forms of cost shifting.... So have the employers finally learned how to slow the escalation of health care costs? No! They have dumped their costs onto the backs of their employees!" (Physicians for a National Health Program)

Good Intentions Won't Make Health Care Affordable Under Obamacare
"[A]s a mechanism for providing access to health care for everybody at a reasonable cost, Obamacare has a number of serious shortcomings. Even if it works entirely as intended, it will still leave 25 million to 30 million people without any coverage at all. It lacks any persuasive mechanism for controlling the costs of public or private programs, meaning that insurance, even with federal subsidies, will likely become increasingly unaffordable." (Physicians for a National Health Program)

[Opinion]

Public Pension Politics Must Change
"Notwithstanding that nearly all opinion surveys indicate overwhelming support for reductions in public employee retiree benefits, pensions in New York are guaranteed in the state constitution. A pension is a contract between government and an employee that becomes effective on the first day of employment. Thereafter that contract cannot be diminished or impaired. That is why so-called pension reform in New York always is geared to new hires. New pension tiers such as those enacted in 2009 and 2011 may save billions of dollars as their proponents claim, but those savings will not be realized for decades." (TimesUnion.com)

Benefits in General; Executive Compensation

Year-End Action Items for Executive Compensation
"[1] Amend stock incentive plans to impose a meaningful annual limit on awards to non-employee directors -- or adopt a separate plan for them. [2] Compensation Committees should apply the six independence factors to any lawyers or consultants that provide advice, information, or material to the Committee. [3] Reevaluate your CD&A disclosure in light of the rash of lawsuits against public companies seeking to enjoin their annual shareholders meetings. [4] Review and revise the Compensation Committee Charter to reflect Dodd-Frank Act changes and some developing best practices." (Winston & Strawn LLP)

Trends In Stock Options, Restricted Stock and RSUs for Company Board Members
"At the median, the mix of pay for directors was 45% cash and 55% equity in 2011.... [E]quity awards to directors are now almost entirely restricted stock grants, and the number of Fortune 500 companies using stock options has dwindled to a "select group." The value of equity awards to directors has not been affected by volatility in stock prices because most companies base director grants on a fixed value rather than on a fixed number of shares." (myStockOptions.com)

2012-13 Towers Watson Talent Management and Rewards Survey (PDF)
"One reason may be the mismatch that often exists between what an organization offers and what employees are looking for.... Employees -- from recent college graduates to top talent in high-potential programs -- are focused more now on security issues and the broader employment deal. Many employers, on the other hand, continue to emphasize nonmonetary rewards such as challenging work and the organization's mission, vision and values." (Towers Watson)

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