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December 5, 2012          Get Retirement News  |  Advertise  |  Unsubscribe
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[Official Guidance]

Text of Final IRS Regs: Fees on Health Insurance Policies and Self-Insured Plans for the Patient-Centered Outcomes Research Trust Fund
"These regulations apply to policy and plan years ending on or after October 1, 2012, and before October 1, 2019.... [T]hese final regulations state explicitly that continuation coverage must be taken into account in determining the PCORI fee, unless the arrangement is otherwise excluded.... [T]he final regulations permit an applicable self-insured health plan that provides accident and health coverage through fully-insured options and self insured options to determine the fee imposed by section 4376 by disregarding the lives that are covered solely under the fully-insured options.... Except as otherwise provided, the final regulations do not permit an issuer or plan sponsor to disregard a covered life merely because that individual is also covered under another specified health insurance policy or applicable self-insurance plan." (Centers for Medicare & Medicaid Services)


[Advert.]

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FSA, DCAP, Full-Flex, HRA, HSA, 132(f)
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[Official Guidance]

Text of IRS Notice 2012-75: Application of the General Welfare Exclusion to Indian Tribal Government Programs That Provide Benefits to Tribal Members (PDF)
"This notice proposes a revenue procedure that would describe general principles for the general welfare exclusion and provide safe harbors under which the Internal Revenue Service would presume that the individual need requirement of the general welfare exclusion is met for benefits provided under Indian tribal governmental programs described in [this] proposed revenue procedure, and would not assert that benefits provided under programs described [herein] represent compensation for services." (Internal Revenue Service)

[Guidance Overview]

Guidance Issued on Permissible Wellness Programs
"Although these latest regulations generally reaffirm the approach taken in regulations proposed in 2006, they also modify the 20% cap on wellness program rewards, offer further guidance on the 'reasonableness' of any alternative standard for obtaining a reward, and clarify both the annual-eligibility and disclosure obligations." (Spencer Fane)

[Guidance Overview]

Reporting the Cost of Health Care Coverage on Form W-2
"The IRS has stressed that the reporting of this cost is informational only and has no impact on whether the reported amounts are or would be taxable. The stated purpose of this mandated reporting is to provide useful and comparable consumer information to employees on the total cost of their health care coverage. This new reporting obligation offers employers an opportunity to highlight the cost of the benefits they are providing to their employees. Many, if not most, employees have no idea of the true total cost of the health care coverage they receive through their employer-sponsored group health care plan." (McDonald Hopkins LLC)

Employer-Sponsored Health Insurance Coverage Continues to Decline in a New Decade
"[T]he share of Americans under age 65 covered by employer-sponsored health insurance (or ESI) eroded for the 11th year in a row in 2011, falling from 58.6 percent in 2010 to 58.3 percent. The situation started deteriorating long before the Great Recession: The share of Americans under age 65 covered by ESI eroded every year from 2000 to 2011, decreasing by a total of 10.9 percentage points. As many as 29 million more people under age 65 would have had ESI in 2011 if the coverage rate had remained at the 2000 level (69.2 percent)." (Economic Policy Institute)


[Advert.]

Nat'l Health Benefits Conf & Expo (HBCE) Jan.29-30, 2013 -- Clearwater Beach, FL

Sponsored by Health Benefits Conference & Expo (HBCE)

Speakers wrote the books on wellness, onsite clinics, disease management, obesity and health reform. Hear from public employers, universities, Boeing, FirstEnergy, JetBlue, Mayo Clinic, many more. Low cost, high quality! HBCE.com Ph: 941-484-1430 info@HBCE.com


Can Online Weight-Loss Programs Be As Effective As In-Person Programs?
"Compared to no or minimal interventions, online weight-loss interventions are an effective strategy for weight loss and weight maintenance, according to the analysis. Although online interventions resulted in smaller weight losses and lower levels of weight maintenance than in-person interventions, the difference was relatively small, therefore 'making the clinical significance of these differences unclear,' according to the analysis." (Human Resource Executive Online)

Consumers Saw Nearly $1.5 Billion Financial Benefit from the MLR Requirement in 2011
"[I]n the individual insurance market, improvements were widespread: 39 states saw administrative costs drop, 37 states saw medical loss ratios improve, and 34 states saw reductions in operating profits. Some states stood out for significant improvements.... [But] in the small-group market, administrative costs were reduced by $190 million, profits increased by $226 million, and the medical loss ratio remained at 83 percent, unchanged from 2010. In the large-group market, insurers reduced administrative costs by $785 million, increased profits by $959 million, and kept their medical loss ratio at 89 percent, also unchanged from 2010." (The Commonwealth Fund)

How Insurance Companies Have Responded to Regulation of Medical Loss Ratios
"This issue brief examines whether insurers have reduced administrative costs and profit margins in response to the new MLR rule. In 2011, the first year under the rule, insurers reduced administrative costs nationally, with the greatest decrease -- over $785 million -- occurring in the large-group market. Small-group and individual markets decreased their administrative costs by about $200 million each. In the individual market, insurers passed these savings on to consumers by reducing their profits even more than administrative costs. But in the large- and small-group markets, lower administrative costs were offset by increased profits of a similar amount." (The Commonwealth Fund)

Rate Review Protects Consumers from Unjustified Premium Increases
"The rate review provision of the ACA provides an 'unprecedented level of scrutiny and transparency to health insurance rate increases' to protect consumers from unjustified premium increases. Consumers in all 50 states will have access to the proposed rate increases, an explanation from the insurer as to why it believes an increase is necessary, and, for the first time, be able to comment on the proposed rate increase." (ExtendHealth)

ML Strategies Health Care Reform Update, December 3, 2012
Weekly update on developments in federal and state health care reform legislation and regulations. Includes summaries of recent announcements and regulatory activity by HHS, CCIIO, IRS and CMS. (Mintz Levin via Compliance Today)

AARP Lobbies Against Medicare Changes That Could Hurt Its Bottom Line
"AARP, the highly influential lobby for older Americans, is fiercely opposing any Medicare or Social Security cuts and emphasizes that it is fighting for the good of its members. But the proposals for changing Medicare also could affect AARP's bottom line.... The group gets a 4.95 percent royalty each time someone buys Medigap insurance with the AARP brand." (The Washington Post; free registration required)

U.S. Seeks Dismissal of Oklahoma's Lawsuit Challenging ACA
"In November 2010, Oklahomans voted to amend the state constitution to bar any rule or law that compels a person, an employer or health-care provider to participate in a health-care system.... In September, [State Attorney General Scott] Pruitt filed a revised complaint in which he said the individual mandate remained inoperable in his state. He also challenged U.S. tax rules on the establishment of health insurance exchanges to make coverage available for residents." (Bloomberg BusinessWeek)

Oklahoma's Challenge To Obamacare Is Legally Flawed, Federal Attorneys Say
"The state lacks any legal standing to make its key claim that the law's tax penalties against employers who fail to provide adequate health insurance to their workers can't be enforced in Oklahoma, federal attorneys argue in their filing at the Muskogee-based court. Pruitt's claim rests on the fact that Oklahoma won't be establishing a state health insurance exchange, and the law doesn't allow for the tax penalties to flow through a federal exchange to be built in the state as a substitute. But the U.S. Justice Department attorneys argue that Oklahoma can't make its claim because it doesn't stand to be damaged by the law's tax penalties." (InsuranceNewsNet)

ACA-Mandated Drug Coverage to Vary from State to State
"[S]ome states will require coverage of virtually all FDA-approved drugs, while others will only require coverage of about half of medications." (The New York Times; free registration required)

[Opinion]

Paul Krugman Doesn't Have Private Health Insurance
"[T]he underlying premise is that there is some fundamental difference between public and private health insurance. This is a belief widely held both on the left and the right of the political spectrum. It is a belief that is wrong." (John Goodman's Health Policy Blog)

[Opinion]

The Perilous Politics of the Health Coverage Tax Break for Employees
"There's not much in health care that economists agree on. But one of the few things that bring them together is the idea that excluding the value of health insurance from federal taxes is nuts.... There are several reasons for that. One is that it's expensive -- it costs the federal government nearly $250 billion a year. Another is that it's regressive -- it benefits people with higher incomes more than those who earn less. And finally, the tax benefit encourages people to take their compensation in health insurance rather than wages. That, in turn, encourages them to use more and more health care." (National Public Radio)

Benefits in General; Executive Compensation

[Official Guidance]

DOL Releases Advance Copies of 2012 Form 5500 and Form 5500-SF Annual Report (PDF)
"Modifications to the Form 5500 and Form 5500-SF for plan year 2012 [include] [1] Optional Paid Preparer Information.... Filers may optionally enter preparer's name and address. Although the preparer information is optional at this time, the IRS encourages filers to provide preparer information on the new lines. [2] Optional Trust Information.... Filers may optionally enter the trust's name and trust EIN. Although this trust information is optional, the IRS encourages filers to provide such information on the new lines. [3] Multiemployer actuarial information reporting has been clarified for changes in adjustable benefits, and for amortization charges under the funding standard account statement for this plan year. [4] The Schedule SB instructions have been updated to advise that additional detail is requested for the prior year's excess contributions to be added to the prefunding balance." (Employee Benefits Security Administration)

[Guidance Overview]

IRS Issues Guidance on Additional Medicare Tax on High Earners (PDF)
"The additional 0.9% tax -- which applies only to the employee's share of FICA -- applies to wages under [FICA] (with no cap), compensation subject to [Railroad Retirement tax], and earned income subject to [Self-Employment tax]... The employer must withhold the additional 0.9% tax from wage/compensation that exceeds the $200,000 wages threshold ... To the extent that the employer fails to withhold such amount, the employer is liable ... for the missed withholding (unless actually paid by the employee on his or her Form 1040)." (Groom Law Group)

[Guidance Overview]

IRS Issues Proposed Regs on 3.8% Net Investment Income Tax
"Starting in 2013, Sec. 1411(a)(1) imposes a tax equal to 3.8% of the lesser of an individual's net investment income for the tax year or the excess (if any) of the individual's modified adjusted gross income for the tax year over a threshold amount.... The tax also applies to estates and trusts, with different threshold amounts." (Journal of Accountancy)

[Guidance Overview]

Proposed Regs Exempt Most Retirement Savings Distributions from 3.8% Net Investment Income Tax, But Not All (PDF)
"Taxable plan distributions would be taken into account in determining whether the AGI threshold is met .... Logically, the same result should obtain for most but not all equity-based compensation arrangements. For example, dividends received after a section 83(b) election is made with respect to a restricted stock award may be subject to section 1411.... In contrast, the taxable portion of annuity payments or withdrawals from and surrenders of nonqualified annuity contracts -- i.e., annuity contracts purchased outside of qualified retirement plans, commonly to accumulate retirement savings -- would be 'investment income' for this purpose[.]" (Sutherland)

Press Releases

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