News Items

"CBO conveyed two main points in its testimony: First, moving to a single-payer system would be a major undertaking. It would involve significant changes for all participants--individuals, providers, insurers, employers, and manufacturers of drugs and medical devices. Because health care spending currently accounts for about one-sixth of the nation's economic activity, those changes could significantly affect the overall U.S. economy. And the transition toward a single-payer system could be complicated, challenging, and potentially disruptive. Second, to establish a single-payer system, lawmakers would need to make many decisions and would face complex trade-offs."

Proposed Rules (EBSA): [1] Fiduciary Rule and Prohibited Transaction Exemptions, [2] Grandfathered Group Health Plans and Grandfathered Group Health Insurance Coverage, [3] Improving Effectiveness of and Reducing the Cost of Furnishing Required Notices and Disclosures. Final Rules (EBSA): [1] Amendment of Abandoned Plan Program 1210-AB47, [2] Electronic Filing of Apprenticeship & Training Plan Notices, and Top Hat Plan Statements, [3] Adoption of Amended and Restated Voluntary Fiduciary Correction Program, [4] Health Reimbursement Arrangements and Other Account-Based Group Health Plans, [5] Definition of an 'Employer' Under Section 3(5) of ERISA -- Association Retirement Plans and Other Multiple Employer Plans.

Benefits-related items include: Determination of Line of Business for Purposes of No-Additional-Cost Service and Qualified Employee Discount Fringe Benefits; Further Guidance on the Application of Section 409A to Nonqualified Deferred Compensation Plans; Deferred Compensation Plans of State and Local Governments and Tax-Exempt Entities; Additional Rules Regarding Pension Plan Funding and Benefit Restrictions; Collectively Bargained Welfare Benefit Funds; Guidance on Rules Applicable to IRAs Under Sections 408 and 408A; Spousal IRAs, SEPs and IRA Technical Changes; Requirements for Employee Stock Ownership Plans; Minimum Vesting Standards; Stage Withholding on Certain Retirement Plan Distributions Under Section 3405(a) and (b); Definition of Church Plan; Application of Various Provisions of Section 2711 of the Public Health Service Act, the [ACA], and the Internal Revenue Code to Health Reimbursement Arrangements; Voluntary Employees' Beneficiary Association (VEBA) Regulations ; Notice to Participants of Consequences of Failing to Defer Receipt of Qualified Retirement Plan Distributions; Expansions of Applicable Election Period and Period for Notices.

Proposed Rules: [1] Valuation Assumptions and Methods: Interest and Mortality Assumptions for Asset Allocation in Single-Employer Plans and Mass Withdrawal Liability Determination in Multiemployer Plans; [2] Benefit Payments; [3] Miscellaneous Corrections, Clarifications, and Improvements; [4] Administrative Review; [5] Multiemployer Plan Guaranteed Benefits; [6] PBGC-Approved Arbitration Procedures -- Multiemployer Plans; [7] Release of Official Information and Testimony by PBGC Employees; [8] Benefits Payable in Terminated Single-Employer Plans: Assumptions for Determining Lump Sum Amounts; [9] Examination and Copying of Pension Benefit Guaranty Corporation Records; [10] Filing and Issuance Rules; and [11] Improvements to Rules on Recoupment of Benefit Overpayments. Final Rules: [1] Methods for Computing Withdrawal Liability, and [2] Adjustment of Civil Penalties.

"The benefits offered to employees by the approved plan must be greater than or equal to the benefits provided by MAPFML.... Self-insured plans must be bonded.... Fully-insured plans must be covered by policy issued by a Massachusetts licensed insurance company.... There are penalties for noncompliance.... Employer must maintain an 'adequate security deposit'.... Plan changes must be reported.... It doesn't get an employer out of everything.... Major plan updates are required.... The application process is tedious and an exemption must be renewed annually.... here are many questions about Q1 2019.... Is an exempt plan subject to ERISA? ... It may not save money.... Alternative Approaches."

"The recent settlement of the Anthem case is a good example of the importance of using appropriate share classes and of other practices in selecting investments and monitoring service providers. This article discusses the complaint, the settlement and risk management for plan sponsors and their fiduciary committees."

"The IRS clarifies in [Rev. Proc. 2019-20] that this determination letter opportunity cannot be used to avoid [VCP] user fees for any document failures discovered during the review.... If the failure meets a specific 'good faith' standard, it will only be subject to the reduced VCP sanctions. With respect to statutory hybrid plans, failures related to the final hybrid plan regulations are not subject to such sanctions. For merged plans, a failure related to the merger amendment itself is likewise not subject to sanctions."

Unnumbered memorandum dated May 20, 2019. "On April 5, 2019 [CMS] announced that if there is a change in the [Anti-Kickback Statute] rules effective in 2020, CMS will conduct a voluntary two-year demonstration that would test an efficient transition for beneficiaries and plans to such a change in the Part D program.... If CMS proceeds with the demonstration after publication of a final AKS rule, CMS will provide instructions on when and how a Part D plan sponsor will notify CMS that they wish to participate in the demonstration. The decision to participate will need to be made at the plan benefit package (PBP) level."

"As an industry, incredible amounts of time and money have been spent trying to educate people and get them to better balance short-term and long-term rewards with little incremental impact being made.... [W]orkers with income in the bottom quartile were projected to have to replace 82% of their pre-retirement income. Social Security was projected to contribute 59% and 23% needed to come from personal retirement savings. To replace that 23% of income, these workers needed total savings rates of between 9% and 11%."

"More than half of small businesses (56 percent) plan to offer new benefits to their employees in 2019, according to recent research from small business consultant Clutch. Small businesses offering new benefits are most likely to offer paid time off (19 percent), health benefits (15 percent), and retirement benefits (11 percent)."

"Before rushing off to fix an apparent error, first be sure you actually have one.... The error may be in the underlying data sent to the payroll/reporting vendor or an error in their system. In other cases, it may not be a true error, but may be a difference of interpretation in how the IRS codes should be applied on the forms.... Depending on the error, you may want to review forms filed in earlier and/or later years to see if there are similar errors in those forms."

"Protections for preexisting conditions for most people with job-based insurance predated the ACA by more than a decade.... [T]he principal purpose of [HIPAA] was to put an end to what was known as 'job lock.' That happened when people with preexisting health conditions were afraid to leave one job with insurance for another job with insurance because the new insurance would not cover their condition, or would impose long waiting periods.... Most of the states had already attempted to address the job-lock problem by the mid-1990s, but states could not reach the majority of the population with health insurance because they were covered by [ERISA]."

"[O]verall satisfaction with providers has declined by 24 percentage points in the past six years to a new low.... Only 25% of participants feel that they can always trust their employer. As to which factors build their trust, participants said satisfaction with the education provided, transparent fees, receiving relevant information, viewing their provider as if they were a partner and believing that the information the provider gives them is in their best interest."

"Understanding the dynamics that drive interest rates ... allows investors and pension sponsors to make informed decisions on how to deploy their bond portfolios and what to expect from their long-term, interest rate-sensitive liabilities. This article examines: [1] What are the drivers of short- and longer-term interest rates; [2] How those drivers impacted 2018 and 2019 year-to-date interest rates; and [3] What is likely for interest rates for the rest of 2019 and 2020?"

"A provider that is not seeking benefits based upon an assignment of a patient's claims under ERISA but instead is pursuing state law claims based solely on agreements and representations made directly by the insurer to the provider may survive attempts to remove the case on grounds of ERISA complete preemption." [California Spine and Neurosurgery Institute v. Boston Scientific Corp., No. 18-7610 (N.D. Cal. May 3, 2019)]

"[A] bipartisan group of senators [has] released new legislation to address surprise medical bills ... by prohibiting balance billing for categories of services where surprise bills commonly arise and prescribing an initial payment from insurers tied to median in-network rates, with the option for providers or insurers to initiate an arbitration process to challenge this rate. By tying automatic payment to the insurer's median in-network rate ... the [STOP Surprise Medical Bills Act] could reduce health care costs as well, although the existence of arbitration as a backstop makes that uncertain."

"Taking cues from Colorado, Missouri, Pennsylvania, Iowa, New Jersey, and Virginia, all of which have recently enacted legislation supporting and encouraging the establishment of ESOPs, the states of Texas, Indiana, and Nebraska are now moving forward with their own pro-ESOP initiatives."

"The Retirement Security and Savings Act of 2019 (S1431) ... would [1] let sponsors of 401(k), 403(b), governmental 457(b) and SIMPLE plans match their workers' student loan payments as if the payments were salary reduction contributions.... [2] make a number of changes to the Code Section 401(a)(9) rules for required minimum distributions (RMDs) ... [3] relax the rules for qualified longevity annuity contracts (QLACs) and commercial annuities to encourage retirees to choose those income-preserving options.... [4] expand the self-correction program (SCP) under IRS's Employee Plans Compliance Resolution System (EPCRS)."

May 21 hearing. Testimony from: [1] The Honorable Katie Porter (D-CA); [2] The Honorable Cathy McMorris Rogers (R-WA); [3] James Patrick Gelfand, ERISA Industry Committee (ERIC); [4] Tom Nickels, American Hospital Association (AHA); [5] Jeanette Thornton, America's Health Insurance Plans (AHIP); [6] Dr. Bobby Mukkamala, American Medical Association (AMA).

"Oklahoma Gov. Kevin Stitt ... signed into law HB 2632, which protects patient access to pharmacy services by establishing network adequacy and 'any willing pharmacy' requirements, minimizes pharmacy benefit manager conflicts of interest by prohibiting higher reimbursement rates for PBM-owned pharmacies, and limits PBM abuses by prohibiting retroactive claim adjustments and denials."

"The decision of when to begin taking Social Security benefits is one of the most important questions for many retirees. Unfortunately, thanks to the maze of Social Security rules individuals must navigate, it is often also one of the most complex. And while many retirees are aware that claiming Social Security benefits 'early' can lead to a reduced benefit, research has shown that fewer individuals understand the Earnings Test rules that can also impact benefits when a young (pre-Full-Retirement Age) worker decides to claim benefits while also still working."

"The estimated investment return for our simplified portfolio for the 12 months ending December 31, 2018, was about -5%, resulting in double-digit losses compared to plans' investment return assumptions. The average investment return assumption dropped from 7.34% in our Fall 2018 study to 7.26%. The aggregate funded percentage for multiemployer plans is estimated to be 74% as of December 31, 2018, down from 81% as of June 30, 2018."

"Health savings accounts received record-breaking contributions in 2018 with accountholders and employers pouring $33.7 billion into HSAs, up 22% from 2017. Employer contributions grew to their highest level, totaling over $8 billion in 2018."

"This decision highlights the importance of considering reinstatement obligations even after FMLA leave has expired and the perils of not reinstating an employee returning from FMLA leave to a position with similar responsibilities. The decision also emphasizes the importance of scrutinizing the elimination of a position when the employee who generally fills that position is on FMLA leave to ensure the elimination of that position is not merely a pretext for retaliation." [Ottley-Cousin v. MMC Holdings, Inc., No. 16-577 (E.D. N.Y. May 6, 2019)]

"[1] People are saving more than ever.... [2] Retirement savings are higher than they ever have been.... [3] Retirees say that they're doing fine.... [4] The poverty rate for retirees is falling.... [5] Coverage by traditional pensions was not that high in their 'golden age.' ... [6] Social Security benefits are more adequate than you think.... [8] The way Social Security is fixed can have a significant effect on the economy.... [9] U.S. retirement plan assets are far larger than other countries'.... [10] Seniors' out-of-pocket health spending is not eating that much more of their incomes.... [11] Pension plans are not a bellwether.... [12] Retirement inequality has not worsened due to the shift from traditional pensions to 401(k)s.... [13] The real gap in retirement savings is in government."