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Public Pension Storm Warning
Mauldin Economics
[Opinion]
Sept. 18, 2017
"Admittedly, public pension liabilities don't come out of nowhere the way hurricanes seem to -- we know exactly where they will strike. In many cases, we know approximately when they'll strike, too. Yet we still let our elected officials make impossible-to-fulfill promises on our behalf.... Worse, we let our government officials use predictions about future returns that are every bit as unrealistic as calling a 13-inch rain in Houston a 100-year event. And while some of us have called pension officials out, they just keep telling lies -- and probably will until we reach the breaking point."
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Why Bernie Sanders' Single Payer Health Care Plan Is a Total Disaster
The Heritage Foundation
[Opinion]
Sept. 18, 2017
"[I]mposition of a government health-care monopoly -- be it in the form of the Medicare fee-for-service system, the British National Health Service or the Canadian health system -- has certain economic features in common. First, such a system will rely on broad-based taxation, usually in the form of some sort of payroll tax.... Second, the program costs will surely outrun the official projections.... Third, the program will not be a model of simplicity."
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Medicare for All: The Two Issues It Must Confront
Paul Keckley
[Opinion]
Sept. 18, 2017
"The U.S. debate will center on two issues: the relatively high prices we pay for the drugs, devices, technologies, services and facilities we use, and the medical necessity for many services provided for which evidence shows no benefit. What happens to innovation if the federal government uses its muscle to ratchet down what it pays for services and who decides what's necessary or not? And what's the administrative expense necessary to managing our $3.4 trillion expenditure? ... The issue will be whether and how primary and preventive health will be elevated in a U.S. single payer model and how specialty and long-term care are impacted long-term."
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Text of PBGC Notice of Intent to Request Extension of OMB Approval of Form 5500, with Modifications
Pension Benefit Guaranty Corporation [PBGC]
[Official Guidance]
Sept. 18, 2017
"With regard to the Schedule MB instructions, PBGC is proposing to change the instructions to require new attachments in two situations ... With regard to the Schedule SB instructions, PBGC is proposing to change the instructions related to an attachment that is currently required of plans for which the IRS has granted permission to use a substitute mortality table.... If the [IRS] regulations are not effective on 1/1/2018, then the proposed changes to the Schedule SB will be deleted from the final Form 5500 instructions. PBGC is proposing to require plans to report additional information (consistent with the amended regulation) as part of the item 23 attachment. The addition of information will allow PBGC to reconstruct the substitute table for which the plan has sought IRS approval."
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Court Finds Pregnancy is Not a Pre-existing Condition for Subsequent Disability Claim
The Wagner Law Group
Sept. 18, 2017
"The court concluded that the policy would essentially require a claimant to be in perfect health at the time of obtaining the policy before the policy would benefit the claimant during the succeeding 12-month period, which would be next to impossible for anyone.... [T]he Eleventh Circuit rejected the insurer's 'but for' argument (i.e., that but for the insured's pregnancy, she would not have developed high blood pressure; but for her high blood pressure, she would not have developed preeclampsia; but for her preeclampsia, she would not have suffered a stroke; and, finally, but for her stroke, she would not have become totally disabled) on the basis that it required too many links." [Bradshaw v. Reliance Standard Life Ins. Co., No. 16-11125 (11th Cir. Aug. 31, 2017; unpub.)]
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Assessing Multiemployer Plans' Capacity for Self-Stabilization (PDF)
The Pension Analytics Group
Sept. 18, 2017
12 pages. "Three main options are available to prevent the exhaustion of the [PBGC's] guarantee fund : [1] empower plans to take stronger actions to avoid or delay insolvency; [2] reduce the level of the PBGC's benefit guarantee, and/or [3] increase the revenue flowing into the fund, either through premium increases or by securing additional revenue sources. [This paper focuses on Option One.]"
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States Protect Consumers Against Balance Bills
Hill, Chesson & Woody
Sept. 18, 2017
"Beginning July 1st, California is the latest state to enact consumer protection against balance billing.... California is now one of 21 states with some form of consumer protection against balance billing. Unfortunately, many of these 21 states have protections for consumers only in limited situations such as emergency care or on certain types of health plans."
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Sanders Bill Would Outlaw Traditional Employer Health Benefits
HR Policy Association
Sept. 18, 2017
"[The single-payer health care bill introduced by] Sen. Bernie Sanders (I-VT) ... would create a national health insurance program (NHIP) and make it 'unlawful' for employers to provide benefits that 'duplicate' the program's benefits. However, the bill appears to allow employers to provide supplemental benefits that cover private contracts employees may enter into with providers, but these benefits may be subject to corporate and individual income taxes as well as payroll taxes."
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Investment Committee Governance Benchmarking
Susan Mangiero, via Fiduciary Leadership, LLC
Sept. 18, 2017
"One way to grade job performance is to create a matrix of relevant attributes and compare actual deeds to expectations of what a prudent investment fiduciary would do in similar circumstances. Although overly simplistic, the [example provided in this article] illustrates the general notion of ranking decisions from great to bad or somewhere in between."
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The DOL Fiduciary Rule: Issues to Consider If You Advise IRAs
K&L Gates LLP
Sept. 18, 2017
"Should a vendor be used to help obtain information about the client's existing account? ... How is the best interest analysis impacted by (a) a self-directed brokerage window in a workplace plan, (b) the plan sponsor subsidizing the current plan's administrative costs, (c) a workplace plan that does not allow the client to leave his or her assets in the plan, (d) a client that has the option to roll assets into an account at a new employer's plan and (e) whether lifetime income options are available under the existing account?"
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Fiduciary Duties in an Age of Impact Investing (PDF)
Steptoe & Johnson LLP, via Bloomberg Law Pension & Benefits Daily
Sept. 18, 2017
"In recent years, managers of charitable organizations and pension plans have come under increasing pressure to adopt investment strategies that consider nonfinancial factors, such as environmental or corporate governance factors, or that further a moral, social, or political cause. Can pension plan and charity managers take into account non-financial factors when investing an organization's or plan's assets? Or do their fiduciary duties and other legal constraints require them to prioritize or focus solely on financial returns when evaluating investments? The answer may be yes to both questions, depending on the circumstances, but the lines are far from bright."
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Pensions Leaving Workers Behind by Focusing on Messaging, Politics
Mark A. Bloomfield, American Council for Capital Formation, via Investor's Business Daily
[Opinion]
Sept. 18, 2017
"[The Council for Institutional Investors (CII)] describes itself as a 'leading voice for effective corporate governance practices for U.S. companies and strong shareowner rights and protections.' But what started off as promoting good governance has transformed into politically motivated environment and social governance, often referred to as ESG. Fiduciary responsibility has taken a back seat.... CII members are staring at an unfunded liability of nearly $4 trillion ... So why do they insist on devoting so much of their time and resources on initiatives that will do nothing to help close that gap?"
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Employers Face 4.3% Increase in U.S. Health Benefit Cost in 2018, Highest Since 2011
Mercer
Sept. 18, 2017
"Average per-employee health benefit cost is predicted to rise by 4.3% in 2018, the highest since 2011, but the long-term trend remains stable. Employers are struggling to control cost for pharmaceuticals, which will rise more than 7% next year as spending on new specialty medications skyrockets. Following the failure of repeal and replace, the excise tax on high-cost plans will go into effect in 2020 -- and with the tax threshold rising at only about half the current rate of health benefit cost, many employers will be affected."
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States See Opportunities for Flexibility in the ACA's Innovation Waiver Program
The Commonwealth Fund
[Opinion]
Sept. 18, 2017
"The waiver program unquestionably provides an opportunity for coverage and affordability improvements, but one that must be monitored. Efforts to streamline the waiver application process ... may be appropriate. But these steps can't override legal protections designed to ensure waivers result from a deliberative process at the state and federal levels, with sufficient opportunity for public review and input. Just as importantly, state waivers must remain within the current guardrails to guarantee that residents, particularly the most vulnerable, aren't hurt by policy changes."
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Appeals Office to Resume In-Person Conferences
Bloomberg BNA
Sept. 18, 2017
" 'Step one is going to be for field cases to turn the decision back over to taxpayers,' Andy Keyso, acting deputy chief at the [IRS] Office of Appeals, said ... 'Do you want an in-person conference? If so, you'll get it.' Step two is to include campus cases. Currently, Appeals is unable to offer in-person conferences for smaller cases that are worked out of the IRS campuses, Keyso said. Field cases include audits by a field revenue agent or office examiner, while campus cases include correspondence exam cases[.]"
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Modeling the Effect of the Individual Mandate on Health Insurance Coverage
Congressional Budget Office [CBO]
Sept. 15, 2017
17 presentation slides. "This presentation provides a discussion of the theoretical and empirical basis for CBO's estimates of the effect on health insurance coverage of repealing the individual mandate -- which requires most people to have insurance or pay a penalty. CBO highlights and interprets new empirical evidence that may inform the size of that effect. CBO also poses unanswered questions for which the agency would like the discussants' and health panel members' insights."
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New York's Paid Family Leave Law Becomes Effective January 2018
Vorys, Sater, Seymour and Pease LLP
[Guidance Overview]
Sept. 15, 2017
"An employer may apply to the chair of the New York State Workers' Compensation Board for approval as a self-insured employer by September 30, 2017. To be approved as a self-insured employer, an employer must: [1] provide PFL benefits at least as favorable as required by the PFLL; [2] demonstrate the ability to make PFL payments; [3] submit certain financial information; [4] file with the chair an agreement to pay disability and PFL benefits; [5] assume all liability for PFL benefits that exceed the funds collected in excess of the maximum contribution amount; [6] post a surety bond; [7] allow the chair to examine its operations and records; and [8] file annual reports."
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California Pension Reform: The San Jose Model
PensionTsunami
Sept. 15, 2017
"[In] August 2015, the San Jose city council passed a compromise resolution that replaced Measure B with a scaled down reform; this was approved by voters in November 2016. The provisions of this new pension reform measure should be of keen interest to local reformers everywhere in California, because they survived relentless attacks in court.... San Jose's current unfunded pension liability now stands at just over $3.0 billion. These reforms are estimated to save $1.7 billion over the next ten years."
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Employers Pull Back on Popular Life Insurance Benefits
InsuranceNewsNet.com
Sept. 15, 2017
"As many as 108 million Americans have life insurance coverage through the workplace, compared with 102 million covered by individual life insurance ... It is the first time that more people are covered by workplace life insurance than by individual policies since LIMRA began tracking data in 1960, LIMRA researchers said.... Meanwhile, companies are cutting back on group life as rising health care costs erode budget allocations for other benefits, Potter said. Another reason for the retreat is that employers do not think their employees value this benefit, which analysts say is a misread."
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