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<< Older News Items  |  March 25, 2019

News Items

Editor's Note: This page is an archive of news items that appear in our daily email newsletters. To automatically receive the latest news items -- plus links to the latest jobs, press releases, webcasts and events -- subscribe to our daily email newsletters.

Don't Rely Exclusively on Technology for Best Participant Engagement
Conrad Siegel Actuaries
Mar. 25, 2019
"Online tools are great, but make sure that it is not critical for participants to access them in order to be successful in your retirement plan.... Recognize that all the Internet 'bells and whistles' in the world do not make for a successful 401(k) plan, and focusing exclusively on web access can actually hurt your participation and retirement outcomes. A better bet is to focus on your overall messaging and how your participants engage and learn, and ensure that your education, systems, and online tools support your specific situation."
Federal vs. New York Family and Medical Leave Law, Part 4
Strategic Benefit Services
Mar. 25, 2019
"In addition to the federal FMLA, New York has laws regarding pregnancy leave, adoptive parents leave, blood donation leave, bone marrow donation leave, military spouse leave and paid family leave (effective Jan. 1, 2018).... [A] chart reviews leave requests, certification requirements, as well as other laws."
Majority of Independent Workers Actively Save for Retirement
T. Rowe Price
Mar. 25, 2019
"56% of independent workers are actively saving for retirement (excluding independent workers who identify as already retired). Significantly more traditional workers are actively saving for retirement in comparison (72%). This may be due to the fact that the majority of traditional workers use their employer-sponsored retirement plan (68%) and likely have access to the automatic savings features typically available in those plans, while independent workers are primarily using IRAs (40%). Meanwhile, independent workers are just as likely as traditional workers to feel they are financially prepared for retirement (49% and 47%, respectively)."
Overlooked and Under-Engaged: How the Workplace Forgot an Entire Generation
Mar. 25, 2019
"Gen X employees [ -- those now aged 38 to 53, who make up a third of the U.S. workforce -- ] not only feel significantly underappreciated at work and engage at lower rates than millennials, they also lag both boomers and millennials in key financial security indicators.... [J]ust 59 percent of Gen X workers are confident in their finances, compared to two-thirds (67 percent) of millennials and 65 percent of boomers.... Gen X [is] the most likely generation to say they will never retire and may remain in the workforce for the next 30 or more years. Nearly one in five (18 percent) Gen X employees do not plan to ever retire[.]"
Editor's Pick Pension Benefit Guaranty Corporation (PBGC): A Primer
Congressional Research Service [CRS]
[Guidance Overview]
Mar. 25, 2019
25 pages. "In FY2018, PBGC insured about 25,000 DB pension plans covering approximately 37 million people. PBGC became the trustee of 58 newly terminated single-employer pension plans and began providing financial assistance to an additional 6 multiemployer pension plans.... At the end of FY2018, PBGC had a total deficit of $51.4 billion, which consisted of a $2.4 billion surplus from the single-employer program and a $53.9 billion deficit from the multiemployer program." [CRS 95-118, updated Mar. 21, 2019]
Incorporating Behavioral Risk Preferences in Retirement Income Strategy Design
T. Rowe Price
Mar. 25, 2019
"[T]he effect of using a salary-dependent mortality schedule depends more on an investor's risk aversion than it does on demographic characteristics or the specific withdrawal strategy under consideration. This suggests that behavioral preferences are more likely to drive the choice of a retirement income strategy. [These] findings highlight the need for a comprehensive framework that captures both demographic factors and risk preferences -- as well as the interaction between the two -- when designing retirement income strategies."
Interim Summary Report on Risk Adjustment for the 2018 Benefit Year (PDF)
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]
[Official Guidance]
Mar. 25, 2019
13 pages. "The HHS-operated risk adjustment methodology determines each plan's risk adjustment transfer amount ... For the 2018 benefit year, HHS applied this methodology in all 50 states and the District of Columbia.... Beginning for the 2018 benefit year, HHS introduced the high-cost risk pool (HCRP) within the HHS-operated risk adjustment methodology.... Additionally, the 2018 benefit year is the first year risk adjustment risk scores account for certain drug classes in the risk adjustment models for adults in the individual and small group (or merged) markets."
Massachusetts Private Paid Family Leave Plan Exemption Applications for Employers Will Be Available April 29
[Guidance Overview]
Mar. 25, 2019
"Beginning April 29, 2019, the Massachusetts Department of Family and Medical Leave will offer approved plan applications for employers seeking an exemption from collecting, remitting, and paying contributions under the PFML that would otherwise be due beginning on July 1, 2019.... For an application to be granted, the Department will assess whether the benefits offered to the employees under the private plan are greater than or equal to the benefits provided by the PFML."
Fourth Circuit Opinion: Fiduciary Considerations in Setting an ESOP's Stock Purchase Price (PDF)
U.S. Court of Appeals for the Fourth Circuit
Mar. 25, 2019
"[C]ourts look to the conduct of the trustee and whether it met its fiduciary obligations, not to whether the trustee arrived at a 'fair' value.... [A] trustee must satisfy both parts of the test to benefit from the adequate consideration exception. Assuming arguendo that the purchase was for 'fair market value,' we find no error in the district court's findings that Wilmington failed to prove that the share price was also 'the product of a determination made by the fiduciary in good faith.' " [Brundle v. Wilmington Trust, N.A., Nos. 17-1873, 17-2224, 17-2323, 17-2324, 18-1029 (4th Cir. Mar. 22, 2019)]
Employer-Provided Student Loan Assistance Options Take Several Forms
Mar. 25, 2019
"The vast student loan debt of Americans who have attended post-secondary educational institutions has received much publicity, prompting lawmakers and employers to seek options to aid those who face such debt. Proposed approaches have included both legislation and options within current employee benefit structures, including retirement plans."
ERISA Health Plan Fiduciaries Defeat DOL's Excessive Fee Claims
McDermott Will & Emery
Mar. 25, 2019
"[T]his decision provides a roadmap to navigating fiduciary obligations to health plans. Whether fiduciaries have the principal obligation to assess fees or the obligation to monitor another fiduciary, the obligations are similar to those of defined contribution plan fiduciaries. The defendants' process included regular review of TPA services and fees, reasonable reliance on retained advisors, negotiation of reduced fees and informal collections of information in the marketplace." [Acosta v. Chimes District of Columbia, Inc., No. 15-3315 (D. Md. Feb. 26, 2019)]
What's Hiding in Your Specialty Drug Claim Costs?
Mar. 25, 2019
"Specialty medication claims have long been paid out through the medical benefit -- most notably those for cancer therapies.... Like the price variability [of] tests like MRI's, the site of service dictates what is paid.... [There are] significant variances in how much health care providers are reimbursed for the same quantity of the same amount of the same drug. The difference, again, is the site of service."
Have Multiple Retirement Accounts? Use Them in This Order
Mar. 25, 2019
"Where you hold different kinds of investments -- whether in a taxable, tax-deferred, or tax-free account -- and which assets you tap first for retirement income are significant factors that can impact after-tax returns over the long term."
Modernizing Benefits for Multinational Companies
Willis Towers Watson
Mar. 25, 2019
"Companies need to consider the numerous countries in which they operate; the need to coordinate stakeholders across multiple functions and geographies; variations in social benefits and local regulatory frameworks; and responding to rapidly evolving technology, employee expectations and dynamics.... [T]he quest for modernization is important if companies want to attract, retain and engage the talent necessary for their business success in an increasingly complex and global world.... [A] systematic approach is critical."
Mental Health Treatment Guidelines: Highlights from Wit v. United Behavioral Health
Dickinson Wright PLLC
Mar. 25, 2019
"The court ... found that the Guidelines were fundamentally flawed ... via significant involvement by the Financial Department in their development and the Guidelines' unwavering and inflexible language.... [A]lthough every class member's health benefit plan includes ... a requirement that the requested treatment must be consistent with generally accepted standards of care, the court found that there was no evidence in the record that the much more restrictive words in the Guidelines could be ignored when they are in conflict with generally accepted standards of care." [Wit v. United Behavioral Health, Nos. 14-2346, 14-5337 (N.D. Cal. Mar. 5, 2019)]
Editor's Pick HHS's Proposed Modification of Pharmacy Rebate Safe Harbors (PDF)
Mar. 25, 2019
"The proposed regulations do not explicitly impact the commercial market, although voluntary alignment with Medicare is a possibility, and HHS Secretary Azar has called for follow-up legislation. The regulations also do not change the safe harbor with respect to drugs purchased through Medicare Part B fee-for-service plans, federal rebates collected for Medicaid MCO claims, or federal or supplemental rebates received directly by Medicaid state agencies."
A Look at Universal Health Coverage in Eight Countries
The Commonwealth Fund
Mar. 25, 2019
"Other high-income nations manage to insure all their residents and spend less per capita than the U.S. But some of them do that by covering everyone through a regulated system of health plans, while others truly have a single public plan for everyone.... [This article takes] a closer look at how eight of our peer countries get to universal coverage, how much they pay for their health care, and what role private insurance plays in each."
Government Mandated, State-Run Auto-IRAs Can Cause Real Harm
Cato Institute
Mar. 25, 2019
"If OregonSaves were adopted nationally, 24.2 million workers aged 25-64 would initially be opted-in. Approximately 33% of affected workers carry high-interest credit card debt, with balances averaging nearly $5,500. Around 15% of affected workers struggle to meet basic needs like paying rent or utility bills. Workers in these situations come out ahead by paying down debt or meeting basic needs, and siphoning off 5% of their paycheck will likely worsen their overall financial situation."
Why Should HR Consider Outsourcing Employee Benefits Administration?
HR Daily Advisor
Mar. 25, 2019
"Outsourcing to multiple vendors allows HR managers to look for the best point solutions to address specific needs for their organization, such as a benefits administration platform. These point solutions are often the provider's core focus, which usually results in a higher level of innovation compared with the 'we can do it all' HR offerings. Integration across vendor platforms is often seamless and allows systems to work together, given the rapid pace of innovation in HR technology, application programming interfaces (APIs), and SaaS-based solutions."
'Medicare for All' Could Eliminate the $600 Billion Insurance Industry
Mar. 25, 2019
"It's hard to overstate the magnitude of such an overhaul. UnitedHealth was ranked fifth on the 2018 Fortune 500 list, grossing more than $226 billion last year; Anthem and Aetna (premerger with CVS) were both in the top 50. Those three companies alone employed more than 364,000 people in 2017. The prospect of all of that simply vanishing has the industry preparing for a fight."
Jury to Decide If HR Manager Was 'Dishonest' in Claiming Discharged Employee Falsified FMLA Documents
Wolters Kluwer; free registration required
Mar. 25, 2019
"A supervisor's statement that 'she did not know, and did not want to say' whether an employee's absence for her hand injury would be covered under her approved intermittent FMLA leave to care for her ill father didn't constitute unlawful interference; the employee knew HR was instead the proper contact, a federal court in West Virginia ruled, granting in part the employer's summary judgment motion." [McCoy v. Diamond Electric Mfg. Corp., No. 17-4329 (S.D.W.V. Feb. 19, 2019)]
'Medicare for All' Would Abolish Private Insurance -- 'There's No Precedent in American History.'
The New York Times; subscription may be required
Mar. 25, 2019
"At the heart of the 'Medicare for all' proposals ... is a revolutionary idea: Abolish private health insurance.... But doing away with an entire industry would also be profoundly disruptive. The private health insurance business employs at least a half a million people, covers about 250 million Americans, and generates roughly a trillion dollars in revenues. Its companies' stocks are a staple of the mutual funds that make up millions of Americans' retirement savings."
Text of IRS Notice 2019-26: Updated Mortality Improvement Rates and Static Mortality Tables for Defined Benefit Pension Plans for 2020 (PDF)
Internal Revenue Service [IRS]
[Official Guidance]
Mar. 22, 2019
"This notice specifies updated mortality improvement rates and static mortality tables to be used for defined benefit pension plans under Section 430(h)(3)(A) of the Internal Revenue Code and section 303(h)(3)(A) of [ERISA] ... These updated mortality improvement rates and static tables, which are being issued pursuant to the regulations under Section 430(h)(3)(A), apply for purposes of calculating the funding target and other items for valuation dates occurring during the 2020 calendar year. This notice also includes a modified unisex version of the mortality tables for use in determining minimum present value under Section 417(e)(3) of the Code and section 205(g)(3) of ERISA for distributions with annuity starting dates that occur during stability periods beginning in the 2020 calendar year."
Amicus Brief to Seventh Circuit on Northwestern University 403(b) Fiduciary Breach Claim
American Benefits Council and Chamber of Commerce of the United States
Mar. 22, 2019
44 pages. "At bottom, Plaintiffs suggest that they should be able to defeat dismissal simply by proffering, with the benefit of 20/20 hindsight, alternative fiduciary decisions that they believe could have resulted in better performance over a time period of their choosing. Plaintiffs' proposed standard would insulate duty-of-prudence claims from dismissal, as a plan fiduciary always could have made some decision that would have proved more profitable; it is not possible to beat the market every time.... This is precisely what Congress sought to avoid in crafting ERISA." [Divane v. Northwestern Univ., No. 18-2569 (7th Cir., amicus brief filed Mar. 21, 2019)]
What Constitutes Hedging Under the SEC's New Disclosure Rules?
Winston & Strawn LLP
[Guidance Overview]
Mar. 22, 2019
"[T]he SEC resisted all requests to provide a definition of hedging, instead placing that burden entirely on the company (and counsel). The SEC declined even to state that the purchase and sale of mutual funds, index funds, and other diversified investment vehicles were excluded from the definition of hedging.... So what is a company to do? Should the company attempt to define hedging or provide examples of what sorts of transactions are prohibited?"

<< Older News Items  |  March 25, 2019

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