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<< Older News   |  March 28, 2017

Benefits in the News


The Affordable Care Act: Chapter Two
Paul Keckley
[Opinion]
Mar. 27, 2017
"As we now pivot to Chapter Two for the [ACA], the realities are these: [1] The healthcare system needs improvement. Affordability is the issue one.... [2] The [ACA] has flaws. It successfully increased coverage for 20 million who were uninsured via Medicaid expansion and subsidized coverage for individuals via the marketplaces, but at a hefty price -- $1.1 trillion over 10 years -- and the rules whereby insurers are required to structure and price their plans are problematic.... [3] The strength of our economies--locally and nationally -- is closely tied to the effectiveness of our health system."
2017 Annual Report to Congress on Self-Insured Group Health Plans (PDF)
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]
Mar. 27, 2017
17 pages. "Approximately 51,600 health plans filed a Form 5500 for 2014, an increase of nearly 3 percent from the health plans that filed a Form 5500 for 2013. Of health plans filing a 2014 Form 5500, about 21,200 were self-insured and approximately 3,800 mixed self-insurance with insurance ('mixed-insured'). Self-insured plans that filed a Form 5500 covered approximately 3 3 million participants in 2014 and held assets totaling about $87 billion. In 2014 there were nearly 26 million participants covered by mixed-insured group health plans; these mixed-insured group health plans held almost $137 billion in assets." [Appendices also available: Abstract of 2014 Form 5500 Annual Reports Reflecting Statistical Year Filings, and Self-Insured Health Benefit Plans 2017 Based on Filings through Statistical Year 2014.]
An Executive's Guide to Defeating the SOX 304 Clawback (PDF)
Paul Hastings LLP
Mar. 27, 2017
"Section 304 of the Sarbanes-Oxley Act (SOX) grants the SEC the discretion to claw back the incentive-based compensation and stock sales of chief executive officers (CEO) and chief financial officers (CFO) after a restatement resulting from corporate misdeeds.... [This article examines] possible arguments and responses to an SEC investigation of alleged SOX 304 violations." [A companion article examines the SEC's burden of proof in SOX 304-related litigation and possible defenses.]
USC Can't Force Retirement Plan Fee Claims Into Arbitration
Bloomberg BNA
Mar. 27, 2017
"The participants' ability to bring claims of fiduciary breach under [ERISA] is unaffected by their arbitration agreements with USC because those claims are, by their nature, plan claims and the plan didn't consent to arbitrate, Judge Virginia A. Phillips of the U.S. District Court for the Central District of California held March 23." [Munro v. Univ. of So. Calif., No. 16-6191 (C.D. Cal. Mar. 23, 2017)]
Anthem Workers Advance Challenge to 401(k) Plan Fees
Bloomberg BNA
Mar. 27, 2017
"The proposed class action accuses the committee of including high-fee mutual fund share classes in Anthem's 401(k) plan and paying excessive record-keeping fees to Vanguard Group Inc. A federal judge largely denied the committee's motion to dismiss on March 23, saying that choosing high-fee share classes when identical lower-fee classes were available could constitute fiduciary breach under [ERISA]." [Bell v. Pension Comm. of ATH Holding Co., No. 15-2062 (S.D. Ind. Mar. 23, 2017)]
City of Los Angeles Updates Paid Sick Leave Rules and FAQs
Littler
[Guidance Overview]
Mar. 27, 2017
"The revised FAQs provide that an employer's business size is based on covered employees, i.e., individuals who perform at least two hours of work in a particular week within the City of Los Angeles and are entitled to the state minimum wage. Also, the revised FAQs specify that employers can use different sick leave methods for different employee classes ... Per the revised FAQs, at the end of each year, employers -- at their discretion -- can pay out accrued but unused sick leave that exceeds the 72-hour overall cap. Finally, relevant revised regulations address frontloading by small employers, calculating an employee's regular rate when sick leave is used, and using existing paid time off benefits to comply with the law."
Proxy Reminders: Don't Forget 162(m) Compliance!
Morgan Lewis
Mar. 27, 2017
"Section 162(m) generally limits a public company's tax deduction for compensation paid to the chief executive officer and its three other highest-paid officers (other than the chief financial officer) to $1 million per year. This deduction limitation does not apply to certain 'qualified performance-based compensation' if certain requirements under Section 162(m) are satisfied.... Timely establish performance goals and goal adjustments ... Use only performance goals approved by shareholders ... Do not exceed individual limits."
Oral Argument March 27 on Definition of 'Church Plan' -- What Issues Are in Play?
Bloomberg BNA
Mar. 27, 2017
"[One] issue that may emerge in the argument is what deference the court should give to rulings by the [IRS] and other agencies on the scope of the exemption. The hospitals' brief argues that if the court deems the statutory language to be ambiguous, it should defer to three decades' worth of agency rulings that such plans are exempt church plans under ERISA." [Advocate Health v. Stapleton, Nos. 16-74, 16-86, 16-258 (oral argument in consolidated cases sched. Mar. 27, 2017)]
Five Reasons Millennials Aren't Saving for Retirement
U.S. News & World Report
Mar. 27, 2017
"They take jobs without retirement benefits.... They aren't eligible for the 401(k) plan.... They fail to sign up.... Parenthood and homeownership responsibilities ... Low salaries."
The Educated Participant: How Employers Can Improve Retirement Readiness
PenChecks
Mar. 27, 2017
"After plan sponsors recognize that their participants need more help, the next question is almost always: Do we expose ourselves to liability for participant investment losses if we voluntarily provide participant education? Fortunately, the [DOL] provides a number of protections for plan sponsors who provide education or more personalized advice, and the safe harbor for participant-directed investments may provide additional protection."
American Health Care Act Fails; What's Next for Employers?
ABD Insurance & Financial Services
Mar. 27, 2017
"In the near-term, there will be intense focus on HHS Secretary Price to provide regulatory relief to the maximum extent permitted under the ACA.... One major concern from an employer-side perspective is whether that regulatory effort will be sufficiently focused on issues facing employer-sponsored group health plans.... In the long-term, there are far more comprehensive repeal/replace alternatives that may form the basis of the next attempt at GOP health care reform down the road."
Merrill Lynch and Morgan Stanley: A Tale of Two Fiduciary 401(k) Business Models
Pensions & Investments
Mar. 27, 2017
"While Merrill Lynch is offering advisers servicing 401(k) plans a fairly high level of discretion, Morgan Stanley is substituting some adviser discretion for more risk at the firm level ... The firms, each with adviser forces of greater than 14,000, are the first among their wirehouse peers to outline changes to how their representatives can conduct fiduciary 401(k) business as the [DOL's] fiduciary rule looms."
How Much Does a Mutual Fund Company Have to Disclose Under BICE for Funds Governed by ERISA?
Rodgrick Hickman, Student at the University of Mississippi School of Law, via SSRN
Mar. 27, 2017
"The Introduction of this article gives a detailed look at what the new rules are and how they have changed from the 1975 regulations. Part 1 discusses the possible areas where conflict will be found in disclosures. Part 2 gives a detailed analysis of 15 mutual fund disclosures from various financial advisors.... [The author] assessed whether the disclosures would be materially misleading under the best interest of the client analysis."
Retirement Assets Total $25.3 Trillion in Fourth Quarter 2016
Investment Company Institute [ICI]
Mar. 27, 2017
"Total US retirement assets were $25.3 trillion as of December 31, 2016, up 1.4 percent from the end of September and up 6.1 percent for the year. Retirement assets accounted for 34 percent of all household financial assets in the United States at the end of 2016."
Illinois Governor Vetoes Bill to Help Improve Funding Ratio for Two Chicago Pension Plans
Pensions & Investments
Mar. 27, 2017
"The measure ... was intended to improve the pension plans' funding ratios to 90% each by 2057 through higher contributions for certain employees and increased city contributions. The bill required that Chicago begin making contributions on an actuarial basis to both pension funds in 2023.... The bill would also have raised payroll contributions for participants of both pension funds hired after Jan. 1, 2017, to 11.5% from 8.5% ... Illinois faces roughly $130 billion in combined unfunded pension liabilities across its five state retirement systems."
House Pulls AHCA Minutes After Expected Vote
Seyfarth Shaw LLP
Mar. 27, 2017
"There are a few possible 'next steps' ... [1] Retain the ACA.... [2] Nothing would stop Congress from further negotiations to attempt to drum up more votes.... [3] Republicans might attempt to add piecemeal repeal efforts into future legislation, or to address those components on a stand-alone basis.... [4] Even in the absence of a comprehensive repeal or reconciliation effort, the Administration retains great flexibility, through regulatory action, to water down various provisions of the ACA."
Study Connects the Dots Between Essential Health Care and Paid Sick Leave
Wolters Kluwer Law & Business
Mar. 27, 2017
"Researchers ... have found that regardless of sociodemographic factors, workers who lack paid sick leave were significantly less likely to have received preventive health care screenings in the last 12 months -- even among those who have been told they have a condition such as diabetes or cardiovascular disease that places them at higher medical risk. Moreover, workers without paid sick leave are 1.6 times less likely to have received a flu shot in the past 12 months[.]"
Health Care Cost Challenges Require Employer Innovation
Healthcare Trends Institute
Mar. 27, 2017
"For the first time, employers reported specialty pharmacy as a top driver of health costs.... [E]mployers may implement pharmacy management techniques, including utilizing specialty tiers within their pharmacy plan designs.... Engaging employees in all aspects of the health insurance program is paramount to controlling benefit costs.... Helping employees understand and navigate their options and costs through coaching and support tools will increase awareness around benefit offerings and deliver on value as well."
What Role Should Your House Have in Retirement Planning?
Journal of Accountancy
Mar. 27, 2017
"Including housing wealth -- and sometimes the debt that accompanies it -- during retirement planning can show clients a more realistic view of their retirement possibilities. At the very least, it can help them envision what their housing situation might look like and changes they need to make."
Hey Millennials, How Much of Your Pay Should You Be Saving?
Ken Steiner, FSA Retired
Mar. 27, 2017
"So, you are a Millennial who is employed but hasn't started to save yet. The 'experts' tell you that you need to start saving like yesterday and you need to save as much as possible. This post will walk you through how to use our Actuarial Budget Calculator for pre-retirees so that you (or your financial advisor) can develop a spending/savings budget that will help you accomplish your financial goals."
Pension Crisis Too Big for Markets to Ignore
Bloomberg
[Opinion]
Mar. 27, 2017
"Unfunded pension obligations have risen to $1.9 trillion from $292 billion since 2007.... [In] 1952, the average public pension had 96 percent of its portfolio invested in bonds and cash equivalents. Assets matched future liabilities. But a loosening of state laws in the 1980s opened the door to riskier investments. In 1992, fixed income and cash had fallen to an average of 47 percent of holdings. By 2016, these safe investments had declined to 27 percent."
More Than Obamacare Repeal, Small Businesses Want Congress to Rein in Costs
The New York Times; subscription may be required
Mar. 27, 2017
"As a bloc, small-business owners have been among the health care law's most vocal opponents.... But every business is uniquely affected by the complex law, and simply demolishing it without putting new guardrails in place is not, for most, the ideal outcome. Small-business owners overwhelmingly say they want Republican and Democratic leaders to quit their partisan bickering, acknowledge that the country's health care economics are fundamentally broken, and work together on fixing the problem."
Judge Open to Anthem's Consumer Benefit Claim
Bloomberg BNA
Mar. 27, 2017
"Anthem argued before a panel of three judges in the U.S. Court of Appeals for the District of Columbia Circuit that a district court ruling blocking the merger was wrong because it ignored the $2.4 billion in medical cost savings the company says it can wrestle from doctors and hospitals. U.S. Circuit Judge Brett Kavanaugh appeared most convinced by the insurer's argument that the deal would lead to savings that could be passed on to consumers. He also seemed persuaded that those savings could be good for competition." [U.S.A. v. Anthem Inc., No. 17-05024, (D.C. Cir. filed Feb. 10, 2017)]
What Comes Next for Obamacare? The Case for Medicare for All
Robert H. Frank in The New York Times; subscription may be required
[Opinion]
Mar. 27, 2017
"[T]he repeal effort's biggest hurdle may have been loss aversion, one of the most robust findings in behavioral science. As numerous studies have shown, the pain of losing something you already have is much greater than the pleasure of having gained it in the first place.... Part of the appeal of Medicare for all is that single-payer systems reduce financial incentives that generate waste and abuse."
House Leaders ‘Came Up Short’ In Effort To Kill Obamacare
Kaiser Health News
Mar. 24, 2017
"The legislation was damaged by a variety of issues raised by competing factions of the party. Many members were nervous about reports by the [CBO] showing that the bill would lead eventually to 24 million people losing insurance, while some moderate Republicans worried that ending the ACA's Medicaid expansion would hurt low-income Americans. At the same time, conservatives, especially the hard-right House Freedom Caucus ... complained that the bill kept too much of the ACA structure in place."

<< Older News   |  March 28, 2017


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