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Benefits in the News

Court Requires Health Plan to Cover Residential Treatment Expenses Incurred Before Mental Health Parity Final Rules
Thomson Reuters / EBIA
Feb. 22, 2018
"The court rejected the insurer's argument, concluding that the agencies considered skilled nursing facilities, which were covered by the plan, to be analogous to residential treatment centers even before they issued the final regulations.... Other courts have come to a different conclusion on the effect of the interim final mental health parity regulations on residential treatment limitations." [B.D. and S.D. v. Blue Cross Blue Shield of Ga., No. 16-099 (D. Utah Jan. 31, 2018)]
Austin, Texas Enacts Paid Sick and Safe Leave Law
[Guidance Overview]
Feb. 22, 2018
"The Austin, Texas City Council has enacted a paid sick and safe leave ordinance, becoming the first southern city to pass such a law for private sector employees. The ordinance will take effect on October 1, 2018 for employers with five or more employees; coverage for smaller employers begins on October 1, 2020."
Making Sure 401(k) and 403(b) Fees Are 'Necessary' and 'Reasonable', Part 3
Fiduciary Plan Governance, LLC
Feb. 22, 2018
"Reference checking is part of the due diligence process.... It is appropriate to stipulate that the references work with the service team they are assigning to you.... Think of the entire process as a negotiation. You want to maintain your leverage right up to the end of the process."
Are the Section 1557 Language-Assistance Requirements the Same as the Requirements for SBCs and Claims?
Thomson Reuters / EBIA
Feb. 22, 2018
"Each of these rules (Section 1557, SBC, and claims and appeals) requires language assistance to be made available for those with limited English proficiency. However, these requirements vary in applicability and scope. Here's a summary of the requirements, including who must comply[.]"
Employer Health and Well-Being Initiatives Fall Short with Employees
Willis Towers Watson
Feb. 22, 2018
"Employees in poor health are twice as likely to be disengaged at work and take almost three times as many days off as employees who are in very good health. The research shows employers have been using programs with significant financial incentives and believe employees are on board with this approach as 54% of employees say their employers should financially reward them for living a healthy lifestyle. Increasingly, though, employees say they would participate only if offered incentives: 46% currently versus 35% in 2011."
Will Employee Perks Survive the Tax Law?
Bloomberg BNA
Feb. 22, 2018
"By effectively making those benefits more expensive, the 2017 tax act's adjustments may drive employers to allocate a larger portion of funds set aside for employee-related expenses to other benefits, such as health care, retirement, or student loan help, as a way to make their perks more tax-efficient[.]"
Defined Contribution Plan Participants' Activities, First Three Quarters of 2017 (PDF)
Investment Company Institute [ICI]
Feb. 22, 2018
"Defined contribution (DC) plan withdrawal activity in the first three quarters of 2017 remained low and was similar to the activity observed in the first three quarters of 2016.... The commitment to contribution activity in the first three quarters of 2017 continued at the high rate observed in the first three quarters of 2016.... Most DC plan participants stayed the course with their asset allocations as stock values increased over the first nine months of the year.... DC plan participants' loan activity was little changed at the end of September 2017."
Association Health Plans and the Sale of Group Health Insurance 'Across State Lines'
Employment Matters, Mintz Levin
Feb. 22, 2018
"While the [DOL]'s proposed AHP regulation seeks to expand the reach of AHPs by encouraging small groups to band together to form larger, homogeneous risk pools, there is no shortage of state laws that seek to require small groups to remain a part of a single, state-wide, heterogeneous risk pool. There is no middle ground. If the Department of Labor's regulation is adopted as a final rule--and there is no reason to think that it will not be--this issue will likely have to be resolved by the courts."
How CBO and Jct Analyze Major Proposals That Would Affect Health Insurance Coverage
Congressional Budget Office [CBO]
Feb. 22, 2018
"The undertaking is a joint effort: CBO takes the lead in estimating the changes in coverage, premiums, and federal spending, and JCT takes the lead in estimating the tax-related budgetary effects, including those related to changes in the exclusion for employment-based insurance and premium tax credits provided for coverage obtained in the health insurance marketplaces established under the ACA."
Text of IRS Final Regs: Health Insurance Providers Fee
Internal Revenue Service [IRS]
[Official Guidance]
Feb. 22, 2018
"This document contains final regulations that provide rules for the definition of a covered entity for purposes of the fee imposed by section 9010 of the [ACA]. The final regulations supersede and adopt the text of temporary regulations that provide rules for the definition of a covered entity. The final regulations affect persons engaged in the business of providing health insurance for United States health risks."
Bipartisan Budget Act of 2018 Brings Changes for Retirement Plans
Ice Miller LLP
[Guidance Overview]
Feb. 22, 2018
"The Act ... expands the sources from which employees may take hardship distributions.... [It] is not clear that these ... changes will apply to 403(b) plans without a change to the 403(b) regulations ... since the 403(b) regulations specifically prohibit distributions from earnings.... Plans sponsors who would like to allow the repayment of amounts wrongfully levied upon by the IRS to their plans should consider amending their plan language to expressly permit these contributions."
Tax Reform's Impact on 401(k) Plan Loan Offset Treatment
Holland & Knight
[Guidance Overview]
Feb. 22, 2018
"Plan administrators and HR benefits managers should [1] contact the plan's record keeper to confirm that the actual practice relating to plan offsets and deemed distribution timing reflects the plan administrator's interpretation ... and that those practices will not be impacted by the new rules.... [2] update employee communications.... [3] establish procedures for accepting rolled over amounts into their plans that include loan offset amounts."
Supreme Court Provides Good News for Sponsors of Union Retiree Medical Benefit Plans
Mayer Brown
Feb. 22, 2018
"[T]he Supreme Court again admonished the Sixth Circuit not to rely on inferences. The Court held that a contract is not ambiguous unless it is subject, by its terms, to multiple interpretations and that the Sixth Circuit -- which was unique in its approach -- erred in its reliance on special inferences in favor of retirees." [CNH Industrial N.V. v. Reese, No. 17-515 (U.S. Feb. 20, 2018, per curiam)]
Interesting Angles on the DOL's Fiduciary Rule, Part 80
[Guidance Overview]
Feb. 22, 2018
"[T]he non-enforcement policy does not give a free pass during the transition period. Instead, there are expectations about good faith efforts to comply with the Impartial Conduct Standards and about the adoption and application of policies, procedures and practices to mitigate the effects of conflicts of interest and incentive compensation."
ESOPs: Legislative Updates
Butterfield Schechter LLP
Feb. 22, 2018
"The National Defense Authorization Act of 2017 ... has been updated to include certain ESOPs as falling within the category of small business concerns owned and controlled by service-disabled veterans. In calculating the 51% minimum veteran ownership, these businesses can now disregard the percentage of ESOP stock ownership. This change effectively opens up more partial employee-owned businesses to defense contracting preferences."
Massachusetts Brings Enforcement Action Against Brokerage Firm Based on Violations of Fiduciary Rule Compliance Policies
Groom Law Group
Feb. 22, 2018
"The Complaint has garnered attention because it is the first enforcement action related to the Fiduciary Rule and also because it is part of a wave of state action (regulatory, legislative, and now enforcement) that sends a signal that if the DOL relaxes its requirements, states may step in. The Complaint also represents the first enforcement effort that relates to a financial institution's compliance with the Fiduciary Rule."
Is This the End of 'Guidance Documents'?
HUB International
Feb. 22, 2018
"What [a recent] DOJ memo means is that DOJ lawyers cannot, in essence, take informal guidance documents (which are roughly the equivalent of the ACA FAQs) and turn them into binding rules. Instead, the lawyers have to prove that a person violated a statute passed by Congress or a regulation that went through formal notice-and-comment rulemaking to show a legal violation.... [M]ere guidance posted on a department's website will not, by itself, be enough to demonstrate a legal violation. However, informal guidance documents can still be used to explain or interpret the law; they just cannot be used to impose new legal obligations."
Should You Switch to an Unbundled Service Provider for Your Defined Contribution Plan?
BNY Mellon
Feb. 22, 2018
"For plan sponsors focused intently on fiduciary considerations, ... bundled service providers also mean restricted investment selections and limited insight into the true costs of asset management and asset servicing. Neither of those plan components are without an associated cost, and the issue of costs and expenses has been the lynchpin in many recent lawsuits filed against plan sponsors."
Funds, Fees, and Annuities: A Guide to 403(b) Investment Options (PDF)
Feb. 22, 2018
11 pages. "[W]hile annuity contracts were once the only option -- and still constitute a majority of the total assets nationwide -- there is a strong trend toward offering mutual funds as an alternative to annuities. In 2015 ... while 87.1% of 403(b) plans offered mutual funds as an investment option, only 58.6% offered annuities.... [A]dditional investment options are not likely to be permitted anytime soon."
More Employees Enroll in HSAs for Long-Term Savings
Feb. 22, 2018
"While paying for health care costs in retirement does not top the list of health care concerns overall, this financial burden holds prominence among employees' concerns for the future when compared to lifestyle expenses. Among those surveyed, 68.7% are more concerned about paying for insurance premiums and other medical expenses than they are about paying for lifestyle items like vehicles and housing in retirement. This is up from 63% last year."
4Q Annuity Sales Show Market Moving on from Fiduciary Rule
Feb. 22, 2018
"Fourth-quarter sales of fixed annuities fell 2 percent to $26.1 billion compared to the year-ago period, while sales of variable annuities also fell to 2 percent, to $24.7 billion[.]"
Clean Up This April with Required Minimum Distributions (PDF)
Feb. 22, 2018
"[P]lans that allow participants to defer receipt of payment past the normal retirement date should carefully monitor participants approaching age 70.... Track any returned mail from required compliance mailings such as annual funding notices, summary material modifications, and summary plan descriptions. Then follow up with an address search.... Use one or more address search vendors that offer to continuously monitor a pension plan's vested terminated population for unreported deaths ... Automatically mail normal retirement packets 90 to 180 days prior to the participant's NRA."
2018 Retirement Security Blueprint: Policies to Help Americans Achieve Their Retirement Goals.
Insured Retirement Institute [IRI]
Feb. 22, 2018
"[1] Maintain and enhance current tax treatment for retirement savings; [2] Expand opportunities to save for retirement by enhancing access and features of workplace retirement plans; [3] Increase access to lifetime income products in workplace retirement plans; [4] Preserve and improve access to professional financial guidance, education and information; and [5] Provide more resources to protect older Americans from financial exploitation."
Letter from Congressman to IRS About Changes to EPCRS Fee Schedule Made by Rev. Proc. 2018-04 (PDF)
Richard E. Neal (D-Mass), via National Association of Plan Advisors [NAPA]
Feb. 22, 2018
"I have concerns about the EPCRS changes because they were implemented with little feedback from the small business community and increase costs for small employers. The lack of feedback is inconsistent with Section 1101 of the Pension Protection Act of 2006, which directs the IRS to take 'into account the special concerns and circumstances that small employers face with respect to compliance and correction of compliance failures' when updating EPCRS."
Benefits and Compensation Changing Due to Tax Cuts and Jobs Act
Willis Towers Watson
Feb. 22, 2018
Infographic. "[T]he most common changes organizations have made or are planning or considering include expanding personal financial planning, increasing 401(k) contributions, and increasing or accelerating pension plan contributions. Other potential changes include increasing the employer health care subsidy, reducing or holding flat the employee payroll deduction, or adding a new paid family leave program in accordance with the ... tax credit available for paid leave for certain employees."

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