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<< Older News Items  |  October 16, 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.

Editor's Pick 401(k) Service Provider Contract Considerations (PDF)
Greensfelder, via 401(k) Advisor
Oct. 14, 2019

"Whether a small plan with only a handful of participants, or a large plan with tens or hundreds of thousands of participants, every 401(k) plan needs to have certain services performed for it. A plan ... is in large part implemented by service providers, who operate pursuant to various agreements. In this Q&A, [the authors] will identify several important types of service providers and what to watch out for in their contracts."

Editor's Pick Medical Stop-Loss Premium Survey (PDF)
AEGIS Risk and International Society of Certified Employee Benefit Specialists [ISCEBS]
Oct. 10, 2019

"The occurrence of truly catastrophic claimants -- in excess of $1 million -- is further verified with 31% of respondents reporting such a claimant in the last two policy years. Stop-loss remains the primary focus of risk management, with 71% of respondents sharing no interest in alternate approaches. Additional updates are provided on individual stop-loss deductible by employer size and other coverage provisions, including aggregate stop-loss. The primary focus of the survey remains current premium rates ... Stop-loss premium reflecting over 940,000 covered employees is measured."

Editor's Pick 2019 ERISA Welfare Plan Checklist for Participant Disclosures (PDF)
Bass, Berry & Sims PLC
Oct. 10, 2019

"[Many employers] sponsor ERISA welfare benefit plans and are currently undergoing their open enrollment process and issuing related participant communications. ... [This] Participant Disclosures Checklist [can be used] during open enrollment and throughout the plan year."

Editor's Pick Stock-Based Compensation Guide (PDF)
PwC
Oct. 10, 2019

253 pages, updated Sep. 2019. "This guide explains the fundamental principles of accounting for all types of stock-based compensation, including which arrangements are subject to its scope, measurement date, vesting conditions, expense attribution, and classification ...  as well as the accounting required when when awards are modified. This guide also discusses the unique accounting for nonpublic companies, awards to nonemployees, employee stock purchase plans, as well as valuation considerations ... [and provides] perspectives on the impact of the accounting guidance on stock-based compensation plan design, including a summary of employer and employee income tax considerations."

Editor's Pick Variation in U.S. Private Health Plans' Coverage of Orphan Drugs
American Journal of Managed Care
Oct. 8, 2019

"Health plans restrict access to orphan drugs approximately one-third of the time, and restrictions vary considerably across plans. Plans more often add restrictions for orphan drugs that are indicated for diseases with a higher prevalence and that have higher annual costs."

Editor's Pick Coordinating HSA Contributions with the Commencement of Social Security Benefits
Quarles & Brady LLP
Oct. 8, 2019

"[T]he Medicare-eligible employee who receives Social Security benefits while participating in the HSA plan has unwittingly become covered by Medicare A ... and now is ineligible for the HSA income tax deduction, starting with the retroactive commencement of the Medicare A coverage. Participating in the HSA plan prior to the commencement of Medicare A coverage is permitted, but the income tax deduction is prorated for the year in which participation began and excludes the part of the year when Medicare A coverage is effective."

Editor's Pick Self-Insured Employers Are Using Price Transparency To Improve Contracting With Health Care Providers: The Indiana Experience
Health Affairs
Oct. 7, 2019

"[A]cross 120 Indiana hospitals, prices negotiated for employers in Indiana averaged 272 percent of what Medicare would have paid for the exact same services at the same hospitals over the period 2013–16.... Equipped with useful pricing information, ... employers were able to quantify their overpayments for medical services and recognize inefficiencies in the contracting arrangements between insurance carriers and providers. Employers' demand for real changes followed."

Editor's Pick Everything You Always Wanted to Know About Medicare, in a Nutshell
Bronfman Rothschild
Oct. 7, 2019

"Although the list of covered medical expenses is substantial, Medicare does not cover everything.... Some Medicare Advantage Plans cover things that are not covered by Part A or Part B, like vision, hearing, dental and other health and wellness programs. Most also include prescription drug coverage under Part D ... Medicare Supplement Insurance policies, sold by private insurance companies, can help pay for the remaining costs (like copayments, coinsurance, and deductibles."

Editor's Pick 2020 Premium Tax Credit Quick Reference Chart (PDF)
Kaufman & Canoles, P.C.
[Guidance Overview]
Oct. 3, 2019

"[1] Locate line where estimated 2019 household income and household size intersect. [2] First column shows household percentage of Federal Poverty Line -- if between 100% and 400% continue. [3] Second column shows percentage of household income required [to] purchase 2nd lowest cost Silver coverage in Marketplace. [4] 'CSR AV' column shows resulting Actuarial Value after Cost Sharing Reductions applied (otherwise standard 70%). [5] 'Monthly contribution' = contribution percentage x household income divided by 12."

Editor's Pick Employee Benefits in the Supreme Court (PDF)
Eversheds Sutherland
Oct. 3, 2019

33 pages. "[I]n the Court's last 44 terms starting with the October 1975 term -- [ERISA] in the main took effect on January 1, 1975 -- the Court has issued merits opinions in: 126 argued cases and two unargued cases directly involving employee benefit arrangements including IRAs, and two additional argued cases substantially implicating these arrangements even though employee benefits were not directly involved on the facts, for an astonishing total of 130 decisions. As of this writing, the Court has three employee benefit cases scheduled for argument during its October 2019 term, although other interesting petitions for certiorari are pending."

Editor's Pick Participant Data as a Plan Asset: Lessons Learned from Recent Class Action
Drinker Biddle
Oct. 2, 2019

"[P]lan fiduciaries may want to ... [1] Inquire about participant data needed by the service provider.... [2] Inquire about the service provider's cross-marketing practices.... [3] Limit use of participant data for marketing non-plan products and services.... [4] Monitor the service provider's use of participant data."

Editor's Pick Agencies Ease ACA Rule on Drug Coupons and Out-of-Pocket Costs
Mercer
[Guidance Overview]
Oct. 1, 2019

"Despite the enforcement relief, employers using or considering copay accumulator programs need to evaluate several issues with counsel: [1] Risk of private litigation.... [2] [I]ssues under ERISA fiduciary and other rules.... [3] Implications of certain HSA-compatible HDHP designs.... [4] Impact of state laws that prohibit copay accumulators."

Editor's Pick Supreme Court to Hear Three ERISA Cases in Upcoming Term
Dechert
Sept. 30, 2019

"[T]he Court will consider whether [1] constitutional or statutory standing requirements prevent a participant in a defined benefit plan from bringing a claim for breach of fiduciary duty where the plan is overfunded; ... [2] constructive knowledge of a breach or other violation of ERISA is sufficient to trigger the statute of limitations applicable to a claim relating to plan investments, and the degree to which whether the specificity of the knowledge is relevant; and ... [3] the applicable standard for pleading a claim of a breach of the duty of prudence where a retirement plan is invested in employer stock."

Editor's Pick FBI Intelligence Bulletin Outlines Methods Used to Commit Fraud Against HSAs
Employers Council on Flexible Compensation [ECFC]
Sept. 30, 2019

"This summer, the FBI issued an unclassified Intelligence Bulletin that details the current fraudulent schemes against HSA programs that it has encountered and what the perpetrators of fraud against HSAs may do in the future."

Editor's Pick How Health Reimbursement Agreements (HRAs) Help Employers Expand Coverage Options for Their Employees
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]
[Guidance Overview]
Sept. 27, 2019

"[CMS has] designed a downloadable tool [XLSM file] to help employers decide whether to offer an individual coverage HRA.... The tool provides specific rate information for the least expensive plan in a certain category (the 'lowest cost silver plan') based on an eligible employee's age and geography. Employers can use this tool in deciding the funding level for an individual coverage HRA.... [L]arge employers ... can use this tool to determine whether their offer of coverage through an individual coverage HRA would be considered affordable based on standards established in the new HRA rules."

Editor's Pick Texas v. U.S.: Some Possible Consequences of the ACA Constitutionality Challenge Pending in the Fifth Circuit
Groom Law Group
Sept. 27, 2019

"A decision in ... the case challenging the constitutionality of the [ACA] is expected at any time. [The authors] have outlined a short summary of the litigation, sketched out a possible timeline and offered [their] thoughts on a handful of frequently asked questions."

Editor's Pick 2019 Employer Health Benefits Survey
Henry J. Kaiser Family Foundation
Sept. 26, 2019

"Annual premiums for employer sponsored family health coverage reached $20,576 this year, up 5% from last year, with workers on average paying $6,015 toward the cost of their coverage. The average deductible among covered workers in a plan with a general annual deductible is $1,655 for single coverage. Fifty-six percent of small firms and 99% of large firms offer health benefits to at least some of their workers, for an overall offer rate of 57%."

Editor's Pick A Painful Pill to Swallow: U.S. vs. International Prescription Drug Prices (PDF)
Committee on Ways and Means, U.S. House of Representatives
Sept. 23, 2019

77 pages. "The United States spent $457 billion in 2016 on combined retail (dispensed at the pharmacy) and non-retail (dispensed in physician offices) drugs.... In the five years between 2011 and 2016, drug spending nationwide grew by 27 percent -- more than 2.5 times the rate of growth in inflation.... This report examines patterns of drug pricing in the U.S. relative to other international comparator countries through a six-part analysis examining price differentials among 79 drugs sold in 11 countries and the U.S. in 2017 and 2018."

Editor's Pick Pension Plan Maturity: Why Big Plans Mean Big Risk (PDF)
American Academy of Actuaries
Sept. 23, 2019

"Once mature, plans often have difficulty reducing their current level of investment risk.... [T]he crucial role for actuaries is to help plan sponsors anticipate and mitigate risks, with the goal of assuring full payment of the intended pensions. However ... [A] plan's level of maturity affects its ability to recover from a negative shock, so different levels of funding and investment risk may be appropriate."

Editor's Pick Proactive Pension Management: An Elected Official's Guide to Variable Benefit and Contribution Arrangements (PDF)
Center for State & Local Government Excellence
Sept. 18, 2019

25 pages. "Under [variable benefit and/or variable contribution] arrangements, a pre-set formula drives occasional adjustments in the plan to maintain long-term stability. This report discusses how such variable arrangements can add flexibility, risk and gain sharing, and potential benefits to the plans and beneficiaries alike. A topic overview is presented, followed by a series of case studies and additional resources."

Editor's Pick 401(k) Amendment Rules Are Strict, But Mostly Straightforward
Employee Fiduciary
Sept. 18, 2019

"While 401(k) amendment rules are strict, they are generally straightforward.... [1] General amendment deadlines ... [2] Special rules for safe harbor 401(k) plans ... [3] Amendments can't cutback accrued benefits ... [4] Correcting late amendments." [Editor's note: Includes a useful "decision tree."]

Editor's Pick A Checklist for Drafting Section 457(f) Plans for Tax-Exempt Employers
Thompson Coburn
Sept. 18, 2019

"Drafting a Section 457(f) plan for a tax-exempt employer can be difficult because of the various statutory and regulatory rules that apply. [This article provides] a checklist for drafting this type of plan."

Editor's Pick Assessing the Value of Financial Advice (PDF)
Vanguard
Sept. 17, 2019

12 pages. "[Working with an advisor] materially altered equity risk-taking for two-thirds of the sample, reduced cash holdings for nearly three in ten investors, and eliminated home bias for over 90%. ... Eight in ten [investors who have established a retirement goal] have an 80% or greater probability of achieving a secure retirement... [E]motional outcomes account for 45% of total perceived value."

Editor's Pick Online IRS Tax Withholding Estimator Helps Retirees; Figures Tax on Social Security Benefits
Internal Revenue Service [IRS]
Sept. 13, 2019

"The new tool offers retirees, as well as employees and self-employed individuals, a more user-friendly way to check their withholding. Whether they receive wages or pension payments, it helps taxpayers estimate if the right amount is being withheld from their income to cover their tax liability. The estimator uses a simple, six-step question-and-answer format using information like marital or filing status, income, withholding, adjustments, deductions and credits."

Editor's Pick How Savings and Retirement Benefit Distributions May Prudently Be Used to Make Charitable Gifts
Law Offices of Albert Feuer, via SSRN
Sept. 12, 2019

"[D]istributions from individual retirement accounts or annuities may be eligible for the favorable tax treatment applicable to qualified charitable distributions (QCDs). This article explains the QCD requirements. The article also discusses when it is prudent to use those provisions ... when it is prudent to do otherwise if savings or retirement benefits fund charitable contributions, and when it is prudent to use other funding sources ... for charitable contributions."


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