Health & Welfare Plans Newsletter |
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| June 22, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy | ||
University Conference Services (Advert.)
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[Guidance Overview]
Options to Remove Liabilities for High Retiree Medical Costs from a Company's Balance Sheet: VEBAs (PDF)
2 pages. Excerpt: "The creation and structuring of the VEBA must fulfill a number of legal requirements all of which are normally manageable. Depending upon how the retiree medical VEBA is to be funded, there are a number of other approvals that may be required and SEC filings that must be made for companies with registered securities if the settlement agreement is a 'material agreement.' Further, the VEBA will allow for different accounting treatments of the change. If the company has securities registered with the Securities Exchange Commission, the company's accounting treatment can be verified by obtaining approval of the proposed accounting treatment through the office of the Chief Accountant at the SEC and the appropriate Counsel's office." (Haynes & Boone)
[Guidance Overview]
DOL Comment Request Includes Form Letter to Contact Plan Administrator Regarding COBRA Subsidy Denial
Excerpt: "EBIA Comment: The application has already been posted on the DOL website for general use . . . . We note that the letter asks the plan administrator to provide the requested information to the DOL within two business days. If the DOL does not receive the information within that time period, it may make a determination solely on the basis of the information from the individual." (Employee Benefits Institute of America)
Senate Finance Committee Might Revise Its Health Care Bill
Excerpt: "Senator Charles E. Grassley of Iowa, the top Republican on the Senate Finance Committee, said on Sunday that the panel would consider revisiting its version of health-care legislation to gain more support." (The New York Times; free registration required)
Public Perspectives on Health Delivery System Reforms (PDF)
6 pages. Excerpt: "Public opinion indicates underlying support for greater emphasis on primary care, prevention, health information systems and other components of proposed health reform. However, there is also evidence of public concern (1) about the trustworthiness of health care products, providers, and sources of health information; (2) about privacy and confidentiality of medical records; (3) about consumers' capacity and willingness to take on greater responsibility for making health care decisions; and, (4) about the effects of reform on choice of providers and treatment options." (Health Care Financing and Organization)
Insurers Revoke Policies To Avoid Paying High Costs of Treatments
Excerpt: "According to a new report by congressional investigators, an insurance company practice of retroactively canceling health insurance is fairly common, and it saves insurers a lot of money. A subcommittee of the House Energy and Commerce Committee recently held a hearing about the report's findings in an effort to bring a halt to this practice. But at the hearing, insurance executives told lawmakers they have no plans to stop rescinding policies." (Morning Edition via National Public Radio)
House Democrats Outline Employer Mandate in Health Bill
Excerpt: "The 850-page proposal is meant to serve as the foundation for the work that the House health, commerce and tax committees will do over the next several weeks to develop a final health care measure by the end of July. Hearings are slated to begin June 23." (Workforce Management; free registration required)
Obama To Formally Announce Medicare Drug Costs Cuts Today
Excerpt: "The pharma.ceutical industry agreed Saturday to reduce Medicare drug costs as part of health overhaul in an apparent effort to stave off potentially more-burdensome givebacks under the Democrats' health-overhaul plan. Today, President Barack Obama will make a formal announcement about the deal. The Wall Street Journal reports: 'Drug makers on Saturday outlined a proposal to forgo $80 billion in revenue over a decade, largely by covering more of the cost of brand-name prescription drugs under the federal government program for seniors. It would make up part of the $313 billion in government health-spending cuts that President Barack Obama has proposed over a decade to help pay for the overhaul plan.'" (Kaiser Family Foundation)
Democrats' New Health Plan Caps Confusing Week
Excerpt: "Top House lawmakers released yet another health-care plan Friday, illustrating the complexities bogging down Democrats' drive to overhaul the system this year. The plan from three key House committees has some important differences with a bipartisan bill taking shape in the Senate Finance Committee -- notably stricter regulations for employers, and a government-run plan to compete with private insurers. The House plan also left out details of how to pay for the expansion." (The Wall Street Journal)
Federal Health Care Reform: Resources
Excerpt: "NCSL provides news, information, and analysis on health reform activities in Congress and in Washington through the new Federal Health Care Reform web page." (National Conference of State Legislatures)
Miller & Chevalier/American Benefits Council 2009 Corporate Health Care Policy Forecast (PDF)
Excerpt: "While there are many parallels to last year's survey, the conclusions of the 2009 survey are dramatic. Regardless of their company's size, geography, industry or even the respondent's political affiliation, corporate benefits executives say they are concerned about several crucial health care policy matters. Industry professionals: Support an individual mandate; Overwhelmingly want improving quality to be a priority feature of health care reform; Do not support the establishment of a public health care plan; Do not want their employees taxed on the value their of employer-provided health benefits[.]" (American Benefits Council/Miller & Chevalier)
Health Care Cuts Could Shift Costs to Private Sector
Excerpt: "Unless doctors and hospitals are able to respond to the government cuts by becoming more efficient, the result could be higher costs for insurers, employers, and people with private medical coverage, [economists] say. Historically, health-care spending has been a bit like a balloon: If it is squeezed in one place, it tends to bulge in another. 'I think there's definitely risk that a portion of the reduction in hospital payments from Medicare will wind up as increased payments by private insurers,' said Paul B. Ginsburg, president of the Center for Studying Health System Change." (The Washington Post; free registration required)
CalPERS Plan To Raise Health Care Premiums Receives Final Approval
Excerpt: "On Wednesday, the CalPERS Board of Administration voted to give final approval to a proposal to raise public workers' and retirees' health insurance premiums by an average of 2.9%, the lowest rate increase in 14 years, the Sacramento Business Journal reports . . . ." (California HealthCare Foundation)
[Opinion]
Health Care Reform Showdown
Excerpt: "The real risk is that health care reform will be undermined by 'centrist' Democratic senators who either prevent the passage of a bill or insist on watering down key elements of reform. I use scare quotes around 'centrist,' by the way, because if the center means the position held by most Americans, the self-proclaimed centrists are in fact way out in right field. What the balking Democrats seem most determined to do is to kill the public option, either by eliminating it or by carrying out a bait-and-switch, replacing a true public option with something meaningless. For the record, neither regional health cooperatives nor state-level public plans, both of which have been proposed as alternatives, would have the financial stability and bargaining power needed to bring down health care costs." (The New York Times; free registration required)
[Opinion]
A Public Health Plan
Excerpt: "As the debate on health care reform unfolds, no issue has caused such partisan rancor -- and spawned such misleading rhetoric -- as whether to create a new public insurance plan to compete with private plans. The nation already has several huge public plans, including Medicare for the elderly (once reviled by conservatives, it is now only short of the flag in its popularity) and Medicaid for the poor. Now the issue is whether to establish a new public plan to encourage more competition among health insurers and provide Americans with an alternative." (The New York Times; free registration required)
[Opinion]
Factsheet: Investing in Health Coverage Makes Sense for Everyone (PDF)
4 pages. Excerpt: "Insured employees are healthier and more productive on the job. Therefore, investing in health coverage will make the workforce healthier and more productive. Higher productivity, in turn, will make the United States more competitive in the global economy. In addition, expanding coverage and making coverage more affordable will increase job mobility and make the labor market work more efficiently." (Families USA)
[Opinion]
Failing to Fund Post-Retirement Benefits: The Downside of 'Pay-As-You-Go'
Excerpt: "In addition to digging a deeper hole, there are three other consequences of pay-as-you-go: higher liabilities and expenses in financial statements; lost and lower investment earnings; and a weakened collective bargaining position." (Governing.com)
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Links to Items on Executive Comp, Benefits in General
[Guidance Overview]Supreme Court Ruling Increases Burden on Employees in Age Discrimination Cases
Excerpt: "On June 18, 2009, the U.S. Supreme Court issued a ruling substantially increasing the evidentiary burden imposed on plaintiffs in federal age discrimination cases. Whereas plaintiffs could previously establish age-based disparate treatment claims by showing their age was a 'motivating factor' in the challenged employment decision (e.g., termination, demotion, failure to hire or promote), plaintiffs must now demonstrate their age was the 'but for' cause of the challenged decision. In other words, employees must now prove their age was the reason why their employer took the disputed action, and not merely a reason that motivated the employer in making the disputed employment decision." (Pepper Hamilton LLP)
[Guidance Overview]
U.S. Supreme Court Increases Employee Burden of Proof in Age Bias Cases (PDF)
2 pages. Excerpt: "In Gross v. FBL Financial Services, Inc., decided on June 18, 2009, a deeply divided U.S. Supreme Court imposed a heightened proof burden on employees to establish age discrimination against their employers. In a 5-4 decision, the Court concluded that the literal text of the Age Discrimination in Employment Act ('ADEA') does not allow a worker to prove discrimination by demonstrating that age was one 'motivating factor' for the employer's adverse employment action. Rather, in the majority's view, workers must prove that age was the decisive factor or 'but for' cause underlying the employer's adverse job action." (Haynes & Boone)
[Guidance Overview]
Court Denies Penalties for Document-Request Failure When Participant Not Harmed
Excerpt: "EBIA Comment: It should be noted that courts disagree on whether a participant or beneficiary must show harm from a failure to provide documents in order to be awarded ERISA penalties. Most courts appear to consider the presence of prejudice or bad faith as only one factor in determining whether penalties should be imposed for a failure to produce documents. Although this court emphasized the employee's failure to take follow-up efforts to obtain the requested documents, other courts have reached the opposite conclusion, reasoning that the purpose of these penalties is to punish plan administrators who do not comply with requests for documents." (Employee Benefits Institute of America)
[Guidance Overview]
Non-Qualified Plans under the Interim Final Rules of TARP/EESA/ARRA
Excerpt: "As I noted on June 15, 2009, the new EESA/ARRA Interim Final Rules on Executive Compensation for TARP institutions shot down nearly every proposed strategy or work around that practitioners had devised for dealing with the more onerous EESA/ARRA TARP restrictions. One of the options taken off the table by the recently issued TARP Interim Final Rules is an employer contribution to, or benefit accrual under, a non-qualified deferred compensation plan." (Michael Melbinger via Winston & Strawn LLP)
Employees Appreciate Lighter Schedule During Summer Months, New Survey Suggests
Excerpt: "Flexible schedules (38%) and leaving work early on Fridays (32%) are the most coveted summer benefits, according to workers polled by OfficeTeam. Other benefits employees would appreciate include social activities such as a picnic or potluck party (6%) and a more relaxed dress code (5%). 'Employees appreciate flexibility in their jobs because it gives them greater control and enables them to handle other commitments without sacrificing their work performance,' said Robert Hosking, executive director of OfficeTeam, in a press release." (PLANSPONSOR.com; free registration required)
Benefits for Ex-City Employees Examined in San Diego
Excerpt: "For weeks after leaving their city jobs, more than 100 San Diego employees enjoyed benefits such as health insurance, holiday pay and pension contributions, according to a new audit. In the past year, the city spent $660,000 to pay the benefits to 111 employees, the report by City Auditor Eduardo Luna found. The workers received the benefits by staying on the payroll while they were paid vacation and sick time they had coming. In part because of union contracts, they were treated as active employees and enjoyed the same benefits as before." (The San Diego Union-Tribune)
Press Releases
PBGC Assumes Pensions at Lehman Brothers Holdings IncPension Benefit Guaranty Corporation (PBGC)
A Plan Sponsor’s Guide: Bridging Employees’ Retirement Income Gap with Income Annuities
Principal Financial Group
Think the Economic Outlook Is Bad for You? Try Being an Aging Woman
Women’s Institute for a Secure Retirement (WISER)
Mercer Sees Defined Contribution Account Balance Recovery As A Significant Challenge For Near Retirees
Mercer
Employers Back 401(k) As Vital Retirement Savings Tool According To New Study From CFO Research And Charles Schwab
Charles Schwab Corporation
Study Illuminates 401(k) Participants’ Preferences for Fee Disclosures
Transamerica Center for Retirement Studies
(Click to post your press release)
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