Health & Welfare Plans Newsletter |
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| July 17, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy | ||
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[Guidance Overview]
Recent Legislation and Regulations Require Changes to Health and Welfare Benefit Plans
Excerpt: "Congress and federal regulatory agencies have been busy enacting legislation and proffering guidance which implements many new requirements for group health and welfare benefit plans. Many of the changes will require thoughtful action on the part of administrators and sponsors of group health and welfare benefit plans. This brief outline of current health and welfare compliance developments is not intended to be exhaustive, but rather serves to illustrate the depth and breadth of changes facing plan sponsors now and in the coming months." (Littler Mendelson P.C.)
Private And Public Insurance Choices Would Help Reduce Administrative Health Care Costs By $265 Billion Over 10 Years
Excerpt: "[A] new report from The Commonwealth Fund projects that including both private and public insurance choices in a new insurance exchange would save the United States as much as $265 billion in administrative costs from 2010 to 2020. Congressional leaders are attempting to keep 10-year federal budget costs of health care reform legislation under $1 trillion." (Medical News Today)
Health Care Reform Bill Has Self-Insurer Tax, New Prescription Drug Rules
Excerpt: "Employers that self-insure their health care plans would face a new federal tax under health care reform legislation under consideration by several House committees. Revenue from the tax, which also would apply to health insurers, would support a federal program created by the legislation to conduct research to compare the effectiveness of various medical treatments. The legislation, H.R. 3200, which House Democratic leaders unveiled Tuesday, July 14, would leave it to the secretary of the Department of Health and Human Services to determine the size of the tax needed to raise $375 million a year." (Workforce Management; free registration required)
Market-Based Insurance Design: A New Approach to Bend the Healthcare Cost Curve (PDF)
4 pages. (Milliman)
The Lewin Group Launches Center for Comparative Effectiveness Research
Excerpt: "The Lewin Group Center for Comparative Effectiveness Research will offer: Development and management of data sets and registries; Data analysis, including linked data sets and electronic health records; Tools for analysis of longitudinal health outcomes for treatment effectiveness and drug safety; Services to conduct and manage institutional review board-approved comparative trials; CER technical assistance, CER knowledge transfer and consulting on CER methods and policies[.]" (The Lewin Group)
Has the Time Come for Cost-Effectiveness Analysis in US Health Care?
Excerpt: "Three-quarters of key decision-makers from a diverse group of California-based health care organizations believe that cost-effectiveness criteria should be used when making insurance coverage decisions. However, the study's authors, who conducted educational workshops and facilitated discussions with decision-makers, found that legal risks and other business-related barriers deter organizations from using information. The study participants also reported being uncomfortable with the concept of 'rationing' -- indicating that how cost-effectiveness analysis is framed will be crucial to its broader acceptance." (The Commonwealth Fund)
U.S. Senate Bill Plugs FMLA Hole
Excerpt: "U.S. Senator Patty Murray (D-Washington) has introduced legislation plugging a hole in the Family and Medical Leave Act (FMLA), which has kept airline pilots and flight attendants from being eligible for unpaid leave. A Murray news release said The Airline Flight Crew Technical Correction Act provides that pilots and flight attendants are eligible by virtue of their work hours for FMLA-provided 12 weeks of unpaid leave time each year." (PLANSPONSOR.com; free registration required)
Connecticut Lawmakers to Consider Override of Governor's Health Bill Veto
Excerpt: "A bill vetoed by Connecticut Governor M. Jodi Rell to open the state's employee health program to other participants may still have a chance. Business Insurance reported that Democrats in the Connecticut General Assembly are expected to meet to decide whether to try to override the Rell veto. Rell had asserted in her veto message that the well-intentioned measure would boost costs for the state and taxpayers because those most likely to join the program would be the heavy health service users . . . ." (PLANSPONSOR.com; free registration required)
Five Costly Medical Conditions to Watch
Excerpt: "[Here is] a list of five common conditions that represent some of the more costly and complicated treatments particular to self-funded health plans. 1. Kidney disease 2. Hemophilia 3. Transplants 4. Specialty drug treatments 5. Extreme premature births" (Employee Benefit News; free registration required)
How Health Care Reform Can Lower the Costs of Insurance Administration
Excerpt: "This issue brief examines the sources of administrative costs and describes how a private-public approach to health care reform -- with the central feature of a national insurance exchange (largely replacing the present individual and small-group markets) -- could substantially lower such costs. In three variations on that approach, estimated administrative costs would fall from 12.7 percent of claims to an average of 9.4 percent. Savings -- as much as $265 billion over 2010-2020 -- would be realized through less marketing and underwriting, reduced costs of claims administration, less time spent negotiating provider payment rates, and fewer or standardized commissions to insurance brokers." (The Commonwealth Fund)
The Financing and Future of Health Benefits for State and Local Government Retirees
Excerpt: "This report is the first systematic (entire workforce) assessment of the level of OPEB (other post-employment benefits) liabilities of US states and a sample of localities. Key findings of the report include: States have unfunded liabilities for retiree health care of about $558 billion. State plans differ substantially in their generosity, coverage, and outstanding liabilities." (Center for State and Local Government Excellence)
[Opinion]
Employers Raise Serious Concerns Over Senate Health Care Reform Legislation (PDF)
6 pages. Excerpt: "We have reviewed the 'Affordable Health Choices Act' approved by the HELP Committee, and while we share some areas of common ground, we have serious concerns about a number of provisions in the legislation. On the positive side, we are pleased that Congress appears to be reaching bipartisan agreement on a number of key issues that are necessary to achieve true reform. These include: reforming regulations in the individual insurance market to require insurers to offer guarantee issue coverage without regard to preexisting conditions and individual health status; requiring individuals to take responsibility for their health and maintain health insurance through public or private coverage; providing subsidies to low-income people to obtain coverage; and taking steps to improve the focus on primary care and expand efforts to promote prevention, wellness, and chronic care coordination." (HR Policy Association)
[Opinion]
Maintaining Current Value of Itemized Deductions for High-Income Taxpayers Could Help Pay for Health Care Reform
Excerpt: "If Congress rejects the President's proposal to help pay for health care reform by limiting the value of itemized deductions for high-income filers, it should at least prevent those subsidies from expanding in 2011, as they would under current law. Simply keeping the value of itemized deductions for filers in the top two brackets at their current levels of 33 and 35 percent, rather than allowing it to expand when those tax rates rise to 36 and 39.6 percent respectively, would raise $68 billion over ten years, according to the Urban-Brookings Tax Policy Center.[1] It could help to finance health care reform, while addressing the criticisms that have been leveled against the Administration proposal -- and maintaining current incentives to donate to charity or buy a home." (Center on Budget and Policy Priorities)
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Links to Items on Executive Comp, Benefits in General
[Guidance Overview]EEOC Issues Employee Guidance on Waivers in Severence Agreements
Excerpt: "[M]ost important for the EEOC and for employers, the guidance explains in several parts that these waivers do not bind the EEOC, that they cannot be used to limit employees from filing charges even if the waivers are enforceable against the employees in court proceedings, and that any effort to do so or recover the consideration (usually severence) could be considered retaliation, which the waiver won't cover." (Workplace Prof Blog)
[Guidance Overview]
Understanding Waivers of Discrimination Claims in Employee Severance Agreements
Excerpt: "To minimize the risk of potential litigation, many employers offer departing employees money or benefits in exchange for a release (or 'waiver') of liability for all claims connected with the employment relationship, including discrimination claims under the civil rights laws enforced by the Equal Employment Opportunity Commission (EEOC) -- the Age Discrimination in Employment Act (ADEA), Title VII, the Americans with Disabilities Act (ADA), and the Equal Pay Act (EPA).[2] While it is common for senior-level executives to negotiate severance provisions when initially hired, other employees typically are offered severance agreements and asked to sign a waiver at the time of termination. When presented with a severance agreement, many employees wonder: Is this legal? Should I sign it? This document answers questions that you may have if you are offered a severance agreement in exchange for a waiver of your actual or potential discrimination claims." (U.S. Equal Employment Opportunity Commission)
[Guidance Overview]
Obama Administration Proposes New Legislation on Compensation Committee Independence
Excerpt: "Today, the Obama Administration delivered draft legislation to Congress that would seek to ensure that 'compensation committees are independent in fact, not just in name.' The proposed legislation has three main components . . . ." (Michael Melbinger via Winston & Strawn LLP)
[Guidance Overview]
SEC Proposes New Executive Compensation and Governance Disclosures
Excerpt: "The SEC has proposed expanding executive compensation disclosure requirements for reporting companies. A major focus of the proposed rules, released July 10, 2009, is the relationship between compensation policies and risk management. The additional disclosures would affect disclosure of compensation policies and their impact on risk taking; stock and options awards; director qualifications; company leadership structure; the board's role in the risk management process; and compensation consultants. The proposed rules also include amendments to Form 8-K and expand proxy disclosures. The SEC anticipates that the new requirements will be effective for the 2010 proxy season." (McGuireWoods LLP)
CEOs Openly Oppose Push for Say-on-Pay by Shareholders
Excerpt: "That executives oppose congressional noodling with their pay is unsurprising. What is surprising is that they are willing to go so public in their opposition, even though passage of a so-called 'say-on-pay' law is likely, says Dawn Wolfe, associate director of social research for Boston Common Asset Management." (USA Today)
Fact Sheet: Administration's Regulatory Reform Agenda Moves Forward: New Independence for Compensation Committees
Excerpt: "The Administration's proposed legislation takes three important steps to ensure that compensation committees have the independence and expert assistance they need to serve their important role: First, the legislation requires that members of the compensation committee meet exacting new standards for independence, just as Sarbanes-Oxley did for members of audit committees. Second, to ensure that committees are receiving objective advice, the legislation requires that any compensation consultants and legal counsel they hire be independent from management. Finally, the legislation requires that compensation committees be given the authority and funding to hire independent compensation consultants, outside counsel, and other advisers who can help ensure that the committee bargains for pay packages in the best interests of shareholders. At the same time, it requires that if the committee decides not to use its own compensation consultant, it explain that decision to shareholders." (U.S. Department of the Treasury)
Fact Sheet: Administration's Regulatory Reform Agenda Moves Forward: Say-On-Pay
Excerpt: "Today, as part of its push for comprehensive regulatory reform, Treasury delivered draft 'say-on-pay' legislation to Congress that would require all publicly traded companies to give shareholders a non-binding vote on executive compensation packages. Say-on-pay legislation - which was co-sponsored by then-Senator Obama in 2007 and also passed the House that year - would encourage greater accountability and better disclosure in setting compensation. The Administration is eager to support Chairman Dodd and Chairman Frank - both long-time advocates for say-on-pay - as they begin consideration of this legislation . . . ." (U.S. Department of the Treasury)
2009 TIAA-CREF Paul A. Samuelson Award Call for Entries
Excerpt: "The TIAA-CREF Institute invites you to submit an entry for the 2009 TIAA-CREF Paul A. Samuelson Award for Outstanding Scholarly Writing on Lifelong Financial Security. Submissions may be theoretical or empirical in nature, but must cover a subject directly relevant to lifelong financial security. The research must be in a book or article form and must have been published between January 1, 2008 and June 30, 2009. Submissions must be received by the TIAA-CREF Institute no later than August 28, 2009. An application must be returned with your submission." (TIAA-CREF Institute)
Meeting of July 15, 2009: Age Discrimination in the 21st Century: Barriers to the Employment of Older Workers
Excerpt: "In light of widespread layoffs, a significant spike in age discrimination charges, threats to employee benefits, and controversial recent court decisions, the U.S. Equal Employment Opportunity Commission (EEOC) [held] a public hearing Wednesday, July 15, 2009, at 10 a.m. (Eastern Time), at agency headquarters, 131 M St, NE, Washington, DC., to discuss age discrimination in employment. Experts will discuss the results of age stereotyping on older workers' ability to keep their jobs during layoffs or to find work afterwards and the effect of recent controversial Supreme Court decisions on enforcement of the Age Discrimination in Employment Act (ADEA). Panelists will suggest potential enforcement and policy solutions. In addition, representatives from recent ADEA cases will discuss their experiences. Finally, the Commission will issue a technical assistance document that explains terminated employees' rights and obligations when offered severance pay in exchange for a waiver of discrimination claims." (U.S. Equal Employment Opportunity Commission)
[Opinion]
Supreme Court Justice Ginsberg Calls ERISA 'Unfair'
Excerpt: "According to the Supreme Court, since the only remedy allowed under ERISA for a wrong-coverage decision was to force the insurance company to pay the benefit it should have paid to the insured in the first place, states could not allow a plaintiff to sue for a worsening of his condition or for pain, suffering, or death caused by the insurance company's decision. In her concurring opinion, Justice Ruth Bader Ginsburg joined 'the rising judicial chorus urging Congress and the Supreme Court to revisit what is an unjust and increasingly tangled ERISA regime.' Justice Ginsburg said the problem was that the Court, through a series of decisions, had made it that virtually all state-law remedies would be preempted. She then noted that a 'series of the Court's decisions has yielded a host of situations in which persons adversely affected by ERISA-proscribed wrongdoing cannot gain...relief,' and called for the current situation to be quickly remedied." (AnAmericanDay.com)
Press Releases
PBGC Moves to Protect Pensions at Nortel Networks Inc.Pension Benefit Guaranty Corporation (PBGC)
U.S. Labor Department Sues to Appoint Independent Fiduciary to Manage Abandoned 401(k) Plan of Former Denver-area Employer
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
U.S. Department of Labor Obtains Settlement Giving Former Cookeville, Tennessee, Company Participants Access to Their Retirement Funds
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Fact Sheet: Administration’s Regulatory Reform Agenda Moves Forward: Say-On-Pay
U.S. Department of Treasury
Obesity Among U.S. Adults Continues to Rise
U.S. Department of Health & Human Services
Responsible Investment Not Losing Steam in Financial Crisis
Mercer
Curbing Executive Pay Incentives Would Devastate Shareholder Equity, Indicates Carnegie Mellon Research
Tepper School of Business at Carnegie Mellon
Cost of Prescription Co-Pays Increases in United States for Healthcare Organizations
Compdata Surveys
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Employee Benefits Jobs
Regional Sales Consultantfor Gallagher Retirement Services
in IN
Director of Plan Technical Services
for Prudential Financial
in CT
Senior Director of Health Care Quality and Cost Management
for A Major Health Plan
in NY
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