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May 31, 2012 Get Retirement News  |  Advertise  |  Unsubscribe  |  Past Issues  |  Search

Employee Benefits Jobs

Client Service Manager
for Milliman in WA

Conversions Specialist
for The Newport Group in NC

ERISA Consultant
for Retirement Plan Consulting Firm in MO

Participant Counselor
for Diversified in CA

Director, Pension Consulting
for Prudential in CT, PA

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Webcasts and Conferences

"Multiple Employer Plans: Aftermath of DOL Guidance" Web Seminar
Nationwide on June 26, 2012 presented by SunGard Relius

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[Official Guidance]
Text of IRS Notice 2012-40 Addressing $2,500 Limit on Health FSAs Becoming Effective Plan Years Beginning in 2013 (PDF)
"This notice provides guidance on the effective date of the $2,500 limit (as indexed for inflation) on salary reduction contributions to health flexible spending arrangements (health FSAs) under Section 125(i) of the Internal Revenue Code (Code) (the $2,500 limit) and on the deadline for amending plans to comply with that limit. This notice also provides relief for certain contributions that mistakenly exceed the $2,500 limit and that are corrected in a timely manner. Finally, the notice requests comments on whether to modify the use-or-lose rule that is currently set forth in the proposed regulations with respect to health FSAs." (Internal Revenue Service)

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[Official Guidance]
Text of First Circuit's Decision Finding DOMA Unconstitutional as Applied to Federal Benefits for Massachusetts Same-S.ex Spouses (PDF)
"To conclude, many Americans believe that marriage is the union of a man and a woman, and most Americans live in states where that is the law today. One virtue of federalism is that it permits this diversity of governance based on local choice, but this applies as well to the states that have chosen to legalize same-s.ex marriage. Under current Supreme Court authority, Congress' denial of federal benefits to same-s.ex couples lawfully married in Massachusetts has not been adequately supported by any permissible federal interest." (U.S. Court of Appeals for the First Circuit)

[Official Guidance]
Text of CCIIO Technical Guidance 2012-004: Questions and Answers on the Medical Loss Ratio Reporting Requirements (PDF)
Issued May 30, 2012. "[Question:] Will CMS grant extensions of the June 1, 2012 deadline for issuers to submit their MLR annual report or the August 1, 2012 deadline for issuers to provide rebates for the 2011 MLR reporting year? [Answer:] No. 45 CFR Section 158.110(b) establishes 'June 1 of the year following the end of an MLR reporting year' as the date by which an issuer must submit the MLR report, and 45 CFR Section 158.240(d) establishes 'August 1 following the end of the MLR reporting year' as the date by which an issuer must provide any rebate owing. Therefore, because the MLR regulation does not provide for extensions to either deadline, no extensions will be granted for these deadlines." (Center for Consumer Information & Insur.ance Oversight)

[Guidance Overview]
Significant Transition Relief for $2,500 Health FSA Limit
"[In Notice 2012-40,] the IRS has provided meaningful transition relief on the effective date of the $2,500 annual spending limit, for employers whose health flexible spending arrangements ('health FSAs') follow a fiscal year. Most significantly, it makes clear that employers with fiscal year health FSAs may keep higher reimbursement limits in effect through the end of their 2012-2013 plan year, and that all employers may adopt retroactive amendments to impose the $2,500 limit at any time before December 31, 2014." (E is for ERISA)

[Guidance Overview]
Guidance Issued on New $2,500 Health FSA Limit
"The $2,500 limit, enacted by the Patient Protection and Affordable Care Act of 2010, P.L. 111-148, and amended by the Health Care and Education Reconciliation Act of 2010, P.L. 111-152, is effective with cafeteria plan years beginning after Dec. 31, 2012, and is indexed for inflation in subsequent years. Under previous law, the health FSA statutory provisions contained no contribution limit ... Under Sec. 125(i), as added by the health care legislation, references to 'taxable year' or years are to be interpreted as plan year or years, the IRS clarified." (Journal of Accountancy)

[Guidance Overview]
DOMA Ban on G.ay Marriage Falls in Court of Appeals for First Circuit
"[The] First Circuit Court on Thursday ruled that Congress did not have the power to intrude on the choice of states — like Massachusetts — to create such a right under state law. In a unanimous three-judge panel ruling in Massachusetts v. Health and Human Services Department (Circuit docket 10-2204), the Circuit Court took a cautious approach that it said was based on recent Supreme Court precedents outlawing discrimination against minorities." (SCOTUSBlog)

New Report Card on Family Leave: Many States Fail
"Eighteen states received an F for failing to provide a single benefit or program to help support families before and after the birth, adoption or foster placement of a child. The report card was issued by the National Partnership for Women & Families, a non-profit advocacy group. Only two states received an A-, California and Connecticut (no states scored an A). California was the first state to pass a paid family leave law, and Connecticut passed a statewide paid sick day law." (Fox News)

An Actuarial Perspective on the 2012 Social Security Trustees' Report (PDF)
"The newly released 2012 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insur.ance and Federal Disability Insur.ance Trust Funds indicates that the Social Security trust fund exhaustion date is three years earlier than projected in the 2011 Trustees Report. The trust fund is projected to run out of assets during 2033, and if reform has not been enacted by that date, benefits would have to be reduced by about one-fourth thereafter." (American Academy of Actuaries)

New York City Mayor Wants To Ban Mega Sugary Drinks
"New York City Mayor Michael Bloomberg wants to block sales of sugary drinks larger than 16 fluid ounces. Restaurants, movie theaters and food trucks would all have to abide by the rule, which is aimed at rising obesity rates." (National Public Radio)

Health Care Costs: The Role of Technology and Chronic Conditions
"Many factors have been cited as health care cost drivers, including demography, geography, economics and health status. But there is little agreement on how much each factor contributes to overall costs. This briefing offered an in-depth look at two of the most often cited cost drivers—technology and chronic conditions." (Alliance for Health Reform)

Health and Well-Being Touchstone Survey 2012 from PwC
The linked web page includes a button to download the survey; free registration is required. "The 2012 survey provides summary data on medical and prescription drug plan design, costs, COBRA rates, wellness and disease management programs, work-life programs, fringe benefits, future healthcare strategies, retirement benefits, and health reform." (PwC)

Behind the Numbers: 2013 Health Care and Medical Cost Trends Report by PwC
"This PwC Health Research Institute (HRI) report looks at the projected increase in the cost of medical services for 2013. Medical cost trend is the primary factor in setting health insur.ance premiums. Commercial insurers and large employers use this information to estimate what the same health plan would cost in the following year.... [HRI] projects medical costs will increase 7.5% for 2013, the fourth year in a row of relatively flat growth" (PwC)

Health Insur.ance's $4.4 Bil.lion Bunker Buster
"Two portions of Obamacare have received relatively little attention and are a backdrop to DaVita's prescient moves. Taken together, these provisions could have a long-term effect that is going to be devastating to the traditional health insur.ance business while also creating huge new opportunities for them and others. The first is the new 'Medical Loss Ratio' (MLR) requirement. The second is allowing flat-fee primary care practices, also referred to as Direct Primary Care Medical Homes ... to compete within the state-based insur.ance exchanges." (Forbes)

Results from the 2011 Study of State Employee Health Benefits
"The report of results from the 2011 Study of State Employee Health Benefits ... provides details about [types of medical coverage offered to state employees].... Almost all states offer either preferred provider organizations (PPOs) or point-of-service (POS) plans. Moreover, that is the predominant type of medical coverage offered in each region. The vast majority of states offer four or fewer family coverage tiers. For all medical plan types, the employee cost sharing percentage is greater for family coverage than for employee-only coverage. The most common deductible amount was $500 (median $350), with nearly 40 percent of PPOs/POS plans having annual per-person deductibles of at least $500." (The Segal Company)

Potential Implications of the Supreme Court Decision on the Affordable Care Act (PDF)
"[This Health Care Advisory focuses] on some of the implications and issues that may arise as a result of the Supreme Court's ruling and [addresses] such implications and issues arising from three potential outcomes of the cases before the Supreme Court[.]" (Alston & Bird)

Health Savings Account Membership Up 18 Percent
"HSA membership rose from 11.4 mil.lion in January 2011 to 13.5 mil.lion in January 2012, with most of the growth occurring in plans offered by large employers, according to an annual census by America's Health Insur.ance Plans, an industry lobby. Since 2008 HSA membership has more than doubled." (Kaiser Health News)

Employers Less Likely to Drop Coverage Than Might Be Expected
"[O]nly 8 percent of the employers surveyed have plans to drop coverage altogether. But half of the companies surveyed do plan to make big changes to the coverage they offer.... [Some] employers worry that they'd be less able to attract the workers they want without offering health coverage. Companies that employ more highly paid workers are less likely to be thinking about dropping coverage." (NPR)

Health Care Reform Might Be Helping Improve Insurers' Notoriously Poor Customer Service
"Insur.ance companies are taking steps to build their relationship with customers as health plans prepare to compete between each other on exchanges where benefit packages will be offered. Because health plans offering benefits on state-regulated exchanges will all offer similar benefit packages, customer service is one key way to stand out to a potential flood of new customers.' (Forbes)

Text of Comments by American Benefits Council to House Ways and Means Committee in Support of Proposed HSA Legislation (PDF)
"Each of these changes will help the growing number of participants in HSAs to meet their current and future health care needs. We particularly support the provision in H.R. 5858 to allow pre-65 retirees to use funds from their HSAs to pay for employer-sponsored health coverage.... We believe that the provision in H.R. 5858 that permits these funds to be used by those who retire before age 65 who have the opportunity to continue health coverage under an employer-sponsored plan will help to encourage individuals and employers to make contributions to these accounts while they are active employees. This improvement will also strengthen the incentives for those age 55 or older to use HSAs to save for retiree health care needs." (American Benefits Council)

Text of Comments by Consumer Directed Health Coalition to House Ways and Means Committee on Proposed HSA Legislation (PDF)
"Since HSAs were first created, enrollment has grown from 1 mil.lion covered lives to approximately 13.5 mil.lion in January of 2012. More importantly, as employees maintain coverage year-over-year, they enjoy the benefits of greater control over their health care spending and, in many cases, are able to save money from one year to the next." (Consumer Directed Health Coalition)

Should We Tax Fat?
"What we have here is a pattern that is repeated over and over again in health policy. Unwise intervention creates a social problem. Instead of undoing the source of the problem, we construct a new intervention. The new intervention, in turn, causes more problems, etc., etc. Still, let's assume for the moment that society is unwilling to let health insurers price risk accurately — for whatever reason. What's the second best solution?" (John Goodman's Health Policy Blog)

Proposed Sick Leave Law Is Unhealthy for Massachusetts
"Witness the renewed push for an employer sick-leave mandate in Massachusetts, bolstered by a study from the Institute for Women's Policy Research (IWPR) claiming a net financial benefit for the state ... The study starts by acknowledging that sick days do carry a cost for employers ... [It then describes] over $215 mil.lion in savings that employers will enjoy due to reduced turnover in the workplace.... [But a survey] of employers actually affected by a sick-leave mandate, in San Francisco, found that they weren't experiencing the promised reductions in employee turnover. One employer pointed out the obvious—if everyone's required to provide the benefit, then there's no particular incentive for employees to stay with one employer over another." (Employment Policies Institute)

The President's Health Care Law Is Hurting Our Economy, and Must Be Fully Repealed
"It's no secret that our nation's economy is struggling, and the president's health care law, enacted in 2010, is making things worse—raising health costs and making it harder for small businesses to hire workers. The only way to change this is by repealing ObamaCare in its entirety." (John Boehner on The Health Care Blog)

Benefits in General; Executive Compensation

[Guidance Overview]
Proposed IRS Regs Under Code Section 83: Just Clarifications, or Potentially Significant Changes?
"[N]umerous lawsuits have been brought over the last ten years - all unsuccessful - alleging that the application of a lock-up agreement or a black-out period to shares of stock prevented the holder from recognizing income on the value of those shares. Interestingly, the proposed regulations also may be IRS' first attempt to clarify the taxation of stock awards and other compensation that is subject to clawback under company policies adopted in accordance with Section 954 of the Dodd-Frank Act...." (Winston & Strawn LLP)

[Guidance Overview]
IRS Issues Proposed Regs Under Internal Revenue Code Section 83
"The proposed regulations clarify that except as specifically provided in Treasury Regulation Section 1.83-3(j) and (k), transfer restrictions do not create a substantial risk of forfeiture, even if violation of transfer restrictions would result in the forfeiture of some or all of the property or the employee's liability for damages, penalties or fees." (Practical Law Company)

U.S. Rep. Barney Frank Introduces Bill to Prohibit Insur.ance Policies Against Executive Comp Clawbacks
"The Executive Compensation Clawback Full Enforcement Act of 2012 would require any officer, director, or employee of a financial firm who is required under a federal financial regulatory law to repay previously earned compensation or to pay a civil penalty to be personally liable for the amounts owed. These individuals would be prevented from using insur.ance or other forms of hedging to protect their personal assets under these laws, and their employers could not procure such protection on their behalf." (Insur.ance News)

A Week After the IPO, What's the Latest on Facebook's Stock Comp?
"The Washington Post reported that 600 of Facebook's 3,700 employees and 250 former employees will become millionaires, according to PrivCo, a research firm. The wealth created for senior executives will be much greater." (

Stockton, California City Council to Vote on Bankrup.tcy Authorization
"The farming center about 80 miles ... east of San Francisco has been holding confidential talks with creditors such as public-employee unions to escape becoming the largest city to enter court protection in U.S. history. Communities and states across the U.S. face soaring costs for pensions and retiree health benefits even as sales and property-tax revenue has fallen from the longest recession since the 1930s." (Bloomberg Businessweek)

Employee Benefits Keep Getting Cut
"Over the past five years, 40% of working adults have seen their employer-sponsored benefits reduced or eliminated entirely, according to a survey by the National Endowment for Financial Education ... This year, workers' out-of-pocket costs rose 5.8% to an average of $3,470 for a typical family of four ... By 2017, cost and competitive pressures are expected to prompt more than 50% of large Fortune 1000 organizations toward dropping health care coverage altogether[.]" (

Union Leaders in Providence, Rhode Island Agree to Suspend COLAs Under Municipal Pension Plan
Union leaders said the concessions were better than having the city enter bankrup.tcy. Cost-of-living adjustments would be suspended for 10 years. In addition, retirees will be moved into Medicare, although the city will continue to pay some retiree health benefits. (

High-Performing Firms Use Total Rewards Effectively; Others Don't
"While companies see the value of and invest significantly in total rewards programs, many don't achieve successful results because of improper execution ... According to Aon Hewitt's analysis, high-performing companies do several things differently with respect to executing total rewards programs ... As a result of these differences, 51 percent of high-performing companies say their employees understand the value of their total rewards programs compared to one-third of other companies, according to the survey. Fifty-one percent report increases in employee engagement over the past 18 months, compared with just 30 percent of the rest of the firms surveyed." (Society for Human Resource Management)

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