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July 17, 2012 Get Retirement News  |  Advertise  |  Unsubscribe  |  Past Issues  |  Search

Employee Benefits Jobs

Senior Relationship Manager
for JULY Business Services in ANY STATE

Retirement Plan Administrator
for PENSYS, Inc. in NC

Sales Director
for MassMutual Financial Group in ANY STATE

IRT Relationship Manager 3
for Wells Fargo in PA

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Webcasts and Conferences

2012 Third Quarter Update
Nationwide on August 16, 2012 presented by McKay Hochman Co., Inc.

401k Service Training Program
in Pennsylvania on October 11, 2012 presented by Financial Service Standards, LLC

401(k) Rekon Advisor Symposium - Portland
in Oregon on August 14, 2012 presented by 401(k) Rekon

Protected Concerted Employee Activity - Live FutureOffice Network Smartcast
Nationwide on July 17, 2012 presented by Davidson Marketing Group -- FutureOffice Network

Health Benefits Laws Compliance Assistance Seminar
in Ohio on August 8, 2012 presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)


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Considerations for Medical Loss Ratio Rebates
"With the August deadline for the first round rebates approaching, employer sponsors of insured plans should keep the following issues in mind.... [S]ponsors of ERISA-covered insured plans should consider whether any MLR rebates received by the policyholder are 'plan assets' under ERISA.... [E]mployers who receive MLR rebates will have to consider how to use and allocate those rebates.... Individuals may have questions about the notice and purpose of the MLR rebates that employers should anticipate answering." (Faegre Baker Daniels)


Health Care Reform Virtual Conference - August 16, 2012   [Advert.]

Sponsored by IFEBP (International Foundation of Employee Benefit Plans)

The Supreme Courtís ruling has a major impact on health plans. This virtual conference will dive deep into portions of the law. Hear expert analysis and gain access to valuable resources to help you understand your responsibilities. Register Now!


Few Will Pay More Under Health Care Law
"Though the law is projected to raise more than $800 bil.lion in taxes, fees and penalties over a decade, 40% comes from about 3.5 mil.lion households with adjusted gross incomes above $200,000. Employers, insurers and health care providers are slated to fork over much of the rest." (USA TODAY)

ML Strategies Health Care Reform Update, July 16, 2012 (PDF)
Weekly update on developments in federal and state health care reform legislation and regulations. Includes summaries of recent announcements and regulatory activity by HHS, CCIIO, IRS and CMS. (Mintz Levin)

Congressional Budget Office Says Military Health Care Costs Could Soar
"Active and retired service personnel and their families are increasing their use of the military health care system at a faster rate than civilians enrolled in comparable private health programs, according to a report by the Congressional Budget Office. As a result, the annual cost to the Defense Department's health care program could grow from $51 bil.lion in fiscal 2013 to $65 bil.lion by 2017 and $90 bil.lion by 2030 ... [A]ccording to the CBO projections, the Defense Department, which will pay out 9 percent of its base budget for health care in fiscal 2013, would be paying out 14 percent in 2030, roughly equivalent to what it spends today on all military research and development programs." (The Washington Post; free registration required)

U.S. Health Care: a Reality Check on Cross-Country Comparisons
"The United States spends substantially more per capita on health care than other developed countries, yet commonly cited reports indicate that the United States does not have superior health system performance. The Organisation for Economic Co-operation and Development (OECD) uses mortality metrics to measure health care system performance, but these data do not adequately indicate health status differences and do not accurately judge health care system efficiency." (American Enterprise Institute)


Outcomes-Driven Health Care & Benefit Design - July 24-26 - Chicago   [Advert.]

Sponsored by World Congress

Health and benefit leaders need proactive, aggressive action to change employer and employee purchasing strategies, advance healthy outcomes, and achieve a data-drive ROI - join the nation's most innovative employers to develop your strategic plan.


[Opinion]

Taxation Without Representation: The Illegal IRS Rule to Expand Tax Credits Under the PPACA
"The Patient Protection and Affordable Care Act (PPACA) provides tax credits and subsidies for the purchase of qualifying health insur.ance plans on state-run insur.ance exchanges. Contrary to expectations, many states are refusing or otherwise failing to create such exchanges. An Internal Revenue Service (IRS) rule purports to extend these tax credits and subsidies to the purchase of health insur.ance in federal exchanges created in states without exchanges of their own. This rule lacks statutory authority. The text, structure, and history of the Act show that tax credits and subsidies are not available in federally run exchanges. The IRS rule is contrary to congressional intent and cannot be justified on other legal grounds. Because the granting of tax credits can trigger the imposition of fines on employers, the IRS rule is likely to be challenged in court." (Case Western Reserve University Research Paper Series in Legal Studies)

[Opinion]

Health Care Continues to Be Impediment to Growth of Small Businesses (PDF)
"Following the Supreme Court's decision on the President's health care law, only 3% of small business owners report that the Supreme Court's decision to uphold the law will make them more likely to hire new employees. The vast majority said they would be less likely to hire or that their workforce would stay the same size. When asked directly what the impact would be, 72% said that the health care law will make it harder for their business to hire. ... Many small business owners reported that, in addition to limiting hiring, the new law might force them to reduce the size of their business." (U.S. Chamber of Commerce)

[Opinion]

Text of Comments by American Benefits Council to IRS Regarding Proposed Regulation on Funding of Patient-Centered Outcomes Research Trust Fund (PDF)
"[The] Council urges the Service to provide a transition period allowing good faith compliance for the first two years the [Patient-Centered Outcomes Research Trust Fund Fee (PCORI)] is in effect.... [The Council requests] that issuers and employers be permitted to determine the number of covered lives using a 'dependency' coefficient in lieu of having to count the actual number of covered lives enrolled in a given plan.... Since employers are required by federal law to offer COBRA coverage, it would seem inappropriate to impose a PCORI Fee on employers with respect to such coverage.... [T]he Council requests that the Service issue guidance confirming that the PCORI Fee will not be imposed with respect to retiree health coverage to help ensure that employers remain willing and able to provide this coverage ... [A]dditional clarification would be helpful to confirm our reading of the Proposed Regulations that similar self-funded Expatriate Plans are also excepted for purposes of the PCORI Fee.... [The Council requests] that the Service issue guidance permitting TPAs to fulfill payment and reporting obligations with respect to the PCORI Fee on behalf of sponsors of self-insured plans." (American Benefits Council)

[Opinion]

Health Reform Law Makes Clear That Subsidies Will Be Available in States with Federally Operated Exchanges
"Some health reform opponents claim that the Affordable Care Act's (ACA) premium tax credits to help low- and moderate-income uninsured people buy coverage through the new health insur.ance exchanges are only available in states that have set up their own exchanges, not in states with federally operated exchanges. A group of Republican members of Congress ... have urged governors to forgo establishing their own exchanges on this ground in order to undermine ACA implementation and thus assist their efforts to repeal health reform. The argument that premium credits are not available to purchase coverage offered through a federally operated exchange rests on a distorted and incorrect reading of the ACA." (Center on Budget and Policy Priorities)

Benefits in General; Executive Compensation

[Guidance Overview]

Change-in-Control and Severance Agreements with a Release of Claims May Need Attention before December 31, 2012
"Severance and other compensation arrangements that promise a payment only if a release of claims (or other employment-related obligations, such as non-solicitation or non-competition agreements) is signed should be reviewed by December 31, 2012, for compliance with Section 409A of the Internal Revenue Code. Failure to ensure that these documents are in compliance could result in substantial penalty taxes and administrative burdens in the future." (Wilson Sonsini Goodrich & Rosati)

[Guidance Overview]

SEC Adopts Final Rules on Compensation Committee and Compensation Adviser Independence
"With only a few exceptions ... the Final Rules do little more than mirror the requirements set forth in the Dodd-Frank Act, although they do establish a definitive timetable for implementation of those requirements... As noted by the SEC in the adopting release, compliance with the final exchange listing standards will likely require compensation committees to create procedures for collecting and analyzing information about potential compensation advisers before they can receive advice from such advisers... The Final Rules expand current SEC disclosure requirements regarding compensation consultants in proxy and information statements for annual meetings (or special meetings held in lieu of an annual meeting) at which directors will be elected." (Goodwin Procter LLP)

Supreme Court Decision On Affordable Health Care Act Affects Stock Compensation Planning
"Starting in 2013, an extra 3.8% tax will be added to the usual capital gains tax for people with yearly adjusted gross income of more than $200,000 (more than $250,000 for married joint filers). This surtax will apply to sales of company stock from equity compensation, and this may prompt some people to sell shares before the end of 2012. For example, if you exercised incentive stock options and have held the shares long enough (two years from grant, one year from exercise) for a sale to be a qualifying disposition, you may decide to sell the shares in 2012, as this would let you pay just the current 15% top capital gains rate and avoid the additional Medicare tax." (myStockOptions.com)

Self-Employed Can Deduct Medicare Premiums, IRS Chief Counsel Advises
"Sec. 162(l)(2)(A) limits the deductible amount of payments made for health insur.ance to the taxpayer's earnings from the trade or business 'with respect to which the plan providing the medical care coverage is established.' [Previous guidance] stated that this meant that payments under a plan that is not established with respect to the taxpayer's trade or business (specifically including Medicare Part B, because it is a federal program) are not deductible. [Chief Council Advice (CCA) 201228037], however, states that because Medicare is insur.ance that constitutes medical care under Sec. 162(l), it is similar to other health insur.ance and its premiums can similarly be deducted, including for coverage of a self-employed taxpayer's spouse and qualifying child or other dependent. Children can include those up to age 27 (effective March 30, 2010). The CCA states that premiums for all Medicare parts are deductible. " (Journal of Accountancy)

Using 'Rolling' Method to Calculate FMLA Leave Almost Always the Best Choice for Employers
"The FMLA regulations allow employers to utilize any one of four different methods to calculate the amount of FMLA leave an employee uses within a 12-month period.... so long as the method is applied consistently and uniformly for all employees.... Clearly, there are pros and cons with each of these four methods. But one method stands out above the rest: the 'rolling' 12-month period measured backward from the date an employee uses any FMLA leave." (FMLA Insights)

Sixth Circuit Finds Individual Relief under ERISA Section 502(a)(2) Unavailable to Life Insur.ance Beneficiary
"[The Sixth Circuit Court of Appeals] held that the ERISA Section 502(a)(2) remedy provision does not permit a life insur.ance beneficiary to recover individualized benefits for an employer's alleged breach of fiduciary duty. The court rejected the beneficiary's argument that this recovery should be permitted under the Supreme Court's decision in LaRue v. DeWolff, Boberg and Associates, Inc. The Sixth Circuit also concluded that ERISA does not require individual notice of the right to convert group insur.ance coverage to an individual policy." [Walker v. Fed. Express Corp., No. 11-5201 (6th Cir. July 11, 2012)] (Practical Law Company)

Make-Whole Relief Under ERISA Comes to the Fourth Circuit
"[The Supreme Court's 2011 decision in CIGNA Corp. v. Amara ], the Fourth Circuit stated, dramatically expanded the remedies available to plan participants or beneficiaries that sought to challenge violations of the terms of the plan. Prior to Amara, damages were limited to benefits due under the plan, premiums wrongfully withheld, or a strict interpretation of equitable relief, such as an order directing the plan to pay promised benefits. The Amara decision, however, seemed to broaden the Court's interpretation of the scope of equitable relief. As a result, injured parties can obtain other remedies, such as an order to make the injured party whole, so that they can obtain the benefit that they believed they had been promised under the plan documents." (HighRoads)

Policy Options for the Social Security Disability Insur.ance Program
"The Social Security Disability Insur.ance (DI) program has expanded rapidly during the past few decades, and CBO projects that, under current law, future spending for the program will significantly exceed the revenues dedicated to it.... CBO has examined a variety of potential modifications to the DI program.... Alleviating the financial pressures on the DI program would require a substantial increase in revenues for the program, a substantial decrease in the program's costs, or some combination of those two approaches." (Congressional Budget Office)

Employee Ownership Update for July 16, 2012
NCEO Executive Director Loren Rodgers discusses the UK government's employee ownership push, the new California Center for Employee Ownership, the Congressional Research Service's report on stock option tax treatment, sample IRS language for 83(b) elections, and company stock in the 401(k) plans of Wall Street firms. (National Center for Employee Ownership)

[Opinion]

Wisconsin Offers California Lessons on Balancing Budget
"Now that three California cities have declared bankrup.tcy, perhaps it's time to consider the lessons of Wisconsin.... When [Wisconsin Governor Scott] Walker introduced his so-called budget repair bill in February 2011, he argued that the biggest beneficiaries of his plan would be cities, towns and school districts, which would gain the flexibility to cut costs without having to negotiate every change in compensation or work rules with local unions. His legislation specifically eliminated collective bargaining by government workers for benefits and required greater contributions from them toward pensions. How local officials employed those changes to cut costs proved revealing." (Los Angeles Times)

[Opinion]

Stockton Bankrup.tcy: Life Goes On
"We're starting to settle into the bankrup.tcy that has enveloped Stockton. It's been almost three weeks since the council meeting in which the vote was a formality that capped five hours—and several months—of tension. What has happened since? The street sweeper was out on my block the other day. The libraries remain open. There's softball being played in Louis Park. City Hall is open and people come and go, continuing to do their business.... Through it all, bankrup.tcy is basically turning out to be a series of showdowns between the city (the council and City Manager Bob Deis) and city employees and retirees." (The Modesto Bee)

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