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October 22, 2012          Get Retirement News  |  Advertise  |  Unsubscribe
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Employee Benefits Jobs

Retirement Planning Consultant
for Diversified in IN

Pension Specialist
for BeneSys, Inc. in MI

Compensation and Benefits Specialist
for Swarthmore College in PA

Regional Sales Director
for Goldleaf Partners in ANY STATE, AZ, CO, NC

Defined Contribution/401k Relationship Manager
for USI Consulting Group in NY, TX

Peer Reviewer - Temporary Assignment
for The Angell Pension Group, Inc. in ANY STATE

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Webcasts and Conferences

The Merits of Passive Investing for DC Plans
in New York on October 30, 2012 presented by S&P Dow Jones Indices

Health Care Reform in the Wake of the Election
Nationwide on November 20, 2012 presented by ABA Joint Committee on Employee Benefits

ERISA Current Development Update Webcast
Nationwide on November 15, 2012 presented by Actuarial Systems Corporation (ASC)

Taking The Mystery Out Of Retirement Planning Workshop
in Massachusetts on December 5, 2012 presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

We also publish the BenefitsLink Retirement Plans Newsletter (free): Subscribe


'Super-Utilizers' of Health Care Place Huge Burden on System
"Health care spending in the United States is unevenly distributed, with the sickest 5 percent of patients causing more than 60 percent of health care costs.... [L]ack of coordination of super-utilizers' treatment often leads to 'repeating really expensive diagnostic tests such as CAT scans,' which dramatically drives up the cost of their care." (The Washington Post; free registration required)


Real-World Solutions for Your Health, Benefits & Wellness Programs

Sponsored by Health & Benefits Leadership Conference

Hear what's working for senior executives at major employers including: American Express, Big Lots, Carlson, Chipotle Mexican Grill, Comcast, H-E-B, Intel, Leviton, Microsoft, NextEra Energy, Walgreens and Yahoo! Limited-time registration offer going on now.

'Behavioral' Hazard in Health Insurance: Those Who Tap Health Care Too Little Rather Than Too Much
"In the traditional model, people who are insured overuse low value medical care because of moral hazard. There is ample evidence, though, of a different inefficiency: people underuse high value medical care because they make mistakes.... With only moral hazard, raising copays increases the efficiency of demand by ameliorating overuse. With the addition of behavioral hazard, raising copays may reduce efficiency by exaggerating underuse. This means that estimating the demand response is no longer enough for setting optimal copays; the health response needs to be considered as well." (National Bureau of Economic Research; purchase required)

Health Insurance Choices Become Complicated Amid Rising Costs
"Insurers expect that on average, premium increases will remain in the single digits. But consumers will feel a bigger hit to their pocketbooks, since more and more companies are looking at so-called consumer-driven plans that shift more costs to workers. So it's more important than ever that employees understand what they're getting into when they pick their options[.]" (St. Petersburg Times)

Disability Insurer Was Proper Party in Claim Under Fully Insured Long-Term Disability Plan
"Acknowledging that [generally] an ERISA suit must be brought against the plan, the court noted that an exception is recognized under applicable Seventh Circuit case law where an entity, like an insurer, is closely intertwined with the plan itself. In concluding that the insurer here was sufficiently intertwined with the plan for this exception to apply, the court emphasized that the insurer controlled eligibility for and payment of benefits, and had sole discretion to interpret the terms of the plan, noting that it appeared that only the insurer could provide the benefits allegedly due under the plan." [Ayotte v. Prudential Insurance Co. of America, 2012 WL 4580316 (N.D. Ill. 2012)] (Thomson Reuters / EBIA)

Health Plan's Subrogation Provision Not Enforceable Against Participant's Attorneys, Leaving Plan With No Remedy
"This plan sponsor was in a tough spot. The plan document language was clear, and twice during the accident litigation the law firm acknowledged the plan's reimbursement right in writing. What more could the plan sponsor have done? It could have joined the accident litigation and pursued its right to subrogation (i.e., direct recovery from the third party) rather than reimbursement -- but that's a costly approach probably not justified by the amount at stake. Case law in this area continues to evolve[.]" [Treasurer, Trustees of Drury Indust., Inc. Health Care Plan & Trust v. Goding, 2012 WL 3870585 (8th Cir. 2012)] (Thomson Reuters / EBIA)

Large Employers Look to On-Site Health Clinics to Reduce Costs and Absenteeism
"A study this year ... found that only 8 percent of employers across the country currently have such clinics. But among big companies -- where large numbers of employees mean a clinic can more easily amass enough patients to justify its cost -- these facilities are becoming more common. A recent study ... found that 46 percent of large employers offered at least one on-site clinic, up from 37 percent the previous year." (The Washington Post; free registration required)

Watch Out for Fly-by-Night Health Insurers
"[R]ising health-care costs ... may push organizations into poor decisions when purchasing insurance. 'There is a risk for American businesses in finding a package that looks financially attractive with health insurers that aren't as well known as the major ones,' [says attorney Elliott Kroll] .... 'the more that companies deal with fringe players in the health-care market, whose numbers will increase in the next few years, the more these types of situations will arise.'" (CFO)

Spending on Health Insurance Exchanges Surpasses $2 Billion
"Arkansas, Colorado, Kentucky, Massachusetts, Minnesota, and the District of Columbia are the latest to receive Exchange Establishment Grants, and that combined $224 million is what pushed the new overall total spent on HIX to approximately $2.2 billion.... [I]t was only 5 months ago when the US Department of Health and Human Services announced that it had hit the $1 billion mark[.]" (American Journal of Managed Care)

Dump 'Use It or Lose It' Rule for Flexible Spending Accounts, Commenters Tell IRS
"Members of the public who responded to IRS Notice 2012-40 regarding health flexible spending accounts (FSAs) have asked the government to eliminate the 'use it or lose it' rule, according to Treasury attorney-advisor Kevin Knopf.... Knopf, from the Treasury's Office of Benefits Tax Counsel, and Stephen Tackney, IRS deputy associate chief counsel (Employee Benefits), Tax Exempt and Government Entities Division, [recently] provided an update on some of the IRS guidance issued under the [ACA]." (Wolters Kluwer Law & Business)

Determining if Disability Insurance Coverage Is Worth It
"The first thing anyone who has looked into buying disability insurance has probably been struck by is the cost.... [T]he cost for coverage in a group policy runs about $16.30 per $1,000 of coverage with a waiting period of 30 days and a maximum benefit of $15,000 a month. For individuals buying their own policies, he said, the cost is $18.60 per $1,000 of coverage but with a 90-day waiting period." (The New York Times; free registration required)


'Transitional Reinsurance Program' in ACA Is Unfair to Employer-Sponsored Health Plans
"Self-insured employers will be assessed a per-participant fee -- likely in the $60 to $90 range -- to help fund the $25 billion program. For a big self-funded employer, with say 100,000 people enrolled in its health care plans, its first-year tab for the three-year program could be about $10 million. And where will all that money go? The beneficiaries will be commercial insurers who will receive the money as partial reimbursement for writing coverage for those in the personal lines market with the highest health care costs." (Business Insurance; free registration required)

Benefits in General; Executive Compensation

[Guidance Overview]

Consider Communicating New 2013 Dollar Limits to Plan Participants Now
"Since plans generally incorporate COLAs by reference, no plan document amendments should be required on account of the 2013 limit increases. However, plans that are established or restated in 2013, and SPDs that are required to be updated in 2013, should reflect the updated dollar amounts. In addition, employers may wish to communicate some of these changes to employees before the end of 2012." (Drinker Biddle)

ISS Releases 2013 Draft Policy Changes for Comment; Executive Compensation Affected (PDF)
"In the compensation area, the most significant U.S. policy changes pertain to (1) a new approach to peer group selection for evaluating pay-for-performance alignment in connection with advisory Say-on-Pay proposals, and (2) new problematic pay practices for evaluating Say-on-Golden Parachute proposals. A third compensation policy change is the extension of ISS' quantitative pay-for-performance test to Canadian companies, similar to the new test implemented in the U.S. in 2012[.]" (Frederic W. Cook & Co., Inc.)

NASDAQ Issuers Face Heightened Requirements Under Proposed Dodd-Frank Rules for Compensation Committees
"As a result of the changes, NASDAQ listed companies, depending upon their current compensation committee policies and procedures, potentially face bigger changes than their NYSE counterparts. This is primarily because the NYSE rules prior to the Dodd-Frank Act were more developed and closer in line with the Dodd-Frank Act standards. Additionally, though the rules of both exchanges are subject to SEC approval, certain provisions of the NASDAQ rules are effective immediately while the NYSE's rules are effective in 2014. Therefore, NASDAQ listed companies should be aware that time is of the essence in reacting to the new rules." (Dechert LLP)

Eighth Circuit Avoids Deciding Whether Informal Complaints Are Protected by ERISA Sec. 510
"Although the Eighth Circuit has not decided whether informal complaints are covered by ERISA Sec. 510, it concluded that it need not reach that issue in this case because the record failed to show that the employee participated in statutorily protected activity." (Wolters Kluwer Law & Business)

Press Releases

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