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March 21, 2013          Get Retirement News  |  Advertise  |  Unsubscribe
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Employee Benefits Jobs

Data Conversion Specialist - Client Implementation
for Transamerica in NY

Customer Service Representative
for YMCA Retirement Fund in NY

Payroll & Benefits Manager
for Paramount Staffing in IL

Consulting Actuary
for New York Life Retirement Plan Services in MA

Retirement Plan Consultant
for CPA Firm in OH

Pension Administration Project Manager - Multiple Locations Available
for Aon Hewitt in CT, GA, IL, TX

Director of System Benefits
for University System of Georgia in GA

Reviewing Actuary
for Kravitz, Inc. in ANY STATE, CA

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Webcasts and Conferences

2013 403(b) Update
Nationwide on April 10, 2013 presented by McKay Hochman Co., Inc.

Ethics Case Studies One
Nationwide on April 25, 2013 presented by McKay Hochman Co., Inc.

Ethics Case Studies Two
Nationwide on June 25, 2013 presented by McKay Hochman Co., Inc.

“Employer Play or Pay” - The Basics plus New Rules and New Hurdles
Nationwide on February 28, 2013 presented by Crowley Fleck PLLP

EPCRS, Determination Letter and DFVCP Update
Nationwide on April 18, 2013 presented by ABA Joint Committee on Employee Benefits

Plan Sponsors and Washington: What You Need to Know Recorded Webcast
Nationwide on April 4, 2013 presented by Vanguard

View All Webcasts and Conferences

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


[Official Guidance]

CMS Holds Health Insurance Marketplace Stakeholder Engagement Open Door Forum
"CMS kicked off the next phase of our stakeholder engagement on the new Health Insurance Marketplace with an open, national conference call on Monday, March 18, 2013, to be followed by quarterly calls throughout 2013 in each state with a Federally-Facilitated or State Partnership Marketplace. Individuals and organizations that will interact with and utilize the Marketplace are encouraged to join these calls. We will provide an update on the implementation of the Marketplace and listen to feedback as we continue to develop and refine the Marketplace." (Centers for Medicare & Medicaid Services, U.S. Department of Health and Human Services)


Learn About HRA Plans and the Annual Limit Prohibition with Wolters Kluwer

Sponsored by ftwilliam.com

Learn about recent guidance suggesting HRAs must be integrated with a major medical plan to be exempt from HCR's prohibition on annual limits. We'll cover other less-discussed exemptions that apply to HRAs under health care reform as well.

[Guidance Overview]

New Hires and Counting Hours for Play-or-Pay Purposes
"In this post, [the law firm authoring the linked article addresses] the special rules for new hires/new employees and how those rules overlap with the rules for ongoing employees." (Benefits Bryan Cave)

[Guidance Overview]

What Employers with Self-Funded Health Plans Need to Know About the New HIPAA Omnibus Rule
"[W]hen an employer funds the benefits itself instead of purchasing insurance, it either directly or through its agent (usually a third-party administrator) has access to its employees' medical information and is responsible for complying with HIPAA's privacy and security rules. These rules include requirements regarding uses and disclosures of health information, notification of breaches, preparation and distribution of notices of privacy practices and procedures, updating of business associate agreements, and training of personnel who have access to PHI." (Nixon Peabody LLP)

[Guidance Overview]

HIPAA: Health Privacy and Security 1.0 (PDF)
54 presentation slides from a February 12, 2013 webinar. Includes extensive coverage of the recently issued final regulations under the HIPAA privacy, security and enforcement rules and the HITECH Act, especially as they affect business associates. (Morgan Lewis)

[Guidance Overview]

Multi-State Plan Program Guidance and Expatriate Plan Transition Relief Issued
"Each [Multi-State Plan ('MSP')] must have essential health benefits equal to the benchmark plan in the applicable State or the EHB-benchmark plan selected by OPM.... The MSP must have cost-sharing limits, including deductibles, co-payments, and co-insurance that comply with ACA as well as any other standards set by OPM.... In order to ensure a level playing field, the MSP must generally provide coverage that is consistent with the Individual and Group Market Reform provisions of ACA, including not imposing any pre-existing condition exclusions and the availability of external review of claims (to be conducted by OPM)." (Seyfarth Shaw LLP)


Employer Health & Benefit Innovation Summit - April 8-10, National Harbor, MD

Sponsored by World Congress

This Summit allows HR, Benefits, & Wellness Executives to evaluate decisions in this time of healthcare reform & market transformations. This event delivers next steps, financial modeling, & data-driven analysis. Promo Code BLINK3 for $300 off.

[Guidance Overview]

Regulations Address the 90-Day Waiting Period Requirement
"[P]lans may require the completion of a specified number of hours to become eligible for health coverage. The proposed regulations indicate that the specified number of hours cannot exceed 1,200, and can only be imposed on a one-time (as opposed to an annual) basis." (Ballard Spahr)

The Role Pharmacies Play Is Expanding -- Are Consumers Better Off?
"While insurance will cover many of the drugstore's other services, the clinics don't accept insurance for any of the check-ups, because they aren't considered equivalent to full-service annual physicals that are covered by health plans. Drugstores counter that for many patients and parents, the cost of popping into a walk-in clinic -- typically about $40 to $80 -- is well worth the convenience of not having to schedule (and, often, wait for) an appointment with a doctor." (MarketWatch.com)

Congressman Calls on IRS to Detail Its Role in Obamacare Implementation
"Ways and Means Oversight Subcommittee Chairman Charles Boustany Jr., M.D. (R-LA) wrote to Internal Revenue Service (IRS) Acting Commissioner Steven Miller to find out how much taxpayer money will be used to implement the Democrats' health care law and how many IRS employees have been pulled away from the agency's core mission to work on it. The IRS will be in charge of administering the health law, including overseeing the more than $1 trillion in tax hikes and major provisions of the law such as the individual mandate." (U.S. House Ways and Means Committee)

Drug Costs Remain a Concern in Federal Employee Health Program
"The health insurance program covering federal employees in 2014 will continue to emphasize cost controls for prescription drugs, which account for about 30 percent of the premiums ... OPM also has emphasized wellness programs such as health risk assessments and encouraging healthy lifestyles ... saying 'our most recent data reveals low levels of member participation. To have a greater impact on enrollee health, we strongly encourage carriers to re-examine the scope of their programs, outreach efforts, and the level of incentives.'" (The Washington Post)

Physicians Abandon Insurance in Favor of Direct Payments
"For doctors with private practices, eliminating insurance will reduce the number of patients they care for but allow them to make more money and provide better care. For patients following the 2014 implementation of the ACA, eliminating insurance will keep costs and quality constant while the health care system as a whole experiences dramatic changes." (National Center for Policy Analysis)

Obamacare to Hit Home on Capitol Hill
"Staffers who work in lawmakers' personal offices go into exchanges -- but those who work for committees don't. And the lawmakers themselves get Obamacare -- unless they are among the roughly 40 senators and 115 House members on Medicare. And there's a big thorny unresolved question about money: whether members and staffers in exchanges will still get a significant part of their health insurance premiums subsidized by their employer, just like other government workers. If they lose that subsidy, it's like getting a pay cut of several thousand dollars." (Politico)

Hot Topics in Employee Benefits (PDF)
37 presentation slides from webinar covering recent developments; topics include: Health and Welfare (including ACA); Fiduciary Developments; Pension "De-risking"; Plan Sponsor Issues; and Fringe Benefits/Payroll Taxes. (Morgan Lewis)

Kaiser Permanente Is Seen as Face of Future Health Care
"[E]ven with all of its effort, its chairman and chief executive, George C. Halvorson, acknowledges Kaiser has yet to achieve the holy grail of delivering that care at a low enough cost. He says he and other health systems must fundamentally rethink what they do or risk having cost controls imposed on them either by the government or by employers, who are absorbing the bulk of health insurance costs. 'We think the future of health care is going to be rationing or re-engineering,' he said." (The New York Times)

Uncertainty Over ACA Grips Small Businesses
"Nearly three years after the health-care law was passed, federal regulators have only recently begun to define its terms. Major pieces of the overhaul, such as state-run exchanges that will serve as marketplaces for qualified health insurance plans, have yet to take shape, and several rules remain unwritten. Consequently, the picture remains anything but clear for small-business owners, some of whom have been warned that their premiums may spike and that their current coverage may fall short." (The Washington Post)

Will Arkansas's Obamacare Math Add Up?
"A few weeks ago, Arkansas put forward an unusual plan to expand Medicaid: It would use the health law dollars to buy private insurance for some 210,000 Arkansans expected to be covered under the program.... But there's always been one big policy question hanging over Arkansas plan: How much would it cost? ... [The state] recently brought on a team of actuaries to run through the question: How much more does it cost to move 210,000 Arkansas residents into private insurance coverage? The answer they came up with: Not much at all. In fact, the costs might come out even." (The Washington Post)

California Expands Protections for Disabled Employees
"[T]he employer is required to start the interactive process in the following situations: an employee or applicant with a known disability requests an accommodation; the employer becomes aware of the need for an accommodation by a third party or by observation; and when an employee with a disability exhausts leave under other laws." (Ford & Harrison LLP)

Can You Get Obamacare? This Insanely Complicated Chart Will Tell You.
"[This] flowchart ... comes from the National Association of Insurance Commissioners, which represents the regulators who oversee each state's insurance market. It is an attempt to draw up the most basic, simple questions to determine eligibility for insurance subsidies or Medicaid. You don't have to spend much time with the chart to get that, it's really not simple at all." (The Washington Post)

How Has CBO's Estimate of the Net Budgetary Impact of the ACA Health Insurance Coverage Provisions Changed Over Time?
"In the estimate prepared in March 2010, CBO and JCT projected that the provisions of the ACA related to health insurance coverage would cost the federal government $788 billion between 2010 and 2019. The latest projections extend the original ones by four years, corresponding to the shift in the regular 10-year projection period since 2009, and the estimated cost of the ACA's insurance coverage provisions between 2013 and 2023 is $1,329 billion. However, the projections for each given year have changed little, on net, since March 2010[.]" (Congressional Budget Office)

Small Employers Express Confusion About ACA Requirements (PDF)
"Almost a third (32%) of respondents incorrectly believe that they will be required by the health reform law to provide group health insurance in 2014. Nearly a quarter (24%) incorrectly believe that they will be required to pay a penalty if they fail to provide group coverage in 2014.... Fewer than two-in-ten small employers (18%) say they can confidently define or explain what a health insurance exchange is. Two-thirds (62%) admit to not understanding exchanges at all." (eHealth)

Michigan Governor Signs Legislation to Make Blues a Nonprofit Mutual Insurance Company
"Beginning next January, the state's largest insurer will begin the transition, which includes paying about $90 million a year in taxes, contributing $1.5 billion over 18 years to a new state endowment fund and ending its 'most favored nation' contracts with hospitals[.]" (FierceHealthPayer)

Five Things Obamacare Got Right -- and What Experts Would Fix
"The law continues to delight supporters with what they see as positive surprises; for example, some backers say Obamacare deserves credit for the unexpected slowdown in national health spending. But critics warn that the law's perverse effects on premiums are just beginning to be felt." (California Healthline)

Results from the Kaiser Health Tracking Poll, March 2013
"[T]wo-thirds of the uninsured and a majority of Americans overall say they have too little information to know how the [ACA] will affect them, and that Americans' awareness of key elements of the law has declined somewhat since passage when media attention was at its height. The survey also finds that the public is not tuned into decisions states are making today about whether to expand their Medicaid program under the law and how to establish the insurance exchange marketplaces." (Kaiser Family Foundation)

Actuaries Project Cost of Newly Insured Individuals Under ACA (PDF)
"Key findings include ... [1] After three years of exchanges and insurer restrictions, the percentage of uninsured nationally will decrease from 16.6 percent to between 6.8 and 6.6 percent, compared to pre-ACA projections.... [2] Under the ACA, the individual non-group market will grow 115 percent, from 11.9 million to 25.6 million lives; 80 percent of that enrollment will be in the Exchanges.... [3] The non-group cost per member per month will increase 32 percent under ACA, compared to pre-ACA projections." (Society of Actuaries)

A Look at the Factors Driving Health Care Spending
"Spending on hospitals has continued to be the largest component of the national health expenditures. In 2011, hospitals accounted for nearly 31% of all health care spending." (America's Health Insurance Plans)


Obamacare Pre-Existing Conditions Coverage: Low Enrollment, High Costs
"In 2010, the Obama Administration estimated that 375,000 people would enroll in the [pre-existing conditions insurance plan ('PCIP')]. But as of January 2013, over two-and-a-half years since the plan began, only 107,139 were enrolled -- less than 29 percent of original projections. Despite such low enrollment, the PCIP is running out of money.... In a 2012 report, the Administration conceded that claims' costs had been 2.5 times greater than they had anticipated." (The Heritage Foundation)


U.S. Can't Afford Flawed Health Care Reforms
"ObamaCare could almost triple health care premiums across the board, with young individuals taking the biggest hit. Recent college graduates, who are struggling to pay off student loans and find good jobs, could see their premiums increase by as much as 189 percent.... Why will costs skyrocket? Price controls and requirements to purchase government-approved plans are leading culprits. The law also imposes $165 billion in new taxes and fees on plans, drugs, and medical devices that will be passed onto consumers in the form of higher premiums and prices." (U.S. Rep. John Kline, Subcommittee on Heath, Employment, Labor and Pensions, Committee on Education & the Workforce, U.S. Senate)


The Myth of the Smarter Healthcare Consumer
"[T]he notion that access to prices alone will enable consumers to choose suitable coverage makes two big assumptions about consumers: (1) that they are in a position to accurately identify and predict their healthcare needs; and (2) that they won't be inclined to value the short term (i.e., more money in their pocket each month due to lower health insurance premiums for higher deductible plans) over the long term (i.e., access to health care treatment they can actually afford when they most need it). The stark reality is that both of these assumptions are wrong." (The Health Care Blog)


Health Care Reform, Swiss-Style: The Road Not Taken
"[O]ver the past 30 years, [Switzerland and the U.S.] have had the two most expensive health care systems in the world. However, we have by now left even Switzerland far behind. In 1980, per capita spending in both countries was roughly equal; in 2010, U.S. spending surpassed Swiss spending by nearly $3,000 per person.... If we had spent only as much per person as Switzerland did over the past 30 years, we would have saved about $15.5 trillion." (The Commonwealth Fund)


The Flip Side of Higher Premiums: Better Health Coverage
"Time Magazine's recent cover story on health care ... has focused attention on hospital prices, especially for people paying out of their own pockets.... [W]hat has been lost in the ensuing commentary on high hospital prices is that Brill's article is as much about inadequate insurance, which is the reason why the patients he writes about were paying the bulk of their own hospitals bills. One of them was uninsured, but the rest had private insurance. The problem was that the insurance plans these policyholders had ultimately covered very little of their care." (Kaiser Family Foundation)


Our Coming Deficits Are Driven by Old People, Not Health Inflation
"You've heard ... that our long-term deficits are almost entirely driven by health-care costs. That's true over the next 50, 60, 70 years, which is, absurdly, the time frame people often talk in. But over the next 20 years, it's not quite right. A more accurate way to put it would be that in the coming decades, new spending is almost entirely driven by health-care programs. But what's really driving the spending in those programs is the aging of the population, not the rise in health-care costs." (The Washington Post)


The More Businesses Learn About Obamacare, the More Reluctant They Are to Hire
"Wondering why the unemployment rate has been near or above 8 percent for nearly four years? The Federal Reserve has an answer for you: Obamacare. Earlier this month, the Fed released its latest 'beige book' -- a monthly report on economic conditions across the country. The book noted that employers across the country have 'cited the unknown effects of the [ACA] as reasons for planned layoffs and reluctance to hire more staff.'" (Forbes)

Benefits in General; Executive Compensation

Discounted Stock Options Are Deferred Compensation Subject to Section 409A
"[T]he U.S. Court of Federal Claims ruled ... that section 409A of the Internal Revenue Code applies to discounted stock options, with the potential adverse tax consequences that the entire appreciation in the option position is subject to the 20% penalty tax under section 409A in addition to ordinary income tax and that this tax would be payable on option vesting rather than on exercise." [Sutardja v. United States, No. 11-724T (Fed. Cl., Feb. 27, 2013)] (Morgan Lewis)

Litigation Over Proxy Statement Disclosure -- Another Update
Attorney Michael Melbinger, author of the linked article, writes to contribute "some (hopefully) useful advice to companies that have not yet filed their proxy statements and are seeking approval of a new or amended plan stock plan (including those seeking only approval of additional authorized shares or performance goals for 162(m)). In a measured response to the plaintiffs' claims in many of these lawsuits and letters, [Winston & Strawn has been] suggesting additional disclosure regarding dilution and other data that would allow that figure to be calculated, including the following tweaks (to the extent not already in the disclosure): ..." (Winston & Strawn LLP)

Cypen & Cypen Newsletter for March 21, 2013
Covers employee benefit developments with an emphasis on governmental plans. Topics include: [1] A Spouse Is a Spouse Is a Spouse; [2] Assessing Stable Value After 2008; and [3] Florida Public Pension Trustees Association Creates Public Pension Institute. (Cypen & Cypen)

Best Practices and Core Principles for the Development, Dispensation and Receipt of Proxy Advice (PDF)
"[A]nnual proxy solicitations increasingly have become a referendum on a growing and sometimes conflicting array of issues. ... We have set forth core principles and a series of specific improvements to serve as a basis for proxy advisory firms, public companies, and investment portfolio manager organizations to engage in a dialogue to create a system that brings transparency and accountability to proxy advisory firms and fosters strong corporate governance." (U.S. Chamber of Commerce's Center for Capital Markets Competitiveness)

District Court Decision Creates More Uncertainty for ERISA Co-Fiduciaries on Contribution Claims
"[T]he court viewed ERISA's silence on contribution among co-fiduciaries to allow it to identify a federal common law right based on its belief that right was not inconsistent with ERISA's structure and intent.... [The] ongoing divide [among the circuit courts of appeal] over the power of federal courts to supplement ERISA's express terms may have wide-ranging effects on ERISA's provisions and remedies that go far beyond the question of contribution among co-fiduciaries." [Guididas v. Community National Bank Corp., No. 8:11-cv-2545-T-30TBM (M.D. Fla., Nov. 5, 2012)] (Jenner & Block via Employee Relations Law Journal)

Press Releases

ASPire Financial Names 403(b), 457 Head
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