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July 9, 2013          Get Retirement News  |  Advertise
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Client Service Manager
for The Newport Group in NC

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for The Standard in IL

Compliance Administrator, Defined Contributions
for Tegrit Group in OH

Compliance Operations Manager
for DST Retirement Solutions in MO

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Webcasts and Conferences

[Guidance Overview]

Health Reform Rule Change Won't Stop Income Verification by Exchanges
"[A] rigorous income verification process remains in place in all states, including those that will operate their own marketplaces.... Here's where the change comes in: it applies to the small percentage of cases where (1) an applicant reports income to the state marketplace that is substantially lower than the income level on the applicant's last tax return, and (2) no additional electronic sources of income data are available that can confirm the drop in income. In these cases, the state marketplace can request additional information from the applicant or his or her employer as part of a more detailed verification process. The change is that, for 2014 only, the state marketplace can accept the income level reported by the applicant." (Center on Budget and Policy Priorities)


DATAIR! More Choices Better Guidance Less Cost

Sponsored by DATAIR Employee Benefit Systems, Inc.

FSA, DCAP, Full-Flex, HRA, HSA, 132(f)
Documents, SPDs, Amendments, Administrative Forms
(888) 328-2474Sales@DATAIR.comwww.DATAIR.com

Failing to Recognize an Employee's Entitlement to FMLA Leave Can Be Costly Mistake
"[E]mployees are not required to cite specifically to the 'FMLA' as a reason for their absence; a bullhorn also is not necessary. The employee need only provide enough information to indicate that the leave of absence might be covered by the FMLA.... [W]hen there is any doubt as to whether FMLA applies, ask questions of your employees! ... Beware of employees who tell you they are in the emergency room for their own or a family member's medical issue.... Training your managers about their obligations under the FMLA is imperative." (FMLA Insights)

Expanding FMLA Coverage for Employees in Legally-Recognized Same-Sex Marriages
"As the FMLA regulations look to where an employee resides to determine benefits, this means that an employee who resides in a state that recognizes same sex marriage, such as Minnesota, but is employed in a state that does not recognize same sex marriage, such as Wisconsin, will be entitled to FMLA benefits related to a same-sex spouse. On the other hand, if the employee marries a same-sex partner in Minnesota, but resides in Wisconsin, regardless of whether the employee works in Wisconsin or Minnesota, as the state of residence does not legally recognize the out of state marriage, the employee is likely not entitled to FMLA benefits related to a same-sex spouse." (Vorys)

New York City Passes Law Requiring Paid Sick Leave for Employers of 20 or More
"Private sector employers with employees working in New York City are covered. Employers with 20 or more employees are required to provide paid sick time, although this threshold could drop to 15 employees; other covered employers are required to provide unpaid sick time.... An employer with a paid leave policy -- such as PTO, vacation, or personal days -- that provides an employee with enough paid leave to meet the accrual requirements, and that allows such paid leave to be used 'for the same purposes and under the same conditions as paid sick leave,' is not required to provide additional paid sick time." (Ballard Spahr)

Eleven U.S. Representatives Request Speedy Explanation of Delay of Employer Mandate from President Obama (PDF)
"Your decision to delay one part of the law affecting employers and leave in place provisions regulating individual and family health care creates many new questions and concerns.... [P]lease provide to Congress any analysis conducted by the agencies regarding the impact of the delay in the employer mandate ... Please also provide to Congress your justification for only delaying the enforcement of the employer mandate at this time and not the new mandate on individuals and families.... Because the unilateral changes to this complicated law were surely made with a great deal of data, review and input, we believe it is reasonable to request answers to these questions by July 16, 2013." (Committee on Education & the Workforce, U.S. House of Representatives)

Smokers Catching a Break? Health Law Glitch May Limit New Tobacco-Use Penalties by Insurers
"The Obama administration -- in yet another health care overhaul delay -- has quietly notified insurers that a computer system glitch will limit penalties that the law says the companies may charge smokers. A fix will take at least a year to put in place. Older smokers are more likely to benefit from the glitch, experts say. But depending on how insurers respond to it, it's also possible that younger smokers could wind up facing higher penalties than they otherwise would have." (The Washington Post)

British Company Is Awarded Contract to Administer Health Rollout
"Racing to meet an October deadline, [the administration has] awarded a contract worth as much as $1.2 billion to a British company ... [Serco] has extensive experience as a government contractor with the Defense Department and intelligence agencies, and it also manages air traffic control towers in 11 states and reviews visa applications for the State Department. But it has little experience with [HHS] or the insurance marketplaces ... Serco will help the Obama administration and states determine who is eligible for insurance subsidies, in the form of tax credits, and who might qualify for Medicaid. Tasks include 'intake, routing, review and troubleshooting of applications,' according to the contract." (The New York Times; subscription may be required)

ACA Subsidies will Help Some Consumers with Deductibles and Co-Pays
"[ACA cost-sharing subsidies] can substantially reduce the deductibles, copayments, coinsurance and total out-of-pocket spending limits for people with incomes up to 250 percent of the federal poverty level ($58,875 for a family of four in 2013). Those reductions could be an important consideration for lower-income consumers when choosing their coverage.... Cost-sharing reductions will be applied automatically for consumers who qualify based on their income, but only if they buy a silver-level plan, considered the benchmark under the law." (Kaiser Health News)

Chris Jennings Hired by White House for Health Care Reform Push
"Known for his communications skills and an ability to work across the partisan divide, Jennings has more than 30 years of healthcare experience that includes eight years with the Clinton White House and 10 years as a Senate aide on Capitol Hill. For the past dozen years, he has headed his own healthcare lobbying and consulting firm for clients that include labor unions, AARP and nonprofit groups including the Clinton Global Initiative." (The Huffington Post)

1.7 Million Affected by Bankruptcies from Unpaid Medical Bills
"[U]npaid medical bills are the biggest cause of U.S. bankruptcies, affecting 1.7 million people this year. Three in five bankruptcies are due to medical bills ... Many of the 14 million newly insured patients expected in 2014 as part of the ACA could struggle, because health plans continue to raise premiums and deductibles." (American Medical News)

Will the ACA Drive Earlier Retirement?
"Will we see an exodus of 'older' employees looking to become cake decorators, shade tree mechanics, volunteers, or small business owners? As an employer, examine your talent acquisition and talent management strategy to determine what your strategy is to keep and/or attract the employees you need to achieve your organization's desired outcomes -- whether that is the older workers leaving or the new employees to replace them." (Kushner & Company)

How Important Is CMS's Recent Release of Hospital Inpatient and Outpatient Charges Data?
"Current patient responsibility under many benefit plans would also render these data somewhat irrelevant especially with respect to inpatient care.... [F]rom a purely financial standpoint, a hospital's gross inpatient charges should have very little impact on the decision-making process of a prospective patient because ... these numbers are meaningless to the patient's potential out-of-pocket spend.... While patients may be more likely to price shop when obtaining outpatient services as a result of increased cost-sharing obligations under many benefit plans, data shows that convenience and quality will still be a consistent driver in these situations[.]" (Drinker Biddle)

A Few Big Blue Plans Quietly Skipping Exchanges
"As the exchange participants become clearer, the threat of 'coverage deserts,' where the uninsured have no plan options, becomes more real. At first coverage deserts seemed to be an issue more likely in the western states, where geographically large counties might only have a few thousand residents. In Mississippi, almost half the counties -- and an estimated 60,000 uninsured -- will have no exchange policy available. That could be a problem anywhere a Blue plan skips the exchange." (HealthLeaders InterStudy)

Do Insurers Risk-Select Against Each Other? Evidence from Medicaid and Implications for Health Reform
"Increasingly in U.S. public insurance programs, the state finances and regulates competing, capitated private health plans but does not itself directly insure beneficiaries through a public fee-for-service (FFS) plan. [The authors] develop a simple model of risk-selection in such settings. Capitation incentivizes insurers to retain low-cost clients and thus improve their care relative to high-cost clients, who they prefer would switch to a competitor.... Implications for the ACA exchanges are discussed." (National Bureau of Economic Research)

Selecting and Strengthening Employee Assistance Programs (PDF)
"Comparison of the data by each year revealed an overall increase in the size of covered employee populations of +17% ... However, this result varied by type of EAP. The Health Plan EAP group experienced significant growth in covered employees (+58%). Organizations that offered both EAP and carve-out [Mental Health Managed Care] programs had an increase in covered employees of +11%. In contrast, Free-standing EAPs had almost no change over time[.]" (Employee Assistance Society of North America (EASNA))

ML Strategies Health Care Reform Update, July 8, 2013 (PDF)
Update on developments in federal and state health care reform legislation and regulations, including summaries of recent announcements and regulatory activity by HHS, CCIIO, IRS and CMS. (ML Strategies, LLC)

Operational Health Information Exchanges Show Substantial Growth, But Long-Term Funding Remains a Concern
"[Thirty] percent of hospitals and 10 percent of ambulatory practices now participate in one of the 119 operational health information exchange efforts across the United States, substantial growth from prior surveys.... 74 percent of health information exchange efforts report struggling to develop a sustainable business model.... [D]espite progress, there is a substantial risk that many current efforts to promote health information exchange will fail when public funds supporting these initiatives are depleted." (Health Affairs)


Delaying Obamacare's Employer Mandate Is Clearly Illegal
"The statute gives the Treasury secretary the authority to collect these penalties 'on an annual, monthly, or other periodic basis as the Secretary may prescribe.' It does not allow the secretary to waive the imposition of such penalties, except in one circumstance: Section 1332 authorizes the Treasury secretary to waive the employer mandate, but only as part of a state-specific waiver, and only if the state enacts a law that would provide equally comprehensive health insurance to as many residents, and only if that law would impose no additional cost to the federal government, and only if there is a 'meaningful level of public input' over the waiver and its approval, and even then not until 2017." (Cato Institute)


Delay in Employer Mandate Does Not Doom Obamacare
"The announcement doesn't mean that ObamaCare is going away, or that scores of employers will dump their employees into the exchanges next year. After all, most large employers already provide health insurance for their employees, and good benefit packages are still a way to attract and retain talent. The delay is, however, an acknowledgement on the part of the Obama administration that adding millions of people to the insured rolls is a huge undertaking with many moving parts, and not everything is going to be ready come Jan. 1, 2014." (HealthLeaders InterStudy)


A Hidden Consensus on Health Care: Employer-Based Coverage Thwarting Fundamental Reform
"The politicians' consensus is that health care reform shouldn't alter or disrupt the way the majority of Americans get their insurance today.... The policy consensus, though, is that the status quo is actually the problem, and that it deserves to be threatened, undermined and replaced as expeditiously as possible. Wonks of the left and right disagree on what that replacement should look like. But they're united in regarding employer-provided coverage as an unsustainable relic: a burden on businesses, a source of perverse incentives for the health care market and an obstacle to more efficient, affordable and universal coverage." (The New York Times; subscription may be required)


Obamacare Just Got Easier to Implement, Not Harder
"There were two noteworthy changes to Obamacare in the last seven days. The first is that the employer mandate, which tells businesses with more than 50 employees to provide affordable insurance or pay a per-employee penalty, won't be enforced until 2015. The second is that people applying for low-income subsidies in the exchanges will face fewer audits in 2014. Both changes make the same trade-off: They raise the law's first-year costs in order to reduce its first-year problems." (Ezra Klein in The Washington Post)


Countdown to the Health Insurance Marketplaces: Four Steps to Ensure Their Success
"[1] The marketplaces must disallow unreasonable prices from insurers. [2] A unified national campaign should be launched to attract a broad pool of marketplace enrollees. [3] Consumers receiving advanced premium tax credits to purchase insurance should be protected from unanticipated tax liability for the first two years of operation, so that the marketplaces attract as many people as possible. [4] New non-profit consumer-run insurance plans (CO-OPs) sponsored by the ACA should have funding restored." (Barbara Markham Smith and Jack Meyer in Health Affairs)


Insurers Game Risk Against Each Other
"This study provides an important lesson for the insurance exchanges being established under the Affordable Care Act. Since a 'public option' was rejected, the exchanges will include only private plans competing with each other. What kind of behavior can we expect?" (Physicians for a National Health Program)


Latest Handout to Big Insurers Hurts Medicare
"Medicare's costs will jump by $7.43 billion next year because of an unprecedented decision by the federal government to change payment rates for private, for-profit Medicare Advantage plans. The government's action will result in a huge financial windfall for big health insurers, whose Washington lobbyists pushed hard for the new rates." (Physicians for a National Health Program)

Benefits in General; Executive Compensation

[Official Guidance]

Semiannual FSLG Newsletter from the IRS Office of Federal, State and Local Governments, July 2013 (PDF)
Articles include: IRS Guidance on Sick Leave Plans; Severance Pay and FICA; Recorded Webinars for Government Employers; EHR Reporting; and Directory of FSLG Specialists. Excerpt: "This is the semiannual newsletter of the office of Federal, State and Local Governments (FSLG) of the Internal Revenue Service. Our mission is to ensure compliance by Federal, state, and local governmental entities with Federal employment and other tax laws through educational and compliance review activities." (Internal Revenue Service)

[Guidance Overview]

New Compliance Check Program Announced for 457(b) Non-Governmental Plans (PDF)
"It is unclear how the VCP program will be applied, since non-governmental 457(b) plans generally cannot be corrected under the [EPCRS] ... However, the Revenue Procedure states that the IRS may consider submissions by tax-exempt entities -- to correct unfunded section 457(b) deferred compensation plans that were erroneously set up to benefit rank and file employees -- if the plan has been operated in a manner similar to a qualified plan. It is unknown how the IRS will react when they encounter 457(b) plan errors by tax-exempt entities that do not fall within this narrow area of consideration." (Buck Consultants)

Text and Status of Recently-Introduced Regulatory Accountability Act of 2013 (H.R. 2122)
Summary from the Library of Congress: "Amends the Administrative Procedure Act to revise and expand the requirements for federal agency rulemaking by requiring agencies, in making a rule, to base all preliminary and final factual determinations on evidence and to consider the legal authority under which the rule may be proposed, the specific nature and significance of the problem the agency may address with the rule, any reasonable alternatives for the rule, and the potential costs and benefits associated with such alternatives. Requires agencies to publish advance notice of proposed rulemaking for major rules and for high-impact rules ... and for rules that involve a novel legal or policy issue arising out of statutory mandates, which shall include a written statement identifying the nature and significance of the problem the agency may address with a rule, the legal authority under which the rule may be proposed, the nature of and potential reasons to adopt a novel legal or policy position, and a solicitation for written data, views, or arguments from interested persons. Sets forth criteria for issuing major guidance ... or guidance that involves a novel legal or policy issue arising out of statutory mandates. Expands the scope of judicial review of agency rulemaking by allowing immediate review of rulemaking not in compliance with notice requirements and establishing a substantial evidence standard for affirming agency rulemaking decisions." (U.S. House of Representatives)

DOMA's Demise in Supreme Court's Windsor Decision Affects Employee Benefits
"In analyzing these issues, employers should take into account the extent to which their plans have previously provided benefits to same-sex spouses, individuals in civil unions under state law or persons who qualify as domestic partners under the employer's policies. Employers will need to consider how plan changes will impact all of these groups." (Goodwin Procter LLP)

Impact of the DOMA Case on Employee Benefit Plans
"If a same-sex couple is legally married and lives in a state that recognizes the marriage, but one or both of the spouses works in a state that does not, how do the federal employment laws apply? Our current advice is that individuals are considered married or not, and the State of residence would control. Therefore, federal employment laws would recognize the marriage regardless of where the spouses work." (Blank Rome LLP)

2013 Canadian Say on Pay Results (PDF)
"Say on Pay ('SoP') is still voluntary in Canada and the uptake continues with 127 companies having SoP votes in 2013, up from 104 last year. Among the S&P/TSX 60 index companies, 82% have now adopted SoP.... SoP votes have generally tracked last years' experience with high approval rates, but they are down slightly from prior years. Three companies failed to receive majority support ... Last year, only one company (QLT Inc.) failed to receive majority support." (Meridian Compensation Partners, LLC)


Comments by U.S. Chamber of Commerce in Support of H.R. 2122, the Regulatory Accountability Act of 2013 (PDF)
"Federal agencies very often fail to grasp the full impact that their new regulations -- added to prior rules and those of other agencies -- have on businesses, communities, and the economy as a whole.... As a result, rulemakings produce flawed, incoherent rules that become subject to lengthy court challenges, leaving regulated parties struggling to understand what exactly they have to do to comply with the law.... The legislation would put balance and accountability back into the federal rulemaking process, without undercutting vital public safety and health protections ... The Act would require federal agencies do a better job of explaining the rationale for new rules and being more open and transparent when they write those rules." (U.S. Chamber of Commerce's Health Care Solutions Council)

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