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September 13, 2013          Get Retirement News  |  Advertise
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[Guidance Overview]

SBA Assures Business Owners: No Fine for Failure to Notify Employees About the New Health Insurance Marketplace
"[T]his week we're debunking another common [ACA] myth: Business owners will be fined if they don't provide notification to their employees about the new Health Insurance Marketplace. Fact: If your company is covered by the Fair Labor Standards Act, you must provide a written notice to your employees about the Health Insurance Marketplace by October 1, 2013. However, there is no fine or penalty under the law for failing to provide the notice." (U.S. Small Business Administration)  


Interaction of Health Care Reform with Other Laws: What Employers and Advisors Need to Know - 9/18 Webinar

Sponsored by Lorman and BenefitsLink

This live webinar is critical for employers, counsel and HR professionals to understand and deal with the effects of PPACA on employer obligations and systems. September 18. Registration discount for BenefitsLink readers.

[Guidance Overview]

IRS Clarifies Scope of Preventive Services for High Deductible Health Plans
"This guidance answers an open question under health care reform's preventive services rules, which include a set of preventive health services that are different than the items of preventive care included under the HSA rules. As a result, preventive health services required under the health care reform rules can be provided, without a deductible, by an HDHP." (Practical Law Company)  

September 12 Comments by DOL Officials May Mean Employers Should Rethink Skipping Health Exchange Notices
"[S]tatements made by ... EBSA officials ... raise concerns about reading the FAQ to mean that there is no consequence for an employer's failure to provide the Exchange Notice. These EBSA officials cautioned that employers should not interpret the statement in the FAQ [that] there is no penalty under ERISA for not providing the Exchange Notice as meaning that there will be no adverse consequence if an employer does not provide an 18B Exchange Notice to its employees. On the contrary, these EBSA officials caution that EBSA may view the Exchange Notice as a required disclosure about the plan, which could trigger audit or other enforcement activity." (Solutions Law Press)  

Selling Marketplace Plans to Medicare Beneficiaries Will Be Illegal
"After reassuring seniors that Medicare is not part of the new health insurance marketplaces, administration officials have a warning for anyone who may have other ideas: selling marketplace coverage to people who have Medicare is illegal.... Federal officials are eager to get the word out that seniors and disabled individuals enrolled in Medicare Part A ... do not need to buy a marketplace plan, because they are already meeting the insurance requirements. And no one needs to sell them one, either ... There can be serious consequences for anyone who violates the law: fines of up $25,000 or up to five years imprisonment or both." (Kaiser Health News)  

Ready for HITECH Changes on September 23, 2013?
Provides a compliance checklist for sponsors of health plans to use to measure their progress toward meeting the new requirements. Areas for consideration include: Business Associate Agreements; Policies and Procedures; Notice of Privacy Practices; and Retraining. (Perkins Coie LLP)  


Creating a Culture of Wellness & Health - October 9-10 - Chicago

Sponsored by World Congress

Shifting organizational norms and behaviors to embody a Culture of Health creates an exponential rise in employee health, engagement and performance. Focus on restructuring resources and charting next steps in transforming your workforce in an uncertain era.

Text of Federal District Court Award of $12M for Unum's Fiduciary Breach in Setting 1% Rate of Return on Group Life Retained Asset Accounts (PDF)
"[T]he risk profile of Unum's RAAs was somewhere between that of money market mutual funds, as very low-risk investments, and money market bank accounts, essentially no-risk savings products insured by the FDIC....Given that the RAA's risk profile fell between these two products, the Court concludes that an appropriate interest rate would be the average of the prevailing annual rate credited on money market mutual funds and the prevailing annual rate credited on money market bank accounts throughout the class period. To the extent this average rate exceeded the 1% credit rate offered by Unum during any given year, the difference would measure the damages to the Plaintiffs." [Merrimon et al v. Unum Life Insurance Company of America, No. 2:10-cv-00447-NT (D. Maine Sept. 11, 2013)] (U.S. District Court, District of Maine)  

SeaWorld Cutting Hours for Part-Time Workers
"SeaWorld Entertainment Inc. is reducing hours for thousands of part-time workers, a move that would allow the Orlando-based theme-park owner to avoid offering those employees medical insurance under the federal government's health-care overhaul.... The company operates 11 theme parks across the United States and has about 22,000 employees -- nearly 18,000 of whom are part-time or seasonal workers.... SeaWorld will schedule part-time workers for no more than 28 hours a week, down from a previous limit of 32 hours a week. The new cap is expected to go into effect by November." (Orlando Sentinel)  

It's Time to Talk to Employees About the ACA (PDF)
"[N]ow is the time for employers that offer group health coverage to start seriously communicating with employees about the [ACA] and the Marketplaces to help them understand what they might need to do, or avoid doing, to retain subsidized employer coverage.... Employers that have worked diligently over many years to build credibility with employees as a reliable source of benefits-related information can play a critical role in getting the facts straight." (Sibson Consulting)  

Healthcare Costs Increase for Mid-Sized Companies
"[A]cross the country, 72 percent of employers in mid-sized companies believe that the costs of healthcare have risen by up to 10 percent as a result of changes from the [ACA]. Specifically, healthcare providers in Virginia and North Carolina reported that they were bracing for higher medical costs stemming from the ACA, with upward of 72 percent and 80 percent in each respective area forecasting price increases." (ConnectYourCare)  

GAO Report: Work Activity Indicates Certain Social Security Disability Insurance Payments Were Potentially Improper
"GAO estimates that SSA made $1.29 billion in potential cash benefit overpayments to about 36,000 individuals as of January 2013.... Using a different methodology ... SSA estimated its DI overpayments in fiscal year 2011 were $1.62 billion, or 1.27 percent of all DI benefits in that fiscal year.... The first population received potential overpayments due to work activity during the DI program's mandatory 5-month waiting period ... Earnings that exceed program limits during the waiting period indicate that individuals might not have long-term disabilities. The second population received potential overpayments due to work activity beyond the program's trial work period[.]" (U.S. Government Accountability Office)  

Kentucky: Healthcare Reform's Epicenter?
"If health reform bends the cost and health curve, Kentucky could be the envy of neighboring states, most of which continue to oppose everything ACA. Years will pass before ACA impact can be quantified, but Kentucky seems uniquely suited to measure its progress." (HealthLeaders InterStudy)  

Detroit Considers Pushing Its Retirees Into Health Exchanges
"[An] attorney who represents associations of Detroit police, firefighters and other city employees, said ... that the emergency manager, Kevyn Orr, is considering offering a stipend of about $125 a month for retirees under age 65. Those over 65, who now get city-paid health insurance to supplement their Medicare coverage, would get only Medicare.... Converting younger retirees to a plan offering a $125 monthly stipend would reduce Detroit's annual retiree healthcare costs to less than $50 million from $170 million[.]" (Reuters)  

Workers Face Crucial Decisions During Open Enrollment, Yet Confusion About Benefits Options Continues (PDF)
"[S]even-out-of-ten (71 percent) American workers already admit they only sometimes or rarely understand the changes to their policies each year, yet 90 percent elect the same coverage every year. The wide-ranging changes anticipated by employers this open enrollment season, and 37 percent of workers believing it will be more difficult to understand everything in their policy this year, point to a greater potential this year for enrollment decisions that will leave workers struggling to cover financially." (Aflac)  

Welcome to the 72-Hour Work Week
"[A] recent survey of 483 executives, managers, and professionals [found] that 60% of those who carry smartphones for work are connected to their jobs 13.5 or more hours a day on weekdays and about five hours on weekends, for a total of about 72 hours. Assuming these people sleep about seven and a half hours a night, that leaves only three hours a day Monday-Friday for them to do everything else (e.g. chores, exercise, grocery shop, family time, shower, relax). It also means they spend 62% of their waking hours every week connected to work (82% on weekdays). That seems like a lot." (Harvard Business Review; free registration required)  


The Attack on Self-Funded Health Plans
"Today a record 61% of covered workers are in a self-insured plan ... Self-insurance used to be concentrated among national companies that could spread risk over large pools of employees. But self-insurance is now filtering down to businesses with 199 workers or fewer, as a hedge against ObamaCare's federal mandates and the danger that costs on its small-business exchanges will soar.... [The] Center for American Progress warns that 'the result of this shift could cause an insurance premium death spiral.' Note how businesses that pay for their workers' health care are suddenly a 'threat.' Wasn't coverage the point of ObamaCare?" (The Wall Street Journal; subscription may be required)  


It's the Third-Party Payers, Stupid
"Even with third-party payers, waste suddenly vanishes if they empower patients and get out of the way. It took all of two years for WellPoint's cost of joint replacements at out-of-network California hospitals to almost match the in-network cost after WellPoint made patients responsible for the extra payments. Think about that. WellPoint didn't have to negotiate a fee with anyone." (John Goodman's Health Policy Blog)  


Will Health Insurance in the World of Obamacare Be Affordable? It Depends
"Three big questions will remain unanswered for the next several months as we learn more about the economic decision-making of the newly insured under Obamacare. First, we are building it, but will they come? ... Second, how long will they stay and pay? ... Third, how sticky will the benefit be for this cohort next year? ... [T]his is largely a national experiment of first impression with plenty of variables to keep us guessing about how the 'affordability' story will unfold across the country." (The Brookings Institution)  

Benefits in General; Executive Compensation

[Guidance Overview]

How the Supreme Court's DOMA Decision Impacts Employee Benefit Plans
"[E]mployers will need to review their various employee benefits (including retirement, health, and fringe benefits) and payroll practices to comply with the new law, to treat same sex spouses as entitled to various spousal protections. A brief look at the key provisions for retirement, health and fringe benefits is set forth in the attached article, along with a review of the appropriate action steps employers (and plan administrators) might take as we await pending guidance from the regulatory agencies." [5-page article includes detailed list of specific effects.] (Groom Law Group)  

Accounting for Stock Compensation Under FASB ASC Topic 718 (PDF)
"[FASB ASC] Topic 718 creates a more 'level playing field' for equity incentive design that is expected to result in the increased prevalence of full-value and performance-vesting awards, and a corresponding decline in plain-vanilla, tax qualified, and reload stock options, and employee stock purchase plans. This paper summarizes the most pertinent provisions of accounting for stock compensation under Topic 718 and other related FASB and [SEC] Topics." (Frederic W. Cook & Co., Inc.)  

TRI-AD Newsletter, September 2013
Articles include: IRS Guidance on the DOMA Court Ruling and the Impact on Benefit Plans; Department of Labor Clarified DOMA Ruling's Impact on FMLA; HIPAA Omnibus Final Rule; Update on Summary of Benefits and Coverage (SBC) for 2014; and Final Regulations Published by IRS for Individual Health Insurance Mandate. (TRI-AD)  

Swedish Retirees Spend More Freely
"New research comparing tight-fisted Americans with more free-spending Swedes found that U.S. retirees tend to hold on to their savings, because they face more risk of having to pay high out-of-pocket costs in the future for their medical and long-term care. U.S. households, by the time they're in their late 80s, have tapped only about one-third of the net worth they held in their late 60s, according to the study. Swedish households in their late 80s have spent more than three-fourths." (Center for Retirement Research at Boston College)  

FASB Considers But Rejects Providing Additional Guidance Regarding the Effect of Clawback Provisions on Equity Compensation Awards (PDF)
"On September 4, 2013 the Financial Accounting Standards Board (FASB) considered whether it should add to its agenda a project to provide guidance on whether the presence of a discretionary clawback feature delays the grant date for equity compensation awards. The grant date is important because it is on that date that compensation cost is measured for equity compensation awards. The FASB decided not to undertake the project at this time because they felt sufficient guidance already exists under Accounting Standards Codification (ASC) Topic 718, which is the accounting standard for equity compensation awards." (Frederic W. Cook & Co., Inc.)  

When Do Shareholders Care About CEO Pay?
"[Results of] two experiments simulating say-on-pay votes ... suggest that investors value shareholder return over CEO pay. As long as company performance was above average, shareholders supported CEO pay regardless of whether it was high or low. However, when the company underperformed relative to the market, then shareholders considered CEO pay, voting 'no' under circumstances when CEO pay was high and company performance was low. The findings suggest that when the probability of a 'no' vote is high (when the recommended CEO pay is high and the firm is underperforming), the board should either reconsider the recommended pay or take steps to mitigate a no vote by educating shareholders on the rationale behind the CEO's pay." (The Harvard Law School Forum on Corporate Governance and Financial Regulation)  

Press Releases

Blue Cross To Offer Marketplace Plans In Every Louisiana Parish
Blue Cross and Blue Shield of Louisiana

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