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September 19, 2013          Get Retirement News  |  Advertise
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DC Administrator
Summit Benefit & Actuarial Services

Operations Supervisor
Austin Capital Retirement Plan Services, LLC
in TX

Regulatory Consultant
The Standard
in OR

Client Relationship Manager
United Retirement Plan Consultants
in CO

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Webcasts and Conferences

Health Care Reform for Employers: Now What?
December 3, 2013 in WA
(Lorman Education Services)

The Employee Plans Team Audit Program Phone Forum
October 16, 2013 WEBCAST
(Internal Revenue Service (IRS))

What Retirement Plan Professionals Should Know About the Health Care Reform Law
September 25, 2013 in TX
(American Society of Pension Professionals & Actuaries (ASPPA))

Account-Based Plans Under Health Care Reform: New Guidance on Individual Policies, Integrated HRAs, and More
October 24, 2013 WEBCAST
(Thomson Reuters / EBIA)

Latest Developments Regarding 409A
November 4, 2013 WEBCAST
(Winston & Strawn)

View All Webcasts and Conferences

  LinkedIn   Twitter   Facebook Hand-picked links to the web's best news articles,
official guidance, jobs, webcasts and more.
[Official Guidance]

Text of Sixth Circuit Opinion Denying Corporation's RFRA Challenge to ACA Contraceptive Mandate (PDF)
"The decision to comply with the mandate falls on Autocam, not the Kennedys. For this reason, the Kennedys cannot bring claims in their individual capacities under RFRA, nor can Autocam assert the Kennedys' claims on their behalf.... We find strong indications that Congress did not intend to include corporations primarily organized for secular, profit-seeking purposes as 'persons' under RFRA... For these reasons, we affirm the district court's denial of Autocam's motion for a preliminary injunction and remand the case with instructions to dismiss the Kennedys' RFRA claims due to a lack of jurisdiction." [Autocam Corporation, Kennedy et al. v. Sebelius, No. 12-2673 (6th Cir. Sept. 17, 2013)] (U.S. Court of Appeals for the Sixth Circuit)  


The new "Go-to Annual Event" | Registration now open!

Sponsored by HRE's Health & Benefits Leadership Conference

Make a difference in your organization and the lives of your employees. From healthcare reform to the changing definition of retirement, this event delivers meaningful solutions to many of today's plaguing issues. Learn more.

[Guidance Overview]

What Do Employers Need to Know About the ACA Marketplace Notices?
"Which Employers are Subject to the Notice Requirement? ... To Whom Must Employers Send the Marketplace Notice? ... When Must Employers Send the Marketplace Notice? ... How Must the Notice be Delivered to Employees? ... What Must the Marketplace Notice Say? ... Are Employers Required to Use the DOL Model Notices? ... What About Multiemployer Plans? ... Can an Employer be Fined for Failing to Provide Employees with the Marketplace Notice?" (Littler)  

[Guidance Overview]

Pre-Tax Individual Medical Coverage Dealt a Significant Blow
"The choice for employers is now between two stark differences: [1] Provide group medical coverage to employees on a tax-free basis. Employees can pay their share of the coverage costs on a pre-tax basis. Assuming the medical coverage meets minimum value and is affordable, the employer penalty will not apply. [2] Provide no medical coverage to employees. Give employees extra taxable wages to pay for their own individual policy coverage. Employer pays the employer penalty." (Kilpatrick Townsend)  

[Guidance Overview]

Guidance on Applying ACA Market Reforms to HRAs, Health FSAs, and Other Health Care Arrangements
"HRAs, employer payment plans and health FSAs ... that are used to purchase coverage on the individual market cannot be integrated with that individual coverage for purposes of complying with the annual dollar limit prohibition or the preventive services requirement. As a result, employers cannot use one of these types of plans to subsidize employees' purchase of coverage on an insurance exchange or in the individual market. The new guidance also confirms that in order for an HRA to be integrated with another group health plan, the employee receiving amounts under the integrated HRA must actually be enrolled in that other group health plan." (Sutherland)  

[Guidance Overview]

Measure Now to Avoid a Flag on 'Play or Pay'
"Employers are still under a tight time frame to build technology and administrative solutions to track hours for these employees. For employers planning to use a 12-month measurement and 12-month stability period for testing employee eligibility for 2015, systems will still need to be operational this fall. Moreover, this process will need to occur every year, so employers need to have a system in place that is accurate and efficient." (Human Resource Executive Online)  


ACI's 6th Annual ERISA Litigation Conference -- October 24-25 -- New York

Sponsored by ACI (American Conference Institute)

Advanced forum designed to bring together the nation's leading in-house experts and outside counsel for a two-day seminar geared towards developing winning litigation strategies and exploring new and emerging theories of liability from the plaintiffs' bar.

A Second Appellate Court Backs Obamacare Birth Control Mandate
"The 6th U.S. Circuit Court of Appeals on Tuesday sided with the Obama administration in the nationwide legal battle over the mandate to cover contraception services, marking the second time a federal appeals court rebuffed a company that argued the mandatory coverage of birth control violates its religious beliefs. A third court, seated in Denver, took an opposing view in July when it granted the Hobby Lobby crafts franchise an injunction that shields the Oklahoma City company from the rule tied to the [ACA] until the merits of their case can be heard. Taken together, the split rulings indicate that the matter is headed for the highest court in the land." (Washington Times)  

Not Quite Ready For Prime Time: The State Health Insurance Marketplaces and Google
"Marketplaces will enable shopping and enrollment mainly through their websites. States are using a variety of promotional strategies, but most people will likely find marketplaces in the same way they find other websites -- through common keyword searches on Google ... [P]reliminary findings show that marketplaces for four states -- Idaho, Maryland, New Mexico, and New York -- and Washington, DC did not appear on the first page of Google results, which generates 92% of all page views. In addition, both unpaid and paid search results for most of the remaining 12 states were frequently absent from page one." (The Health Care Blog)  

Cleveland Clinic to Cut $330 Million from Next Year's Budget, May Cut Jobs
"Cleveland Clinic Chief Executive Toby Cosgrove [announced] ... that the health system may have to eliminate jobs to meet a target of cutting $330 million from its 2014 budget. The Clinic will first offer early voluntary retirement to about 3,000 employees, who will be notified in October. It's not clear if any further cuts in staff could be avoided if all these employees choose to retire, however.... 'Healthcare reform has really changed things, and the burden of cost is going to be falling on patients,' [said a hospital spokeswoman]. 'We want to make sure we can keep care affordable.'" (Cleveland Plain Dealer)  

When to Kick Adult Children Off Your Health Plan
"[W]hile many families will find it worthwhile to keep kids on the parents' health plan, that won't always be the case. Here are some of the issues: ... Plan Status: Is the parents' plan exempt from ACA rules? ... Does the young adult live in a different state? ... How old are the parents and young adult child? ... What does the employer pay toward dependent coverage? ... How much does the young adult earn and are they claimed as a dependent? ... How much does the child want parents to know?" (MarketWatch)  

Almost All Large Employers Planning to Provide ACA Exchange Notices
"94 percent of respondents were planning to provide an Exchange notice to employees by October 1st. Only 6 percent said that they would not meet the deadline or were undecided, and most of those companies planned to provide the notice later in 2013.... 92 percent of the companies planned to use the model notice created by the [DOL] ... Thirty-six percent of companies were planning to make few changes to the notice, while 56% were planning to omit the 'optional' information." (The ERISA Industry Committee [ERIC])  

A Better Way to Encourage Price Shopping for Health Care
"[Why are] consumers, in increasingly popular high-deductible health plans, leaving money on the table? ... First, despite the proliferation of state-level price transparency initiatives, health care prices may still be opaque to consumers.... Second, consumers may use price as a signal of quality of care, since information on quality is notoriously hard to find; even the new private-sector initiatives provide scant information on quality. The notion that higher prices indicate better quality may discourage consumers from bargain hunting. And third, patients may be reluctant to question the advice of their doctors on where to get a particular service." (Harvard Business Review; free registration required)  

U.S. Government Scales Back Obamacare Impact for 2014
"[HHS] now expects 11 million uninsured Americans to obtain coverage next year, down from about 22 million projected a year ago ... It said healthcare spending would rise 6.1 percent in 2014, partly due to the implementation of Obamacare, compared with a previous projection of an increase of 7.4 percent.... Over the longer term, the report said healthcare spending growth would accelerate to 6.5 percent by 2022, when the industry would hit the $5 trillion mark and represent 19.9 percent of gross domestic product. Obamacare's contribution to spending is expected to diminish after 2015 as retiring baby boomers shift the momentum toward the Medicare program for the elderly and disabled." (Reuters)  

Federal Spending on the Government's Major Health Care Programs Is Projected to Rise Substantially Relative to GDP
"Under CBO's extended baseline ... net federal spending for those programs (that is, spending net of offsetting receipts for Medicare) would grow from an estimated 4.6 percent of GDP in fiscal year 2013 to 8.0 percent in 2038; in that year, 4.9 percent of GDP would be devoted to net spending on Medicare and 3.2 percent would be spent on Medicaid, CHIP, and the exchange subsidies. Beyond 2038, CBO projects, federal health care spending would continue to climb relative to GDP but at a slower rate than has been sustained historically." (Congressional Budget Office)  

Companies Are Satisfied with Group Long-Term Disability Plans But Gaps in Coverage May Leave Executives Underinsured
"More than eight in ten employers offer group long-term disability insurance to employees, and while 83 percent of those employers feel the amount of base coverage is adequate, gaps still exist in the coverage for executives. Despite this exposure, only 15 percent of companies plan to change their Group LTD programs in the future." (MassMutual)  


Obamacare Ads Are Starting to Get Weird and Kind of Creepy
"Obamacare's marketplaces open for enrollment less than two weeks from now, and that means we're now seeing a wave of advertisements, aiming to convince people either to buy health coverage -- or stay away from it completely.... As we've hit the final stretch before the health law launch, however, things have taken a turn for the decidedly weird. Here's [a sample] of Obamacare ads over the past few weeks." (Sarah Kliff in The Washington Post; subscription may be required)  


ACA May Hit Snags After Its October 1 Launch
"There will be glitches when the major provisions of the Affordable Care Act are implemented starting Oct. 1. Huge glitches. Many glitches. Bet on it.... Even those quite excited about President Barack Obama's federal health law have the same expectation: The rollout of the biggest new social program in nearly 50 years is not going to be pretty." (Pew Center on the States)  


Benefit Shock? Consumers Will Be Surprised By What They Find on the New 'Obamacare' Health Insurance Exchanges
"[Covered California data shows] the net of subsidy cost a single person would pay at the various income points for the second lowest cost Silver plan, as well as the deductibles and co-pays they can expect to see from the standard Silver plan.... A single person making $22,980 per year would face a premium, net of subsidies, of $121 per month.... [T]hat same person would also face a $500 deductible and up to $2,250 in out-of-pocket costs for things like co-pays. If the individual were sick, that looks like a pretty good deal. If they were healthy, would they spend what is perhaps 10% of their monthly take home income for a plan with an upfront $500 deductible?" (Health Care Policy and Marketplace Review)  


U.S. Employers Will Stop Offering Health Insurance in Five Years
"At least, that's if you believe health tech entrepreneurs and their advisers. Currently, 54.9% of Americans get their health care from an employer-sponsored insurance plan. That number has been steadily falling in recent decades as health-care costs have increased, leading fewer companies to offer coverage. But the idea that employers might get out of the business altogether in five years thanks to the new US health-care law is a dramatic change." (Quartz)  

Benefits in General; Executive Compensation

[Official Guidance]

Text of SEC Proposed Rule: Pay Rate Disclosure (PDF)
162 pages. Excerpt from SEC summary: "The proposed rules ... are designed to comply with the statutory mandate and to address commenters' concerns regarding the potential costs of complying with the disclosure requirement.... [We] are proposing alternatives that we believe will reduce costs and burdens, while preserving what we believe to be the potential benefits, as articulated by commenters, of the disclosure requirement mandated by the Dodd-Frank Act. We note, however, that neither the statute nor the related legislative history directly states the objectives or intended benefits of the provision.... We have considered the statutory mandate of Section 953(b) in the context of other executive compensation disclosure under Item 402, and, where practicable, we have sought to make the mandated disclosure of Section 953(b) work with the existing executive compensation disclosure regime. In light of the significant potential costs articulated by commenters, we believe that it is appropriate for the proposed rules to allow registrants flexibility in developing the disclosure required by the statute." (U.S. Securities and Exchange Commission)  

[Official Guidance]

SEC Fact Sheet on Proposed CEO Pay Disclosure Rules
"As required by the Dodd-Frank Act, the proposal would amend existing executive compensation disclosure rules to require companies to disclose: [1] The median of the annual total compensation of all its employees except the CEO. [2] The annual total compensation of its CEO. [3] The ratio of the two amounts.... The proposed rule would not specify any required calculation methodologies for identifying the median employee in terms of total compensation for all employees. Instead, it would allow companies to select a methodology that is appropriate to the size and structure of their own businesses and the way they compensate employees.... The proposal will be subject to a 60-day public comment period once it is published in the Federal Register." (U.S. Securities and Exchange Commission)  

[Guidance Overview]

Pay Ratio Disclosures Made Simple
"The proposed pay ratio disclosure requirements specify that the ratio must be expressed as a ratio in which the median of the annual total compensation of all employees is equal to one, or, alternatively, expressed narratively in terms of the multiple that the [principal executive officer (PEO)] total compensation amount bears to the median of the annual total compensation amount. For example, if the median of the annual total compensation of all employees of a registrant is $45,790,39 and the annual total compensation of a registrant's PEO is $12,260,000,40 then the pay ratio disclosed would be '1 to 268'[.]" (Dodd-Frank.com, a blog by Leonard, Street and Deinard)  

[Guidance Overview]

SEC Approves Proposed Rule on CEO Pay Ratio Disclosure (PDF)
"It seems likely that the SEC will adopt a final rule sometime in the first quarter of 2014, making it unlikely that the CEO pay ratio disclosure will apply to the bulk of the 2014 proxy season." (Meridian Compensation Partners, LLC)  

[Guidance Overview]

CEO Pay Ratio Rules Provide Significant Flexibility for Companies
"Companies need not calculate the precise Summary Compensation Table total compensation ... number for every employee. Instead, employers would be able to use a definition of compensation of their choosing (such as W-2 wages) and a statistical sampling methodology that is appropriate for the company's size to identify the median employee for their company.... Once the median employee is determined, only then will a Summary Compensation Table calculation need to be done for that particular employee." (Towers Watson)  

[Guidance Overview]

DOL on Board with IRS Approach to Same-Sex Marriage (PDF)
"The guidance does not appear to impact DOL regulations governing the federal Family and Medical Leave Act (FMLA). Whether the DOL's Wage and Hour Division, which enforces the FMLA, acts to change existing FMLA regulations and adopt a 'state of celebration' rule remains to be seen." (Buck Consultants)  

Second Circuit Finds Catalyst Theory May Support Attorneys' Fee Award under ERISA
"The Scarangella decision addresses a question ... of what a party must achieve to demonstrate 'some degree of success on the merits.' In the Second Circuit, under Scarangella, a party can satisfy this standard even if it does not secure complete victory at trial or through dispositive motion practice. So long as its conduct results in judicial action that, in turn, serves as a 'catalyst' for one party to provide another with relief, ERISA attorneys' fees may potentially be recovered." [Scarangella v. Group Health, Inc., No. 12-2750 (2d Cir. Sept. 10, 2013)] (Practical Law Company)  

The Challenges of an Aging Workforce
"With [more baby boomers] opting to stay in the workforce, organizations will be able to continue reaping the benefits of their skills and institutional knowledge. An aging workforce brings far more than experience, however. Along with it comes a new slate of challenges and prejudices that must be addressed if employers hope to realize the full benefit of an increasingly mature workforce. From managing brief, yet damaging indignities, dubbed microaggressions, to accommodating physical limitations to offering flexible work schedules and retraining initiatives, employers are taking steps to ensure their aging population is able to remain on the job." (Human Resource Executive Online)  

State Income Taxes and Married Same-Sex Couples
"[S]ame-sex couples married in a jurisdiction that permits such marriages will be treated as married for federal tax purposes, even if they live in a jurisdiction that does not recognize such marriages. But what about such couples' recognition as married for purposes of state income taxes? ... [E]mployers which are in many instances expanding spousal coverage for same-sex partners under employee benefit plans will need to know the characterization of such coverage for purposes of state taxes. Many would no doubt assume that whether a state will treat couples as married for tax purposes depends on whether it would recognize their marriages generally. However, that may not necessarily be the case." (Calhoun Law Group)  

DOL Announces a 'Place of Celebration' Rule for Employee Benefit Plans
"Although the Release does not provide detailed guidance for employee benefit plans (e.g., with regard to COBRA or HIPAA), the DOL notes that it intends to issue further guidance addressing specific provisions of ERISA and its regulations. In addition, the Secretary of Labor stated in the related press release that he has 'directed the department's agency heads to ensure that they are implementing the decision in a way that provides maximum protection for workers and their families.'" (Proskauer's ERISA Practice Center)  

SEC Proposes Rule to Disclose CEO-to-Worker Pay Ratios
"'This pay data is important to investors because it shines a light on the company pay ladder for all employees, not just the pay of top executives that is already disclosed under current rules,' AFL-CIO President Richard Trumka said ... 'The statistic has so much 'noise' that it's rendered meaningless, failing to take into account key differences between strategy, sectors and geographies, among other factors, all of which impact a company's pay ratio,' [said Irv Becker, national practice leader for the U.S. executive compensation practice at Hay Group]." (Society for Human Resource Management)  

SEC Releases Pay Ratio Disclosure Proposal
"According to the release, all employees means all employees. The release clarifies that all employees employed as of the fiscal year end must be considered when identifying the median annual total compensation, including full-time, part-time, seasonal and/or temporary workers employed by the company or any of its subsidiaries within the U.S. and abroad." (Steven Hall & Partners)  

SEC Issues Proposed Rules on CEO Pay Ratio Disclosure
"To its credit, the SEC recognized that calculating the median of the annual total compensation of all employees of the issuer using the Summary Compensation Table for every employee ... would be literally impossible for most corporations.... [T]he SEC's elegant solution to this problem (at least in the proposed rules) is to allow corporations to use a reasonable method, e.g., W-2 reported wages, of determining WHICH employee(s) represent the median of the annual total compensation of all employees, and require the corporation to use the Summary Compensation Table method for calculating that employees total compensation for comparison against the CEO." (Winston & Strawn LLP)  

U.S. Chamber Calls on SEC to Ensure Pay-Ratio Proposal Provides Investors with Useful Information
"Pay ratios will not give any insight on the performance of a company or its management and fail to give investors decision-useful information or assist with capital formation. This proposal has the potential to drive up compliance burdens and costs for public companies with no benefit to investors -- a formula that continues to make it less attractive to be a public company in the United States." (U.S. Chamber of Commerce)  

Press Releases

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