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December 9, 2013          Get Retirement News  |  Advertise
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Employee Benefits Jobs

Retirement Plan Consultant
in CA

Pension Administrator
Pension Parameters Financial Services, Inc.
in NJ

Client Relationship Manager
Goldleaf Partners
in MN

Plan Analyst
Verisight, Inc.
in IL

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Webcasts and Conferences

The IRS and DOL Have Spoken: Same-Gender Partner Benefits in a Post-Windsor World
December 18, 2013 WEBCAST
(Thompson Interactive)

Ethics Case Studies One
December 18, 2013 WEBCAST
(McKay Hochman Co., Inc.)

Alternatives in DC Conference
February 11, 2014 in NY
(Pensions & Investments)

View All Webcasts and Conferences

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

Proposed Regs Would Modify Transitional Reinsurance Program and Other Health Care Reform Rules for 2015
"The proposed regulations contain a plethora of technical and actuarial details primarily affecting insurers (including criteria for 'routine' updates of the actuarial value calculator used to determine the value of health plans, including QHPs, in the individual and small-group markets) ... There is ample discussion of FF-SHOP coverage, including stand-alone dental plans; processes for premium calculation, payment, and collection; the eligibility determination process; and employer enrollment directly through an agent's or broker's website (previously available only in the individual market)." (Thomson Reuters / EBIA)  


DATAIR's FlexPlus System – Makes Administration Profitable

Sponsored by DATAIR Employee Benefit Systems, Inc.

Proposals, Testing, Claims Processing, Debit Cards and more!
Plus CafeDocs/SPDs and 5500s/SARs
(888) 328-2474   Sales@DATAIR.com   www.DATAIR.com

Sixth Circuit 502(a)(3) Windfall to Disability Claimant in Rochow v. Life Insurance Company of North America
"The problem with ignoring the crucial ERISA principle of making whole, not punishing, is that the plaintiff's [$3.8 million] windfall punishes all the other participants in employer-sponsored health care, disability and life insurance plans, whose premiums could skyrocket to cover this new threat to clawback 10+ years of corporate return on equity. Combine this with health care reform, and the Dudenhoeffer assault on employee stock ownership plans, and I have to ask whether employer-sponsored plans will become dinosaurs, and I need to starting thinking about my career security." (Porter Wright Morris & Arthur LLP)  

Sixth Circuit Finds ERISA Section 502(a)(3) Remedy for Wrongful Denial of Benefits May Include Disgorgement of Profits
"The debate going forward is whether the Supreme Court's Varity case allows this outcome. That case stands for the proposition that where a plaintiff has a remedy for benefits under 502(a)(1)(B), a remedy on the same claim cannot be had for breach of fiduciary duty under 502(a)(3), as 502(a)(3) is only supposed to apply if no other provision does. It is the catch-all. Here, the court says essentially these are two different claims so Varity does not apply. It also says that the disgorgement sum of $3.7 million dollar is the appropriate remedy given the size of the benefit denied (almost $1 million disability claim), the time elapsed, and the fact that the benefit owed was commingled with other insurance company monies." [Rochow v. Lina, No. 12-2074 (6th Cir. Dec. 6, 2013)] (Paul Secunda in Workplace Prof Blog)  

Sixth Circuit Upholds Disgorgement of $3.8 Million in Company Profits Earned on Plaintiff's Denied Disability Benefit
"[T]he district court did not abuse its discretion when it found that [the Life Insurance Company of North America (LINA)] held [former president Daniel] Rochow's wrongfully withheld money in its general account where it could be used for any business purpose, as opposed to a segregated investment account.... Second, the district court did not abuse its discretion by selecting [return on equity (ROE)] as the metric for calculating a reasonable approximation of LINA's profits. While there is a dearth of case law expressly applying the ROE metric to determine unjust enrichment, selecting ROE as a basis for calculating LINA's profits does not violate any clearly established principle of law or equity." [Rochow v. Lina, No. 12-2074 (6th Cir. Dec. 6, 2013)] (U.S. Court of Appeals for the Sixth Circuit)  

Where ERISA and the ACA Collide (PDF)
"A strategy of reducing employee hours could potentially expose employers to liability under [ERISA] section 510.... In the context of the ACA, claims may be made that an employer's workforce management efforts interfered with an employee's right to health coverage.... [T]he most obvious plaintiff would be an employee who averaged 30 hours or more a week previously and whose employer reduced his or her workload below 30 hours per week in response to the employer mandate. In such a situation, arguments could be made that the change was made with the intent to deny that individual a right to which he or she would have been entitled (i.e., health coverage)." (Epstein Becker Green via Law360)  


COBRA: A Little of Everything - December 16 webinar

Sponsored by Lorman and BenefitsLink

COBRA -- impact of the subsidy and of ACA dependent coverage, and what to do about Health FSAs and payroll deduction. Registration discount for BenefitsLink readers.

Valid Assignment Confers Beneficiary Status on Chiropractor
"The [federal district court in Illinois] ruled that one of the individual chiropractors had standing to assert claims under ERISA because the chiropractor's patients (i.e., plan participants) had assigned to him their rights to payment under their health plans and was thus an ERISA beneficiary. The court found that the chiropractor was not afforded ERISA notice and appeal rights to which a beneficiary is entitled following an adverse benefit determination, and thus granted the chiropractor summary judgment as to liability." [Pennsylvania Chiropractic Association v. Blue Cross Blue Shield Association, 2013 U.S. Dist. LEXIS 159331 (N.D. Ill. Nov. 7, 2013); 2013 U.S. Dist. LEXIS 159491 (N.D. Ill. Nov. 7, 2013)] (Proskauer's ERISA Practice Center)  

Reversing Course, Federal Health Officials Discouraging Paper Health Applications
"Federal health officials, after encouraging alternate sign-up methods amid the fumbled rollout of their online insurance website, began quietly urging counselors around the country this week to stop using paper applications to enroll people in health insurance because of concerns those applications would not be processed in time." (Associated Press)  

On Health Exchanges, Premiums May Be Low, but Other Costs Can Be High
"[As] consumers dig into the details, they are finding that the deductibles and other out-of-pocket costs are often much higher than what is typical in employer-sponsored health plans.... For policies offered in the federal exchange, as in many states, the annual deductible often tops $5,000 for an individual and $10,000 for a couple.... By contrast, according to the Kaiser Family Foundation, the average deductible in employer-sponsored health plans is $1,135." (The New York Times; subscription may be required)  

Does Knowing Medical Prices Save Money?
"In an effort to raise awareness and rein in what can seem like the Wild West of health care, [CalPERS] ... and Anthem Blue Cross started a 'reference pricing' initiative in 2011. The initiative involved a system to guide their enrollees to choose facilities where routine hip and knee replacement procedures cost less than $30,000.... The results tallied savings of $2.8 million for CalPERS, and $300,000 in patients' cost sharing[.]" (Kaiser Health News)  

IRS Updates Same-Sex Marriage FAQs to Address Refunds of Overpaid Social Security and Medicare Taxes
"The IRS has updated its FAQs for married same-sex couples with three new questions and answers -- two of which are particularly relevant for employer plans. Both FAQs relate to the right to seek a refund of overpaid Social Security and Medicare taxes resulting from the change in tax treatment for health coverage provided to same-sex spouses under the Supreme Court's Windsor decision[.]" (Thomson Reuters / EBIA)  

HHS Delays Online Enrollment for FF-SHOP, Requiring Paper Applications for 2014
"[S]mall employers wishing to purchase coverage through the FF-SHOP for 2014 will have to file a paper application available through the HealthCare.gov website. Most employers are expected to work with an agent, broker, or insurer to complete and submit the application, but the announcement notes that employers can submit the application to the FF-SHOP without any outside assistance.... [T]his is not a delay of the FF-SHOP itself -- an important point for small employers contemplating use of the small business health care tax credit, since they have to purchase coverage through a SHOP to qualify for the credit." (Thomson Reuters / EBIA)  

How Regulation Makes Health Care Cost More
"The authors estimate an added potential savings of $810 million nationwide in 2014 if all states allowed [nurse-practitioners (NPs)] to practice independently. They refer to predictions of 5,000 retail clinics being in operation by 2015 and recommend that scope-of-practice laws permit NPs to operate to the fullest extent of their abilities to improve care and decrease costs." (John Goodman's Health Policy Blog)  

New Documents Reveal Administration Knew In August Small Business Exchange Would Not Be Ready
"[On] August 13, Mark Calem, Vice President of Consulting for CGI, emailed Henry Chao about a 'planned rollout schedule for SHOP: October 1 -- Initial webinars conducted; October 15 -- Online training materials available; November 1 -- Employer portal goes live; November 15 -- Employee portal goes live'. Chao immediately asked, 'Can we sign this with blood?' ... [T]he administration announced November 27, more than a week after this agreed to timeline, that the online functions would be delayed for an entire year." (House Committee on Energy and Commerce)  


Paul Krugman Is Wrong Again About Obamacare
"Yes, the growth rate of health care spending [in 2010] was well below the historical average. But it was just as much below it in 2009, the year before the act was passed! Health care spending growth in 2010 was exactly the same as it was in 2009. It remained exactly the same in 2011. And again in 2012. Looking only at the numbers, we would have to conclude that nothing that happened in 2010 had any impact whatsoever on health care spending. Nothing Congress did; nothing the president did; nothing that anyone did that year seems to have mattered." (John Goodman's Health Policy Blog)  


Got Obamacare? Only the Oracle Knows.
"The D.C. exchange has been crashing, sending error messages and creating multiple applications -- leaving senators and aides unsure whether they actually managed to get coverage. But unlike most Americans, they don't have to worry or wait. They can just ask the Oracle.... [T]he rest of America is not so lucky.... [O]ne in four Americans who think they signed up for Obamacare through HealthCare.gov may not actually have signed up at all.... [T]here is a growing possibility that there will be more uninsured Americans at the start of the new year than there were before the launch of Obamacare." (The Washington Post; subscription may be required)  

Benefits in General; Executive Compensation

[Official Guidance]

Text of IRS Notice 2013-80: Standard Mileage Rates for 2014 (PDF)
"The standard mileage rate for transportation or travel expenses is 56 cents per mile for all miles of business use (business standard mileage rate).... The standard mileage rate is 14 cents per mile for use of an automobile in rendering gratuitous services to a charitable organization under Section 170.... The standard mileage rate is 23.5 cents per mile for use of an automobile (1) for medical care described in Section 213, or (2) as part of a move for which the expenses are deductible under Section 217." (Internal Revenue Service)  

2013 Year End Benefit Plan Compliance Update and Reminders for Employers
"Employment practices that affect the administration of benefit plans should also be reviewed. Chief among these practices is the classification of workers as employees or independent contractors. In this regard, we note that both the IRS and DOL intend to focus on worker classification issues in the coming year. This enforcement activity could affect both welfare plans and retirement plans, so employers should put this issue at the top of their compliance work plans for 2014." (Verrill Dana LLP)  

Stock Plan and Award Litigation:Risk Management Checklist
"Be sure to fully document award grant dates, and to be sure the exercise price for stock options is not below-FMV on the date on which all approvals are received for the award.... When employees terminate employment or otherwise face expiration of their stock options, consider sending them a plan prospectus or other notice in order to avoid nuisance claims ... Although there is no fiduciary duty to structure awards in a manner that qualifies for a Code 162(m) exemption, the compensation committees of public companies should endeavor to do so when feasible." (Executive Pay and Loyalty)  


Towers Watson CEO Pay Ratio Comments Urge SEC to Provide Greater Flexibility and Year-to-Year Predictability
"We recommended that the SEC permit companies to use either a consistent definition of compensation or a consistently applied job level to determine the universe of employees where the median employee can be found. Once that universe is identified, the company would then be required, as under the proposed regulations, to identify the median employee within that universe, using statistical sampling if desired." (Towers Watson)  

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