Health & Welfare Plans Newsletter

January 28, 2015

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Employee Benefits Jobs

Retirement Plan Administrator
Great Lakes Pension Associates, Inc.
in MI

Plan Investment and Advisory Analyst
Christian Retirement Ministries
in CO

Benefits Associate
Ogletree Deakins
in OR

Specialist Bundled Services
Nationwide
in OH

Compliance/Documents Specialist
United Retirement Plan Consultants
in CO, NJ, WA

Compliance/Documents Assistant
United Retirement Plan Consultants
in WA

Retirement Plan Consultant
Strategies, LLC
in CO

Compliance Manager
General Board of Pension and Health Benefits
in IL

Retirement Plan Administrator
Goldleaf Partners
in MN

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Webcasts and Conferences

State Efforts to Expand Coverage: Illinois Secure Choice Savings Program Act
RECORDED
(ASPPA [American Society of Pension Professionals & Actuaries])

ERISA Fiduciary Investment Basics 2015
February 4, 2015 WEBCAST
(Practising Law Institute)

ERISA Fiduciary Investment Basics 2015
February 4, 2015 in NY
(Practising Law Institute)

Protecting Your Benefit and Retirement Plans from a DOL Audit
February 24, 2015 in TX
(Worldwide Employee Benefits Network [WEB] - Dallas Chapter)

A Road Map to Major Changes Coming to Multi-Employer Pension Plans
February 26, 2015 WEBCAST
(Polsinelli)

View All Webcasts and Conferences



CBO Now Says 10 Million Will Lose Employer Health Plans Under ACA
"Thanks to ObamaCare, the CBO now expects that 10 million workers will lose their employer-based coverage by 2021. This finding stands in sharp contrast to earlier CBO projections, which at one point suggested ObamaCare would increase the number of people getting coverage through work, at least in its early years. The budget office has, in fact, increased the number it says will lose workplace coverage every year since 2011." (Investor's Business Daily)  


[Advert.]

Health Care Management Conference -- April 13-15, 2015

Sponsored by International Foundation of Employee Benefit Plans [IFEBP]

Attend the Health Care Management Conference in Santa Monica, CA. Learn the latest news, legal requirements and strategies plans are taking to implement the Affordable Care Act through case studies and action-oriented sessions. Register Today!



Employer's Poorly Drafted FMLA Policy Allows Employee to Advance FMLA Claim (That Should Have Never Seen the Light of Day)
"[The employer (the Road Commission)] maintained an FMLA policy in which 'eligibility' to take FMLA leave was satisfied if [an employee] met the first two criteria [allowed by the FMLA statute] (12 months and 1,250 hours). The Road Commission's FMLA policy made absolutely no reference to the requirement that [an employee would be eligible only if he works at a location where the employer employs at least] 50 employees [who] work within 75 miles.... Because the Road Commission left out the third prong of what the court considered an 'unambiguous and unqualified' FMLA eligibility provision, a 'reasonable person in [Terry's] position could fairly have believed that he was protected by the FMLA.' " (FMLA Insights)  

Industry Group to Back Results-Focused Healthcare Payments
"A coalition of some of the nation's largest health care systems and insurers vowed on Wednesday to change the way hospitals and doctors are paid -- placing less emphasis on the sheer amount of care being delivered and more on improving quality and lowering costs.... The private coalition includes, among others, Partners HealthCare, the powerful Boston health system that oversees Brigham and Women's and Massachusetts General hospitals; Ascension, the nation's largest Catholic and nonprofit health system; Aetna, a national for-profit insurer; and Health Care Service Corporation, which operates five state Blue Cross plans." (The New York Times; subscription may be required)  

High Court Opinion Vacates Longstanding 6th Circuit Position on Retiree Healthcare Liabilities
"[According to the Court, in] Yard-Man, the 6th Circuit was imposing its own suppositions about the parties' intentions, when the evidence at hand was not sufficient to support those conclusions ... For example, the circuit inferred that the parties would not leave so important a matter as retiree benefits to future negotiations. That was an unacceptable assumption to make, because it was not backed by any showing that this was a common belief or practice in the industry. It was also a mistake because the circuit was allowing that assumption to outweigh contrary implications from the CBA's duration clause terminating the agreement generally." [M&G Polymers v. Tackett, No. 13-1010 (U.S. Jan. 26, 2015)] (Thompson SmartHR Manager)  

Supreme Court Says No Presumption That Retiree Medical Benefits Are Vested
"While this decision arises out of the private sector, it has application and force to public employers. The California Supreme Court in Retired Employees' Association of Orange County v. County of Orange has similarly held that retiree medical benefits contained in a collective bargaining agreement are to be interpreted according to ordinary contract principles." [M&G Polymers v. Tackett, No. 13-1010 (U.S. Jan. 26, 2015)] (Liebert Cassidy Whitmore)  


[Advert.]

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Supreme Court Rejects Presumption of Vesting of Retiree Welfare Benefits
"The Court held that although a court may look to known customs or usages in a particular industry to determine the meaning of a contract, the court may not rely on its own unsupported suppositions. Instead, the parties must prove those customs or usages with actual evidence." [M&G Polymers v. Tackett, No. 13-1010 (U.S. Jan. 26, 2015)] (Sidley Austin LLP)  

Supreme Court Rejects Yard-Man: Ordinary Contract Principles Apply When Interpreting Retiree Medical Promises
"The invalidation of Yard-Man will help employers, but the CBA's language as a whole and -- if the agreement is ambiguous -- appropriate evidence of the parties' intent remain key to resolving whether the employer has retained the right to amend, modify or terminate retiree medical benefits.... Durational language limiting retiree medical coverage to the term of the CBA can limit the employer's obligation to continue providing retiree medical benefits, unless the durational language is diluted by other language in the CBA that indicates retiree medical coverage continues beyond the contract term." [M&G Polymers v. Tackett, No. 13-1010 (U.S. Jan. 26, 2015)] (McGuireWoods LLP)  

Health Insurance Marketplace 2015 Open Enrollment Period: January Enrollment Report (PDF)
44 pages. "More than 7.1 million people have selected or been automatically reenrolled into 2015 Marketplace plans in the 37 states that are using the HealthCare.gov platform in 2015 as of January 16th ... Nearly 2.4 million people have selected or been automatically reenrolled into 2015 Marketplace plans in the 14 states (including DC) that are using their own Marketplace platforms in 2015, based on data through January 17th ... Among the plan selections in the 37 states that are using the HealthCare.gov platform in 2015, 87 percent qualify for premium tax credits and/or cost-sharing reductions, and 2.5 million are under the age of 35." (Assistant Secretary for Planning and Evaluation [ASPE], U.S. Department of Health and Human Services [HHS])  

Obamacare Costs: $50,000 for Every American Who Gets Health Insurance
"The best-case scenario described by the CBO would result in 'between 24 million and 27 million' fewer Americans being uninsured in 2025, compared to the year before the Affordable Care Act took effect. Pulling that off will cost Uncle Sam about $1.35 trillion -- or $50,000 per head." (Daily Mail)  

[Opinion]

It's Time for the Employer Mandate to Go
"[T]he real reason the White House and congressional Republicans both seem unhappy with the employer mandate but reluctant to fully dismantle it [is that to do so] would increase federal deficits by eliminating revenue raised from penalties and increasing the pool of Americans eligible for subsidies. But there are better, less distortionary ways to address these budget concerns while still promoting access to affordable health care -- if only Congress and the White House could just admit they're both on the same page." (San Antonio Express-News)  

Benefits in General; Executive Compensation

[Guidance Overview]

Annual Reporting Requirements for Incentive Stock Options and Employee Stock Purchase Plans
"For [1] any exercise of an incentive stock option (ISO) during 2014 or [2] transfer during 2014 of a share previously purchased pursuant to a tax-qualified employee stock purchase plan (ESPP) where the purchase price paid for the share was (a) less than 100% of the fair market value on the date of grant or (b) not fixed or determinable on the date of grant, the Internal Revenue Code requires companies to: furnish, by February 2, 2015, annual information statements to the participant who exercised the ISO or transferred the ESPP share; and file, by March 2, 2015 (for paper filers) or by March 31, 2015 (for electronic filers), an information return with the IRS[.]" (Orrick)  

Federal District Court in California Asked to Determine Retroactive Applicability of United States v. Windsor
"The IRS has stated its position. In Notice 2014-19, the IRS stated that retirement plans are not required to recognize same-sex spouses prior to June 26, 2013, the date of the Windsor decision. However, the IRS permits employers to amend their plans to reflect the outcome of Windsor prior to June 26. In other words, employers can provide retroactive benefits, but they are not required to do so. It seems unlikely that the California district court, and perhaps ultimately the Supreme Court, would take a position different from the IRS. Nonetheless, employers should keep a close eye on the outcome of the decision. If the court finds that Windsor should be applied retroactively to employee benefits, it is possible that many other suits may be filed, and those suits may not be limited to surviving spouse benefits." (Bass, Berry & Sims)  

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