Health & Welfare Plans Newsletter

August 6, 2015

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Pension Administrator
Retirement Strategies, Inc.
in GA

Director, Fringe Benefits Office
Operating Engineers Local 3 Trust Funds
in CA

Tax Manager - Employee Benefits
Postlethwaite & Netterville
in LA

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Great-West Financial
in MA

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Webcasts and Conferences

ACA Reporting — What Happens When We Guess
RECORDED
(Dorsey ERISA)

Dodd-Frank Executive Compensation Update—Rounding the Final Turn?
August 13, 2015 WEBCAST
(Winston & Strawn)

Is Your Wellness Plan a Lawsuit Waiting to Happen?
August 26, 2015 WEBCAST
(Lorman Education Services)

Compensation Conundrums and Merger/Acquisition Perplexities
September 15, 2015 in MN
(ASPPA Benefits Council [ABC] of Greater Twin Cities)

2016 Retirement Income Summit
May 2, 2016 in IL
(InvestmentNews)

View All Webcasts and Conferences


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[Guidance Overview]

IRS Again Solicits Input on Cadillac Tax: Procedural and Payment Issues (PDF)
"To determine whether the tax applies, the employer will look to each covered employee and determine the total cost of coverage ... [then] notify each coverage provider of the proportionate amount of tax owed by that provider. Then, the provider will remit payment to the IRS (and will likely charge that cost back to the employer).... For insured coverage, the coverage provider is the insurer. For HSAs, the employer is the coverage provider. In all other instances, the coverage provider is the 'person who administers the coverage.' Does that mean the TPA [in a detailed example] owes the $157 to the IRS? Or should ABC, the plan sponsor, be liable?" (Lockton)  


[Advert.]

State and Local Government Benefits Association (SALGBA)

Sponsored by State and Local Government Benefits Association [SALGBA]

(SALGBA) is the premier organization providing educational and collaborative support for public sector employee benefits professionals, such as national and regional conferences, member directory, and more. For a complete list visit www.salgba.com.



[Guidance Overview]

Pittsburgh City Council Approves Amended Paid Sick Leave Bill
"Pittsburgh is the second Pennsylvania city to approve a paid sick leave measure this year.... Any employer that is situated or does business in Pittsburgh, and employs one or more persons in exchange for any form of compensation, will be required to provide paid sick leave.... [E]mployees will accrue one hour of paid sick time for every 35 hours worked (including overtime hours) in Pittsburgh, unless the employer provides for a faster accrual rate." (Littler)  

The Paradox of Unlimited Paid Leave
"Netflix's announcement makes the generous leave policies offered by Facebook, Google, Accenture and Johnson & Johnson -- which offer paid leave for up to four or five months -- pale in comparison. However, the longstanding question about unlimited time-off policies -- whether they're for vacation, health reasons or the birth or adoption of a child -- is that if you leave it to the discretion of employees as to how much time to take, won't they actually end up taking less time (or none at all) than if they were given a set amount?" (HRE Daily)  

Chicago Inspector General Advisory Concerning the City of Chicago Employee Wellness Program (PDF)
"[W]hile the City spent nearly $10.5 million in taxpayer resources from 2012 through 2014 to improve employee health and reduce healthcare costs through [the city's current employee wellness program], the City has not formally assessed the program's impact in either area and, at present, has no plans to do so.... OIG further suggests that the City clarify its expectations for the program by setting specific health status and healthcare savings targets as well as a timeline for achieving them. Once established, the City should monitor [the program's] performance on an ongoing basis to ensure that the program meets the City's wellness and cost-savings objectives." (City of Chicago Office of Inspector General [OIG])  

DOL and EEOC Explain How They Will Approach FMLA and Reasonable Accommodation Enforcement
"[Helen Applewhaite, the DOL's Branch Chief for FMLA, identified] several compliance problems that pop up regularly during DOL investigations: [1] Employers' inability to recognize the need for FMLA leave and then disciplining employees for an absence that should be covered by FMLA. [2] Failing to meet notice deadlines established by the FMLA. [3] Failing to properly administer medical certification, including requests for recertification more frequently than permitted." (FMLA Insights)  

Obama Drafts Executive Order on Paid Sick Leave for Federal Contractors
"President Obama has drafted an executive order to force any company that contracts with the federal government to issue paid leave to employees who are sick, are seeking medical attention or need to care for a sick relative. The draft order ... could affect hundreds of thousands of workers, because it would apply to federal contractors and their subcontractors.... The [DOL] was to approve the order and send it to the White House by Wednesday afternoon [August 5], according to internal communications[.]" (The New York Times; subscription may be required)  

Microsoft Boosts Paid Parental Leave for Mothers and Fathers
"Microsoft Corp. said it will offer 12 weeks of paid time off to all new parents, improving its policy as the issues of gender equity and family balance gain greater prominence in the technology industry. Combined with the previously available leave of eight weeks for maternity disability, that means new mothers can now take a total of 20 weeks of leave fully paid, the company said[.]" (Bloomberg)  

Pregnancy a Touchy Subject in Employee Health Assessments
"Are you pregnant?' ... and 'How old were you when you first became pregnant?' are both included in a health risk assessment offered to some clients of [one] wellness firm. Similar queries are posed in health risk assessments offered by other wellness programs, say consumer groups ... Many cite fears that wellness program information about pregnancy status will get back to employers -- although several laws and rules sharply limit what employers can glean ... and some could use it against employees." (Healthcare Payer News)  

Five Questions to Ask About Your Health Plan Before Summer Travel
"What is my health insurance company's phone number? ... Can my health plan help me with medical translation while I'm in another country? ... Does my health insurance plan cover my out-of-pocket medical costs while I'm in another country? ... Does my employer's health plan cover long-term hospitalization? ... Will your health insurance plan cover emergency family extraction?" (eHealth)  

Has Faster Healthcare Spending Growth Returned? (PDF)
"Following several years of slow growth in U.S. national health spending from 2008 to 2013, recent reports suggest such growth has returned to a more typical level of approximately 5.6 percent in 2014 ... Interpreting these new data is difficult, however, because 2014 was the first year of the [ACA's] coverage expansion, under which an estimated 10.6 million individuals gained coverage. In this paper we estimate how the underlying spending growth rate, absent the coverage expansion, compares to GDP growth." (Urban Institute)  

Anthem Joins Blue Cross' State Farm Deal to Sell Obamacare
"Anthem, which sells Blue Cross brand plans in more than a dozen states, will expand a partnership with the Blue Cross and Blue Shield Association that will put Blues branded health insurance policies into the hands of thousands of State Farm sales representatives.... It expands a deal announced last year that State Farm negotiated with five other Blue Cross plans owned by Health Care Service Corp. to offer individual health insurance policies." (Forbes)  

Drivers of 2016 Health Insurance Premium Changes (PDF)
8 pages. "Major drivers of 2016 premium changes include: the underlying growth in health care costs, the phase down of the transitional reinsurance program, and how assumptions regarding the composition of the 2016 risk pool differ from those assumed for 2015. Premiums in the small group market could also change due to the expansion of the small group market to include groups sized 51-100. Average premium rate changes may not represent the rate change experienced by a particular consumer." (American Academy of Actuaries)  

[Opinion]

Don't Repeal the Cadillac Tax on High Cost Health Plans
"One important beneficial effect of the tax is that anticipation of it has set in motion serious work by many employers to reduce the premiums enough to escape it.... The tax has also encouraged delivery systems to restructure to achieve efficiencies, as in the case of hospitals and their medical staffs joining forces to create accountable care organizations to serve the commercial population." (Health Affairs)  

Benefits in General; Executive Compensation

[Official Guidance]

Text of SEC Final Rule on CEO Pay Ratio Disclosure (PDF)
294 pages. "Registrants must comply with the final rule for the first fiscal year beginning on or after January 1, 2017.... [A]fter considering specific suggestions from commenters on alternatives that could help to mitigate compliance costs and practical difficulties associated with the proposed rule, we are adopting a number of revisions in the final rule.... [1] Non-U.S. Employee Exemptions and Additional Permitted Disclosure ... [2] Employees of Consolidated Subsidiaries ... [3] Employed on Any Date Within Three Months of the Last Completed Fiscal Year ... [4] Identifying the Median Employee Once Every Three Years ... [5] Initial Compliance Date ... [6] Transition Period for New Registrants ... [7] Additional Transition Periods." (U.S. Securities and Exchange Commission [SEC])  

[Guidance Overview]

SEC Fact Sheet on CEO Pay Ratio Disclosure Final Rule
"The rule addresses concerns about the costs of compliance by providing companies with flexibility in meeting the rule's requirements. For example, a company will be permitted to select its methodology for identifying its median employee and that employee's compensation, including through statistical sampling of its employee population or other reasonable methods. The rule also permits companies to make the median employee determination only once every three years and to choose a determination date within the last three months of a company's fiscal year. In addition, the rule allows companies to exclude non-U.S. employees from countries in which data privacy laws or regulations make companies unable to comply with the rule and provides a de minimis exemption for non-U.S. employees." (U.S. Securities and Exchange Commission [SEC])  

[Guidance Overview]

SEC Adopts Final Pay Ratio Rule: A Comprehensive Summary
"[T]he final rule requires disclosure of: [1] the median of the annual total compensation of all employees of the registrant (except the registrant's chief executive officer, which the rule refers to as the PEO) (A); [2] the annual total compensation of the registrant's PEO (B); and [3] the ratio of the amount in (B) to the amount in (A), presented as a ratio in which the amount in (A) equals one, or, alternatively, expressed narratively in terms of the multiple that the amount in (B) bears to the amount in (A).... [T]he final rule permits registrants to choose one of two options to express the ratio.' " (Dodd-Frank.com, a blog by Stinson Leonard Street)  

[Guidance Overview]

SEC Issues Final Rule on CEO Pay Ratio Disclosure
"[T]he rule will not require companies to report the pay ratio disclosure for any fiscal year beginning before January 1, 2017, which means, for most companies, reporting in the 2018 proxy statement.... The final rules [1] allow a company to select a date within the last three months of its last completed fiscal year on which to determine the employee population for purposes of identifying the median employee.... [2] only allow a company to exclude non-U.S. employees from the determination of its median employee in two circumstances ... [3] prohibit companies from full-time equivalent adjustments for part-time workers or annualizing adjustments for temporary and seasonal workers when calculating the required pay ratio." (Winston & Strawn LLP)  

[Guidance Overview]

How to Navigate the SEC's Proposed Mandate on Clawbacks
"As currently drafted, the Proposed Rules could require recovery of incentive-based compensation that an executive officer earned in his or her capacity as a non-executive officer.... A 'no-fault' clawback policy triggered only by accounting errors puts increased pressure on directors and officers who are responsible for reviewing company financials and the scope of any errors." (Latham & Watkins)  

Will a New SEC Rule Make the Pay Gap Between CEOs and Workers Any Smaller?
"Will the rule be effective in publicly shaming companies, as is the apparent intent? It could be, but public shaming has its limits. The U.S. has been requiring companies to reveal how much they pay their CEOs since the 1930s, and CEO pay continues to soar even with that transparency." (The Atlantic)  

CEO Pay Ratio Rule Rankles Many
"[The SEC] had found in two studies that pay ratios would not be significantly affected if a minority of employees were excluded. Even excluding 40% of employees would reduce the average pay ratio by only 11%, the SEC found. But the final rule allows companies to exclude only 5% of their overseas workers. Not only did that not satisfy companies, as such exclusion will scarcely reduce their burden and compliance costs at all, it also didn't satisfy the AFL-CIO, the trade union federation, which has been among the most vocal, high-profile supporters of increased CEO compensation disclosure." (CFO)  

Press Releases

Regina T. Jefferson Named to PBGC Advisory Committee
PBGC [Pension Benefit Guaranty Corporation]

CAPTRUST and MFP Strategies Merge
CAPTRUST Financial Advisors

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