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New on the Supreme Court Docket: ERISA and 'Damages' in Equity

"[On April 22] the Supreme Court called for the views of the Solicitor General on Putnam Investments, LLC v. Brotherston, a case about the burden of proving causation for losses in ERISA suits. There is a 6-4 circuit split about whether the ERISA plaintiff or the fiduciary defendant has the burden of persuasion regarding whether the fiduciary defendant's breach caused the loss.... [T]here are at least three reasons to think the fiduciary defendant has this burden."

Major Blow to ACA Individual Mandate: IRS Won't Reject Tax Returns That Don't Answer Health Insurance Question

"Earlier this month, the IRS quietly altered its rules to allow the submission of 1040s with nothing on line 61. The IRS says it still maintains the option to follow up with those who elect not to indicate their coverage status, although it's not clear what circumstances might trigger a follow up. But what would have been a mandatory disclosure will instead be voluntary. Silent returns will no longer be automatically rejected. The change is a direct result of the executive order President Donald Trump issued in January directing the government to provide relief from Obamacare to individuals and insurers, within the boundaries of the law."

GOP's New Health Care Plan Shows That Republicans Have Become Trapped by Obamacare

"Although the plan starts by repealing the health care law in its entirety, it ends up replacing many of its central components with similar provisions: preexisting coverage rules, subsidies for the purchase of insurance, and even an (implicit) mandate.... The proposal might help weaken the link between health insurance and employment. But what this plan ... demonstrates most is an inability to move substantially beyond the framework established by the [ACA]."

Arizona Voters Approve Public Employee Pension Reforms

"New hires will be able to choose between defined contribution plan (like a 401(k)-style savings plan) or a hybrid defined benefit plan rather than the traditional pension system. New hires will have the salary cap for pension calculations reduced from $265,000 to 110,000 per year, seriously limiting incentives for finding ways to 'spike' pensions with bonuses or unused vacation time to jack up what retiring employees will be receiving. The eligibility age for new hires will be increased from 52.5 to 55.... The Reason Foundation calculates savings of $1.5 billion over 30 years and a reduction of retirement costs for new employees by 20 to 43 percent."

Public vs. Private Employees on the Pension Crisis: Nobody Wants Responsibility

[Yesterday's newsletter contained a link to the press release; here is a lengthier article.] "[P]rivate sector workers -- who largely fund government workers' defined benefit pensions -- strongly favor shifting current employees to 401k style accounts by a margin of 65 to 31 percent. However, public employees oppose 52 to 46 percent. Nevertheless, a slim majority of government workers would favor such a reform if it only applied to future government workers, and not themselves (54 percent favor to 43 percent oppose).... [G]overnment workers remain opposed to 401k-style accounts even if that means taxes would have to be raised on everyone else or government would have to cut services."

The Golden State's Pension Reforms Get Spiked

"CalPERS did not provide a cost estimate for how much employers' pension costs might rise due to the inclusion of the 99 special pay categories to newer employees' pensionable income, but the costs of special pay items do add up. As the San Diego County Taxpayers Association noted in a 2013 study, if a 60-year-old pads his or her salary with $7,850 in special benefits in the final year of employment and lives to be 80, the specialty benefits result in an extra $118,000 in pension benefits over the retiree's lifetime."

What's Going on With Employer-Sponsored Health Insurance?

"RAND's survey results don't match up to what almost anyone expected, but unlike the CBO, which is crunching outside data to make a projection, RAND is relying on their own measurements taken on the ground. If RAND is right, though, then Obamacare's effects will look quite different from what anyone assumed, and the exchanges will be much less of a factor than the law's designers planned."

How to Break an American City: Ignore Cost of Retiree Healthcare and Pensions

"The National League of Cities ... took a poll of its members in 2012 to determine the most popular methods for coping with personnel costs at a time of economic stagnation and declining tax revenue.... At the bottom [of the list:] Changing union contracts, cutting back health care benefits, and reforming pension funds. This despite the fact that seven out of 10 city finance directors said public-employee benefits were having significant negative impacts on their budgets ... Officials are unable or unwilling to confront the root causes of municipal decrepitude."

Obamacare Poster Boy Chad Henderson and His Dad Didn't Really Buy Insurance

"Reporters struggled ... to find individuals who said they had been able to enroll in one of the law's 36 federally run health-insurance exchanges. That changed ... when they found Henderson ... But details of Chad's story proved difficult to verify.... Chad Henderson's story was picked up by the national media because of how difficult it was to find individual stories of successful enrollment in the federal health exchanges during the initial days of enrollment. It appears that reporters may have to keep looking."

The Folly of Regulating Employer Wellness Policies

"Somewhat lost in the back and forth between business lobbyists and the Obama administration, though, is a bigger question: Why should the federal government be regulating these sorts of wellness policies at all? If businesses want to provide health and wellness incentives to employees, that should be something that employers and their employees negotiate between themselves, just like other benefits and wages. It is, ultimately, a compensation issue."