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Benefits in the News

Older News | April 23, 2014
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North Carolina Employee Union Takes Pension Complaints to SEC
WRAL.com More items by WRAL.com
4/23/2014

"The union representing tens of thousands of North Carolina state workers [has] filed a complaint with the [SEC] over how State Treasurer Janet Cowell is managing the $86 billion pension system.... One of the union's major objections is that Cowell has the authority to invest up to 35 percent of pension fund holdings into hedge funds, private-equity firms or other alternative investments ... State lawmakers last summer raised the maximum that could be directed to those investments. The pension fund's quarterly update in February reported about $19 billion in pension assets, about 21 percent, were in alternative investments."
Fast Food Failure: How CEO-to-Worker Pay Disparity Undermines the Industry and the Overall Economy
Demos More items by Demos
4/23/2014 [Opinion]

"Accommodation and Food Services had a CEO-to-worker pay ratio of 543-to-1 in 2012. Over the period from 2000 to 2012 the average ratio was 332-to-1, 44 percent higher than the sector with the next-highest compensation ratio. In 2012, the compensation of fast food CEOs was more than 1,200 times the earnings of the average fast food worker.... [T]he ratio remained above 1,000-to-1 in 2013.... Fast food workers are the lowest paid in the economy.... The most unequal sectors are among those providing the greatest numbers of new jobs in the economy, replacing jobs in sectors with lower income inequality."
You Can Get Help Unraveling Your Pension Benefits
Providence Journal More items by Providence Journal
4/23/2014

"Developing a financial plan for retirement can be a challenge. You will need to navigate the waters of federal and state regulations, Social Security income, investments and, as you have found out, the world of changing corporate pension policies. If your financial planner is to develop a retirement income strategy to meet your goals, your advisor will need pension information from your previous employers. You can start gathering that information by contacting the New England Pension Assistance Project[.]"
Competition, Not Higher Premiums, May Turn Out to Be the Biggest Threat to Obamacare Buyers
The Health Care Blog More items by The Health Care Blog
4/23/2014

"[T]he key to affordability next year in the Obamacare exchanges -- at least for those receiving subsidies-is whether the insurers try to undercut each other on price in the silver category. Such competition will lead to more choices and better prices -- but it will either require consumers to switch plans or pay higher premiums."
Small Plan 401(k) Fees: A Few Important Statistics
401kA Averages Book More items by 401kA Averages Book
4/23/2014

Infographic. [1] Plan cost breakdown. [2] Total plan cost trend. [3] Range of costs per participant. [4] Total plan costs as a percent of assets. [5] Average investment costs.
Private Health Insurance Exchanges: Tax and ERISA Issues (PDF)
Sutherland More items by Sutherland
4/23/2014

9 pages. Excerpt: "Private exchanges are largely unregulated as an entity, raising persistent concerns regarding the potential application of ERISA and tax rules for health plans.... [N]ew complexity surrounding the use of HRAs to fund employer-sponsored plans has caused private exchange sponsors to reevaluate the use of HRAs as a vehicle for funding employer premium subsidies. Although it appears that current HRA integration rules should apply to coverage offered on a private exchange, the guidance to date has not addressed the use of HRAs alongside private exchange coverage, and the path to full compliance remains unclear."
2015 Transitional Reinsurance Fee and Out-of-Pocket Limits
Towers Watson More items by Towers Watson
4/23/2014 [Guidance Overview]

"Self-insured health plans may use one of the following methods to determine the number of covered lives under their major medical coverage: [1] An actual count of the number of covered lives over the first three quarters of the year.... [2] A snapshot count, which totals the number of lives covered on representative dates in each of the first three quarters of the year.... [3] The snapshot factor method ... [where] the number of lives covered on a date is calculated by multiplying the number of employees with family coverage by 2.35 and then adding it to the number of employees with self-only coverage.... [4] The Form 5500 method, which obtains the number of lives covered from the most recently filed Form 5500."
Does Use of Non-GAAP Performance Metrics Mean Executives are Gaming the System?
Towers Watson More items by Towers Watson
4/23/2014

"[W]hile the Audit Analytics study found an increase in the prevalence of non-GAAP metrics in incentive plans over the past few years, this likely reflects the fact that companies are adopting plans that incorporate the key metrics being presented to investors in corporate financial statements.... A key to proper target setting is consistent application of the metric between when the target is set and when performance is evaluated. If certain aspects of the financial statement are being excluded from a non-GAAP incentive metric ... it shouldn't result in higher incentive awards as long as they are excluded consistently from both the initial budgeted level of performance and actual performance."
Sixth Circuit Decision Highlights Importance of Antitrust Considerations in Health Care Consolidation Planning
Vorys, Sater, Seymour and Pease LLP More items by Vorys, Sater, Seymour and Pease LLP
4/23/2014

"Finding that the merger would increase ProMedica's pricing and bargaining power in an already compressed market without creating any procompetitive efficiencies to offset these anticompetitive effects ... the administrative law judge ordered ProMedica to divest St. Luke's.... The Sixth Circuit [on April 22] concurred ... Coupled with the recent decision ... which ordered the complete divestiture of an Idaho hospital's acquisition of a large physician group following a similar challenge by the FTC, [this] decision reinforces the FTC's continuing focus on the health care industry and highlights the crucial importance of antitrust considerations and analysis in the evolving health care marketplace. " [ProMedica Health System, Inc. v. Federal Trade Commission, No. 12-3583 (6th Cir. Apr. 22, 2014)]
California Court Finds Fitness-for-Duty Exam after Employee Restored to Job is Permitted under FMLA
Jackson Lewis LLP More items by Jackson Lewis LLP
4/23/2014

"[The employee] argued that, once her physician certified her to return to work, the [employer] could not require her to undergo a fitness-for-duty evaluation because the evaluation would undermine her return-to-work certification. The Court rejected this argument.... [and] concluded, 'the FMLA should be interpreted to render the employee's health care provider's opinion conclusive on the issue of whether the employee should be immediately returned to work, but to permit the employer to thereafter require a [fitness-for-duty evaluation], if it has a basis to question the employee's health care provider's opinion.'" [White v. County of Los Angeles, No. B243471 (Cal. Ct. App. Apr. 15, 2014)]
New Mortality Table Recommended by Society of Actuaries
October Three Consulting More items by October Three Consulting
4/23/2014

"The most significant piece of [Exposure Draft RP-2014] is the new set of generational mortality tables. These tables reflect significant improvement in mortality relative to the rates in the current regulatory framework (RP-2000 plus Mortality Improvement Scale AA). To put that in English: the conclusion of the [Society of Actuaries] is that the current rules significantly understate how long DB plan participants will live because they do not reflect changes (improvements) in life expectancy that have happened since Scale AA was published."
Text of Amicus Brief by 38 Members of Congress Supporting Challenge to Administration's Enforcement of ACA (PDF)
Judicial Education Project and 38 Members of the United States Congress More items by Judicial Education Project and 38 Members of the United States Congress
4/23/2014

35 pages. Excerpt: "Instead of faithfully implementing and executing the ACA, the Executive Branch has claimed open-ended authority to suspend or modify that law. The result has been a wholesale rewrite of the ACA by executive fiat.... In its initial implementation of the ACA, the Executive Branch eviscerated the grandfathering protection by promulgating regulations eliminating grandfathered status whenever insurance plans make even the most minor adjustments over time (which all of them must inevitably do).... [By] fiat, the Executive has now suspended [the employer mandate and reporting requirements] by twice postponing their effective date. Even worse, the second of the suspension orders purports to modify substantive law as well as effective dates, and to create regulatory categories with no statutory basis whatsoever."
Visualizing Health Policy: A Snapshot of U.S. Global Health Funding
Kaiser Family Foundation More items by Kaiser Family Foundation
4/23/2014

"[This] infographic shows global health funding's share of the U.S. federal budget, the flattening of U.S. funds for global health during the 21st century, where U.S. dollars for global health are spent, the major areas receiving U.S. global health funding, and how the U.S. public overestimates the percentage of the federal budget that is spent on foreign aid."
Lifetime Income Scores: Latest Assessment of Retirement Preparedness (PDF)
Putnam Investments More items by Putnam Investments
4/23/2014

12 pages. Excerpt: "For the second year in a row, working Americans are on track to replace 61% of their household income in retirement.... Deferring 10% or more to a workplace savings plan and using a financial advisor continue to have a major impact on retirement preparedness. Plan eligibility, participation, and auto-plan features continue to be core elements of successful retirement planning for most American workers."
Will a Boom in Retirees Lead to a Bust in Equity Returns?
Vanguard More items by Vanguard
4/23/2014

"As baby boomers transition into retirement, many have speculated that a corresponding reversal of fortune could hit the stock market as retirees liquidate assets to support living expenses.... Five reasons the concern is overblown: [1] Boomers won't retire all at once ... [2] Boomers' share of stock market is similar to prior generations ... [3] Boomers' wealth is highly concentrated ... [4] Growth of foreign investors in U.S. stock market ... [5] No correlation between aging populations and long-term returns."
Some Things Are Worth Repeating: Beware of PTO Cash-Outs!
Focus on Public Benefits More items by Focus on Public Benefits
4/23/2014

"Most people ... have a hard time appreciating why an employee with hundreds of hours of unused PTO would be taxable on the value of PTO that they do not either take or cash out. But ... 'constructive receipt' can make a person taxable on income (cash) that the person could take, but chooses not to.... Employers with such policies have almost certainly under-reported income taxes and payroll taxes!"
Obamacare: Observations from the Marketplace
Bob Laszewski's Health Care Policy and Marketplace Review More items by Bob Laszewski's Health Care Policy and Marketplace Review
4/23/2014 [Opinion]

"About half of the enrollments are coming from people who were previously insured and half are not.... About 15% to 20% of new enrollees are not completing their first month's enrollment by not paying their premium... The back-end of HealthCare.gov, that reconciles enrollment between the feds and the health plans, is still not fully built and won't be for months to come.... There is a lot of dissatisfaction being communicated from consumers to insurance company call centers and their agents about the new health insurance plans, particularly compared to the plans people are used to.... What will the 2015 rate increases be? 9.9%... Will any health plans exit the Obamacare exchange markets in 2015? No."
Public Pension Plan Investment Return Assumptions (PDF)
National Association of State Retirement Administrators [NASRA] More items by National Association of State Retirement Administrators [NASRA]
4/23/2014

"Although public pension funds, like other investors, experienced sub-par returns in the wake of the 2008-09 decline in global equity values, median public pension fund returns over longer periods meet or exceed the assumed rates used by most plans....[At] 9.0 percent, the median annualized investment return for the 25-year period ended December 31, 2013, exceeds the average assumption of 7.72 percent ... while the 10-year return is below this level.... Among the 126 plans measured in the Public Fund Survey, more than one-half have reduced their investment return assumption since fiscal year 2008."
Target-Date Funds: What Retirement Savers Should Know
Michael Kitces in The Wall Street Journal; subscription may be required More items by Michael Kitces in The Wall Street Journal; subscription may be required
4/22/2014

"The irony of this distinction is not just that 'to' funds may require you to reassess your investments in retirement itself-as they're not really intended to take you through retirement at that point-but that 'to' funds may actually leave retirees better prepared for retirement, after all. The reason is that recent research is finding the traditional 'through' fund approach -- where exposure to stocks stays higher in earlier retirement and drifts downward over time -- may actually not be the optimal 'glide path' for equities."
Effects of Prescription Drug Insurance on Hospitalization and Mortality: Evidence from Medicare Part D
National Bureau of Economic Research [NBER]; purchase required More items by National Bureau of Economic Research [NBER]; purchase required
4/22/2014

"[O]btaining prescription drug insurance through Medicare Part D was associated with an 8% decrease in the number of hospital admissions, a 7% decrease in Medicare expenditures, and a 12% decrease in total resource use. Gaining prescription drug insurance through Medicare Part D was not significantly associated with mortality."
Attitudes Toward Mandated Coverage of Birth Control Medication and Other Health Benefits
JAMA More items by JAMA
4/22/2014

"Most respondents ... supported a policy of mandated coverage of birth control medication in health plans. This proportion was significantly lower than the proportion that supported other benefits ... In multivariable regression analysis, support for mandated coverage of birth control medication was significantly higher among women, non-Hispanic blacks, Hispanics, parents with children younger than 18 years living in the home, and adults with private or public insurance vs comparison groups ... but was not associated with education or income."
Statistics on Access to Employer-Sponsored Healthcare Benefits for Domestic Partners
U.S. Bureau of Labor Statistics More items by U.S. Bureau of Labor Statistics
4/22/2014

"In March 2013, among all civilian workers, 72 percent had access to employer-sponsored healthcare benefits, and virtually all of those workers could extend those benefits to their spouses; this compares with 32 percent of workers who had access to healthcare benefits that could be extended to unmarried same-sex partners, and 26 percent who had access that could be extended to unmarried opposite-sex partners."
Why Are Many Members of Congress Among the Few Americans That Can Retire?
Jane White in The Huffington Post More items by Jane White in The Huffington Post
4/22/2014 [Opinion]

"The lack of mandates for an adequate retirement plan is ironic given that most long-serving members of Congress look forward to more generous pensions than the vast majority of their constituents. A member of Congress retiring with 20 years of service under Federal Employees' Retirement System and a high three-year average salary of $174,000 will get an initial annual FERS pension of more than $59,000 -- on top of Social Security. Compare that pension paycheck to the typical American worker. According to the Federal Reserve Board, the median amount saved in 401(k) accounts and other savings for those age 55 to 64 was $100,000 in 2010. Observing the 4 percent withdrawal rule, a nest egg of $100,000 turns into a measly annual income of $4,000, or about $77 a week."
CMS to Private Insurers: Adopt Payment Reforms More Quickly
Healthcare Payer News More items by Healthcare Payer News
4/22/2014

"Leaders from [CMS] think private insurers have been too slow to adopt payment reforms, but they would be best served by adopting value-based payment systems in tandem with CMS today.... [P]rivate insurers may be further along in the journey than CMS gives them credit for. Cigna is aiming to have 100 accountable care initiatives in place by the end of the year, many of them with physician groups, while more than 50 percent of WellPoint's physician contracts now use value-based reimbursement models."
CMS: Engaging Multiple Payers in Payment Reform
JAMA More items by JAMA
4/22/2014

"CMS is testing more than 20 models under this authority that create new incentives for clinicians and organizations that deliver medical care through CMS programs to deliver better care at lower cost. CMS is also supporting a variety of state efforts to create new incentives for these clinicians and organizations through the Medicaid and CHIP programs. All of these models share a common pathway for success: they hinge on getting clinicians and health care organizations to manage the health of populations and to act as good stewards of health care resources."
Fifth Circuit Widens Split on Firestone, Reviews Fiduciary Breach Claim De Novo
Bloomberg BNA More items by Bloomberg BNA
4/22/2014

"Despite finding no fiduciary breach in a plan trustee's decision to pay legal fees with plan assets, the court rejected the trustee's argument that his actions were entitled to deferential judicial review under [Firestone] ... In a footnote, the court explained that Firestone applied only to benefit denials and didn't govern suits for fiduciary breach. This issue -- the extent to which Firestone deference applies outside of the context of benefit denials -- has split the circuits and may be headed for the U.S. Supreme Court." [Futral v. Chastant, No. 13-30856 (5th Cir. Apr. 18, 2014)]
Rise in Executive Comp Was Offset by Pension Value Changes in 2013
Towers Watson More items by Towers Watson
4/22/2014

"Total compensation disclosed in company proxy statements for [CEOs] at the nation's largest corporations remained relatively unchanged in 2013, primarily the result of sharply lower pension values ... [T]otal pay for S&P 1500 CEOs increased less than 1% (0.5%) in 2013, down from the 5.7% median increase CEOs received in 2012.... [R]ealizable pay, which takes into consideration the current value of a CEO's outstanding stock-based awards, increased nearly 15% last year, reflecting strong stock market performance.... Nearly eight in 10 (78%) companies awarded performance-based long-term incentive awards in 2013, compared with 67% in 2011. Meanwhile, 58% of companies awarded stock options in 2013, down from 64% in 2011."
Are Your Pharmacy Benefits Being Adjudicated Properly?
Milliman More items by Milliman
4/22/2014

"While almost all pharmacy benefit manager (PBM) contracts include audit provisions, many plan sponsors underestimate the value of auditing their PBM, which can help recover funds lost through overpayments or system errors. Recovered losses mean that a typical pharmacy benefit audit claim more than pays for itself, but at the very least ensures plan sponsors that they are meeting fiduciary responsibilities in the area of managing it's PBM contract."
The Latest Problem With Obamacare: COBRA and the ACA
Forbes More items by Forbes
4/22/2014

"Laid off workers who opt for temporary coverage under [COBRA] while they evaluate options under the [ACA] can't switch to Obamacare until the next open enrollment period in November.... Most people ... wait a month or more to get the COBRA notice and then make the decision.... What happens if you have medical costs during the gap period? ... If [a family] elects and pays for COBRA, those expenses will be covered retroactively. But if the family chooses Obamacare, they aren't. What's more, it takes at least three or four days after you apply for Obamacare for it to cover you[.]"
Helping Employees to Visualize Retirement
Human Resource Executive Online More items by Human Resource Executive Online
4/22/2014

"Getting employees to build an 'emotional connection' with their future selves may be the key to getting them to save more for retirement.... [R]esearchers found that when study participants were given the chance to interact with 'age-enhanced' digital renderings of themselves ... They were willing to put an average of 6.8 percent of their pay into their 401(k) plans. This compares to participants in a control group who were not shown such images -- they were willing to contribute an average of only 5.2 percent of their pay."
Is Famed Fiduciary Advocate Ron Rhoades Ready to Concede Defeat?
Fiduciary News More items by Fiduciary News
4/22/2014

"[Rhoades recently predicted that the] DOL's new Fiduciary Rule will not apply to IRAs and the SEC will offer a 'New Federal Fiduciary Standard.' This new standard would include the same suitability standard as currently practiced by non-fiduciaries but with 'casual disclosure' requirements added on.... While an industry sponsored study claims billions of dollars in retirement assets will leave brokers if the DOL's proposed Fiduciary Rule were to include IRA, Rhoades says what the industry doesn't tell you is that it's really a migration already taking place."
Private Exchanges and Employer Implementation
Healthcare Trends Institute More items by Healthcare Trends Institute
4/22/2014

"Over half (54.5 percent) of employers report that they are somewhat to very familiar with private exchanges.... [L]ess than 7 percent of these employers are already using exchanges.... [An] Infographic provides an outlook of private exchange implementation among employers, as well as what employers report looking for in a private exchange."
Bankruptcy Judge Rules Mostly in Retirees' Favor in American Airlines Health Benefits Case
Dallas Morning News More items by Dallas Morning News
4/22/2014

"U.S. Bankruptcy Judge Sean Lane on [April 18] denied part of American Airlines' request for summary judgment on the issue of retiree health benefits and approved part of the request.... The judge wrote that the question was whether promises made to provide the benefits had been promised in way that they were vested and couldn't be unilaterally changed.... American had argued that commitments to retirees provided in union contracts changed when the contracts changed. But Lane ruled that the collective bargaining agreement in place at the time of the employee's retirement governed that retiree's benefits, not any subsequent labor contracts approved after the person retired." [In Re: AMR Corporation et al. v. Committee of Retired Employees, No. 12-01744 (Bankr. S.D.N.Y. Apr. 18, 2014)]
Insurance Coverage Provisions of the ACA: CBO's April 2014 Baseline (PDF)
Congressional Budget Office More items by Congressional Budget Office
4/22/2014

Report includes four tables: [1] Effects on the Deficit of the Insurance Coverage Provisions of the ACA; [2] Effects of the ACA on Health Insurance Coverage; [3] Enrollment in, and Budgetary Effects of, Health Insurance Exchanges; and [4] Comparison of CBO and JCT's Current and Previous Estimates of the Effects of the Insurance Coverage Provisions of the ACA.
Were Higher Healthcare Costs in the Second Half of 2013 Caused by the ACA?
Sheppard Mullin More items by Sheppard Mullin
4/22/2014

"With expanded insurance coverage, it was expected that there would be a surge in short-term health spending, as previously unmet healthcare needs were addressed. The real question of interest, however, is whether that initial surge will be moderated or will continue and/or accelerate over time, as the new enrollees' health status is assessed and treated and the costs of that fully enter the healthcare system."
IRS Issues Rules for Changes by Safe Harbor 401(k) Plans
Wolff & Samson More items by Wolff & Samson
4/22/2014 [Guidance Overview]

"An employer seeking to reduce or suspend its safe harbor contributions for 2014 should consider doing the following to take advantage of the additional flexibility provided by the final regulations: [1] determine whether it is operating at an economic loss; [2] review its safe harbor notice for 2014 to determine whether such notice includes the [required] information ... and [3] arrange for non-discrimination testing to be performed for the plan year."
No Portfolio Is an Island (PDF)
Morningstar Investment Management More items by Morningstar Investment Management
4/22/2014

37 pages. Excerpt: "[I]ndustry-specific human capital, region-specific housing wealth, and pensions have statistically significant exposures to different asset classes and risk factors. Through a series of portfolio optimizations [the authors] determine that the optimal allocation for an investor's financial assets varies materially for different compositions of total wealth. These findings suggest that narrowly focused portfolio optimization routines that ignore human capital and outside wealth are insufficient, and that a holistic definition of wealth is necessary to build truly efficient portfolios."
A Take-Away from the Quality Stores Decision
Squire Sanders More items by Squire Sanders
4/22/2014

"Quality Stores tried to argue that the payments should not be considered 'employee' wages that are subject to FICA tax because they were made after termination of employment. The Supreme Court flatly rejected that argument, essentially relying on a simple rationale that payments to former employees have the employment relationship as their genesis.... In various circumstances, employers have taken, and may currently be taking, positions that certain types of employee-related payments are not subject to FICA tax (e.g. contract terminations or signing bonuses). If so, employers should revisit those positions."
Court Invalidates New York State's Restrictions on Executive Comp Paid by State-Funded Private Organizations
Towers Watson More items by Towers Watson
4/22/2014

"On April 8, a trial court in Nassau County concluded that the rules capping executive compensation and another unrelated rule prohibiting certain conflicts of interest were both invalid ... because [the New York State Department of Health (DOH)] built a regulatory scheme based on its own conclusions about the appropriate balance of trade-offs between health and cost and was acting solely on its own ideas of sound public policy, thus operating outside of its proper sphere of authority[.]"
Exiting Retiree Medical: An Approach for Eliminating the Obligation While Protecting the Promise to Retirees
Towers Watson More items by Towers Watson
4/22/2014

"For most large employers, sponsoring a retiree medical benefit program has proved a costly, long-term obligation with no strategic value. Yet until now, few employers were willing to risk the potentially adverse consequences of a plan termination, which included union contract issues, retiree lawsuits and concerns about the financial burden placed on retirees.... [A] new approach ... uses customized group annuities and an innovative transaction structure to overcome traditional barriers to an exit strategy without adverse tax and legal consequences."
Sixth Circuit Provides Guidance for ERISA Penalty Claims
Lane Powell PC More items by Lane Powell PC
4/22/2014

"The [Sixth Circuit] adopts the 'clear notice' standard: '[T]he key question under the clear notice standard is whether the plan administrator knew or should have known which documents were being requested.' Plaintiff's counsel's 'broadly phrased' request should have alerted the plan administrator that this request included the accidental death policy because that was the key document supporting its decision to deny the claim. The court did not abuse its discretion in awarding $55 per day penalty rather than the maximum $110 per day because there was a 'lack of prejudice' caused by the delay." [Cultrona v. Nationwide Life Insurance Company, Nos. 13-3558/3585 (6th Cir. Apr. 9, 2014)]
Employee Financial Wellness Survey 2014 (PDF)
PricewaterhouseCoopers More items by PricewaterhouseCoopers
4/22/2014

24 pages. Excerpt: "Healthcare continues to be a hot issue in the U.S. with most employees believing that healthcare costs will rise, and less than half of all Baby Boomers confident they'll be able to cover their medical expenses in retirement.... Nearly half say that they would be willing to sacrifice a portion of their future pay increases for guaranteed retirement income, with a majority of employees saying they prefer a retirement plan with guaranteed fixed monthly payments for life over a plan where they can take a lump sum at retirement and invest the funds themselves."
Text of Comments by NHeLP to CMS on Exchange and Insurance Market Standards for 2015 and Beyond
National Health Law Program [NHeLP] More items by National Health Law Program [NHeLP]
4/22/2014 [Opinion]

22 pages. Excerpt: "We recommend that the notices be sent no later than October 31.... The option of allowing notices to be sent up until the first day of open enrollment could hinder some individuals from getting the assistance they need, particularly given that this open enrollment period will encompass both Thanksgiving and the winter holidays.... All insurers participating in the Exchange should be required to comply with similar procedures on terminations, cancellations and reinstatements so that there is a consistent process.... Consumers will benefit by having ready access to quality ratings, along with the ability to further research and consider the underlying bases for those ratings."
GAO Report to Senate Finance Committee: 'Private Pensions: Pension Tax Incentives Update'
U.S. Government Accountability Office More items by U.S. Government Accountability Office
4/22/2014

"[F]rom 2009 through 2011, private-sector employers sponsored about 81,000 new pension plans, including 75,000 [DC] plans and 6,000 [DB] plans. DC plans with fewer than 100 participants accounted for about 90 percent of all new plan growth over this period.... The percentage of DC participants affected by the 2010 statutory limits and their income characteristics were similar to those reported previously for participants affected by the 2007 limits.... [A]bout 6 percent of all DC participants who contributed to their plans in 2010 were affected by the statutory limits ... Of this group: About 3 percent were under age 50 and contributed at least $16,500 (the elective deferral limit). About 3 percent were aged 50 or older and contributed at least $22,000 (the combined elective deferral and catch-up contribution limits). Another one-tenth of 1 percent of all ages contributed at or above the combined employer-participant contribution limit of $49,000."
District Court for New Jersey Rejects Equitable Tolling Argument, Imposes Contractual Limitations Period
Health Plan Law More items by Health Plan Law
4/22/2014

"The Court noted that '[a]n administrator need only "substantially comply" with' ERISA's claims regulations procedures -- thus the denial letter 'was sufficient to discharge its obligations under the ERISA regulations.' The Court charged the provider with knowledge imputed to his patient. This issue merges to some extent with the duty on the plaintiff regarding diligence in asserting equitable tolling, but overall, the Court's position seems rather harsh." [Torpey v. Anthem Blue Cross Blue Shield, 2014 U.S. Dist. LEXIS 53342 (D.N.J. Apr. 16, 2014)]
As Medical Providers Consolidate, Questions Arise About Effects on Costs, Quality of Care
The Washington Post; subscription may be required More items by The Washington Post; subscription may be required
4/22/2014

"When Idaho's largest hospital system bought the state's largest doctor practice in 2012, the groups expressed hope that the deal would spark a revolution in delivering better-quality care.... Despite St. Luke's good intentions, the judge worried that the merged entity would be so dominant that it could raise prices at will. He suggested that hospitals could work with doctors to deliver more efficient care without buying them out. Similar arguments are being raised in other areas, including Boston, Pittsburgh and Northern California, where hospital systems have gained strength through acquisitions of doctors' practices and other hospitals at a time of rapid consolidation."
Healthcare Costs in U.S. Far Exceed Costs in Other Countries
Los Angeles Times More items by Los Angeles Times
4/22/2014

"An average one-day hospital stay in the United States cost $4,293 last year, six times more than it did in Argentina and nearly 10 times the cost in Spain ... Medical procedures, tests, scans and prescription medicine cost far more in the United States than in eight other countries ... Heart bypass surgery cost an average of $75,345 in the United States, compared with $15,742 in the Netherlands and $16,492 in Argentina. The average cost of an MRI ranged from $138 in Switzerland to $1,145 in the United States."
2013 Prices of Medical Procedures, Tests, Scans and Treatments in Nine Countries
International Federation of Health Plans [IFHP] More items by International Federation of Health Plans [IFHP]
4/22/2014

"Designed to showcase the variation in healthcare prices around the world, the report examines the price of medical procedures, tests, scans and treatments in nine countries. This year the survey also shows pricing for five specialty prescription drugs. As in prior years, the survey data shows that the United States continues to have the highest fees of those countries surveyed for drugs and various medical procedures. Some of the larger disparities were in prescription and specialty drugs prices."
Managing Risk and Opportunity: Trends and Challenges in Defined Benefit Plans (PDF)
Millennium Trust Company More items by Millennium Trust Company
4/22/2014

19 pages. Excerpt: "[R]isk management strategies appear to encompass three distinct categories: plan design, funding and investment, and settlement activities. Almost 50 percent of companies with plan assets in excess of $5 billion plan to manage risk only through investment practices, and none expect to transfer all of their obligations to a third party. In contrast, most plans with fewer than $5 billion in assets are not planning to rely only on investment practices. They also plan to manage risk through settlement activities."
Paid Sick Leave Laws: A Growing Trend Across the U.S.
Towers Watson More items by Towers Watson
4/21/2014

"In 2006, San Francisco became the first city in the U.S. to require paid sick leave. Since then, the momentum for paid sick leave has been building, with Washington, D.C.; Jersey City, N.J.; New York City; Portland, Ore.; Seattle; the state of Connecticut; and most recently Newark, N.J., following suit. Washington, D.C., and New York City have recently expanded their sick leave laws.... In a countertrend, some states have enacted preemption laws that prohibit local governments from passing paid sick leave legislation, including Arizona, Florida, Georgia, Indiana, Kansas, Louisiana, Mississippi, North Carolina and Tennessee. Wisconsin enacted legislation in 2011 that bars cities, villages and counties from enacting family and medical leave rules that differ from state standards, which effectively eliminated Milwaukee's paid sick ordinance."
Overview of Health Care Changes in the FY2015 House Budget (PDF)
Congressional Research Service More items by Congressional Research Service
4/21/2014

"Chairman Ryan's budget proposal, as outlined in his report and in the committee report, suggests short-term and long-term changes to federal health care programs, including to Medicare, Medicaid, and the health insurance exchanges established by the [ACA]. Within the 10-year budget window (FY2015-FY2024), the budget allows for the full repeal of the ACA or just certain provisions, including those that reduce Medicare spending, those that expand Medicaid coverage to the non-elderly with incomes up to 133% of the federal poverty level, and those provisions that establish health insurance exchanges. Committee documents also suggest restructuring Medicaid from an individual entitlement program to a block grant program. In addition, beginning in 2024, the budget assumes the conversion of Medicare to a fixed federal contribution ('premium support') program. This report summarizes the proposed changes[.]"
The ACA and Small Business: Economic Issues (PDF)
Congressional Research Service More items by Congressional Research Service
4/21/2014

"[T]his report explains how employer-sponsored insurance can be used to address concerns about health insurance coverage and cost. Second, it summarizes the three ACA provisions most relevant to small businesses ... Next, it analyzes these provisions for their potential effects on small businesses. Last, this report presents several approaches that could address some concerns associated with these provisions (particularly the employer penalty)."
Health Insurance Exchange Enrollment Closed, Risk Assignment Challenges Start
Healthcare Payer News More items by Healthcare Payer News
4/21/2014

"Aside from collecting premiums -- it's still not known how many of the new enrollees have paid for the first month -- many exchange insurers are now trying to learn as much as they can about new enrollees to start assigning them risk scores. What is known is that in the 36 states with federally-managed exchanges, 28 percent of new plan buyers are between 18 and 34 years old -- a bit less perhaps than what some may have hoped for, but probably enough to avert a premium 'death spiral.'"
Report on CMS Collection and Use of ACA Annual Fee on Branded Prescription Drug Companies
Office of Inspector General, Department of Health and Human Services More items by Office of Inspector General, Department of Health and Human Services
4/21/2014

"Although the funds from the annual fee are allocated to the [Medicare] Part B Trust Fund, the ACA grants to Treasury the responsibility of administering the fee process, including transferring the fee to the Trust Fund. To the extent that the fees were not in the Trust Fund, the Trust Fund may have missed an opportunity to earn interest income on these fees. Our results indicate that it may be beneficial for CMS to periodically monitor the status of this fee in the Trust Fund, and to contact Treasury if CMS finds that the full amount to be collected under the ACA each year has not been received."
Pensions Still Cloud Stockton Bankruptcy Exit
Calpensions More items by Calpensions
4/21/2014

"Stockton's plan to leave a huge pension debt untouched was still an issue last week as the city council, hoping to end a two-year bankruptcy, approved settlements for 95 percent of the claims. The settlements include Assured Guaranty and National Public Finance Guarantee, the main opponents of Stockton's eligibility for bankruptcy. The bond insurers argued that an early plan to cut bond debt, but not pension debt, treated creditors unfairly. Now the last major creditor that has not settled, Franklin Bonds, argues that if Stockton exits bankruptcy without cutting pension debt, the city could slide back toward insolvency like Vallejo."
Governor Details Healthcare Payment Reform Path in Arkansas
HealthLeaders Media More items by HealthLeaders Media
4/21/2014

"Arkansas is among several states that have decided to expand Medicaid through a 'private option,' using the 100 percent federal expansion financing to fund private insurance policies for the poor purchased through the state's PPACA exchange[.]"
Obamacare's High Risk Pools Are Closing for Real This Time
The Washington Post; subscription may be required More items by The Washington Post; subscription may be required
4/21/2014

"About 21,000 people were still enrolled in PCIP at the end of January, the most recent figures CMS has provided. That was down from about 77,600 at the end of December. Presumably, more people have found coverage since the end of January, and advocates feel comfortable seeing the program come to an end."
Heinz 'Derisks' Pension Plans
Pittsburgh Post-Gazette More items by Pittsburgh Post-Gazette
4/21/2014

"The company recently merged [a] plan for salaried employees ... with another one that was set up for nonunion hourly employees, a move the company said simplifies administration. The two plans combined include 5,173 participants, with 521 of those still active. The rest are retired or separated from service. Effective April 30, the combined plan is to be terminated.... Heinz has also merged two other plans, known as Plan B and Plan C, which cover both active and former employees covered under collective bargaining agreements ... That second combined plan is not being terminated, but the company is offering lump sum payments for vested participants and annuities for retirees already receiving benefits."
Suddenly Health Insurance Is Not for Sale
Philadelphia Inquirer More items by Philadelphia Inquirer
4/21/2014

"Exchange plans don't have a choice, but off-exchange health insurers can decide when to offer coverage ... They can limit enrollment to a designated period mirroring the Obamacare sign-up and special enrollment periods. Or, they can sell insurance year-round ... Few are choosing to leave the door wide open ... '[T]he biggest misconception was that [consumers] would just get the tax penalty' if they missed the March 31 open enrollment deadline, [Carrie McLean, director of customer care for eHealthInsurance] noted. 'People really did not understand that you couldn't get insurance at all[.]'"
DOL Releases Proposed 408(b)(2) Fee Disclosure 'Guide' Regs (PDF)
Steptoe & Johnson LLP More items by Steptoe & Johnson LLP
4/21/2014 [Guidance Overview]

"Underlying the proposed regulation is the DOL's assumption that providers have 'specialized' knowledge enabling them to more easily locate fee information... Also underlying the proposed regulation is the assumption that a provider's specialized knowledge will reside in a single 'financial ... or similar professional' through whom the provider may quickly construct the guide for any given service.... Since these guides can 'make or break' the use of the exemption, it is hard to imagine that the guide will not require several levels of review at the business, compliance and legal level, as well as a review by 'plain English' editorial staff.... Even if one assumes that a guide would take a business person and a lawyer working together three to four hours per plan, at perhaps $1000 per plan, the cost of such a requirement would be 684,000 times $1000 ($684,000,000), or more than 17 times the benefit ($40,300,000) described in the cost analysis."
Court Rejects Hospital's Church Plan Exemption, Allowing ERISA Lawsuit to Proceed
Thomson Reuters / EBIA More items by Thomson Reuters / EBIA
4/21/2014

"This case presents a critical issue for church-affiliated organizations that, in reliance on the church plan exemption, have not designed or operated their pension or welfare plans in accordance with ERISA's trust, fiduciary, and other requirements. Rollins appeared to be an outlier in 2013, but this case suggests momentum may be building. Although both decisions are only at the trial court level, they are noteworthy for their narrow interpretation of the exemption, and because they cast doubt on the practice of relying on IRS determinations of church plan status." [Kaplan v. Saint Peter's Healthcare System, No. 13-2941 (D.N.J. Mar. 31, 2014)]
SSA Letter-Forwarding Program Discontinued
Thomson Reuters / EBIA More items by Thomson Reuters / EBIA
4/21/2014

"Until ... DOL and IRS guidance are updated, plans might consider supplementing the remaining required methods with additional mechanisms suggested by the agencies, such as Internet searches, commercial locator services, and credit-reporting agencies. If the cost of these additional search options will be charged to participants' accounts, plan fiduciaries must consider the size of a participant's account in relation to the cost of the search when deciding whether the search option is appropriate for that participant."
New Perk Gives Federal Employees a Break on the Cost of Education
Government Executive More items by Government Executive
4/21/2014

"Federal workers who live outside of Maryland can receive a 25 percent discount on all undergraduate and most graduate programs offered at the University of Maryland University College.... Federal workers' spouses and their legal dependents also are eligible for the reduced rates. The tuition break applies to in-person and online classes."
Obamacare Triggers Jump in U.S. Consumers' Healthcare Spending
Bloomberg More items by Bloomberg
4/21/2014

"Consumer spending climbed by $20.4 billion at an annualized rate adjusted for inflation in February, and $13 billion of the increase came from outlays on health services spurred by the [ACA].... While it's been rising fairly steadily since 2000, the share of consumer budgets dedicated to medical care climbed to a record 17.1 percent in February from 16.9 percent in December. Since the end of the recession in June 2009 through September, the proportion ranged from 16.4 percent to 16.7 percent."
Health Care Spending's Recent Surge Stirs Unease
The New York Times; subscription may be required More items by The New York Times; subscription may be required
4/21/2014

"A surge of insurance enrollment related to rising employment and President Obama's health care law has likely meant a surge of spending on health care, leaving policy experts wondering whether the government and private businesses can control spending as the economy gets stronger and millions more Americans gain coverage.... A report from IMS, a health care data and analytics firm, found use of the health care system increasing broadly in 2013. Americans made more visits to doctors' offices, were hospitalized more often and purchased more prescription medication."
Social Security to Resume Benefits Statement Mailings
Reuters More items by Reuters
4/21/2014

"Starting this September, the Social Security Administration (SSA) will resume mailings at five-year intervals to workers who have not signed up to view their statements online ... The statements will be sent to workers at ages 25, 30, 35, 40, 45, 50, 55 and 60 ... [T]he agency [will] continue to promote use of the online statements."
Illinois Pension Law Had Costly Typo
Houston Chronicle More items by Houston Chronicle
4/21/2014

"Universities were already worried about large-scale departures of employees who would lose benefits under the change to Illinois' public pensions if they didn't leave by June 30. The language in the bill signed into law last December was intended to ease that concern by limiting how much public university employees who didn't retire would lose. But it made the effective date June 30, 2013, rather than 2014 -- taking away a full year of benefits."
Why Asset Class Diversification Is Important (PDF)
Manning & Napier More items by Manning & Napier
4/21/2014

"[S]tudies have shown that more than 90% of the variations in a portfolio's return can be attributed to the asset allocation decision.... [A table] illustrates that the major asset classes ... have experienced negative returns in approximately 25%-40% of the 120 calendar quarters covering the last 30 years. However, the table also shows that the historical probability of multiple asset classes experiencing negative returns at the same time is significantly lower."
Helpful Tips to Prepare for a Retirement Plan Financial Audit (PDF)
Belfint, Lyons & Shuman for Legg Mason More items by Belfint, Lyons & Shuman for Legg Mason
4/21/2014

"What is the 80-120 Rule? ... Under what conditions can small plans waive the requirement for a plan audit? ... What are the filing requirements for 403(b) and other non-ERISA retirement plans? ... When are limited-scope audits worthwhile? ... Is your auditor helping you become IRS audit-ready?"
Unpaid Employer Contributions as Plan Assets: Expansion Of Liability Under ERISA
Proskauer Rose LLP More items by Proskauer Rose LLP
4/18/2014

"In a distinct trend, federal courts have found that, depending on the text of the underlying plan documents, unpaid employer contributions due under a CBA may be viewed as plan assets, such that the representatives of an employer who exercise fiduciary control over those plan assets can be held individually liable for the unpaid amounts (together with interest and penalties) under ERISA. These cases will no doubt help plan trustees and administrators collect monies owed to the plan. They also should serve as cautionary warnings to contributing employers to ensure that they fully understand the obligations that they are undertaking when they agree to contribute to ERISA funds pursuant to CBAs."

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