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Older News | August 20, 2014
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Divided Fourth Circuit Panel Rules on Burden of Proving Loss Causation in ERISA Fiduciary Breach Case
Proskauer's ERISA Practice Center More items by Proskauer's ERISA Practice Center
8/19/2014

"The Fourth Circuit's decision makes a number of significant statements and rulings on the burdens of proof related to loss causation, the meaning of 'objective prudence,' and the standards for reviewing decisions pertaining to stock funds in the wake of the Supreme Court's ruling in Fifth Third v. Dudenhoeffer. Some of the Court's pronouncements are difficult to reconcile with existing case law. If not set aside on en banc or Supreme Court review and if adopted elsewhere, the decision could substantially impact the future conduct of fiduciary breach litigation, as well as plan practices in administering stock funds." [Tatum v. RJR Pension Investment Committee, No. 13-1360 (4th Cir. Aug. 4, 2014)]
Retirees Living on Less
Center for Retirement Research at Boston College More items by Center for Retirement Research at Boston College
8/19/2014

"The majority of the recent retirees reported their annual income is between $25,000 and $100,000. Social Security is the largest single source of that income, and smaller but equal shares come from defined benefit pensions and from retirement savings plans. Many of the retirees report their households are managing to get by on less than the 70 percent to 80 percent of their pre-retirement income that most financial planners and retirement experts estimate they need. And four out of 10 are living on 60 percent or less."
Kill the Income Tax Exclusion for Health Insurance
National Review More items by National Review
8/19/2014 [Opinion]

"This tax break has been praised as a pillar of our employer-based private health-insurance system, but its age is showing. A growing list of critics agree that the tax exclusion needs to be changed. The key questions are when and how. We should expect a significant overhaul, but not a full retirement party, within the next five to ten years."
A Tribute to Retirement Security Hero Bob Nagle
Pension Rights Center More items by Pension Rights Center
8/19/2014

"As General Counsel of the Senate Committee on Labor and Public Welfare, Bob was responsible for crafting and securing passage of the Employee Retirement Income Security Act of 1974, the seminal law that safeguards retirement protections for American workers and retirees. Later, as Executive Director of the Pension Benefit Guaranty Corporation from 1979 to 1982, he implemented the law's insurance program. In recent years, Bob was a lawyer in private practice, an arbitrator, a neutral trustee for two mining industry pension and health funds, a participant in the Pension Rights Center's Conversation on Coverage, and a Michael S. Gordon Fellow at the Center."
Robert Nagle, an Architect of ERISA, Dies at 84
Pensions & Investments More items by Pensions & Investments
8/19/2014

"Robert E. Nagle, who as general counsel of the Senate Committee on Labor and Public Welfare was one of the architects of the Employee Retirement Income Security Act of 1974, died on Saturday [August 16, 2014] in McLean, Va., following a battle with cancer. He was 84."
District Court Finds Termination During FMLA Leave Not Unlawful
Bass, Berry & Sims More items by Bass, Berry & Sims
8/19/2014

"A leave under the FMLA does not insulate an employee from the consequences of misconduct if the employer would have taken the action anyway, regardless of the leave. Proceeding with an investigation into the misconduct while the employee is on leave is often the better option rather than awaiting the employee's return (or announced return) and then beginning the investigation. The employer had enforced the policy violation consistently, a key element." [Bloom v. Group Health Plan, Inc., No. 12-3060 (D. Minn. Aug. 13, 2014)]
Pittsburgh Health Care Giants Take Fight to Each Other's Turf
National Public Radio More items by National Public Radio
8/19/2014

"For decades, Highmark BlueCross/Blue Shield and University of Pittsburgh Medical Center worked together. But as the line between insurance companies and health care providers across the country blurs, these longtime allies are venturing into each other's business and becoming competitors.... There's another reason an insurance company would decide to become a healthcare provider: the Affordable Care Act. It tells insurance companies what basic services to offer; who they must insure and even what percent of premiums can go to administrative expenses and profits. That takes away a lot of what insurance companies used to do, so they're looking for new reasons to exist."
Will Taxpayers Bail Out Health Insurers?
National Center for Policy Analysis More items by National Center for Policy Analysis
8/19/2014

"If the reinsurance fund raises less revenue than expected and 2014 medical claims in the exchanges are higher than HHS anticipates, the fund will fall short of satisfying insurers' claims against losses. They will look elsewhere to be made whole. That 'elsewhere' is the risk corridors.... [R]isk corridors appear to be revenue neutral, requiring no increase in government spending of taxpayers' funds. But this is not the case, because payments are based on premiums paid, not claims incurred.... In March 2014, the administration proposed a rule that, among other things, increased taxpayers' exposure to Obamacare's risk corridors by adjusting the risk corridors formula."
HMO, PPO, EPO: How's a Consumer to Know Which Health Plan Is Best?
Kaiser Health News More items by Kaiser Health News
8/19/2014

"Ideally, plan type provides a shorthand way to determine what sort of access members have to providers outside a plan's network, including cost-sharing for such treatment, among other things. But since there are no industry-wide definitions of plan types and state standards vary, individual insurers often have leeway to market similar plans under different names."
Detroit Bankruptcy Reveals Virtues of the Defined Contribution Retirement Plan Model
USA TODAY More items by USA TODAY
8/19/2014 [Opinion]

"Regardless of the final cuts imposed, the message is clear: promised city and county pension benefits are no longer sacrosanct, including those that are fully vested and supposedly guaranteed under state law.... The Detroit experience also means that public employees, who routinely have lobbied for oversized pensions local governments can't afford, need to realize that defined-benefit pensions may not be such a good deal after all. Defined-contribution pensions, such as the 401(k) or 403(b), where retirement benefits are not tied to the long-term financial health of a single business or local government, may be a better idea."
CalPERS Pension Rules Would OK 99 Types of Extra Pay to Count Under Benefit Formula
The Sacramento Bee More items by The Sacramento Bee
8/19/2014

"Staff at [CalPERS] has suggested that the fund's board authorize 99 types of special payments as counting toward pension calculations for employees hired since [Gov. Jerry] Brown's pension law took effect on Jan. 1, 2013. Among them: longevity pay, police marksmanship certification pay, physical fitness pay, smog inspector license pay, notary pay, cement finisher pay and holiday pay. Public pension-change advocates, including Democratic San Jose Mayor Chuck Reed, say the proposal is another sign that the union-dominated CalPERS board 'is doing what they can to resist reforms. ... They're in favor of anything that expands benefits.'"
CMS Presentation on the Reinsurance Contribution Submission Process: Contributing Entities and Counting Methods (PDF)
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS] More items by Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]
8/19/2014 [Guidance Overview]

24 presentation slides dated August 18, 2014. "Enrollment counts are calculated based on a benefit year (calendar year) and not a plan year. The Counting Methods generally calculate covered lives based on enrollment in the first nine months of a calendar year ... [A] self-insured group health plan using the Form 5500 Method may use enrollment based upon its plan year, instead of the 2014 Benefit Year. The Form 5500 Method is the only Counting Method that does not use the first nine months of the applicable benefit year to determine covered lives."
Outsource Fiduciary and Combine with HSA or Die!
Fiduciary News More items by Fiduciary News
8/19/2014 [Opinion]

"Given that healthcare costs could consume us all in the years ahead, cost control, limiting liability and reducing administrative burden has become Job #1 for employers of all sizes. Outcomes are being redefined and retirement specialists who fail to adapt and provide solutions to these glaring needs may not survive.... In addition to huge employer savings on healthcare and employment taxes, advisors can combine HSAs with a few other tactics to facilitate retirement readiness, outcomes (employer & participant), added value, and differentiation to capture plan sponsor attention in an unprecedented manner."
Supreme Court Disregards ERISA and Goes Further Astray in Applying Bankruptcy Law to Retirement Assets
Albert Feuer via SSRN More items by Albert Feuer via SSRN
8/19/2014 [Opinion]

"The Court's implicit addition of the phrase 'debtor's created' at the start of the exemption is based on its unexamined assumption that otherwise the phrase, 'Retirement funds to the extent that those funds are in,' would be rendered 'superfluous.' ... The phrase 'retirement funds to the extent that those funds are in' has a significance without the addition of any words that is consistent with the legislative history of the phrase, the other bankruptcy provisions, and ERISA.... Under this analysis the bankruptcy fund protection would be available to the participants and beneficiaries of such non-ERISA pension plans." [Clark v. Rameker, No. 13-299 (U.S. June 12, 2014)]
Employees Highly Value Their 401(k) But Are More Likely to Get Help Changing Their Oil Than Managing Their Investments
Charles Schwab More items by Charles Schwab
8/19/2014

"Half of those surveyed (50%) say their 401(k) plan investment information is more confusing than their health care benefits information. Roughly one in three (34%) admit they feel a lot of stress when it comes to allocating their 401(k) dollars.... Less than one quarter (23%) of those with access to professional 401(k) advice say they have used it.... A large majority of participants surveyed (70%) say they would feel extremely or very confident in their ability to make the right investment decisions if they enlisted the help of a financial professional. Only 39 percent feel that same level of confidence when making investment decisions on their own." [Also available: an infographic and survey results (17 pages).]
California Employers: Are You Ready for School-Related Leave for Parents?
Ogletree Deakins More items by Ogletree Deakins
8/19/2014 [Guidance Overview]

"California Labor Code section 230.8, the self-described 'Family-School Partnership Act,' is a leave law that gives parents the right to take time off from work to participate in their children's school or child care activities.... The Family-School Partnership Act applies to companies employing 25 or more employees in one location.... The covered employee may take off up to 40 hours each year, not exceeding 8 hours in any calendar month of the year."
Should Pension Assets Be Leveraged?
Cliffwater LLC More items by Cliffwater LLC
8/19/2014

"[V]ery few pensions have implemented risk parity at the fund level, meaning that the fund borrows directly as part of a strategic asset allocation. [The San Diego County pension system] is one and targets 35% leverage. Another is the Ohio Police & Fire Pension, which targets 18% leverage. What they have in common, apart from leverage, is a significant overweight to fixed income.... Both are leveraging lower risk, lower return portfolios in very similar ways."
Text of Comments by American Benefits Council to IRS Requesting Guidance on HATFA Funding Stabilization Provision (PDF)
American Benefits Council More items by American Benefits Council
8/19/2014 [Opinion]

9 pages. "[S]ubject to a contrary election by the plan sponsor, the Act modifies the segment rates for a year prior to the year of enactment.... The core point here is that Congress intended for employers to be able to fully use the modified segment rates for 2013, despite the fact that we are now well into 2014. So Congressional intent is clear; any deadlines or rules that would prevent an employer from fully using the modified segment rates for 2013 should not apply."
A Plea to Leave Fate of Health Care Subsidies to the Court
SCOTUSblog More items by SCOTUSblog
8/19/2014

"[The Halbig plaintiffs have] urged a federal appeals court ... to stand aside and let the issue be decided finally -- and soon -- by the Supreme Court. A sixteen-page brief opposed the government's plea for a new review of that dispute before the en banc U.S. Court of Appeals for the District of Columbia Circuit.... At the least, the filing asserted, the D.C. Circuit should put the government's en banc request on hold until after the Supreme Court has acted on the pending case of King v. Burwell. That approach should be taken, the challengers said, if the D.C. Circuit has any doubt about whether the Supreme Court will step in this fall, at or near the opening of the new Term." [Halbig v. Burwell, No. 14-5018 (D.C. Cir. July 22, 2014)]
ACA Compliance: Changes in Employment Status Under the Look-Back Measurement Method
Mintz Levin More items by Mintz Levin
8/19/2014 [Guidance Overview]

"While these rules appear simple and straightforward, this is not always the case in practice.... [W]hat happens if a newly hired employee changes his or her status during his or her initial measurement period or the corresponding stability period? The final regulations provide the following rules: Full-time employee... New variable hour, seasonal, and part-time employees... Ongoing employees."
DOL Guidance: Use Internet to Find Missing DC Participants
Thompson SmartHR Manager More items by Thompson SmartHR Manager
8/19/2014 [Guidance Overview]

"The new [Field Assistance Bulletin (FAB) No. 2014-01] removes a requirement to use IRS and Social Security Administration letter-forwarding services that were ended in recent years. Instead, DOL said, expanded, free electronic search tools are to be used. Improved Internet search technologies also have led DOL to codify its enforcement safe harbor for distributing missing participant benefits ... The new FAB also reflects some suggestions from the 2013 ERISA Advisory Council, which focused last year on the topic of locating missing participants[.]"
Domestic Violence Leave Now Mandated in Massachusetts
Ogletree Deakins More items by Ogletree Deakins
8/19/2014

"The new law is effective immediately ... [E]mployers with 50 or more employees must provide employees up to 15 days of unpaid leave in any 12-month period if the employee or a covered family member of the employee is a victim of abusive behavior. Covered employers must notify employees of their rights and responsibilities under the law."
Alternative Financing Strategies Are Needed to Reach U.K. Pensions Stability
Aon Hewitt More items by Aon Hewitt
8/19/2014

"Companies and trustees will therefore increasingly view their schemes through different lenses, as the companies see the risk of trapped surplus, while the trustees still see funding deficits because they are required to consider a prudent funding basis. Companies will want to consider reducing deficit contributions, but trustees with schemes which are still underfunded on a prudent funding basis are likely to seek other means of security for members' benefits if they are to accept the end of deficit contributions."
Prescription Drug Benefits: An Important Part of a Compensation Plan
Idaho Business Review More items by Idaho Business Review
8/19/2014

"[P]rescription drugs can substitute for a more expensive medical service, reduce absenteeism and improve on-the-job worker productivity. If not managed, prescription drugs represent a constant financial drain on company resources that undermines the return on investment of the entire health care benefits program."
September 23 Deadline: Ensure Your Business Associate Agreements Comply with the HIPAA Omnibus Final Rule
DLA Piper More items by DLA Piper
8/19/2014

"We suggest [covered entities (CEs)] and [business associates (BAs)] pay particular attention to terms requiring the reporting of Security Incidents. Under the Final Rule, contracts between CEs and BAs must include provisions that require BAs to report to CEs any Security Incidents of which they become aware. [The regulations define] 'security incident' as 'the attempted or successful unauthorized access, use, disclosure, modification or destruction of information or interference with system operations in an information system.'"
Federal Contractors See Hike in Service Contract Act Health & Welfare Rates
Ford & Harrison LLP More items by Ford & Harrison LLP
8/19/2014

"The obligation to pay current prevailing wages and benefits under the [Service Contract Act (SCA)] falls to the employer (whether a prime or a subcontractor). Contracting agencies are required to utilize the correct wage determinations, including the most current fringe benefit rates. However, contractors should not simply take the contracting agency's word for it, but should instead be proactive in evaluating whether the wage determinations being used by the agency reflect not only the current wage rates, but also the current health and welfare rates."
Terminated Plans Can Roll Over Benefits of Lost Participants
Nelson Mullins More items by Nelson Mullins
8/19/2014 [Guidance Overview]

"[T]he plan fiduciary should make reasonable efforts to locate the participants and beneficiaries using all of the following: Certified mail; Check records of related plans and employer(s); Contact designated beneficiaries to ask about participants; Use free electronic (Internet) search tools.... If the participant or beneficiary is not located, then the fiduciary should consider distributing the plan account directly to an IRA because the account will continue the deferral of income, and avoid both the 20% mandatory withholding and the 10% early distribution tax."
ACA Simplified-Reporting Threshold Must Be Met Each Month
Bloomberg BNA More items by Bloomberg BNA
8/19/2014 [Guidance Overview]

"Employers need to be sure they are offering affordable, minimum-value coverage to at least 98 percent of the employees on whom they report under the [ACA] on a monthly basis, rather than a yearly average, in order to use simplified reporting rules, an IRS official said. Employers that have part-time employees close to the 30-hours-per-week threshold for inclusion as full-time workers might want to include them in their total count, to take advantage of the simplified reporting method[.]"
Understanding the Social Security Trust Funds
Center on Budget and Policy Priorities More items by Center on Budget and Policy Priorities
8/19/2014

"[T]he Social Security trust funds are invested in Treasury securities that are every bit as sound as the U.S. government securities held by investors around the globe; investors regard those securities as being among the world's very safest investments. This brief paper provides some basic information about the Social Security trust funds."
IRS Has No Plans to Establish Determination Letter Program for Individually Designed 403(b) Plans
Wolters Kluwer Law & Business More items by Wolters Kluwer Law & Business
8/19/2014

"The new 403(b) pre-approved plan program has no mechanism for providing opinion and advisory letters to plan sponsors of individually designed 403(b) plans ...[E]mployers are allowed to adopt individually designed 403(b) plans, and those plans still have a remedial amendment period ... But there is no letter that sponsors of individually designed plans can rely upon for corrections made during the remedial amendment period, unless the plan is restated as a pre-approved plan by the required deadline."
Total Annuity Sales Improve Eight Percent in Second Quarter 2014
LIMRA More items by LIMRA
8/19/2014

"Total U.S. annuity sales reached $61.4 billion in second quarter, improving eight percent from prior year. In the first six months of 2014, total U.S. annuity sales increased 10 percent, compared with 2013. 'This is only the second time we have seen quarterly sales over $60 billion since the third quarter of 2011,' said Todd Giesing senior analyst, LIMRA Secure Retirement Institute Annuity Research. 'Despite declining interest rates during the first six months of this year, fixed annuity sales continue to drive overall annuity sales growth.'"
Upcoming IRS Phone Forum: Correcting Retirement Plan Mistakes Using IRS Correction Programs, September 4, 2014
Internal Revenue Service [IRS] More items by Internal Revenue Service [IRS]
8/19/2014 [Guidance Overview]

"Learn about: [1] The correction programs available under the Employee Plans Compliance Resolution System (EPCRS); [2] The Voluntary Closing Agreement Program (VCAP) for issues that cannot be addressed under EPCRS; [3] Common failures and approaches to addressing those failures; [4] Procedural tips that could facilitate the processing of VCP submissions; [5] Q&As -- Responses to selected questions submitted in advance of the presentation." [Submit questions to IRS via email by August 28, 2014.]
Individual Medical Policy Arrangements May Result in Significant Excise Tax Liability (PDF)
Employers Council on Flexible Compensation [ECFC] More items by Employers Council on Flexible Compensation [ECFC]
8/18/2014 [Guidance Overview]

31 pages. "[ECFC agrees] that the payment of [individual market (IM)] policy premiums is a permissible cafeteria plan qualified benefit and that the provision of such coverage through the cafeteria plan continues to be exempt from income and employment tax under the Internal Revenue Code. We also agree that a cafeteria plan, in and of itself, is not a group health plan subject to the ACA. However, the Agency Guidance clearly states that any arrangement, which pays or reimburses an employee's IM policy premiums on a pre-tax basis would be an 'employer payment plan', which the Agency Guidance clearly indicates is a 'group health plan' subject to the ACA. The Agency Guidance is also clear that an employer payment plan violates the ACA and employers who sponsor such arrangements would be subject to a potential excise tax of $100 per employee per day."
Cypen and Cypen Newsletter for August 14, 2014
Cypen & Cypen More items by Cypen & Cypen
8/18/2014

Article titles include: Stakeholders...or Steakholders? How IRAs Work; Federal Employees Will Get Phased Retirement; Pension Plan Amendments May Constitute Breach of Contract Under State Law; Equities Boost U.S. Master Universe Returns; So Long Tension ... Hello Pension; TIAA-CREF Survey Finds One-third of Americans Have Never Increased Their Retirement Plan Contribution Rate; and Social Security Has Rules to Explain Rules!
Text of District Court Opinion Granting Award of Attorney's Fees Because of Extended Delays in Approval of Disability Benefits (PDF)
U.S. District Court for the District of Minnesota More items by U.S. District Court for the District of Minnesota
8/18/2014

"LINA could have exercised greater care in reviewing the record and applying the literal terms of its Policy to its review of Nozal's claim.... LINA offered to pay Nozal's attorney's fees and costs, but offered her nothing in return for the significant delay and apparent violation of the ERISA plan's administrative review process. Nozal's attorney will not be faulted for rejecting such an offer.... LINA sought an extension to answer the Complaint and ostensibly to continue settlement negotiations, which Nozal granted. However, instead of continuing to negotiate, LINA filed a Rule 12(b)(6) motion to dismiss the entire Complaint and largely ignored the delay in the appeals process." [Nozal v. Allina Health Systems Long-Term Disability Benefit Plan; and Life Insurance Company of North America [LINA], No. 13-2270 (D. Minn. Aug. 15, 2014)]
Verbal COBRA Notice OK, Says Court in Ruling for Employer
Thompson SmartHR Manager More items by Thompson SmartHR Manager
8/18/2014

"In a decision that overlooked key COBRA guidance, a federal district court ruled that an employer/plan administrator fulfilled its notice obligation by verbally providing a notice of COBRA rights and accepting premium payments -- which apparently the qualified beneficiary had to pay a few days after her employment termination.... [The court's] reasoning did not consider federal regulations that describe the form and structure of COBRA notices. It also did not consider that an employer is required to give a qualified beneficiary at least a 60-day election period and at least 45 days from the election date to pay the initial COBRA premium." [Madonia v. S 37 Management, Inc., No. 14-C-678 (N.D. Ill. Aug. 14, 2014)]
More Than One-Third of Americans Have No Savings
U.S. News & World Report More items by U.S. News & World Report
8/18/2014

"About 70 percent of Americans between the ages of 18 to 29 have not started saving for retirement, compared with 33 percent of 30- to 49-year-olds and 26 percent of 50- to 64-year olds ... One out of every seven Americans 65 and older does not have retirement savings ... the most common decade for people to start saving is in their 20s. Twice as many 30 to 49 year olds said they started saving in their 20s instead of their 30s, while the 50 to 64 age group was 'only slightly more likely' to have started saving in their 20s over their 30s[.]"
Testing Investment Service-Provider Agreements: The 'Brown M&Ms' Provision
Pension Risk Matters More items by Pension Risk Matters
8/18/2014

"Consultants, asset managers and banks say they are searching for ways to satisfy their clients while still being able to earn a reasonable rate of return for their efforts. One solution is to streamline operations, to the extent possible, while acknowledging any fiduciary implications associated with prevailing law and governance standards. If cutting corners to preserve a profit margin ends up sacrificing requisite quality, trustees could be at risk of being investigated for anemic oversight of service providers. Vendors could be at risk for failing to deliver contractual services."
Detroit to Sell Millions in New Debt to Settle Bankruptcy
Bloomberg More items by Bloomberg
8/18/2014

"Detroit plans to sell about $975 million in bonds for retirement costs and some creditor settlements as part of its bankruptcy restructuring plan awaiting approval by a federal judge.... $632 million in bonds would finance $450 million for retiree health care through a voluntary employee beneficiary association, agreed to by retirees."
Have Missing Participants? The DOL Says, 'Google Them!'
Benefits Bryan Cave More items by Benefits Bryan Cave
8/18/2014

"If the free or cheap options don't work, fiduciaries can't stop there. They need to consider how prudent it would be to utilize other tools, such as commercial locator services, credit reporting agencies, information brokers, investigation databases, and analogous services that charge. The fiduciary's analysis should take into account the size of the participant's account and the cost of those steps. Many of those services can be quite cost effective, so it's important to research them thoroughly before dismissing them out of hand.... The DOL notes the plan administrator can charge missing participants' accounts for the reasonable expenses associated with finding them."
Missouri Lags Behind in Insurance Pricing Transparency
St. Louis Post-Dispatch More items by St. Louis Post-Dispatch
8/18/2014

"The Show-Me State is one of the only states that does not have the ability to review health insurance rates. Wyoming is close behind; it has only the ability to review rates for health maintenance organizations, or HMOs.... Only two carriers, Coventry and Anthem Blue Cross Blue Shield, offered plans on the Missouri exchange during the inaugural year. And while both are expected to offer plans again this year, details about their insurance products -- as well as those offered by other insurance companies -- are unlikely to be known before the Nov. 15 start of open enrollment on the exchange."
Merced County (California) Pensions Still Only 51.4% Funded
Calpensions More items by Calpensions
8/18/2014

"Merced County stands out with the lowest level of funding in the last reported year, 54.7 percent in 2010-11.... The 4,600-member system owes $1 billion for pensions promised in future decades, up from $692 million in 2008. The projected assets from employer-employee contributions and investment earnings only increased from $488 million to $547 million.... [A] pension increase a decade ago was retroactive to the date of hire, immediately adding to the pension system's debt or liability. Past employer and employee contributions had been based on amounts needed to pay for lower pensions."
Patient Advocacy Groups Claim Insurance Discrimination in New Forms
ABC News More items by ABC News
8/18/2014

"Ending insurance discrimination against the sick was a central goal of the nation's health care overhaul, but leading patient groups say that promise is being undermined by new barriers from insurers. The insurance industry responds that critics are confusing legitimate cost-control with bias. Some state regulators, however, say there's reason to be concerned about policies that shift costs to patients and narrow their choices of hospitals and doctors."
Local Governments in West Virginia Say New GASB Pension Rules Will Have Little Impact
Williamson Daily News More items by Williamson Daily News
8/18/2014

"Although the [GASB] approved rules in June 2012 requiring a change in reporting pension plan accounts by local government, most ... city and county officials said they have been working diligently to make sure government-operated pension plans are solvent and have had little time to consider Statement Number 67 and 68 ... [Charleston Mayor Danny Jones] said he was not certain that the new requirements will assist the city in handling its pension funds and he is also not sure it will require any information not already available from his city."
How We Can Transcend Obamacare
Avik Roy, in National Review More items by Avik Roy, in National Review
8/18/2014 [Opinion]

"If we were to spend all our capital 'repealing and replacing' Obamacare, we might not have enough left to tackle the real drivers of unsustainable single-payer health care in America: Medicare and Medicaid.... Exchange-based plans would give those below the poverty line access to high-quality, private insurance and phase out single-payer public-option health insurance. Over the long run, only private insurers will have the competence and the incentive to come up with innovative, cost-efficient ways to improve health outcomes for the poor.... [M]igrating future retirees and low-income Americans onto exchanges could yield substantial benefits to the quality and cost of subsidized health coverage. But there's no reason we should accept the Obamacare exchanges as they are."
Investment Advisers Can Help Plan Sponsors Become Better Fiduciaries (PDF)
Deborah A. Castellani, CFA, via NAPFA Advisor More items by Deborah A. Castellani, CFA, via NAPFA Advisor
8/18/2014

"Many plan sponsors rely on and often have been 'educated' by non-fiduciaries like securities brokers or record-keepers who don't know what it's like to be a fiduciary. Because they aren't fiduciaries, their advice about what a fiduciary must do is often flawed and incomplete....There are many ways that, as an investment fiduciary. you can support plan sponsors without accidentally creating compliance issues of your own.... You're a full-time fiduciary and understand the problems, issues, mindset, and, in some ways, how to make the process easier for them."
U.K.'s Lower Per-Person Health Costs May Not Indicate That Single-Payer Provides Effective Cost Control
InsureBlog More items by InsureBlog
8/18/2014 [Opinion]

"UK's cost reached our 1994 level in 2014; and so UK's cost may well reach what ours is today, in 2034. This interpretation also suggests the UK is not retarding the growth of medical cost any more successfully than the US. The US is simply the leading indicator for cost growth over time. This interpretation also suggests the higher US point-in-time costs arise from other factors."
Final IRS Regs Expand on Proposal to Facilitate Longevity Annuities
Towers Watson More items by Towers Watson
8/18/2014 [Guidance Overview]

"The final rules are largely consistent with the proposed regulations but respond to public comments by expanding the permitted longevity annuities in several respects, including: Maximum permitted investment ... 'Return of premium' death benefit: ... Correction mechanism."
Hedge Funds in Your 401(k): Do They Fit?
The Wall Street Journal; subscription may be required More items by The Wall Street Journal; subscription may be required
8/18/2014

"So far, 401(k) plans aren't stampeding into alternatives. Industrywide, analysts and consultants say, well below 10% of assets is invested there. Most 'target date' funds, popular among employees who expect to retire on a specific date, don't yet hold any alternatives. But according to Lipper, the fund-research company, the 25 target-date funds with the biggest stake in derivatives -- futures, options and other instruments tied to the returns of stocks, bonds and commodities -- have an average of 36% of assets there. That indirect measure of exposure to alternatives is up from 21% a year ago."
Embracing Social Media and Mobile Technology in 401(k) Communications
401kHelpCenter.com More items by 401kHelpCenter.com
8/18/2014

"How important is it that plan sponsors factor social media and mobile into their participant communications strategies? ... Are there any common myths plan sponsors have about social media and mobile use? ... What are some steps or action items a sponsor should take to meet the challenge of this new world of communications? ... What are a few examples of 'meaningful and valuable' information? ... What role does the plan vendor play?"
District Court Allows Fiduciary Claim to Proceed Against CEO Who Had Checkwriting Authority Over Company Account Containing Participant Contributions
Thomson Reuters / EBIA More items by Thomson Reuters / EBIA
8/18/2014

"This lawsuit filed by the DOL alleged that a company and three of its officers breached their fiduciary duties under the company health and welfare plan by failing to segregate [employee payroll deductions and COBRA premiums] from general corporate accounts and using the contributions for company operations instead of benefits.... For purposes of [a motion to dismiss filed by one of the officers], the court held that under the plain language of ERISA, a person can be a fiduciary through the exercise of any authority or control over plan assets, even without discretion.... [The court found] that the officer's checkwriting authority over general corporate accounts containing participant contributions gave him sufficient authority and control over plan assets to make him a fiduciary." [Perez v. Geopharma, Inc.,No. 8:14-cv-66-T-33TGW. (M.D. Fla. July 25, 2014)]
Sixth Circuit Confirms Michigan's Tax on Health Claim Payments Is Enforceable Against Self-Insured Plans
Thomson Reuters / EBIA More items by Thomson Reuters / EBIA
8/18/2014

"[T]he Sixth Circuit took pains to distinguish a recent Second Circuit decision barring application of Vermont's health data-reporting law to self-insured ERISA plans ... While there are some differences in the laws, one wonders whether these decisions might set the stage for the Supreme Court to take another look at ERISA preemption in this context.... If not preempted, the additional compliance costs of state tax and reporting obligations ultimately will be borne by plan sponsors -- either directly or through their TPA contracts -- and should be taken into account in estimating total plan costs." [Self-Insurance Inst. of America v. Snyder, No. 12-2264 (6th Cir. Aug. 4, 2014)]

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