Health & Welfare Plans Newsletter

May 6, 2015

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Webcasts and Conferences

Mid-Year Election Changes: Cafeteria Plan Tips & Traps
May 13, 2015 in NC
(Hill, Chesson & Woody)

Capital Forum on Pensions 2015
May 20, 2015 in CA
(Western Pension & Benefits Conference - Sacramento Chapter)

Bona Fide HIPAA Security Risk Analysis and Risk Management
May 22, 2015 WEBCAST
(Clearwater Compliance)

Completing the Risk Corridors Plan-Level Data Form 2014
June 1, 2015 WEBCAST
(Centers for Medicare & Medicaid Services [CMS])

Completing the Risk Corridors Plan-Level Data Form 2014
June 3, 2015 WEBCAST
(Centers for Medicare & Medicaid Services [CMS])

Form 5500 Workshop 2015 - Knoxville
June 17, 2015 in TN
(SunGard Relius)

401(k) Plan Workshop 2015 - Knoxville
June 19, 2015 in TN
(SunGard Relius)

Governance and Fiduciary Duty ? What Retirement Consulting Actuaries Need to Know Audio/Webcast
July 8, 2015 WEBCAST
(Conference of Consulting Actuaries)

28th Annual Administrators' Symposium: Achieve Excellence
August 5, 2015 in TX
(ECFC [Employers Council on Flexible Compensation])

View All Webcasts and Conferences


[Guidance Overview]

IRS Releases 2016 Health Savings Account Limits
"The HSA contribution limit for an individual with self-only HDHP coverage remains at $3,350 for 2016. The 2016 contribution limit for an individual with family coverage is increased to $6,650. These limits do not include the additional annual $1,000 catch-up contribution amount for individuals age 55 and older, which is not subject to cost-of-living adjustments." (Ascensus)


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More Employers Adopt FSA Carryover Option
"In 2015, 60 percent of U.S. employers that offer employees health care flexible spending accounts (FSAs) stated that they opted to also provide a carryover option for employee contributions, up from 49 percent a year ago and more than double the number from 2013 ... At the same time, the number of employers offering FSAs that instead incorporate a grace period feature has fallen from 57 percent in 2013 down to 32 percent in 2014 and to just 23 percent this year." (Society for Human Resource Management [SHRM])

State Regulation of Marketplace Plan Provider Networks (PDF)
"This brief examines state network adequacy standards for marketplace plans in the 50 states and District of Columbia. [The authors] identify state requirements in effect at the outset of marketplace coverage, focusing on quantitative measures of network sufficiency and rules designed to ensure the delivery of accurate and timely provider directories. [They] then explore the extent to which those standards evolved for 2015." (The Commonwealth Fund)

Many Americans Seek Health Care Prices, Fewer Compare Across Providers (PDF)
"Study findings indicate most Americans have already sought price information before getting care; that individuals who compared prices across multiple providers believe that they saved money; and that more people want to know the prices of medical services in advance and are willing to choose less expensive providers. Yet, most Americans are not aware that prices vary, potentially keeping them from comparing prices or shopping for health care services. Further, Americans are split on whether it is reasonable to expect patients to compare prices before obtaining care." (Changes in Health Care Financing & Organization, a program of the Robert Woods Johnson Foundation)

Cancer Drug Market Just Hit $100 Billion, Could Jump 50% in Four Years
"The U.S. spends the most on cancer drugs as an absolute amount.... But Europe spends more on cancer drugs as a percentage of total spending on medicines.... More cancer drugs are approved in the U.S. than anywhere else.... The cost per month for a new cancer drug has increased 40%, or $5,900, over the past decade.... More of these costs are being borne directly by patients themselves, not just insurance companies." (Forbes)


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[Opinion]

A Health Care Revolution on Private Exchanges?
"[S]tates and municipalities would be better served by enrolling public-sector workers in the newly emerging private exchanges that already provide the affordable health coverage that corporate employees want. For example, enrollees on Bloom Health's exchange cost 22 percent less than the national average, and a whopping 42 percent of employees chose high-deductible HSA-eligible plans. With an average per-employee cost of $11,500 nationally, the potential for big savings is enormous. This would be especially true in high-cost states like New York." (Robert Emmet Moffit, Senior Fellow, Heritage Foundation)

Benefits in General; Executive Compensation

[Guidance Overview]

IRS Clarifies 409A Correction for Unvested Amounts
"[ Chief Counsel advice memorandum 201518013 ] clarifies ... that this means of correction is effective only if completed before the taxable year in which the compensation vests, and not merely before the date on which the compensation vests.... The IRS memorandum implicitly recognizes that a 409A violation could be corrected without adverse tax consequences if no portion of the deferred compensation is vested at the end of the year of the correction." (National Law Review)

[Guidance Overview]

SEC Proposes Dodd-Frank Pay vs. Performance Disclosure Rules
"[A] principles-based approach that allows companies more flexibility to communicate their pay versus performance story will serve as a superior construct to the prescriptive methodology offered in the Proposed Rule. We strongly believe a holistic approach that takes into account key financial metrics relevant to the company and industry as well as long-term stock price performance is the appropriate way to measure the relationship between pay and performance. By defining performance solely in the form of TSR, we believe that the SEC is highlighting a performance metric for both companies and investors that is limited in scope and may not directly correlate with underlying operating performance." (Steven Hall & Partners)

SEC Proposes Rules for Disclosure of Hedging Transactions
"If the proposed rules are implemented in their current form, public companies could be forced to choose between [1] disclosing that some forms of hedging are allowed under their hedging policies -- thereby risking adverse voting recommendations from proxy advisory services ... or [2] modifying existing hedging polices to limit investment approaches used to diversify concentrated stock positions, which would complicate compliance oversight of hedging policies and lead to changes by executives in their investment strategies, including potentially more sales of issuer stock under 10b5-1 programs." (McDermott Will & Emery)

Aligning Executive Pay: Are Activist Investor Proposals the Harbinger of the Next Wave of LTI Design?
"[Several recent] demands for restructuring CEO pay from activist investors that had taken significant stakes in their companies ... included changing equity-based long-term incentives (LTIs) to require measurable and significant shareholder value creation in order for the CEO to receive any LTI payout.... [Is] this a better model? Implicitly, does the current portfolio approach foster complacency? How should the two disparate approaches be rationalized?" (Towers Watson)

Employees at Very Small Firms Give Poor Ratings to Their Benefits
"Only 25 percent of employees at very small companies who are offered benefits rate their benefits as excellent or very good, compared with 58 percent of employees at large companies.... Less than two-thirds (62 percent) of employees at very small companies who are offered benefits report a good understanding of their benefits, well below the 80 percent reported by workers at large firms.... Just over half (55 percent) of very small business workers who are offered benefits agree they highly value the insurance benefits provided by their employer, compared to 70 percent at large firms." (Colonial Life)

Small Businesses Score Big on Employee Benefits Satisfaction
"Nine in ten responding small employers provide health care coverage and three in four provide a retirement plan. Yet, compared with larger corporations, not surprisingly, small employers were less likely to offer a wide variety of other benefits ... [The authors] asked employers to subjectively rate their employees' engagement and benefits satisfaction.... [R]atings came back just as high for small employers as they did for their larger peers." (International Foundation of Employee Benefit Plans [IFEBP])

[Opinion]

SEC Wants Link Between Executive Pay and Shareholder Returns
"The new rule will just make it easier for all of your shareholders to know what your more engaged and advanced shareholders already know. Do you pay your executives in a way that aligns with total shareholder return for a three to five year period? It is an important thing to know, but it is not earth shaking new information, or even the most important metric for some companies or their shareholders." (Performensation)

Press Releases

NTSA Elite Advisor Award Semi-Finalists Named National Tax-Deferred Savings Association [NTSA]

US Labor Department Sues Defunct Oregon Wood Manufacturing Company and its Owner to Restore Retirement Plan Assets Employee Benefits Security Administration [EBSA], U.S. Department of Labor

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David Rhett Baker, J.D., Editor and Publisher
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