Spencer and Benefits NetNews – July 25, 2014

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Featured This Week

New Reports

  • Analysis: State Requirements Under Federal Health Reform, 7/14 (503.-1)

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  • Analysis: Employer-Sponsored Coverage Remains Dominant Source Of Health Coverage, 7/14 (422.2.-5)


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  • Analysis: Sec. 401(k) Plan Loans, 7/14 (225.-11)


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  • Survey: 2014 PBGC Interest Rates, 6/14 (619.5.-53)


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July 25, 2014

Just One-Third Of Organizations Have Quantified Cost Of ACA

Just 31 percent of organizations have quantified the cost of the Patient Protection and Affordable Care Act (ACA), according to recent research from Arthur J. Gallagher & Company (AJG). Among those that have quantified the cost impact of the ACA, 42 percent expect to see costs increase by at least 6 percent in 2014, and 26 percent expect costs to increase by 10 percent or more. In addition, 90 percent of employers reported having no written total rewards or strategic benefits plan with measureable objectives…

(Read Intelliconnect) »

Health Insurer That Paid Another Insurer’s Claims Is Not Entitled To Reimbursement

Although an insurer that covered students’ sports injuries was obligated to pay for their medical expenses where its policy and a health insurer’s policies overlapped, it did not have to reimburse the health insurer for payments that had already been made on the students claims, according to the Sixth Circuit U.S. Court of Appeals in
Central States, Southeast and Southwest Areas Health and Welfare Fund v. First Agency, Inc.
(No. 13-2077). This was because the claim was brought under ERISA Sec. 502(a)(3)(B), which only provides for equitable, not monetary relief, the court held. The terms of the two insurers’ policies conflicted with regard to which company was responsible for making payments…

(Read Intelliconnect) »

July 24, 2014

Federal Appeals Court Axes Subsidies For Federally-Run Health Insurance Exchanges

IRC Sec. 36B limits the availability of premium tax credit subsidies only to insurance purchased under state-established Exchanges and not to insurance purchased under Exchanges established by the federal government on behalf of the states, according to a three judge panel of the federal appeals court for the District of Columbia circuit in
Halbig v. Burwell. Thus, the appeals court, in a 2 to 1 decision, reversed the district court’s ruling that the subsidies apply to both state-operated and federally-established Exchanges and remanded the case with instructions to vacate the IRS regulation that allows for the subsidies to apply to individuals purchasing coverage under both state-established Exchanges and federally-run Exchanges…

(Read Intelliconnect) »

Automatic Retirement Plan Deferrals Favored By More Than Half Of Workers

Fifty-five percent of retirement plan participants said they would favor automatic annual increases to their contributions, according to results of a recent survey from American United Life Insurance Company (AUL), a OneAmerica company. Containing responses from over 7,500 individuals, the survey was conducted to better understand behaviors and resources that might help participants prepare for retirement. For example, women were 6 percent more likely to be influenced to participate in a plan by enrollment meetings than were men. Also, 56 percent of participants reported that they favored such online tools as calculators, articles, and videos…

(Read Intelliconnect) »

July 23, 2014

HSAs More Popular Than HRAs Among Small To Mid-Size Employers And Employees

The number of employers offering health savings accounts (HSAs) increased from 14.7 percent to 15.1 percent in 2013, and employee participation in these plans rose from 7.1 percent to 8.8 percent in the same period, according to new data released from the 2013
UBA Health Plan Survey. By contrast, the percentage of U.S. employers offering plans with health reimbursement arrangements (HRAs) in 2013 was only 8.6 percent and employee participation in these plans dropped from 8.8 percent in 2012 to 8.6 percent in 2013. UBA expects these trends to continue as HSAs prove themselves to be better at driving consumer behavior and cost containment while still in compliance with the maximum allowable out of pocket costs under the Patient Protection and Affordable Care Act (ACA) of $6,350 for individual and $12,700 for family coverage…

(Read Intelliconnect) »

Americans’ Attitudes Toward ACA Fall Mostly Along Party Lines

Attitudes toward health care reform are tied closely to Americans’ political leanings, according to recent research from Morning Consult. The study showed that 17 percent of respondents strongly approve of the Patient Protection and Affordable Care Act (ACA), 25 percent somewhat approve, 16 percent somewhat disapprove, and 39 percent strongly disapprove. Among staunch Democrats, however, 34 percent strongly approved and only 8 percent strongly disapproved. Only 2 percent of staunch Republicans strongly approved, and 69 percent strongly disapproved…

(Read Intelliconnect) »

July 22, 2014

Would Employees Quit Their Job If They Could Buy Comparable Health Coverage Elsewhere? 40 Percent Say Yes

Forty percent of employees said they would quit their jobs if they could buy health insurance comparable in cost and coverage to the insurance they now receive in the workplace, according to recent research from Securian Financial Group. While currently 60 percent of Americans receive health insurance through the workplace, the availability of the Patient Protection and Affordable Care Act’s (ACA) Health Insurance Exchanges has raised questions whether employees will choose to leave the workplace and purchase coverage through an Exchange…

(Read Intelliconnect) »

“Leakage” Hurts 401(k) Accumulations

Would restricting preretirement withdrawals from 401(k) plans help or hurt retirement savings in America? New analysis conducted by the Employee Benefit Research Institute (EBRI) for the ERISA Advisory Council finds that “leakage”—preretirement access to 401(k) plan savings by workers, either through loans, hardship withdrawals, or payout at job change—can have a negative impact on 401(k) accumulations (defined as 401(k) account balances plus IRA rollovers originating in 401(k) plans) at age 65…

(Read Intelliconnect) »

July 21, 2014

ERISA-Governed Health Plans That Cease Providing Contraceptive Services Must Disclose Changes

In response to the Supreme Court’s decision in Hobby Lobby v. Burwell, the Departments of Labor (DOL), Health and Human Services, and the Treasury have issued a frequently asked question (FAQ) that addresses disclosure requirements for plans that will cease providing coverage for some or all contraceptive services mid-plan year…

(Read Intelliconnect) »

MLR Has Surprisingly Small Effect On Health Insurers’ Business Decisions

According to an October 2013 to July 2014 study by the Government Accountability Office (GAO), federal minimum medical loss ratio (MLR) standards were only one of many requirements that affected health insurers’ business practices since 2011. Of the eight insurers included in the GAO study, all of whom increased their premium rates since 2011, three reported that the MLR requirements were only one of several factors influencing their decisions with regard to premium rates. Four of the eight stated they had changed the amounts of payments to their agents and brokers. Only one insurer reported that the MLR requirements were a primary driver behind its business decisions…

(Read Intelliconnect) »

DB Participants’ Tax Court Anti-Cutback Challenge Estopped By Prior Seventh Circuit Decision

Defined benefit plan participants are collaterally estopped by a prior Seventh Circuit decision from pursuing Tax Court litigation related to their contention that plan amendments violated ERISA’s anti-cutback rules, the Seventh Circuit U.S. Court of Appeals has ruled in
Carter, et al. v. Commissioner of Internal Revenue, et al. The prior decision (Carter v. Pension Plan of A. Finkl & Sons Co., 654 F.3d 719 (7th Cir. 2011) (Carter I)) held in part that no anti-cutback violation occurred…

(Read Intelliconnect) »