Spencer Benefits Reports NetNews – July 31, 2015

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July 31, 2015

 

ACA is affecting employers’ benefits funding, delivery, and insurance strategies

According to the latest Guardian Workplace Benefits Study, expected cost increases stemming from the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) are spurring employers to consider new approaches to benefits funding and administration. An increasingly complex benefits environment is also making employers rethink their benefits strategies, which may allow them to take advantage of new opportunities for benefits communication, funding, and administration, Guardian says…

(Read Intelliconnect) »

EBSA clarifies fiduciary duty in selecting, monitoring annuity providers for benefit distributions from DC plans

The Employee Benefits Security Administration (EBSA) has issued guidance clarifying the duty of fiduciaries in selecting and monitoring annuity providers to distribute benefits from 401(k) and other defined contribution (DC) plans under the annuity selection safe harbor provided in ERISA Reg. Sec. 2550.404a-4. Specifically, the guidance addresses concerns about liability by clarifying that an employer’s fiduciary duty to monitor an annuity provider generally ends when the plan no longer offers annuities from the annuity provider as a distribution option, not when the annuity provider finishes making all promised payments…

(Read Intelliconnect) »

July 30, 2015

 

HRA contributions exempt from gross income

Contributions made by the taxpayer to the retiree HRA on behalf of eligible retirees, spouses, and eligible dependents that were used exclusively to pay for eligible medical expenses were excludable from the retirees’ gross income under Code Sec. 106, according to a recently-released IRS private letter ruling. Further, contributions made to the retiree HRA on behalf of eligible retirees, spouse and eligible dependents were not wages subject to FICA taxes (Social Security and Medicare taxes) imposed under Code Sec. 3121, FUTA taxes imposed under Code Sec. 3306(b) or income tax withholding under Code Sec. 3401(a)…

(Read Intelliconnect) »

Grandfathered plans should be careful when modifying wellness programs

While employers maintaining a grandfathered health plan under the Patient Protection and Affordable Care Act (ACA) may add or modify their wellness programs, these employers should be very careful not to do anything to lose their grandfathered status, according to Larry Grudzien, an ACA expert attorney at a recent ACA Wellness Compliance webinar sponsored by ACAenroll.com…

(Read Intelliconnect) »

Participants had standing to seek employer’s profits from transferring their retirement plan assets

Reversing a district court’s grant of summary judgment in favor of Bank of America in an ERISA suit brought by a group of retirement plan participants seeking disgorgement of the profits earned by the employer when it transferred their 401(k) plan assets into a pension plan, the Fourth Circuit U.S. Court of Appeals found the participants had statutory standing for equitable relief as well as Article III standing to bring their claims, and the claims were timely. The appeals court vacated that portion of the lower court’s order denying the participants’ cross-motion for summary judgment based on its erroneous standing determination, and remanded the case for further proceedings…

(Read Intelliconnect) »

July 29, 2015

 

Performance recognition, flex-time and paid time-off policies most favored by employers, survey finds

Total rewards strategies that empower organizations to attract, motivate, retain and engage employees remain a popular business model in today’s workplace, according to a new survey, “Total Rewards Programs and Practices” by WorldatWork. The idea of total rewards emerged in the 1990s and has accelerated as companies realize they must take a much broader look at external forces such as economics, the labor market, cultural norms and regulatory changes reshaping the workplace. The 2015 survey was designed to measure the prevalence of 50 specific types of total rewards programs and practices…

(Read Intelliconnect) »

 

Experts examine tax implications of the ACA

“2015 Tax Update,” a webinar sponsored by Accounting Today and presented on July 14, featured several issues of relevance to practitioners with respect to the 2015 tax year and the upcoming 2016 filing season. Some related issues of continuing importance that first arose in 2014 were also covered. Roger Harris, a former chairperson of the IRS Advisory Council and currently president and chief operating officer of Padgett Business Services, led the webinar and discussed, among other areas, the impact of the Patient Protection and Affordable Care Act (ACA), as well as highlighting some changes within the upcoming 2016 filing season…

(Read Intelliconnect) »

Networks in marketplace plans narrower than commercial plans

An analysis released by Avalere Health revealed that the provider networks of health insurance plans available through the marketplace, or health insurance exchange (HIE) are significantly narrower than those of commercial plans sold in the same areas. On average, Avalere found that the marketplace plans had 34 percent fewer providers than the commercial plans. Avalere vice president Elizabeth Carpenter noted that consumers should shop carefully to be sure that their providers participate in the network of the plan they buy. Under the Patient Protection and Affordable Care Act (ACA), sec. 1302(c)(3)(B), health plans offered through the marketplace do not have to count payments to out-of-network providers toward the out-of-pocket limits on cost sharing…

(Read Intelliconnect) »

 

July 28, 2015

 

Unmodified since 1996, severance policy plausibly an ERISA plan

Vacating the dismissal of a physician’s complaint for benefits owed under a severance plan, the Second Circuit found that the severance policy as alleged qualified as an ERISA “employee welfare benefits plan.” In effect without revision since 1996, the medical center’s written severance policy involved the kind of undertaking that came within the meaning of ERISA’s “any plan, fund, or program” language. To the court, the policy represented a decades-long commitment to provide severance benefits under a wide variety of circumstances; it required managerial discretion in its implementation and an individualized review whenever certain covered employees were terminated…

(Read Intelliconnect) »

IRS Commissioner updates lawmakers on ACA provisions and 2015 filing season

Responding to congressional inquiries, IRS Commissioner John Koskinen on July 17 sent a letter to lawmakers providing preliminary results of the 2015 filing season with respect to tax-related provisions of the Patient Protection and Affordable Care Act (ACA). Koskinen reminded them that this was the first year that taxpayers saw changes to their income tax returns related to the individual shared responsibility provision and the premium tax credit, as well as the first year the IRS administered the new provisions…

(Read Intelliconnect) »

 

Employers unsure of health strategy impact of carrier consolidation

Recently, it was announced that insurers Aetna and Humana plan to merge. According to a recent pulse survey from Aon, companies have varying opinions on the impact that existing and future health insurer consolidation will have on their organization’s health and benefit strategy…

(Read Intelliconnect) »

July 27, 2015

 

Surgical costs assessed for notice violations, but no per diem sanctions

A former employee who did not receive a timely COBRA notice was entitled to equitable relief, but only for her medical costs, because her former employer’s actions did not warrant a more severe per diem penalty since they were merely notice violations, according to a district court in Pennsylvania…

(Read Intelliconnect) »

“Satisfaction gap” narrowing between traditional health plans and CDHPs: EBRI

Individuals with health insurance continue to express higher satisfaction with traditional health plans compared with consumer-driven health plans (CDHPs), but the “satisfaction gap” appears to be narrowing, according to new research from the Employee Benefit Research Institute (EBRI). The
Consumer Engagement in Health Care Survey (CEHCS) found that traditional-plan enrollees were more likely than CDHP and high-deductible health plan (HDHP) enrollees to be extremely or very satisfied with their overall plan in all years of the survey. In 2014, 61 percent of traditional-plan enrollees were extremely or very satisfied with their overall health plans, compared with 46 percent among CDHP enrollees and 37 percent among HDHP enrollees…

(Read Intelliconnect) »

 

Balances in IRAs continue to grow

Recent research by the Employee Benefit Research Institute (EBRI) found that, in the EBRI IRA Database, assets in individual retirement accounts (IRAs) continue to rise. Specifically, the EBRI report,
Individual Retirement Account Balances, Contributions, and Rollovers, 2013; With Longitudinal Results 2010–2013: The EBRI IRA Database, found that the average account balance for individuals owning at least one IRA increased to $119,804 in 2013, which is an increase of 30.4 percent from 2010 to 2013, and 14.1 percent from 2012 to 2013. The median (mid-point) followed the same pattern, going from $25,296 in 2010 to $32,179 in 2013, representing increases of 27.2 percent between 2010 and 2013 and 15.0 percent between 2012 and 2013…

(Read Intelliconnect) »