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Companies that self-fund health benefits are larger than companies that fully insure health benefits and their solvency is just as good as companies that fully insure, a government report required by the health reform law indicates. The reform law requires reports on the prevalence, solvency and quality of self-funded plans, with the stated goal of […]
Fiduciaries of 401(k) plans were reminded by a recent court decision that it’s best not to accept financial consultants’ investment advice for a retirement plan’s assets without careful scrutiny. At the same time the case, which raised other issues important to managing defined contribution plans, resulted in several rulings in the plan sponsor’s favor. Facts […]
Recently, four bills were introduced in state legislatures that would make self-funding less attractive by limiting stop-loss coverage for self-insured health plans. Many such proposals would raise minimum specific deductibles above the standard $20,000 seen in most enacted laws. This and other measures are intended to rein in self-insured plans, observers in the self-insured industry […]
Amid historically low interest rates, the U.S. 7th Circuit Court of Appeals’ recent affirmation of a retirement plan’s choice of discount rate for converting annuities into lump-sum payments to beneficiaries should reassure defined benefit plan sponsors facing similar challenges. In Dennison v. MONY Life Retirement Income Security Plan (No. 12-2407, 7th Cir., March 6, 2013), […]
Employers must make accommodations to allow employees with disabilities to participate in their wellness programs, the U.S. Equal Employment Opportunity Commission said in a recently released informal discussion letter. The letter was written in response to an employer’s question about a special program for employees with diabetes. The employer wanted to waive its annual health […]
Plan participants’ shortfalls and worries about retirement preparedness can provide an opportunity for plan sponsors to fill the void with participant education, tools and financial advisory services. Less than half of Americans are taking basic steps to prepare for retirement, and their confidence about how much they need to put away to be financially comfortable […]
On March 28, the IRS issued long-awaited guidance to help 403(b) retirement plan sponsors comply with written plan document requirements in the form of Revenue Procedure 2013-22, which contains a “master and prototype program,” and an information package with sample plan provisions. As a result, beginning June 28, 2013, the IRS will accept plan sponsor […]
Employers will be affected by the U.S. Supreme Court’s impending ruling on the constitutionality of the federal Defense of Marriage Act — no matter how the Court rules. The argument in this case hinges on Section 3 of DOMA and the fact that under DOMA, it is not possible for same-sex spouses to have access […]
Employers are understandably nervous about the transitional reinsurance fee, which health insurers and employer health plans must pay from 2014 through 2016. The fee will be collected by HHS, even though the states will tailor their own risk adjustment programs. It must be paid annually. Plans will probably make their first payment for 2014 a […]
Employers could use auto-escalation as a way to encourage 401(k) participants to increase their contributions and reduce the number of employees missing out on matching contributions from the plan sponsor. That’s the finding by WorldatWork and the American Benefits Institute, which said that nearly a third of U.S. retirement plan sponsors they surveyed think more […]