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The Spencer’s Benefits Reports is a summary of the week's news items posted in the WHAT'S NEW pages of Spencer’s Benefits Reports Online. For questions regarding this email service, contact Customer Service at (800)449-9525.
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On September 25, the Senate unanimously passed H.R. 2851, which provides continued coverage protections for dependent students on medical leave. The House passed the bill, which was introduced by Rep. Paul Hodes (N.H.), on July 30. H.R. 2851 has been sent to President George W. Bush for his signature…
The Profit Sharing/401k Council of America (PSCA) has released its 51st Annual Survey of Profit Sharing and 401(k) Plans, which provides up-to-date information on current practices and trends in profit-sharing and 401(k) plans. The survey reports on the 2007 plan year experience of 1,011 plans with 7.4 million participants and more than $730 billion in plan assets…
With the ratio of elderly persons growing at a faster rate than the working-age population in many parts of the world and the implications that this trend has on financing of future health care and pension benefit costs, “employers will play a critical role in shaping public policy and addressing these concerns,” according to benefits consulting firm Mercer. In 2007, the United Nations predicted that by 2050, the ratio of persons age 60 and older will have grown from 21% to 32% of the population in developed countries. Mercer’s conclusion is based on the report that it recently released with the World Economic Forum (WEF) entitled The Future of Pensions and Healthcare in a Rapidly Aging World: Scenarios to 2030…
Sen. Olympia Snowe (Maine) has introduced the Prosthetics Parity Act of 2008 (S. 3517), which would amend ERISA and the Public Health Service Act (PHSA) to provide parity under group health plans and group health insurance coverage for the provision of benefits for prosthetic devices and components and benefits for other medical and surgical services. The bill was referred to the Health, Education, Labor, and Pensions Committee…
In two recent disaster relief announcements, the Pension Benefit Guaranty Corporation waives certain penalties and extends certain deadlines for entities affected by Hurricane Ike in Texas and Louisiana. The relief provided by the announcements applies to entities such as plan administrators and contributing sponsors located in any of the affected counties in the two states…
The Treasury Department and the Internal Revenue Service have issued Notice 2008-82, which allows reservists to recover funds in their health flexible spending accounts (health FSAs) after being called to active duty…
In Rev. Proc. 2008-62, the Internal Revenue Service updates the procedure by which the sponsor of a single-employer defined benefit plan may request and obtain approval for the use of plan-specific substitute mortality tables in accordance with IRC Sec. 430(h)(3)(C) and ERISA Sec. 303(h)(3)(C). The revenue procedure modifies Rev. Proc. 2007-37, I.R.B. 2007-25, 1433…
In Notice 2008-85, the Internal Revenue Service provides the static mortality tables to be used under IRC Sec. 430(h)(3)(A) and ERISA Sec. 303(h)(3)(A) for purposes of calculating the funding target for pension plans and other items for valuation dates occurring during calendar years 2009 through 2013 (see also previous story). The notice also includes a modified “unisex” version of the mortality tables for use in determining the minimum present value of accrued benefits under IRC Sec. 417(e)(3) and ERISA Sec. 205(g)(3) for distributions with annuity starting dates that occur during stability periods beginning in calendar years 2009 through 2013…
Annual average premiums for employer-sponsored health insurance rose 5% in 2008 to $12,680 for family coverage, even with more workers enrolled in high-deductible health plans (HDHPs), according to the 2008 Employer Health Benefits Survey, jointly issued by the Kaiser Family Foundation (KFF) and the Health Research and Educational Trust (HRET). Although the premium increase this year was relatively small, it has more than doubled since 1999, when it was $5,791 for family coverage, the report noted. Since 1999, workers’ wages rose 34% and general inflation rose 29%, while the cost of employer-sponsored health care premiums grew by 120%…
In Advisory Opinion 2008-06A, the Department of Labor’s Employee Benefits Security Administration (EBSA) concludes that a welfare plan may be amended to transfer its remaining assets to an IRC Sec. 501(c)(3) tax-exempt organization and then, following the plan’s termination, have the assets transferred to an organization that is not a party-in-interest. Louis Campagna, chief of the division of fiduciary interpretations in the EBSA’s Office of Regulations and Interpretations, wrote the advisory opinion…
In Rev. Proc. 2008-61, the Internal Revenue Service outlines areas in which rulings and determination letters will not be issued as to the tax consequences of nonqualified deferred compensation arrangements described in IRC Sec. 409A. The revenue procedure modifies Rev. Proc. 2008-3, I.R.B. 2008-1, 110, which lists areas in which the IRS will not issue advance rulings, including specified requirements under Sec. 409A…
According to Towers Perrin’s annual Health Care Cost Survey, the average health benefit expenditure in 2009 for large companies will be $9,660 per employee, an increase of 6% over 2008 figures. The Towers Perrin survey database shows that total health care costs have increased by 33% since 2004, with the employee share increasing by 42% during the same period…
The Department of Labor has obtained a court order that appoints an independent fiduciary to manage the abandoned 401(k) plan maintained by the defunct Freedom Security Systems of New Hyde Park, N.Y. The order was entered by the U.S. District Court for the Eastern District of New York, in Chao v. Freedom Security Systems, Inc., 401(k) Plan (Civil Action No. 08-CV-3146)…
In a September 22 letter to members of the Senate, the American Benefits Council urged Congress to pass the House-approved version of technical corrections to the Pension Protection Act of 2006 (PPA) (H.R. 6382). The House passed its version of the legislation this past March, while the Senate passed a somewhat different version last December…
Medicare beneficiaries’ coverage generally is less generous than the coverage from a large employer plan or from the most popular coverage in the Federal Employees’ Health Benefits Program (FEHBP), according to a study recently conducted by the Kaiser Family Foundation…
The Financial Accounting Standards Board (FASB) has agreed to postpone until 2009 the effective date of the changes it is making in Financial Accounting Statement (FAS) No. 132(R)-a, Employers’ Disclosures about Postretirement Benefit Plan Assets. In coming to this decision at its September 24 board meeting, the FASB members acknowledged that their deliberations have been slower than expected. The original effective date would have been for years ending after Dec 15, 2008…
After almost eight years of slowdowns, health care costs have begun to creep up, with Hewitt Associates projecting a 6.4% average increase for employers in 2009, up slightly from the 6.0% increase in 2008 and 5.3% increase in 2007…
The retiree drug subsidy (RDS) is facing greater scrutiny and audits as required by the Centers for Medicare and Medicaid Services (CMS), Susan Hayes, principal at Pharmacy Outcome Specialists in Lake Zurich, Ill., told attendees of the recent Second Annual Pharmacy Benefit Academy sponsored by the Midwest Business Group on Health (MBGH) and Pharmacy Outcome Specialists in Chicago. The CMS plans to perform financial audits on one-third of all of the 450 prescription drug plans (PDPs) and Medicare Advantage prescription drug plans each year over the next three years, with an eye toward identifying and stemming fraud, waste, and abuse, Ms. Hayes said…
In a recent report to the Senate, the Government Accountability Office (GAO) found that the Department of Health and Human Services (HHS) has made progress toward protecting electronic health information, but that more work remains. The new report is an update on the HHS’s progress since the GAO evaluated its health information technology (IT) policies in January 2007…
The Department of Labor has obtained a consent judgment that requires G. Conway, Inc., of Boston and corporate officers Gerard D. Conway and Robert Conway to repay $72,803 to the company’s 401(k) plan. The consent judgment was entered by the U.S. District Court for the District of Massachusetts, in Chao v. Gerard D. Conway (Civil Action No. 1:08-CV-10646-GAO)…
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