American Benefits Council
Benefits Byte


February 18, 2014

The Benefits Byte is the American Benefits Council’s regular e-mail and online newsletter for members only, providing timely reports on legislative, regulatory and judicial developments, along with updates on the Council’s activities in support of employer-sponsored benefit plans.

The Benefits Byte is published by the American Benefits Council, based on staff reports and edited by Jason Hammersla, Council director of communications. Contact information for Council staff related to specific topics can be found at the end of each story.

Click here to read past issues on the Benefits Byte Archive page.

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American Benefits Council IN THE NEWS

The Council remains a resource in contributing commentary and analysis to the news media on employee benefits topics.

The Council’s opinion has been widely sought with regard to implementation of the Patient Protection and Affordable Care Act (PPACA), including new rules prohibiting employers from providing better health benefits to top executives that to other employees. Kathryn Wilber, senior counsel for health policy for the Council, offered significant commentary in a January 18 New York Times piece by Robert Pear. Wilber described the existing restrictions on self-insured health plans as “outdated, inadequate, and unworkable.” Said Wilber, “Employers should be permitted to provide lower-cost coverage to employees who may not be able to afford the comprehensive coverage being provided to other employee groups.” Wilber’s comments to the Times were also included in articles on CNBC, National Law Review, Mondaq and Opposing Views.

Council President James Klein offered further analysis of health care policy in a January 24 POLITICO article examining employer behavior and thoughts on continuing health care coverage. Klein maintained, “[Employers] want to make sure the exchanges represent a venue where their workers can get good coverage at affordable prices. ... [t]here are some employers who will now provide coverage who before were not, and there will be others who will cease providing coverage and allow their employees to get coverage through the exchanges.” Klein also discussed with Bloomberg BNA (link courtesy of ADP) on January 7 the forthcoming challenge of complying with the final employer “shared responsibility” rules. Depending on how the rules are structured, he said, “employers are going to be spending a lot of time evaluating those and making sure that they’re in compliance with them as soon as necessary.”

In a February 3 letter to the Centers for Medicare and Medicaid Services (CMS), Klein called on CMS to avoid significant additional rate cuts to Medicare Advantage, urging the agency to hold rates at current levels for 2015. “We are concerned that further rate reductions could detrimentally affect retirees in the form of higher out-of-pocket costs, less coverage, and fewer provider options for retirees.” The letter was cited in conjunction with a broad-based public relations effort to raise awareness of this issue and by several healthcare watch groups and blogs, including LifeHealthPRO, Health System Review, AHIP Coverage, and Healthwise Daily.

With regard to retirement policy, Klein commented on tax policy affecting retirement plans in a January 16 Wall Street Journal article by John D. McKinnon. McKinnon noted the efforts of Dave Camp (R-MI), Chairman of the House of Representatives Ways and Means Committee, and his push to expand Roth-type savings accounts as part of his big tax overhaul. “This idea has been discussed a lot, and even though there is certainly no confirmation of it, it seems to be very likely,” said Klein. “It is generally expected to raise a lot of revenue. Unlike most proposals that are scored as raising tax revenue, this idea would be attractive to some taxpayers.”

The Council recently provided analysis of the “My-RA” initiative, which was significantly highlighted during President Obama’s State of the Union address. In a January 29 Associated Press story by Paul Wiseman, Lynn Dudley, senior vice president for retirement and international benefits policy suggested that this initiative is clearly aimed at individuals without a traditional pension or savings plan. "The people who would likely take advantage of this typically move from job to job often," she said.This article was reproduced in media across the country, including The Green Bay Press Gazette and The Spokane, Washington, Spokesman-Review.

Dudley also discussed automatic IRAs in a January 28 Pensions and Investments article by Hazel Bradford that was also published in Financial Advisor and Investopedia. “We know that access leads to participation, and we also know that participation leads to savings,” Dudley said.

For more information on the Council’s public relations activities, please contact Jason Hammersla, director, communications, at (202) 289-6700.

New Council Blueprint Summarizes Proposed 'USA Retirement Funds'

A new Benefits Blueprint, prepared for the Council by Kent Mason of Davis & Harman, LLP, provides a detailed summary and analysis of the “USA Retirement Fund” proposal that is the centerpiece of the Universal, Secure, and Adaptable (USA) Retirement Funds Act (S. 1979).

S. 1979 was introduced on January 30 by Senator Tom Harkin (D-IA), Chairman of the Senate Health, Education, Labor and Pensions (HELP) Committee. As we reported in the January 31 Benefits Byte, the centerpiece of this bill is the creation of a new workplace savings plan, called an automatic USA Retirement Fund, that is intended to help workers who do not already have a retirement plan. Employers with more than ten employees would be required to offer a retirement plan with automatic enrollment and a lifetime income option or automatically enroll employees in a USA Retirement Fund. The concept was first raised in Harkin’s July 2012 report, The Retirement Crisis and a Plan to Solve It (see pages 6-7).

The whole bill also includes many provisions addressing defined contribution and defined benefit plans generally, including clarification of hybrid plan rules for which the Council has long advocated. The Council previously issued a Benefits Blueprint summary of these hybrid plan provisions.

The Council continues to have concerns about the presence of employer mandates in S. 1979 and the potential effect on plan sponsorship of the USA Retirement Fund. Senator Harkin will retire at the end of the year, and as he seeks middle ground with Republicans on some or all elements of his bill some provisions could be modified and/or considered separately on a bipartisan basis.

For more information, contact Lynn Dudley, senior vice president, retirement and international benefits policy, Diann Howland, vice president, legislative affairs, or Jan Jacobson, senior counsel, retirement policy, at (202) 289-6700.

The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council's members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.

Notice: the information contained herein is general in nature. It is not, and should not be construed as, accounting, consulting, legal or tax advice or opinion provided by the American Benefits Council or any of its employees. As required by the IRS, we inform you that any information contained herein was not intended or written to be used or referred to, and cannot be used or referred to (i) for the purpose of avoiding penalties under the Internal Revenue Code, or (ii) in promoting, marketing or recommending to another party any transaction or matter addressed herein (and any attachment).