eBRIEFS Masthead

July 2012


Featured Article

HR Leaders Scrambling after Supreme Court's Health Care Reform Ruling

From the individual mandate provision to 'pay or play' rule, companies find it's time to deal with the bottom line. Click here to continue.



In This Issue
ACA Deadlines Loom for Reporting and Disclosure
New Guidelines on Obesity Treatment Herald Changes in Coverage
NLRB Takes Sledgehammer to Social Media Policies
IRS Proposes Rules to Help Retirees
Facing the National Long Term Care Nightmare
Bollinger's Risk Management Services Newsletter
National Flood Insurance Program Extended

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 Legislative/Regulatory Update

Supreme Court Upholds the Affordable Care Act's Individual Mandate: What It Means for Employers and Plan Sponsors


The Supreme Court of the United States (the "Court") ruled, in a 5-to-4 landmark decision, that the individual mandate under the Patient Protection and Affordable Care Act ("the Act") is constitutional, although it also held that certain Medicaid expansion provisions are unconstitutional. The Act's coverage mandates remain in effect and the implementation and administration of its various mandates will need to continue. Although the Act was upheld, the legal challenges to healthcare reform are far from over. Click here to continue. 

Additional Guidance on the Summary of Benefits and Coverage


The Departments of Labor, Health and Human Services and Treasury (the "Departments") recently released the ninth in their series of answers to frequently asked questions on implementation issues associated with the Affordable Care Act. The recent FAQ provides clarification on the summary of benefits and coverage ("SBC"), which is required to be provided by group health plans and health insurers starting with the first open enrollment or plan year beginning on or after September 23, 2012. Click here to continue.

Guidance Issued on Fees for Research


In April, the Internal Revenue Service issued proposed regulations on collecting fees from health insurance issuers and self-insured group health plan sponsors for establishing the Patient-Centered Outcomes Research Trust Fund, as required under the Patient Protection and Affordable Care Act. The fund provides funding for a new Patient-Centered Outcomes Research Institute. PPACA requires the Institute to conduct research to evaluate and compare health outcomes and the clinical effectiveness, risks, and benefits of medical treatments, services, procedures, drugs and other strategies or items that treat, manage, diagnose or prevent illness or injury. Click here to continue.

Lawmakers Drop Provision That Would Have Boosted Mass Transit Tax Break


What was probably the last legislative vehicle during the current congressional session for federal lawmakers to retroactively restore a temporary boost in the maximum pretax monthly contribution employees can make to pay for mass transit expenses is now gone. Click here to read our advisory notice.

IRS Releases Guidance on $2,500 Health FSA Contribution Limit


On May 30, 2012, the Internal Revenue Service ("IRS") released Notice 2012-40 (the "Notice"), which provides guidance on the application of the Affordable Care Act's $2,500 limit on employee pre-tax contributions to health flexible spending arrangements ("health FSAs"). The Notice clarifies the effective date of the $2,500 limit and the deadline for amending cafeteria plans that offer a health FSA to comply with the limit. The Notice also provides relief for certain contributions that mistakenly exceed the $2,500 limit. Employers sponsoring health FSAs may rely on the guidance provided in the Notice pending issuance of future Treasury regulations.  Click here to continue.


 Health Care Reform

ACA Deadlines Loom for Reporting and Disclosure


With the Supreme Court's June 28 ruling affirming health reform, its legal requirements on employer health plans are a green light. Plans therefore continue to face important requirements this calendar year. Fortunately, they're the same ones employers have known about for some time. But if an employer has been holding off from comprehensive implementation, a reminder of the four most important health reform requirements with looming adoption dates could be helpful. Click here to continue.

Battle Shifts to Insurance Exchange Subsidies


Critics of the new health care law, having lost one battle in the Supreme Court, are mounting a challenge to President Obama's interpretation of another important provision, under which the federal government will subsidize health insurance for millions of low- and middle-income people. Click here to continue.

Court Decision on Health Care to Trigger Compliance Frenzy


Now that the Affordable Care Act (ACA) has survived its constitutional challenge, companies will markedly ramp up the implementation of its provisions in the coming months. Significant regulations will continue to be issued, including those related to employers' "pay or play" decision (i.e., whether to offer employees insurance meeting "minimum essential coverage" or pay a penalty to the government), the methodology for determining who is a "full-time employee," the operations of the state-run health-insurance exchanges provided for in the law, automatic enrollment in health plans, and more.  Click here to continue.

Good News for Mental Illness in Health Law


Americans with mental illness had good reason to celebrate when the Supreme Court upheld President Obama's Affordable Care Act.  The law promises to give them something they have never had before: near-universal health insurance, not just for their medical problems but for psychiatric disorders as well.  Click here to continue.


 Benefit Trends

New Guideline on Obesity Treatment Herald Changes in Coverage


Eat less, exercise more. Simple? Yes. Easy? No. If weight loss were easy, obesity rates among adults in the United States probably wouldn't have reached the current 36 percent. Recently revised guidelines from the U.S. Preventive Services Task Force acknowledge that fact. They recommend that clinicians screen patients for obesity, which is defined as having a body mass index of 30 or higher. Further, they say patients who meet or exceed that level should be offered or referred to "intensive, multicomponent behavioral interventions" to help them lose weight.  Click here to continue.

When Summer Isn't So Much Fun


Summer kicks off a time of family barbecues and outdoor fun, but it also is a time for something else - accident claims. Unum has noticed nearly a 20% increase in accident claims for emergency room visits, follow-up treatments and fractures and lacerations during summer months. For the past two years, the number of accident-related claim payments has averaged close to 15% higher now than any other time of year. Click here to continue.

Employees Fight Physicians on Rx Adherence


Patients who don't take their medication as prescribed is a billion-dollar problem, reports pharmacy benefit manager Express Scripts in its 2011 Drug Trend Report. Nonadherence to prescription medication cost the U.S. health care system $317.4 billion in 2011. And that's just for treating medical complications - not the cost of lost productivity - that could have been avoided if patients had taken their medication as prescribed. The report shows that for many therapy classes, less than 50% of patients take their medication as prescribed. Click here to continue.


 HR and Payroll Issues

NLRB Takes Sledgehammer to Social Media Policies


In a May 30, 2012, report whose guidance is likely to be challenged in the courts, the National Labor Relations Board (NLRB) cautioned that it believes that numerous common clauses in social media policies violate the National Labor Relations Act (NLRA).  Click here to continue. 

'Deferred Action' from Deportation Clarified by ICE


President Barack Obama issued an executive order June 15, 2012, that has in effect halted the deportation of an estimated 1.4 million young, undocumented immigrants. Referred to as DREAMers, after the proposed DREAM (Development, Relief and Education for Alien Minors) Act, the imnmigrants would be allowed conditional permanent residency if they arrived in the United States as minors and now live in the U.S.  Click here to continue.  

Generations Learn From Each Other


In Chicago's South Side, a young man is just beginning his career in a steel manufacturing firm and an older man is approaching the end of his career after 49 years on the job. These two men work closely together, despite their significant age difference. Christian Reyes is a Millennial. He was born in 1991.  Click here to continue.


 Retirement Plans

IRS Proposes Rules to Help Retirees Make Their 401(k) Funds Last Longer

Even if they've been diligently socking away money in their 401(k) plans, employees who are about to retire are no doubt nervous about their financial futures. The nagging question: With retirees living longer, will their retirement savings last as long as they do? Believe it or not, the IRS wants to help. Under a recently released IRS guidance package, you can play an active part in helping retirees manage this so-called longevity risk. Click here to continue.

How 401k Plan Sponsors Can Best Teach Employees to Quit Emphasizing Income


One of the biggest complaints concerning 401k plans from financial professionals deals with investors' implausible enthusiasm for income-oriented investments. The 2006 Pension Protection Act tried to address this very concern by encouraging default options which emphasized equities over bonds. Alas, fate decided to thwart this effort by producing one of the worst equity markets almost as soon as the legislation became effective. Click here to continue.

What Do I Do With All These Fee Disclosures From Service Providers?


Under Department of Labor ("DOL") regulations that became effective July 1, 2012, a retirement plan's contract or arrangement with a covered service provider constitutes a prohibited transaction unless the service provider and plan fiduciary comply with disclosure requirements under Section 408(b)(2) of the Employee Retirement Income Security Act ("ERISA"). Plan fiduciaries ultimately bear responsibility for ensuring that they receive complete disclosures under ERISA Section 408(b)(2), and that the plan pays reasonable compensation to service providers.  If a plan has an unreasonable arrangement or contract with its service provider, the plan fiduciary may be subject to significant penalties under ERISA or the Internal Revenue Code (the "Code").  Thus, plan fiduciaries should ensure that they understand the disclosure rules described in this article. Click here to continue.

 Financial Services

Facing the National Long Term Care Nightmare


The topic of retirement already causes many people to lose sleep at night, as they realize they don't have enough money saved up to retire any time soon.  Making matters worse is the understanding that we may need to help our parents with long-term care in their final years, placing another emotional and financial burden on our finances and families. Then another troubling reality hits: We may need the same special care in a few decades.  Click here to continue.


 Risk Management

Bollinger's Risk Management Services Newsletter


Click here to view the most recent issue.

How to Gauge the Cost of Corporate Risk


With earthquakes in Japan and New Zealand, floods in Australia and Thailand, and tornadoes in the United States causing large insured losses last year, it's no shock that the total cost of risk (TCOR) - a widely used metric of corporate expense for insuring and managing risks - rose in 2011, according to a recent risk-management survey. The surprise is how little it went up. Click here to continue.

Workers Compensation Rates for Employers Likely to Increase


Employers renewing their workers compensation policies likely will pay more for the coverage as claims costs rise and insurers' combined ratios deteriorate, experts say. Click here to continue.


 Personal Lines

Bollinger's Summer Newsletter


Click here to view this issue.

National Flood Insurance Program Revised and Extended until 2017


President Obama has signed a five-year extension of the National Flood Insurance Program into law.  Click here to continue.

Study Questions Collision Systems


The Highway Loss Data Institute found in a recent analysis of insurance claims that some crash-avoidance systems were what researchers called ''clear winners,'' while others did not appear to be living up to their promise, the group said on Tuesday. Click here to continue.