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The ERISA Industry Committee. Washington Update: July 23, 2012 . Participation Procedure . Procedure for audience participation Audience will be in a “listen-only” mode If you wish to ask a question or make a comment, press *6 on your telephone to “un-mute” your telephone
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The ERISA Industry Committee Washington Update: July 23, 2012
Participation Procedure • Procedure for audience participation • Audience will be in a “listen-only” mode • If you wish to ask a question or make a comment, press *6 on your telephone to “un-mute” your telephone • After speaking, please press *6 again to re-enter “listen-only” mode
Washington Update Agenda Welcoming Remarks Scott Macey, new President and CEO of ERIC Amicus briefs Comments from Marty Reiser Ways & Means Professional Staff Health Update Retirement Update Concluding Remarks/Questions
Amicus Briefs • Frommert v. Conkright (Xerox case in 2nd Circuit ) • ERIC is supporting brief • to be filed this Friday • Key Issues • Deference to administrator decisions • Required SPD level of details • Relevance of participant expectations
Amicus Briefs, cont. • US Airways v. McCutchen (Supreme Court) • Amicus brief support requested • no decision yet • Key Issues • Application/limitation of subrogation provision • Equitable remedy of plan reformation
The SCOTUS decision on the Affordable Care Act • ACA in essence upheld • Individual mandate not OK under Commerce Clause • But OK under power of Congress to tax • Medicaid expansion • Expansion not unconstitutional BUT feds cannot force states to expand by withholding existing Medicaid funds
The SCOTUS decision: the impact on employers • Impact of the Medicaid change • States may opt out for financial and/or political reasons • Significant effect on coverage of uninsured and, thus, costs of uncompensated care • Direct effect on employer “shared responsibility” penalty under ACA • Intertwined with question of whether federally run Exchanges may offer premium subsidies
The SCOTUS decision: the aftermath • November elections • Will one party take control of the White House and Congress??? • Impact on ACA could be huge if R’s have total control • Other legal challenges
Health Legislation • House votes to repeal the ACA (HR 6079) • 33rd attempt to fully or partially repeal ACA • 5 D’s join all R’s to repeal • No action by Senate likely
Health Legislation, cont. • House votes 270-146 to approve HR 436 • Repeal 2.3% medical device tax • Permit reimbursable purchase of OTC drugs without prescription • Allow up to $500 of FSA funds to be distributed rather than forfeited • Senate action unlikely, although some bipartisan support for bill
Health Regulations • Still awaiting guidance on several key issues • Full time/part time employee definition • Coordination with waiting periods • Employer shared responsibility provisions • Minimum value • Affordability • Cadillac tax • Reinsurance • Meeting with government 7/20
Health Regulations, cont. • Transitional reinsurance program • ACA requires contribution from insurers and self-insured plans for three years • Intended to partially offset costs of insurers for insuring high-risk individuals • $12B in 2014 • $8B in 2015 • $5B in 2016 • Big question: how will yearly fee be apportioned? • Also reporting concerns
Health Regulations, cont. • DOL EBSA civil enforcement projects • Greater emphasis on health plan investigations • Health Benefits Security Project • Pursues enforcement of ACA provisions and investigations of MEWAs
Retirement – Legislative Update MAP-21 (highway/student loan/flood insurance) signed into law on July 6 includes: Interest Stabilization Stabilized rates used for specified purposes PBGC Premium Increases Section 420 extension & expansion
Retirement – Regulatory Update, Department of Labor • Participant Disclosure FAQs issued May 7th • Q&A #30 on brokerage windows • May 31st meeting with DOL representatives on Q&A 30 • July 3rd OMB meeting • Letter to Secretary Solis • Hill visits
Retirement – Regulatory Update, cont Department of Labor • Beneficiary statements & lifetime income (mandate vs safe harbor) • Definition of Fiduciary proposed regulation • Department of Labor brief on Forum selection clause (Monzingo v. Trend Personnel Services) Court of Appeals, 10th Circuit
Retirement – Regulatory Update, cont. Treasury Department/IRS • 25 year stabilization rate
Upcoming ERIC calls and meetings • Washington Update conference call: Monday, September 9, 11:00 a.m. • Washington Representatives Committee meeting: Monday, September 9, 3:30 p.m. • ERIC Membership and Committee meetings: October 24-25, 2012
To receive ERIC updates • If you would like to receive your own copy of our emails and notifications of future updates, please let us know by writing to Adreanne Cooper at ERIC (acooper@eric.org.) In this email, please include your contact information or signature block, and please indicate whether you wish to receive information on retirement issues, health issues, or both.
For further information • Kathryn Ricard, Senior Vice President, Retirement Security • kricard@eric.org • Gretchen Young, Senior Vice President, Health Policy • gyoung@eric.org • ERIC: 202/789-1400