Benefit News' Daily Diversion 
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Attention all Daily Diversion readers! This is the last post to our blogspot url!From now on, you can read DD posts at http://ebn.benefitnews.com/blog/daily_diversion/. If you RSS us, you'll have to resubscribe at the new address. I'm no techie, but if you run into trouble feel free to e-mail me. Otherwise, I'm looking forward to reconnecting at the same Bat-time, new Bat-channel.Thanks for reading! --K.B.
A recent report in The Washington Post reveals that Sen. Edward Kennedy's health care reform proposal involves mandates both for employees and employers, similar to the health care system in Kennedy's home state of Massachusetts.It's no secret that employers are solidly against a mandate for businesses to chip in for the cost of health insurance, so I encourage you to make your voice heard on Sen. Kennedy's plan. According to the Post, he plans to unveil it today and my sources tell me that a bill of of some kind could come as early as this month.
Overheard @: Trimming FSAs could pay for health care reform
In a recent article written for the Center on Budget and Policy Priorities, authors Chuck Marr and Kris Cox suggest that "Congress should consider scaling back or eliminating health care flexible spending accounts as part of its effort to pay for health care reform."Among their reasons for deep-sixing FSAs, Marr and Cox say:* FSAs encourage excess utilization of health care.* FSAs’ “use or lose it” requirement promotes wasteful spending.* FSAs complicate peoples’ lives while providing only modest benefits for non-wealthy accountholders.* Health care reform’s changes to the treatment of out-of-pocket costs are likely to weaken the rationale for FSAs.I found their arguments to be interesting and very rational, particularly the part about the "use it or lose" requirement promoting wasteful spending. I can't tell you how many colleagues and friends buy several pairs of eyeglasses and bottles upon bottles of aspirin in December each year so they can use up their FSA dollars.What do you think? With HSAs growing in popularity, are medical FSAs even needed anymore?
Tip of the Day: Submit your ideas for fixing the retirement system
Do you have an idea of what a universal, secure, and adequate retirement system should look like? Retirement USA wants to hear from you!The organization is accepting proposals from us regular folks on how to revamp retirement to make sure everyone has happy and secure golden years. There are a few caveats -- proposals have to align with Retirement USA's principles, but they're things I think we all can agree on for the most part: plans that are universal, secure, portable and provide adequate retirement income.So put your ideas out there!
Yay or Nay: Is the employer-sponsored system worth saving?
Although President Obama has called the employer-based health care system "an accident of history that works," a recent New York Times opinion piece by Princeton economics professor Uwe Reinhardt says the system makes employers "pickpockets, so to speak, who take a chunk of the employee’s total compensation and buy with it whatever fringe benefits they 'give' their employees."While I'm sure you don't wholly agree or disagree with either the president or Reinhardt, what are your thoughts? Should the employer-based system stand, or do you think it needs dismantling?
Tip of the Day: Prepare for a health care battle
As summer approaches, so does the official start of a duel over health care reform. A host of proposals from Republicans and Democrats are on the table, and Sen. Charles Grassley acknowledged to reporters earlier this spring, "This is the toughest issue we have ever taken on -- every part has got a chance of blowing up."One of the stickiest points of contention is whether or not reform should incorporate a public plan option. To keep with all the "duel" imagery, Les Masterson of Health Plan Insider writes that CDHPs and HSAs should prepare to "do battle" with a public plan.As Masterson notes, some 8 million Americans are covered by HSA-eligible plans with enrollment steadily growing. He cites two recent surveys touting the accounts and writes:"These two studies were released at the same time that the health care reform debate rages in DC. That's not a coincidence. Private health plans are rightfully viewing portions of health care reform as a direct assault on their business.HSAs, the poster boys for creating better health care consumers and lowering health care costs under the Bush administration, are not seen by most Democrats as a solution—but rather a problem that prices the poor out of quality health care."So pros, since employers increasingly are turning to HSAs to lower cost, you should get your war paint ready if you don't want to see HSAs decline. Or, perhaps you're content to see employees enroll in the public plan. What are your thoughts? Comment and let me know.
News You Can Use: Another day, another delay
If there's one thing the government does well, it's make things take longer. The Department of Labor announced on Thursday a second extension for public comment on final regulations that would permit 401(k) and other retirement plan fiduciaries to provide more advice to plan participants under the Pension Protection Act of 2006. The new deadline is Nov. 18, 2009.Employers have long awaited better guidance on what forms of investment advice the government wants to permit, or encourage. The comment period was previously extended to allow the Obama administration sufficient time to examine the legal and policy issues present in the regulation, according to a White House memo. On Jan. 21, 2009, DOL released a final rule administering the provision of investment advice under the ERISA's prohibited transaction provisions. Subsequently, Labor officials drew out the applicability and effective dates of the final regulation from March 23 to May 22.No word yet on what will be accomplished during the second extension other than changing of seasons.
Tip of the Day: Hit all the right target dates next month
Mark your calendars, pros; there's some don't-miss action going on at Capitol Hill next month regarding target-date funds.The first date to put in your Outlook is June 18, when the Department of Labor and Securities and Exchange Commission will hold a joint one-day hearing on the issues (read: abysmal '08 performance) surrounding target-date funds.According to a press release from the agencies, the hearing will "examine the need for additional guidance given the importance of these investments to the retirement savings of investors." By "importance," they mean the large number of participants with savings in these funds. (Last year, 53% of 401(k) plans use target-dates as the default option.)The hearing will cover topics like "portfolio composition, risk, and disclosure," according to DOL's website. Not very specific, is it? That's why the second don't-miss date is June 10 -- the day the agencies say they'll release the hearing agenda.The last date to mark is June 5. That's the deadline for written requests to testify at the hearing. Make your voice heard! Send requests to e-ORI@dol.gov, or to Office of Regulations and Interpretations, Employee Benefits Security Administration, 200 Constitution Ave., N.W., Washington, D. C. 20210.
Yay or Nay: Is swearing at work okay?
Two surveys find differing opinions on whether it's okay to swear at the workplace, and I want to get your thoughts, pros.According to a poll by SurePayroll, 80% of respondents believe that even seemingly innocent swearing on the job can be interpreted the wrong way and have negative consequences, even though 40% admit to swearing themselves at least occasionally and 11% actually think swearing can boost employee morale.Another study from researchers at the University of East Anglia (in Norwich, England) finds that embracing your inner Blago can "reflect solidarity and enhance group cohesiveness, or as a psychological phenomenon to release stress," according to study director Yehuda Baruch.The study also discovers younger workers are more tolerant of profanity, and that women swear more than you might expect of the fairer sex and execs are less profane than the rank-and-file.So, is swearing at work okay -- yay or nay?
Tip of the Day: Raise the roof (on HSA limits)
The Internal Revenue Service recently released a notice outlining 2010 minimums and maximums for health savings accounts plans and high-deductible health plans.For calendar year 2010, the annual HSA contribution limit for an individual with self-only HDHP coverage is $3,050, up $50 from 2009. For an individual with family coverage under a HDHP, the new limit is $6,150, up $200 from 2009.The 2010 minimum on HDHP deductibles, for self-only HDHP coverage, jumped to $1,200 (up $50 from 2009), and $2,400 (up $100 from 2009) for family coverage. The 2010 maximum on HDHP out-of-pocket expense increased to $5,950 (up $150 from 2009) for self-only HDHP coverage and $11,900 ($300 from 2009) for family HDHP coverage.Related EBN coverage:What's in it for me?Offering answers to 'What's happening to my health plan?'
Overheard @: 'We had a $3 billion investment loss'
If the recession drags on, it will be a red-hot summer for the PBGC -- emphasis on "red."In a report from BenefitNews.com, the Pension Benefit Guaranty Corp. reports that the agency’s underfunded liabilities for its single-employer insurance program hit an all-time high of $33.5 billion, surpassing the former record of $24 billion in 2004.“The reason that our deficit grew is not because of investment losses, rather because of more plan terminations coming through the agency since the last fiscal year,” Constance Markakis, senior attorney advisor in the legislative and regulatory department at PBGC, said late last week. “We had a $3 billion investment loss on our $63 billion assets portfolio. Also, 70% of our assets are invested in fixed-income.”Still, the recession and the stock market decline means more defined benefit plans are substantially underfunded, thus seeking distressed terminations. “The $33.5 billion includes both actual terminations and probable terminations, which are terminations that we predict will occur within the next year,” explained Markakis.PBGC insures the pensions of about 33.8 million workers and retirees in about 28,000 private-sector DB plans under its single-employer insurance program and 10.1 million participants under its multiemployer program in about 1,500 plans, according to the Employee Benefit Research Institute.
Tip of the Day: Wait! You forgot your 401(k)!
When an employee leaves, I know you must have your offboarding procedures: take their security card, give them a COBRA application, perhaps conduct an exit interview. But somewhere in those procedures, I beg of you to remind them to take their 401(k)s with them.New research from Charles Schwab shows 43% of assets held by 401(k) participants who left their jobs in the first quarter of 2008 had not been moved a year later.And no, there's nothing terribly wrong with that, but participants should be encouraged to be active and engaged about what they do with those savings. “We urge people to educate themselves on their options when they leave a job, especially if they expect to be out of work without access to a savings plan at a new job,” says Rene Kim, Charles Schwab senior vice president.“In many cases, rolling an old 401(k) into an IRA can be a strategic move, because it is tax free, there is no penalty, and an IRA provides more investment choices,” Kim continues. “A rollover IRA can also keep retirement savings more top of mind. People who leave money in a previous employer’s 401(k) plan often forget the money is even there, which can result in asset allocations falling way off balance based on an individual’s savings objectives and risk tolerance.”And while rolling savings into a new employer's plan also is a good move, Kim (and every other retirement expert on the planet0 strongly warns against cashing out.“Unless there is a dire and immediate financial need, cashing out a 401(k) is almost always a bad idea,” Kim says. “Cashing out eliminates the power of compounding savings, and people generally find it very hard to get back on track once they begin tapping retirement savings for shorter term needs.”
Overheard @: HSA enrollees have no regrets
As more employers switch to CDHPs and HSAs to fight the good fight against health care costs, they have greater reassurance that the plans will be well-received by employees, as two new surveys show HSA participants have few regrets about switching to the plans.In an online survey by OptumHealth, 82% are content with their accounts and 74% would recommend an HSA to a friend. The online survey involved 500 HSA owners and was conducted in February and March.Further, countering the charge from opponents that HSAs are only for the healthy and wealthy, America’s Health Insurance Plan reports that almost half (49%) of HSA holders live in neighborhoods with median incomes under $50,000, according to 2000 Census data.AHIP also finds about 8 million Americans are covered by an HSA-eligible insurance plan. The study also reveals that HSA owners are forward thinkers when it comes to financial and physical well-being. For instance, 64% have asked about generic options for medication and 47% have queried their physicians about charges.HSA accountholders also believe that people need to become more engaged in their health care, with 83% of respondents agreeing that consumers should research and comparison shop their health care options as they would for a new television set. Additionally, 72% said that individuals should be responsible for helping to manage their health care costs.Related EBN coverage:Readers sound off on March editorial [on HSAs]CDHPs praised, ROI panned
News You Can Use: Republicans reveal health care reform proposal
Us EBNers don't believe in duplicating efforts, so rather than rehash the new Republican-led health care proposal here, I'll just link you to the writeup from Benefits Explained, the blog from EBN sister title Employee Benefit Adviser.The key buzzterms you'll want to note, though, are: tax credits, health insurance exchanges and no mandates. And no, you didn't miss anything; the plan does seem to remove employers' tax exemption for providing health benefits. Let the debate begin!
Tip of the Day: Mandating health risk assessments is an ADA no-no
Some employers have taken the bold step in recent years to mandate employees to participate in health risk assessments to obtain group health insurance. However, a new informal letter from the Equal Employment Opportunity Commission says that such a requirement is one bold step forward but two legal steps back, writing that the mandate is a violation of the Americans with Disabilities Act.In part, the letter reads: "Although the Equal Employment Opportunity Commission has not taken a formal position on this issue, this office believes the policy you described would violate provisions of the Americans with Disabilities Act that require disability-related questions or medical examinations of employees to be job-related and consistent with business necessity."I understand the EEOC's position, but in this economy, if every dollar in health savings isn't "business necessity," I don't know what is. What do you think, pros? Comment and let me know.Click here to read the full text of the EEOC's letter.