The Health Care Supreme Court Case: Who Would Be Affected?

via NY Times

The Supreme Court on Wednesday will hear arguments on whether people in states where the federal government runs the health insurance marketplaces are eligible for subsidies that help them afford insurance. The court’s ruling is expected at the end of its term, in late June or possibly early July. If it decides against subsidies in the federal marketplaces, millions of Americans could be affected.

How many people could lose their subsidies?

If the court rules against the Obama administration in the King v. Burwell case, about 7.5 million people could lose their subsidies in 34 states that use the federal health care marketplace. The status of people in three other states — Oregon, Nevada and New Mexico — is unclear because those states at one time intended to run their own marketplaces, but now rely on the federal government to manage them.

How would insurance coverage change?

The effect of a court decision would not be limited to the people currently receiving subsidies in the federal marketplaces. People who buy their own health insurance in those states, even without subsidies, could be affected, because rates would increase if insurance pools become older and less healthy. Estimates from the Urban Institute prepared for The New York Times show how a post-King world would look compared with the current trajectory for the Affordable Care Act — or if the health law had never passed…

To View the NY Times full interactive article CLICK HERE

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RAND: How Do ACA Tax Subsidies Affect Premiums & Enrollment?

via RAND Corporation

A stethoscope lies on top of cash and a health insurance claim form with the American flag in the background.

To encourage enrollment in the new individual insurance exchanges, the Affordable Care Act (ACA) offers tax credits to help lower-income individuals and families buy coverage. These tax credits have faced multiple court challenges. In early November 2014, the U.S. Supreme Court announced that it will hear King v. Burwell, a challenge that disputes the legality of the ACA’s tax credits in the 34 states with federally run health insurance exchanges. What’s at stake if the Supreme Court upholds this challenge?

To read the full research brief CLICK HERE

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Supreme Court Receptive to Investors in 401(k) Case

via Wall Street Journal

WASHINGTON—The Supreme Court on Tuesday signaled it was likely to side with 401(k) investors in a case that examines when workers can sue businesses for offering high-cost mutual-fund options in retirement plans when cheaper options are available.

The justices, in a case examining the 401(k) offerings by energy holding company Edison International , suggested a San Francisco-based federal appeals court was wrong when it held a legal time limit barred employees from suing over allegedly higher-cost funds that had been offered as options in the 401(k) for more than six years.

The Supreme Court’s hourlong oral argument largely proceeded on the assumption the appeals court applied the time limit too strictly. Justice Samuel Alito said both sides in the case seemed to agree that such lawsuits are “not categorically barred.”

To read the full article CLICK HERE

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Lockton Compliance Alert: IRS Asks for Comments on Cadillac Tax

On Monday, Feb. 23, the Department of Treasury and the Internal Revenue Service (IRS) issued a request for information (RFI) on a variety of issues related to the excise tax on high-cost employer coverage that will apply in 2018. Known as the Cadillac tax, health coverage under insured and self-funded employer plans will be subject to a 40 percent excise tax to the extent the value of the coverage provided to an employee exceeds prescribed thresholds (generally, $10,200 for single coverage and $27,500 for any other level of coverage).

Please click for the full Lockton Compliance Services Alert.

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High-Court Spotlight Put on 401(k) Plans

The U.S. Supreme Court is scheduled to hear arguments Tuesday in a case that could have broad implications for the way millions of Americans save for retirement.

The court will focus on a narrow issue concerning the statute of limitations in the case, called Tibble v. Edison International . A ruling against Edison could trigger a wave of lawsuits against companies over the way they set up and manage 401(k) retirement accounts and similar plans, according to lawyers not involved with the case.

Tibble is one of 13 class-action lawsuits filed in the past eight years that have accused U.S. companies, including Boeing Co. and Massachusetts Mutual Life Insurance Co., of failing to act in the best interest of employees who participate in their 401(k) plans. The issues include failing to monitor excessive fees, favoring some high-cost retail mutual funds over lower-cost options and funneling employee savings into investment products managed by affiliate companies..

To read the full WSJ article CLICK HERE

Posted in Executive Benefits, Retirement, Retirement Plans

How to Lobby for a Better 401(k)

via Wall Street Journal

It’s tough to tell whether your 401(k) plan is delivering all it should for retirement. It’s even harder to persuade your employer to make changes if you find room for improvement.

Common flaws in the popular savings plans include high fees and the absence of low-cost index funds, which can make investing cheaper and easier. Conflicts of interest, fraud or theft, though far less common, also can cost 401(k) participants dearly.

Yet pushing for change can put workers in the uncomfortable position of confronting their employer. Few people want to question the judgment of people who sign their paycheck and control promotions and raises.

That means employees who see ways to bolster their 401(k) need to determine whether the requests are reasonable, and then make the case tactfully..

To read the full article CLICK HERE

Posted in Executive Benefits, Retirement, Retirement Plans

Scenes From ObamaCare Tax Season

via Wall Street Journal

We keep reading that ObamaCare is working beautifully—a liberal reverie interrupted only by those moments when the law is not. The latest arrived Friday, featuring another political exemption from the individual mandate.

This tax-filing season is exposing Americans for the first time to the ObamaCare command to buy health coverage or else pay a penalty—or pay maybe, kind of, to some extent. The White House carved out vast exceptions to the mandate last year to assuage its unpopularity, but a few saps are still discovering they must pay 1% of their gross income or $95, whichever is higher, for going uninsured. This remains unpopular, and thus we get calls for more regulatory improvisation.

Though open enrollment for the 37 states with federal exchanges closed this month, the White House created a special sign-up grace period that will begin in March and run for seven weeks. The uninsured people docked the ObamaCare tax on their 2014 return will be able to join the exchanges they otherwise couldn’t use. Come next tax return, they’ll thereby gain a chance to avoid the stiffer 2015 penalty, which rises on paper to the greater of 2% of income or $325…

To read the full article CLICK HERE

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