Compliance May 3, 2017

FSR Makes Retirement Plan Recommendations to Treasury

Among other things, FSR said Treasury should replace the DOL's current fiduciary rule with a “best interest standard” adopted by SEC and state insurance regulators.
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In response to the Trump administration’s Executive Order directing the Treasury Department to conduct an assessment of financial regulation, the Financial Services Roundtable (FSR) submitted a letter outlining major recommendations to help grow the economy and create jobs.

“Improving the financial regulatory system, while protecting consumers, will grow the economy and expand opportunity for more Americans,” says FSR CEO Tim Pawlenty.

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Among its recommendations, the FSR suggests the Administration should support policies that will promote retirement savings and enable financial services providers to better meet the long-term needs of Americans in their retirement years.           

The letter says the Administration should:

  • Oppose the implementation of the Department of Labor’s (DOL) current fiduciary rule and work to replace that rule with a “best interests standard” adopted by the Securities and Exchange Commission (SEC) and state insurance regulators;
  • Treasury should support overhauling the techniques for assessing the “cost” of tax expenditures to reflect a realistic view of the benefits of retirement incentives that extend well beyond the customary five- or ten-year budget window; and
  • Grant the private-sector authority to establish open multiple employer plans (MEPs) for small businesses.
Benefits May 3, 2017

Employers Say They Will Keep Key ACA Provisions

On the left and right of the political spectrum there is a lot of enthusiasm for protecting certain key provisions of the Affordable Care Act. 

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New research from Willis Towers Watson suggests that, as Congress continues to consider repealing and replacing the Affordable Care Act (ACA), employers expect to retain some of the law’s popular provisions, “even if they are not required to by a new law.”

Survey data provided by the firm shows approximately one-third of employers are “not sure of future plans,” but more employers plan to keep popular provisions than make changes.

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“For example, if unlimited lifetime benefits are repealed, employers are more than three-times more likely to keep them in place than they are to reinstitute lifetime dollar limits, at 50% versus 15%, respectively,” Willis Towers Watson reports. “In addition, if contraceptive care at a 100% benefit is repealed, employers are nearly six times more likely to maintain coverage at that level than they are to reduce it, at 59% versus 11%.”

The findings come from the Willis Towers Watson 2017 Emerging Trends in Health Survey, which polled 666 U.S. employers. The survey also found that if the age 26 dependent coverage rule were to be repealed “more than twice the number of employers would keep the eligibility age at 26 than lower it: 48% versus 22%.”

“Employers are more likely to retain some of the popular ACA benefit provisions because of their positive impact on employee engagement and the potential for changes to be viewed negatively in the context of overall rewards,” observes Julie Stone, a national health care practice leader at Willis Towers Watson. “As we see an increased focus on employee productivity, employers will be careful about the implications of change, not just from a dollars and cents perspective, but in terms of employee perceptions.”

NEXT: Employees Expect Generous Coverage 

According to Willis Towers Watson, employers are also unlikely to make changes to their broader health care strategy if certain provisions of the ACA that have been unpopular with employers are repealed.

“For example, just 6% of employers said they are very likely and 13% said they are somewhat likely to make changes if the employer mandate is repealed,” the survey data shows. “The employer mandate requires employers to offer affordable, minimum-value coverage to full-time employees or pay a penalty.”

If restrictions on offering stand-alone or premium health reimbursement accounts for active employees are eliminated, just 4% of employers are "very likely" and 13% are "somewhat likely" to make changes to their current health care strategy, Willis Towers Watson finds. In addition, even if limits are placed on the dollar amount of employer-sponsored premiums that are exempt from federal income and payroll taxes, “relatively few employers would make broad changes.”

“Just 16% of employers are very likely and 31% are somewhat likely to make changes if the tax exclusion is capped,” data shows.

“Employers are confident they'll be providing health care for the near future and are hesitant to commit to changes until they see the big picture,” Stone concludes. “Whatever provisions a new law might include, most employers will stay on their current path to build a high-performing health care program. Improving plan design value and creating program efficiencies will remain core components of an effective long-term health care strategy.”

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