Benefits September 8, 2011

4th Circuit Overturns Lower Court Ruling on Health Care Mandate

September 8, 2011 (PLANSPONSOR.com) – A U.S. appeals court ruled against the state of Virginia and others seeking to invalidate President Barack Obama’s health care law as unconstitutional.
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The 4th U.S. Circuit Court of Appeals overturned a lower court judge who had ruled the federal government could not compel people to buy health insurance or face paying a penalty, Reuters reports. (See Judge Strikes Down HCR Coverage Mandate) The individual mandate takes effect in 2014. 

Virginia had contended this provision conflicted with a state statute, giving it standing to challenge the federal law, but the appellate court found that Virginia did not have the right to challenge it and overturned the decision. One day after Congress passed the federal health care overhaul in March 2010, Virginia signed into law a measure aimed at protecting its residents from the federal law, but the court said that was merely a declaration and did not trump the federal government’s authority. 

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According to Reuters, the court did not address Virginia’s challenge to whether the mandate was constitutional. In a separate ruling, it ordered another lawsuit against the health care law, which targeted the penalty imposed for those who do not purchase insurance, be dismissed because the penalty has yet to be imposed. 

It was the second major victory at the appellate level for the White House in a case that will likely be heard by the U.S. Supreme Court during the 2011-12 term that begins next month. 

The 4th Circuit decision follows a similar one in late June by the 6th U.S. Circuit Court of Appeals that upheld the individual mandate by ruling that Congress had the power to require Americans to buy health insurance. (See Court Upholds Ruling that Health Care Law is Constitutional).  

However, it contrasts with one by the 11th Circuit in August that ruled against the individual mandate requirement in a challenge brought by 26 states. (See 11th Circuit Finds Health Care Mandate Unconstitutional).  

Those conflicting decisions likely ensure the Supreme Court will have to step in to resolve the differences, Reuters said.  

Benefits September 8, 2011

Study Finds Genders Have Differing Thoughts on Life Insurance

September 8, 2011 (PLANSPONSOR.com) - While four in five employees today believe their life insurance coverage is adequate, 45% of working women and 28% of working men with life insurance have not evaluated their needs since obtaining their first policy.
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MetLife’s 2011 Insurance Literacy Study found working women with life insurance are also nearly twice as likely as men (21% vs. 12%) to acknowledge they don’t know how much coverage they have and are also more likely to underestimate how much coverage might be needed. While a good starting place for life insurance coverage is typically outstanding debt plus five years of salary, according to MetLife, the survey found 54% of women and 47% of men believe coverage equal to outstanding debt and only three years of salary or less will be adequate.   

The study also found that only one in four men or women considered outstanding debt when calculating their life insurance needs yet 52% want their death benefit to cover these obligations.

The survey indicates men and women have different desires for what they want their insurance policies to cover.  Nearly three-quarters (73%) of married men say their number-one expectation for their life insurance coverage is to pay for future living expenses for their spouse, compared to 47% of married women. For married women, the number-one expectation is to cover their final expenses (69% versus 55% of married men). However, both married men and women express nearly identical levels of interest in protecting the financial futures of their children.  

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In addition, more than one-fourth of those interviewed are unfamiliar with the basic features of their own life insurance policies. For example, nearly one quarter (24%) of employees who say they have term life insurance believe this coverage offers financial protection for an unlimited amount of time when in fact, term insurance often offers financial protection for a defined time period such as 10, 15, or 20 years, or if provided through an employer-maintained group policy, for the duration of employment. Twenty-eight percent of those employees who own permanent life insurance are unaware that this coverage can build cash value as they pay their premiums.  

The survey sample consisted of 500 telephone interviews of employed adults who have life insurance. The interviewing was conducted from June 22, 2011-July 1, 2011. 

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