July 12, 2012 (PLANSPONSOR.com) – U.S. exchange-traded funds (ETFs) enjoyed $16 billion in net inflows in June, their best month since February’s $15 billion in net inflows.
That brought total ETF net inflows, including exchange-traded notes (ETNs) to $20 billion for the second quarter of 2012 and $75 billion in the first half of 2012 – significantly better than the $56 billion in net inflows in 2011’s first half, according to Strategic Insight, an Asset International company. The first-half 2012 pace seems likely to result in the sixth straight year of $100 billion or more in net inflows to US.. ETFs.
The most popular ETF categories in June were large-cap blend, intermediate-term bond, large-cap growth, long-term bond and diversified emerging markets equities.
Sponsors Should Focus on Compliance, Cost Management for ACA
July 12, 2012 (PLANSPONSOR.com) - Following the Supreme Court’s recent ruling to uphold the Patient Protection and Affordable Care Act, plan sponsors should focus on both complying with the new rules and the longer-term impact for their plans.
During a webinar sponsored by Fidelity and hosted by PLANSPONSOR, experts emphasized that regardless of the November presidential election outcome, plan sponsors should not delay their preparations.
The milestone years for the health care reform are 2014 and 2018. The year 2018 seems far down the road, but “that’s only four annual enrollments away,” cautioned Brad Kimler, executive vice president of benefits counseling at Fidelity.
“The longer you wait [to plan], the more aggressive you’re going to need to be,” said Jeff Munn, vice president of benefits policy development at Fidelity.
Regarding near-term compliance, companies should prepare to deliver on employee communications, payroll issues, and financial and reporting information. “Get on board and keep moving with the compliance,” said Christi Wise, senior vice president of product management at Fidelity.
Employee Communications
$2,500 health care flexible spending account (FSA) limit effective January 1, 2013;
Notice of exchanges by March 1, 2013; and
Summary of Benefits and Coverage/Uniform Glossary for annual enrollment beginning September 23, 2012 and beyond.
Payroll
Medicare taxes for higher income employees effective January 1, 2013; and
W-2 reporting of health care value distributed by January 31, 2013.
Financial and Reporting Information
Comparative effectiveness research fees apply to calendar year plans from 2012 to 2018, first due July 31, 2013;
Elimination of retiree drug subsidy (RDS) deductibility for employers effective January 1, 2013; and
Medical loss ratio rebates must be paid by August 1, 2012.
For the longer term, plan sponsors should prepare for 2014 changes and implement communication strategies surrounding things such as employer mandate/penalties; increases in allowed rewards for wellness programs from 20% to 30%; and the elimination of preexisting condition limitation exclusions.
Sponsors should also prepare well in advance for the 2018 excise tax on high-cost health plans with a 40% tax on excess value, as well as higher thresholds for early retirees and specific high-risk occupations.
With all the health care changes on the horizon, it is imperative that employers focus on cost control now. Without cost control, the Fidelity webinar panelists cautioned, employers may be forced to reduce benefits dramatically when the excise tax becomes effective in 2018.
Employers should get compliance issues out of the way and then make key long-term decisions about managing costs to stay under the excise tax cap as long as possible, Kimler said.