1 The ERISA Industry Committee Washington Update: December 5, 2011

2 Participation Procedure Procedure for audience participation Audience will be in a “listen-only” mode If you wish to ask a question or make a comment, press *6 on your telephone to “un-mute” your telephone After speaking, please press *6 again to re- enter “listen-only” mode

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4 Washington Update Agenda Welcoming Remarks Retirement Update Health Update Concluding Remarks/Questions

Retirement – Legislative Update Demise of Super Committee (11/12/11) Next Steps/Pressing Congressional Business –Extension of Payroll Tax Holiday (with extension to employers) –Extension of Unemployment Benefits –“Doc Fix” –“AMT” Issues

Retirement – Legislative Update, cont Issues Expiration of Bush Tax Cuts Deficit Commission Failure & Effect Defined Contribution Plans & Tax Reform Tax Reform (“Sense of Congress” Resolution)

Retirement – Legislative Update, cont. ERIC LOBBYING ACTIVITIES PBGC Premium Proposal Pension Funding Proposal Hybrid Plan Lobby Campaign Update

Retirement – Regulatory Update Department of Labor –Definition of Fiduciary Regulations to undergo additional economic analysis – most likely to come out in early 2012 (96-1 likely to be amended) –Service provider final disclosure regulations (under 408(b)(2)) still at OMB (at OMB for Paperwork Reduction Act review) –Participant fee disclosure regulations – expected first quarter 2012

Retirement – Regulatory Update, cont. DOL Investment Advice Final regulations under PPA issued – ERIC member survey results Lifetime Income Disclosure & Benefits Statement Project ERIC/PSCA held joint conference call on 11/15/11 ERIC/PSCA to meet with DOL on 12/8/11

Retirement – Regulatory Update IRS & Treasury -IRS/Treasury lifetime income guidance– Treasury guidance to be first out of gate “soon” to be followed by DOL & Treasury joint guidance - ERIC & PSCA to schedule meeting with Treasury & IRS on this issue

Health: Budget Control Act of 2011 Part Two: debt ceiling increased $1.2T - $1.5T –Super Committee charged with achieving $1.5T debt reduction Unable to agree on a package –Thus: sequestration $1.2T in cuts > FY FY 2021 go automatically into effect –Effective January 2, 2013 Cuts divided equally between defense and non-defense

Health: Impact of sequestration Exempt from cuts: Medicaid and social security –OK to cut Medicare, but not more than 2%, and may only apply to provider payments Medicare cuts expected to approach $123B –Also exempt: CHIP, Part D low-income subsidies, Catastrophic coverage subsidies, ACA premium subsidies

SCOTUS and the ACA SCOTUS will consider ACA constitutionality –Oral arguments this spring –Decision probable late June Key issues –Individual mandate – heart of the case –Severability –Impact of the AIA –Medicaid expansion Circuit Courts split over constitutionality –Two favorable, one against, one no standing

Health legislative update: CLASS Act HHS Secretary Sebelius “suspends” implementation of CLASS Act –LTC program under the ACA –“…we have not identified a way to make CLASS work at this time.” Several hearings in House Bills introduced in both House and Senate to repeal –Congressional passage unlikely

Amendments to SF HCSO San Francisco Health Care Security Ordinance requires medium/large employers to pay for employee health care –One mechanism: HRA HCSO amends rules on use of HRAs –24 months to use contributions –Rollover of year-end 2011 balances –New reporting requirements ERISA preemption implications? FocusOn call 12/7

Health: regulatory guidance Uniform summary of benefits and coverage –New rules not applicable until issuance of final regulations Mental health parity –Guidance on applying parity to “nonquantitative treatment limitations”

Meetings with regulators OMB –Use of Medicare claims data EEOC –Wellness madness

New initiative: ERIC Wellness Coalition First conference call: Wednesday, 11/9 Initial task: address regulatory challenges under GINA, ADA, HIPAA, and (presumably) ACA Results of informal survey To join coalition:

FocusOn calls Completed: –Wellness (11/9) –ERRP (11/15) –Health care reform task force (12/1) Upcoming: –SF HCSO (12/7) –HRAs under the ACA (12/8) –Reporting health care costs on the W-2 (12/13) –Health care reform task force (1/5/12) –Impact of same-sex marriages (TBD) 19

Upcoming ERIC meetings Next Washington Update call: 1/9/12 ERIC Membership and Health Policy/Retirement Security Committee meetings: March 14 and 15, 2012

21 To receive ERIC updates If you would like to receive your own copy of our s and notifications of future updates, please let us know by writing to Adrienne Cooper at ERIC In this , please include your contact information or signature block, and please indicate whether you wish to receive information on retirement issues, health issues, or

22 For further information Kathryn Ricard, Senior Vice President, Retirement Security Gretchen Young, Senior Vice President, Health Policy ERIC: 202/