1. 1 The ERISA Industry Committee Washington Update: January 9, 2012

2. 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

3. Check out the new ERIC website! www.ERIC.org All new content: amusing photos of ERIC staff, funny jokes, delicious recipes, insider gossip, and penetrating insights into today’s top benefit stories* *Under construction

4. 4 Washington Update Agenda Welcoming Remarks Outlook for health policy in 2012 –Scott Raab, Policy Advisor to Senate Minority Leader Mitch McConnell (R-KY) Health Update Retirement Update Concluding Remarks/Questions

5. SCOTUS and the ACA SCOTUS will consider ACA constitutionality –Briefs coming in now –Oral arguments this spring 3/26: does the AIA preclude a ruling on the case at this point? 3/27: is the individual mandate constitutional? 3/28: 1) what other provisions can be upheld if the mandate is unconstitutional; and 2) is the expansion of Medicaid constitutional? –Decision probable late June

6. Wyden-Ryan Medicare proposal Plan introduced by Sen. Ron Wyden (D- OR) and Rep. Paul Ryan (R-WI) –Medicare recipients would get premium support to buy health insurance on federally regulated exchange Could choose private plan or traditional Medicare Would start in 2022; no impact on those 55 or over –Premium support level determined by second- lowest cost plan and traditional Medicare

7. Wyden-Ryan Medicare proposal, cont. New Medicare plans –Must offer benefits at least as comprehensive as those offered by traditional Medicare –No discriminatory premiums Must accept all, regardless of age, gender, health –Feds would contribute more money to plans covering sickest seniors Low-income seniors would receive financial help with OOP costs New help for catastrophic costs

8. Wyden-Ryan Medicare proposal, cont. Wyden “free choice” redux –Small (<101 employees) employers may give employees option of taking cash instead of health coverage Employees may keep unspent balance, but taxed Overall cap on Medicare spending: economic growth plus 1%, starting in 2023

9. Essential health benefits under the ACA Two roles for EHBs under ACA –Must be offered in Exchange plans –Plans may limit dollar value of non-EHBs HHS permits states to set benchmarks from: –One of the three largest small group plans in the state; –One of the three largest state employee health plans; –One of the three largest federal employee health plan options; or –The largest HMO plan offered in the state’s commercial market

10. EHBs, cont. What is a workable definition of EHBs that plans may use to limit benefits that are not EHBs? –Examples: bariatric surgery, in-vitro fertilization –Would a benchmark be useful? –Can we come up with a list of EHBs? Do we need a definition? –Are dollar limits on non-EHBs something we can live with as long as other limits are available? Subject of ERIC FocusOn call this Wednesday (1/11)

11. Reporting cost of health coverage on Form W-2 New IRS Notice 2012-9 augments, tweaks, and clarifies earlier guidance New points addressed include: –EAP, wellness programs, on-site clinics –Separate dental and vision plans –Related employers with common paymaster –Excess reimbursements under 105(h) Future guidance will be prospective

12. Medicare claims data CMS [finally] publishes regulation to permit use of Medicare claims data to analyze provider quality and performance –Specified entities may access standardized extracts of Medicare claims data under Parts A, B, and D to measure provider performance

13. ERRP – the well is dry! Employers may not submit ERRP claims with incurred date on or after 1/1/12 CMS has sent survey to plan sponsors who have received ERRP reimbursements –Survey intends to document use of ERRP funds –Contact Gretchen Young if you have not received one and would like to complete it ERIC call with CMS on 12/16

14. Striking news from California Premiums for employer health insurance plans in CA have risen 153.5% since 2002 –5 times rate of inflation Proportion of state employers offering coverage to workers fell to 63% from 73% over last two years

15. Retirement – Legislative Update 2012 Congress Conference to begin next week on extension of payroll tax holiday beyond 2 month extension passed in late December: to include –Extension of Payroll Tax Holiday –Extension of Unemployment Benefits –“Doc Fix”

16. Retirement – Legislative Update, cont. Immediate Concerns/Opportunities for ERIC Members’ Issues Inclusion of all/parts of Administration’s proposal on PBGC Premiums Opportunity to include funding relief in “tax legislation”

17. Retirement – Legislative Update, cont. “Active Issues for Congress” Defined Contribution Plans & Tax Reform Tax Reform (“Sense of Congress” Resolution) Hybrid Plan Lobby Campaign Update House Education & Workforce Committee hearing on “Costs to Sponsor Defined Benefit Plans” tentatively scheduled for early February 2012

18. Retirement – Regulatory Update, Department of Labor –Service provider final disclosure regulations (under 408(b)(2)) still at OMB (at OMB for Paperwork Reduction Act review) - possibility of extension of April compliance deadline –Definition of Fiduciary Regulations to undergo additional economic analysis – unclear when re- proposed regulation will be out (DOL consistently stated early 2012 for anticipated release) (96-1 likely to be amended)

19. Retirement – Regulatory Update, cont. Lifetime Income Disclosure & Benefits Statement Project ERIC/PSCA held joint conference call on 11/15/11 ERIC/PSCA met with DOL on 12/8/11 (update) Proposed regulation expected by mid-2012

20. 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

21. PBGC PBGC released “statement” on reconsideration of policy on recharacterization of contributions: now will reject amended filings based on recharacterized contributions We expect Administration to include premium proposal in budget (to be released in February)

22. ERIC FocusOn calls Completed: –SF HCSO (12/7) –HRAs under the ACA (12/8) –Reporting health care costs on the W-2 (12/13) –ERRP call with CMS (12/16) –Health care reform task force (1/5/12) Upcoming: –Essential health benefits (1/11/12) –Industry Funding Relief Proposal (1/19/12) –Health care reform task force (2/2/12) –Impact of same-sex marriages (TBD) –SCOTUS oral arguments under the ACA (late March) 22

23. Upcoming ERIC calls and meetings Next Washington Update call: 2/22/12 ERIC Membership and Health Policy/Retirement Security Committee meetings: March 14 and 15, 2012 Try-outs for “ERISA: The Musical” (TBD)

24. 24 To receive ERIC updates If you would like to receive your own copy of our emails and notifications of future updates, please let us know by writing to Adreanne Cooper at ERIC (acooper@eric.org.) In this email, please include your contact information or signature block, and please indicate whether you wish to receive information on retirement issues, health issues, or both.acooper@eric.org

25. 25 For further information Kathryn Ricard, Senior Vice President, Retirement Security –kricard@eric.orgkricard@eric.org Gretchen Young, Senior Vice President, Health Policy –gyoung@eric.orggyoung@eric.org ERIC: 202/789-1400