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

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

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

5. 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

6. Retirement – Legislative Update, cont. 2012-2013 Issues Expiration of Bush Tax Cuts Deficit Commission Failure & Effect Defined Contribution Plans & Tax Reform Tax Reform (“Sense of Congress” Resolution)

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

8. 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

9. 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

10. 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

11. 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 2013 - FY 2021 go automatically into effect –Effective January 2, 2013 Cuts divided equally between defense and non-defense

12. 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

13. 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

14. 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

15. 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

16. 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”

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

18. 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: email gyoung@eric.orggyoung@eric.org

19. 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

20. 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. 21 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 Adrienne 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

22. 22 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