Archive for March, 2013

The truth behind the CVS wellness program

CVSThe media has been buzzing recently with the news that CVS CareMark Corp. is requiring employees to disclose their weight and other health information or pay a fine of $600. While this is technically true, the media has cast a negative light on this program, leading to inaccurate assumptions about corporate wellness programs.

CVS CareMark has embarked on a wellness initiative which asks employees to undergo a screening with their physician to measure weight, body fat and glucose levels. The employer picks up the cost of this screening, and if employees do not complete this screening by May 1st, they will have to pay $600 more per year for health insurance. Despite the fact that this wellness initiative is clearly optional for employees, unfortunately the media has focused on headlines like, “CVS CareMark demands Read more…

D&O premiums jump as small banks feel pressure from FDIC

March 25, 2013 Leave a comment

FDICMany small banks have been heavily hit with rising D&O insurance premiums, as federal regulators seek to recover some of the $86.8 billion it paid out to community bank lenders during the financial crisis. The Federal Deposit Insurance Corporation (FDIC), has filed 19 suits against former executives and directors of collapsed banks since October. That number is expected to increase, as the agency has also authorized 94 lawsuits – the initial step regulators take immediately following a bank’s failure and prior to filing an actual claim. The FDIC then has three years from the time the bank closes to file suit. FDIC officials say the agency collected around $337 million in settlements last year and nearly $232 million in 2011.

The lawsuits primarily target directors and officers of small banks accused of approving loans that later contributed to the bank’s collapse. Insurance experts say D&O rates for small banks Read more…

Survey shows small to midsize business not prepared to handle consequences of a data breach

March 21, 2013 Leave a comment

data-breachNew research shows that smaller companies are especially vulnerable to data breaches, according to a Poneman Institute survey released last week. The survey found that more than half of U.S. small and mid-sized businesses have experienced data breaches caused by issues such as employee mistakes, lost or stolen laptops and smart phones and procedural mistakes. While 46 states have enacted legislation requiring notification of security breaches involving personal information, the study found that only 33% of companies experiencing data breaches have done so.

Experts say many small companies are not prepared to handle data breaches, leaving them subject to legal penalties for failing to respond in a timely and effective manner. Outsourcing may be one reason data breaches can be such a big problem Read more…

Roth conversions allowed for 401(k) and 403(b) plan participants

RothOne of the provisions included in the American Taxpayer Relief Act of 2012 (aka the Fiscal Cliff bill) impacts Roth 401(k) accounts held inside qualified plans. Under the new law, participants in a Qualified Retirement Plan that allows Roth (after-tax) contributions will be allowed to convert traditional (tax-deferred) contributions to the Roth account, regardless of their age or eligibility for a distribution. Individuals will have the option to make the Roth conversion for all or any part of the traditional (pre-tax) amount held in 401(k) plans, 403(b) plans and governmental 457(b) plans that allow Roth contributions.

While these conversions are subject to ordinary income tax for the year in which the conversion is made, participants will not have to pay the 10% early distribution tax Read more…

Bad for Business: HHS pricing restrictions could hurt Massachusetts employers

opEd-pricingMassachusetts employers who were at the forefront of healthcare reform in 2007 know firsthand that health reform is expensive. Employers in Massachusetts had several direct and indirect fees and taxes added on to their healthcare premium over the last five years. We had hoped the bulk of those rate spikes were behind us, but not so, based on recently released HHS regulations regarding PPACA, the federal health care reform law.

In addition to the number of new fees and taxes being added to health premiums in 2014, (see my earlier blog item on Obamageddon) comes troubling calculations and new rating restrictions that may adversely impact most Massachusetts employers, particularly those with less than 100 employees. WGA’s Health Reform consultants have analyzed many of these new pricing restrictions and anticipate Read more…

Challenges continue for rebuilding scientific research lost in Sandy

March 14, 2013 Leave a comment

miceTrialsv2When Superstorm Sandy flooded NYU Lagone Medical Center last October, over 300 patients were evacuated from the hospital, which lost power and was later closed for nearly two months. The water also swamped the basement of the building’s research center, where 7,000 cages of research mice used for studying cancer, diabetes and brain development were housed. Researchers lost some 600 mice in the flood, most of which were specifically engineered to carry genetic mutations to mimic human conditions such as autism and other health issues.

Scientists say the cost of losing the mice will be tens of millions of dollars, and finding replacements could take another two years. While not all the mice were lost, those that survived were exposed to contaminants that affected their genetic modifications. The mice are tailor-made Read more…

‘Play or pay’ and other important PPACA fee updates

healthcareupdateThe Patient Protection and Affordable Care Act (PPACA) effective on January 1, 2014 mandates that an employer with at least 50 full-time employees offer affordable, minimum essential coverage or face a penalty, with the rule defining a full-time employee as working 30 or more hours per week. With the deadline approaching, many companies are trying to determine how to avoid or absorb the penalties associated with the “play or pay” provision as it goes into effect. In order to make the decision, WGA’s Health Reform Advisory Team has developed some material to outline the guidelines and regulations that each employers should to be aware of:

  1. The Employer Shared Responsibility Pay or Play Provision includes guidance on how to determine who is a full-time employee for purposes of this mandate. Explanations are provided Read more…