Archive

Archive for June, 2014

Attention employers: have you double checked your FMLA policies?

rings_courtRecently, the U.S. Department of Labor (DOL) announced a revision to the definition of a spouse under the Family Medical Leave Act (FMLA). The long-awaited change comes in response to the Supreme Court’s ruling last summer which struck down a key provision of the Defense of Marriage Act (DOMA). Employers can now use the “place of celebration” standard to determine FMLA eligibility, allowing a qualified employee in a legally recognized same-sex marriage to take a job-protected leave of absence for his or her spouse or family member regardless of where he or she resides.

The proposed rule is a welcome relief for employers who previously had to administer conflicting guidance for same-sex married couples on laws such as COBRA, cafeteria plan elections, ERISA and FMLA. With PPACA provisions consuming employers’ time these days, it is still important to remember the significance of improper FMLA administration. Read more…

Halliburton case decision: Companies get another (expensive) bite at the dismissal apple

court_gavelThis time the smart money was right. As most readers know, in the Halliburton case the Supreme Court was presented with a challenge to its 1988 case (Basic v. Levinson) that made many shareholder class-action securities cases possible. Plaintiffs’ lawyers hoped that the Court would uphold Basic, while business groups advocated reversal. Most who heard oral arguments before the Court felt that the justices were struggling to find an acceptable compromise — limiting the scope of Basic but not requiring each and every plaintiff to show individual reliance on an misrepresentation. The Court found that middle ground. It gave defendant companies an opportunity early in a purported securities class action case to convince judges to deny class certification to plaintiffs — and thereby prevent the claims from moving forward.  Read more…

FDA suggests social media standards for pharma and med device companies

fda_twitterThe FDA issued a pair of guidelines on Tuesday for pharmaceutical and medical device companies regarding the use of social media and internet communication for medical products. While other industries, including financial services , retail and real estate have immersed themselves in using social media as a marketing tool,  pharmaceutical companies have been slower to embrace the trend, due to strict regulatory and privacy laws. But as technology continues to drive consumer and patient behavior – a 2013 study found that one in four interactions with doctors, healthcare professionals and patients in the U.S. is digital – the FDA recognizes a need to adapt to these changes and in turn, establish industry best practices for social media use. The long-awaited guidance aims to provide consumers with more accurate, accessible information online, and proposes guidelines for pharmaceutical and medical device companies about how to correct misinformation posted online by others. Read more…

The other arbitrage in the movement of drug company domicile for EU tax inversions

EU_boardroomLast month, Pfizer attempted to purchase and merge with AstraZeneca in order to obtain a lower corporate tax rate in the European Union. While the pharma giant’s effort may have been a failure, this week’s non-hostile merger of EU-based Covidien PLC (a company actually run by a U.S. management team) with Medtronic is an even bigger whopper, and another lesson on just how far a company will go to in order to reduce its tax rates.

In addition to tax reductions, the merged company could also see their Directors’ & Officers’ Liability (D&O) insurance rates drop. Historically, there have been several different ways to structure D&O programs for these re-domiciled entities. In recent years, many U.S. companies facing compliance issues while re-domiciling (frequently through a merger) have moved their D&O program from a U.S. placement to an international one. Since D&O programs provide coverage for the Parent Company and all majority owned entries under it, the merged company is able to follow that organizational structure and receive coverage. Read more…

Single Premium Paid Up Life insurance as a solution

stethoscope and dollarSeveral months ago, a colleague and I worked on a case where the client, a smaller regional hospital, was acquired by a large health care system. Due to the acquisition, the hospital was about to lose life insurance coverage for its retired employees. Despite reaching out to various carriers throughout the life insurance market, none were willing to cover the retirees without also covering the hospital’s active employees. Fortunately, thanks to an alternative approach, a Single Premium Paid Up Life policy, we were able to offer our client a solution that kept their retired employees insured.

The concept behind this type of coverage is simple: the carrier collects the entire premium in a lump sum payment during the policy’s implementation, and then covers that liability until every single retiree dies. The carrier’s actuaries determine the total liability (the combined life insurance for all retirees), determines their retention (the cost to set up and administer the plan) and then applies an interest discount (based on interest rate levels and life expectancy of the retirees). In the example described above, the regional hospital was able to charge a one-time payment to policyholders that was 29% less than the total life insurance liability. Under this type of agreement, age, gender and market interest rates tend to be the main drivers of cost determination. Read more…

New HCCI health portal to enhance transparency for health plan buyers

fingers_laptopWith reports that national healthcare spending will continue to rise (estimates project costs to reach 4.7 trillion by 2020), it’s more important than ever that consumers have access to reliable and informative data about the prices and the quality of their health care options. Fortunately, regulators and insurers are stepping up to the plate to ensure that happens.

Last month, the the Health Care Cost Institute (HCCI) announced it will partner with Aetna, Humana and UnitedHealthcare to develop an online portal for consumers to use that will offer the latest information and accurate pricing about health care services. HCCI, a non-profit, non-partisan group dedicated to providing independent research and analysis on the causes behind U.S. health care spending, said the new program is designed to promote cost transparency and solutions for consumers to help them make more informed decisions about their health care. Aetna, Humana and Read more…

Businesses adapt the threat of climate change

flood_businessTwenty years ago, data on climate change was primarily only used and needed by researchers and federal agencies. But as extreme temperatures, major floods and torrential storms continue to knock out communities across the globe at an alarming rate, understanding the causes and threats of climate change has become a lesson everyone involved must learn. Analysts at the Insurance Information Institute say three of the top six years for catastrophic losses have occurred since 2005, totaling more than $140 billion in insured losses.

Furthermore, with reports from federal researchers indicating that climate change in the U.S. is accelerating at a faster pace due to more greenhouse gas emissions, climate-related risks are sure to increase. The more often these disasters strike, the Read more…