Supreme Court: SPDs are not legally binding contracts. In what has been characterized as a “partial victory” for CIGNA, the U.S. Supreme Court remanded CIGNA Corp. v. Amara back to the lower court this week. The case focused upon CIGNA’s 1998 retirement plan conversion from a traditional defined benefit pension plan into a cash balance plan. Employees sued, claiming the summary plan description (SPD) was misleading and that the misleading communication caused them financial harm. According to the decision issued this week, the 27,000 CIGNA employees affected by the plan conversion may be entitled to relief under ERISA rules, but not under the provision applied by the federal court. Myron Rumeld, an employee benefits attorney, explained that the ruling will set a precedent limiting employees’ abilities to seek “equitable relief” based upon their understanding of SPDs, rather than the actual terms of the plan itself.
Health care costs soar in tandem with insurance company profits. According to the annual Milliman Medical Index, 2011 marks the fourth straight year that medical costs have increased by more than 7 percent. The average health care costs for a family of four covered by a PPO plan is now $19,393, up from $18,074 in 2010. Rising medical costs did little to interfere with insurance companies’ expanding profit margins, according to a New York Times story published this week. The Times piece attributes insureds’ profit growth to premium increases – often in the double-digit percentage range – despite low plan utilization rates due to “a lingering recessionary mind-set among Americans who are postponing or foregoing medical care.” The story stirred up a lot of reader hostility directed toward insurance companies.
The 5 top health care reform stories this week:
- Governor signs Maine health insurance overhaul
- PPACA: Moody’s makes MLR variability a rating factor
- Survey: Many grads may not get health coverage from parents
- PPACA: Could navigators be temporary?
- Plan finalized for health insurer rate reviews
HSA sales climb: More than 10 million Americans are now covered by an HSA plan, and 61 percent of employers now offer a consumer directed health plan, according to recent figures. Key drivers of HSA growth are transparency and education.
Mac and cheese and fiduciary duty: BenefitsPro spoke this week with employee benefits attorney Jenny Kiesewetter about the lessons plan sponsors should learn from the Kraft 401(k) lawsuit.
Employees encouraged to do push-ups: May 18 was National Employee Health and Fitness Day.
Employers facing fines as DOL steps up enforcement: Most plan sponsors are unaware of their fiduciary duty and that responsibility may carry personal liability for “anyone within a company that has any responsibility or influence regarding their 401(k).”
No more 401(k)s on rainy days? A Senate Bill introduced this week would limit employees’ ability to tap their 401(k)s in times of need.
Jump in employer medical costs in 2012: According to a PwC report, employers can expect their medical costs to jump 8.5 percent next year.
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Useful #hashtags: Five of the most popular Twitter hashtags on health care
Useful app: Humana released a new mobile app to help consumers compare the cost of prescription drugs
Health care reform resource: Aetna recently launched a forum on health care reform
The most read article on BenefitsPro this week: Group calls broker bill a “death blow” to consumers