FTC Guidance Regarding Application of Red Flags Rule to Certain Benefit Plan

The FTC has issued some Q & As which are very helpful to practitioners regarding the application of the Red Flags Rule to certain benefit plans:

Plan Loans:

12. If our company meets the definition of a

Op-Ed from Wall Street Journal on How Health Care Legislation Will Change ERISA

From the Wall Street Journal–“Repealing ERISA.” Excerpt:

ERISA allows employers that self-insure–that is, those large enough to build their own risk pools and pay benefits directly–to offer uniform plans across state lines. This lets thousands of businesses avoid, for the most part, the costly federal and state regulations on covered treatments, pricing, rate setting and so on. It also gives them flexibility to design insurance to recruit and retain workers in a competitive labor market. Roughly 75% of employer-based coverage is governed by ERISA’s freedom of purchase rules.

Goodbye to all that. The House bill says that after a five-year grace period all ERISA insurance offerings will have to win government approval–both by the Department of Labor and a new health choices commissioner who will set federal standards for what is an acceptable health plan. This commissar–er, commissioner–can fine employers that don’t comply and even has suspension of enrollment powers for plans that he or she has vetoed, until satisfied that the basis for such determination has been corrected and is not likely to recur.

One Man’s Reward: Doing the Right Thing

A great story in the Boston Globe (as noted by Plan Sponsor) today: “Lappin takes hit for workers.” It describes how an owner and founder of a charity, Ronald Lappin, has restored the 401(k) balances of his employees to the tune of $5 million, after they were hit with losses resulting from the Madoff Ponzi scheme. The article notes that the restoration occurred even though Mr. Lappin’s net worth is only one-tenth of what it was before being impacted by the Madoff disaster. Excerpt:

Lappin himself lost some of his personal fortune to Madoff, and his foundation was forced to briefly close last December after $8 million of its money vanished in what investigators call the largest Ponzi scheme in history.

“I wanted to do the right thing,” Lappin said. “And, I feel, I’ve done the right thing and that to me is my reward.”

Organizational Chart of the Proposed Health Care Plan

Access it here. Read about it in this press release here. Read about the proposed legislation here.

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