On January 13, Arnie Prentice and Kibble & Prentice were honored by the American Jewish Committee, an organization focused on global Jewish advocacy, with their annual Human Relations Award. Arnie and all Kibble & Prentice associates were recognized for their lifetime of service to their communities within the Puget Sound region.
In the same spirit of giving, to aid the citizens of Haiti following their catastrophic earthquake, Kibble & Prentice/USI Northwest is matching all donations made to supportive organizations by employees to Direct Relief International.
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Employee Benefits
The Early Results for 2010 are in – Health Care Reform in Flux, Continued Challenges for Employers
The turn of events in the recent Massachusetts Senatorial election has put health care reform on an uncertain and, perhaps, uncharted path. Even after the President’s renewed commitment to health care reform in his State of the Union Address, the near-term prospects for enactment of any kind of health care reform measure, and its substance and scope, remain difficult to assess. This uncertainty will translate into unease and concern for insurers and is likely to cause conservative pricing trends. This uncertainty regarding price pressure could add to an already difficult year for employers struggling to contain rising healthcare renewals.
The recent extension of COBRA subsidies and prospects for additional extensions will also put pressure on employer costs as COBRA loss experience tends to run worse than traditional active employee loss ratios.
Most likely reform measures will more likely benefit the individual and small group markets (under 100). Scaled back reform measures are likely to present additional burdens to the provider community (limits on exclusions, etc.) without some of the accompanying relief (curtailment of overly generous plans).
While we await and anticipate health care reform measures, employers need to commit to longer range strategies for the managing medical trend to be back in line with other trend factors such as the consumer price index.
The attached Goldman Sachs report, issued in the Fall of 2009 discusses the state of the managed care market across the US from a Wall Street perspective. Michael Turpin, USI’s EVP of Employee Benefits is interviewed in the Goldman review offering insights into the carrier market based on field reconnaissance from major markets. Insights combine to paint a picture of rising costs, limited ability of carriers to control trend without better engagement from employers and a landscape where meaningful public policy reforms will not offer permanent relief for employers attempting to reduce costs or attack root causes of their healthcare.
Change must occur from within every organization, so make this your resolution for the New Year. Kibble & Prentice (USI Northwest) will continue to work with Northwest companies to develop new employee benefit strategies. We look forward to speaking with you soon, or send us an email.
Retirement Plan Services
U.S. Department of Labor (DOL) Issues Final Safe Harbor Timing Allowed for the Deposit of Employee Contributions and Loan Payments to SMALL Plans
Per the DOL small plans, i.e. those with fewer than 100 participants, have a safe harbor period of seven business days to deposit funds into their plan’s trust account. Employee contributions plus any loan payments must be deposited no later than seven days following the date that the funds would have otherwise been paid to the participant.
The DOL did not expand the safe harbor to cover plans with 100 or more participants. Currently, employers of large plans “must transmit employee contributions as soon as they can reasonably be segregated from general assets of the employer, but no later than the 15th business day of the month following the month in which contributions are withheld by the employer.”
Late deposits are considered a prohibited transaction, i.e. to be a use of participant money by Plan Sponsors. Corrections for “late” deposits are subject to interest payments to participants, excise taxes being owed to the IRS, and possibly additional penalties. Plan Sponsors are required to report late deposits on their plan’s annual Form 5500. They are also often a trigger for a DOL audit.
In all DOL audits we have seen in recent years, the agents look at how quickly the deposits have ever been made and make that their standard for determining if other deposits are “late.” Small plans will now have the safe harbor of seven business days. Large plans will still be subject to the Agent’s opinion of “late.” The review is time consuming, and corrections are expense as DOL audits often go back a number of years. We have seen them review up to six years, and they could go back even farther.
We highly recommend that all your deposits be made to the trust account as soon as possible following the pay date.
Tip For Submitting Form 5500
Retirement plans, both large and small, are also subject to the requirement of electronically filing an annual Form 5500 and related schedules. If K&P will be creating your signature ready filing, you will be able to submit it through our third party software portal that we will provide to you. This software will have a link to the signer registration web site, or if you would like to register early you may do so at via the EBSA web site Register - Privacy Statement. We will be providing more information directly to our administration clients once the draft of their filing is ready for review.
Property & Casualty
A Closer Look at the 2009 Securities Lawsuits: Summary of Key Points
Recently, two major firms released year end reports summarizing their securities class action findings for 2009. Overall, securities class action filings were down slightly from (15.9%) last year. Read More
Winter Driving Tips
A lot of thought should go into maintaining a vehicle and being on the road during the winter months. Review these safety tips on how to make certain that you don’t get caught off guard! Full Article
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Benefits Alerts
New Form 5500 Electronic Filing Requirements
An insured and/or unfunded health and welfare plan is required to file a Form 5500 when 100 or more participants are covered by the plan at the beginning of the plan year. Similar plans with fewer than 100 participants are exempt from the reporting requirement. This year, a number of changes go into effect that will impact 5500 filings for plan years that began on or after January 1, 2009, including a new electronic filing program. Learn MoreEverything But Marriage Act - FAQ for Employers
Washington’s Everything but Marriage Act was effective December 3, 2009, requiring equal treatment of registered domestic partners and spouses. From an employer perspective this may impact, among other things, current benefit plan offerings and leave policies. Learn More
Revised COBRA Model Notices Issued Reflecting Subsidy Extension
The American Recovery and Reinvestment Act of 2009 (ARRA) reduced the COBRA premium for Assistance Eligible Individuals (AEIs) for a limited period of time. The 2010 DOD Act amends the ARRA provisions to extend eligibility for the reduced COBRA premium to include involuntary terminations that occur through February 28, 2010. Learn More
Investment Advisory Group
The Lost Decade? Sound Investment Advice and Cost Efficient Wealth Management
Throughout much of 2009, many stock market pundits were quick to point out that the 2000s were a “Lost Decade” for equity investors. A simple calculation of returns would seem to prove them correct. However, as the data in this article shows, many asset classes had strong, positive returns for the same 10-year period. Full Story
Risk Strategies
A catastrophic fire at a seafood processing facility caused major damage to buildings and machinery/equipment and resulted in a significant interruption to operations. With our help, the client put $700,000 back into their pockets that would otherwise have been lost. Full Story
Wellness Corner
What a Heart Failure Diagnosis Really Means for You
Hearing the words "heart failure" from your doctor is a frightening thing. If that is your diagnosis, you're not alone - more than 5 million Americans are affected by heart failure. But while it is certainly serious, it is not quite as ominous as it sounds. The good news is that there have been tremendous strides in heart care treatment in recent years, which enables patients with the disease to live full, active, normal lives. Full Article
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IRS Circular 230 Disclosure: Kibble & Prentice Holding Co. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with Kibble & Prentice Holding Co. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties. Also, the information contained in this brochure should not be construed as medical or legal advice and is intended for educational purposes only. Kibble & Prentice operates in the State of California under the name of Kibble & Prentice Holding Company dba Kibble & Prentice Insurance Agency (0E28835).
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