Metlife failed to make pension payments
- Wednesday, 21 February 2018 07:32
According to an article in Insurance Business America:
MetLife has come under fire after admitting it failed to make hundreds of millions of dollars worth of pension payments to about 13,500 people over 25 years – averaging at almost $20,000 in missing payouts per head.
The major insurer announced the failure on Tuesday, blaming its practice of presuming customers “would never respond” if staff had made two attempts to reach them without success, according to a Financial Times report. MetLife has now released a statement, saying: “Following a detailed review, management concluded that such administrative practices were not sufficient.”
The blunder occurred at MetLife’s pensions “risk transfer” business, which enables companies to transfer their retirement liabilities to insurers. The company warned in December that it had failed to take adequate steps to track down former employees of its corporate clients.
Shares in the company have dropped 17% in the past two weeks, since MetLife announced it would need to book a charge of more than half a billion dollars to cover the unpaid obligations. On Tuesday, the company said it would need to boost reserves by $510 million on a pre-tax basis.
Steven Kandarian, chief executive and chairman, said the error was “unacceptable and deeply disappointing.” The life and pensions company “can and will do better.”
“We are rigorously addressing the situation and are committed to significantly improving our operational performance to better serve our customers and strengthen shareholders’ confidence,” Kandarian added.”
Idaho Health Plan Says it Will Not Comply with the Affordable Care Act
- Wednesday, 21 February 2018 07:29
Earlier this week, Blue Cross Blue Shield of Idaho announced it would offer options in 2019 that would violate key Affordable Care Act principles.
These options would not offer minimum Essential Benefits and could deny coverage to individuals with preexisting conditions, which violates the 2010 law.
Idaho’s potential challenge to the health care law has national significance. The Trump Administration’s strong opposition to the ACA has raised questions whether it would require Idaho to enforce its requirements.
New U.S. Health and Human Services Secretary Alex Azar told Congress last week that he is waiting for Idaho state regulators to act before getting involved.
Lower-cost, lower coverage plans coming?
- Wednesday, 21 February 2018 07:25
In an article on Fox News (click here for the full article), the Trump administration proposed allowing insurers to sell 12-month long “short term medical plans.” These used to be available, at a much lower pricing point, but the Obama Administration eliminated them for the most past.
Considering the increasing numbers of clients I speak to who are dropping coverage, or going without, because of the high premiums, this may be a very popular option.
“We need to be opening up more affordable alternatives,” Health and Human Services Secretary Alex Azar told reporters. “It’s one step in the direction of providing Americans with alternatives that are both more affordable and more suited to individual and family circumstances.”
DOL Reaches Settlement on 401k plans
- Saturday, 17 February 2018 16:11
From Plan Sponsor:
The U.S. Department of Labor (DOL) has entered into a settlement agreement with U.S. Fiduciary Services and three of its subsidiaries that provides for payment of more than $7 million to 42 retirement plans that suffered losses as a result of investments in fictitious loans made by Florida-based First Farmers Financial LLC (FFF).
The agreement and anticipated future payments from a pending receivership estate case involving FFF are expected to compensate the retirement plans fully for approximately $16 million in losses.
FFF created the fictitious loans and forged documents stating that the loans were guaranteed by the U.S. Department of Agriculture. Forty-two retirement plans invested in a fund exposed to the fraudulent FFF loans through subsidiaries of U.S. Fiduciary Services.
The DOL’s Employee Benefits Security Administration (EBSA) conducted investigations of the subsidiaries—Salem Trust Company, Pennant Management Inc., and GreatBanc Trust Company—for potential violations of the Employee Retirement Income Security Act (ERISA) in connection with the plans’ investments in a fund exposed to the fictitious FFF loans.
After its investigations, the DOL entered into the settlement agreement with U.S. Fiduciary Services and the three subsidiaries, resolving its claims of ERISA violations. Representatives of the ERISA-covered retirement plans that are due to receive settlement proceeds were also parties to the settlement agreement.
“Fiduciaries must work solely in the interest of participants and beneficiaries,” says Jeffrey A. Monhart, EBSA Regional Director in Chicago. “The Department of Labor conducts investigations and undertakes enforcement actions to protect Americans’ hard-earned benefits. This settlement restores vital benefits that rightfully belong to employees.”