Life and health trade groups are celebrating the passage of many sections of H.R. 4, the pension reform bill that Congress passed earlier this month. But the groups will work next year to have Congress reconsider a flexible spending account rollover provision that failed to make the final cut.
President Bush is expected to sign the Pension Protection Act of 2006 sometime this week.
The authors of the bill wrote it primarily to improve the finances of defined benefit pension plans and the Pension Benefit Guaranty Corp.
Life insurers that sell the group annuities backing many defined benefit plans have a huge stake in the welfare of the traditional pension system.
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But at life groups, the sections of H.R. 4 that will impose new marketing rules on sellers of corporate-owned life insurance and encourage 401(k) plan sponsors to provide individualized advice seem to be getting more attention.
In addition, insurers are looking at what was deleted from H.R. 4 before its passage and voicing the most concern over the decision to delete a flexible spending account rollover provision, presumably because of its cost.
Janet Trautwein, executive vice president of the National Association of Health Underwriters, Arlington, Va., says she is disappointed about the exclusion provision that would let workers roll over up to $500 in unused FSA assets each year.
Under current use-it-or-lose-it rules, money left in the FSA at the end of the year is forfeited to the employer. “Allowing for a minimal rollover re-funds the account for the following year, providing peace of mind if one becomes sick early in the year,” Trautwein says.
NAHU hopes the next Congress will take another look at the FSA rollover issue and let workers use employer cafeteria plans to buy long term care insurance, she adds.