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| June 23, 2008 |
| Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. |
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[Official Guidance] Text of Opinion: Metropolitan Life Insurance Co. et al. v. Glenn (PDF)
34 pages. Excerpt: "The Employee Retirement Income Security Act of 1974 (ERISA) permits a person denied benefits under an employee benefit plan to challenge that denial in federal court. 88 Stat. 829, as amended, 29 U.S. C. §1001 et seq.; see §1132(a)(1)(B). Often the entity that administers the plan, such as an employer or an insurance company, both determines whether an employee is eligible for benefits and pays benefits out of its own pocket. We here decide that this dual role creates a conflict of interest; that a reviewing court should consider that conflict as a factor in determining whether the plan administrator has abused its discretion in denying benefits; and that the significance of the factor will depend upon the circumstances of the particular case." (Supreme Court of the United States)
[Guidance Overview] Prudential Policy Language Insufficient to Trigger Abuse-of-Discretion Review
Excerpt: "Language commonly used by Prudential in its disability policies is no stranger to dispute. The language says that a claimant is entitled to benefits 'when Prudential determines' that he or she is eligible. Prudential asserts that this language meets the Firestone test for vesting discretionary authority." (The Wood Law Firm)
[Guidance Overview] Genetic Information Nondiscrimination Act Will Affect Health Plan Practices
Excerpt: "The act's restrictions on the collection and use of genetic information and privacy protections will affect many aspects of plan operations, including health risk assessments and vendor relations among others. To prepare, plan sponsors should review the new requirements, identify all practices that involve genetic information and determine whether changes will be necessary." (Watson Wyatt Worldwide)
[Guidance Overview] Explanation of Benefits Not Effective as a Denial of Claims, Causing Plan to Lose Exhaustion of Remedies Defense
Excerpt: "This case demonstrates the importance of meeting all of the requirements of the DOL's claims procedure regulations. It also highlights the fact that EOBs issued by most plans are simply inadequate to trigger the start of the claims appeal period. If a claim is not timely denied or a sufficient notice of denial is not timely issued, the procedural violation may allow the participant (or as in this case, the participant's representative) to proceed immediately to court." (Employee Benefits Institute of America)
[Guidance Overview] Supreme Court: Insurer's Conflict in Evaluating and Paying Claims Is a Factor That Reviewing Court Must Consider
Excerpt: "This case may fundamentally change the landscape for claims decisionmakers, although it remains to be seen exactly how the circuit courts will apply the Supreme Court's ruling, which does not provide a detailed set of instructions or enunciate a precise standard for other courts to use when weighing the importance of a conflict. Conflicted decisionmakers may, however, want to heed the Court's suggestion that deferential review of benefit denials may be protected by taking structural steps (such as walling off claims administrators and imposing management checks) to prevent the conflict from tainting the decisionmaking process." (Employee Benefits Institute of America)
[Guidance Overview] Supreme Court's Reaffirmation of Firestone Has Ramifications for Benefits Claims Determinations
Excerpt: "Companies and benefits plan administrators should note a Supreme Court decision that may inject more uncertainty into the claims determination process. Reaffirming the 1989 decision in Firestone Tire & Rubber Company v. Bruch, the Supreme Court yesterday found in Metropolitan Life Insurance Company v. Glenn that courts should apply a deferential review standard when reviewing claims determinations made under a plan that gives an administrator discretionary authority to make benefit determinations." (Ballard Sphar Andrews & Ingersoll, LLP)
[Guidance Overview] Centers for Medicare & Medicaid Services Issues Additional Guidance on Rebate Adjustments for the Retiree Drug Subsidy Program (PDF)
2 pages. Excerpt: "Recent CMS guidance clarifies that the requirement that plan sponsors report rebates retained by a Pharmacy Benefit Manager applies only to RDS applications with plan years starting on or after January 1, 2007." (Buck Consultants)
[Guidance Overview] SPD Posted on Intranet Site Not Properly Furnished to Participants, Court Finds
Excerpt: "A recent unpublished decision by the Ninth Circuit Court of Appeals reiterates the rule that employee benefit plan sponsors do not satisfy their ERISA duty to deliver summary plan descriptions (SPDs) and other plan documents to participants by simply posting those documents to an intranet site. Gertjejansen v. ________, No. 06-56329 (9th Cir., 2008)." (Deloitte via BenefitsLink.com)
Bush Signs Bill Extending Mental Health Parity Act Through End of 2008
Excerpt: "Legislation that extends the Mental Health Parity Act's (MHPA) sunset date until Dec. 31, 2008, was signed June 17 by President Bush. The Heroes Earning Assistance and Relief Tax (HEART) Act of 2008 (Pub. L. 110-245) extends the MHPA provisions of ERISA, the Public Health Service Act and the Internal Revenue Code, which had expired Dec. 31, 2007." (Thompson Publishing Group Inc.)
Continental Airlines, Shedding Jobs, Offers Health Benefits to Workers Who Leave
Excerpt: "Continental Airlines Inc., which is shedding 3,000 jobs in a cost-cutting move, is offering employees a year's worth of health insurance and travel perks if they leave on their own." (AP via International Herald Tribune)
Waistlines Expand Into a Workplace Issue
Excerpt: "In their capacity as health insurance providers, employers pay heavily for obesity's spread. Obesity accounted for 27 percent of the rise in medical costs from 1987 to 2001, according to research by Kenneth Thorpe, a professor of public health at Emory University, and three colleagues. Obesity costs companies $45 billion a year, according to a report by the Conference Board and RTI International, a research institute." (The New York Times; free registration required)
Health Plans Work to Counter Ailing Enrollment Among Small Employers Jolted by Economy
Excerpt: "Assurant spokesperson Peter Duckler says the company and other carriers are looking at ways to repackage individual medical (IM) policies and offer them to small-business owners. Although the employer typically doesn't pay for this kind of coverage, the arrangement allows the employee to pay for the individual coverage through payroll deduction." (AISHealth.com)
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Links to Items on Executive Comp, Benefits in General
[Official Guidance] Employee Not Entitled to FICA Tax Refund Where Deferred Compensation Plan Is Terminated Prior to Benefit Payment
Excerpt: "Drawing an analogy to a poor investment choice, the IRS Office of Chief Counsel has advised that an employee whose nonqualified deferred compensation plan was terminated before the benefits were fully paid is not entitled to a refund of the FICA taxes previously imposed on the unpaid benefit amounts. IRS Chief Counsel Advice Memorandum, No. 200823001 (June 6, 2008)." (Deloitte via BenefitsLink.com)
[Guidance Overview] The Heroes Earnings Assistance and Relief Tax Act of 2008
Excerpt: "The HEART Act addresses the treatment of payments made to individuals who are called to active military service, provides mandatory and optional changes to the treatment of reservists on active military duty under retirement plans, and permits special distributions from health flexible spending arrangements to employees who are called to active military service." (Kilpatrick Stockton LLP)
[Guidance Overview] Focus on Employee Benefits, June 19, 2008 (PDF)
6 pages. The newsletter includes items on: ERISA Litigation: Supreme Court Ruling in MetLife v. Glenn; Exec Comp Corner: Proposed Legislation Would Tax Foreign Deferred Compensation Arrangements; Income, Reporting and Employment Tax Rules for Post-Death Exercises of Nonqualified Stock Options; Offsetting Pensions of Rehired Employees; and, Vested Retiree Health Benefits. (Miller & Chevalier Chartered)
More Employers Are Offering Group Legal Plans to Employees
Excerpt: "Prompted by the national mortgage mess and myriad other legal issues that people face, an increasing number of employers are following in Fujitsu America's footsteps by offering group legal plans to employees. Under these programs, employees sign up for payroll deduction to pay the fee -- usually around $200 annually -- to have access to attorneys." (Workforce Management; free registration required)
Administrators Only Required to Provide Documents Governing Plans
Excerpt: "The U.S. District Court for the Southern District of Iowa ruled that a plan administrator was not required to provide a participant who was denied benefits under a severance plan all the documents she requested." (PLANSPONSOR.com; free registration required)
New Jersey Teachers Protest State Pension Reform Plans
Excerpt: "On Friday night, the state Senate and Assembly budget committees approved an omnibus bill designed to limit most public employee pensions and benefits. They may be up for final votes before the full Senate and Assembly on Monday. Among other things, it would increase the retirement age of future employees from 60 to 62, require employees to earn $7,500 to qualify for the pension system and tie that figure to the consumer price index. It also would require that employees work 20 hours to qualify for health benefits and would allow employees with other health benefits to take a cash payment worth 50 percent of the benefit's value." (pressofAtlanticCity.com)
[Opinion] Rethink That Executive Deferred Comp Plan Now
Excerpt: "So now is an excellent time to revisit decisions about deferred compensation. Many expect tax rates to rise by 2011, when the Bush tax cuts expire, boosting what will be owed when money is pulled from the plans. Moreover, times are tough, and if your employer runs into trouble you may not be able to recover the money in your plan. Unlike savings in a 401(k), deferred comp isn't protected from creditors in a corporate bankrup.tcy." (BusinessWeek)
Newly Posted Press Releases
Health Coverage in America Chartbook Becomes Online Resource, Available via Kaiser Fast Facts
Kaiser Family Foundation
Kathryn Ricard Joins ERIC as Vice President Retirement Security
ERIC (ERISA Industry Committee)
Despite Economic Downturn, Employee Benefits Remain Stable in 2008
Society for Human Resource Management (SHRM)
MassMutual's Center for Behavioral Research(sm) Releases White Paper on 'Why Data Matters: Generating Value from Retirement Plan Data'
MassMutual
Newly Posted or Renewed Job Openings
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Pension Administrator
for Pension Administration Firm located in Westchester, NY
in NY
Pension Administration
for Stephen H. Rosen & Associates, Inc.
in NJ
Marketing Representative
for Retirement Benefit Solutions, LLC
in VA
Pension Administrator
for Retirement Benefit Solutions, LLC
in VA
Retirement Plan Administrator
for Lebenson Actuarial Services
in NV
401(k) Pension Consultant / Administrator
for Malcolm Thompson & Associates, Inc.
in TX
Defined Contribution Plan Consultant
for Schloss & Co.
in NY
Health and Welfare Service Delivery Manager
for Affiliated Computer Services
in NJ
Defined Benefits Service Delivery Manager
for Affiliated Computer Services
in NJ
Client Relationship Manager - Chicago or Detroit
for Transamerica Retirement Services
in IL, MI
Cafeteria Plan Specialist
for Swerdlin and Company
in GA
Senior Benefits Associate
for New York Life Insurance Company
in NY
Manager, Retirement Plans
for Lincoln Benefits Group
in PA
Senior Benefits Analyst , (Temporary)
for Stanford University, Human Resources, Benefits Department
in CA
Sr Technical Specialist (DC Plan Tech Specialist)
for Prudential Financial
in NJ
Defined Contribution Client Account Manager
for New York Life Retirement Plan Services
in MA
Benefits Education Specialist
for Municipal Employees' Retirement System
in MI
Conversion Quality Assurance Manager
for Charles Schwab
in OH
Handy Links:
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