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October 15, 2008

Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy.


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[Guidance Overview] Health Plan Medicare Secondary-Payer Reporting Begins Jan. 1, 2009; Details Announced
Excerpt: "Starting in 2009, employers may need to help insurers and third-party administrators report group health plan participant and dependent Social Security numbers to CMS. Employers with self-insured and self-administered group health plans must also comply." (Mercer)


[Guidance Overview] Summary of Final Mental Health Parity Legislation (PDF)
2 pages. Excerpt: "The Mental Health Parity Act becomes effective in plan years beginning after December 31, 2009. This Hewitt Consulting bulletin discusses the requirements of the Mental Health Parity Act and its impact on employer group health plans." (Hewitt Associates via American Benefits Council)


[Guidance Overview] New Mental Health and Substance Abuse Law Has Delayed Effective Date for Collectively Bargained Plans
Excerpt: "The latest issue of our electronic publication 'Capital Checkup' discusses ambiguity in the effective date for collectively bargained plans of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), which was passed as part of the Emergency Economic Stabilization Act . . . ." (The Segal Group, Inc.)


Wellness Programs Growing Worldwide
Excerpt: "The fastest-growing components of wellness programs include technology-driven tools such as Web portals, online healthy-lifestyle programs and personal health records, according to 'Working Well: A Global Survey of Wealth Promotion and Workplace Wellness Strategies.'" (Workforce Management; free registration required)


Cost Fears Spur Companies to Amend Health Plans for 2009
Excerpt: "Some employers, worried that costs will exceed their budgets, have changed plan designs to keep their budgets on an even keel as they head into a new year filled with economic challenges." (Workforce Management; free registration required)


Michelle's Law Silent on Interplay With COBRA
Excerpt: "A new federal law that amends group health plan rules to add a one-year continuation coverage requirement for ill or injured college students falls short in describing how it may coordinate with COBRA's continuation coverage rules." (Thompson Publishing Group Inc.)


Growing Healthcare Reform Challenge for Next President
Excerpt: "Barack Obama and John McCain both have big-ticket proposals to change how people obtain and pay for health insurance. A long history of failed health-reform plans shows how difficult it is to achieve that goal. And the job only got tougher for any future president with the financial meltdown. Despite the worsening economic picture, though, neither candidate has signaled any intention to scale back his plans. And the head of the Senate Finance Committee, which would have a big say in just about everything the next president hopes to accomplish on health care, says he won't let the current financial crisis stop the committee from tackling it." (The Houston Chronicle)


The 2009 U.S. Health Legislative Agenda (PDF)
5 pages. Excerpt: "This article highlights key measures that Congress is likely to consider early in 2009: State Children's Health Insurance Program (SCHIP), Medicaid, Medicare, health information technology, 'follow-on' biologics and the Medicare prescription drug benefit." (McDermott Will & Emery)


Financial Crisis Could Override Promised Reforms to U.S. Health System
Excerpt: "Any major overhaul of the U.S. health system next year are shaky given the $700 billion federal rescue of Wall Street and the troubled economy. Although the industry will forge ahead with its proposals to provide all Americans with access to affordable coverage, many health care observers wonder how much urgency such reforms will be given." (BestWeek via Consumer Watchdog)


Employers Want Lower Costs from Health Plan Providers, According to Study
Excerpt: "Recent research indicates that two thirds of employers are willing to forego customization of health plan features to secure reduced pricing from their insurance providers. As a result of cost pressures, many employers have implemented a number of plan changes including high-deductible health plans, wellness initiatives, and disease management programs, but employee cost-sharing continues to be the most prevalent health care cost containment strategy used or planned for use with active employees and retirees, PricewaterhouseCoopers (PwC) pointed out in its research report." (PLANSPONSOR.com; free registration required)


Employers Caught Up in Participation Stats with Health Incentives
Excerpt: "A new survey by a San Francisco health research group found that many organizations are focusing on employee participation rather than improved health in measuring their healthy choice incentives. A news release from the Integrated Benefits Institute (IBI) said encouraging employee participation is seen by employers as the most important goal rather than having healthier workers. Nearly two-thirds of the surveyed employers provide incentive programs for their employees to promote improved health and productivity." (PLANSPONSOR.com; free registration required)


EEOC Steps in Following Employers' Attempts to Crack Down on Workers' Alleged Abuse of Sick Leave Policies
Excerpt: "A recent lawsuit against retail chain Dillard's Inc. is highlighting what some claim is a growing problem in the workplace: employers asking too much information about workers' illnesses when asked for sick leave. In the Dillard's case, the Equal Employment Opportunity Commission claims that one California store required employees to reveal the specific nature of their illness in order to deem sick leave as an excused absence. The EEOC argues that this policy violates the Americans With Disability Act (ADA). EEOC v. Dillard's, No. 08-CV-1780 (S.D. Calif.)." (Law.com)


DOL Requests Info on Genetic Nondiscrimination
Excerpt: "The U.S. Department of Labor's Employee Benefits Security Administration (EBSA) has published a 'request for information' (RFI) to assist the department in implementing the requirements under the Genetic Information Nondiscrimination Act of 2008 (GINA) for group health plans and health insurance issuers." (PLANSPONSOR.com; free registration required)


Business Groups Question Health Benefits Cost Disclosure Bill in Senate
Excerpt: "Several business groups are 'reacting with caution' to a bill proposed last week that would require employers to show the entire cost of an employee's health coverage on a tax form . . . . Under the legislation . . . employers would have to disclose on annual W-2 tax forms the amount spent on health insurance premiums for employees and their families, as well as the amount spent on dental and vision coverage . . . . The senators believe that showing employees the cost of health care they lose in wages will encourage them to be more thoughtful in making health care decisions and help reduce health care costs . . . ." (Kaiser Family Foundation)


New Health Care Information Technology Tools Aim To Help Patients Manage Health Conditions
Excerpt: "The New York Times on Sunday examined new tools 'being developed that may help harried patients, including those with chronic health conditions, monitor their medications, home tests and other details' and allow the information to 'be posted to a Web page that the patient can choose to share with a doctor, pharmacist, friend or caregiver.'" (Kaiser Family Foundation)


Los Angeles Times Examines Potential Cost of New Mental Health Parity Law
Excerpt: "The Los Angeles Times on Monday examined how a new mental health parity law . . . could affect the cost of health care in the U.S. (Worth [1], Los Angeles Times, 10/13). . . . According to the Times, an increase in group health insurance premiums is '[m]ost likely, but estimates vary.'" (Kaiser Family Foundation)


[Opinion] American Benefits Council Letter to Massachusetts Commonwealth Health Insurance Connector Authority Regarding Minimum Creditable Coverage (PDF)
3 pages. Excerpt: "I am writing to share the views of the American Benefits Council regarding the impact of proposed revisions to the Minimum Creditable Coverage (MCC) regulations on employer-sponsored health benefits coverage; particularly coverage sponsored by national or multi-state employers that rely upon a uniform federal regulatory framework to provide a consistent set of benefits to their employees. We are concerned that the lack of employer flexibility in the revised regulations as proposed could ultimately and inadvertently limit, rather than expand, Massachusetts residents' access to employer-sponsored health coverage." (American Benefits Council)



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Links to Items on Executive Comp, Benefits in General

[Official Guidance] Text of IRS Notice 2008-94: Executive Comp Provisions of Emergency Economic Stabilization Act (PDF)
29 pages. Excerpt: "New 162(m)(5) and 280G(e) provide additional limitations on the deductibility of compensation paid to certain executives by employers who sell 'troubled assets' in the 'troubled assets relief program' included in EESA. Section 162(m)(5) generally reduces the $1 million deduction limitation to $500,000 for certain taxable years . . . . Section 280G(e) generally expands the definition of a parachute payment to include certain payments made contingent on severance from employment." (Internal Revenue Service)


[Guidance Overview] End of Year Challenges for Benefit Plans As Statutory and Regulatory Mandates Impact Administration and Design of Compensation, Retirement, and Welfare Arrangements
Excerpt: "Although many of the provisions and requirements discussed in this article will not apply to all employers, it is essential that those who are subject to any of those requirements take steps to adopt and implement appropriate measures to ensure their plans' compliance. However modest the requirements may be with respect to a particular plan, the failure to timely implement any required changes could create substantial liability and cost in the event that remedial action is needed at a later date." (Ogletree, Deakins, Nash, Smoak & Stewart, P.C.)


[Guidance Overview] Milliman's Monthly Benefit News and Developments, October/November 2008 (PDF)
4 pages. The newsletter provides a summary of the previous month's legislative, regulatory, and judicial information on employee benefits. (Milliman)


[Guidance Overview] Human Resources and the 2008 'Bailout Bill'
Excerpt: "On October 3, President Bush signed into law the Emergency Economic Stabilization Act of 2008 (EESA), better known as the 'Bailout Bill'. While the provisions intended to save certain troubled financial institutions got all the press, EESA had provisions in it that affect human resource programs especially those related to compensation and mental health. In this article, we focus on those human resource programs and the changes that EESA brings to them." (JPMorgan Chase & Co.)


[Guidance Overview] San Francisco Requires Employers to Provide Transportation Benefits
Excerpt: "It is anticipated that regulations will be issued to provide guidance on the new requirements (e.g., on calculating the average number of employees, the average number of hours worked, etc.). Clarification will also be needed on how the 'look back' determination is administered in connection with the initial implementation of the law. For example, will January 19 be the date counting hours must commence in order to determine which persons are 'covered employees' entitled to benefits on February 1 or, will December be the 'look back' month for counting hours in order to determine which persons are 'covered employees' entitled to benefits no later than January 19?" (Deloitte via BenefitsLink.com)


[Guidance Overview] New IRC Section 457A: Nonqualified Deferred Compensation from 'Tax Indifferent' Entities to Be Subject to more Immediate Income Inclusion
Excerpt: "Attached as a revenue raiser to the Emergency Economic Stabilization Act (H.R. 1424), new IRC 457A will impose more restrictive income timing rules on nonqualified deferred compensation from 'tax indifferent' entities. Aimed at offshore hedge and private equity funds and at other service recipients that are not subject to U.S. income tax, IRC 457A requires income inclusion when there is no substantial risk of forfeiture -- which exists only if the right to the compensation is 'conditioned upon the future performance of substantial services.'" (Deloitte)


[Guidance Overview] Executive Compensation Issues in the Current Economic Crisis (PDF)
6 pages. Excerpt: "An immediate impact will be felt by financial services companies that accept relief under the Emergency Economic Stabilization Act that was signed into law October 3. These organizations will have to come to terms with the effects of new pay restrictions for their senior executives (defined as CEO, CFO and three other highest paid proxy-named executives or equivalent for private companies). The restrictions are likely to create significant internal equity issues among senior leaders in companies participating in the bailout and may make it more difficult for these organizations to attract and retain senior executive talent, although the full magnitude of the impact won't be known for several months when more guidance is issued." (Towers Perrin)


[Guidance Overview] Nonqualified Deferred Compensation Plans: IRS Breaks No-Ruling Policy -- Somewhat
Excerpt: "Carving out an exception to IRS's general prohibition against issuing rulings regarding nonqualified deferred compensation plans subject to IRC 409A, the IRS issued a Revenue Procedure which will allow it to rule on the application of certain other tax laws such as FICA and estate and gift taxes to such plans. Revenue Procedure 2008-61." (Deloitte via BenefitsLink.com)


Executive Pay Limits May Prove Minimal: Lawmakers Hail Plan, but Analysts Question Its Impact
Excerpt: "With the nation's largest banks set to receive an unprecedented infusion of public funds, lawmakers boasted yesterday that the top executives will for the first time face federal limits on their multimillion-dollar pay packages. But outside analysts and the banks themselves said the new limits are unlikely to significantly reduce anyone's paycheck." (The Washington Post; free registration required)


Banks' Bailout Unlikely to Crimp Executive Pay
Excerpt: "The Treasury's plan seeks to take aim at the eight-figure pay packages given to Wall Street executives that have enraged so many Americans in the wake of the country's financial collapse. Banks that get an equity infusion from the government will have to follow some general rules on paying their top five executives. They will be restricted from offering golden parachutes, as rich severance packages are called, and they will have to pay more taxes if an individual's compensation exceeds $500,000." (The New York Times; free registration required)


Treasury Details Executive Comp Standards
Excerpt: "Federal officials on Tuesday released executive compensation standards for companies involved in any of several phases of the economic recovery bill recently signed into law. A Treasury Department news release said the standards issued under the Emergency Economic Stabilization Act, 'generally apply' to the chief executive officer, chief financial officer, and the next three most highly compensated executive officers." (PLANSPONSOR.com; free registration required)


'Perverse' Bonuses, Not Exuberance, Led to Crisis, Study Claims
Excerpt: "Perverse bonuses for managers at some less-than-prudent banks and financial intermediaries, not irrational exuberance, fuelled the debt securitization boom that led to the financial crisis, a study said on Tuesday. 'A large number of financial intermediaries retained a prudent policy over the last years. But others, including some large players, did not,' said the study by the Center for Financial Studies (CFS) at Frankfurt's Goethe-University." (Reuters via Financial Week; free registration required)


DOL Adds to Enforcement Policy for Gifts, Entertainment and Educational Expense Reimbursement
Excerpt: "The U.S. Department of Labor (DOL) recently added a new section to its enforcement manual concerning gifts and entertainment provided to plan fiduciaries. The section directs DOL investigators to determine whether gifts, meals and entertainment (including expenses associated with educational conferences) violate ERISA's fiduciary standards." (Watson Wyatt Worldwide)




Newly Posted Events
(Post Yours!)

EBSA's Proposed Guidance on Investment Advice for 401(k): Be Prepared Webcast
Nationwide on October 28, 2008
presented by International Foundation of Employee Benefit Plans

ERISA Benefits Litigation: From Pilot Life and Firestone to Glenn -- Where Are We Now?
Nationwide on December 2, 2008
presented by ALI-ABA (American Law Institute-American Bar Association)

Providing Domestic Partner Health Benefits: Practical Advice for Employers and Service Providers
Nationwide on November 13, 2008
presented by EBIA / Thomson Reuters

Qualified Transportation Fringe Benefits: The 132(f) Basics
Nationwide on November 5, 2008
presented by Qualified Pension Consulting, Inc.

Writing Effective SPDs (60-Minute Power Series Webcast)
Nationwide on November 4, 2008
presented by International Foundation of Employee Benefit Plans



Newly Posted Press Releases
(Post Yours!)

Employees Want to Improve their Health and Want Employer Help, National Business Group on Health Survey Finds
National Business Group on Health

Beyond Translation: Unum Bridges Cultural and Language Gaps in Employee Benefits
Unum



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