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October 17, 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 Final Regs for Group Health Plans and Health Insurance Issuers Under the Newborns' and Mothers' Health Protection Act (PDF)
46 pages. Excerpt: "This document contains final rules for group health plans and health insurance issuers concerning hospital lengths of stay for mothers and newborns following childbirth pursuant to the Newborns' and Mothers' Health Protection Act of 1996 and the Taxpayer Relief Act of 1997. . . . Applicability Dates: [For Group market rules:] These final regulations for the group market apply to group health plans and group health insurance issuers for plan years beginning on or after January 1, 2009. [For individual market rules:] These final regulations for the individual market apply with respect to health insurance coverage offered, sold, issued, renewed, in effect, or operated in the individual market on or after January 1, 2009." (Internal Revenue Service; Employee Benefits Security Administration; Centers for Medicare & Medicaid Services)

[Official Guidance] Text of IRS Rev. Proc. 2008-66: Inflation-Adjusted Tax Items for 2009; Parking Exclusion to be $230 (PDF)
21 pages. Section 132 aggregate fringe benefit exclusion amount for transportation in a commuter highway vehicle and any transit pass is $120 (up from $115); monthly limitation for fringe benefit exclusion amount for qualified parking is $230 (up from $220); Section 137 adoption expense exclusion limit is $12,150. (Internal Revenue Service)

[Guidance Overview] Mental Health Parity Provisions of the Bailout Law
Excerpt: "If your group health plan is subject to the Mental Health Parity Act requirements, provides coverage for mental health or substance use disorder benefits, and imposes financial requirements or treatment restrictions greater than those now permitted, it will need to be revised before the first plan year beginning on or after October 3, 2009 (or a later date as permitted for certain collectively bargained plans). Unless mental health and substance use disorder benefits are eliminated, the cost of coverage can be expected to increase." (Porter Wright Morris & Arthur LLP)

[Guidance Overview] Maryland Flexible Leave Act Takes Effect, But Significant Ambiguities Create Pitfalls for Employers
Excerpt: "As an initial matter, it is not entirely clear to whom the MFLA applies. Although covered employers must have fifteen or more employees, the law does not specify whether those employees must be located in Maryland, or whether this includes an employer based out-of-state with fewer than fifteen employees in Maryland. How are employees counted who work in multiple states, or who report to a Maryland location but work from their homes outside of Maryland? Must the employer have the minimum number of employees for a certain period of time, as is true under the Family and Medical Leave Act (FMLA), or is an employer covered as soon as it reaches the 15-employee mark? None of these issues is addressed by the law." (Jackson Lewis LLP)

[Guidance Overview] Internal Appeals Processes Require Strict Compliance By Claimants
Excerpt: "Two important judicial doctrines converge in this case, both to the detriment of the plaintiff. First, the court finds that the plan administrator 'substantially complied' with the claims regulations; second, the court applied the failure to exhaust administrative remedies defense, rebuffing the plaintiff's justification based upon futility. The caselaw continues to demonstrate that claimants must carefully attend to all requirements of internal appeals processes and resolve any close cases with further application to the appeals avenues offered under the plan." (Health Plan Law blog by Attorney Roy F. Harmon III)

Hawaii Ending Universal Child Health Care
Excerpt: "Gov. Linda Lingle's administration cited budget shortfalls and other available health care options for eliminating funding for the program. A state official said families were dropping private coverage so their children would be eligible for the subsidized plan." (AP via Yahoo! News)

Court Dismisses FMLA Challenge
Excerpt: "A federal judge has declared that the former manager at a Pennsylvania bank was not protected from firing in an embezzlement probe because he had requested Family and Medical Leave Act (FMLA) leave." (; free registration required)

2nd Disability Exam Advised for L.I.R.R. Workers
Excerpt: "The federal Railroad Retirement Board, which approves disability payments for just about every railroad employee who requests them, should first require that workers undergo independent physical exams -- something that infrequently happens now -- to prove that they are actually disabled, federal investigators said in a new report." (The New York Times; free registration required)

HIPAA Covered Entities in Calif. Face Stiff Penalties for Privacy Breaches Under Two New States Laws, Which Could Be National Models
Excerpt: "Two laws, AB211 and SB541, include provisions that assess civil penalties of up to $250,000 on individuals or entities that improperly disclose private medical information." (

Impact of Health Reform on Underinsurance in Massachusetts - Do the Insured Have Adequate Protection?
Excerpt: "The findings suggest . . . that health reform in Massachusetts is both providing new coverage for many of those who were previously uninsured and improving the quality of coverage for those with insurance coverage." (The Urban Institute)

Who Gained the Most Under Health Reform in Massachusetts?
Excerpt: "We know that health insurance coverage rose dramatically in the past year in Massachusetts. This study examines what the effect has been on specific populations, finding that the greatest gains in insurance coverage were reported by lower-income adults, younger adults and those in minority groups. Further, the reductions in uninsurance tended to be largest for subgroups that started out with higher levels of uninsurance." (The Urban Institute)

Health Care Policies of Our Presidential Candidates
Excerpt: "Health care reform has become a major theme of this year's run for president. Senators John McCain and Barack Obama have announced different policies for health care that each Senator claims will improve the accessibility of health care in America." (Nixon Peabody LLP)

Health Care Plans Lead Information Technology Movement
Excerpt: "[America's Health Insurance Plan's] paper, Trends and Innovations in Health Information Technology, is based on telephone interviews with chief information officers and other health IT professionals at eight AHIP member health care plans, and found that plans are strongly committed to creating an interconnected health care system in which health information can be exchanged electronically." (Wolters Kluwer)

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Links to Items on Executive Comp, Benefits in General

[Official Guidance] Text of IRS Announcement of Hearing on Proposed Section 6039 Regs for Reporting of Incentive Stock Options, Employee Stock Purchase Plans
Excerpt: "This document provides notice of public hearing on [October 30 on] a notice of proposed rulemaking relating to the return and information statement requirements under section 6039 of the Internal Revenue Code. These regulations reflect changes to section 6039 made by section 403 of the Tax Relief and Health Care Act of 2006. These proposed regulations affect corporations that issue statutory stock options and provide guidance to assist corporations in complying with the return and information statement requirements under section 6039. . . . The IRS must receive outlines of the topics to be discussed at the hearing by October 23, 2008." (Internal Revenue Service)

[Guidance Overview] Employment Law Risks in the Current Financial Crisis
Excerpt: "There are several, critical employment law issues that must be taken into account in any organization's plan to address the new economic realities especially if reductions in force are a part of the organization's strategy. . . . Employers that are considering reductions in force and providing severance payments to laid-off employees may wish to consider establishing a severance plan governed by the Employee Retirement Income Security Act (ERISA). . . . As the economic noose tightens, employers are bound to consider cutbacks in benefits and impose greater cost sharing with employees. In the health plan arena, employers have, for years, been passing along a greater share of the costs to employees." (Mondaq; free registration required)

[Guidance Overview] Time Off to Vote on Election Day
Excerpt: "While some states have no applicable requirements, the majority of states obligate employers to provide employees time off to vote in certain situations and impose civil and/or criminal penalties for non-compliance. Some of these jurisdictions even require such time to be paid for non-exempt employees. Finally, some jurisdictions also obligate employers to provide employees time off to act as election officials." (Jackson Lewis LLP)

[Guidance Overview] How Bailout Will Affect Executive Compensation
Excerpt: "Boards of financial institutions that participate in the bailout program will have to limit executive compensation in a manner that prevents the top five executives from receiving incentives to take 'unnecessary and excessive risks that threaten the value of the financial institution during the period that the Secretary [of the Treasury] holds an equity or debt position.' Furthermore, these boards must reserve clawback rights against these executives for bonus and incentive compensation arising from financial results that are later proven to be materially inaccurate." (American Banker via Paul, Hastings, Janofsky & Walker LLP)

[Guidance Overview] Emergency Economic Stabilization Act of 2008 Limits Executive Compensation and Offshore Deferrals
Excerpt: "Financial institutions that sell assets to the Treasury Department (Participating Financial Institutions) under the TARP are subject to new limitations with respect to the compensation of their executives. Note that the new restrictions on executive compensation summarized in this Section do not apply to (i) financial institutions that only insure assets through the TARP or (ii) entities that do not participate in the TARP." (Morgan, Lewis & Bockius LLP)

[Guidance Overview] Section 409A Compliance Deadline (PDF)
2 pages. Excerpt: "[Listed] are examples of compensation arrangements that should be examined for Section 409A compliance: Traditional deferred compensation agreements; Employment and consulting agreements; Severance agreements and plans; Bonus and performance incentive plans; Equity and equity-based plans including, stock option plans; Supplemental retirement plans; Post-retirement benefits; Change-in-control agreements; Indemnification agreements; Split-dollar insurance agreements." (Drinker Biddle & Reath LLP)

[Opinion] Avoiding the Tough Issues: The Candidates on Health Care and Entitlements
Excerpt: "Wharton faculty say the candidates have done a better job of clarifying their positions on these difficult issues than their predecessors in prior elections. Still, they add, Senators Barack Obama of Illinois and John McCain of Arizona fall short of laying out richly detailed plans to solve the deep, structural problems with these programs, mainly because there are no easy solutions and speaking hard truths is likely to alienate voters." (Wharton School of the University of Pennsylvania)

Newly Posted Events
(Post Yours!)

401(k) Webinar: The Current Economy & Your Company's 401(k) Plan
Nationwide on October 30, 2008
presented by AFS Financial Group

ERISA Advisory Council November Meeting
in District of Columbia on November 6, 2008
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

ERISA Advisory Council Working Groups November Meetings
in District of Columbia on November 5, 2008
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Voluntary Insurance Products in the Workplace: Avoiding Pitfalls and Limiting Employer Obligations
Nationwide on October 2, 2008
presented by EBIA / Thomson Reuters

Newly Posted Press Releases
(Post Yours!)

Introducing NIPA's Distribution Administrator Certificate Program
National Institute of Pension Administrators

Federal Agencies Finalize Rules On Newborns’ and Mothers’ Health Protection Act
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

IRS Announces Pension Plan Limitations for 2009
Internal Revenue Service (IRS)

Boomers Want Careers with Meaning and Impact Later in Life, But Will Nonprofits Hire Them?

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