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| October 20, 2008 |
| Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. |
Today's sponsor is BeneCom Associates, LLC
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| Reenrollment is over. Now, is your SPD up-to-date? |
| If your health or retirement plan has undergone major changes in the last five years, your SPDs may be out of date. If so, BeneCom has the experience and resources you need to bring them into compliance efficiently and cost effectively, often by using WebSPD, our easy-to-navigate online resource.
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[Official Guidance] Additional Formats: Text of Final Regs for Group Health Plans and Health Insurance Issuers Under the Newborns' and Mothers' Health Protection Act
The linked document is in HTML format, from the U.S. Government Printing Office; it includes a link to the typeset format, which appears in today's printed Federal Register. (Internal Revenue Service; Employee Benefits Security Administration; Centers for Medicare & Medicaid Services)
[Guidance Overview] Onsite Health Facilities: Watch Out for Regulatory Pitfalls
Excerpt: "By 2009, roughly 30 percent of large employers will have an onsite health care facility, according to research performed jointly by Watson Wyatt and the National Business Group on Health. While these employer-provided onsite facilities serve a useful purpose, many employers and vendors are unaware of the welfare benefit implications they entail." (Watson Wyatt Worldwide)
[Guidance Overview] Procedural Crossroads After Remand of Case to Plan Administrator
Excerpt: "This dispute over long term disability benefits illustrates the exacting procedural requirements that must be observed in protecting a claim for benefits for appellate review. In this instance, the district court applied Sixth Circuit authority to hold that a motion to reopen the case after a remand to the plan administrator was the proper procedural course." (Health Plan Law blog by Attorney Roy F. Harmon III)
[Guidance Overview] Recent Sixth Circuit Decision Authorizes Creative Solution to Address Runaway Intermittent Leave
Excerpt: "Many employers have been pulling their hair out attempting to address runaway intermittent leave under the FMLA. The Sixth Circuit's decision in Davis v. Michigan Bell authorizes one creative solution – change your 12-month FMLA period to a calendar-year basis." (Porter Wright Morris & Arthur LLP)
[Guidance Overview] No Penalties for Claims Administrator That Failed to Furnish Requested Plan Document
Excerpt: "EBIA Comment: The court's ruling is consistent with that of most courts on this issue . . . . As the court explained, the DOL claims procedure regulations broaden the plan administrator's duties but they do nothing to broaden the meaning of the term plan administrator." (Employee Benefits Institute of America)
[Guidance Overview] Employer Was Not Required to Provide a COBRA Election Notice for Its Long-Term Disability Plan
Excerpt: "EBIA Comment: As this court pointed out, COBRA does not apply to welfare benefit plans, such as typical long-term disability plans, that do not provide medical care. But employers should carefully examine their long-term disability plans to ensure that no ancillary benefits for medical care are present -- if benefits for medical care are provided, COBRA would apply to that part of the plan (assuming, of course, that the plan otherwise satisfies the conditions that cause a group health plan to be subject to COBRA)." (Employee Benefits Institute of America)
[Guidance Overview] Corrected Link: FMLA Amendments -- Significant Changes and Their Impact (PDF)
27 pages. PDF version of a PowerPoint presentation. (Morgan, Lewis & Bockius LLP)
Kaiser White Paper on Health Care Costs Helps to Evaluate Presidential Candidates' Proposals (PDF)
7 pages. Excerpt: "At a national level, health care accounts for a large and growing slice of the overall U.S. economic pie. The growth in health expenditures routinely outpaces growth in income, making health insurance less affordable for all Americans and making it more costly to extend coverage to the over 45 million Americans who are uninsured. These rising health costs also make public health programs more difficult to sustain, straining federal and state budgets. Finding a way to address high costs and cost growth without unreasonably reducing access to new and needed services is a significant challenge. How the candidates for the upcoming election propose to address the challenges posed by the increasing costs of health care is a critical component of the current political debates." (Kaiser Family Foundation)
Oregon Businesses Sign Up for Self-Insurance Health Plan
Excerpt: "Typically only larger businesses risk paying employee medical bills with their own money rather than buying health insurance. But now there's a health-insurance policy that gives small businesses the option to self-insure without the risk of having to absorb unexpectedly big medical expenses. Cigna HealthCare is marketing a product called Level Funding, which combines the benefits of self-insurance and of regular coverage, and for which employers pay monthly premiums just as with ordinary insurance. The company says it's the only such product available." (Portland Business Journal via bizjournals.com; free registration required)
Wellness Programs on the Rise Among Larger Employers, According to MetLife Study
Excerpt: "[MetLife's] Sixth Annual Employee Benefits Trends Study found that nine out of ten (94%) companies, both large and small, that offer a wellness program believe they are effective for reducing medical costs. These wellness programs include different items such as smoking cessation, weight management, an exercise regimen or cancer screening." (MSN.Money)
Report Shows Primary Care Doctors Have Limited Knowledge About Consumer-Driven Health Plans
Excerpt: "A large proportion of the nation's primary care physicians are not prepared to advise patients enrolled in consumer-driven health plans on such issues as coverage limitations and cost considerations, a new survey has found. In fact, 43 percent of the doctors responding to the survey, which was conducted by the Robert Wood Johnson Foundation Clinical Scholars Program and published Wednesday, October 8, in the American Journal of Managed Care, said they have heard 'a little' or 'not at all' about consumer-driven health plans . . . ." (Workforce Management; free registration required)
Parents Press States for Autism Insurance Laws
Excerpt: "If autism advocates get their way, more states will follow Indiana's lead by requiring health insurers to cover intensive and costly behavior therapy for autism. In the past two years, six states -- Texas, Pennsylvania, Arizona, Florida, South Carolina, Louisiana -- passed laws requiring such coverage, costing in some cases up to $50,000 a year per child. The powerful advocacy group Autism Speaks has endorsed bills in New Jersey, Virginia and Michigan and is targeting at least 10 more states in 2009, including New York, California and Ohio." (AP via Contra Costa Times)
Estimating State and Local Government Pension and Retiree Health Care Liabilities
Excerpt: "Liabilities for pension and retiree health-care benefits provided by U.S. state and local governments are causing concerns for taxpayers and for those holding government bonds. Many question whether the methodology used to calculate these liabilities is appropriate, since the private sector calculates retirement system liabilities using different methods and assumptions. This chapter reviews and critiques current actuarial and accounting standards under which governmental retiree liabilities are calculated and compares and contrasts these standards to those used by private-sector employers." (Pension Research Council; registration required to download fulltext of paper)
Health Plans Add Coaches to Target Behavior and Boost Effectiveness of Wellness Programs
Excerpt: "On Oct. 1, Minnesota-based Medica Health Plans launched a new health coaching program after testing it on several member groups during 2007. And a program being piloted by CIGNA Corp. combines the insurer's behavioral health experience with a unique health-coaching methodology in an effort to help enrollees lead healthier lives. CIGNA and Medica are among a growing number of health insurers that are incorporating new health coaching strategies into their wellness programs." (AISHealth.com)
Childbirth Hospital Stay Coverage Final Rules Unveiled
Excerpt: "Federal regulators have released final rules governing implementation of the Newborns' and Mothers' Health Protection Act that governs the length of hospital stays insurers must cover after childbirth. Friday's rule release came from the U.S. Department of Labor's Employee Benefits Security Administration (EBSA), the Internal Revenue Service, and the U.S. Department of Health and Human Services, which have jurisdiction over the September 1996 law. According to a news release, group health plans and health insurance issuers may not restrict benefits for a hospital stay in connection with childbirth to less than 48 hours (or 96 hours following a cesarean section)." (PLANSPONSOR.com; free registration required)
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Links to Items on Executive Comp, Benefits in General
[Guidance Overview] Van Pools Cut Costs, But Increase Some Risks
Excerpt: "As more businesses help their workers find lower-cost commuting options, employers need to be aware of the risks such programs can raise." (Workforce Management; free registration required)
[Guidance Overview] Strategies for Fiduciary Best Practices After LaRue and Glenn (PDF)
5 pages. Excerpt: "[T]hese cases can provide strategies to protect employers and fiduciaries, and to facilitate their proper exercise of fiduciary duties. Employers should consider making changes and acting proactively to implement these strategies now to help ensure that plan disputes are channeled through a plan committee and that the committee's decisions receive deference from the courts." (Winston & Strawn LLP)
[Guidance Overview] IRS Delay of Effective Date for Smart Card Requirements
Excerpt: "The IRS has delayed – again – the effective date of Revenue Ruling 2006-57, which confirmed that employers could use debit, credit or smart cards to deliver qualified transportation fringe benefits and outlined the required procedures for doing so. The ruling was supposed to take effect Jan. 1, 2008, but was delayed for a year to give transit systems more time to implement the required technology. Apparently some transit systems are still not ready. The revenue ruling is now slated to take effect Jan. 1, 2009, but employers and employees may rely on the ruling in the meantime." (Watson Wyatt Worldwide)
[Guidance Overview] Claims Denial Faces Stricter Review Because Sponsor Failed to Meet DOL Electronic Delivery Requirements
Excerpt: "A ruling by the 9th U.S. Circuit Court of Appeals emphasizes the importance of compliance with the U.S. Department of Labor's regulations on delivering plan documents electronically. In Gertjejansen v. Kemper Insurance Companies, Inc., the court applied a stricter standard of review to a claims denial because the employer's delivery of the summary plan description (SPD) did not meet DOL requirements." (Watson Wyatt Worldwide)
[Guidance Overview] Switching 401(k) and Other ERISA Plan Vendors—Inherent Risks for Employers and Plan Fiduciaries (PDF)
3 pages. Excerpt: "Plan fiduciaries may face risks, including personal liability, when corporate decisionmakers turn their attention to retirement and welfare plan administration as a source of savings in perilous economic times. The authors discuss some of the most notable areas for possible ERISA violations when fiduciaries face corporate cost-cutting pressures." (The Bureau of National Affairs, Inc. via Paul, Hastings, Janofsky & Walker LLP)
[Guidance Overview] New Veterans' Benefits Law Amends USERRA to Expedite Enforcement and Address Statute of Limitations Issue
Excerpt: "EBIA Comment: Whether the new deadlines imposed by the Act will actually expedite USERRA enforcement is unclear, since the Act does not include any penalty for failure to meet those deadlines. However, the Act also includes expanded reporting requirements for the enforcement process, suggesting that Congress has a keen interest in improving USERRA enforcement and that additional Congressional action might follow if the speed and quality of enforcement do not improve." (Employee Benefits Institute of America)
[Guidance Overview] New Section 457A Limits Tax Deferral for Certain Compensation Paid by Tax Indifferent Parties
Excerpt: "The new rules apply in addition to the requirements of existing Code Section 409A and any other provisions with respect to nonqualified deferred compensation, and are effective for amounts deferred that are attributable to services performed after December 31, 2008. For existing deferrals, the deferral amounts will be includible in the later of a) the year 2017, or b) the tax year in which no substantial risk of forfeiture exists concerning the rights to the deferred compensation." (Perkins Coie LLP)
[Guidance Overview] Treasury Department Issues Executive Compensation Rules under the Capital Purchase Program for U.S. Financial Institutions (PDF)
8 pages. Excerpt: "In order to participate in the program, the financial institutions must agree to four sets of compensation restrictions described in Interim Final Regulations ('Interim Regulations)' promulgated by the Treasury Department on October 14 that apply to senior executive officers ('SEOs') of participating institutions." (Frederic W. Cook & Co., Inc.)
[Guidance Overview] Code Section 162(m) – An Overview of Performance-Based Compensation (PDF)
5 pages. Excerpt: "Code Section 162(m) limits the amount of annual compensation that may be deducted by a public company for each of its top four executives to $1 million. Certain types of compensation are not subject to the limit, including compensation that is performance-based within the meaning of IRS regulations. The following summarizes the requirements for the performance-based exception." (Drinker Biddle & Reath LLP)
Vail Valley Sanitation Worker's Mortgage Is Cheaper Than Rent, Thanks to Employer's Housing Program
Excerpt: "Vail wastewater operator Jim Cliche recently bought a deed-restricted, three-bedroom house with a garage for about $300,000 in Edwards, about 15 miles away from work. He made a $3,000 down payment to close the deal under a new home-help mortgage program offered by the U.S. Department of Agriculture. Wells Fargo approved him for a loan. Cliche, 55, says his monthly mortgage payment is cheaper than rent would be on the same home in the open market." (The Denver Post)
[Opinion] Guidance on Meals, Gifts, and Entertainment Provided to ERISA Plan Fiduciaries
Excerpt: "The United States Department of Labor recently amended its 'Enforcement Manual' regarding how DoL investigators treat meals, gifts, and entertainment provided to ERISA plan fiduciaries. This amendment, which we have been working on for almost two years, directs DoL investigators to ignore noncash meals, gifts, and entertainment with an aggregate value below $250 per year. Equally important, investigators are instructed to ignore the cost of a fiduciary's participation in education conferences in certain circumstances." (PLANSPONSOR.com; free registration required)
Newly Posted Events
Legislative & Regulatory Updates/EPCRS Updates/Fee Disclosures
in Arizona on November 13, 2008
presented by National Institute of Pension Administrators - Phoenix, AZ
Newly Posted Press Releases
A Chart of the 2009 Cost-of-Living Adjustments
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