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December 15, 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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[Guidance Overview]
Trial Court Dismisses Retirees' Claims That Terminating Their Medical and Prescription Drug Benefits Violated the ADEA

Excerpt: "The court in this case appears to be the first to have applied the 2007 final EEOC regulations. The employers were able to use the regulations to successfully defend their coordination of benefits for Medicare-eligible retirees. But this isn't the end of the story. The employers have not defeated the retirees' life insurance benefit claims under the ADEA, and the retirees may be able to prove that they acquired vested rights to medical, prescription drug, and life insurance benefits. Thus, as in the past, employers who change their retiree benefits still run the risk of lawsuits, and should consult with legal counsel beforehand." (Employee Benefits Institute of America)

[Guidance Overview]
Hospital Not Entitled to Notification That Participant Was in COBRA Election Period

Excerpt: "Although apparently not raised by the hospital, the IRS COBRA regulations require an indemnity or reimbursement plan to make a complete response to any inquiry from a health care provider regarding a qualified beneficiary's right to coverage under a plan during the COBRA election period. However, this provision of the regulations refers only to indemnity and reimbursement plans -- HMOs (such as the one in this case) and other plans providing services (such as walk-in clinics) are not mentioned. Nevertheless, such plans may decide to adopt the disclosure practices in the IRS regulations for provider inquiries during the COBRA election period as a way to avoid disputes and potential liability (including possible state-law misrepresentation claims), even though these disclosures technically may not be required." (Employee Benefits Institute of America)

Obama and Lawmakers Expanding Health Measures in Stimulus Plan
Excerpt: "President-elect Barack Obama and Democratic leaders in Congress are devising plans to significantly expand the health provisions in next month's economic recovery legislation, arguing that pouring billions of dollars into an array of health programs will not only boost the economy but also make a down payment on promises of broader health-care reform." (The Washington Post; free registration required)

Learning from Clinton Mistakes, Nominee for Health and Human Services Secretary Favors Going on Political Offensive to Bring About Reform
Excerpt: "Guided by lessons from President Clinton's healthcare debacle 15 years ago, [Tom] Daschle has put a premium on cooperation between the White House, Congress and major healthcare interest groups, many of whom agree that major action on healthcare is vital. Daschle, who will lead both the Department of Health and Human Services and a new White House Office of Health Reform, favors moving decisively to seize political momentum and, if necessary, cut off opposition, something he said Clinton failed to do in 1993." (Los Angeles Times)

Nondependent Domestic Partner's Health Benefits Are Tax-Free if Retiree Was Taxed on Value of Partner's Coverage
Excerpt: "This ruling also left many practical questions unanswered: For example, it did not specify when the value of the partner's coverage is taxed to the union member, how the value of the partner's coverage is actuarially determined, or how the member proves the partner's existence." (Employee Benefits Institute of America)

Shifting to Electronic Health Records Would Save Billions of Dollars and Improve Millions of Lives
Excerpt: "Amazingly, less than 5 percent of U.S. medical spending goes toward prevention; the rest goes to treatment. To remedy this imbalance, the U.S. must help doctors change how they practice. A good place to start is by encouraging the use of electronic health records (EHRs), software that stores and analyzes patients' medical information. Doctors tend to ignore prevention largely because they're overworked and busy. The EHR can help doctors stay on top of this excess of incoming data, allowing them to track exactly who needs what preventive measures." (The Baltimore Sun)

Generic Prescription Drugs Led to Savings of $1B for Consumers and Health Insurers in 2008
Excerpt: "U.S. consumers and health insurers saved about $1 billion on generic medications for the 12 months that ended in September, according to a report released on Wednesday by IMS Health, Bloomberg reports. The report found that total spending on generic medications decreased by 2.7% to $33 billion, the largest decline in at least a decade." (Kaiser Family Foundation)

ALM (Sponsor)

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Complete Benefits Law Guidance from Law Journal Press

The nation's workforce and health care system are constantly evolving and so are the legal issues. Law Journal Press helps you handle any benefits law question with up-to-date, authoritative books on all aspects of the field. Get legal and practical advice from leading experts on everything from COBRA to ERISA, "contingent" employees to family and medical leave, and more. Browse our product listings for detailed information and special offers.

Links to Items on Executive Comp, Benefits in General

[Guidance Overview]
Compliance Dates for Employee Benefits (PDF)

Chart. 3 pages. (Swerdlin & Company)

[Guidance Overview]
IRS Provision of Relief from Income Taxes for Deferred Compensation Amounts Under IRC Sec. 409A

Excerpt: "As provided by Notice 2008-113, a taxpayer is not eligible for the relief provided in the notice unless all of the specified requirements are met, as well as the requirements of the particular section of the notice providing the applicable relief and the enumerated reporting requirements. In each instance, the taxpayer claiming the relief has the burden of demonstrating that the taxpayer was eligible for the relief and that the requirements of the notice have been met. Any application of the relief provided in the notice is subject to examination by the IRS." (Wolters Kluwer)

[Guidance Overview]
Proposed Section 409A Income Inclusion Regulations and Related Guidance

Excerpt: "Final regulations implementing the requirements of Section 409A take effect on January 1, 2009. As a result, Section 409A nonqualified deferred compensation plans must be brought into full operational and written compliance with those requirements by January 1, 2009. As the January 1 effective date draws nearer, increasing attention is being focused on how to determine the tax impact of Section 409A failures. The proposed regulations provide some initial insight into how to determine this tax impact, although they are likely to be revised in certain respects. However, under IRS Notice 2008-115 (issued separately on December 10, 2008), the proposed regulations can be relied upon with respect to the calculation of income includible under Section 409A and the calculation of the additional taxes until the issuance of final regulations." (McGuireWoods LLP)

Executive Pay Limits May Prove Toothless as Loophole in Bailout Provision Leaves Enforcement in Doubt
Excerpt: "Congress wanted to guarantee that the $700 billion financial bailout would limit the eye-popping pay of Wall Street executives, so lawmakers included a mechanism for reviewing executive compensation and penalizing firms that break the rules. But at the last minute, the Bush administration insisted on a one-sentence change to the provision, congressional aides said. The change stipulated that the penalty would apply only to firms that received bailout funds by selling troubled assets to the government in an auction, which was the way the Treasury Department had said it planned to use the money." (The Washington Post; free registration required)

Strategies for Fiduciary Best Practices After LaRue and Glenn (PDF)
Excerpt: "The U.S. Supreme Court's recent landmark decisions in Metropolitan Life Insurance Co. v. Glenn and LaRue v. DeWolff, Boberg & Associates Inc. put a spotlight on fiduciary governance and could prompt lawsuits against retirement plan fiduciaries accused of breaching their duties under the Employee Retirement Income Security Act. In this analysis, Winston & Strawn attorneys Michael S. Melbinger and Ranjan S. Emani lay out strategies identified ''by reading between the lines'' of the decisions, arguing that employers and fiduciaries can take proactive steps to ensure that plan disputes are channeled through a plan committee and that the committee's decisions receive deference from the court." (The Bureau of National Affairs, Inc. via Winston & Strawn LLP)

Global Study Shows 31% of Companies Anticipated the Dramatic Business Dropoff
Excerpt: "The news release said the study also found that: Most employers are keeping benefits programs relatively intact including health and retirement plans." (; free registration required)

The Long-Term Effects of the Divorce Revolution: Health, Wealth, and Labor Supply
Excerpt: "This paper contributes to the evaluation of the change in divorce laws by examining a less studied area: the long-term effects of this policy change on the well-being of men and women who were young adults when the laws were changing . . . ." (Center for Retirement Research at Boston College)

New Jersey State Commission Urges Marriage Equality Now
Excerpt: "A key issue now is whether Governor Jon Corzine will allow a marriage bill to move before his 2009 reelection bid. In a report comprehensive in scope and sweeping in its conclusions, an official government commission in New Jersey recommended that the Legislature change state law 'to allow same-sex couples to marry' and to do so 'expeditiously because any delay in marriage equality will harm all the people of New Jersey.' The findings, released on the morning of December 10 and which ran to 45 pages plus appendices, were issued in the 'final report' of the New Jersey Civil Union Review Commission, a 13-member body established when civil unions were enacted in late 2006 [a link to the complete report is on the target page]." (G.ayCityNews)

Retired San Jose Officers and Firefighters Again Seek Benefit for Spouses They Marry After Retirement
Excerpt: "[F]or employees who marry after retiring, their spouses are not eligible for survivorship pension benefits unless the employee had agreed to a reduced pension, and those spouses cannot receive health benefits from the plan after the retired officer or firefighter dies. Such restrictions are commonplace; San Jose officials say no other major California city extends the desired benefits to spouses married after retirement." (The Mercury News)

Expat Benefits: Achieving Parity in a Global Arena
Excerpt: "Recent years have witnessed a surge in the number of expatriates, as companies pursue international business expansion and global growth in an environment of acute skill shortages. It is no longer enough for companies to rely upon traditional generous perquisites and allowances to make up for the lack of adequate employee benefits. As a result, expatriate (expat) benefit programs are becoming increasingly complex, as companies strive to maintain global consistency among plans while allowing sufficient flexibility to ensure appropriate and adequate coverage in an increasing number of, often challenging, locations around the world. This is no easy task, and Mercer's recent Benefits Survey for Expatriates and Globally Mobile Employees was designed to assess how employers are dealing with these issues." (Mercer LLC)

Automakers' Insolvency Opens All the Benefit Cutback Targets and Problems to Examination

Excerpt: "The insolvency (whether or not in Chapter 11 reorganization) of the three automakers brings 'legacy costs' back to the center stage of ERISA cutback negotiation and litigation. The automakers have already put themselves on the cutting edge of many of these issues outside of bankrup.tcy." (Pension & Benefits Blog)

Newly Posted Events
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Wellness Programs: Rewards, Penalties and Legal Risks
Nationwide on February 26, 2009
presented by Lorman Education Services

Newly Posted Press Releases
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Pittsburgh Post-Gazette Selects Great-West to Manage 401k Plan
Great-West Retirement Services

New York Life Retirement Plan Services Expands West Coast Presence
New York Life Investment Management

401k Advisors Launches Retirement Plan Hotline
401k Advisors

GAFRI Will Help Schools Comply With 403(b) Regulations
Great American Financial Resources

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