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January 19, 2009

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


Today's sponsor is Employee Benefits Institute of America (EBIA)

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Banner ad for Employee Benefits Institute of America (EBIA)

EBIA's In Person Seminar Series

EBIA's In Person seminars provide education on employee benefits topics to professionals, including TPAs, attorneys, benefits consultants, human resources managers, plan administrators, insurance professionals, and accountants. For information about CE credit, course materials, speakers, locations, and agenda details, and to register, please visit EBIA's In Person Seminars.

[Guidance Overview]
New FMLA Regulations Take Effect (PDF)

5 pages. Excerpt: "One of the major struggles facing employers is how to apply and interpret the definition of the term 'serious health condition' in determining whether an employee qualifies for FMLA leave. This is especially problematic when employers are faced with employees who have certain conditions like the common cold or the flu. Despite an outpouring of requests for clarification, little additional guidance is offered in the new regulations, and the six individual definitions of serious health condition are retained." (Alston & Bird LLP)


[Guidance Overview]
Massachusetts 'Fair Share Contribution' Filing Requirements Modified Again

Excerpt: "Based on data compiled by the Division of Unemployment Assistance (DUA) in connection with 2007 and 2008 FSC reporting, it became clear that the majority of Massachusetts employers were either not subject to the FSC rules or were able to pass the applicable tests. Specifically, out of 37,000 employers required to submit an FSC filing, fewer than 1,500 are expected to fail the FSC test for the quarter ending December 31, 2008. As a consequence, the new quarterly reporting rules appear unnecessarily burdensome." (Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C.)


[Guidance Overview]
New Department of Labor FMLA Regulations Effective January 16, 2009

Excerpt: "The Department of Labor's revisions to the Family and Medical Leave Act (FMLA) and its regulations take effect today, January 16, 2009. Accordingly, it is important for employers to review their policies and procedures to ensure that they comply with the revised FMLA and its regulations. Specifically, employers should take the following measures . . . ." (Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C.)


[Guidance Overview]
CMS's Revised Guidance and Model Disclosure Notices for Part D Eligible Individuals for Use After January 1, 2009

Excerpt: "EBIA Comment: CMS had previously requested public comment on a proposal to drop the model personalized notice, so its elimination is not surprising . . . . Employers using the model disclosure notices will need to replace them with the revised versions, while those using customized versions of the notices should review their practices for providing personalized information for consistency with the revised guidance. In any event, employers will likely welcome having one less notice to track for Medicare Part D." (Employee Benefits Institute of America)


[Guidance Overview]
Retiree Coverage Different from Active Coverage Creates COBRA Loss of Coverage That Triggers Obligation to Provide Election Notice

Excerpt: "EBIA Comment: Even though it is a preliminary holding, this decision includes a rare discussion of the IRS regulations defining loss of coverage for COBRA qualifying event purposes. There will be times, as here, when a loss of coverage occurs even though the affected individual continues to receive coverage and is, therefore, unlikely to elect (and pay for) COBRA coverage. The inclination not to provide COBRA notices in these situations must be resisted, however, because as illustrated here, other events may create a dispute that stirs up the technical notice claims. To protect against the risk of potentially expensive claims, plan sponsors dealing with this kind of plan design must have procedures in place to address the required notices." (Employee Benefits Institute of America)


[Guidance Overview]
IRS Updates Publication 503. Child and Dependent Care Expenses, for 2008

Excerpt: "The IRS has updated Publication 503 (Pub. 503) for use in preparing 2008 tax returns. Pub. 503 explains the requirements that taxpayers must meet in order to claim the dependent care tax credit (DCTC) under Code Section 21 for child and dependent care expenses. Similar, but not identical, requirements must be met for expenses to be reimbursable under a DCAP [dependent care assistance program]. . . . EBIA Comment: Because Pub. 503 is written primarily to help taxpayers determine whether expenses qualify for the DCTC, caution is needed if using it as a guide for determining what expenses are reimbursable under a DCAP. For example, the DCTC and DCAPs have different rules about the maximum amount of expenses that can be taken into account and about the timing of expenses." (Employee Benefits Institute of America)


HHS Final Rule Delays Adoption Deadlines for ICD-10, HIPAA 5010
Excerpt: "HHS has approved final rules that delay deadlines for adopting ICD-10 code sets and the HIPAA 5010 transaction sets, Health Data Management reports (Goedert, Health Data Management, 1/15)." (California HealthCare Foundation)


Bill Would Offer COBRA Subsidies, Extend Eligibility
Excerpt: "The federal government would pay 65 percent of COBRA health care continuation premiums for one year for eligible beneficiaries who have lost their jobs since September 1, 2008, as part of a massive economic stimulus bill the House Democratic leadership has unveiled." (Workforce Management; free registration required)


Early Start to 2009 Health Care Reform Debate
Excerpt: "In the weeks following the Nov. 4 elections, some of the lawmakers hoping to steer health care reform legislation through the Senate this year got a head start. On Nov. 12, 2008, Senate Finance Committee Chairman Max Baucus (D-Mont.) released a policy paper outlining his vision for comprehensive health care reform. In addition, some members of the Senate Finance Committee and the Senate Health, Education, Labor and Pensions (HELP) Committee met to discuss health care reform. These endeavors capped a year in which Congress set the stage for a major health care reform debate and suggest that lawmakers plan to get to work on the issue early in 2009." (Watson Wyatt Worldwide)


2009 Health Care Cost Survey Reveals High-Performing Companies Gain Health Dividend
Excerpt: "High-performing companies are making significant strides in controlling health care costs by aggressively managing their benefit programs and making effective use of account-based health plans (ABHPs) and other consumer-based approaches. Results from the Towers Perrin 2009 Health Care Cost Survey show that high-performing companies will pay, on average, 12% less in annual health care premiums in 2009 compared to low-performing companies. Equally striking, high performers share the cost savings with employees -- and, overall, report a health dividend that includes both better financial results and workforce performance advantages, such as high employee engagement." (Towers Perrin)


COBRA Expansion, Subsidies Proposed in House Democrats' Stimulus Plan
Excerpt: "COBRA's coverage period would be expanded -- and premium subsidies provided -- under an $825 billion economic stimulus package outlined Jan. 15 by House Democrats. According to summaries from the House Committees on Appropriations, and Ways and Means, the proposal would set aside more than $30 billion . . . ." (Thompson Publishing Group Inc.)


Health Care Opinion Leaders' Views on Priorities for the Obama Administration
Excerpt: "The 17th Commonwealth Fund/Modern Healthcare Health Care Opinion Leaders Survey asked a diverse group of experts about priorities for the incoming administration and found President Obama enjoys a strong mandate for major elements of the health care reform proposal unveiled during the 2008 presidential campaign. There was strong support for allowing uninsured individuals to purchase coverage through a health insurance exchange, expanding the State Children's Health Insurance Program, creating new insurance market regulations, instituting employer provision or financing of coverage, and including a public insurance option in an insurance exchange." (The Commonwealth Fund)


National Health Reform Begins
Excerpt: "Many of those working on health-reform issues in Congress and the new administration were part of the failed effort during the Clinton administration. One of their lessons learned was to make the effort more of an open process -- so now is the time for HR leaders to make their views known." (Dallas Salisbury via Human Resource Executive Online)


The EAP: A Corporate Perk for a Stressful Time
Excerpt: "AS more workers lose their jobs, many are gaining a host of unforeseen problems in exchange. Beyond the obvious financial consequences, a layoff can result in psychological, emotional and even physical difficulties, and the impact may extend to families and former co-workers. A widely available but often ignored corporate perk -- the employee assistance program -- can help workers who are suddenly facing a layoff, as well as those who worry that the same fate will befall them." (The New York Times; free registration required)


House Bill Would Expand COBRA Coverage
Excerpt: "Part of a new stimulus package under consideration includes an expansion of COBRA coverage. The Health Insurance for Unemployed Workers provision has three components; a new temporary subsidy for COBRA (Consolidated Omnibus Budget Reconciliation Act) premiums to enable people who have been involuntarily terminated from their jobs to maintain the coverage they had through work, new options for states to extend healthcare to unemployed workers through Medicaid, and an extension of COBRA eligibility (without subsidies) for long-term employees and older workers." (PLANSPONSOR.com; free registration required)


[Opinion]
American Benefits Council Summary and Recommendations: Federal Subsidies for COBRA Coverage (PDF)

3 pages. Excerpt: "Congress is considering federal subsidies for COBRA health care continuation coverage as part of an anticipated economic stimulus package. In addition, Congress is considering expanding the duration of COBRA coverage for individuals who have lost their jobs and are age 55 or older. While these proposals could make it possible for more individuals to continue health care coverage during this turbulent time, they are also likely to raise costs and administrative burdens for employers. These added costs and administrative burdens should also be minimized as part of the economic stimulus package, particularly during this time when many companies are facing unprecedented economic challenges." (American Benefits Council)


[Opinion]
Health Care Fix in Connecticut: Now, Later ... or Never?

Excerpt: "One day State Senate President Don Williams proclaimed 'dead on arrival' any proposal that costs money. The next week he embraced an ambitious proposal to move Connecticut toward universal health care. The conflicting signals from Williams (including his public remarks at a rally this week, captured in this video clip) reflect a dilemma facing Connecticut as a new state legislative session gets underway. A consensus has been building for dramatic reform to a health care system that leaves hundreds of thousands of people without insurance and many more underinsured, burdened with huge bills, or fearful of losing care. At the same time, the state faces a $6 billion budget gap over the next two years. Those conflicting pressures came into focus this week." (New Haven Independent.org)


[Opinion]
Socialized Health Care Fundamentally Changes the Relationship Between Citizens and State

Excerpt: "For all his talk of allowing consumers to select their own health-care coverage, Mr. Obama's proposal, as he laid it out in his campaign, will provide strong financial incentives for employers and individuals to sign up with a new, Medicare-style government plan for working-age people and their families. This plan will almost certainly use a price-control system similar to the one in place for Medicare, allowing it to charge artificially low premiums by paying fees well below private rates. These low premiums will serve as a magnet for enrollment and will devastate the private companies trying to compete in the health-insurance market. The result will be the nationalization of the health-care sector, which today accounts for 16% of U.S. gross domestic product." (The Wall Street Journal)


[Opinion]
Payments for Provided Health Care Not So Reasonable and Customary

Excerpt: "Patients who feel ripped off whenever they use a doctor outside their insurance company's network should benefit from two important new agreements. New York State's attorney general, Andrew Cuomo, and UnitedHealth Group, one of the nation's largest health insurers, have agreed to set up a new system for calculating out-of-network payments. UnitedHealth also has agreed to pay $350 million to settle class-action lawsuits brought by the American Medical Association and other groups on behalf of patients and doctors who claimed to be shortchanged for services provided out of network. Before approving the settlement, the courts will have to decide if the amounts agreed to are enough." (The New York Times; free registration required)



University Conference Services (Sponsor)

(Click on company name or banner to learn more.)
Banner ad for University Conference Services

Taking a Closer Look at Your Health Care Dollars

With an uncertain economy, premium increases that continue to outpace inflation, and a new administration in the White House pushing for change, offering a strong health care plan isn’t easy—or cheap. But making the most of your health care dollars has never been more critical. The Boston Health and Welfare Plan Management for Mid-Sized Employers Conference, April 26–29, is your source for solutions to the formidable challenges you face.


Links to Items on Executive Comp, Benefits in General

[Guidance Overview]
Treasury Issues Guidance on New Section 457A: More Compliance Headaches for Deferred Compensation Arrangements (PDF)

8 pages. Excerpt: "As discussed [in this article], a critical factor in determining whether the new provisions will apply to a nonqualified deferral arrangement is whether the foreign corporation maintaining the deferred compensation arrangement is resident in a country that is not a party to a comprehensive income tax treaty with the United States or does not otherwise have a 'comprehensive foreign income tax.'" (Miller & Chevalier Chartered)


[Guidance Overview]
Section 409A Follow-Up for 2009

Excerpt: "Yes, I know that we are all sick of 409A work, but the unfortunate truth is that it will be with us for the rest of our careers in the executive compensation field. The following are seven items we all will need to look out for in 2009 (and future years) . . . ." (Michael S. Melbinger via Winston & Strawn LLP)


[Guidance Overview]
Treasury Issues Additional Executive Compensation Rules Under TARP

Excerpt: "The new rule requires the CEO of a participating institution to certify annually within 135 days after the institution's fiscal year end that the institution and its compensation committee have complied with these executive compensation standards." (Michael S. Melbinger via Winston & Strawn LLP)


Treasury Issues Executive Compensation Reporting Requirements Under TARP
Excerpt: "The U.S. Department of the Treasury on Friday issued interim final rules for reporting and recordkeeping requirements under the executive compensation standards of the Troubled Asset Relief Program's (TARP) Capital Purchase Program (CPP). The new rule requires the chief executive officer (CEO) to certify annually within 135 days after the financial institution's fiscal year end that the financial institution and its compensation committee have complied with the standards." (PLANSPONSOR.com; free registration required)


Looking Back at Ten Years of Pension Accounting and Financial Reporting
Excerpt: "The GASB has embarked upon a project that will examine its standards of accounting and financial reporting for postemployment benefits -- including pension benefits and other postemployment benefits (OPEB), most notably retiree health insurance. The project began with a two-year research effort aimed at understanding if the GASB's pension standards -- Statements No. 25, Financial Reporting for Defined Benefit Pension Plans and Note Disclosures for Defined Contribution Plans, and No. 27, Accounting for Pensions by State and Local Governmental Employers -- have been effective. Those Statements were issued in 1994 and were fully implemented by the late 1990s." (Governmental Accounting Standards Board)


Lose Your Job? There Could Be Tax Surprises
Excerpt: "If you lose your job, you could be in for some tax surprises - some nice, some nasty. If you receive unemployment benefits or severance pay, cash in a retirement account or have a big change in income, your tax bill could be much more - or less - than you expect. To avoid surprises, here are some tips." (San Francisco Chronicle)


[Opinion]
SBCA Supports Limiting Code Section 409A to Public Companies (PDF)

5 pages. Excerpt: "The SBCA urges Congress to limit the application of Internal Revenue Code Section 409A to publicly traded companies. This onerous code section is applicable to small businesses even though there is no abuse in the small business context. Most small businesses do not even know it applies to them and are totally unaware of the substantial penalties that currently apply." (Small Business Council of America)




Newly Posted Press Releases

Target Date v. TargetAge™: Retirement Investing Based on Reality, Not Hopes
Securian Retirement Services

U.S. Labor Department Finalizes Rule On Investment Advice For 401(k) Plans And IRAs
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

CareCounsel Contributes to President-Elect Obama’s Transition Health Policy Team
CareCounsel

Treasury Issues Additional Executive Compensation Rules Under TARP
U.S. Department of Treasury

Liberty Mutual Web Site Explains New Federal and State Family Medical Leave Rules
Liberty Mutual

Workshops Educate San Francisco Businesses on Compliance with New Transit Benefit Ordinance
Accor Services North America

Schwab Announces 2008 Highlights for Institutional Services
Charles Schwab Corporation



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