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February 17, 2009

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


Today's sponsor is International Foundation of Employee Benefit Plans

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Banner ad for International Foundation of Employee Benefit Plans

E-learning from the International Foundation of Employee Benefit Plans

The International Foundation’s E-learning courses provide the fundamentals as well as the latest on compliance. Courses are continuously updated to reflect recent regulatory changes. Many courses include fun interactive features that will help you fully understand concepts and implications—not just memorize terms. If you are interested in training your team, ask us about our convenient, cost-effective token program. For more information on e-learning courses and team training, visit www.ifebp.org/elearning.

[Guidance Overview]
New York AG Investigation of Data Used to Determine Out-of-Network Reimbursement Rates

Excerpt: "Plan sponsors should determine whether their insurers and/or third-party administrators use Ingenix data to determine out-of-network reimbursement rates and, if so, whether to continue that relationship." (Spencer Fane Britt & Browne LLP)


[Guidance Overview]
Premium Subsidy for COBRA Beneficiaries (PDF)

4 pages. Excerpt: "With the effective date of the COBRA subsidy not even two weeks away, employers will quickly need to address the administrative, payroll, and other systems changes necessary to accommodate this revision of the COBRA rules. The immediate action items will differ depending on whether the employer's health plan is insured or self-funded and whether the employer administers COBRA in-house or uses a COBRA administrator. In general, however, employers and/or plan administrators will need to do the following . . . ." (Aon Consulting)


[Guidance Overview]
Major COBRA Changes in New Law

Excerpt: "On February 17, 2009, President Obama is expected to sign the American Recovery and Reinvestment Act of 2009 (ARRA), ushering in changes to COBRA administration and transportation plan limits, among other things." (Infinisource)


[Guidance Overview]
The Subsidized COBRA Coverage Soon to Be Enacted

Excerpt: "The American Recovery and Reinvestment Act (H.R. 1) will be signed into law at any moment. The massive stimulus package will subsidize COBRA coverage for some eligible qualified beneficiaries. The COBRA provisions will take effect soon after enactment and so require prompt attention and action from plan sponsors and administrators. Among other actions, employers must issue updated COBRA notices, provide new enrollment options and implement subsidy procedures." (Watson Wyatt Worldwide)


[Guidance Overview]
COBRA Subsidy Affecting Employers and Insurers (PDF)

5 pages. Excerpt: "The economic stimulus legislation that President Obama is expected to sign into law next week includes the Health Insurance Assistance for the Unemployed Act of 2009. The Act provides a subsidy of 65% of the COBRA premiums for employees who were involuntarily terminated between September 1, 2008 and December 31, 2009. The employer (or insurer for insured plans) can promptly claw back the premium by withholding the payment as a credit against Federal payroll taxes. The subsidy is expected to take effect March 1st and is available for a maximum of nine months." (Miller & Chevalier Chartered)


[Guidance Overview]
CHIP Reauthorization and Expansion Impacts Health Plans

3 pages. Excerpt: "On February 4, 2009, President Obama signed into law H.R. 2, the Children's Health Insurance Program Reauthorization Act of 2009 ('CHIP' or 'Act'). Significant for employer sponsors of group health plans, the Act contains new rules relating to state assistance for payment of employee premiums under a group health plan, new special enrollment rights, new employer notice requirements, and penalties for failure to comply. In addition, the effective date of the Act's premium payment and special enrollment rules is April 1, 2009." (Groom Law Group)


[Guidance Overview]
COBRA Provisions in American Recovery and Reinvestment Act (PDF)

4 pages. Excerpt: "Income Treatment. As long as an individual is eligible for the premium subsidy, it will not be considered additional taxable income. In addition, the premium subsidy cannot be considered as additional income or resources in determining eligibility for any federal or state public benefit program." (Groom Law Group)


The Effect of Fast Food Restaurants on Obesity
Excerpt: "We find that among 9th grade children, a fast food restaurant within a tenth of a mile of a school is associated with at least a 5.2 percent increase in obesity rates. . . . Our results imply that policies restricting access to fast food near schools could have significant effects on obesity among school children . . . ." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve fulltext)


U.S. to Compare Effectiveness of Medical Treatments
Excerpt: "The $787 billion economic stimulus bill approved by Congress will, for the first time, provide substantial amounts of money for the federal government to compare the effectiveness of different treatments for the same illness. Under the legislation, researchers will receive $1.1 billion to compare drugs, medical devices, surgery and other ways of treating specific conditions. The bill creates a council of up to 15 federal employees to coordinate the research and to advise President Obama and Congress on how to spend the money." (The New York Times; free registration required)


Benefit Funding Neglected for Civil Retirees
Excerpt: "State and local governments have set aside virtually no money to pay $1 trillion or more in medical benefits for retired civil servants, a USA TODAY survey found. With bills coming due as Baby Boomers start to retire, states, cities, school districts and other governments may be forced to raise taxes, cut benefits or both -- a task made especially difficult in an economic downturn." (USA TODAY)


Coalition that Produced National Lobbying Campaign on Health Care Reform, Stalls
Excerpt: "After spending two years and more than $20 million to promote the idea, collaborators in the Divided We Fail coalition -- a project of the seniors lobby AARP, the service workers' union, and groups representing small business and the Fortune 500 -- are indeed divided over key elements of how to fix health care." (AP via The New York Times; free registration required)


Union Talks on Retiree Health Care Seen as Key as G.M. Makes Case for Funds
Excerpt: "With its access to a government lifeline possibly at risk, General Motors executives were locked in intense negotiations Monday with leaders of the United Automobile Workers over ways to cut its vast bills for retiree health care. . . . On Monday, G.M. pressed union leaders in a meeting in Detroit for a deal on financing what was the centerpiece of the 2007 U.A.W. contract -- a perpetual, G.M.-financed trust to cover health care costs of hundreds of thousands of retired hourly workers and their surviving spouses." (The New York Times; free registration required)


Healthy Americans Act Makes 2009 Debut
Excerpt: "Healthy Americans Act Makes 2009 Debut from Spencer's Benefits Reports: On February 5, Sens. Ron Wyden (Ore.) and Bob Bennett (Utah) introduced S. 391, the Healthy Americans Act, which would guarantee health care coverage to all Americans. The senators [introduced similar legislation in the previous Congress.] S. 391 would require every adult to enroll in a Healthy Americans Private Insurance (HAPI) plan, which could include a plan established by the states or a plan offered by an employer (in a two-year transition period), unless coverage is provided through Medicare, Medicaid, a retiree health plan, a collectively bargained plan, a veterans' plan, or a plan of the Indian Health Service. Adults also would be responsible for enrolling their dependent children." (Wolters Kluwer)


Cost Impact to Payers and Employers of TIA and Stroke: An Actuarial Analysis (PDF)
24 pages. (Milliman)



University Conference Services (Sponsor)

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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]
Executive Compensation Rules in Stimulus Bill and Treasury Guidance (PDF)

5 pages. Excerpt: "The Act comes on the heels of new TARP executive compensation restrictions announced by the Obama Administration on February 4th. [This document] is a summary of the notable restrictions in the Act and those imposed by the Obama Administration. While both sets of rules only apply to TARP recipients, there is considerable concern that future legislation may apply some of these restrictions to companies not accepting TARP funds. As discussed . . ., the Administration plans to look into executive compensation reforms for all financial institutions, not just those receiving TARP funds. And key Congressmen have expressed interest in applying some of these rules more broadly." (Groom Law Group)


[Guidance Overview]
Securing the Tax Deduction Under Section 162(m): Addressing Revenue Ruling 2008-13 (PDF)

Pages 7-9 of 15 pages. Excerpt: "In 2008, the Internal Revenue Service (IRS) released Revenue Ruling 2008-13, limiting the scope of the section 162(m) performance-based compensation exemption. While this Revenue Ruling affirms the surprising and controversial position taken by the IRS in a private letter ruling issued in September 2007 (but only publicly released in February 2008), it does provide useful transition relief. Under Revenue Ruling 2008-13, if performance-based compensation is also payable upon termination of employment (i) by the company without 'cause,' (ii) by the employee for 'good reason,' or (iii) due to voluntary retirement, then any such payments will not be deductible as performance-based compensation under section 162(m) -- even if no such termination event occurs and the performance conditions are satisfied." (The Hay Group)


[Guidance Overview]
What the Board of Directors Should Know About the Compensation Committee (PDF)

Pages 5-7 of 15 pages. Excerpt: "While most of the attention on executive compensation has focused on CEOs, it really is the compensation committee of the board of directors that is responsible for the ultimate executive pay decisions. However, even the most responsible and diligent committee may make certain compensation decisions it later regrets, including ones that have been forgotten until exposed in a less than favorable light. Following several recent high profile severance payments, some compensation committee members were quoted as not really understanding the nuances of certain severance and change-in-control programs or the size of the cumulative awards." (The Hay Group)


[Guidance Overview]
Stock Grant Approaches in a Volatile Market (PDF)

Pages 1-5 of 15 pages. Excerpt: "The steep drop in many companies' share prices during 2008 has challenged traditional methods of determining the appropriate level of executives' equity incentive awards. Compensation committees must review their reward methodologies to ensure they are effectively balancing award competitiveness, effective share usage, and reasonableness and fairness to shareholders." (The Hay Group)




Newly Posted Events



403(b) Regulations: They're Here...Now What? Webcast
Nationwide on February 20, 2009
presented by AMR Management Services

Complimentary Webcast: Proposed Changes to COBRA and Other Health Reform Legislation
Nationwide on February 25, 2009
presented by Buck Consultants, an ACS Company



Newly Posted Press Releases



Spencer’s Benefits Reports Begins Collecting Data For COBRA Continuation Of Coverage Survey
Wolters Kluwer Law & Business



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