Health & Welfare Plans Newsletter |
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| May 18, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy | ||
Employee Benefits Institute of America (EBIA) (Advert.)
EBIA's 11th ANNUAL ADVANCED CAFETERIA PLANS CONFERENCE Register now for EBIA's 11th Annual Advanced Cafeteria Plans Conference, which will be held in Seattle on July 8-10, 2009. Our speakers include outstanding employee benefits attorneys who are contributing authors on one or more EBIA manuals. Don't miss the optional pre-conference seminar: Advanced Briefing on New Federal Mandates! As in past years, we expect this annual conference to sell out, so be sure to register soon at www.ebia.com. |
[Official Guidance]
Text of U.S. Supreme Court Opinion Holding for AT&T; Approves Special Treatment of Pregnancy Leave Prior to 1978 Under Pension Formula (PDF)
31 pages. Excerpt: "Held: An employer does not necessarily violate the PDA when it pays pension benefits calculated in part under an accrual rule, applied only pre-[Pregnancy Discrimination Act], that gave less retirement credit for pregnancy than for medical leave generally. Because AT&T's pension payments accord with a bona fide seniority system's terms, they are insulated from challenge under Title VII section 703(h)." (U.S. Supreme Court)
[Guidance Overview]
California Changes Law to Add Some Flexibility to Rigid Alternative Workweek Schedule Rules
Excerpt: "Responding to employers' concerns about the inflexibility of California's alternative workweek schedule provisions, the California legislature and governor have enacted modest changes to add flexibility to those schedules. The changes will allow employers to offer a regular schedule of five eight-hour days in a workweek as an option. They also will allow more frequent switches between various menu options under an alternative workweek schedule, if multiple options were approved. The changes are effective on May 21, 2009." (Nixon Peabody LLP)
[Guidance Overview]
New Jersey DOL Issues Regulations on Family Leave Insurance Benefits (PDF)
4 pages. Excerpt: "The New Jersey Department of Labor and Workforce Development recently issued final regulations on the state's new paid family leave insurance benefits. The New Jersey paid family leave law, which took effect January 1, 2009, allows eligible employees to receive qualifying leave benefits beginning July 1, 2009. This law impacts virtually all New Jersey employers." (Buck Consultants)
[Guidance Overview]
The 2010 HSA Contribution Limits and HDHP Minimum Deductibles and Out-of-Pocket Maximums
Excerpt: "EBIA Comment: The inflation-adjusted figures announced in this revenue procedure are not effective until 2010, but those working with HSAs and HDHPs will be glad to have these figures now as they plan both benefits design and employee communications for the coming year. On a related note, the annual catch-up contribution limit (for HSA-eligible individuals who are age 55 or older), set by statute, remains at $1,000 for 2010." (Employee Benefits Institute of America)
[Guidance Overview]
One-Time Irrevocable Election to Waive Retiree Health Benefits in Exchange for Higher Pay Isn't Taxable
Excerpt: "EBIA Comment: In recent years, concerns about cost and open-ended liability have caused a strong general trend away from retiree medical coverage that is fully paid for by the employer. Instead, many employers are considering ways to help their retirees pay for post-retirement medical expenses on a pre-tax basis, such as through this plan design. But employers must be mindful that any benefits design that offers a choice between cash and nontaxable benefits might result in constructive receipt." (Employee Benefits Institute of America)
U.S. Supreme Court Upholds AT&T Pension Plan's Treatment of Pregnancy Leave Taken Prior to 1978
The Supreme Court holds that AT&T's pension plan formula does not violate the Pregnancy Discrimination Act of 1978 merely because pregnancy leave taken before 1978 (then considered a 'personal' leave of absence, with a cap of 60 days counted as service for plan purposes) is not counted as liberally as other disability leaves of absence. (Associated Press via New York Times)
Health Plans Would Add to Controls on Insurers
Excerpt: "The government could rein in aggressive marketing practices of health insurance companies, regulate their premiums and allow workers to drop out of group health plans to seek a better deal on their own under legislation being developed by leading Democratic senators. The Senate proposals, which emerged this week, are broadly similar to ones being drafted by the chairmen of three House committees. Democrats in both houses would vastly expand federal regulation of insurance to guarantee that all Americans have access to affordable coverage, a top priority of President Obama." (The New York Times; free registration required)
Bill Would Guarantee Up to 7 Paid Sick Days for American Workers
Excerpt: "A long-stalled effort to guarantee American workers paid sick days takes a big step forward Monday with the introduction of legislation by Congressional Democrats. . . . Business groups are vowing to block the legislation, arguing that the recession makes this an inopportune time to create a new mandate that they say would raise costs for employers." (The New York Times; free registration required)
Paid Sick Days Bill Reworked as Groups Start Dialogue on Flexibility
Excerpt: "Legislation that would ensure paid sick leave for American workers has been modified because of employer concerns about the way that time off was provided in a previous version of the bill, according to Capitol Hill staff and advocates. Under the measure, which will be introduced within days, employees would earn one hour of paid sick time for every 30 hours they work up to a total of 56 hours -- or seven days -- annually, said Karen Minatelli, director of work and family programs at the National Partnership for Women and Families." (Workforce Management; free registration required)
Changes Envisioned for Health Tax Exclusion at Senate Finance Meeting
Excerpt: "The largest potential cost savings could come from changes in the employee tax exclusion for employer-provided health care, which also produced the most disagreement among the panelists. Edward Kleinbard, chief of staff, Joint Committee on Taxation, said in prepared remarks (http://finance.senate.gov/JCT.pdf) that 'the exclusion of employer sponsored health care had a 2008 value of $226 billion, with $133 billion coming from exclusion from the income tax and $93 billion from excluding the value of health insurance from both the employer and employee portions of the Federal Insurance Contribution Act FICA tax.'" (Wolters Kluwer)
Few Firms Will Drop Mental Health Coverage, According to Survey
Excerpt: "Only a few employers are considering dropping mental health coverage in response to new parity rules that take effect for plan years beginning after Oct. 3, according to a survey. Meanwhile, nearly 38% of responding employers plan to increase the promotion and use of employee assistance program services to help them achieve mental health parity, which is required under a 2008 law, concludes the survey conducted by the Partnership for Workplace Mental Health, a program of the American Psychiatric Foundation in Arlington, Va." (Business Insurance)
Target Corporation Pilot Program Pays Employees to Monitor Health
Excerpt: "Target Corp., the No. 2 U.S. discount retailer, is testing a program it hopes will lower health care costs by paying employees to undergo a health screening and follow recommended steps. The pilot program is being run in partnership with RedBrick Health. It has been offered to roughly 4,000 Target employees, including 10% of the workers at the retailer's Minneapolis headquarters, a distribution center and 11 stores." (Business Insurance)
Wellness Program Saves Kalamazoo County, Michigan, About $900,000
Excerpt: "Since instituting a work-site-wellness program in 2006, Kalamazoo County has trimmed about $900,000 in health-care costs annually . . . . Kalamazoo County's efforts have succeeded because of the support of administrators and an incentive program in which employees earn prizes and paid personal time in exchange for taking weight-management classes, walking and participating in health screenings . . . ." (The Kalamazoo Gazette)
Bankrup.tcy Judge Denies Chrysler Retirees' Motion
Excerpt: "A bankrup.tcy judge on Thursday denied a request from a group representing Chrysler LLC's retired white collar workers to appoint an official retiree committee to take part in the automaker's bankrup.tcy proceedings. U.S. Judge Arthur Gonzales said that any decisions regarding the future of retiree benefits ultimately will be made by the automaker's new owners and as a result there isn't much point in the retirees group negotiating with Chrysler now." (AP via Gold Country Media)
GM Nears Crucial Deal With UAW That Affects Retiree Health Care Benefits
Excerpt: "General Motors Corp., under the direction of the U.S. Treasury, is near a deal that would cut its hourly labor costs by more than $1 billion a year and reduce its $20 billion pledge to the United Auto Workers to cover health-care obligations, said people familiar with the matter. The plan is still in flux, but GM and the union could finalize terms as early as next week. The Detroit auto maker expects to halve its remaining cash outlays for retiree health costs to about $10 billion, and supplement that contribution with a 39% equity stake in the reorganized GM, the people familiar with the matter said." (The Wall Street Journal)
[Opinion]
Obama and Rising Health Care and Entitlement Costs: Spend Now and Save Later
Excerpt: "If he is going to sustain his agenda, if he is going to prevent national insolvency, he has to control health care costs. Health care costs are now the crucial issue of his whole presidency." (The New York Times; free registration required)
[Opinion]
Should Health Benefits Be Taxed?
Excerpt: "Under current law, employers can treat the contributions they make to the premiums for their employees' health insurance as a tax-deductible business expense. On the other hand, employees do not pay income taxes or payroll taxes on this contribution, though it clearly is part of the employees' total compensation. In 2007, this tax preference reduced federal tax revenues by an estimated $250 billion or so. Estimates for 2010 have been as high as $297 billion. Most economists (myself included) and many other health policy experts have long looked askance at this tax preference." (Uwe E. Reinhardt via The New York Times; free registration required)
ALM (Advert.)
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]Proposed COLI Deduction Limit Could Impact NQDC Programs
Excerpt: "Employers who have relied on corporate owned life insurance (COLI) to fund either non-qualified deferred compensation benefits or other post retirement benefits not funded in a tax-deferred manner may find that option at least partially closed off in coming months. A client advisory prepared by The Groom Law Group said the restriction could come from an Obama administration proposal to deny a pro-rata portion of the interest deduction based on insurance held on any individual other than a 20% owner of the business. That 'greatly expands' the current situation which, according to the Groom memo, involves pro-rata denial of the interest expense deduction that currently applies to COLI on individuals who are not employees." (PLANSPONSOR.com; free registration required)
Executives' Financial Planning Perks Are on the Chopping Block
Excerpt: "As bailed-out financial institutions take more heat over the massive pay packages dished out to their executives, a key fringe benefit usually awarded to top officers -- the financial planning perk -- appears to be on the chopping block. Every element of executives' pay is being carefully scrutinized by lawmakers, shareholders and taxpayers. As a result, several of the nation's largest financial institutions have already stopped footing the bill for their executives' financial planning, which historically has been a staple of compensation packages for CEOs, CFOs and other top brass." (Workforce Management; free registration required)
Give Your Retirement and Health Plans a Litigation Checkup
Excerpt: "At a time when plaintiffs' attorneys are probing employers' plans for systemic vulnerabilities that could lead to class-action suits and multimillion-dollar judgments, plan sponsors and fiduciaries should review their retirement and health plans and take steps to reduce the potential for litigation. Here are some areas for review." (Workforce Management; free registration required)
Employee Ownership Update for May 15, 2009
NCEO Executive Director Corey Rosen discusses the impressive 2003-2008 stock price growth of ESOP companies in a recent NCEO survey of executive compensation; stories that your customers tell about you, illustrated by an anecdote from Southwest Airlines President Emeritus Colleen Barrett; a new paper saying that the stock options backdating scandal caused significant shareholder damage; and the Ownership Thinking conference. (National Center for Employee Ownership)
Press Releases
PBGC Moves to Protect Foamex Pension PlanPension Benefit Guaranty Corporation (PBGC)
U.S. Labor Department Recovers Almost $32,000 for Company 401(k) Plan From Shelton, Connecticut, Employer
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
The SPARK Institute Issues White Paper Defending 401k
SPARK Institute
Aon Consulting Launches New Media and Creative Services Group for Clients
Aon Consulting
Buck Consultants Launches Third Annual Global Wellness Survey
Buck Consultants, an ACS Company
New Consultant Joins Arnerich Massena
Arnerich Massena & Associates
(Click to post your press release)
Employee Benefits Jobs
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in NC
Account /Client Services Manager (Insurance/TPA)
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ERISA Document Specialist
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in IL
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for Drinker Biddle & Reath LLP
in IL
Retirement Plan Consultant
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in FL
Senior Plan Consultant
for Scholz, Klein & Friends Enlightened Retirement Group, Inc.
in TX
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