Health & Welfare Plans Newsletter |
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| May 27, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy | ||
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[Guidance Overview]
First Circuit Refines Its Standard of Review Analysis Based on Supreme Court's Glenn Decision
Excerpt: "EBIA Comment: While the court's modest refinements of the First Circuit's standard of review analysis are significant, this case is also interesting for its suggestion that, under Glenn, courts must inquire into the steps a decisionmaker has taken to mitigate the effects of a structural conflict. If plan decisionmakers understand that the courts will be looking for that information, they may be more likely to regularly document the steps they have taken to prevent or mitigate conflicts. And if conflicts are not fully revealed by the administrative record, participants may be more likely to seek discovery about them, although the permissible scope of such discovery remains unsettled." (Employee Benefits Institute of America)
[Guidance Overview]
Election Notice Sent to Last-Known Address of Employee Terminated After Medical Leave Complied With COBRA
Excerpt: "EBIA Comment: The COBRA election notice generally should be sent to the qualified beneficiary's last-known address. DOL guidance provides that the notice should be mailed based on 'the most recent information available to the plan.' To this end, addresses used for COBRA purposes should be substantiated on a regular basis. One tool to help employers avoid COBRA lawsuits is to follow a policy of obtaining up-to-date mailing addresses from departing employees and forwarding them to other entities involved with plan administration (e.g., insurers and TPAs)." (Employee Benefits Institute of America)
General Motors Labor Deal Would Cut Retiree Health Benefits Immediately
Excerpt: "Retiree medical benefits will be cut with immediate effect at the insistence of the U.S. Treasury because of GM's 'difficult financial situation.' Benefits for retirees could be cut further in 2010 and 2011 because of the 'uncertainty regarding the long-term value of the GM stock.' UAW anticipates paying retiree health care benefits in 2010 and 2011 from cash, including the $585 million dividend from preferred stock. It does not expect to be able to sell GM stock until 2012 at the earliest." (Reuters Limited via USA Today)
UAW to Own 20% of General Motors
Excerpt: "United Auto Workers leaders representing 61,000 hourly employees agreed Tuesday to accept up to 20 percent of General Motors Corp. stock -- about half of what was previously expected -- and significant concessions on labor rules and retiree health care obligations. . . . The UAW health care trust fund has agreed to accept 17.5 percent of GM's common stock, $6.5 billion of preferred shares and a $2.5 billion note, plus warrants equal to 2.5 percent of GM's stock. The UAW trust fund will receive $585 million annually in interest income on its preferred stock. The union was eligible to own up to 39 percent of GM's equity through the independent health trust fund, called the Voluntary Employees' Beneficiary Association, that will assume responsibility for retiree health care. But the lower than 20 percent stake could mean that the company is attempting to appease unsecured bondholders, who charged that the UAW was getting a better deal." (The Detroit News)
Target Corp. Encouraging Healthier Employee Lives and Behaviors by Using a Powerful Incentive: Cold, Hard Cash
Excerpt: "A pilot program that pays employees to fill out health-risk assessments, undergo screenings and participate in wellness initiatives is showing high levels of engagement by the workers. Experts say such cash incentives work better than premium discounts -- especially for younger workers." (Human Resource Executive Online)
Official Summary Tax Equity for Health Plan Beneficiaries Act, S. 1153 (PDF)
1 page. Excerpt: "Background. In growing numbers, employers across the country have made the business decision to voluntarily provide health benefits to domestic partners of their employees. As of February 2009, 57% of Fortune 500 companies (268) were providing such coverage. This is more than a twelve-fold increase since 1995. Federal tax law has not kept up with corporate changes in this area, however, and the employees who receive these benefits are taxed inequitably." (American Benefits Council)
Official Summary of the Tax Equity for Health Plan Beneficiaries Act, H.R. 2625 (PDF)
1 page. Excerpt: "The Tax Equity for Health Plan Beneficiaries Act of 2009 would end the federal tax inequities for employer-sponsored health coverage provided to domestic partners and other non-spouse, non-dependent beneficiaries, as detailed [in the target page]." (American Benefits Council)
Tax Examples for Tax Equity Legislation: Domestic Partner Tax Example (PDF)
2 pages. Excerpt: "When an employer provides health insurance for the spouse or dependents of an employee, federal tax law allows the value of the health insurance coverage to be excluded from an employee's gross income. No such exclusion exists under current law for health insurance provided by an employer to an employee's domestic partner or the dependents of an employee's domestic partner. Accordingly, the value of the health insurance coverage provided by an employer (including coverage paid for with employee pre-tax contributions) for an employee's domestic partner or the dependents of an employee's domestic partner is income that is imputed to the employee and subject to federal income and payroll taxes. As a result, individuals that secure employer-provided health insurance coverage for themselves and their non-spouse, non-dependent family members face a significant tax penalty; one that, depending on the facts applicable to the specific individual, can be in the thousands of dollars per year and result in an individual paying in excess of 50% more in federal taxes." (American Benefits Council)
Out-of-Pocket Health Expenses Rising, According to Survey
Excerpt: "As health care costs continue to rise, employers are boosting deductibles and other out-of-pocket payments made by employees, according to a survey released Tuesday. The PricewaterhouseCoopers L.L.P. survey of 694 employers found that 20% of respondents this year imposed an in-network deductible between $400 and $999, up from 17% last year, while 11% imposed a deductible of at least $1,000, up from 8%." (Business Insurance)
Antitrust Laws a Hurdle to Health Care Overhaul
Excerpt: "President Obama's campaign to cut health costs by $2 trillion over the next decade, announced with fanfare two weeks ago, may have hit another snag: the nation's antitrust laws. Antitrust lawyers say doctors, hospitals, insurance companies and drug makers will be running huge legal risks if they get together and agree on a strategy to hold down prices and reduce the growth of health spending. Robert F. Leibenluft, a former official at the Federal Trade Commission, said, 'Any agreement among competitors with regard to prices or price increases -- even if they set a maximum -- would raise legal concerns.'" (The New York Times; free registration required)
What Is 'Socialized Medicine'?: A Taxonomy of Health Care Systems
Excerpt: "With another 'national conversation' about health reform upon us -- as it is every decade or so -- we will hear a lot of derisive talk about the evils of 'socialized medicine.' The term is regularly confused with 'social health insurance,' which is not at all the same concept. The chart [followed by text explanations in the article] may be helpful in appreciating the distinction." (Uwe E. Reinhardt, The New York Times via Physicians for a National Health Program)
[Opinion]
Curbing Flexible Spending Accounts Could Help Pay for Health Care Reform
Excerpt: "Congress should consider scaling back or eliminating health care flexible spending accounts (FSAs) as part of its effort to pay for health care reform. This paper . . . outlines several ways in which Congress could curtail FSAs." (Center on Budget and Policy Priorities)
[Opinion]
Are CDHPs/HSAs Ready to Battle a Public Health Plan?
Excerpt: "In an attempt to resurrect CDHPs' standing and make them part of the healthcare reform debate, two reports released over the past week from the health insurance industry promote the idea of health savings accounts. But health insurers need more than just surveys given the heightened interest of a public health plan in Washington. The industry must improve on CDHP tools, such as cost and quality Web sites, real-time claims adjudication, and member outreach, in preparation of competition from a public health plan." (HealthLeaders Media via HCPro, Inc.)
[Opinion]
Is Employer-Based Health Insurance Worth Saving?
Excerpt: "Ask any group of health policy experts whether they would have put in place our employment-based health insurance system, had they had the luxury of designing our health system from scratch, the resounding answer most likely would be 'No.' In fact, no other industrialized country has quite this arrangement. It is uniquely American in origin and in modus operandi. Our employment-based system was not the product of a carefully designed health policy. It was a byproduct of evading wage controls during World War II." (Uwe E. Reinhardt via The New York Times; free registration required)
EmployeeBenefitsJobs.com (Advert.)
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Links to Items on Executive Comp, Benefits in General
Bill to Require 'Say on Pay' Introduced in Senate (PDF)2 pages. Excerpt: "Companies [would be required to] give shareholders an annual non-binding vote on executive compensation as disclosed in the proxy statement pursuant to SEC compensation disclosure rules (i.e., 'Say on Pay'). Say on Pay is currently required for companies that received financial assistance under the Troubled Asset Relief Program (TARP) and filed their proxy statements after February 17, 2009. In the prior Congress Say on Pay legislation was passed by the House of Representatives, and Say on Pay provisions were included in Senate bills introduced by then Senators Clinton and Obama. A number of non-TARP companies have announced voluntary adoption of Say on Pay." (Frederic W. Cook & Co., Inc.)
FASB Going to Codification System on July 1, 2009
Excerpt: "The U.S. Financial Accounting Standards Board (FASB) is expected to institute a major change in the way accounting standards are organized on July 1, 2009. The FASB Accounting Standards Codification (TM) is expected to become the single official source of authoritative, nongovernmental U.S. generally accepted accounting principles (GAAP). After final approval by the FASB only one level of authoritative GAAP will exist, other than guidance issued by the Securities and Exchange Commission (SEC). All other literature will be non-authoritative. . . . While the FASB Codification is designed to make it much easier to research accounting issues, the transition to use of the Codification will require some effort and training. The FASB offers a free online tutorial, weekly alerts and an archived Webcast. In addition, Codification training opportunities are offered through professional accounting organizations such as the American Institute of Certified Public Accountants (AICPA)." (International Foundation of Employee Benefit Plans)
Webcasts and Conferences
ERISA Advisory Council Meetingin District of Columbia on June 11, 2009
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
(Click to post your webcast or conference)
Press Releases
U.S. Labor Department Obtains Judgment Appointing Independent Fiduciary to Oversee Abandoned 401(k) Plan of Defunct Minneapolis EmployerU.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Great-West Retirement Services Appoints New Regional Sales Director
Great-West Retirement Services
(Click to post your press release)
Employee Benefits Jobs
Pension Administratorfor Jordan & Associates
in CA
Defined Benefit Plans Unit Leader
for Southern California Pipe Trades Administrative Corporation
in CA
Benefits Coordinator
for Akin Gump Strauss Hauer & Feld LLP
in DC
Retirement Plan Case Design / Illustration Specialist
for The Guardian Insurance Company
in NY
Senior Technical Consultant
for Multnomah Group, Inc.
in OR
Retirement Specialist
for Municipal Employees' Retirement System of Michigan
in MI
Client Relationship Manager - Chicago, Minneapolis or St. Louis
for Transamerica Retirement Services
in IL, MN, MO
(Click to post your job opening | View all jobs |
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