Health & Welfare Plans Newsletter |
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| May 29, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy | ||
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[Guidance Overview]
Retiree Benefits and Section 1114
Excerpt: "Although the question of whether § 1114 applies to the modification or termination of retiree benefits that would otherwise be modifiable at will remains an open one, Judge Drain's recent decision [in the Delphi Corporation bankrup.tcy] is significant for several reasons. First, it adds further support to the seemingly growing consensus that § 1114 does not apply in such circumstances. Second, it gives debtor-employers a well-reasoned treatment of the issue to follow in fighting off objections to their attempts to escape or lessen the crushing burden of retiree benefits costs, the success of which may be the difference between a successful reorganization or a failed effort. Finally, it may spur further attempts by Congress and President Obama's administration to amend the Bankrup.tcy Code to strengthen the protections for retiree benefits, particularly since this issue is one that will likely take center stage in future automotive and other cases." (Haynes & Boone)
[Guidance Overview]
Health Insurance Mandates in the States, 2009 (PDF)
24 pages. Excerpt: "The mandate chart is broken down on a state-by-state basis into three categories: benefits, providers and covered populations. Boxes with a 'Y' indicate that the state has passed that particular mandate. Totals for each state and mandate are also included. Thus anyone can easily determine how many mandates and which ones each state has passed." (Council for Affordable Health Insurance)
[Guidance Overview]
Summer Vacation Leave Policies
Excerpt: "Many small-business owners are likely to find a perennial summertime challenge, keeping their companies staffed during peak vacation times, even harder this year. Layoffs and jobs lost to attrition mean many companies have leaner staffing, while employees still want to take time off. Owners may find this summer that they need to change their vacation policies. And those without policies may feel the need to create them." (NJ.com)
[Guidance Overview]
Towers Perrin U.S. Legislative Tracking Charts -- Health and Welfare -- Updated May 28, 2009 (PDF)
14 pages. Except: 'These charts summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors." (Towers Perrin)
The Massachusetts Commonwealth Health Insurance Connector: Structure and Functions
Excerpt: "This issue brief describes the structure and functions of the Connector, providing a primer to policymakers interested in exploring similar reforms at the state and national level. The authors describe how the Connector works to promote administrative ease, eliminate paperwork, offer portability of coverage, and provide some standardization and choice of plans. National policymakers looking to achieve similar policy goals may find some of the structural components and functions of the Connector to be transferable to a national health reform model, say the authors." (The Commonwealth Fund)
An Update on Health Reform in Massachusetts, Fall 2008
Excerpt: "More than two years after implementation of its landmark health insurance reforms, Massachusetts had achieved historically high levels of coverage and widespread improvements in access to care, according to this study . . . on implementation of the state's reforms. The authors find, however, that constraints on provider capacity and rising health care costs -- trends that predate reform -- have eroded some of the gains. Massachusetts is now seeking ways to contain costs and expand provider capacity, including a proposal to shift from fee-for-service provider payments to global fees that emphasize care coordination and collaboration" (The Commonwealth Fund)
UAW Health Care Trust May Own 17.5% of General Motors
Excerpt: "Under the deal struck by GM and the United Auto Workers, 17.5% of the company's shares will be owned by a union health-care trust, with an option for up to 20% over time, WSJ reports. That's down from an earlier offer of 39%. The independent trust was created as part of the UAW's contract with GM in 2007. The company puts health-care money into the trust, taking retiree health obligations off of its balance sheet while giving the union the ability to manage the health benefits." (The Wall Street Journal)
Sen. Kennedy's Health-Care Measure To Require Employer Contributions
Excerpt: "Sen. Edward M. Kennedy (D-Mass.) is circulating the outlines of sweeping health-care legislation that would require every American to have insurance and would mandate that employers contribute to workers' coverage. The plan in the summary document, provided by two Democrats who do not work for Kennedy, closely resembles extensive changes enacted in the senator's home state three years ago." (The Washington Post; free registration required)
Insurers' Role Key to Health System Overhaul, CBO Says
Excerpt: "In a report, the Congressional Budget Office said a government mandate requiring people to buy health insurance would not necessarily be considered a new form of federal taxation so long as people had a variety of private plans from which to choose and a government entity was not in charge of collecting their insurance premiums." (The Washington Post; free registration required)
Employers and Employees Pay 'Hidden Tax' for Health Costs of the Uninsured
Excerpt: "The average U.S. family and their employers paid an extra $1,017 in health care premiums last year to compensate for the uninsured, according to a study to be released Thursday by an advocacy group for health care consumers. Families USA, which supports expanded health care coverage, found that about 37% of health care costs for people without insurance -- or a total of $42.7 billion -- went unpaid last year. That cost eventually was shifted to the insured through higher premiums, according to the group." (USA Today)
Nearly One Million Californians Head to Mexico for Healthcare Annually
Excerpt: "Some are seeking medical services, some are seeking dental help. Others just want prescriptions. About half of those who travel to Mexico for such services are Mexican immigrants. Those who have been in the United States for at least 15 years are more likely to head south for health-related reasons than are people who have been here fewer than 15 years." (Los Angeles Times)
[Opinion]
Kilpatrick Stockton Comments Regarding the Application of the Mental Health Parity and Addiction Equity Act (PDF)
5 pages. The letter addresses the use of employee assistance programs. (Kilpatrick Stockton LLP)
[Opinion]
ERIC Urges Balance on Implementing Regulations under Mental Health Parity Act
Excerpt: "The ERISA Industry Committee (ERIC) . . . submitted comments to the Department of Labor's Employee Benefits Security Administration in response to a 'request for information' regarding the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). . . . ERIC makes recommendations on the terms and provisions of implementing the MHPAEA, disclosure requirements, and the effective date and transition rules of the forthcoming regulations under the MHPAEA, including " (The ERISA Industry Committee)
[Opinion]
Text of Law Firm's Comments to DOL and IRS on Treatment of Employee Assistance Programs Under Mental Health Parity and Addiction Equity Act of 2008 (PDF)
5 pages. Excerpt: "I . . . recommend that for purposes of MHPAEA compliance you do not require that the EAP be aggregated with the employer's traditional group health plan providing medical and mental health benefits. . . . [and] that you allow employers the option of requiring its employees to use the EAP first for those services covered by the EAP (i.e., outpatient counseling) before the employee can use the mental health services covered by the employer's traditional group health plan." (Kilpatrick Stockton LLP)
[Opinion]
The Massachusetts Health Care Reform Act: Demonstrating that ERISA Preemption is Health Care Reform's Best Friend
Excerpt: "Well, I have argued more than once on these electronic pages that ERISA preemption, rather than being the whipping boy of choice for people who advocate state level health insurance mandates, should be understood as a key element in bringing about any type of effective change to the health insurance system. Why is that? Because ERISA preemption forbids the states from enacting health insurance reform statues since states cannot enact them without either deliberately or unavoidably rejiggering employer provided - and thus ERISA governed - health plans, meaning that any real change from the current employer provided (and voluntary) health insurance system can only take place on a national level." (Stephen Rosenberg of The McCormack Firm, LLC)
[Opinion]
Text of Comments by Employers Council on Flexible Compensation Concerning Proposed Tax Law Changes for FSAs, HRAs and Employer-Provided Health Coverage in General
5 pages, submitted to the Senate Finance Committee May 26, 2009. (Employers Council on Flexible Compensation)
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Links to Items on Executive Comp, Benefits in General
[Guidance Overview]California Supreme Court Upholds Ban on Same-S.ex Marriage, but Recognizes Marriages Performed in 2008
Excerpt: "From an employee benefits perspective, the immediate impact of the court's ruling is that approximately 18,000 same-s.ex marriages have been ruled valid (unlike the same-s.ex marriages performed in San Francisco in 2004). As a result, employers will need to review their employee benefit plans to determine whether changes are necessary or desirable in light of the fact that spousal benefits may be provided indefinitely to a limited number of same-s.ex couples." (McDermott Will & Emery)
[Guidance Overview]
Alternatives to Non-Qualified Deferred Compensation
Excerpt: "Before we continue our ongoing discussion of issues relating to the protection of non-qualified deferred compensation, let's take another step back.* The first strategy for both executives and employers should be to make absolutely certain that they have maximized the benefits provided under their qualified retirement plans (pension, 401(k), ESOP or other). Qualified plans are still the last, best tax sheltered vehicle available." (Winston & Strawn LLP)
[Guidance Overview]
Fundamental Change in Executive Compensation Practices
Excerpt: "Companies need to rethink how to effectively utilize compensation alternatives, as they are pressed to strike the right balance between appropriately motivating and rewarding individuals (who are in large part the key drivers to enhancing long-term shareholder value) on the one hand, and encouraging sound management decisions that do not foster 'unnecessary and excessive risk taking,' on the other hand. This Commentary highlights some executive compensation practices that may need to be reconsidered." (Jones Day)
[Guidance Overview]
Recent Economic Recovery Legislation Contains Significant New Executive Compensation Requirements (PDF)
3 pages. Excerpt: "The new provisions require a covered institution's Chief Executive Officer and Chief Financial Officer (or equivalents) to certify in writing that the institution has complied with the . . . requirements, as applicable. Publicly-traded companies must file this certification with the SEC along with the company's annual securities filings. Private companies must file the certification with the Secretary." (Winston & Strawn LLP)
[Guidance Overview]
Towers Perrin U.S. Legislative Tracking Charts -- Human Resources -- Updated May 28, 2009 (PDF)
6 pages. Excerpt: "These charts summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors." (Towers Perrin)
An Executive Compensation Plan for the Long-Term
Excerpt: "[N]ew Wharton research suggests that a compensation structure based on long-term escrow accounts could be better -- at least for a company's future -- than the common practice of rewarding short-term changes in share price. Wharton finance professor Alex Edmans and a group of colleagues propose linking an executive's compensation to the performance of the firm over a longer horizon. Their method also takes into account changing conditions within the firm." (The Wharton School of the University of Pennsylvania)
Treatment of Federal Employees' Domestic Partners
Excerpt: "Secretary of State Hillary Clinton plans to announce that she will grant the domestic partners of g.ay and les.bian diplomats many of the same rights and protections as the spouses of heterose.xual Foreign Service officers. But there are limits to what she can promise. Clinton can open the door to diplomatic passports, emergency evacuations, medical clinics and language classes, and she can offer preferential consideration for certain jobs. But she can't extend coveted benefits such as membership in the Federal Employees Health Benefits Program to domestic partners. The State Department situation illustrates a challenge for agency heads who want to put g.ay and les.bian employees and their partners on equal footing with their straight counterparts. Agency leaders can make some changes, but sweeping reforms to the benefits system will require legislative action." (GovernmentExecutive.com)
Nevada Legislature Approves Bill Cutting Benefits to Public Employees
Excerpt: "A bill that saves the state millions of dollars by cutting public employee retirement and health care benefits won approval Thursday night on votes of 19-2 in the Senate and 41-0 in the Assembly. . . . During hearings on SB427, both Republican and Democrats said benefit reductions were necessary to guarantee the continued solvency of the Public Employees Retirement System and the Public Employees Benefits Program." (Las Vegas Review-Journal)
EBSA Semiannual Regulatory Agenda Addresses Mental Health Parity
Excerpt: "The Employee Benefits Security Administration (EBSA) has released its semiannual regulatory agenda, which outlines regulations that have been selected for review or development during the next year, as well as any regulations that have been finalized during the last six months. . . . [Among t]he prerule and proposed rule EBSA agenda items are . . . The review of the plan assets-participant contributions regulation in accordance with section 610 of the Regulatory Flexibility Act; The development of regulatory guidance pursuant to ERISA §712, as amended by the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (P.L. 110-343) . . . ." (Wolters Kluwer)
Delta Pilots Union OKs Buyout Plan
Excerpt: "Delta Air Lines Inc. and its pilots union have come to a tentative agreement on an early retirement program to eliminate an unspecified number positions. In a Wednesday memo to pilots, Delta pilots union chairman Lee Moak said eligible pilots who elect to retire could receive up to nine month pay and benefits as part of an early-exit program." (Atlanta Business Chronicle via bizjournals.com; free registration required)
[Opinion]
Interplay of Bankrup.tcy Laws and ERISA Fiduciary Law
Excerpt: "The Bankrup.tcy Case Blog has an interesting post . . . about how federal courts are split over the issue of whether fiduciary status under ERISA carries over into the federal bankrup.tcy laws. Excerpt: The federal courts are currently split on the issue of whether the functional definition of 'fiduciary' used in ERISA constitutes a 'fiduciary' for purposes of the section 523(a)(4) discharge exception when the ERISA fiduciary fails to comply with ERISA obligations." (ERISA Fiduciary Guidebook)
Webcasts and Conferences
Same-S.ex Marriage and Employee Benefits: Responding to Recent Developments in California and Other States WebcastNationwide on June 4, 2009
presented by Trucker Huss
Specialty Drugs: What You Need to Know to Manage Cost and Utilization Webcast
Nationwide on June 11, 2009
presented by International Foundation of Employee Benefit Plans
(Click to post your webcast or conference)
Press Releases
Transamerica Retirement Services Expands Executive TeamTransamerica Retirement Services
ftwilliam.com Releases Sample Amendment to Suspend Safe Harbor Nonelective Contributions
ftwilliam.com
Morningstar Announces New Target-Date Fund Series Rating and Research Reports
Morningstar, Inc.
New Online Tool Offers Access to City and County Retiree Benefit Data
Center for State and Local Government Excellence
Voters Urged to Support Budding Moves to Include Long Term Care in National Health Reform
LTC Financial Partners
Conceive Magazine Publishes 3rd Annual Listing of America's Most Fertility- and Adoption-Friendly Workplaces
Conceive Magazine
(Click to post your press release)
Employee Benefits Jobs
Regional Vice President - Retirement Plansfor Nationwide Retirement Solutions
in IL, OH
HR Communications Sr. Consultant/Team Leader
for Segal
in IL
Retirement and Institutional Trust Services Relationship Manager
for Bank of Oklahoma
in OK
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