Health & Welfare Plans Newsletter |
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| June 1, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy | ||
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[Guidance Overview]
DOL Issues Details of Appeal Process for COBRA Subsidy Denials
Excerpt: "The . . . memo summarizes two recent developments involving the COBRA subsidy under the American Recovery and Reinvestment Act of 2009 - the Department of Labor's application for appealing COBRA subsidy denials and IRS Website Q&As." (Groom Law Group)
[Guidance Overview]
6th Circuit Says ERISA Does Not Preempt State Laws Preventing Insurers From Including Discretionary Language in Insurance Policies
Excerpt: "Two more courts have concluded that ERISA does not block the enforcement of state laws that prohibit 'discretionary' language in insurance policies issued under ERISA plans. (As background, discretionary language reserves discretion to interpret the plan and is required for an insurer to receive a more favorable standard of review if benefit denials go to court.) In these latest cases, insurers (or their representatives) challenged the state laws on ERISA preemption grounds." (EBIA)
[Guidance Overview]
Employer Loses Bid to Avoid Trial on Alleged Failure to Provide COBRA Initial and Election Notices
Excerpt: "The court agreed that the employer had shown that a COBRA election notice was timely provided to the employee. But the court ruled that the employer had failed to show whether it had ever provided COBRA initial notices to the employee or his spouse, or whether it had ever provided COBRA election notices to the employee's spouse or to their minor children -- in effect putting the employer at risk for civil penalties, uncovered medical expenses, attorneys' fees, and costs for these alleged failures." (EBIA)
[Guidance Overview]
No COBRA Qualifying Event Where Health Insurance Was Canceled Due to Employer's Non-Payment of Premiums
Excerpt: "The employee in this case sued his former employer in state court, alleging that the employer breached an employment agreement by terminating the employee's health coverage about two months before the employee terminated employment. In documents originally filed with the state court, the employee mentioned a possible violation of federal COBRA and, on this basis, the employer moved the case to federal court. In this decision, the federal trial court sent the case back to state court because it found the COBRA claim to be completely meritless . . . ." (EBIA)
[Guidance Overview]
Overview of COBRA Premium Reduction Guidance in IRS Notice 2009-27 (PDF)
At pp. 7-11 of 13-page newsletter. Excerpt: "This article discusses some of the major issues raised in [IRS Notice 2009-27], including its guidance on what constitutes an 'involuntary termination' and the interplay of the premium reduction and coverage provided in connection with a severance policy or plan." (Trucker Huss)
General Motors Files for Bankrup.tcy Protection
The UAW VEBA will assume all retiree healthcare liabilities next year. In the deal the VEBA receives a 17.5% share of the company's common stock, interest-bearing preferred stock, and a $2.5 billion note. (AP via New York Times; free registration required)
UAW OKs Healthcare Benefits Reduction for GM Retirees; DB Plan to Continue
Excerpt: "[I]nstead of GM contributing about $20 billion in cash and other contributions, the new VEBA will receive a note, payable in cash, with a principal amount of $2.5 billion. The note will make cash payments of $1.38 billion, including accrued interest, in 2013, 2015 and 2017. The VEBA also will receive preferred stock in the restructured company with a face value of $6.5 billion. The stock will pay an annual cash dividend of $585 million for as long as the VEBA holds the stock. Finally, the VEBA will receive 17.5% of the common stock issued by the restructured GM . . . ." (Business Insurance)
GM Files for Bankrup.tcy Protection; 17.5% Ownership by VEBA Is Proposed
Excerpt: "Under the proposed restructuring, about 60 percent of the new GM would be owned by the United States, about 12 percent by the governments of Can.ada and Ontario, 17.5 percent by a union health trust, and 10 percent by the company's current bondholders." (Washington Post; free registration required)
Recent Modifications of Employee Benefits Data in the National Compensation Survey
Excerpt: "The first part of the article provides a general overview of BLS benefits surveys over time, and the second part focuses on the five benefits that were recently dropped from the NCS [namely, educational assistance, recreational benefits, adoption assistance, employer-provided home computers, and travel accident insurance]." (U.S. Bureau of Labor Statistics)
Legislation Introduced in Massachusetts to Permit Small Businesses to Form Health Insurance Purchasing Alliance
Excerpt: "Small-business owners, many struggling to stay afloat, are trying to band together to buy employee health insurance in much the same way cities and towns were granted permission a few years ago. . . . But in order for small businesses to negotiate as a group, a state law must be changed. And that is not an easy venture." (Boston.com)
[Opinion]
A Sickening Outcome for GM's 377,000 Retirees
Excerpt: "A trust fund set up a few years ago to protect [retiree healthcare] benefits [for 377,000 retirees] -- while allowing General Motors to clean up its balance sheet --is seriously underfunded. Now, the United Automobile Workers union is about to discover that it's no better at managing escalating health care costs than GM. . . . As part of the deal, the union agreed to forgive $20 billion that GM owes to the retiree health care trust." (Joann Muller in Forbes)
[Opinion]
Comments of American Benefits Council, U.S. Chamber on Implementation of Wellstone-Domenici Mental Health Parity Act (PDF)
9 pages. Excerpt: "We recommend that the Agencies adopt a non-enforcement policy or good faith compliance period for the first plan year for which the Act applies to any particular plan. The Act is generally effective for plan years beginning after October 3, 2009. . . . The regulations should confirm that the classification of a mental health or substance use disorder is a matter of plan design as determined by the plan sponsor. . . . Compliance with the Act will be virtually impossible if the provision of limited mental health or substance use benefits under an EAP must be compared with the medical benefits provided under the employer's medical benefit option." (American Benefits Council)
[Opinion]
Taxing Health Care: Obama and Democrats Owe John Mccain an Apology
Excerpt: "Last year liberals mauled John McCain for daring to touch the employer-based exclusion to finance more coverage for the individually uninsured. He was proposing 'a multitrillion-dollar tax hike -- the largest middle-class tax hike in history,' said Barack Obama, whose TV ads were brutal. But now Democrats need the money to finance $1.2 trillion or more for their new health insurance entitlement. Last week Senate Finance Chairman Max Baucus released his revenue 'policy options' and high on the list is . . . taxing health benefits. Or listen to White House budget director Peter Orszag, who recently told CNN's John King that the exclusion 'was not in the President's campaign plan, it wasn't in our budget. Clearly, some Members of Congress are putting it on the table and we are going to have to let this play out.'" (The Wall Street Journal)
University Conference Services (Advert.)
Solving the Puzzle of Managing Health Care Benefits Today Managing your organization’s health and welfare plans can be compared to assembling a giant jigsaw puzzle —and never more so than in the current economic environment. Do you have all the pieces? How do they fit together? The Chicago Health and Welfare Plan Management for Mid-Sized Employers Conference, June 7–10, is the ideal place to turn the jigsaw pieces of your plan into a complete picture. |
Links to Items on Executive Comp, Benefits in General
Mandatory Employee Sick Leave Legislation Introduced in House of Representatives (PDF)2 pages. Excerpt: "The current bill would require employers with at least 15 employees to allow workers to earn at least 1 hour of paid sick leave, to be used for specific purposes, for every 30 hours worked . . . . Notably, then-Senator Obama supported the Healthy Families Act during the 110th Congress, which increases the likelihood that the current version of the bill will receive serious consideration. Rumors from Capitol Hill are that there seems to be momentum on this issue, which is likely to increase if health reform efforts stall." (Miller Chevalier)
Webcasts and Conferences
Protecting Plan Assets In Bankruptcy Workshopin North Carolina on June 18, 2009
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
The New HIPAA Privacy and Security Rules: Getting Ready for Important Changes
Nationwide on May 28, 2009
presented by EBIA / Thomson Reuters
Voluntary Fiduciary Correction Program, EBSA Investigations and COBRA Provisions in the ARRA Workshop
in North Carolina on June 17, 2009
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
(Click to post your webcast or conference)
Press Releases
Principal Releases New Retirement Educational MaterialPrincipal Financial Group
Transamerica Launches New Plan Administration Support Service
Transamerica Retirement Services
Three Out Of Four Public Employers Consider Increasing Employee Deductibles, Copays or Premiums
International Foundation of Employee Benefit Plans
(Click to post your press release)
Employee Benefits Jobs
Senior Pension Sales Consultantfor Executive Benefit Design Group
in ANY STATE
Defined Benefit Analyst
for Boyce & Associates, Inc.
in AZ
401(k) Plan Sales
for Ingham Retirement Group
in FL
(Click to post your job opening | View all jobs |
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