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July 20, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy

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[Guidance Overview]
EEOC Staff Members Provide Informal Views on Health Risk Assessments, ADA, and Other Benefit-Related Issues

Excerpt: "EBIA Comment: While the report provides helpful insight regarding the issues addressed, it should be remembered that the EEOC staff members' responses reflect their unofficial, individual views. EEOC guidance would be particularly helpful regarding the design and use of health risk assessments -- to date, the EEOC has not taken a position as to the level of incentives that would be considered voluntary for ADA purposes in connection with the completion of an assessment." (Employee Benefits Institute of America)


[Guidance Overview]
HSAs Are Subject to IRS Levy, and Levy Amount Generally Is Subject to 10% Excise Tax on Nonmedical Distributions

Excerpt: "EBIA Comment: To our knowledge, this [Chief Counsel Advisory (CCA)] is the first IRS guidance addressing IRS levies upon HSAs. In confirming that a tax levy may reach an HSA, the CCA focuses on whether the amount of the levy is subject to the additional 10% excise tax for nonmedical HSA distributions. Although the CCA does not explicitly discuss the issue, we note that the distribution resulting from the levy, like any other HSA distribution for nonmedical purposes, would also be included in the taxpayer's gross income and subject to income tax. CCAs are issued by the Office of Chief Counsel to IRS field or service center employees, and while they cannot be used or cited as precedent, they are helpful in determining the IRS's position." (Employee Benefits Institute of America)


Congressional Budget Office, Congress's Chief Fiscal Watchdog, Warns of Health Care Overhaul Cost
Excerpt: "The CBO assessment quickly reverberated around Capitol Hill, where House and Senate Democratic leaders are struggling to secure votes to advance health legislation before a scheduled break in August. Some Democrats had already grown nervous about the health-care effort in recent days, after House Democrats said they would pay for their plan with a surtax on upper-income families -- a proposal that could cause trouble for some Democrats in Republican-leaning districts." (The Wall Street Journal)


America's Affordable Health Choices Act Implementation Timeline, 2010-2018 (PDF)
4 pages. Published July 14, 2009. (U.S. House of Representatives Committees on Ways and Means, Energy and Commerce, and Education and Labor via Employee Benefit Research Institute)


Health Behaviors and Health Care Costs in the Multigenerational Workforce (PDF)
2 pages. Excerpt: "According to analysis of data from the UnumProvident Disability Database (2005), 'medical costs are reported to rise at an estimated 25% from age 40 to 50 and 35% from age 50 to 60. Age is less a factor in health care costs than the presence of such risk factors as smoking, obesity, lack of exercise, and diabetes.' 'Health risk factors [such as smoking, obesity, uncontrolled blood pressure, etc.], double and triple the healthcare cost of the older worker. For example, the health cost differential between the low-risk 40 and 50 year old and the high-risk 40 and 50 year old is 3.0 and 2.8 times higher respectively. The health costs for the 60 year old with low risk is an estimated 2.4 times lower than the health risk for the high-risk 60 year old.'" (The Sloan Center on Aging & Work at Boston College)


Obama Administration Remains Quiet on San Francisco Health Plan
Excerpt: "In contrast to President George W. Bush's Labor Department, which unsuccessfully urged a federal appeals court to overturn the groundbreaking law, the new administration submitted no arguments before the July 10 deadline for briefs supporting or opposing Supreme Court review. President Obama, meanwhile, has praised the San Francisco program, the first of its kind in the nation, while pressing Congress to enact comprehensive health coverage." (San Francisco Chronicle)


CBO Re-Estimates House Health Reform Bill and Finds It Is Budget Neutral
Excerpt: "Late on Friday, hours after two House committees -- Ways and Means and Education and Labor -- approved reform legislation, the Congressional Budget Office (CBO) had bad news: HR 3200 would result in a net increase in deficit spending of $239 billion during the next 10 years, according to its analysis. But House leadership immediately challenged the findings -- and CBO changed its tune hours later." (HealthLeaders Media)


Senate HELP Committee Approves Health Care Reform with Public Plan Option
Excerpt: "Under the Senate proposal, employers with more than 25 employees that do not offer qualifying coverage or that pay less than 60% of their employees' monthly premiums would be subject to a $750 annual fee per uninsured full-time employee and $375 per uninsured part-time employee. For employers subject to the assessment, the first 25 workers would be exempted. Beginning in 2013, the penalty amounts would be adjusted using the Consumer Price Index for Urban Consumers. Employers with 25 or fewer employees would be exempt from penalties and are eligible for program credits." (Wolters Kluwer)


Health Care Reform Hurdles Mounting As Largely Partisan Votes Advance Distinct Plans in House and Senate
Excerpt: "Three of the five congressional panels with jurisdiction on the issue -- the Senate Health, Education, Labor and Pensions Committee and the House Education and Labor Committee and Ways and Means Committee -- passed distinct packages intended to bring the United States closer to universal health care coverage. Even as the committees acted, there were warning signals of the hurdles the legislation faces." (Business Insurance)


An Analysis of the Distribution of Cost-Sharing Levels in Individual and Small-Group Coverage (PDF)
3 pages. Excerpt: "In this analysis, responses to the America's Health Insurance Plans (AHIP) recent surveys of member health insurance plans on the characteristics of coverage purchased in the small group and individual markets were analyzed to identify the most common benefit structures. The most recent survey of individual coverage was published in December 2007, with data from late 2006 and early 2007. The data on benefits was based on nearly 2 million single policies and approximately 800,000 family policies in force. Released in March 2009, AHIP's latest survey of small group coverage, from 2008 data, provided information on the benefits of approximately 5 million workers and 4 million dependents." (Changes in Health Care Financing and Organization)


Little Unity Among Businesses on Health Care Reform, According to Survey
Excerpt: "One reform proposal that scares employers who do business in multiple states is the possibility that officials on the state level would be able to usurp the authority of the Employment Retirement Income Security Act. Despite its name, ERISA primarily deals with health-plan regulation, and the law allows multistate employers to administer a companywide health plan. A survey by Miller & Chevalier and the American Benefits Council found nine out of 10 employers want to maintain ERISA's national standards rather than allow more state autonomy." (Chicago Tribune)


Does Health Insurance Make You Fat?
Excerpt: "The prevalence of obesity has been rising dramatically in the U.S., leading to poor health and rising health care expenditures. The role of policy in addressing rising rates of obesity, however, is controversial. Policy recommendations for interventions intended to influence body weight decisions often assume the obesity creates negative externalities for the non-obese. We build on earlier work demonstrating that this argument depends on two important assumptions: 1) that the obese do not pay for their higher medical expenditures through differential payments for health care and health insurance, and 2) that body weight decisions are responsive to the incidence of medical care costs associated with obesity. In this paper, we test the latter proposition - that body weight is influenced by insurance coverage - using two approaches." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve fulltext)


Health Care Reform Progresses through Congress
Excerpt: "Two U.S. House committees have now joined with a Senate panel in approving a version of health care reform - with two more Congressional panels still set to take up the issue. As the House rushed to report out a health reform bill before its summer recess next month, the House Education and Labor Committee and the House Ways and Means Committee approved the measure. They joined the Senate Health, Education, Labor and Pensions Committee (HELP), which okayed the measure on Thursday, but by a party-line vote." (PLANSPONSOR.com; free registration required)


Amendment to Grant States the Right to Implement Single Payer Passes House Committee
Excerpt: "Today witnessed the landmark passage of the States Single Payer Amendment which would remove federal barriers to implementation of a single payer health care system at the state level. This bipartisan vote signifies the prominence of the single payer solution as the plan favored by a majority of Americans. The amendment introduced by Rep. Dennis Kucinich (D-Ohio) during the Education and Labor Committee's consideration the health reform bill -- H.R. 3200 -- passed by a bipartisan margin of 25-19. The amendment would free states from Employer Retirement Income Security Act (ERISA) regulations that have been used by insurance companies to tie down states with litigation, preventing them from implementing progressive health care solutions." (HuffingtonPost.com, Inc.)


Side-by-Side Comparison of Major Healthcare Reform Proposals
Excerpt: "[N]ow includes details from H.R 3200, the America's Affordable Health Choices Act of 2009, introduced this week jointly by the three key House committees with responsibilities for health reform. The online tool allows users to compare any or all of 11 different plans, including proposals from the Senate Health, Education, Labor and Pensions Committee; the Senate Finance Committee; Senators Tom Coburn and Richard Burr and Representatives Paul Ryan and Devin Nunes; Representative John Conyers; Representative John Dingell; Senator Bernie Sanders; Representative Pete Stark; and Senators Ron Wyden and Bob Bennett. The tool also includes a summary of President Obama's reform principles, and a proposal from three former Senate Majority Leaders." (Kaiser Family Foundation)


[Opinion]
House Health Bill's High-Income Surcharge: A Reasonable Approach: Impact on Small Businesses Would Be Modest

Excerpt: "The House surcharge proposal is reasonable and well-targeted. In recent decades, incomes have grown disproportionately for households at the top of the income scale, while their tax burden has fallen substantially. Moreover, despite charges to the contrary, the proposal would have only a small impact on small businesses. The congressional Joint Tax Committee estimates that it would have no impact at all on 96 percent of small business owners -- broadly defined as any taxpayer with as little as $1 of business income -- and that only half of the 4 percent of small business owners who would be affected derive more than a third of their income from a business.[2] At the same time, the House plan would enhance the ability of small businesses to offer affordable, quality health insurance to their employees . . . ." (Center on Budget and Policy Priorities)


[Opinion]
Bipartisan Support for Removing Barriers to State Single-Payer Experiments

Excerpt: "Whether the country as a whole is ready for an equitable system whereby the government pays for everyone's health care costs out of tax revenue is clearly a debatable question. But many states and localities may already be. A consistent roadblock has been legal interpretations of ERISA, the Employee Retirement Security Act of 1974. ERISA governs the laws surrounding benefits offered by an employer, including health care benefits. ERISA, of course, does not require employers to provide health insurance. The fact that it does not always comes up when as the basis of legal challenges for employer mandates . . . ." (Change.org)



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Links to Items on Executive Comp, Benefits in General

[Guidance Overview]
SEC's Proposed Revisions to Proxy Disclosure of Executive Compensation (PDF)

2 pages. Excerpt: "For the most part, the proposed revisions represent fine-tuning of the comprehensive revision of the compensation disclosure requirements adopted by the SEC in 2006. They also contain new disclosure requirements that reflect public perception surrounding the causes of the current financial crisis -- particularly the perception that incentive policies focused on shortterm results have encouraged excessive risk-taking. This alert outlines some of the principal revisions proposed by the SEC . . . ." (Seyfarth Shaw LLP)


Rep. Frank Puts Out Discussion Draft for House Executive Compensation Bill
Excerpt: "Next week the U.S. House Financial Services Committee is expected to begin consideration of legislation that would give shareholders a voice in a company's executive compensation policies. In a Web statement, Chairman Barney Frank (D-Massachusetts) said the bill to be marked up in committee was similar to a measure passed by the House in 2007, as well as a recent Treasury Department proposal . . . . In addition to giving shareholders a say on the compensation for the top five most highly paid executives, the measure would also empower federal regulators to proscribe inappropriate or imprudent compensation practices as part of solvency regulation of all financial firms." (PLANSPONSOR.com; free registration required)


Company Cost-Cutting Strategies in the Downturn, According to Survey
Excerpt: "The survey identified these trends: In the first wave of cost cutting, which began late in 2008 and continued through the first quarter of 2009, respondents took a fairly traditional approach, with salary freezes for the overall workforce (59%) and no salary increases for executives (59%), as well as tighter bonus criteria for executives (41%)." (Towers Perrin)



Press Releases

U.S. Department of Labor Obtains Consent Judgment Against Herndon, Virginia, Company to Protect Participants of Abandoned Retirement Plan
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Employee Benefits Security Administration Releases Field Assistance Bulletin on Annual Reporting by 403(b) Plans
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

ERIC Says No Need for Additional ERISA Regulations Aimed at Target Date Funds
ERIC (ERISA Industry Committee)

Employers Express Doubts About Employer Mandate and Government-Sponsored Public Plan, Says Aon Consulting Survey
Aon Consulting

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