Health & Welfare Plans Newsletter |
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| July 27, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy | ||
International Foundation of Employee Benefit Plans (Advert.)
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[Guidance Overview]
Sixth Circuit Opines on ERISA 'Safe Harbor' Exemption
Excerpt: "In general, in order to fall under this safe harbor (and fall out of ERISA), one of the requirements of the safe harbor is that no contributions be made by the employer, i.e. if the employer is making contributions to the plan, then it is an ERISA-covered plan. Thus, because many disability plans are funded either partially or fully by the employer, they are covered by ERISA. In the recent Sixth Circuit case of Helfman v. GE Group Life Assurance Company, et al., a participant had challenged the district court's decision that the plan was covered by ERISA because the participant sought to get out from under the ERISA banner of deference afforded the plan administrator's decision. The district court had ruled that the plan administrator had not abused its discretion and upheld the insurer's termination of the participant's benefits." (ERISA Fiduciary Guidebook)
[Guidance Overview]
Court Enforces Plan-Imposed Limitations Period for Filing Benefit Lawsuit
Excerpt: "EBIA Comment: Limitations periods like this one are common in both insured plans and self-insured plans. Not all courts have enforced such provisions; in addition to the Fourth Circuit, the Ninth Circuit has declined to do so. Also, factual differences between cases can change the result, including the clarity of the language in question and whether it was clearly communicated to the claimant (an issue apparently not in dispute here). Nevertheless, the courts will generally enforce reasonable plan-imposed limitations periods, leaving three lessons to be drawn from the cases. First, plans should consider imposing their own limitations periods given that the otherwise applicable periods vary from state to state and can be quite long. Second, care must be taken to draft the provisions clearly. Third, as a best practice, any limits should be explained both in the plan SPD and in claim denial notices. " (Employee Benefits Institute of America)
[Guidance Overview]
HIPAA Does Not Preempt State-Law Claim for Improper Disclosure of Medical Records
Excerpt: "EBIA Comment: Although this case did not involve a health plan, it caught our attention because it makes the important point that while HIPAA provides no private cause of action for individuals whose privacy rights are violated, state-law claims are still possible. This is because only state laws that are 'contrary' to HIPAA are preempted and a provision of state law is 'contrary' to HIPAA only if it would be impossible to comply with both the state and federal requirements, or if the state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of HIPAA. We also note that if the state-law claim in this case had been made against a health plan subject to ERISA (ERISA applies to most private-sector plans), the plan would have had an additional argument for preemption based on ERISA's more sweeping preemption provision." (Employee Benefits Institute of America)
CBO Predicts No Major Shift in Employer Coverage Under House Pay-or-Play Provisions
Excerpt: "During the House Ways and Means hearings on the Tri-Committee health reform bill (HR 3200) mid-July, a question was asked numerous times by Republican members: Would larger employers be enticed to give up paying for their employees' health insurance under proposed 'shared responsibility' requirements--which required all individuals to be insured--if the federal penalty was not high enough? An analysis released Sunday from Congressional Budget Office Director Douglas Elmendorf took a look at this issue and several other coverage issues." (HealthLeaders Media via HCPro, Inc.)
Connecticut Governor's Veto Stands: Small Employers Prevented from Buying into Government Health Insurance Purchasing Pool
Excerpt: "Connecticut legislators failed this week to override Governor M. Jodi Rell's veto of a bill that would have opened up the health insurance program covering state employees to other participants. According to Business Insurance, supporters of the bill said allowing Connecticut municipalities, nonprofit organizations, and employers with fewer than 50 employees to be part of a much bigger purchasing entity by joining the state program would result in lower rates compared with buying coverage on their own. However, Rell asserted in her veto message that the measure would boost costs for the state and taxpayers because those most likely to join the program would be the heavy health service users . . . ." (PLANSPONSOR.com; free registration required)
Idea That Members of Congress Get Free or Low-Cost, Highest Quality Health-Care Plans Is a Myth
Excerpt: "It is repeated so often that many Americans believe it: Congress gets free or extremely low-cost, gold-plated health care. . . . Problem is, the belief that Congress gets cheap-but-Cadillac-quality health benefits is a myth. Some members of Congress, in fact, pay higher premiums for their health plans than they would if privately employed." (Cleveland Live Inc.)
Forum Panelists Say Health Care Benefit Changes Needed
Excerpt: "Fundamental changes in health care and employee benefit programs are needed to solve the problems of soaring costs, low care quality and access to health care services, a panel of experts said Friday, July 24. Speaking at a Chicago forum on national health care reform and its effect on Illinois, the panelists outlined major problems in the health care system and suggested ways to address those issues. 'Employers' house of benefits needs an extreme makeover,' said Larry Boress, president and CEO of the Midwest Business Group on Health, a Chicago-based coalition that hosted the forum with the National Coalition on Health Care." (Workforce Management; free registration required)
Connecticut: Small Businesses Struggle with Soaring Premiums, Unintended Consequences of Old Law
Excerpt: "'Premiums for small employers have been rising by double-digit increases for a few years, and they don't have the negotiating power of larger employers,' the Hartford (Conn.) Courant reports. This year's increases are even higher than usual, on top of an economic recession. Connecticut businesses are resorting to drastic measures to preserve employee's coverage, or are forced to drop it all together." (Kaiser Family Foundation)
Additional Information Regarding Effects of Specifications in 'America's Affordable Health Choices Act' Pertaining to Health Insurance Coverage
Target page links to Letter to the Honorable Dave Camp and to the CBO Director's Blog on the issue. Excerpt: "The attached analysis responds to your request for additional information about the effects of the specifications regarding health insurance coverage. In particular, you asked about the effects on enrollment in private coverage, in the new public plan, and in Medicaid; the effects on private-sector insurance premiums and the labor market; the longer-term cost of the plan; and the allocation of its net budget impact between outlays and revenues. Because of the complexity of the changes that have been proposed and their potential effects, we are unable to address all aspects of every question that you raised." (U.S. Congressional Budget Office)
A Bid to Tax Health Plans of Executives
Excerpt: "[Goldman Sach's medical coverage for executives] entered the health care discussion on Sunday when David Axelrod, senior adviser to President Obama, cited the Goldman program as an example of the expensive benefits the administration might consider taxing to help pay for its health care program. 'The president actually was asked this the other day by Jim Lehrer, and what he said was that this was an intriguing idea to put an excise tax on high-end health care policies like the ones that the executives at Goldman Sachs have, the $40,000 policies,' Mr. Axelrod said." (The New York Times; free registration required)
Health Care and the Middle Class: More Costs and Less Coverage
Excerpt: "This analysis paper examines the availability, affordability and stability of the health insurance coverage of the American middle class, defined as those with incomes of $44,000 to $88,000 for a family of four. It also addresses the growing burden of health care costs for the middle class, the adequacy of today's health insurance plans to protect them from large medical bills, and the difference both make as individuals and families make health care decisions for themselves." (Kaiser Family Foundation)
Health Reform Bills Jeopardize Consumer-Directed Health Accounts
Excerpt: "Some may wonder why health care reform legislation contains a provision that would eliminate the ability of employees with flexible spending accounts, health reimbursement arrangements and health savings accounts to use them to pay for over-the-counter medications. Benefit experts say there is no apparent policy reason beyond the need to raise revenue, but say the OTC provision illustrates how health reform measures moving through Congress have become magnets for proposals that have little, if any, connection to the core of the bills." (Business Insurance)
Analysts Assess Winners and Losers in Health Care Reform
Excerpt: "Depending on the outcome of health care reform, investment opportunities could be found in a variety of related sectors, including pharma.ceuticals, biotechnology and even certain insurers. . . . If Medicaid, a state-administered program, is expanded to cover more of the uninsured, companies that are subcontracted to provide that coverage -- such as Amerigroup Corp. (AGP) and Centene Corp. (CNC) -- would benefit, said Dave Shove, a senior health analyst at BMO Capital Markets Corp. in New York. . . . Another possibility, which would include having a major commercial public plan that would allow private insurers to cover more individuals, would benefit large managed-care companies because their existing provider networks allow them to get good discounts for physicians and hospitals . . . ." (Investment News; free registration required)
BenefitsLink Newsletter (Advert.)
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Links to Items on Executive Comp, Benefits in General
[Guidance Overview]EEOC's Employee-Friendly Guidance on Separation Agreements
Excerpt: "Most U.S. employers continue to offer downsized employees severance benefits in exchange for a release of claims. Recognizing this, the U.S. Equal Employment Opportunity Commission (EEOC) issued new guidance on July 15, 2009 titled Understanding Waivers of Discrimination Claims in Employee Severance Agreements. In form, EEOC's new Severance Agreement guidance is unusual in that it is directed to employees in a Q&A format." (Seyfarth Shaw LLP)
[Guidance Overview]
Mergers and Acquisitions: Employee Benefits Review (PDF)
3 pages. Excerpt: "A critical part of the due diligence conducted before a buyer acquires the stock or assets of a target company is a review of the employee benefits offered and maintained by the target company. The objective of employee benefits due diligence is to identify all of the potential issues and liabilities associated with the target's employee benefits and to adequately address these issues in the acquisition agreement." (Morgan, Lewis & Bockius LLP)
[Guidance Overview]
The State of the Same-S.ex Union: Part Two in a Three-Part Series
Excerpt: "As we described in Part One of this series, the battle over same-s.ex marriage in the United States has been hard-fought in legal, political, and social arenas. Proponents and opponents have scored both victories and losses, leading to the checkered current landscape, in which same-s.ex couples' rights can vary widely from state to state. The rights of same-s.ex couples to gain formal recognition of their relationship differ by state - in terms both of whether any recognition is available and, if it is, what kind of recognition. Here, in Part Two, we describe in detail the states in which same-s.ex couples can obtain formal recognition from the state - whether in the name of 'marriage' or some alternative status - and the states in which recognition is banned. We also explain why significant additional changes to the landscape are unlikely in the near future." (FindLaw)
[Guidance Overview]
EEOC's New Guidance on Discrimination Waivers and Releases
Excerpt: "On July 15, the Equal Employment Opportunity Commission (EEOC) issued a new guidance document concerning discrimination waivers and releases contained in employee severance agreements. The full text of the guidance, titled 'Understanding Waivers of Discrimination Claims in Employee Severance Agreements' (EEOC Guidance), is available online at www.eeoc.gov/policy/docs/qanda_severance-agreements.html. The EEOC Guidance does not dramatically change the EEOC's detailed regulations concerning age discrimination waivers and releases, which center around the complex requirements imposed under the Older Workers Benefit Protection Act of 1990 (OWBPA). However, the new EEOC Guidance is important in several respects . . . ." (Morgan, Lewis & Bockius LLP)
[Guidance Overview]
SEC Proposal on Executive Compensation and Corporate Governance Disclosure Requirements and Proxy Solicitation Rules (PDF)
14 pages. Excerpt: "On July 10, the Securities and Exchange Commission (SEC) issued a release proposing various rule amendments that would add or revise executive compensation and corporate governance disclosures in proxy and information statements, and address certain issues relating to proxy solicitations (Proposal Release). Comments on the proposed amendments must be submitted by September 15, 2009. If the proposed amendments are adopted, the SEC expects that they will be effective for the 2010 proxy season." (Morgan, Lewis & Bockius LLP)
Reform Efforts on Compensation Aim at Financial Industry
Excerpt: "[Rep. Barney Frank] has made broker-dealers, investment advisers, banks and credit unions targets for additional compensation reforms in a proposal that he introduced to the House of Representatives last week. 'These financial institutions are the capital engines that drive our economy and manage our wealth,' said Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware in Newark. 'So anything that can directly influence the success or failure of their businesses will be a logical target for lawmakers -- and for better or worse, that means executive compensation.'" (Investment News; free registration required)
Mergers and Acquisitions: Due Diligence (PDF)
2 pages. Excerpt: "Before agreeing to acquire a company, the buyer should conduct a thorough investigation of the target. This 'due diligence' process serves to determine the value of the target, identify any problems, and assist with structuring the deal. The buyer should examine the target's business operations, financial information, and legal documentation. Due diligence in the United States is often more extensive than comparable investigations performed in other jurisdictions." (Morgan, Lewis & Bockius LLP)
The Impact of the Recession on Employers (PDF)
31 pages. Excerpt: "This study is designed to address the following questions among a nationally representative sample of U.S. employers with 50 or more employees: 1. What percentage of employers have taken steps to reduce labor and operational costs in the past 12 months? 2. Among these, what specific cost reduction strategies have they used? 3. What are employers doing to help employees deal with the recession? 4. What is happening with workplace flexibility during the recession? 5. Do the strategies employers use for dealing with the recession differ for employers that have larger proportions of women or men; of hourly or salaried employees; of unionized or non-unionized employees? Do they differ for employers that are nonprofit or for-profit? And do they differ for employers of various sizes? 6. What are employers doing that they think would serve as useful examples for other employers? Throughout the report, we include employers' responses to this open-ended question." (Families and Work Institute)
A Benefits Primer for New Employees
Excerpt: "Human resources professionals often underestimate how complicated a benefit packet can appear to new employees, particularly if they are young or are recent entrants to the workforce. Here's basic guidance you can use to inform them about role benefits play in total compensation." (Workforce Management; free registration required)
Webcasts and Conferences
"July 2009 ERPA Test Review - Part 1" Recorded Web SeminarNationwide on July 24, 2009
presented by SunGard Relius
(Click to post your webcast or conference)
Press Releases
Rapid Growth in Health Care Costs Hurts Economic Performance of U.S. IndustriesRAND Corporation
EPIC Advisors Inc. Announces Director of Consulting and Risk Management
EPIC Advisors, Inc.
(Click to post your press release)
Employee Benefits Jobs
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in NV
Defined Contribution Analyst I
for The Standard
in OH
Team Lead II RP Administration
for The Standard
in OR
Account Manager I - SRS
for The Standard
in OR
401(k) Specialist / Administrator
for Pension and Retirement Services
in MO
Retirement Plan Administrator
for PlanTech, LLP
in AL
Supervisor, Participant Services
for Ascensus
in MN
Account Manager / Sr. Account Manager
for Gallagher Benefit Services
in NC
Plan Document Manager
for Local TPA Firm
in TX
Channel Management Segment VP
for Prudential Financial
in CT
Market VP - Relationship Management
for Prudential Financial
in TX
Market VP - Relationship Management
for Prudential Financial
in IA
Market VP - Relationship Management
for Prudential Financial
in IL
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