Health & Welfare Plans Newsletter |
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| August 4, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy | ||
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[Guidance Overview]
NY Governor Signs Law to Allow Dependent Children to Remain Covered Under the Employer's Health Plan Through Age 29
Excerpt: "Governor Paterson has signed a law that revises New York State Insurance Law section 3221 to require a commercial insurer, which provides a group health insurance policy to an employer, to offer an election to an employee under that policy to continue the health care coverage of his or her dependent children who have otherwise 'aged off' of the coverage. These children may continue to be covered under the group policy through age 29, as long as they do not become eligible for other employer sponsored health insurance coverage, and are not covered by Medicare. The children need not be financially dependent on their parents to receive this coverage. For purposes of the new law, a 'dependent child' is any child of an employee who is unmarried and is under age 30." (ERISA Lawyer Blog)
[Guidance Overview]
New ERISA Plan Reimbursement & Subrogation Checklist for Group Health Plans
Excerpt: "I am beginning a revision of the tutorials on this site and decided to update those resources by adding an ERISA plan reimbursement checklist which you can access [at http://www.healthplanlaw.com/?page_id=1433]. Sufficient caselaw has developed post-Sereboff that I can now annotate that page with some useful perspectives. What you will find now on the page is my first approach to that project which I will begin augmenting with caselaw under the existing or where indicated, additional topics. Cases and rulings are welcome as always, as are suggestions." (Roy Harmon III via Health Plan Law)
[Guidance Overview]
Vacation Policy Cannot Save Massachusetts Employers from Paying Accrued, Unused Vacation Time upon Termination
Excerpt: "Employers are wise to evaluate their paid leave policies and practices to ensure that they are consistent with the decision in Electronic Data Systems v. Attorney General. In June 2009, the Massachusetts Supreme Judicial Court held that an employer could not rely on its vacation policy to avoid paying involuntarily terminated employees for unused vacation time. The decision confirmed a long-standing interpretation of the Wage Act by the Massachusetts Attorney General, and serves as a lesson to employers who mistakenly believe they can avoid paying accrued but unused vacation time upon termination merely by creating a policy that purports to give them authority to do just that. As the highest court in Massachusetts has now made clear, employers must include accrued but unused vacation time in the final paychecks of Massachusetts employees who are involuntarily terminated." (McDermott Will & Emery)
[Guidance Overview]
Tenth Circuit Rules Against a 'Rascally Pretext' to Deny Health Insurance to Worker
Excerpt: "The 10th Circuit invoked the age-old feud between Bugs Bunny and Elmer Fudd in a ruling Friday, saying the Wyoming Associated Builders Insurance Trust (WABIT) can't use a 'rascally pretext' to deny health insurance to a worker diagnosed with bone cancer. Scott Phelan, 26, was a member of Wyoming Associated Builders when he received the diagnosis. Just before he submitted a large claim for cancer treatment in December 2006, the association terminated his employer's membership in WABIT, purportedly because the employer had submitted a late payment that wasn't a cashier's check." (Courthouse News Service)
[Guidance Overview]
Court Finds LTD Plan Was Subject to ERISA, Addresses Disability Claim Decisionmaking
Excerpt: "EBIA Comment: Disability benefit disputes comprise a significant number of reported decisions under ERISA. This case caught our eye not only because of the voluntary plans issue but also because of the several court-made rules it discusses affecting the use of medical experts in the disposition of disability claims." (Employee Benefits Institute of America)
Audio and Text: Are Health Insurers' Profits As Low As They Claim?
Excerpt: "America's Health Insurance Plans (AHIP), the trade association for the nation's health insurers, is fighting a familiar battle. It is fighting the perception that health insurance companies focus more on their shareholders' bottom lines than the interest of their patients. To negate this notion, AHIP features a dollar bill with one tiny slice out of it (shown below) on their Web site, illustrating that their members only make 1 cent of every dollar spent on health care. . . . That may be the case, says Princeton economist Uwe Reinhardt, but 'whether it's fair or not depends on what it is you want to describe,' he says. 'All that statement says is, if you eliminated all our [insurance company] profits, national health spending in America would be 1 percent lower. It has meaning only in that context,' Reinhardt says. Insurers are measuring their profits against total health care spending. That's all the money you and I and employers and insurers and the government spend for doctors' visits, hospitalizations, drugs and other things." (All Things Considered via National Public Radio)
Will Emphasis on Prevention Bring Health Costs Down?
Excerpt: "Studies have shown that requiring even small copayments can deter patients from prevention screenings. . . . Health plans appear to be getting the message that to encourage prevention they should make the tests free." (Kaiser Family Foundation)
Elevating the Value of Dental Benefits Through Employee Communications (PDF)
17 pages. Excerpt: "By moving beyond just a spreadsheet analysis and taking a deeper look at dental benefit plan design elements, brokers, consultants and employers, in partnership with their dental benefit carriers, can find ways to spend benefit plan dollars more wisely and yet provide more value to employees. Making appropriate benefit changes can have a positive impact -- helping employers drive employee satisfaction, control dental plan costs and add value to their plans." (Metropolitan Life Insurance Company)
What Happened When GE Paid Employees to Quit Smoking?
Excerpt: "In 2004, researcher Kevin Volpp at the University of Pennsylvania School of Medicine and Wharton School secured a federal grant to test the effectiveness of financial incentives on smoking cessation. The General Electric Corporation, which spends tens of millions of dollars each year on smoking-related illnesses, volunteered to help design and host a clinical trial. The trial was extremely successful, with incentivized participants giving up smoking at three times the rate of their non-incentivized peers. Subsequently, GE has decided to launch an incentive program for all of its 152,000 U.S. employees." (The Commonwealth Fund)
Blue Cross Accused of Deceptive Practices
Excerpt: "A federal [suit] accuses Blue Cross of a wide-ranging scheme to underpay claims from out-of-network hospitals. Methodist Hospital of Southern California claims Blue Cross refuses to let it transfer patients from emergency rooms, then underpays the hospital and sticks patients with hefty bills, falsely claiming the patients 'requested' to stay put. Methodist Hospital of Southern California accuses Blue Cross and Anthem affiliates in 10 states of RICO and ERISA violations. The insurance company faces similar actions in courts across the country. The scheme follows a well established pattern, according to the hospital, which quit the Blue Cross network in 2008, citing low payback rates that were 'onerous and one-sided in favor of Blue Cross.'" (Courthouse News Service)
University Conference Services (Advert.)
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Links to Items on Executive Comp, Benefits in General
[Guidance Overview]Notes on Preparing Form 5500; Implementing New Rules for Reporting of Fees
Excerpt: "Generally, all organizations that offer employee retirement and welfare benefit plans are required to file a Form 5500 each year. There will be significant changes to filing procedures for 2009, including the requirement to report both direct and indirect fees and to file electronically instead of by mail." (Hewitt Associates)
[Guidance Overview]
ERISA Litigation Newsletter for August 2009 from Proskauer Rose (PDF)
Articles include Bucking the Trend, District Court Finds That Utah's Attempt to Bar Discretionary Clauses Is Preempted By ERISA; When Discretion Is Gone... Is There Full Blown Federal Discovery?; Are Unpaid Employer Contributions to an ERISA Plan 'Plan Assets'? Courts and Government Weigh In; Defendants Acquire Favorable Judgments in Latest Round of Stock Drop Cases Involving Subprime and Stock Option Claims; Seventh Circuit Rules That 'Normal Retirement Age' Need Not Be Defined By Reference To A Specific Age. (Proskauer Rose)
[Guidance Overview]
IRS Summary of How Accountable Plan Rules Apply to Per Diem Payments
Excerpt: "EBIA Comment: As the information letter points out, business expense reimbursements paid by an employer generally must satisfy the accountable plan rules in order to be nontaxable. The accountable plan rules themselves are not complex, but administering them can be time-consuming, so shortcuts to satisfying the substantiation and return of excess requirements -- like the use of per diem payments -- are welcome if they can be properly applied. While this information letter does not go into much detail about the conditions for using per diems (for the details it refers readers to IRS Publication 15 (also known as Circular E)), it does offer a useful introduction to the general subject of accountable plans." (Employee Benefits Institute of America)
[Guidance Overview]
SEC Proposal to Expand Compensation and Governance Disclosure for 2010 Proxy Season
Excerpt: "This Update provides a high-level overview of the proposed rules and a more detailed summary of the key components of the proposed rule changes and the SEC's comment requests relating to executive compensation disclosure, as well as practical guidance for public companies preparing for the 2010 proxy season." (Perkins Coie LLP)
[Guidance Overview]
IRS States it Can Enforce Tax Levy by Seizing and Selling Employee/Taxpayer's Stock Options
Excerpt: "Late in June, the IRS released a memorandum from the Office of the Chief Counsel, declaring that the IRS can seize and sell executive stock options held by a taxpayer regardless of restrictions on the transferability of the options. The taxpayer had received and held both Incentive Stock Options (ISOs) and Non-Incentive Stock Options (NISOs). His Employer's Stock Plan and the Option Award Agreements unambiguously provided that the Options: could not be transferred except by will, the laws of descent or distribution, or pursuant to a qualified domestic relations order (QDRO)*, and during the taxpayer's life, could only be exercised by the taxpayer, his guardian or legal representative, or the Taxpayer's transferee pursuant to a QDRO." (Michael Melbinger via Winston & Strawn LLP)
Former In-House Counsel Loses Law License Due to Backdating of Stock Options
Excerpt: "A New York state appellate court has suspended for three years the Empire State law license of the former general counsel of a New York video games maker in connection with backdating stock options. A New York Law Journal report said the penalty was handed down against Kenneth Selterman in connection with stock-option backdating activities at Take-Two Interactive Software where Selterman served as general counsel from 1999 to 2007. The company makes the popular 'Grand Theft Auto' game series." (PLANSPONSOR.com; free registration required)
Understanding Benefit Practices: Business Owner Market Study (PDF)
16 pages. Excerpt: "Recognizing that not all companies make changes on an annual basis, business owners were asked if they plan to change . . . benefits in the next 12 months. The likelihood is low, with 19% of business owners saying they may change their Group Medical plan and Wills. In addition, individual disability income for the business owner and Executive Bonus may have more market opportunity than other plans, each coming in at 12%." (Principal Financial Group)
12-Month Private Industry Compensation Costs Increase in June
Excerpt: "Compensation costs for private industry workers increased 1.5 percent for the 12-month period ending June 2009. This is the smallest percent change published for this series since it began in 1980. The cost increases -- evident in both wages and salaries as well as benefits -- were the smallest increases published in the history of these data series." (U.S. Bureau of Labor Statistics)
After 6,000 Take Buyouts, G.M. to Lay Off Thousands
Excerpt: "Workers who agreed to leave their job received cash payments of $20,000 to $115,000, with the largest amount going to those who gave up retirement benefits other than their pensions. Departing workers also received a voucher worth $25,000 toward a new-vehicle purchase." (The New York Times; free registration required)
Webcasts and Conferences
EFAST 2 - What You Should KnowNationwide on August 14, 2009
presented by ftwilliam.com
ERISA Class Actions – Up Close and Personal: An In Depth Look At The Myriad Of Complex And Ever-Evolving Issues Webcast
Nationwide on August 6, 2009
presented by BNA, Inc.
Is Your Compensation Committee Ready for the Executive Compensation Disclosure and Governance Changes? Webcast
Nationwide on August 11, 2009
presented by BNA, Inc.
What You Need to Know: Final Regulations (and Penalties Related to HIPAA Security Breaches Webcast
Nationwide on August 27, 2009
presented by International Foundation of Employee Benefit Plans
(Click to post your webcast or conference)
Press Releases
Financial Engines Managing Over $20 Billion In Retirement AssetsFinancial Engines, Inc.
Pension and Law Enforcement Experts Join Forces to Create New Standard of Investment Scrutiny
Benchmark Financial Services, Inc.
HHS Delegates Authority for the HIPAA Security Rule to Office for Civil Rights
U.S. Department of Health & Human Services
(Click to post your press release)
Employee Benefits Jobs
Project Based Services Center Specialistfor ACS, Inc. (Affiliated Computer Services)
in NJ
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