Health & Welfare Plans Newsletter |
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| September 11, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy | ||
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[Guidance Overview]
Retirees Prevail in Claim for Vested Health Benefits Notwithstanding Reservation of Rights Provision in Summary Plan Description
Excerpt: "The Third Circuit made a number of important conclusions when reaching its decision. First, the court concluded that Unisys' human resource staff members were acting in a fiduciary capacity when they discussed the retiree health benefits with the plaintiffs. Second, and most troubling, the court concluded that human resource staff members' failure to disclose Unisys' right to modify or wholly eliminate the plaintiffs' medical benefits at any point in the future resulted in an inadequate disclosure of information. In other words, even though the human resource staff members' representations were accurate statements about the duration and costs of retiree medical benefits at the time the statements were made, the staff members should have said more. Specifically, they should have mentioned that Unisys reserved the right to change benefits in the future, even though there was no current plan to change the benefits." (Nixon Peabody LLP)
[Guidance Overview]
SPD Passes 9th Circuit Scrutiny in Benefits Denial Case
Excerpt: "An employer's decision to include in the disability chapter of its summary plan description (SPD) a mention of a one-year limit on worker lawsuits over disability benefit denials meets federal benefits law, a court ruled. The 9th U.S. Circuit of Appeals rendered that decision in a suit by plaintiff Donna Scharff against Raytheon Co., in which Scharff alleged the lawsuit time limit notation should have been placed in the SPD's administrative chapter and should have been more conspicuously displayed. The appellate panel decided that the SPD met the requirements of Employee Retirement Income Security Act's (ERISA) Section 102 in explaining how a plan participant could be disqualified or ruled benefits ineligible in a way that can be understood." (PLANSPONSOR.com; free registration required)
[Guidance Overview]
Restoration of ERISA Plan for Retirees Appropriate Equitable Relief Following Misrepresentations
Excerpt: "Controversies over post-retirement benefits often yield some of the most detailed analysis of fiduciary obligations in the welfare benefit plan context. The stakes are significant enough to warrant diligent prosecution of the opposing sides of the dispute. This recent opinion in the protracted Unisys litigation is certainly an example. The prior history of this litigation is extensive, but not necessary to appreciate the key points of the opinion." (Roy Harmon III via Health Plan Law)
[Guidance Overview]
IRS Reminder to Public About COBRA Subsidy Ineligibility Notice and Penalties
Excerpt: "An IRS news item reminds COBRA qualified beneficiaries receiving federal premium assistance that they must notify the former employer sponsoring their coverage when they lose eligibility for the COBRA premium subsidy. Qualified beneficiaries who fail to give this notice may incur penalties of up to 110 percent of the subsidy received after loss of eligibility. Others aware of a beneficiary's failure to provide notice of subsidy ineligibility can use Form 3949-A to report the violation to the IRS." (Mercer LLC)
Health Plan Taxes, Cap on FSAs Under Discussion in Health Care Reform Plan
Excerpt: "Commercial health insurance companies and administrators of self-funded health care plans would have to pay an excise tax of 35 percent on health care plans whose costs exceed a certain level under a draft health care reform proposal by Senate Finance Committee Chairman Max Baucus, D-Montana. Under the proposal that Sen. Baucus described Monday, September 7, as a 'framework' for discussion and not a final product, the 35 percent excise tax would apply to health care premiums that exceed $8,000 for individual coverage and $21,000 for family coverage." (Workforce Management; free registration required)
Senate Committee's Health Care Bill May Be Palatable to Business
Excerpt: "Hours before President Barack Obama urged Congress to act on health care reform, the Senate Finance Committee moved toward offering the fifth legislative proposal on the issue and the one that could draw the most support from business. On Wednesday, September 9, Sen. Max Baucus, D-Montana and chair of the panel, said he will introduce a bill next week and then begin the committee mark-up the week of September 21." (Workforce Management; free registration required)
The Health Reform Devil May Offer Silver Lining for Employers (PDF)
10 pages. Excerpt: "Company health benefits sponsors -- and the self-funding community in particular -- have reacted with some dread to congressional health reform proposals that would mandate a national play-or-pay scheme and that would field a public option potentially to compete with employer-sponsored group coverage for employee lives. But on closer examination, despite claims to the contrary, various reform proposals may contain some silver linings for self-funding. This special report examines such proposals, and gives informed speculation on impacts for employer sponsors of health plans and their service providers." (Thompson Publishing Group, Inc.)
ERISA Benefits Litigation Article Discusses Effect of Met Life v. Glenn
Excerpt: "Mark Stephenson, Nelson Levine de Luca & Horst, recent published an article entitled ' ERISA Benefits Litigation - A Tilting Playing Field' in the Legal Intelligencer. The article notes the varied approaches taken in judicial review post-Glenn and the concommitant burdens placed upon ERISA plan sponsors and fiduciaries." (Roy Harmon III via Health Plan Law)
Health Reform in Massachusetts: An Update on Insurance Coverage and Support for Reform as of Fall 2008
Excerpt: "Rather than undermining private insurance coverage, as some feared, health reform in Massachusetts has led to an expansion of employer-sponsored insurance in the state." (Robert Wood Johnson Foundation)
Examining Obama's Assertions on Health Care Reform
Excerpt: "[T]he president said that 'if you are among the hundreds of millions of Americans who already have health insurance' through an employer or the government 'nothing in our plan requires you to change what you have.' That is technically true. But there is a real possibility that existing policies could change as a result of the legislation. The government, for instance, would set new standards, and employers that already offer insurance would have to bring their plans into compliance." (The New York Times; free registration required)
Trends in Satisfaction and Confidence in Health Care, by Insurance and Health Status: Findings from the 2009 EBRI/MGA Health Confidence Survey (PDF)
Pages 2- 12 of 20 pages. Excerpt: "This article examines public opinion by insurance status and health status. It finds that the uninsured are more likely than individuals with insurance coverage to be dissatisfied with the quality of health care received and they are less confident in various aspects of health care. The gap in satisfaction and confidence has also grown over time. Similar differences in satisfaction and confidence are found by health status. While these sharp differences in attitudes are not surprising, shoring up the system for the uninsured and individuals with chronic conditions means changing the health care system for everyone -- notably for those with insurance coverage and in good health. Ultimately, will the needs of the few outweigh the satisfaction of the many?" (Employee Benefit Research Institute)
Are Your Health-Promotion Programs Really Saving You Money?
Excerpt: "Preventive services have been a prime component of the Obama administration's vision for healthcare reform. Underlying it is the idea that prevention adds up to billions in savings by boosting patient wellness and providing early detection of conditions that, if allowed to go untreated, could wind up costing more in their advanced stages. But not so fast. Douglas W. Elmendorf, director of the Congressional Budget Office, sent a letter to the U.S. House Energy and Commerce Committee citing a 2008 study in the New England Journal of Medicine that showed that 'slightly fewer than 20% of [preventive] services that were examined save money, while the rest add to costs. ... [S]creening costs will exceed the savings from avoided treatment in cases in which only a very small fraction of the population would become ill in the absence of preventive measures.'" (Institute for Corporate Productivity, Inc.)
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Links to Items on Executive Comp, Benefits in General
[Guidance Overview]Common 409A Problems After the Transition Period
Excerpt: "Code Section 409A, passed by American Jobs Creation Act of 2004, consisted of only about 2,700 words. The 409A regulations, finalized in April, 2007, were approximately 110,000 words long. And now that the reasonable, good faith transition period is over beginning January 1, 2009, every one of those words is fully in effect. Given the onerous penalties involved in any 409A compliance failure, most employers are working hard to avoid errors. However, some of the more complex rules of the 409A regulations are continuing to create plan design and drafting issues for employers. The attached article will discuss a selected few of those issues so that employers can be aware of them to avoid them in the future and take necessary corrective steps with existing plans." (Journal of Pension Planning and Compliance via Groom Law Group)
Senate to Take Up Bill on Say-on-Pay and Compensation Committees as Congress Returns from Recess
Excerpt: "On July 31, 2009, the House of Representatives, with the support of the Obama Administration, passed H.R. 3269, the Corporate and Financial Institution Compensation Fairness Act of 2009, proposed legislation that would require all publicly traded companies to seek a nonbinding "say-on-pay" vote of shareholders on executive compensation packages annually and in acquisition transactions. The bill would also result in the establishment of new independence standards for compensation committees. The legislation is now before the Senate, which reconvenes this week after the congressional August recess. Although a similar bill passed the House last year but failed to gain Senate approval, many observers believe that some form of this legislation will be enacted this year." (Perkins Coie)
Chart: Wages and Benefits by Occupational Group, June 2009
Excerpt: "In June 2009, private industry employer compensation costs averaged $27.42 per hour worked. Wages and salaries averaged $19.39 per hour (70.7 percent), while benefits averaged $8.02 (29.3 percent)." (U.S. Bureau of Labor Statistics)
How Do Voluntary Plans Affect Engagement?
Excerpt: "Tangible benefits associated with increased employee engagement and enablement resulted in revenue growth that was 4.5 times greater than the lowest-performing organizations in those two areas, as well as 54% higher customer satisfaction scores. Moreover, there was a total reduction in voluntary turnover of 54% when comparing the best and worst performers on employee engagement and enablement." (Employee Benefit Adviser; free registration required)
[Opinion]
U.S. Supreme Court to Hear Case on Executive Compensation
Excerpt: "Earlier this year, the U.S. Supreme Court agreed to hear an appeal of Jones v. Harris Associates L.P., 527 F.3d 627 (7th Cir. 2008). . . . At the risk of stating the obvious, let me be crystal clear about the potential importance of this case: The entire system of board responsibility and liability for executive compensation decisions, based on the business judgment rule as it now is, could be upended based on the Supreme Court's decision in this case. The Supreme Court has scheduled oral arguments in this case for November 2, 2009. Rest assured that this Blog will keep you apprised of developments in this case and analyze the Supreme Court's decision as soon as it is published." (Michael Melbinger via Winston & Strawn LLP)
Webcasts and Conferences
"EFAST2: The Future of Form 5500" in Denverin Colorado on October 7, 2009
presented by SunGard Relius
"EFAST2: The Future of Form 5500" in Minneapolis
in Minnesota on October 8, 2009
presented by SunGard Relius
"ERISA Workshop" in Denver
in Colorado on October 8, 2009
presented by SunGard Relius
"ERISA Workshop" in Minneapolis
in California on October 9, 2009
presented by SunGard Relius
"Plan Forms, Notices, and Amendments: Streamlined, Effective, Timely" in Denver
in Colorado on October 7, 2009
presented by SunGard Relius
"Plan Forms, Notices, and Amendments: Streamlined, Effective, Timely" in Minneapolis
in Minnesota on October 8, 2009
presented by SunGard Relius
Integrated Delivery Systems: Positioning for the Future
Nationwide on September 30, 2009
presented by MCOL
Introduction to DBK Plans
Nationwide on October 29, 2009
presented by Qualified Pension Consulting, Inc.
The Golden Carrot: Uncovering the Key Competencies of Return to Work Coordinators
Nationwide on September 29, 2009
presented by Liberty Mutual
(Click to post your webcast or conference)
Press Releases
U.S. Labor Department Sues to Appoint Independent Fiduciary for 401(k) Plan Abandoned by Buffalo, New York, EmployerU.S. Department of Labor, Employee Benefits Security Administration (EBSA)
New Liberty Mutual Website And Guide Gives HR Managers The Tools To Better Manage Group Life Programs
Liberty Mutual
Goldleaf Partners Names Benefits Administrator To Its Chandler, AZ Location
Goldleaf Partners
(Click to post your press release)
Employee Benefits Jobs
Senior Plan Consultantfor Scholz, Klein & Friends Enlightened Retirement Group, Inc.
in TX
Plan Administrator/Trust Accountant
for Thomas F. Barrett, Inc.
in MD
Case Manager
for MandMarblestone Group
in PA
(Click to post your job opening | View all jobs |
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EmployeeBenefitsJobs.com (Sponsor)
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Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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