Health & Welfare Plans Newsletter |
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| October 19, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy | ||
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[Guidance Overview]
Update on the Legal and Workplace Implications of H1N1
Excerpt: "Because experts predict that the virus will likely become more widespread as the current flu season progresses, it is even more important that employers consider the nature and scope of H1N1, identify potential legal liabilities, develop action and communications plans, and identify and address related labor and employee relations issues." (Seyfarth Shaw LLP)
[Guidance Overview]
Health Plan TPA Could Still Be a Fiduciary
Excerpt: "A federal judge in Massachusetts has ruled that a third-party administrator (TPA) for two health plans cannot be blamed as a 'functional fiduciary' for problems in processing claims that allegedly cost the plans millions of dollars. However, U.S. District Judge F. Dennis Saylor IV of the U.S. District Court for the District of Massachusetts indicated that a trial would have to be held to decide whether the TPA, BeneFirst LLC, was instead a 'named fiduciary.' Saylor asserted BeneFirst's discretion over the health plans, sponsored by a chain of New England and New York hardware stores, as well as its ability to control plan bank accounts did not rise to the level of making the TPA liable as a 'functional fiduciary' under the Employee Retirement Income Security Act (ERISA)." (PLANSPONSOR.com; free registration required)
[Guidance Overview]
Court Holds That QDRO Controls Determination of Life Insurance Beneficiaries Because Welfare Plan QDROs Are Not Preempted by ERISA
Excerpt: "EBIA Comment: The list of decisions that recognize a preemption exception for welfare plan QDROs keeps growing. Although the decision in this case (by a trial court in the First Circuit) is not binding precedent there, welfare plans in the Second, Fourth, Sixth, Seventh and Tenth Circuits should be prepared to deal with QDROs. Plan sponsors and insurers faced with conflicting QDRO-based claims to welfare benefits may, as the insurer did in this case, want to consider using interpleader to resolve the dispute and avoid the risk of having to pay benefits twice. Notwithstanding the growing weight of authority to the contrary, we continue to think there are reasons to conclude that ERISA's QDRO provisions properly apply only to pension plans (based on the legislative history and because the QDRO definition appears in Part 2 of ERISA which, under the plain language of ERISA Section 201(1), does not apply to welfare plans). These arguments might yet form the basis for a different conclusion in another federal circuit (or even in the Supreme Court, if the issue ever reaches that court)." (Employee Benefits Institute of America)
[Guidance Overview]
Requirement that Employees Complete Health Risk Assessments in Order to Receive HRA Reimbursements Violates the ADA
Excerpt: "The broadened scope of the definition of 'disability' under recent amendments to the ADA . . . may cause more inquiries in health risk assessments to be viewed as disability-related and thus subject to scrutiny under the ADA. Formal guidance from the EEOC on the ADA's application to wellness programs is sorely needed. It also bears repeating that in addition to the ADA, wellness programs must also meet applicable HIPAA requirements and comply with GINA." (Employee Benefits Institute of America)
Employees Facing 'Shockingly Higher' Health Costs
Excerpt: "It's open enrollment time at work. Prepare yourself. Starting in 2010, your employer is making sure that when it comes to paying for your health care, you're going to be sharing much more of the burden. 'The headline is greater cost sharing,' said Tom Billet, senior consultant with human resources consultancy Watson Wyatt. 'That means higher [employee] contributions, higher deductibles, or both,' he said. In 2010, employers are 'putting everything on the table,' implementing benefit changes aimed at making workers more aware of the actual cost of services,' said Paul Fronstin, director of the health research program at the Employee Benefit Research Institute (EBRI), a public policy research group." (CNNMoney.com)
Health Reform Bills May Not Protect Consumers from Treatment Denials
Excerpt: "'Experts said the legislation under consideration does not significantly enhance patient protections against insurers refusing to cover requests for treatment. Most people currently have no right to challenge health insurers' treatment decisions by suing them for damages.' The Employee Retirement Income and Security Act (ERISA) 'bars suits for damages over health benefit decisions' for the 132 million people who get insurance through employers. Current health care bills do not remove the barrier (Girion, 10/19)." (Kaiser Family Foundation)
A Call for Repeal of Health Care Insurers' Antitrust Exemption
Excerpt: "Sen. Charles Schumer, D-New York, urged his colleagues Wednesday, October 14, to add an amendment to health care reform legislation that would strip health insurers of their limited antitrust exemption. Sen. Schumer, a co-sponsor of the Health Insurance Industry Antitrust Enforcement Act introduced last month, made his call one day after the Senate Finance Committee approved a health care reform bill. Insurers enjoy a limited antitrust exemption under the McCarran-Ferguson Act. The health insurance industry's 'antitrust exemption is one of the worst accidents of American history,' Sen. Schumer said in a statement. 'It deserves a lot of the blame for the huge rise in premiums that has made health insurance so unaffordable. It is time to end this special status and bring true competition to the health insurance industry.'" (Workforce Management; free registration required)
Investigation of Fireman's Fund Termination of Retiree Medical Benefits
Excerpt: "At the end of September, Fireman's Fund Insurance Company ('FFIC') notified most of its retirees that it intends to discontinue providing medical benefits for the overwhelming majority of its retirees effective January 1, 2010. Cohen Milstein is currently investigating whether FFIC is permitted to make those changes." (Lewis, Feinberg, Lee, Renaker & Jackson, P.C.)
Legislation Would Keep Children in Federal Employee Health Benefits Program Longer
Excerpt: "Democratic leaders announced on Tuesday that the final House health care reform package will include a provision requiring all insurance plans -- including the Federal Employee Health Benefits Program -- to cover dependents up to age 27. FEHBP currently covers unmarried dependent children up to age 22." (GovernmentExecutive.com)
IRS Representatives Address Employee Benefits Issues at Meeting
Excerpt: "In a meeting on employee benefits issues raised by the American Bar Association's (ABA) employee benefits committee section on taxation, representatives of the Internal Revenue Service addressed COBRA, imputing fair-market value to self-insured employer-provided health care coverage, and one-time lump sum cash payments for irreversible waiver of retiree health benefits. Two of the COBRA situations involved the tax treatment of employer voluntarily continued coverage after COBRA ends for certain beneficiaries, and waiver of the COBRA subsidy." (Wolters Kluwer)
Some Firms Get Tougher on Workers' Health Habits with High-Risk Employees Forced to Pay More for Health Insurance
Excerpt: "While smoking surcharges remain the most popular added premium assessment used, the size has grown significantly from a nominal fee when such surcharges were introduced several years ago to what many consider 'real money,' especially during a recession. A few intrepid employers have gone a step further, relegating employees who decline to take better care of themselves to health plans that provide less coverage. Some benefits law experts are concerned these employers may be pushing the envelope a bit too far, but legislation passed last week by the Senate Finance Committee appears to reinforce employers' aggressive efforts to rein in health care costs through the use of incentives . . . ." (Business Insurance)
Corpus Christi, Texas, Police Pension Benefits Curtailed
Excerpt: "Trustees for a union-run health insurance trust voted to curtail benefits in July, citing unsustainable obligations. The plan had paid about $400 per month for her benefits, Roberts said. Now the plan will pay just a fraction of that. According to financial statements filed in 2008, the trust had roughly $2 million in assets in 2007. But the trust had incurred nearly $38 million in obligations. Since then, the obligations have risen and the assets have declined." (The E.W. Scripps Co.)
Arizona County Orders Flu-Ridden Employees Home, or Else
Excerpt: "Officials of an Arizona county have opted to take their concerns about spread of the swine or regular flu among their employees a step farther with this stern message: stay home if you are sick or risk being fired. An Associated Press news account said supervisors in Pima County, in which Tucson is located, unanimously adopted the policy for their nearly 7,000 employees. Under the rule, sick workers must inform their supervisor who is given the authority to send the person home. The mandate indicates that employees with a temperature of at least 100.4 degrees or who exhibit flu symptoms must remain home for at least 24 hours or until after the fever subsides. Anyone not complying with the instructions to leave work can be discharged or otherwise disciplined under the new rule, which the news account said will likely be lifted next spring." (PLANSPONSOR.com; free registration required)
Administrative Hassles from COBRA Subsidy Limited Usefulness
Excerpt: "Ceridian Benefits Services said the new COBRA subsidy enacted by the U.S. government may have been able to help greater numbers of displaced workers afford health care if it required fewer compliance, paperwork, and recordkeeping responsibilities from employers. . . . The report lists several possible reasons for the low COBRA enrollment rate, including tight deadlines to implement the mandate, the additional accounting burdens presented by the subsidy, and the difficulty of tracking eligibility to only those involuntarily terminated. 'Our data shows that the COBRA enrollment rate under ARRA is less than anticipated and that the unique challenges the law presents to employers may have discouraged participation,' said Colleen O'Reilly, Ceridian's chief author of the report . . . ." (PLANSPONSOR.com; free registration required)
In Hawaii's Health System, Lessons for Health Reform
Excerpt: "Since 1974, Hawaii has required all employers to provide relatively generous health care benefits to any employee who works 20 hours a week or more. If health care legislation passes in Congress, the rest of the country may barely catch up. Lawmakers working on a national health care fix have much to learn from the past 35 years in Hawaii, President Obama's native state. Among the most important lessons is that even small steps to change the system can have lasting effects on health. Another is that, once benefits are entrenched, taking them away becomes almost impossible. There have not been any serious efforts in Hawaii to repeal the law, although cheating by employers may be on the rise." (The New York Times; free registration required)
[Opinion]
Making Sense of High-Deductible Health Plans
Excerpt: "During the open enrollment season for employee benefits, now under way for next year, you are likely to hear a whole lot about Consumer-Directed Health Plans. You, of course, are the consumer. And you're being directed to save your employer a lot of money -- so much so that many employers are offering workers lucrative incentives to make the switch into a consumer-directed plan. Should you bite?" (The New York Times; free registration required)
[Opinion]
Who Says Your Employer Should Choose Your Healthcare Plan?
Excerpt: "Since World War II, the bedrock of the American health care system has been our reliance on the nation's employers to provide health care coverage to its workers. Senator Ron Wyden (D-Ore.) wants to know why this must continue to be the case, given that employers have a tendency to do what is best for them rather than what might be best for their employees while increasing the costs of insurance by limiting competition. Wyden has been pitching the idea of opening up the health insurance exchanges, likely to be created in the reform effort, to all Americans - not just those who are not covered by employer plans. The Senator's argument boils down to the idea that by freeing everyone to participate in the health care exchange, employees would be 'liberated' from their employer chosen health care plans and be free to shop for policies they actually want." (True/Slant)
Opal Events (Advert.)
The Future of Medicare Advantage under the New Administration Opal Events brings together the best and brightest of the Medicare Advantage community to discuss the problems and solutions facing the managed care industry today. Topics to be covered include: logistics of transitioning members from PFFS to a network; MIPPA interpretations; risk-adjusted reimbursement issues; compliance specific to Part D; and HR6331. |
Links to Items on Executive Comp, Benefits in General
[Guidance Overview]2010 Cost-of-Living Adjustments for Retirement, Social Security, and Health Benefits (PDF)
2 pages. (Milliman)
[Guidance Overview]
Cost-of-Living Adjustments for Transportation Benefits, Adoption Assistance, and More
Excerpt: "EBIA Comment: Employers with adoption benefit plans will need to confirm whether their plans automatically apply the latest limits or whether an amendment is needed to recognize the cost-of-living increases. If employers are applying the higher limits, they should communicate the increases to employees. (Transportation plan limits are unchanged for 2010, so employers will not need to consider or communicate any increases for those plans this year.) We note that, although 2010 parameters have been released for Archer MSAs, the Archer MSA pilot program expired at the end of 2007, which means that no new Archer MSAs can be established after that date unless Congress acts to extend the program again. Many who previously had Archer MSAs have switched to HSAs, which are generally more favorable." (Employee Benefits Institute of America)
[Guidance Overview]
Montana Supreme Court Upholds Award in Executive Pension Plan Case
Excerpt: "The Montana Supreme Court has upheld a $21.4 million award in a case filed by 15 retired Montana Power Co. executives whose supplemental retirement benefits were cut off in 2005 without notice. With a purchase agreement between NorthWestern Corp. of South Dakota and Montana Power Co. in 2002, NorthWestern Corp. assumed responsibility for the supplemental pensions offered to some Montana Power employees for taking early retirement. . . . However, after NorthWestern emerged from bankrup.tcy reorganization in late 2004, its board of directors decided to stop paying the supplemental pensions, without telling retirees." (PLANSPONSOR.com; free registration required)
[Guidance Overview]
Many Companies Need to Amend for 162(m) by Year End
Excerpt: "Many companies will need to amend their employment agreements, equity plans and awards, and other incentive plans and agreements by December 31, 2009, to preserve the deductibility of performance-based awards and amounts under Code Section 162(m) [the $1 million limit on public companies ability to deduct compensation payments to its named executive officers] in light of Rev. Rul. 2008-13." (Winston & Strawn)
Physical Exams for Executives: Effective? Inequitable?
Excerpt: "The theory is the extensive series of medical tests and exams are more likely to expose health risks, perhaps even life-threatening ones. Identifying these concerns early helps ensure executives aren't sidelined, thus minimizing chances for leadership disruptions and productivity losses. Considering this bundle of benefits, who would oppose executive physicals?" (Human Resource Executive Online)
Telework Programs Can Provide Myriad Benefits If Companies Get the Appropriate Policies in Place
Excerpt: "Technology has enabled telework programs to evolve beyond images of people dialing up in pajamas to remote workers tapping advanced collaboration tools that increase productivity and ensure business continuity. In some cases, disaster recovery plans have spawned well-structured and documented telework programs. But at the majority of companies, there are no formal telework policies in place, even as more and more workers go mobile. . . . Here are 10 simple steps that can help organizations advance their telework programs from ad hoc to admirable." (Network World)
Commuter Benefit Offerings Increase, According to Survey
Excerpt: "Despite concerns about cutting costs during the down economy, most employers are maintaining -- and in some cases increasing -- tax-free commuter benefits as part of their compensation packages, according to TransitCenter's 2009 Commuter Impact Survey. Eight months after the passage of the American Recovery and Reinvestment Act, which increased the amount of tax-free income employees could use to pay for their mass transit fares from $120/month to $230/month, TransitCenter found that over one-third (35%) of companies surveyed offer a tax-free commuter benefit, according to a press release. The announcement said employees at small businesses have been particularly enthusiastic about the increase in the tax benefit, with TransitCenter showing that 32% of the employees at its existing small business customers who were deducting the monthly maximum of $120 prior to the passage of the bill increased their deductions to above $120 after the bill's passage. The survey found flextime (33%), telecommuting (30%) and Transit (30%) are the top commute-related benefits offered by the surveyed companies. Seventy-two percent of respondents indicated they see tax-free commuter benefits as a way to help reduce their company's carbon footprint." (PLANSPONSOR.com; free registration required)
Employee Ownership Update for October 16, 2009
NCEO Executive Director Corey Rosen reports on the following: the S Corporation ESOP Promotion and Expansion Act of 2009 would provide tax benefits and establish an S corporation employee ownership assistance office at the DOL; the NCEO has developed a list that provides an analysis of employee ownership in the S&P 900 index of large- and mid-cap publicly traded companies; and ESOP companies can get employees and/or outsiders involved at the board level in a non-fiduciary advisory capacity. (National Center for Employee Ownership)
NCEO Provides New Data on Employee Ownership in S&P 900
The NCEO has completed an analysis of employee ownership in the S&P 900 index of large- and mid-cap publicly traded companies. Based on Form 5500 filings, we found 196 of the companies in the index had ESOPs or KSOPs (401(k)-ESOP combinations). Of these, 36 owned 5% or more of the company's outstanding shares. 19 companies had 401(k) plans that owned 5% or more of company shares out of 199 companies that had some company stock in their retirement plans. The data is available for purchase. (National Center for Employee Ownership)
Webcasts and Conferences
COBRA Compliance Workshopin Oregon on November 4, 2009
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
COBRA Workshop
in Oregon on November 5, 2009
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Employee Benefits Half-Day Conference
in Illinois on December 9, 2009
presented by Illinois CPA Society
Free Webcast! Tax-Exempt & Governmental Plan Consultant (TGPC): The Premier Credential for 403(b) and 457 Plan Professionals
Nationwide on October 27, 2009
presented by American Society of Pension Professionals & Actuaries (ASPPA)
Live Q & A Sessions With the IRS - - Defined Benefit and Defined Contribution
Nationwide on November 4, 2009
presented by American Society of Pension Professionals & Actuaries (ASPPA)
Online Enrollment Made Easy! Webinar Demonstrates How To Simplify Complex Benefits Enrollment
Nationwide on October 29, 2009
presented by Benefit Software Inc.
The Key To Improving Employee Morale - Personalized Employee Benefit Statement Webinar
Nationwide on October 29, 2009
presented by Benefit Software Inc.
Webinar: Improve Employee Morale - Produce Personalized Employee Benefit Statements In House On Your Own Computer
Nationwide on November 4, 2009
presented by Benefit Software Inc.
(Click to post your webcast or conference)
Press Releases
U.S. Department of Labor's ERISA Advisory Council Sets November MeetingU.S. Department of Labor, Employee Benefits Security Administration (EBSA)
benefitsCONNECT® and HSA Bank Partner to Simplify Health Savings Account Enrollment
Transcend Technologies Group, Inc.
World's First Global Pension Index Ranks Pension Systems of US and 10 Other Countries
Mercer
The Standard Launches New Retirement Savings Campaigns
The Standard
(Click to post your press release)
Employee Benefits Jobs
Client Services Managerfor AUL/OneAmerica Financial Partners, Inc.
in CA
Deputy / Associate General Counsel
for Lockheed Martin Investment Management Company
in MD
Sales Director
for Goldleaf Partners
in AZ, CO, FL, IA, ID, IL, IN, KS, MO, NE, NM, TX, WI
Client Services Manager
for Garnett-Powers & Associates, Inc.
in CA
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