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November 16, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy

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[Guidance Overview]
ERISA Plan Documents Time Limitations Are Enforceable

Excerpt: "In two separate cases, U.S. circuit courts buttressed a plan's right to invoke a time limit on lawsuits over benefit denials, by refusing to accept plaintiff arguments that the plans confused them about the starting point of the time limits. In one of the cases . . ., the court adopted the limit from state law (because presumably the plan document lacked one). In the other case, the limit was housed in an ERISA plan document, thereby preempting state law. An increasing number of circuit courts hold that reasonable time limitations in ERISA plan documents are enforceable. In a similar case, Scharff v. Raytheon, 2009 WL 2871229 (9th Cir., Sept. 9, 2009), the 9th U.S. Circuit Court of Appeals enforced an employer's one-year limit on worker lawsuits over benefit denials." (Passion for Subro)


[Guidance Overview]
ERISA TPA That Is Not a Fiduciary Must Face State-Law Breach of Contract Claims by Plan Sponsor

Excerpt: "EBIA Comment: This well-written decision (collecting numerous other cases) is recommended reading for employers and TPAs alike, as it reviews and summarizes many of the most important contractual provisions and legal principles governing the TPA relationship. One lesson to be learned: In the event of contract disputes, TPAs that successfully argue they are not ERISA fiduciaries should be prepared to face alternative claims under state law." (Employee Benefits Institute of America)


[Guidance Overview]
IRS Explanation of How COBRA Premium Subsidy Is Reimbursed When Subsidy Exceeds the Employer's Payroll Tax Liability

Excerpt: "EBIA Comment: According to the letter, this employer didn't have the funds to pay the subsidy and was considering terminating its health plan. Thus, the IRS's suggestion to pay the tax and then recover it as a refund may not have been much help, from a cash flow standpoint. The employer's suggestion that the subsidy payment be reimbursed through the insurer is a practical one, but ARRA's rule that permits reimbursement through the insurer is only available for comparable continuation coverage under state law and is not available for employers, such as this one, that are subject to federal COBRA." (Employee Benefits Institute of America)


What Are Immediate Reforms for Employment-Based Health Insurance Plans?
Excerpt: "At first glance, employers appear to be off the hook from the changes in the House-passed Affordable Health Care for America Act until 2018. Employer-based health plans that are in effect at the end of 2012 have an additional five years to meet the requirements for a qualified health benefits plan, including the essential benefit package requirement, as noted in an earlier post." (Wolters Kluwer)


For Many Ill with the Flu, Staying Home Isn't an Option
Excerpt: "In response to President Obama's declaration of the H1N1 flu as a national emergency and federal health and labor officials urging sick workers to stay home, Rep. George Miller and Rep. Lynn Woolsey introduced the H1N1 Flu Emergency Sick-Leave Bill. It would provide five paid sick days for a worker sent home or directed to stay home by their employer for a contagious illness, such as the H1N1 flu virus. [On November 13] the Los Angeles Times wrote an excellent article on why this legislation is necessary." (U.S. House Committee on Education & Labor)


Congress Considering Extensions of COBRA Premium Subsidy
Excerpt: "There are now three separate bills pending in Congress to expand both the amount of time COBRA continuation coverage may be available as well as to extend the previous COBRA premium subsidy under ARRA." (Gary Kushner's Benefits Blog)


Business Roundtable Backs Some Health Care Reform Provisions in a New Report
Excerpt: "Democrats scored a victory Thursday when a major business group issued a report endorsing some provisions of health care reform legislation in Congress, CQ HealthBeat reports. The report from the Business Roundtable, a group of CEOs from major U.S. companies, said that certain provisions in the bills under consideration by Congress would yield savings for businesses. Those proposals would help reduce health costs by 15% to 20% by 2019, according to the study." (California HealthCare Foundation)


Drug Makers Raise Prices in Face of Health Care Reform
Excerpt: "Even as drug makers promise to support Washington's health care overhaul by shaving $8 billion a year off the nation's drug costs after the legislation takes effect, the industry has been raising its prices at the fastest rate in years. In the last year, the industry has raised the wholesale prices of brand-name prescription drugs by about 9 percent, according to industry analysts." (The New York Times; free registration required)


Medicare Part D and the Financial Protection of the Elderly
Excerpt: "We examine the impact of the expansion of public prescription prescription-drug insurance coverage from Medicare Part D has had on the elderly and find evidence of substantial crowd-out. Using detailed data from the 2002-6 waves of the Medical Expenditure Panel Survey (MEPS), we estimate that the extension of Part D benefits resulted in 75% crowd-out of prescription drug insurance coverage and 33%-50% crowd-out of prescription drug expenditures of those 65 and older. Part D is associated with relatively small reductions in out-of-pocket spending. This suggests that the welfare gain from protecting the elderly from out-of-pocket spending risk through Part D has been small." (Center for Retirement Research at Boston College)


Both Workers and Companies Will Be Paying Higher Health Insurance Premiums in 2010 (PDF)
Excerpt: "This article from BusinessWeek discusses the shifting burden of rising health care costs from employers to employees, and what interventions employers can take to avoid cutting coverage." (BusinessWeek via Towers Perrin)


Republicans Halt Abortion Coverage for Their Workers
Excerpt: "It's tough to argue against coverage of abortion in any health overhaul, when your own insurance policy would pay for it. Now a 'chagrined' Republican National Committee Chairman Michael Steele, as the Associated Press puts it, has ordered a halt to coverage of elective abortions under GOP insurance provided by Cigna. Strange as it may seem, an insurance plan offered by the GOP, staunch opponent of abortion, has covered the procedure since 1991." (National Public Radio)


Path to Alternative Health Therapies Is Littered With Obstacles
Excerpt: "[M]y purpose here is to provide financial guidance for those who, like Ms. Klenke, [who was told five years ago that she had pancreatic cancer and was given three months to live,] choose to take the medical path less traveled. Besides learning the ins and outs of complementary and alternative medicine, Ms. Klenke has also become something of an expert on how to pay for these treatments. With the help of the Block center and her own research and persistence, she persuaded her insurance company to cover her entire course of treatment and the follow-up treatments that she continues to pursue, as she puts it, 'to boost my immune system and keep me cancer-free.' So-called complementary and alternative medicine -- or CAM, as it is known by practitioners and adherents -- is becoming more mainstream every day." (The New York Times; free registration required)


10 Ways to Cut Health Care Costs Right Now
Excerpt: "BusinessWeek has looked at 10 such attempts to lower health-care costs and improve patient care. These innovations cannot have the same impact as a comprehensive federal bill. Nor are the gains from private efforts assured. . . . Still, companies and hospitals are taking the initiative, and some results are in plain view. 'Three years ago, professional medical organizations were very reluctant to talk about inappropriate treatments. . . . [T]he American College of Cardiology recently published several standards of care for angioplasty and other common treatments, aimed at preventing unnecessary and costly interventions. Given that about one in six U.S. health-care dollars is currently spent on cardiovascular procedures, 'that's a big step forward,' . . . ." (Yahoo!News)


[Opinion]
Getting to the Real Issues in Health Care Reform

Excerpt: "If current congressional health care reform proposals become law it would be only the start of the reform process, according to a policy perspective by HSC President Paul B. Ginsburg, Ph.D., published online on Nov. 12 by the New England Journal of Medicine." (Center for Studying Health System Change)


[Opinion]
Protect Hawaii Health Care from ERISA

Excerpt: "The health care reform package approved by the U.S. House last week may bear little similarity to the Senate version, if one emerges. In its final form, a reform measure should expand Hawaii's health care system, but separate federal and state legislation may be needed to prevent Hawaii's system from being dismantled as a result. Three years after Hawaii's Prepaid Health Care Act was enacted in 1974, Standard Oil won a court ruling that invalidated the act as a violation of the federal Employment Retirement Income Security Act. Hawaii's congressional delegation saved the day by securing an exemption from ERISA through legislation." (starbulletin.com)


[Opinion]
ERISA Preemption Redux

Excerpt: "In a recent post, Mark Hall raises an interesting issue regarding ERISA preemption and the proposal in HR 3962, the recently enacted House of Representatives' health reform bill. Mark suggests that: '1) for insurance sold outside of the exchange, ERISA law and its preemption remains the same; 2) for insurance sold inside the exchange, ERISA preemption is rolled back, and state law applies - even if the coverage might be employer-sponsored in some fashion.' In response, attorney Richard Johnston counters that 'HR 3962 preserves ERISA's malignant scheme.' As Mr. Johnston notes, he is a plaintiff's attorney and can be expected to characterize ERISA as malignant. (As my previous post on ERISA preemption suggests, I largely agree with Mr. Johnston's depiction.) But Mr. Johnston goes further and seems to suggest that Mark's second point is not correct and that ERISA preemption remains in force. Who's right? As Mark correctly notes, 'one can't be sure.' This is, after all, ERISA preemption where nothing is what it appears to be -- sort of the Alice in Wonderland of health law! My own take is closer to Mr. Johnston's." (O'Neill Institute for National and Global Health Law)


[Opinion]
Single-Payer Health Care: Simple, Fair, and Affordable

Excerpt: "Why is a single-payer health care system the best and only realistic solution to the crisis of the uninsured and underinsured? The answer is simplicity, inclusiveness (everyone is in, no one is left out), breadth of service, equality, preservation of the current private delivery system, and, perhaps most of all, affordability. Multiple state and federal studies show that by eliminating the overhead associated with private insurance and negotiating prices with drug companies, it is possible to offer lifetime coverage to everyone in the country for an amount similar to that which we currently pay for coverage of only part of our population (5). Health insurance would be uncoupled from employment, so that individuals who lost or changed jobs would keep the same coverage, regardless of age, preexisting conditions, or state of residence. No one would be without health insurance, accomplishing in the simplest way possible the overall goal of health reform -- improving access to health care for all Americans." (American Journal of Respiratory and Critical Care Medicine via Physicians for a National Health Program)



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Links to Items on Executive Comp, Benefits in General

[Guidance Overview]
ERISA Section 510: The Environment Is Ripe for Claims

Excerpt: "ERISA §510 makes it unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary for exercising any right to which he is entitled or may become entitled under an ERISA plan. It also makes it unlawful to discharge, fine, suspend, expel, or discriminate against any person because he has given information or has or is about to testify in any ERISA-related inquiry or proceeding. With layoffs continuing into the second half of the year, the setting is ripe for an increase in claims by employees who believe their discharge was motivated by their employers' desire to reduce or avoid benefit plan expenses. And §510 claims are not necessarily made in a vacuum. They can come as part of a general wrongful discharge claim, age discrimination claim, or a whistleblower action where the employee also alleges the employer attempted to interfere with ERISA-protected rights." (Tax Management Inc.)


SEC Says No More Lenience on Pay Disclosure
Excerpt: "After three years of reviewing companies' pay disclosures, the Securities and Exchange Commission appears to be running out of patience. Since late 2006, when the SEC revamped its guidelines for disclosing information on the compensation of top executives, the regulator has been sending out comment letters to companies whose disclosures they consider insufficient. These companies have been asked to do a better job next time or to provide additional information in a response letter." (CFO.com)


The Impact of Women's Growing Participation in the Workforce
Hearing held November 13, 2009, on The Shriver Report: A Woman's Nation Changes Everything. (U.S. House Committee on Education & Labor)


Sunoco Will Freeze Defined Benefit Pension Plans for Most Workers and Phase Out Medical Benefits for Most Retirees
Excerpt: "Sunoco spokesman Thomas P. Golembeski told the Philadelphia Inquirer the DB cutback would be accompanied by unspecified 401(k) enhancements. The company made the announcement as it reported its third-quarter financial results showing a $312-million loss, according to a Sunoco news release. Golembeski said Sunoco deliberately delayed the benefit changes for eight months to allow employees enough time for proper planning including 'individual decisions regarding retirement.'" (PLANSPONSOR.com; free registration required)


Employee Benefits 2009 Year-End Checklist, Year in Review, and Planning Ahead for 2010 (PDF)
9 pages. Excerpt: "In addition to the items on the legislative agenda, both the Department of Labor and the Internal Revenue Service have important guidance projects still awaiting release, some or all of which may be issued in 2010. Employers should stay tuned for news about the following items in particular: Pending Department of Labor guidance requiring enhanced disclosure to plan participants about benefit plan administrative costs and investment expenses, and enhanced disclosure obligations from plan service providers to plan fiduciaries. Department of Labor regulations governing the provision of investment advice to retirement plan participants. Congress is also considering legislation in this regard. IRS regulations governing cafeteria plans and flexible spending accounts, particularly with respect to compliance with non-discrimination rules." (Harter Secrest & Emery LLP)



Webcasts and Conferences

CT NIPA: ERISA Washington Update with Speaker Sal Tripodi
in Connecticut on December 3, 2009
presented by National Institute of Pension Administrators-CT Chapter

(Click to post your webcast or conference)

Employee Benefits Jobs

401(k) Plan Administrator
for Capital Retirement Plan Services, Inc.
in PA

Director, Marketing
for New York Life Retirement Plan Services
in MA

Vice President, New Business Marketing.
for New York Life Retirement Plan Services
in MA

Project Leader, Conversions
for New York Life Retirement Plan Services
in MA

Defined Benefit Administrator
for Central New Jersey Firm
in NJ

Assistant Administrator
for Central New Jersey Firm
in NJ

Defined Contribution Administrator
for Central New Jersey Firm
in NJ

Paralegal Attorney
for Vaccaro & Prisco, LLP
in NY

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