Health & Welfare Plans Newsletter |
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| November 19, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy | ||
International Foundation of Employee Benefit Plans (Advert.)
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[Guidance Overview]
Year End Update Regarding COBRA Subsidy
Excerpt: "First, Employers are not required to issue any information reporting documents (Forms W-2 or 1099) to involuntarily terminated workers to report the amount of the COBRA subsidy. Employers claiming the credit must, however, maintain documentation to support the credit claimed. Second, Employers must claim the COBRA subsidy using Form 941 and must file such claims on a Form 941 filed for a quarter in the year in which the subsidy was provided to the assistance-eligible individual." (Miller & Chevalier Chartered)
[Guidance Overview]
Employer's Guide to Wellness Programs (PDF)
55 pages. Excerpt: "Wellness initiatives can implicate a variety of federal and state laws. The federal laws at the center of the wellness storm are the Health Insurance Portability and Accountability Act (HIPAA) -- specifically, its nondiscrimination rules -- and the Americans with Disabilities Act (ADA), particularly after its modification by the ADA Amendments Act of 2008. This Employer's Guide explores the compliance landscape of wellness programs in considerable detail, and also adds some practical observations and anecdotal experience." (Lockton Benefits Group)
[Guidance Overview]
Interim Final Regulations on Increased Penalties for HIPAA Violations (PDF)
2 pages. Excerpt: "The interim final regulations take effect on November 30, 2009, and apply to violations occurring on or after February 18, 2009. . . . . The interim final regulations establish the significantly increased penalty structure for HIPAA privacy and security violations. Covered entities should assure that they can demonstrate full compliance with HIPAA requirements to avoid significant liability." (Buck Consultants)
[Guidance Overview]
Clinical Evidence Protocols Rejected Under ERISA Plan's Medical Necessity Standard
Excerpt: "This unpublished opinion from the Second Circuit is instructive in showing that evidence-based protocols, e.g., clinical studies, may exceed what is required to show medical necessity, even under an abuse of discretion standard of review. In this case, the claimant, Richard Durgin, challenged Blue Cross' denial of coverage for a 'standing component' on his motorized wheelchair under BCBS's 'Vermont Freedom Plan'." (Roy Harmon III via Health Plan Law)
[Guidance Overview]
EEOC Revision of 'Equal Employment Opportunity Is the Law' Poster to Address ADA Amendments and GINA
Excerpt: "EBIA Comment: Employers should update their EEOC posters right away in accordance with the applicable options, keeping in mind that special rules apply about where to post such notices. As a practical matter, we recommend using the November 2009 poster, which contains a full description of the current rules and would be less confusing for employees. Note that many of the employment nondiscrimination laws in the EEOC posters provide protections relating to fringe benefits (including group health plans) provided by employers." (Employee Benefits Institute of America)
[Guidance Overview]
Court Refuses to Impose Separate Penalties for Multiple Beneficiaries Affected by a Single COBRA Notice Violation
Excerpt: "EBIA Comment: This appears to be the first reported case in which a court awarded penalties for a timely but deficient election notice. Regarding the question of whether multiple penalties are available, the few courts to address this issue have not been in agreement. Certain other courts have separately calculated and awarded statutory penalties for spouses or dependent children. Still another court, noting that a failure to provide an election notice to a former employee and his spouse constituted two notice violations, concluded that the violations had 'merged' so that a single penalty was appropriate. Notwithstanding that disagreement, this case illustrates an important lesson for plan sponsors. Care should be taken to ensure that election notices conform to the detailed requirements of the DOL's notice regulations because failure to do so creates the potential for large penalty awards in court." (Employee Benefits Institute of America)
What Determines Movement Across Health Care Plans?
Excerpt: "In sum, the authors find that adverse selection is more important than adverse retention in explaining insurance plan dynamics for this pool. However, these effects are modest relative to the impact of changing the mix of employer and employee premiums. If the relative price of a FFS plan were increased considerably, the authors suggest that it is 'entirely possible that an adverse selection death spiral would set in, and the generous FFS plan would ultimately no longer be available.' Pointing to the importance of demographics such as age and sex in explaining both spending differentials and plan mobility decisions, the authors end on 'a note of optimism about the ability to have a competitive choice process for health insurance,' since insurers can easily observe these characteristics and price insurance plans accordingly." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve fulltext)
FCC Seeks Comments on Use of Broadband to Promote Health Care Delivery and Services
Excerpt: "Comments in response to the FCC's public notice on health care issues are due December 4, 2009. The Federal Communications Commission (FCC) has formally requested comments from the health care sector on ways in which broadband and other advanced communications services can be used to promote better health outcomes and the more efficient delivery of health care services. The FCC intends to use these comments to assist in its development of a National Broadband Plan to be presented to Congress in February 2010. Among other things, Congress has directed the FCC to include in its National Broadband Plan 'a plan for the use of broadband infrastructure and services in advancing health care delivery.'" (McDermott Will & Emery)
Employers Continue to Shift Health Costs to Retirees
Excerpt: "Large U.S. employers are continuing to shift significant health coverage costs to retirees or exiting sponsored retiree health benefit programs altogether, according to Towers Perrin's 2010 Retiree Health Care Cost Survey. According to a press release, the survey finds that pre-65 retirees, who are not yet eligible for Medicare, will be hardest hit as they attempt to balance fixed incomes with steady increases in health coverage costs. At the same time, the survey also reveals that many employers are missing significant opportunities to deliver retiree benefit value while saving money and improving program effectiveness." (PLANSPONSOR.com; free registration required)
Insurance Companies Say Mammogram Coverage Won't Change
Excerpt: "Insurance companies contacted by USA TODAY say they will continue paying for annual mammograms amid widespread fears that new breast cancer screening guidelines from a federal task force could lead women to lose coverage for those tests. The guidelines - suggesting that most women under 50 don't need routine mammograms and that women over 50 need them only every other year - were issued Monday night by the U.S. Preventive Services Task Force." (USA TODAY)
West Virginia Senate Committee Votes Down Retiree Health Benefit Proposal
Excerpt: "Legislation to freeze the state's gas tax at its current rate, and to allow cities to close out critically underfunded police and firefighter pension funds are on track for passage, as a brief special legislative session enters its third day Thursday. However, one piece of Gov. Joe Manchin's special session agenda was in trouble Wednesday: a proposal to give school boards and other local governments a one-year reprieve from having to carry massive unfunded liabilities for future retiree health benefits on their financial books. Backers of the legislation (HB405, SB4405) believe it would benefit county school boards that will be selling bond issues next year in order to draw down federal economic stimulus funds for school construction and renovation." (The Charleston Gazette)
Rising Obesity Will Cost U.S. Health Care $344 Billion a Year
Excerpt: "If Americans continue to pack on pounds, obesity will cost the USA about $344 billion in medical-related expenses by 2018, eating up about 21% of health-care spending, says the first analysis to estimate the future medical costs of excess weight. These calculations are based on the projection that in 10 years 43% of Americans adults may be obese, which is roughly 30 or more pounds over a healthy weight, if obesity continues to rise at the current rate. Extra weight increases the risk of diabetes, heart disease and many types of cancer." (USA TODAY)
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Links to Items on Executive Comp, Benefits in General
[Guidance Overview]IRS's 2009 Version of Form 2106 for Employees to Report Deductible Business Expenses
Excerpt: "EBIA Comment: The accountable plan rules allow employees to avoid tax on business expense reimbursements if three principal requirements are met: the expenses have a business connection, they are adequately substantiated, and any excess reimbursements are returned. If accountable plan reimbursements do not fully cover an employee's expenses, the employee may use Form 2106 to take a deduction for the unreimbursed expenses. Expenses may not be deducted, however, unless the employee maintains adequate records to substantiate them. Options like the standard mileage rate and standard meal allowances . . . can significantly simplify those requirements." (Employee Benefits Institute of America)
[Guidance Overview]
Section 409A Reporting Required This Year for Plan Document Violations, Including Outstanding Discounted Options
Excerpt: "We expect there to continue to be very little code Z reporting in 2009 due, in part, to the IRS's correction program in Notice 2008-113 for operational violations. However, one type of Code section 409A income that will need to be reported this year is the section 409A income from any outstanding discounted options. While most discounted options were corrected or exercised during transition, there may still be some outstanding. The spread on any such options outstanding as of the end of 2009 will need to be reported as code Z income. This will require a careful review of Notice 2008-113, as well as the more detailed guidance in the proposed regulations, and consideration of whether and how the employer will obtain the associated withholding taxes in connection with the Code section 409A income." (Miller & Chevalier Chartered)
Code Sections. 409A and 457A Present M&A Issues, Treasury Official Notes
Excerpt: "Practitioners doing due diligence in mergers and acquisitions (M&A) transactions have been among the first to identify issues under Code Secs. 409A and 457A that may require further guidance, observed Treasury Deputy Benefits Tax Counsel Helen Morrison. Speaking on an executive compensation panel at the Practising Law Institute's (PLI) 'Tax Strategies for Corporate Acquisitions, Dispositions, Spin-Offs, Joint Ventures, Financings, Reorganizations & Restructurings 2009,' in New York on October 28, 2009, Morrison reviewed the Treasury's guidance plans under Code Secs. 409A and 457A." (Wolters Kluwer)
As Pensions Were Abandoned, Four Firms Paid Top Executives $49.5M in Benefits
Excerpt: "Top executives at four companies that jettisoned their employee pension plans received $49.5 million in retirement and severance benefits in the years before the companies filed for bankrup.tcy, while retirees saw their benefits cut by as much as two thirds, congressional investigators conclude in a report to be released today. The Government Accountability Office (GAO) reports that pensions at the companies, United Airlines, US Airways, Polaroid and Reliance Insurance, were underfunded by more than $11 billion when the companies turned them over to a government-backed insurance fund. The report says executives at those four companies and six others that abandoned their pension plans took in a total of $350 million in pay and perks in the years leading up to the bankruptcies." (USA TODAY)
Temporary Extension of Unemployment Benefits: Emergency Unemployment Compensation
Excerpt: "The new tier IV benefit may provide up to an additional 6 weeks of benefits if the state unemployment rate is at least 8.5%; however, at this time tier IV benefits are largely symbolic as few workers will qualify for tier IV before the EUC08 program authorization expires. Congress is likely to address the expiring authorization of the EUC08 program (December 26, 2009) in the next few weeks. Bills that currently propose to extend the authorization of the EUC08 program through 2010 include H.R. 3404 and S. 1647." (opencrs.com)
Pressure Mounts for Special Process in Congress to Address Federal Debt, Including Health Care and Retirement Entitlements
Excerpt: "Noting that the regular order in Congress will not be able to deal with the increasing federal debt load, which is driven largely by entitlement programs such as Social Security and Medicare, Senate Budget Committee chair Kent Conrad (N.D.) concluded in a committee hearing on November 10 that a 'special process' is needed to compel legislators to fix the nation's fiscal problems." (Wolters Kluwer)
Webcasts and Conferences
2009 401(k) Testing Issues WebcastNationwide on December 15, 2009
presented by National Institute of Pension Administrators
403(b) vs. 401(k) Plans –Retirement Plan Roadmap Webcast
Nationwide on December 9, 2009
presented by National Institute of Pension Administrators
Confronting Diabetes Crisis through Collaborative Management
in California on December 9, 2009
presented by MCOL
Ethics: What ERPAs and Pension Administrators Need To Know Webcast
Nationwide on December 1, 2009
presented by National Institute of Pension Administrators
(Click to post your webcast or conference)
Press Releases
US Labor Department Withdraws Rules on Investment AdviceU.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Great-West Retirement Services Appoints Regional Sales Director For Arkansas and Oklahoma
Great-West Retirement Services
Transamerica Taps Top Industry Professional to Head TPA Distribution
Transamerica Retirement Services
John Marshall's Kathryn Kennedy Inducted Into American College Of Employee Benefits Counsel
John Marshall Law School, The
In A Tough Year, Employers Hold The Line On Health Benefit Cost Increases
Mercer
The Standard to Offer Managed Account Service to 403(b) Plans
The Standard
Former Mercer Team Launches Independent Executive Compensation Consulting Firm
Compensation Advisory Partners LLC
(Click to post your press release)
Employee Benefits Jobs
Defined Benefit Plan Administratorfor Chicago Suburban Pension Firm
in IL
(Click to post your job opening | View all jobs |
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EmployeeBenefitsJobs.com (Sponsor)
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| Where the best employers find the best candidates! |
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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