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Health & Welfare Plans Newsletter
December 8, 2009 
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Employee Benefits Institute of America (EBIA) (Advert.)
EBIA's Recorded Web Seminars - Quality and Convenience! We know that employee benefits professionals have many demands on their time. To help ease the time-crunch, EBIA's recorded web seminars are available 24/7--any time and any place you have an internet connection. What's more, when you purchase a recorded web seminar from EBIA, you and your co-workers can view it as many times as you wish for 60 days after purchase! Visit our website and you can search for seminars by topic, experience level, or key word. |
[Official Guidance]
Text of Proposed Prohibited Transaction Exemption for Ford Motor Company's VEBA for Union Retiree Healthcare Benefits (PDF)
18 pages. Excerpt: "Generally, the Applicant seeks exemptive relief for three sets of transactions. The first set of transactions involves the acquisition, holding, and disposition of the employer securities described above by the Ford VEBA Plan. The second set relates to the exercise by Ford or the Ford VEBA Plan of certain rights and obligations pursuant to the Securityholder and Registration Rights Agreement. Finally, the third set of transactions involves those transactions between Ford and the Ford VEBA Plan that may occur as a result of the transition of responsibility to provide benefits from Ford to the Ford VEBA Plan under the 2009 Settlement Agreement, such as possible extensions of credit, reimbursement of expenses, or the mistaken deposits of assets into the Ford VEBA Plan. With respect to the three sets of transactions described above, the Applicant states that the transactions provide the only feasible method of funding health care benefits for retirees and their beneficiaries while preserving the financial health of Ford. The UAW and Class Counsel have joined in supporting this request for exemptive relief described fully herein." (Employee Benefits Security Administration, U.S. Department of Labor)
[Guidance Overview]
COBRA Subsidy May Be Extended Before Year End
Excerpt: "While there is an interest to extend the COBRA subsidy program among lawmakers, it is not clear exactly how the program will be extended. There is some discussion about extending the period of eligibility beyond December 31, 2009, as well as expanding the nine-month period of the subsidy. While the uncertainty regarding a COBRA subsidy extension remains, employers are faced with certain choices that must be made before year end." (Seyfarth Shaw LLP)
[Guidance Overview]
Michelle's Law Leave
Excerpt: "Michelle's Law, passed last year, requires both self-funded and insured group health plans to provide up to one year of coverage for students who are on medically necessary leaves of absence from postsecondary educational institutions. The law is effective for plan years beginning on or after October 9, 2009, making it effective January 1, 2010 for calendar year plans. Employers should review their plans to ensure compliance for the upcoming plan year." (Dorsey & Whitney LLP)
[Guidance Overview]
Disability Plan's Interpretation of Earnings to Exclude Commissions Upheld as Reasonable
Excerpt: "EBIA Comment: The result in this case highlights the importance of giving discretionary authority to those who decide benefit appeals. Without such discretion, the court would have had to examine more closely the company's premises and reasoning, and it might have been willing to accept the employee's simple, literal reading of the plan. (The court noted that, given the plan's design, 'probably nothing would prevent odd results in some cases.')" (Employee Benefits Institute of America)
[Guidance Overview]
Employer's Hand-Delivery Process for Distributing SPDs Was Sufficient Under ERISA
Excerpt: "EBIA Comment: Although the DOL regulations specifically approve of 'in-hand delivery' of SPDs at the worksite, it can be difficult as a practical matter to maintain the business records necessary to show that an SPD was furnished as required. This employer was able to provide a written copy of its process for distributing SPDs (along with an employee list) and detailed statements from its employees who were responsible for SPD delivery. But if key employees have left, it may be difficult to establish (to the satisfaction of a court) what distribution method was actually used. Note also that records evidencing an employer's SPD distribution processes will need to be retained for the applicable statute of limitations period for ERISA benefits claims; the periods vary by state and can be quite long (6-10 years is not uncommon)." (Employee Benefits Institute of America)
The Secrets of Massachusetts' Success: Why 97 Percent of State Residents Have Health Coverage
Excerpt: "Less than two years after Massachusetts' 2006 reform law was implemented, 2.6 percent of residents were uninsured -- the lowest proportion ever recorded in an American state. The state's individual mandate alone does not explain this result, since it is not enforced against adults with incomes at or below 150 percent FPL or children. During a multi-day site visit, researchers identified several factors contributing to Massachusetts' high enrollment, including an intensive marketing campaign; use of data to establish subsidy eligibility for newly-insured residents; an integrated eligibility system serving multiple subsidy programs with a single application; and healthcare provider/community-based organization-driven application assistance." (Urban Institute)
Retirees' Cost Burden for Retiree Medical Benefits Is Expanding, According to Survey
Excerpt: "Large U.S. employers continue to shift significant health coverage costs to retirees or cease sponsoring retiree health benefit programs altogether, according to Towers Perrin's 2010 Retiree Health Care Cost Survey. At the same time, the survey also revealed that many employers are missing significant opportunities to deliver retiree benefit value while saving money and improving program effectiveness. For the survey, Towers Perrin obtained responses from 550 of the largest employers covering 10.3 million employees and dependents." (Wolters Kluwer)
Employers Would Reduce Benefits to Avoid Tax in Senate Health Bill, According to Survey
Excerpt: "Nearly two-thirds of employers would reduce health benefits to avoid paying an excise tax in the Senate version of health reform legislation, a Mercer survey finds. Mercer estimates that 20 percent of employers offer health coverage that would be deemed 'too generous' under the proposed Patient Protection and Affordable Care Act and thus be subject to the bill's 40 percent nondeductible tax on the excess value." (Mercer LLC)
State Labor Officials and Worker Advocates Appeal for Quick Congressional Action to Extend Emergency Jobless Benefits and to Renew Health Insurance Subsidies
Excerpt: "Prolonged unemployment insurance, passed this year in the stimulus act, expires this month, and an estimated one million workers will see benefits end in January if Congress does not act. The health subsidies, under which the federal government pays 65 percent of insurance costs under Cobra for up to nine months, have expired and are not available to the newly unemployed. Renewal this month of both forms of aid is 'a moral imperative,' Sandi Vito, the secretary of the Pennsylvania Department of Labor and Industry, said Monday at a news conference here. Ms. Vito said the extensions were needed 'through at least the end of 2010 as a bridge for people.'" (The New York Times; free registration required)
[Opinion]
State of the Third-Party Administrator Industry & Forecast for 2010
Excerpt: "NEW SERVICES & MARKETS: TPAs really shine when it comes to helping clients design, implement, and administer innovative plans & services. This is the place where the biggest evolution has been going on. Wellness is booming in a wide variety of formats. Interest in Consumer-Directed Health Plans (CDHP, such as HSAs) is expanding, as are ways to help plan participants be better consumers and maximize the value of Consumer-Directed and other flexibility. Every day seems to bring new services TPAs can offer their clients to not only maximize efficiency for plan administration & expenditures, but TPAs are also helping plans have more value for the new generations in the workforce." (Society of Professional Benefit Administrators)
ALM (Advert.)
Complete Benefits Law Guidance from Law Journal Press The nation's workforce and health care system are constantly evolving and so are the legal issues. Law Journal Press helps you handle any benefits law question with up-to-date, authoritative books on all aspects of the field. Get legal and practical advice from leading experts on everything from COBRA to ERISA, "contingent" employees to family and medical leave, and more. Browse our product listings for detailed information and special offers. |
Links to Items on Executive Comp, Benefits in General
[Guidance Overview]Correct Code Section 409A Violations by December 31, 2009
Excerpt: "Employers have until December 31, 2009 to take advantage of opportunities to avoid the 20% and other penalty taxes that otherwise would be imposed by Section 409A of the Internal Revenue Code. We recommend employers review all their plans and agreements that are subject to Section 409A, including nonqualified deferred compensation, severance, change of control plans and agreements, and employment agreements." (Haynes and Boone LLP)
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