Health & Welfare Plans Newsletter
January 12, 2010

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[Guidance Overview]
IRS Clarification of Timing of COBRA Subsidy Payroll Tax Credits

Excerpt: "The Internal Revenue Service confirmed that employers receiving a 35% COBRA premium payment in 2010 for subsidized COBRA coverage provided in 2009 must take a payroll tax credit in 2010, not 2009. The employer 65% COBRA subsidy can be claimed on the quarterly payroll tax return (Form 941) for the quarter in which the premium is received, or later in the same calendar year. On the other hand, if an employer chooses to reduce its payroll tax deposits in the quarter when the 35% COBRA premium is received, that quarter's Form 941 filing must reflect the credit." (Mercer LLC)

[Guidance Overview]
IRS Delay of Debit Card Rules for Transit Benefits

Excerpt: "IRS rules allowing automatic substantiation of tax-free transit expenses paid by employees using smartcards or debit cards will take effect Jan. 1, 2011. Despite the delayed effective date -- the third since 2006 -- employers may rely on the rules through 2010. Transit expenses paid with cards other than the smartcards and debit cards allowed under the rules must be substantiated to qualify as tax-free." (Mercer LLC)

Medicare Traps for the Still-Working 65-Year-Old
Excerpt: "Making the transition from an employer health plan to Medicare by way of COBRA coverage can be problematic. Each decision point along the way involves is subject to very specific deadlines. Miss one and you may find yourself in health insurance limbo." (Morningstar)

Employing E-Health: The Impact of Electronic Health Records on the Workplace
Excerpt: "The potential effects of health information computerization on the workplace are numerous. Employers may obtain and process EHRs for purposes of fitness for duty determinations, reasonable accommodations, workers' compensation, and payment of medical claims. Digitized records could enable employers to obtain unprecedented amounts of information in response to lawful requests and thus intensify workers' concerns about privacy and discrimination." (Social Science Research Network)

The Comprehensive Congressional Health Reform Bills of 2009: Health Insurance, Delivery System, and Financing Provisions, Updated January 2010
Excerpt: "This report provides an overview of key provisions of the two comprehensive health reform bills passed by the House of Representatives and the Senate. While the general frameworks of the bills are very similar -- both include provisions intended to improve and expand coverage and all would create a comprehensive and coherent strategy for improving health care quality -- they differ in a few key respects. Most important, the Senate bill does not include a requirement that employers offer coverage or create a public health insurance plan; the House bill includes both features." (The Commonwealth Fund)

Governance Implications of Health Care Reform (PDF)
Excerpt: "With the impending passage of health care reform, it becomes important to consider the likely governance-related implications for hospitals and health systems. The ultimate legislation will arguably have the most significant impact on the health care financing system since the enactment of Medicare in 1965." (Law360 via McDermott Will & Emery)

CBO Letter to the Honorable Olympia Snowe: Estimated Premiums for 'Bronze' Coverage Under the Patient Protection and Affordable Care Act (PDF)
3 pages. Excerpt: "In general, . . . small employers would provide plans with a greater amount of coverage than Bronze plans, as they do under current law. The average premiums in 2016 for plans provided by small employers cited in the recent analysis by CBO and JCT -- about $7,800 for single policies and $19,200 for family policies -- differ from the amounts cited above for individual Bronze policies primarily because the average actuarial value of coverage purchased by small employers would be substantially higher than the Bronze level (about 85 percent, CBO estimates, rather than 60 percent). The premiums for specific employers could deviate significantly from those averages for various reasons." (U.S. Congressional Budget Office)

In Health Reform, Employers Must Report Costs; FSA Distributions Limited to Prescribed Drugs
Excerpt: "As the House and the Senate discuss their differing health reform proposals, Spencer's Benefits Reports continues a series examining health reform provisions that would affect employer-sponsored health plans and would take effect soon after enactment of any legislation." (Wolters Kluwer)

An Integrated Approach to Solving the Caregiver Conundrum for 'Real' Workers
Excerpt: "This Paper is the second part of a project aimed at ending caregiver discrimination for all workers who are struggling to balance work and family. In the first part of the project, I argued that the communitarian theory supports the broad reform I envisioned, and in this piece, I articulate that vision. This reform project utilizes a synergy of solutions, taking a comprehensive and creative approach to ending the caregiver conundrum for all working caregivers." (Social Science Research Network)

Mercer Encourages Employers to Offer Health Care Claims Advocacy Services for Its Employee Plan Participants
Excerpt: "According to a Mercer news release, offering some type of health care advocacy service as part of an employer's benefits package has been gaining momentum - the 2009 Mercer National Survey of Employer-Sponsored Health Plans found that 53% of large employers . . . stated that they offer health advocacy services as part of their benefits package, up from 47% in 2008." (

Brand-Name Prescription Drug Pricing: Lack of Therapeutically Equivalent Drugs and Limited Competition May Contribute to Extraordinary Price Increases
40 pages. Excerpt: "GAO was asked to examine extraordinary price increases for brand-name prescription drugs. Specifically, GAO examined the: (1) frequency of extraordinary price increases for brand-name prescription drugs from 2000 to 2008, (2) characteristics of the brand-name prescription drugs that had extraordinary price increases, and (3) factors that contributed to the extraordinary price increases experienced by these brand-name prescription drugs." (U.S. Government Accountability Office)

CLASS Act Momentum Sparks LTC Plan Industry Fears
Excerpt: "Concern is mounting about the worksite market impact of a proposed government-run plan to provide in-home, long-term care (LTC) assistance to the elderly and disabled that survived a flurry of amendments to both the House and Senate health care reform bills." (Employee Benefit News; free registration required)

Commuter Benefits Remain on the Benefits Hot List
Excerpt: "According to TransitCenter's fourth annual Commuter Impact Survey, 35% of employers offered tax-free commuter benefits in 2009. Among large companies, this number rises sharply to 58%." (Employee Benefit News; free registration required)

Health Reform Provisions that Could Impact Consumer-Driven Health Plans (PDF)

Excerpt: "The health care reform legislation making its way through the 111th Congress will likely have a modest impact on consumer-driven health plans and their associated health care accounts (i.e., FSAs, HRAs, and HSAs). Earlier proposals that would have eliminated some of these options (particularly FSAs and HRAs) did not survive the legislative process. [The target page] is a description of the remaining provisions that may be included in the final health reform legislation." (Council for Affordable Health Insurance)

Reforming Health Care: What Has the 'Public Plan Option' Got To Do With It? Instead: Think ERISA

Excerpt: "[T]he pension model [of federal preemption by ERISA of state laws regulating pension plans] would be no less effective with respect to the delivery of health care than it has proved to be in the regulation of pension benefits under ERISA, and completely refutes the claimed need for a 'competing' government plan option, while avoiding all the bureaucratic baggage and financial risks inherent in such a radical option. Why stray so far from the traditional approach of our 'more perfect Union?'" (Alvin D. Lurie on

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Executive Compensation; Benefits in General

[Guidance Overview]
IRS Document Corrections Program for Deferred Compensation Plans Under Code Section 409A (PDF)

10 pages. Excerpt: "Importantly, the Notice provides a relatively generous initial timeline to correct document errors, setting the transitional deadline for fixing document failures at December 31, 2010, which is extremely valuable in that it substantially limits the income inclusion and additional taxes that might otherwise apply." (Morgan, Lewis & Bockius LLP)

IRS Requirements for Using IRS Forms or Acceptable Substitutes to File 2009 Information Returns
Excerpt: "The IRS has released Revenue Procedure 2009-49 setting forth the requirements for using IRS forms to file 2009 information returns, for preparing acceptable substitutes for the official forms, and for using official forms or acceptable substitute forms to furnish information to recipients. The procedures cover Forms 1096, 1099 series, 5498 series, and 1042-S. Further, the procedures outline the official form specifications for a form or statement to be acceptable." (Wolters Kluwer)

Webcasts and Conferences

"EFAST2: A New Decade in Plan Reporting" Web Seminar
Nationwide on February 2, 2010
presented by SunGard Relius

"EFAST2: A New Decade of Plan Reporting" Web Seminar
Nationwide on January 26, 2010
presented by SunGard Relius

"Schedule C: C is for Confusion" Web Seminar
Nationwide on January 28, 2010
presented by SunGard Relius

"Schedule C: C is for Confusion" Web Seminar
Nationwide on February 4, 2010
presented by SunGard Relius

Future Care 2010 Web Summit
in California on January 21, 2010
presented by MCOL

Improving Employee Morale and Retaining Key Employees During A Recession (No-Cost Webinar)
Nationwide on January 14, 2010
presented by Benefit Software Inc.

Integrated Delivery Systems 2010: Insights from Leaders
in California on February 23, 2010
presented by MCOL

Streamline Employee Benefit Enrollment: No-Cost Webinar Demonstrates How To Simplify Your Enrollment and Lower Costs
Nationwide on January 14, 2010
presented by Benefit Software Inc.

You Can Change The Way Your Employees Think About Their Benefits With One Simple Statement (No-Cost Webinar)
Nationwide on January 13, 2010
presented by Benefit Software Inc.

(Click to post your webcast or conference)

Press Releases

PBGC Protects Pensions at Hartmarx Corporation
Pension Benefit Guaranty Corporation (PBGC)

Employee Benefits Security Administration Issues Additional Guidance on Extension of COBRA Premium Subsidy
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Great-West Retirement Services Adds Six More Sales Staff In Step To Further Support Its Adviser And TPA Channels
Great-West Retirement Services

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Newly Posted Employee Benefits Jobs

Director, Strategic Sales Support-Institutional Solutions
for Prudential
in CT, NJ

Retirement Plan Administrator / Consultant – Entry Level
for Madison Pension Services, Inc.
in NY

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