Health & Welfare Plans Newsletter
January 21, 2010

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Should House Democrats Decide to Pass the Senate Bill on Health-Care Reform Intact, What Would the Cost Be for Employers?
Excerpt: "Should that Senate bill pass unmodified and become law, the cost of employer-provided health care for large companies would shoot up an additional 7% to 10% per year (beyond current increases) over the next decade, for a grand total of between $62.7 billion and $89.2 billion, estimates the HR Policy Assn., a group of human-resource executives at the country's largest 300 or so firms." (CFO Publishing Corporation)

Employer 'Pay-or-Play' Requirements in Health Care Reform Bills Portend Inequitable Results for Workers
Excerpt: "The House and Senate bills each include the following 'assessments' or 'penalties' on employers that do not offer their workers health insurance: House[:] Effective Jan. 1, 2013, employers with annual payrolls exceeding $750,000 would be assessed a tax of 8% of their payroll. Senate[:] Effective Jan. 1, 2010, employers that have at least one full-time worker who receives a tax credit for health insurance obtained through a health insurance exchange would have to pay a tax of either $750 for each full-time employee or $3,000 for each full-time employee who is receiving the tax credit." (Wolters Kluwer)

White House Health Reform Concessions to Unions Panned
Excerpt: "President Obama struck a deal with labor leaders and others Jan. 14 to increase the thresholds of the proposed 40% health care plan excise tax for family plans valued at $23,000 to $24,000 and individual plans from $8,500 to $8,900, delay the effective date of the tax by five years for collectively bargained plans and public employers, and make dental and vision plans exempt starting in 2015. In return, the labor leaders agreed to support the legislation. EBA asked our health reform panelists to weigh in on the situation." (Employee Benefit Adviser; free registration required)

Health Care Costs and U.S. Competitiveness
Excerpt: "Some economists say these ballooning dollar figures place a heavy burden on companies doing business in the United States and can put them at a substantial competitive disadvantage in the international marketplace. For large multinational corporations, footing healthcare costs presents an enormous expense." (Council on Foreign Relations)

Does the Congressional Budget Office Underestimate Savings from Reform? A Review of the Historical Record
Excerpt: "This study examines CBO scoring of major reform legislation enacted during each of the past three decades, including the prospective payment system for hospitals in the 1980s, the Balanced Budget Act of the 1990s, and the Medicare Modernization Act of 2003. In contrasting actual spending with predicted spending, CBO, in all three cases, substantially underestimated savings from these reform measures." (The Commonwealth Fund)

State Health Care Legislation for 2010
Excerpt: "The chart . . . provides a snapshot of state bills introduced in 2010 related to expanding coverage and increasing access to health care." (National Conference of State Legislatures)

New Article Analyzes Proposed Levies Under Health Care Reform
Excerpt: "Rodney P. Mock and Jeffrey Tolin, both of California Polytechnic State University, have published an article entitled 'Purchase or Else: The Health Insurance 'Tax'' in Tax Notes. The article examines the nature of the tax or penalty imposed on taxpayers who fail to purchase health care coverage meeting proposed criteria of acceptability." (Roy Harmon III via Health Plan Law)

What Employers Want from Health Insurers in 2010
Excerpt: "This report addresses how employers' satisfaction with health insurers has eroded over the past year. Employers' expectations of their health insurers continue to change. While many studies examine the relationship between employees and their employer-sponsored benefits, less is known about employers and what they want from health insurance carriers. Employers want insurers to evolve their consultative relationship by helping them engage their employees, manage costs and cut waste." (PricewaterhouseCoopers)

Evidence That Value-Based Insurance Can Be Effective
Excerpt: "Value-based insurance design reduces patient copayments to encourage the use of health care services of high clinical value. As employers face constant pressure to control health care costs, this type of coverage has received much attention as a cost-savings device. This paper's examination of one value-based insurance design program found that the program led to reduced use of nondrug health care services, offsetting the costs associated with additional use of drugs encouraged by the program. The findings suggest that value-based insurance design programs do not increase total system wide medical spending." (Health Affairs)

IRS Updates Website Info on COBRA Subsidy Reimbursement
Excerpt: "The Internal Revenue Service has updated its Website to answer questions on the extension of COBRA premium subsidies for former employees." (

Despite Congressional Political Shift, Employers Insist They Want Health Care Reform

Excerpt: "'What we've always wished for is a sensible, practical, bipartisan health reform bill,' said Paul Dennett, senior vice president for health policy at the American Benefits Council. 'This may be the wake-up call that nudges the legislation in the right direction.'" (Workforce Management; free registration required)



The Defined Contribution Plans Summit taking place February 24-25, 2010 in New York, NY is the perfect platform for corporate and public DC plans to hear from their plan sponsor peers, leading policymakers and top investment executives. Attendees will share ideas through tailored interactive roundtables, benchmark their DC plans through case studies, and network with fellow plan sponsors and investment professionals. For more information please visit –


Executive Compensation; Benefits in General

Making ESOP Debt Payments with Dividends or S Corporation Distributions
In her latest column on the NCEO Web site, ESOP expert Nancy Dittmer discusses making employee stock ownership plan (ESOP) debt payments with dividends or S corporation distributions. (National Center for Employee Ownership)

More Bad News for Employers Under the IRS Notice on Correction Procedures

Excerpt: "As I noted . . ., the IRS issued Notice 2010-6, Relief and Guidance on Corrections of Certain Failures of a Nonqualified Deferred Compensation Plan to Comply with § 409A(a) (the 'Notice'). Importantly, the Notice does much more than just offer correction methods. It contains numerous examples of situations that the 409A final regulations do not clearly address - and provides for significant penalties for many plan provisions that a normal person might view as a foot fault." (Michael Melbinger via Winston & Strawn LLP)

Webcasts and Conferences

COBRA Premium Reduction Extension Provisions Compliance Assistance Webcast
Nationwide on January 22, 2010
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Roth IRA Conversions
Nationwide on February 25, 2010
presented by ABA Joint Committee on Employee Benefits

Workshop with Sal Tripodi
in California on February 17, 2010
presented by National Institute of Pension Administrators - San Francisco Bay Area Chapter

(Click to post your webcast or conference)

Press Releases

COBRA Subsidy Eligibility Period Extended Through February; 15-Months Subsidy Now Available to Those Who Qualify
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

US Labor Department Announces Updated Model Notices and Webcast on Extension of COBRA Subsidy
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

U.S. Department of Labor Sues Fiduciaries of Former Raleigh, NC-based Human Resources Company to Restore Employee Health and 401(k) Assets
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

U.S. Department of Labor Sues Atlanta Engineering Company to Bar Owners from Serving as Employee Benefit Plan Fiduciaries
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

U.S. Labor Department Investigation Results in Defunct Memphis, Tenn., Heating and Air Conditioning Maintenance Company Being Removed as Plan Fiduciary
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

U.S. Department of Labor Sues Defunct Dallas, Pa., Company and Its Owner to Recover Benefit Plan Assets
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

U.S. Department of Labor Sues Defunct Lewes, Del., Company to Protect Participants of Abandoned Retirement Plan
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Great-West Appoints Florida Regional Sales Director
Great-West Retirement Services

BrightScope Unveils Personal 401k Fee Report

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Newly Posted Employee Benefits Jobs

Wellness Consultant
for Northwestern Benefit Corporation of Georgia
in GA

Pension Plan Operations Representative
for Transamerica Retirement Services
in CA

In-House Employee Benefits Attorney
for Providus
in TX

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