Health & Welfare Plans Newsletter

February 1, 2010

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COBRA Premium Subsidy Extended: What Needs Immediate Attention

COBRA Premium Subsidy Extended: What Needs Immediate Attention

The Department of Defense Appropriations Act for 2010 extends the COBRA premium subsidies that were enacted last year in the American Recovery and Reinvestment Act. The new law is retroactive (as if included in the ARRA) and will require immediate attention from plan sponsors and their COBRA administrators. The International Foundation’s e-learning course will focus on what plan sponsors need to do to administer those requirements.

International Foundation of Employee Benefit Plans

[Guidance Overview]
Podcast: When Does Additional Leave Beyond FMLA Need to be Granted?
Excerpt: "In the January FMLA Insights podcast, one of the most common inquiries they receive from their clients is how they should handle a situation where an employee has exhausted 12 weeks of FMLA leave and now seeks additional leave (or where his/her return date is still uncertain). [The firm of Franczek Radelet] advises employers to individually assess the employee's need for leave and any return to work issues before deciding to terminate employment. In the podcast, they offer practical tips on how to handle these situations." (Workplace Prof Blog)

[Guidance Overview]
Health Savings Accounts Information: Updated for 2010 (PDF)
3 pages. Two-page chart with questions and answers on HSAs. (Council for Affordable Health Insurance)

Gains from Shifting Away from Employer-Sponsored Health Insurance and Toward an Individual Exchange
Excerpt: "We estimate how much employees would be willing to pay for the right to apply their employer subsidy to the plan of their choosing. We make use of a proprietary dataset containing information on plan offerings and enrollment for 800+ large employers between 1998 and 2006 . . . ." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve fulltext)

Genetic Testing: An Ever-Evolving Health Field Raises Complex Coverage Issues (PDF)
4 pages. Excerpt: "Since the 1990s, there has been explosive growth in both the number of genetic tests and the costs associated with them. As part of their constant efforts to manage their health plan costs, trustees of multiemployer health funds need to be aware of these developments so they can periodically revisit their plans' coverage for genetic testing to ensure that it has medical value. This NewsLetter presents an overview of the issues and options." (The Segal Group, Inc.)

State Legislation Opposing Certain Health Reforms, 2009-2010
Excerpt: "As part of state-based responses to federal health reform legislation, individual members of at least 29 state legislatures are using the legislative process to seek to limit, alter or oppose selected state or federal actions, including single-payer provisions and mandates that would require purchase of insurance. In general the measures seek to make or keep health insurance optional, and allow people to purchase any type of coverage they may choose. The individual state language varies." (National Conference of State Legislatures)

As Health Care Reform Starts and Stops, Companies Face Difficult Decisions About Where to Invest Now
Excerpt: "As health-care reform moves forward, many CFOs face a dilemma: should they continue to invest in programs that might rein in costs over the long term, or stop providing insurance altogether, given the disincentives contained in current versions of the legislation?" (CFO Publishing Corporation)

Caregivers' Health Toll Costly for Employers
Excerpt: "A new study asserts that caregivers for the elderly suffer more health problems like diabetes or hypertension that can cost employers an additional 8% or $13.4 billion annually to treat." (

DOL, Treasury, HHS Issue New Rules on Mental Health Parity
Excerpt: "The U.S. Departments of Labor, Health and Human Services (HHS), and the Treasury have jointly issued new rules providing parity for consumers enrolled in group health plans who need treatment for mental health or substance use disorders." (

National Health Care Reform Is Gridlocked: Let the States Take the Lead
Excerpt: "If comprehensive national health care reform can't pass with overwhelming Democratic majorities in the House and Senate and a strong Democrat in the White House, it is time to face facts. Instead of trying to impose complicated systemic change from above in Washington -- as has been tried unsuccessfully in fits and starts for 100 years -- it is time to encourage individual states to take up the endeavor." (The Baltimore Sun)

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Executive Compensation; Benefits in General

[Official Guidance]
List of Expiring Federal Tax Provisions 2009-2020
48 pages. The Provisions Expiring in 2010 are on pages 14-26. (The Joint Committee on Taxation)

[Guidance Overview]
Time for Employers to Review Their Severance Agreements
Excerpt: "The United States Equal Employment Opportunity Commission (the 'EEOC') recently issued guidance in question and answer format entitled 'Understanding Waivers of Discrimination Claims in Employee Severance Agreements' . . . . While the Severance Agreement Guidance does not break much new ground, it provides a useful summary of the requirements for a legally enforceable severance agreement and the potential pitfalls into which an employer may stumble." (The Metropolitan Corporate Counsel, Inc.)

[Guidance Overview]
Guidance for Implementing Provisions of the HEART Act
Excerpt: "The HEART Act provides that in the case where an employer pays differential wage payments to a participant on QMS, these amounts are treated as compensation for purposes of qualified retirement plans, Section 403(b) contracts, and Section 457(b) plans. The Notice clarifies that employers are not required to treat differential wage payments as compensation in determining a participant's benefit under a Plan." (McGuireWoods LLP)

[Guidance Overview]
Supreme Court Continues to Wrestle with Questions on Benefits
Excerpt: "Two Supreme Court decisions in 2008 (Metropolitan Life Ins. Co. v. Glenn, 128 S.Ct. 2343 and LaRue v. DeWolff, Boberg & Assocs., Inc., 128 S.Ct. 1020) were intended to provide final answers to questions that had vexed benefits professionals for years. Unfortunately, to one degree or another, the decisions raised as many questions as they answered and have actually spawned new litigation." (Employee Benefit Adviser; free registration required)

[Guidance Overview]
New Rules for ESPPs and Reporting ISO and ESPP Share Transactions
Excerpt: "In response to comments, the final regulations include an exception to the reporting and return requirements for certain nonresident aliens. Neither an information report nor a return is required for employees for whom the employer is not required to file a Form W-2 for certain specified periods." (McGuireWoods LLP)

[Guidance Overview]
Guidance Providing Relief for Certain Plan Document Failures Under Code Section 409A
Excerpt: "A full description of all the guidance and associated relief provided by this notice is well beyond the scope of this article. Instead, we will summarize generally eligibility for relief under the notice, the areas within the scope of the notice, discuss underlying themes and consider how employers might use this guidance to their advantage." (J.P. Morgan Compensation and Benefit Strategies)

SEC Issues Rules on Disclosure of Executive Compensation
Excerpt: "The rules will require public companies to make new or revised disclosures concerning compensation policies and practices that present material risks to the company, stock and option awards of executives and directors, director and nominee qualifications, the leadership structure of the board of directors, the board's role in risk oversight, and potential conflicts of interest of compensation consultants that advise companies and their boards." (Wolters Kluwer)

Press Releases

US Secretary of Labor Hilda L. Solis Announces New Appointments and Leadership to 2010 ERISA Advisory Council
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

U.S. Labor Department Sues Fiduciary of ERISA-covered Plan Sponsored by Columbus, Indiana-based Company
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

U.S. Labor Department Obtains Default Judgment and Appointment of Independent Fiduciary for 401(k) Plan Abandoned by Buffalo, New York, Employer
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

City of Baltimore Chooses Great-West Retirement Services® as its Deferred Compensation Provider
Great-West Retirement Services

ACLI Statement On Information Request On Annuitization By Treasury And DOL
American Council of Life Insurers

WisdomTree to Close 10 ETFs
WisdomTree Investments, Inc.

ING Launches New Practice Management Program to Help Retirement Professionals Grow Their Business
ING Retirement Services

Ask These 15 Key Questions In 2010 About Your Employee Benefits
Rhodes-Joseph & Tobiason Advisors, LLC

FCRC Apps, LLC Announces the Release of - Version 2.0

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