Health & Welfare Plans Newsletter

February 4, 2010

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[Official Guidance]
Model Notice from DOL for Employers to Use Regarding Eligibility: Premium Assistance Under Medicaid or the Children's Health Insurance Program (PDF)
4 pages. Excerpt: "On February 4, 2009, President Obama signed the Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA, Pub. L. 111-3). CHIPRA includes a requirement that the Departments of Labor and Health and Human Services develop a model notice for employers to use to inform employees of potential opportunities currently available in the State in which the employee resides for group health plan premium assistance under Medicaid and the Children's Health Insurance Program (CHIP). The Department of Labor (Department) is required to provide the model notice to employers within one year of CHIPRA's enactment. This document announces the availability of a Model Employer CHIP Notice."
(Employee Benefits Security Administration)

[Guidance Overview]
Employer Pays for COBRA Chaos: Clarifying Job Status and Communication
Excerpt: "Leaves of absence are often difficult to manage, and errors are easy to make. This can be an expensive lesson, as one employer learned recently."

[Guidance Overview]
Beginning in July, Employer Health Plans Will Be Subject to Mental Health Parity Rules
Excerpt: "The rules, which apply to group health plans and group health insurance issuers for plan years beginning on or after July 1, 2010, go into great detail about the design and implementation of mental health benefits, and all plan sponsors should start preparing now for compliance. Calendar year benefit plans have until the beginning of 2011 to implement these rules."
(Wolters Kluwer)

[Guidance Overview]
ERISA's Exemption for Governmental Plans and Right to Jury Trial, According to the Tenth Circuit Court
Excerpt: "The 10th Circuit Court of Appeals recently issued a decision addressing two ERISA issues: (1) what constitutes a 'governmental plan;' and (2) the right to trial by jury. These issues were addressed in the case of Shirley Graham v. Hartford Life and Accident Insurance Company, 589 F.3d 1345 (10th Cir. 2009), decided December 29, 2009. This was an appeal out of the Northern District of Oklahoma."
(Law Office of Shawn E. McDermott, LLC)

Accountable Care Organizations: Executive Briefing for Health Care Decision-Makers
Excerpt: "Partisan politics notwithstanding, the proposed Senate and House health reform bills have some common themes, including more active provider involvement in furnishing care on a coordinated and cost effective basis. The bills reference accountable care organizations (ACOs) and other organizational structures as participants in a retooled health care delivery and payment system. Although such constructs convey an image of novelty and complexity, the new ACOs will likely revolve around certain basic concepts, consisting of an organizational structure involving health care providers and focusing on effective care management and delivery to a defined group of covered lives."
(Faegre & Benson LLP)

Value-Based Health Insurance Design Will Balance Costs for Drugs and Other Medical Services
Excerpt: "A value-based health insurance design program that promotes proven effective drugs for chronic medical conditions will, at the very least, keep costs balanced through reduced use of medical services, according to the results of a study published in the February 2010 Health Affairs. The study, Evidence that Value-Based Insurance can be Effective . . . ."
(Wolters Kluwer)

Health Spending Projections Through 2019: The Recession's Impact Continues
Excerpt: "The economic recession and rising unemployment -- plus changing demographics and baby boomers aging into Medicare -- are among the factors expected to influence health spending during 2009-2019. In 2009 the health share of gross domestic product (GDP) is expected to have increased 1.1 percentage points to 17.3 percent -- the largest single-year increase since 1960. [P]ublic spending is projected to account for more than half of all U.S. health care spending by 2012."
(Health Affairs)

The Constitutionality of Mandates to Purchase Health Insurance
Excerpt: "This paper analyzes whether Congress can legislate a health insurance mandate and the potential legal challenges that might arise, given such a mandate. The analysis of legal challenges to health insurance mandates applies to federal individual mandates, but can also apply to a federal mandate requiring employers to purchase health insurance for their employees. There are no Constitutional barriers for Congress to legislate a health insurance mandate as long as the mandate is properly designed and executed . . . ."
(Georgetown University)



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

How Effective Is Your Company Clawback?
Excerpt: "Clawback provisions in employment agreements and compensation plans, which permit a company to recoup bonus or other compensation paid or owed to an employee, are on the rise. Shareholder groups, legislators and compensation reform advocates endorse clawbacks as an effective tool to prevent executives and other employees from retaining undeserved windfalls and to enhance pay-for-performance initiatives."
(Pillsbury Winthrop Shaw Pittman LLP)

Public Company Accounting Oversight Board Web Site Redesigned and Expanded
Excerpt: "A board news release said the site features a new layout, updated content organization, and an improved search function. More frequently viewed pages are now accessible from the home page and new pages have been added with information about the PCAOB's International program and Research & Analysis activities, according to the announcement."

New Edition of Accounting for Equity Compensation
Accounting for equity compensation is one of the most challenging and complex areas of stock plan administration. Written in plain English for non-accountants by leading expert Barbara Baksa, this book is a survival guide for understanding the impact of stock compensation (such as stock options, ESPPs, restricted stock, and SARs) on corporate financial statements.
(National Center for Employee Ownership)

Webcasts and Conferences

New Mental Health Parity and Addiction Equity Act Regulations: What You Need to Do to Comply
Nationwide on March 11, 2010
presented by EBIA / Thomson Reuters

Retirement Plan Fees
in Georgia on February 18, 2010
presented by WEB (Worldwide Employee Benefit Network) Atlanta Chapter

Press Releases

ASPPA Urges DOL To Modify EFAST2 System
American Society of Pension Professionals & Actuaries (ASPPA)

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