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Health & Welfare Plans Newsletter

February 15, 2010

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HIPAA covered entities, including health plans, health care clearinghouses, and covered health care providers, must comply with the HIPAA Security Rule effective February 17, 2010. This regulation also requires compliance from business associates. If you are responsible for your HIPAA Security Policy and Procedural Manual, this course is essential.

[Guidance Overview]
Interim Final Regulations Establishing Parity Standards for Mental Health and Addiction Treatment
Excerpt: "According to the regulations' preamble, government enforcement of the 2008 Act will take into account good-faith efforts to comply with a reasonable interpretation of its requirements as to violations occurring before the regulations take effect. However, this does not preclude participants or beneficiaries from bringing private lawsuits to redress alleged violations of the 2008 Act."
(McGuireWoods LLP)

[Guidance Overview]
Penalties Awarded for Election Notice That Misstated Date of Qualifying Event and Date Existing Coverage Would Terminate
Excerpt: "EBIA Comment: The DOL COBRA regulations require the election notice to identify the qualifying event and the date when plan coverage will terminate unless COBRA is elected. The regulations do not specifically require identification of the date of the qualifying event. Thus, the lynchpin of this court's decision in favor of the employee was the direct link between the intentionally misstated date of the employee's qualifying event and the resulting misstatement of the date on which his health coverage terminated."
(Employee Benefits Institute of America)

[Guidance Overview]
IRS 2010 Versions of Forms 1099-SA and 5498-SA for HSA, Archer MSA, and Medicare Advantage MSA Trustees and Custodians
Excerpt: "EBIA Comment: Remember that trustees and custodians should not use these 2010 forms until 2011, when reporting for the 2010 tax year is due. The 5498-SA and 1099-SA information returns -- together with account-related information provided by employers on Forms W-2 -- provide useful information to account holders, who have reporting obligations of their own."
(Employee Benefits Institute of America)

[Guidance Overview]
Tax Court Holds That Sex Reassignment Surgery Expenses Were for Medical Care
Excerpt: "EBIA Comment: Determining whether an expense is for medical care is not always easy -- in addition to the majority opinion discussed above, multiple concurring and dissenting opinions were issued. The majority's holding differs from the conclusion reached in earlier Chief Counsel Advice on the same topic (see our Checkpoint Newsstand article), which we understand involved the same taxpayer. Meanwhile, health FSA administrators will appreciate having this new guidance."
(Employee Benefits Institute of America)

Provisions for Extension of 65% COBRA Premium Subsidy Removed from Jobs Bill
Excerpt: "Top members of the Senate Finance Committee last week released a draft of a bipartisan jobs creation bill in which several COBRA premium subsidy provisions had been embedded. Within two days of the release of the draft, though, Sen. Reid jettisoned COBRA and numerous other provisions from the measure and said he would seek immediate passage of a more narrowly focused bill."
(Business Insurance)

Audio and Text: Republicans Spurn Once-Favored Health Insurance Mandate
Excerpt: "The last time Congress debated a health overhaul, when Bill Clinton was president, Hatch and several other senators who now oppose the so-called individual mandate actually supported a bill that would have required it."
(Morning Edition via National Public Radio)

UAW's VEBA: Health Plan's Assets May Fall Short
Excerpt: "Without much fanfare on Jan. 1, the United Auto Worker's health plan for retirees -- called the UAW Retiree Medical Benefits Trust -- opened its doors. How long it remains in operation is a question, however. Federal filings indicate the UAW may not have enough assets in the plan to cover the last living retiree at Ford Motor Co., General Motors Co. and Chrysler Group L.L.C."
(Crain's Detroit Business)

Access to Health Care: State Legislation for 2010, Updated February 12, 2010
Excerpt: "State policymakers are also keeping a close eye on federal health reform. Pending legislation, as of mid-January 2010, has significant implications for states including provisions related to access to health care and expanding Medicaid eligibility. . . . The chart [on the target page] provides a snapshot of state bills introduced in 2010 to expand coverage and increase access to health care."
(National Conference of State Legislatures)

A Survey of Health Care Claims Receipt and Processing Times, 2009 Update (PDF)
Excerpt: "The percentage of claims that were automatically adjudicated - that is, validated and processed without manual intervention - increased to 75 percent in 2009, up from 68 percent in 2006 and 37 percent in 2002 . . . ."
(America's Health Insurance Plans)

Figuring Out a Way to Pay for CalPERS
Excerpt: "In a perfect world, we'd all be covered by health insurance plans that cost little or nothing, provide excellent coverage with low or no co-pays and are guaranteed for life. In California, that world isn't a fantasy. It's the normal life of retirees who worked under the CalPERS pension and benefits system that protects most state workers. It's a great system that - to some - represents the ideal way to meet the healthcare needs of an aging population. Except for one problem: the cost."
(California Independent Voter Network)

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

[Guidance Overview]
When Employee Benefits are Subject to ERISA and What that Means
Excerpt: "Although some of ERISA's requirements may add work that would not be necessary otherwise, ERISA-coverage also provides some benefits for an employer. ERISA preempts state law with respect to benefits provided under an ERISA-covered plan. This preemption is advantageous for you because state laws generally provide more expansive remedies than the remedies available under ERISA. Therefore, you can use ERISA to protect yourself from exposure to the liabilities associated with state court remedies."
(Poyner Spruill LLP)

[Guidance Overview]
Amending Nonqualified Deferred Compensation Plans Without Penalty (PDF)
2 pages. Excerpt: "To take advantage of the relief provided in the Notice, employers should take the following actions: A. Review all potential nonqualified deferred compensation arrangements promptly to determine whether they are subject to Section 409A. B. Determine whether applicable arrangements are compliant with Section 409A or need to be amended. C. Amend any non-compliant arrangements by December 31, 2010."
(Porter Wright Morris & Arthur LLP)

Webcasts and Conferences

"401(k) Plan Workshop: Current Issues and New Developments", March-May, 22 Cities
Nationwide on March 19, 2010
presented by SunGard Relius

"Form 5500 Workshop: Preparing for EFAST2", March - May, 35 Cities
Nationwide on March 18, 2010
presented by SunGard Relius

Advanced ERISA for Health & Welfare Plans: Reduce Risks and Costs By Fine-Tuning Your Compliance
Nationwide on March 25, 2010
presented by EBIA / Thomson Reuters

Press Releases

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