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Health & Welfare Plans Newsletter

February 16, 2010

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[Guidance Overview]
Pharmacy Benefit Manager Fees Must Be Reported on Schedule C
Excerpt: "Not all welfare plans are required to annually report on Form 5500 or Schedule C. A plan that covers less than 100 participants at the beginning of the plan year - and which is unfunded, fully insured, or a combination of both - is exempt from the annual reporting requirement. See Department of Labor Regulation § 2520.104-20 and 2009 Instructions to Form 5500, page 4. Where such a welfare plan has 100 or more participants at the beginning of the plan year, it is subject to the annual reporting requirement but is not required to file Schedule C."
(Deloitte via

[Guidance Overview]
Does Your Health Plan Violate the New Mental Health Parity Rules?
Excerpt: "Though these regulations withdraw prior rules that date to 1997, they do not answer all employer questions about the New Mental Health Parity Act - such as questions concerning the exemption from the requirements for plans that experience certain cost increases from compliance. The regulators are seeking comments generally and on several specific questions through May 3, 2010."
(Benefits eAuthority via Ogletree, Deakins, Nash, Smoak & Stewart, P.C.)

[Guidance Overview]
New Interim Final Regulations on Mental Health Parity and Addiction Equity Act of 2008 (PDF)
8 pages. Excerpt: "The Regulations replace the prior mental health parity regulations effective April 5, 2010, and generally apply to group health plans and health insurance issuers for plan years beginning on or after July 1, 2010 (there is a special rule for collectively bargained plans - see section G below). This means the provisions would be applicable on January 1, 2011 for most calendar year plans."
(Groom Law Group)

Excise Tax on 'Cadillac' Health Plans Loses Support Amid White House Push
Excerpt: "With support for the tax eroding, Congressional leaders are searching for alternative sources of revenue. The search has some urgency because Mr. Obama has said he hopes House and Senate Democrats can resolve their differences and come up with a final version of the legislation before he convenes a bipartisan meeting on the issue on Feb. 25."
(The New York Times; free registration required)

Ohio Lawmakers Say Business Not Government Responsible for Health Care Needs of Workers
Excerpt: "Four Ohio lawmakers released information Tuesday provided by the Ohio Dept. of Job and Family Services (ODJFS) that revealed over 100,000 employees of large corporations like Wal-Mart or McDonald's doing business Ohio rely upon government-run programs like Medicaid or food stamps to make ends meet."
(Columbus Government Examiner)

Making Health Reform More Affordable for Working Families: The Effect of Employee Choice Vouchers
Excerpt: "Many low-income workers would be prevented from accessing subsidies under current health reform proposals if they are offered employer-sponsored health insurance (ESI). This report examines the effectiveness of two employee choice voucher options in making health care more affordable for such families. Findings show that employee choice vouchers would make health coverage dramatically more affordable for the low-income families who take advantage of them, would increase insurance coverage very modestly, and would not significantly change government or employer spending. The voucher programs considered would modestly reduce the number of people covered by ESI while having little effect on premiums."
(Urban Institute)

Many Employees Fear Seeking Treatment for Mental-Health Issues
Excerpt: "Employees with mental- or physical-health issues have always worried about keeping their jobs. But with a recession raging, a recent study from Arlington, Va.-based American Psychiatric Association concludes those concerns may be heightened. Concerns about losing status at work and about confidentiality are among the main reasons many American workers are more hesitant to seek treatment for mental-health issues than for physical-health problems, according to the study."
(Human Resource Executive Online)

A Connection Between Employee Autonomy and Long-Term Wellness
Excerpt: "Every single full-time Social Strata employee now has access to unlimited paid leave.' . . . Social Strata's new policy enriched an already extensive benefits mix, including 100-percent company-paid employee-health insurance. In addition to alignment with corporate culture, why would a company go this far?"
(Human Resource Executive Online)

Employers, Workers, and the Future of Employment-Based Health Benefits (PDF)
24 pages. Excerpt: "This Issue Brief summarizes presentations at EBRI's 65th biannual policy forum, held in Washington, DC, on Dec. 10, 2009, on the topic, 'Employers, Workers, and the Future of Employment-Based Health Benefits.' The forum brought together a wide range of economic, benefits, management, and labor experts to share their expertise at a time when major health reform legislation was being debated in Congress. The focus: How might this affect the way that the vast majority of Americans currently get their health insurance coverage?"
(Employee Benefit Research Institute)

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Executive Compensation; Benefits in General

[Guidance Overview]
IRS Rules That Clothing and Accessories Given to Employees Are Excludable from Income As De Minimis Fringe Benefits
Excerpt: "EBIA Comment: This ruling offers an unusually detailed example of the analysis that the IRS uses to determine whether property given to an employee qualifies as a de minimis fringe benefit. As noted in the ruling, there is no simple dollar threshold for determining when a benefit is de minimis, so employers must be prepared to demonstrate that the facts and circumstances justify the exclusion. While this ruling cannot be relied on by others as precedent, it does help illustrate what may be needed to document the exclusion."
(Employee Benefits Institute of America)

Employee Ownership Update for February 15, 2010
NCEO Executive Director Corey Rosen discusses the following: President Obama's budget proposal would reinstate capital gains rates at 20%, which could make ESOPs more attractive. The Obama budget also proposes a permanent fix that would index the AMT each year for inflation. Labor Secretary Hilda Solis has filed an amicus brief in a controversial case involving company stock in Citigroup's 401(k) plan. The NCEO's board elections are over. The Gathering of the Games meeting will be in May.
(National Center for Employee Ownership)

Allocation Methods for ESOP Activity
In her latest column on the NCEO's Web site, Nancy Dittmer discusses how the various items of contribution, income, and so on are allocated among participants' accounts within an ESOP.
(National Center for Employee Ownership)

Webcasts and Conferences

How To Simplify Your Open and Ongoing Enrollment and Lower Costs (No-cost Webinar)
Nationwide on February 18, 2010
presented by Benefit Software Inc.

Improving Employee Morale and Retaining Key Employees During A Recession (No-Cost Webinar)
Nationwide on February 18, 2010
presented by Benefit Software Inc.

Improving Employee Understanding and Appreciation for Their Benefits (No-Cost Webinar)
Nationwide on February 17, 2010
presented by Benefit Software Inc.

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