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Health & Welfare Plans Newsletter

February 23, 2010

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[Guidance Overview]
California Supreme Court Holds 'Kin Care' Law Does Not Apply to Unlimited Sick Leave Policies
Excerpt: "Interpreting the reach of California's 'kin care' law, the California Supreme Court has held that the law does not apply to all sick leave policies. The court held the law does not cover policies providing for an uncapped, or unlimited, amount of paid days off. Employers with such policies are not obligated to allow employees to use paid sick leave to provide 'kin care' to family members. The decision in McCarther v. Pacific Telesis Group was unanimous."
(Nixon Peabody LLP)

[Guidance Overview]
Welfare Plan Fees Paid to PBMs Are Reportable Direct Compensation for Form 5500 Schedule C
Excerpt: "In recently released Supplemental frequently-asked questions about the 2009 Schedule C, the DOL also stated that rebates or discounts that the PBM receives from drug makers are not reportable indirect compensation for Schedule C, unless the plan agreement with the PBM cedes the rebates and discounts to the PBM as part of its compensation."
(Wolters Kluwer)

[Guidance Overview]
DOL Posts Updated Application and Instructions for Expedited Review of Denial of COBRA Subsidy
Excerpt: "EBIA Comment: While the DOL is responsible for review requests from individuals covered by group health plans of private employers subject to the federal COBRA requirements, individuals covered by group health plans of federal, state, and local government employers or group health plans subject to COBRA-comparable state law must use the CMS application (which has also been updated for the amendments made by the 2010 DOD Act)."
(Employee Benefits Institute of America)

[Guidance Overview]
IRS Discusses Deductibility of Monthly Fee Paid to Alzheimer's Medical Facility
Excerpt: "This IRS information letter responds to an inquiry about the deductibility of a monthly fee paid to an Alzheimer's medical facility. The letter explains that the entire cost of medical care, meals, and lodging furnished in an institution is deductible as a medical care expense if the availability of medical care in the institution is a principal reason for the individual's presence there."
(Employee Benefits Institute of America)

Wellness Programs Pay Off Fitness with Lower Premiums
Excerpt: "In today's emerging health care reality, your weight, whether you smoke and, in some cases, even your blood sugar level could have an impact on how much you pay for health care premiums. The more fit you stay, the less you're likely to pay."
(The Daytona Beach News-Journal)

Don't Let Your Wellness Program Obsess Over Weight Loss
Excerpt: "If your employee wellness program offers smoking cessation classes, encourages moderate physical activity, and provides healthy food options in the cafeteria, you're on the right track. If the focus of your wellness program is weight loss, however, you're wasting time and money, and maybe even endangering your employees' health. So says Paul Campos, a professor of law at the University of Colorado, and the author of The Obesity Myth: Why America's Obsessions with Weight is Hazardous to Your Health."
(HealthLeaders Media)

Future of UAW's New Voluntary Employee Beneficiary Association Is in Question
Excerpt: "Federal filings indicate that 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. And because of uncertainty over the plan's assets, the UAW is expected to make benefit plan changes and negotiate lower rates with contracted health plans and insurers this year."
(Workforce Management; free registration required)

The Tax Exclusion for Employer-Sponsored Health Insurance
Excerpt: "This paper reviews the issues around and impacts of the tax exclusion for employer-sponsored insurance. After reviewing the arguments for and against this policy, I present micro-simulation evidence on the federal revenue, insurance coverage, and distributional impacts of various reforms to the exclusion."
(National Bureau of Economic Research; paid subscription or individual purchase required to retrieve fulltext)

Dependent Eligibility Audits Bring Employers 'Immediate, Often Staggering' Savings
Excerpt: "American companies lose an estimated $22 billion annually paying for the health care of their employees' ineligible dependents, according to Ceridian. On top of that, employers are now finding that factors such as high divorce rates and blended families are leading to even higher numbers ineligible dependents, Attwooll said."
(Ceridian Corporation)

The President's Health Reform Proposal: Insurance and Revenue Provisions
Excerpt: "All of the provisions of the President's Proposal arguably relate to the revenues and outlays of the federal government and should pass muster under the Senate reconciliation rules."
(Health Affairs)

More Employers Making Health Program Changes to Control Costs
Excerpt: "A growing number of large U.S. employers are taking more aggressive measures to control rising health care costs and motivate workers to take charge of their own health, according to a survey conducted by Towers Watson and the National Business Group on Health (NBGH)."

White House Health Reform Proposal Bumps up Assessment on Employers
Excerpt: "The Obama administration has released a new health care reform proposal that bumps up an assessment that would be imposed on employers with more than 50 employees that do not offer coverage."

Health Reform Subsidy Calculator Now Reflects White House Proposal
Excerpt: "The Foundation [has updated its interactive calculator] to reflect the subsidies proposed in the President's reform proposal. The calculator helps to illustrate what assistance people would get with their insurance premiums if they purchase coverage on their own through an exchange under the major health reform plans. The calculator provides a rough guide to examine the impact of the proposals on people who do not have employer coverage and are not eligible for Medicare or Medicare."
(Kaiser Family Foundation)

Health Reform Side-by-Side Comparison of Major Health Care Reform Proposals Now Reflects White House Proposal
Excerpt: "The Foundation has updated its interactive side-by-side health reform comparison tool . . . to reflect provisions included in President Obama's health reform proposal, unveiled Monday morning in advance of Thursday's reform summit with congressional leaders. The new proposal is based on the bill passed by the Senate in December, but incorporates some elements from the House-passed bill and other changes outlined in the new White House summary."
(Kaiser Family Foundation)

'Cadillac Tax' on Health Plans Would Hit Union and Nonunion Jobs Equally
Excerpt: "[A]ccording to a new analysis, the conventional wisdom about the tax is wrong: The tax would actually fall equally on nonunion plans. At least 80 percent of the workers whose plans would be subject to the tax in 2019 would be in nonunion jobs, according to the analysis by Ken Jacobs of the University of California at Berkeley Labor Center and William H. Dow, a professor of health economics at Berkeley who was a member of President George W. Bush's Council of Economic Advisers."
(The Washington Post; free registration required)

Michigan House Reforms Legislators' Retirement Plan
Excerpt: "The Michigan House of Representatives recently passed a bill to stop covering retirement health care benefits for future legislators age 55 and older, a measure seen as symbolic burden-sharing by the legislature. Current Michigan lawmakers and their spouses with at least six years of service are eligible to join the Legislative Retirement System. The bill, passed February 2, removes the eligibility for legislators elected in November of 2010."
(The Heartland Institute)

The World Congress 7th Annual World Health Care Congress | April 12 - 14, 2010 | Washington, DC
The MUST attend event for health care government and corporate leaders to formulate business strategies in a new era of reform and market competition!
Sponsored by World Congress

Executive Compensation; Benefits in General

[Guidance Overview]
DOL-Published Overview: Getting Ready for Changes in Filing Your Plan's Annual Return/Report Form 5500
Excerpt: "Do you file a Form 5500 annual return/report? If so, you need to be aware of important changes to the form and the filing process beginning with 2009 plan year filings. To ease the transition, the U.S. Department of Labor's Employee Benefits Security Administration (EBSA) is helping filers understand the new filing system and changes to the Form 5500 so you are ready when you need to prepare and file your annual report(s)."
(U.S. Employee Benefits Security Administration)

Lessons from, and Research on, Open Enrollment
Excerpt: "Graem Clark, assistant vice president of national accounts at Colonial Life, sits down with Associate Editor Lydell Bridgeford to discuss lessons employers most likely learned from the 2009 open enrollment season and the company's latest research on the open enrollment experience."
(Employee Benefit Adviser; free registration required)

Webcasts and Conferences

EFAST2 5500 Forms - Free Webcast Demo by ASC
Nationwide on February 25, 2010
presented by Actuarial Systems Corporation (ASC)

Ninth Annual Consumerism Web Summit - 2010
Nationwide on March 18, 2010
presented by MCOL

Press Releases

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