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March 17, 2010

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[Guidance Overview]
Employers Required to Issue New 'CHIP' Health Benefit Eligibility Notice to Employees
Excerpt: "Employers are now required to notify each employee of [the] opportunities under state Medicaid and CHIP for financial assistance in paying for employer-provided health insurance. The Department of Labor has issued a model notice by which employers may satisfy this requirement. "
(Nixon Peabody LLP)

[Guidance Overview]
Employee Notice about CHIP/Medicaid Programs Now Required
Excerpt: "[E]mployers should determine whether they will provide the notice to all employees, regardless of their state of residence, or send the notice only to those employees who live in one of the 40 listed states. Finally, employers should determine how to provide the notices. Options include mailing it along with other printed materials as part of annual open enrollment, sending it as a separate mailing, or, for those workforces that use computers as a regular part of their job duties, providing the notice electronically."
(The Segal Group, Inc.)

[Guidance Overview]
Employee's Own Testimony Can Help Prove FMLA Eligibility
Excerpt: "A federal appellate court has ruled that an employee's own testimony can be used in conjunction with medical evidence to prove eligibility for Family and Medical Leave Act (FMLA) leave. Setting its precedent, the 3rd U.S. Circuit Court of Appeals noted the regulation at issue in this case provides that the ambiguous statutory language 'continuing treatment by a health care provider,' can be satisfied by showing at least three days of incapacitation, but does not speak to whether medical testimony is required."
(PLANSPONSOR.com)

[Guidance Overview]
Employees Have FMLA Retaliation Protections Before They Are Eligible to Take FMLA Leave
Excerpt: "A recent decision from the United States District Court for the District of South Carolina clarified that an employee may make an FMLA retaliation claim based on employment actions occurring before the employee is eligible to take FMLA leave. In Gleaton v. Monumental Life Ins. Co., the plaintiff alleged she became seriously ill in October 2007 and told her employer she would need FMLA beginning in November 2007. The plaintiff had not worked for the employer for 12 months as of October 2007 and was not, therefore, eligible to take FMLA leave [until] November 2007."
(Poyner Spruill LLP)

[Guidance Overview]
ICD-10 Impact on Provider Reimbursement (PDF)
7 pages. Excerpt: "In 2013, entities covered by HIPAA must begin using ICD-10 for HIPAA-covered transactions that contain diagnoses or hospital inpatient procedures. This white paper discusses the short- and long-term effects of the ICD-10 requirement, and also recommends actions that organizations can take to manage the risks associated with the coding change."
(Milliman)

Trends in Employment-Based Coverage Among Workers, and Access to Coverage Among Uninsured Workers (PDF)
Pages 8-12 of 16 pages. Excerpt: "While the percentage of workers with coverage has ebbed and flowed with the economy and health care costs, trends in the percentage of workers offered coverage and the percentage of workers taking coverage when offered have remained steady. Prior research had shown that the percentage of workers offered health benefits had been increasing, but the take-up rate had been declining . . . ."
(Employee Benefit Research Institute)

Most Large Employers Comply with Mental Health Parity Law, Hewitt Finds
Excerpt: "A recent survey of 70 Fortune 500 employers that offer mental health benefits found that none of the companies eliminated their mental health or substance abuse coverage because of the 2008 Mental Health Parity Act. According to the Hewitt Associates survey, all of the respondents eliminated their annual and lifetime maximums for mental health benefits as the law requires."
(Employee Benefit Adviser; free registration required)

Redding, California, Cuts Retiree Health Benefits for Electric Utility Workers
Excerpt: "The Redding City Council this evening took the extraordinary step of imposing its final contract offer on electric utility workers. Facing a Council Chamber packed with union members and their supporters, the council voted 4-1 to force the International Brotherhood of Electrical Workers Local 1245 (IBEW) to accept the contract. . . . The agreement offers IBEW a general 3 percent raise but requires current workers to accept cuts to their retirement health insurance benefits."
(The Record Searchlight)

Political Maneuvering and the President's Health Care Plan
Excerpt: "Key elements of the White House plan include: Closing the Medicare prescription drug 'donut hole' coverage gap; . . . Increasing tax credits for health insurance premiums; Federal review of insurance rates; Delaying the excise tax on high-cost insurance plans and increasing the amount of exempt premiums; Broadening the Medicare Hospital Insurance tax base to include unearned income of high-income households; Tax credits for small businesses to support health insurance for their employees . . . ."
(Drinker Biddle & Reath LLP)

More States Join in Extending Coverage Age for Dependents
4 pages. Excerpt: "While federal lawmakers struggle with health care reform, states have been taking their own steps to extend coverage to as many citizens as possible. Extending the age of children eligible for dependent coverage under insured group health and HMO plans is one strategy that has become increasingly popular among states. This Update explores benefit cost and taxation, compliance, notice and COBRA issues that arise for employers when so-called limiting-age laws are extended."
(Mercer LLC)

The Cost of Failure to Enact Health Reform: 2010 - 2020 (Updated)
Excerpt: "This report assesses the changes in coverage patterns and health care costs that will occur nationally if major reforms are not enacted. The authors find that by 2015, there could be 59.7 million people uninsured. The number could swell to 67.6 million by 2020, up from an estimated 49.4 million in 2010. As premiums nearly double, employees in small firms would see offers of health insurance almost cut in half, dropping from 41 percent of firms offering insurance in 2010 to 23 percent in 2020."
(Urban Institute)

Effective Contracting with Pharmacy Benefit Managers (PDF)
6 pages. Excerpt: "As prescription drug costs continue to increase, health plan sponsors should pay careful attention to the services they get from their pharmacy benefit managers (PBMs) and what they pay for them. Effective PBM contracting can ensure that plan members get the services they need at a cost that's right for the plan sponsor."
(Health Watch via Milliman)




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Executive Compensation; Benefits in General

[Guidance Overview]
IRS Section 409A Notice Requires Review of Compensation Agreements That Condition Payments Upon Signing Releases
Excerpt: "Not all severance or employee payment plans are subject to Section 409A. If all payments under an agreement are made by March 15 of the calendar year following the year in which the right to the payment vests, then the payment is considered a 'short-term deferral' and exempt from Section 409A. For example, many separation agreements that are created at the time of separation with a prompt lump sum payout may not present a problem."
(Nixon Peabody LLP)

[Guidance Overview]
SEC Interpretive Guidance on Executive and Director Compensation Disclosure Rules (PDF)
8 pages. Excerpt: "The guidance has been updated several times over the years, with the most recent updates occurring during the first quarter of 2010. The guidance is in the form of questions and answers of general applicability to the disclosure rules, as well as interpretive responses regarding particular situations. The guidance replaces staff interpretations issued in previous years, and is drafted in a manner that facilitates periodic future updates. The interpretative guidance is briefly summarized [in the target document] with the most recent 2010 guidance presented in italics."
(Frederic W. Cook & Co., Inc.)

SEC Clarification of Revised Equity Disclosure Rules
Excerpt: "Updated SEC guidance addresses equity award treatment under the recently revised executive pay disclosure rules. Issued March 1, new Compliance & Disclosure Interpretations (C&DIs) discuss how to report awards over which the compensation committee has 'negative discretion,' exercise of options with 'reload' features and valuation assumptions. SEC staff also have eliminated earlier C&DIs that no longer apply under the revised rules."
(Mercer LLC)

Work-Life Balance Series on NPR This Week
Excerpt: "NPR is running a series this week on work-life balance. Today's reports [at http://www.npr.org/templates/story/story.php?storyId=124698891] focus on flexible work schedules and low-wage workers. Joan Williams, Director of the Center for WorkLife Law at U.C.-Hastings, is featured prominently."
(Workplace Prof Blog)

Website: Financial Literacy Center
Excerpt: "The mission of the Financial Literacy Center is to develop and test innovative programs to improve financial literacy and promote informed financial decision-making. With support from the Social Security Administration, the Center was established in October 2009 by the RAND Corporation, Dartmouth College, and the Wharton School of the University of Pennsylvania in order to develop educational tools and programs that help individuals prepare for their long-term financial stability."
(RAND Corporation)

DOL Participating in Open Government Initiative; Accepting Comments on Their Services Until March 19
Excerpt: "The Department of Labor (DOL), along with other agencies across the federal government, is gathering ideas from the public online to comply with the White House Open Government Initiative to increase transparency, participation, and collaboration. The DOL has developed an Open Government Plan. To learn more about this initiative, see their Web site at www.dol.gov/open. The DOL is asking for the public's input about how they can improve their services."
(International Foundation of Employee Benefit Plans)

Employment Status of Workers Ages 55 or Older, 1987--2008 (PDF)
Pages 2-7 of 16 pages. Excerpt: "A growing percentage of older Americans are in the labor force: The percentage of those ages 55 or older in the labor force increased from 29.4 percent in 1993 to 39.4 percent in 2008. For those ages 65-69, the percentage increased from 18.4 percent in 1985 to 30.7 percent in 2006. These trends mark a significant change in behavior for individuals in these age groups, and are likely driven by their need to obtain affordable employment-based health insurance and to accumulate retirement savings."
(Employee Benefit Research Institute)

Managing Through Fiscal Stress: Voluntary Benefits Expand Coverage Options (PDF)
4 pages. Excerpt: "Over the years, voluntary benefits have been called many things, including contributory benefits, supplemental benefits, employee-pay benefits, association benefits, employee buy-ups, work/life benefits and, more recently, worksite benefits. Through voluntary benefits offerings, employers have the potential to expand employees' access to benefits that supplement employer-sponsored benefits at a fair, employer-negotiated price. Although voluntary benefits are available through the worksite at group rates, they are usually entirely paid for by those employees who opt to participate."
(The Segal Group, Inc.)

Employee Ownership Update for March 16, 2010
NCEO Executive Director Corey Rosen discusses the following in the latest Employee Ownership Update: A recent court case and an IRS ruling support ESOP account segregation and rebalancing. A settlement has been reached between the former ESOP participants, the Department of Labor, and the defendants in the long-running Couturier case. The NCEO now has made available its list of companies with ESPPs and other broad-based equity plans.
(National Center for Employee Ownership)

[Opinion]
Comments on Fortune Brands' Useful Supplemental Compensation Disclosure
Excerpt: "I noticed an interesting addition to the 2010 Proxy Statement disclosure . . . filed last week by Fortune Brands, Inc. . . . . Right below the footnotes for the Summary Compensation Table, the Company adds a chart labeled - 'TAXABLE COMPENSATION REPORTED' - showing the actual W-2 compensation for each of the NEOs for 2007, 2008 and 2009. In some cases and years, but not all, the W-2 figures are less."
(Michael Melbinger via Winston & Strawn LLP)

[Opinion]
As Federal Spending Has Increased, the Tax Rate Has Decreased and the Deficit Is Ballooning
Excerpt: "Congressional Republicans have shown little willingness to consider any tax increases, and Mr. Obama has shown no indication of breaking his $250,000-and-under pledge. We voters, meanwhile, tend to oppose government spending in general while supporting the government programs that the spending pays for."
(The New York Times; free registration required)


Webcasts and Conferences

Health Care Reform 2010: What Will It Mean For Employers?
in Michigan on April 13, 2010
presented by International Society of CEBS - West Michigan Chapter


Press Releases


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