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March 22, 2010

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[Official Guidance]
Text of DOL Announcement of Model COBRA Notices, Revised to Reflect March 2, 2010 Extension and Changes (PDF)
3 pages. Excerpt: "In an effort to ensure that the notices include all of the information required under ARRA, as amended, while minimizing the burden imposed on group health plans and issuers, the Department has created several packages. As with those models previously developed by the Department, each of the new packages is designed for a particular group of qualified beneficiaries, and contains all of the information needed to satisfy the content requirements for ARRA's new and amended notice provisions. The packages include the following disclosures: [1] A summary of ARRA's premium reduction provisions. [2] A form to request the premium reduction. [3] A form for plans (or issuers) that permit qualified beneficiaries to switch coverage options to use to satisfy ARRA's requirement to give notice of this option. [4] A form for an individual to use to satisfy ARRA's requirement to notify the plan (or issuer) that the individual is eligible for other group health plan coverage or Medicare. [5] COBRA election forms and information, as appropriate."
(U.S. Employee Benefits Security Administration)

[Guidance Overview]
New Model Notices Reflect Latest Extension of COBRA Subsidy
Excerpt: "Plans must provide the updated Notice of New Election Period to an individual who: Experiences a qualifying event that was a reduction in hours from September 1, 2008 through March 31, 2010; Subsequently experiences a termination of employment from March 2, 2010 through March 31, 2010; and Either did not elect COBRA coverage when it was first offered or elected COBRA coverage but later discontinued the coverage. Date Notice Must Be Provided: Within 60 days of the termination of employment."
(Haynes and Boone, LLP)

[Guidance Overview]
Updated COBRA Model Notices Available from DOL
Excerpt: "The U.S. Department of Labor has released updated model notice packages to enable group health plans and employers to provide notice on the availability of the COBRA continuation coverage premium reductions through March 31. . . . The DOL said it updated two of its existing models and developed several new models to cover various situations faced by dislocated workers and their families. The Department provides: An updated model general notice; A model new election period notice; A model extended election period notice; A model supplemental information notice; and An updated model alternative notice."
(PLANSPONSOR.com)

[Guidance Overview]
Congress Extension and Expansion of the COBRA Premium Subsidy Rules
Excerpt: "[The Temporary Extension Act of 2010] also included expanded enforcement provisions, allowing the Department of Labor, the Department of Health and Human Services, or an individual, to bring a civil action for a violation of the COBRA premium subsidy requirements. TEA also permits the Department of Labor or the Department of Health and Human Services to assess a $110 per day per person penalty against a plan sponsor for a violation of the COBRA premium subsidy requirements."
(Sherman & Howard L.L.C.)

[Official Guidance]
Text of Section-by-Section Analysis of H.R. 4872, the Health Care & Education Affordability Reconciliation Act of 2010
Prepared by Committees on Ways & Means, Energy & Commerce, and Education & Labor, March 18, 2010.
(U.S. House of Representatives, Committee on Rules)

What Health Care Reform Means for Your Small Business
Excerpt: "The sweeping health-care bill passed by the House of Representatives Sunday, and now headed for President Obama's desk, promises a sea change in the way that small business owners purchase and provide health insurance for themselves and their employees. But many of the provisions won't kick in until 2014 -- and the final rules could still be changed by amendments that will now be considered by the Senate."
(Cable News Network)

Health Reform Legislation Will 'Kill' Health Savings Account Plans
Excerpt: "Health reform legislation threatens to derail the adoption of health savings accounts (HSAs) and high-deductible health plans (HDHPs), and ultimately kill HSAs, according to a brief published by the National Center for Policy Analysis (NCPA)."
(Wolters Kluwer)

Impact of Health Reforms on Employers Weighed
Excerpt: "[E]mployers that don't bring health care plan costs under control eventually would be exposed to a new 40% federal excise tax on health insurance premiums that exceed certain levels. In addition, employers could face assessments of $3,000 a year per employee if employees' share of health care premiums fails a new affordability test. Employers most likely to be affected by the health reform changes will be those whose workforces are comprised largely of lower-wage workers paying premiums that exceed what the legislation defines as affordable, experts say."
(Business Insurance)

The Immediate Effects of the Health Reform Bill
Excerpt: "Tax credits for businesses: Businesses with fewer than 25 employees and average wages of less than $50,000 could qualify for a tax credit of up to 35 percent of the cost of their premiums."
(Henry J. Kaiser Family Foundation)

Consumers Guide to Health Reform
Excerpt: "The health overhaul package passed by the House Sunday and sent to the Senate for final action is the most far-reaching health legislation since the creation of the Medicare and Medicaid programs. While the underlying Senate bill will become law as soon as President Barack Obama signs it, additional changes will occur if the Senate passes the reconciliation-bill part of the package. The [target page] is a look at the impact of the entire package, which would extend insurance coverage to 32 million additional Americans by 2019, but also have an effect on almost every citizen."
(Henry J. Kaiser Family Foundation)

House Approves Landmark Bill to Extend Health Care to Millions
Excerpt: "Congress gave final approval on Sunday to legislation that would provide medical coverage to tens of millions of uninsured Americans and remake the nation's health care system along the lines proposed by President Obama."
(The New York Times; free registration required)

Side-by-Side Comparison of Major Health Care Reform Proposals
Excerpt: "The Kaiser Family Foundation has updated its interactive side-by-side health reform comparison tool to reflect the legislation (H.R. 4872, The Health Care & Education Affordability Reconciliation Act of 2010) developed for consideration in the House of Representatives, with a vote scheduled as soon as Sunday. The new legislation is based on the bill passed by the Senate in December and incorporates elements from the House-passed bill and changes sought by the Obama administration. The online tool allows users to quickly compare the latest legislation with the previously passed House and Senate bills, as well as 11 other comprehensive reform proposals that have been put forward during the yearlong debate."
(Henry J. Kaiser Family Foundation)

Health Reform Subsidy Calculator: Premium Assistance for Coverage in Exchanges/Gateways
Excerpt: "The Foundation also has updated its interactive calculator to reflect the revised premium subsidies included in the new legislation. The calculator helps illustrate the financial help that people would be eligible for, based on their income, if they do not have employer coverage and are not eligible for Medicaid or Medicare and instead purchase coverage on their own through a newly-created exchange under the major health reform plans."
(Henry J. Kaiser Family Foundation)

House Clears Path for Final Health Vote
Excerpt: "The House on Sunday took the most critical step yet toward adoption of legislation to overhaul the nation's health care system and guarantee access to medical insurance for tens of millions of Americans, all but assuring a hard-fought but politically risky victory for President Obama and his party. By a vote of 224-206, the House approved the key procedural measure necessary to pass the legislation . . . ."
(The New York Times; free registration required)

Five Questions About the Health Care Legislation Currently Under Consideration
Excerpt: "As the House prepares to vote this weekend on the Senate's health-care bill and a reconciliation package of changes, we answer five questions about the bill, the process and what it ultimately means to the American people."
(The Washington Post; free registration required)

[Guidance Overview]
Appeals Court Holds that an Employee's Self-Diagnosis Can Establish Ongoing Medical Condition Under FMLA
Excerpt: "Brace yourself for yet another twist in the ever-evolving standards governing an employee's leave under the Family Medical Leave Act (FMLA). On March 11, 2010, the U.S. Court of Appeals for the 3rd Circuit joined the 8th Circuit Court of Appeals in holding a combination of expert and lay testimony can establish that an employee was medically incapacitated for more than three days, thereby triggering FMLA protection. Schaar v. Lehigh Valley Health Services. At issue in Schaar was whether an employee was entitled to FMLA protection when she relied, in part, on her own diagnosis that she was incapacitated for more than three days, thus triggering FMLA protection."
(Fisher & Phillips LLP)

[Guidance Overview]
Fifth Circuit Upholds Summary Judgment for Plaintiff's Claim for Disability Benefits, Based on Insurer's Failure to Consider Social Security Administration's Determination That Plaintiff Is Disabled
Excerpt: "In Schexnayder v. Hartford Life and Accident Insurance Company, No. 08-30538 (5th Cir. 2010), the plaintiff, Kelvin Schexnayder, sued Hartford Life and Accident Insurance Company . . . under ERISA for long terms disability benefits. The district court granted summary judgment to the plaintiff, holding that Hartford abused its discretion in denying the benefits."
(Stanley D. Baum of Fellheimer & Eichen LLP)

The Effect of Health Insurance Coverage on the Use of Medical Services
Excerpt: "[We find that not having] insurance leads to a 40 percent reduction in [emergency room] visits and a 61 percent reduction in inpatient hospital admissions."
(National Bureau of Economic Research; paid subscription or individual purchase required to retrieve fulltext)

Safeway to Market Health Plan Incentive Program to Other Employers
Excerpt: "Safeway Inc. is attempting to capitalize on the success of its incentive-based health plan by offering to set up similar programs at other employers for a share of the cost savings it generates. . . . Safeway gained recognition for its health plan success in 2008 when CEO Stephen A. Burd published an article in the Wall Street Journal describing how it had basically held its health care costs flat since 2005."
(Business Insurance)

Companies Adopt Smoker-Free Policies To Arrest Chronic Disease Costs
Excerpt: "To obtain a workforce that doesn't smoke (thereby lowering health and insurance costs), some employers are prohibiting smokers on and off-site, even if that means regulating off-hours behavior. Adapting a smoker-free policy is more stringent than a smoke-free policy, which bans smoking on the worksite or premises and is often implemented in response to a local or state ordinance requiring employers to do so."
(Thompson Publishing Group Inc.)

[Opinion]
The Real Arithmetic of Health Care Reform
Excerpt: "ON Thursday, the Congressional Budget Office reported that, if enacted, the latest health care reform legislation would, over the next 10 years, cost about $950 billion, but because it would raise some revenues and lower some costs, it would also lower federal deficits by $138 billion. In other words, a bill that would set up two new entitlement spending programs -- health insurance subsidies and long-term health care benefits -- would actually improve the nation's bottom line. Could this really be true?"
(The New York Times; free registration required)

[Opinion]
Five Myths About the Politics of Health Care Reform
Excerpt: "Here are a few misconceptions about the health-care reform battle that should be busted before the history is written . . . ."
(The Washington Post; free registration required)




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Executive Compensation; Benefits in General

New Proposed Executive Compensation Corporate Governance Rules
Excerpt: "The Restoring American Financial Stability Act of 2010 was released by Senator Christopher Dodd (D-CT), Chairman of the Senate Banking Committee, on March 15, 2010 (the 'Financial Reform Bill'). In addition to the many financial services reform items contained in the proposed legislation, there are a number of provisions that would affect the corporate governance of executive compensation at public companies, including provisions that will be mandatory for companies to continue being listed on a national securities exchange such as the NYSE or NASDAQ."
(Pillsbury Winthrop Shaw Pittman LLP)

California Public Pension Funding Gap Widens as Liability Surge Raises Concerns
Excerpt: "As local lawmakers brace for yet another round of budget cuts to make up for chronic shortfalls trickling down from Sacramento, some are pointing to burgeoning public pension liabilities as a looming financial disaster. Over the past decade, California's unfunded public pension and health care liability has soared from zero to nearly $60 billion, and experts warn that unless costs are cut and policies change, that number could increase dramatically in coming years."
(San Bernardino Sun)

Employee Benefits Update, March 2010 (PDF)
The four-page newsletter presents select compliance deadlines and reminders; retirement plan developments; and, health and welfare plan developments, with comments from Reinhart.
(Reinhart Boerner Van Deuren s.c.)


Webcasts and Conferences

TRI-AD HealthSaver HSA Virtual Showcase
Nationwide on March 25, 2010
presented by TRI-AD


Press Releases

U.S. Labor Department Announces Updated Model Notices and Educational Material on Extension of COBRA Subsidy
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)




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