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Health & Welfare Plans Newsletter

March 31, 2010

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This timely Webcast will address the key elements of the Patient Protection and Affordable Care Act and the related provisions of the Health Care & Education Affordability Reconciliation Act of 2010. Three industry experts will present their views on key elements of health care reform legislation, timeline of required compliance dates, impact on stakeholders and plan design implications.

[Guidance Overview]
Health Care Reform Law Delivers New Transparency Requirements for Health Industry (PDF)
3 pages. Excerpt: "The Patient Protection and Affordable Care Act of 2010 as amended by the Health Care and Education Reconciliation Act of 2010 (the Healthcare Reform Law) provides for a number of new transparency requirements for several health industry sectors, including drug and device manufacturers and suppliers, pharmacy benefit managers, physician practices that provide ancillary services, and skilled nursing facilities. These requirements are generally related to financial relationships and activities and impose mandatory reporting obligations to the government that will have a broad impact on internal tracking and monitoring procedures as well as industry funding activities related to research, training, and education."
(Morgan, Lewis & Bockius LLP)

Chart: Health Care Reform at a Glance (PDF)
2 pages. The chart lists implications for large employers.
(Buck Consultants)

Impact of Health Care Reform on Employers and Employer-Sponsored Health Plans
Excerpt: "The employer responsibility provisions of Health Care Reform are designed to require employers to shoulder a large portion of the burden of providing group health coverage to their employees, either directly through subsidized employer sponsored coverage or by funding a portion of the cost of coverage provided through the Exchange. While most of the employer mandates affect only 'large' employers . . ., all group health plan sponsors will be impacted to some degree by these new mandates."
(Kilpatrick Stockton LLP)

Employer Responsibilities Under Health Care Reform
Excerpt: "Within the next few weeks, Spencer's Benefits Reports will examine those proposals that affect employer-sponsored plans in the near future. Today, preventive care is examined."
(Wolters Kluwer)

What Employers Need to Know Now about Health Care Reform (PDF)
4 pages. Excerpt: "This alert addresses the impact the law will have on employers by providing an introductory overview of certain provisions and the applicable effective dates."
(Bryan Cave LLP)

More Employers Commit to Penalizing Workers for Unhealthy Behaviors, Hewitt Finds
Excerpt: "A new survey by Hewitt Associates demonstrates employers' growing commitment to penalize workers for unhealthy behaviors. In Hewitt's annual health care trends survey of nearly 600 large U.S. employers, 47% say they either already use or plan to use financial penalties over the next three to five years for employees who do not participate in certain health improvement programs."
(Employee Benefit Adviser; free registration required)

Benefits Managers Eye Impact of Health Insurance Reforms
Excerpt: "Among provisions generating the greatest concern are extending coverage to employees' adult children until age 26 and to part-time employees who work at least 30 hours per week; eliminating annual or lifetime benefit limits and providing 100 percent coverage for certain wellness and preventive health care services; a cap on contributions to flexible spending accounts and a ban on the use of those funds to pay for over-the-counter drugs; reducing the value of federal subsidies paid to employers that provide prescription drug coverage to Medicare-eligible retirees; and the fact that neither H.R. 3590, the Patient Protection and Affordable Care Act, nor H.R. 4872, the Health Care and Education Affordability Reconciliation Act of 2010, goes far enough to reduce the cost of the health care delivery system."
(Workforce Management; free registration required)

Companies Begin to Make Plans Comply with Health Care Reform Law
Excerpt: "To meet a January 1, 2011, deadline that will apply to employers with calendar-year plans, employers during the next few months will have to redesign their health care plans to extend coverage to employees' adult children up to age 26, eliminate lifetime dollar limits and remove pre-existing condition exclusions, if any, for children up to age 19. They also will have to narrow allowed spending from flexible spending accounts to bar reimbursement for nonprescription, over-the-counter drugs, an FSA feature that the Internal Revenue Service sanctioned in 2003."
(Workforce Management; free registration required)

Health Care Reform Provisions
Excerpt: "Health care reform will be phased in over time. Some features of the new law, however, become effective as of the first day of the first plan year beginning six months after date of enactment. For many employers with calendar year plans, this means January 1, 2011. Some of the changes affecting plan sponsors have deferred effective dates leaving ample time to consider design strategies. Other changes become effective as early as January 1, 2011 for calendar year plans and require the prompt attention of plan sponsors and administrators. A summary of the changes [ are outlined in the target document]."
(Troutman Sanders LLP)

Same-S.ex Couples Often Pay More for Health Insurance Coverage
Excerpt: "Here's why: While the value of health benefits that employers pay on behalf of workers' spouses are excluded from employees' gross income by federal law, same-s.ex couples aren't extended the same tax break. That is, the value of a domestic partner's health-insurance benefit is counted as income paid to the worker. . . . A provision in the health-care reform bill originally passed by the House of Representatives last November would have extended tax-free status to all domestic partners and other non-spouse beneficiaries of employer health plans. But it wasn't included in the landmark legislation that President Obama signed into law in March.'"
(Henry J. Kaiser Family Foundation)

Small Businesses Prepare for Health Reform Changes
Excerpt: "The Associated Press/Washington Post . . . has a rundown of the perks and penalties for small businesses in the health reform law. Perks include tax credits for employers with 25 or fewer workers with wages of $50,000 or less starting in 2010, and insurance exchanges where business with up to 100 employees -- and the self-employed -- can pool together to offer better rates for health coverage (3/31)."
(Henry J. Kaiser Family Foundation)

EBSA and Centers for Medicare & Medicaid Services Announces Meeting of CHIP Working Group, Addressing Employer-Sponsored Group Health Plan Coverage Coordination (PDF)
2 pages. Excerpt: "The CHIP Working Group will meet . . . to develop a model coverage coordination disclosure form for group health plan administrators to send to States upon request regarding benefits available under the plan. . . . The CHIP Working Group will identify and report on the impediments to the effective coordination of coverage available to families that include employees of employers that maintain group health plans and members who are eligible for medical assistance under title XIX of the [Social Security] Act or child health assistance or other health benefits coverage under title XXI of the [Social Security] Act."
(Employee Benefits Security Administration, U.S. Department of Labor; Centers for Medicare & Medicaid Services, U.S. Department of Health and Human Services)

Adoption Credit Increased, Made Refundable by Health Care Act
Excerpt: "The Patient Protection and Affordable Care Act (PL 111-148) temporarily increased the adoption expense credit and fringe benefit exclusion limit for adoption assistance programs and made the credit refundable. The changes are effective for tax years beginning after Dec. 31, 2009."
(American Institute of Certified Public Accountants)

Changes Included in Final Health Care Law That Affect Employers
Excerpt: "According to an update from Mercer, now that President Obama has signed into law the health care reform package (HR 4872) revising the Patient Protection and Affordable Care Act (PL 111-148), employers should note that all insured and self-insured employer plans (except some collectively bargained ones) will have to comply with certain mandates for plan years starting on or after these dates . . . ."

Health Savings Accounts May Benefit from Mandates for Companies
Excerpt: "Employers and individuals may take a closer look at using health savings accounts in conjunction with high-deductible health plans because the health care reform legislation includes mandates that employers with more than 50 workers purchase health care insurance, HSA proponents say."
(Investment News; free registration required)

Summary of the Patient Protection and Affordable Care Act
Excerpt: "The centerpieces of health reform - the individual mandate, subsidies, Health Insurance Exchanges, and the employer free rider penalty - are all effective in 2014. However, important changes to plan benefit design rules, certain tax rules, and the Medicare program are effective either in the near future or over the next four years. This Stat! contains a brief summary of the law's key provisions, divided into seven sections . . . ."
(The Segal Group, Inc.)

National Employee Benefits Day acknowledges employee benefits professionals for the quality benefits you provide and for the important role you have in your colleaguesí well being.
This year Benefits Day has a special focus on Workplace Wellness. We encourage you to evaluate your wellness offerings and to reach out to your employees with suggestions on living a healthier lifestyle.

Visit for free resources to help you celebrate!

Executive Compensation; Benefits in General

[CORRECTED LINK: Guidance Overview]
Employers Should Be Cautious of New Decision Holding that Severance is Not 'Wages' Subject to FICA
Excerpt: "In United States v. Quality Stores, Inc., a federal district court in Michigan held that severance payments were not wages subject to Social Security and Medicare taxes ('FICA' taxes). This decision appears to conflict with a decision of the Court of Appeals for the Federal Circuit. It also is likely to be challenged by the Internal Revenue Service (IRS)."
(Littler Mendelson P.C.)

[Guidance Overview]
Former Brocade CEO Found Guilty in Options Backdating Suit Retrial
Excerpt: "A federal jury on Friday convicted former Brocade CEO Gregory Reyes on nine out of 10 felony counts relating to the backdating of stock options."

Webcasts and Conferences

2010 Summer Tour: Two-Day IRA Workshop
in District of Columbia on June 8, 2010
presented by Ascensus

2010 Summer Tour: Two-Day IRA Workshop
in Ohio on June 10, 2010
presented by Ascensus

2010 Summer Tour: Two-Day IRA Workshop
in Minnesota on June 15, 2010
presented by Ascensus

2010 Summer Tour: Two-Day IRA Workshop
in Oregon on June 15, 2010
presented by Ascensus

2010 Summer Tour: Two-Day IRA Workshop
in Texas on June 22, 2010
presented by Ascensus

Historic Health Care Overhaul: What It Means for Employers Webinar
Nationwide on April 21, 2010
presented by Ogletree Deakins

Press Releases

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