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Health & Welfare Plans Newsletter

April 15, 2010

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[Guidance Overview]
Limitation of Distributions from Health Accounts for Over-the-Counter Medicines
Excerpt: "The definition of qualified medical expenses, for purposes of reimbursements from health flexible spending arrangements (health FSAs) or health reimbursement arrangements (HRAs), and distributions from health savings accounts (HSAs) or Archer medical savings accounts (Archer MSAs), has been modified to include amounts paid for medicine or a drug only if such medicine or drug is a prescribed drug (determined without regard to whether such drug is available without a prescription) or is insulin."
(Wolters Kluwer)

[Guidance Overview]
Health Care Reform Bill Requires Group Health Plans to Cover 'Adult Child' Dependents
Excerpt: "This requirement applies for plan years beginning on or after September 23, 2010, (January 1, 2011 for a calendar year plan), subject to the rules and exceptions described [in the target document.]"
(Drinker Biddle & Reath LLP)

[Guidance Overview]
Same-S.ex Couples Sue CalPERS and IRS over Partner LTC Benefits
Excerpt: "The case challenges a 1996 federal law that permits states to establish long-term care plans for their employees. The law denies coverage to a state worker's same-s.ex partner. In 2005, California granted spousal benefits to same-s.ex domestic partners but exempted long-term care plans authorized by the 1996 federal law."
(California HealthCare Foundation)

The Missing Pieces of the Wellness Program Results Puzzle
Excerpt: "The program requires an ongoing commitment from the top down. Scheduling meetings in advance and on a regular basis, at least quarterly, keeps the program on track. Review the data you have and determine if it is the right data. Something that works one year might not work the next, so make adjustments. If the owners of the program lose interest, how can they expect employees not to do the same?"
(Employee Benefit Adviser; free registration required)

Chart on Health Care Reform's Plan Design Requirements (PDF)
7 pages. Excerpt: "This chart summarizes these provisions in chronological order of effective dates to assist employers and group health plan sponsors in focusing on the issues that will be come effective for most employers as group health plan sponsors as of January 1, 2011."
(Troutman Sanders LLP)

Health Care Reform: Employer Focus for 2010
Excerpt: "This alert focuses on the issues that employers and group health plan sponsors face in preparing for group health plan years beginning on or after October 1, 2010 (January 1, 2011 for calendar year plans)."
(Troutman Sanders LLP)

Immediate Health Care Reform Law Issues for Group Health Plans (PDF)
7 pages. Excerpt: "While employers await the inevitable regulations necessary to flesh out and implement the Healthcare Reform Law (and what are likely to be a fair amount of technical corrections to it), they should begin to focus on the following select items: [Retiree Drug Subsidy Taxation; Early Retiree Medical Reinsurance Program; Small Employer Tax Credit; Adult Child Coverage Until Age 26; Pre-existing Condition Exclusions; Lifetime Maximums; Prohibition on Rescissions; and, more.]"
(Morgan, Lewis & Bockius LLP)

FAQs on Health Care Reform and Employee Benefits
Excerpt: "Employers who participated in our April 7th webcast, 'Health Care Reform: What's Happened and What's Next,' asked many penetrating questions about the implications of health care reform on employee benefits. As promised, here are our answers."
(Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C.)

Comments Sought on Medical Loss Ratio Requirements
Excerpt: "The EBSA Request for Comments Regarding Section 2718 of the Public Health Service Act (Medical Loss Ratios), as added by the Patient Protection and Affordable Care Act ('PPACA') has been published in the April 14 issue of the Federal Register . . . . Comments are to be submitted by May 14, 2010."
(Roy Harmon via Health Plan Law)

New Long-Term Care Insurance Program Will Provide Flexible Cash Benefits
Excerpt: "A provision in the health care overhaul law signed by President Barack Obama last month . . . . establishes a voluntary, long-term care program that will provide cash to enrollees who suffer at least two limitations in daily activities, such as eating, bathing and dressing. Supporters say the program, known as the Community Living Assistance Services and Supports (CLASS) Act, will give families greater means to care for disabled relatives."
(Henry J. Kaiser Family Foundation)

Summary of the Delivery and Payment Reform Elements of the Patient Protection and Affordable Care Act of 2010 (PDF)
21 pages. Excerpt: "the newly enacted law includes a wide range of provisions intended to control health care costs and improve the health care delivery system. This summary provides a review of some of the major areas of reform that relate to fostering delivery system reform, including: Payment Reform; Priority Setting, Performance Measurement, and Quality Improvement; Public Reporting; Promoting Population Health and Wellness; Comparative Effectiveness Research; Health Information Technology and Administrative Efficiency."
(Consumer-Purchaser Disclosure Project)

Insured Plans Must Comply with New Nondiscrimination Rules Under Health Reform
Excerpt: "Sec. 10105 and 10101(d) of the Affordable Care Act involves new nondiscrimination rules for insured plans: Insured group health plans now must comply with the nondiscrimination requirements for self-funded plans, including rules that the plan does not discriminate in favor of highly compensated individuals as to eligibility to participate. In addition, the benefits provided under the plan may not discriminate in favor of participants who are highly compensated individuals."
(Wolters Kluwer)

Multinationals Take Health Strategies Global
Excerpt: "As obesity, work-related stress and chronic disease accelerate among the non-U.S.-based employees of multinationals, the number of multinational companies that are taking a global approach to mitigate these so-called 'lifestyle diseases' will double by 2012. Workforce Health Strategies: A Multinational Perspective, a survey conducted by Towers Watson, found that while only about one in four (26%) multinational companies has a global health strategy in place, an equal number plan to implement a global health strategy by 2012."

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Executive Compensation; Benefits in General

House Oversight and Government Reform Committee Approves Measures to Expand Telework and to Allow Federal Employees to Invest Value of Unused Leave in Retirement Accounts
Excerpt: "The panel passed the 2009 Telework Improvements Act (H.R. 1722) by a voice vote, after debating three amendments aimed at strengthening oversight. The measure would codify a governmentwide telework policy Office of Personnel Management Director John Berry announced last year, guaranteeing eligible federal employees the right to work off-site for at least 20 percent of every two-week period. It also would require every agency to designate a telework managing officer and it would provide training on the alternative work arrangement for employees and supervisors."

House Slated to Vote on Legislation Providing That Employer-Provided Cell Phones Not Be Treated by IRS As a Taxable Fringe Benefit to Employees
Excerpt: "Dow Jones reported that the Internal Revenue Service (IRS) interprets current law to require the inclusion of the value of a work cell phone in employee pay, unless detailed records are kept establishing that the phone is not used for personal calls."

No More Opinion Letters from DOL's Wage and Hour Division
Excerpt: "The Department of Labor's Wage and Hour Division has announced it will no longer publish opinion letters to provide fact-specific guidance to employers and employees. According to an article by James M. Coleman and Maureen R. Knight, attorneys in the Fairfax, Virginia, office of Constangy, Brooks & Smith LLP, in the future requests for opinion letters will be responded to by providing references to statutes, regulations, interpretations and cases that are relevant to the specific request, but without an analysis of the specific facts presented, called 'administrator's interpretations.'"

Employee Ownership Update for April 14, 2010
NCEO Executive Director Corey Rosen discusses the following in the latest Employee Ownership Update: The White House's 2011 budget estimates a $1.7 billion tax cost for ESOPs this year. Broad-based employee ownership is alive and well in 2010. French companies with employee-elected directors perform better. An alternative to a more formal board of directors is to create a board of advisors.
(National Center for Employee Ownership)

Press Releases

New Book on Defined Benefit Pension Plans
Executive Benefits Design Group

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