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Health & Welfare Plans Newsletter

April 20, 2010

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[Guidance Overview]
The CLASS Act: What Employers Should Know
6 pages. Excerpt: "Before embracing the government program, employers will need to answer a few key questions: What are the advantages and disadvantages of choosing the CLASS program or a private plan? Is it practical for employers to simultaneously offer both the CLASS program and a private plan? If not, what is a better choice? What are employees' potential perceptions? Which plan will offer them better value? Note: Because many of the details of the CLASS program have been delegated to the Secretary of HHS to develop, including the fundamental details of premium rates and benefit levels, this analysis cannot be conclusive until regulations or other guidance is issued."
(PricewaterhouseCoopers LLP)

[Guidance Overview]
Extension of COBRA Premium Subsidy to Cover Involuntary Terminations Through May 31, 2010
Excerpt: "To date, every time the premium subsidy program has been extended, the Department of Labor ('DOL') has provided revised general COBRA notices to alert qualified beneficiaries of potential rights under the program. At a minimum, employers should expect that they will be required to provide updated notices to individuals in the following two groups: Employees who were involuntarily terminated since April 1, 2010. It appears this notice will permit a retroactive election and a 60-day period within which to elect coverage. Individuals who experience a qualifying event (of any type) on or after April 1, 2010 but prior to May 31, 2010."
(Michael Best & Friedrich LLP)

[Guidance Overview]
Two-Month Extension to COBRA Subsidy Signed into Law on April 16, 2010 (PDF)
Excerpt: "The numerous extensions and new notice requirements have made the administration of COBRA continuation coverage requirements a challenge for employers, plans and administrators and additional extensions are likely. The Jobs for Main Street Act (H.R. 2847), passed by the House last December, would extend the COBRA subsidy program through June 30, 2010. In March, the Senate passed the American Workers, State, and Business Relief Act of 2010 (H.R. 4213), which would extend the COBRA subsidy program through December 31, 2010. It is possible that Congress will pass a longer-term extension before the Memorial Day Congressional recess, but the timing and legislative vehicle for such an extension remains uncertain."
(Groom Law Group)

Reporting Minimum Loss Ratios under Health Reform
Excerpt: "So what's included in Sec. 10101(f) of the Affordable Care Act, concerning minimum loss ratios? Health insurers offering group or individual insurance coverage must submit an annual report to the Department of Health and Human Services for each group and individual coverage for each medical plan year. This report must describe the ratio of the incurred claims plus a loss adjustment expense to earned premiums, typically called a medical loss ratio."
(Wolters Kluwer)

Health Reform Law Will Require Changes to Employer-provided Benefits over the Next Several Months
Excerpt: "The Patient Protection and Affordable Care Act ('PPACA') was signed by President Obama on March 23, 2010, formally implementing health care reform in the United States. The new requirements imposed by PPACA (along with the Health Care and Education Reconciliation Act of 2010 passed shortly thereafter) will gradually take effect in phases over the next several years. This Client Alert addresses the first four phases of PPACA changes that will affect employers within the next year."
(Greensfelder, Hemker & Gale, P.C.)

Health Care Reform: What Employers Need to Know Now
Excerpt: "Health care reform has ushered in sweeping changes for employers and group health plans. Although many provisions will not take effect until 2014 or later, a number of provisions take effect this year and in 2011. Employers need to know about -- and prepare for -- the changes that will have a more immediate impact on them and their employees."
(Faegre & Benson LLP)

EAPs As Core Health Management Strategic Element
Excerpt: "Shifting market forces, a challenging economy and the needs of a constantly changing workforce have broadened the scope and depth of employee assistance programs over the last several years. The days of an EAP being a benign benefit that sits in the corner and waits for utilization are over. Today, companies are aware that the advantages of an EAP that extend well beyond assistance for alcohol-related problems. An effective EAP should be a core component of a company's population health management strategy. By capitalizing on integration with an organization's other employee benefits, an EAP can have a positive impact on a company's productivity, efficiency, well-being and health care spend."
(Employee Benefit Adviser; free registration required)

Health Care Reform's Tax Provisions for Employers
Excerpt: "The massive health care legislation, signed into law by President Obama, contains provisions that will affect every employer. But timing ranges from items that apply immediately in 2010 to a variety of tax increases that become effective from 2011 to 2018. Andy Biebl, tax principal with LarsonAllen, urges employers to focus on those items taking effect in the next couple of years. 'The tax costs and coverage mandates don't hit until 2013 or 2014."
(LarsonAllen LLP)

Tax Provisions for Individuals in the Health Reform Act
Excerpt: "The colossal health care legislation, signed into law by President Obama, includes provisions that will affect most individuals, particularly those in the workforce. However, while several items are effective immediately, a variety of mandates, tax increases, and tax credits become effective over the next few years."
(LarsonAllen LLP)

IRS Notifies Small Employers of Health Care Tax Credit
Excerpt: "The Internal Revenue Service has begun mailing postcards to more than four million small businesses and tax-exempt organizations to make them aware of the benefits of the recently enacted small business health care tax credit. An IRS news release explained that a provision included in the Patient Protection and Affordable Care Act provides a tax credit to small employers that pay at least half the cost of single coverage for their employees in 2010."
(PLANSPONSOR.com)

What Do Plan Sponsors Need to Be Concerned About Within the Next Year Under PPACA?
Excerpt: "Under PPACA, while the employer mandates aren't effective until 2014, and the 'Cadillac plan' excise tax until 2018, there are a number of plan design considerations for 2010 and 2011. Most immediately, employers may be able to take advantage of the retiree reinsurance program."
(PLANSPONSOR.com)

CLASS: A New Voluntary Long-Term Care Insurance Program
Excerpt: "The new health reform law establishes a federal, voluntary long-term care insurance program, known as Community Living Assistance Services and Supports, or CLASS. This brief paper describes the need for CLASS, explains its benefits and financing, and corrects some misconceptions about the program's effect on the federal budget."
(Center on Budget and Policy Priorities)




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Executive Compensation; Benefits in General

Healthcare Reform and Executive Compensation
Excerpt: "For plan years which start on or after the date which is six months after the date of enactment (for calendar year plans this mean an effective date of January 1, 2011), the nondiscrimination requirements of IRC Section 105(h)(2) which prohibit discrimination in favor of highly compensated individuals will apply to both insured as well as self-insured group health plans (grandfathering may apply). What does this mean from a practical perspective?"
(Nelson Mullins Riley & Scarborough LLP)

[Guidance Overview]
Accounting Standards Update on Stock Compensation (PDF)
15 pages. Excerpt: "The objective of this Update is to address the classification of an employee share-based payment award with an exercise price denominated in the currency of a market in which the underlying equity security trades. FASB Accounting Standards Codification Topic 718, Compensation -- Stock Compensation, provides guidance on the classification of a share-based payment award as either equity or a liability. A share-based payment award that contains a condition that is not a market, performance, or service condition is required to be classified as a liability."
(Financial Accounting Standards Board)

IRS Grants Tax Relief to Victims of Severe Storms and Flooding in Massachusetts
Excerpt: "The IRS has announced in IRS News Release MA-2010-15 tax relief for taxpayers who reside or have a business in the federal disaster area of Bristol, Essex, Middlesex, Norfolk, Plymouth, Suffolk, and Worchester counties in Massachusetts affected by severe storms and flooding beginning on March 12, 2010."
(Wolters Kluwer)


Webcasts and Conferences

"401(k) Plan Workshop: Current Issues and New Developments" - Charlotte
in North Carolina on May 21, 2010
presented by SunGard Relius

"401(k) Plan Workshop: Current Issues and New Developments" - Dallas
in Texas on May 14, 2010
presented by SunGard Relius

"401(k) Plan Workshop: Current Issues and New Developments" - Detroit
in Michigan on May 14, 2010
presented by SunGard Relius

"401(k) Plan Workshop: Current Issues and New Developments" - Kansas City
in Kansas on May 21, 2010
presented by SunGard Relius

"401(k) Plan Workshop: Current Issues and New Developments" - Knoxville
in Tennessee on May 20, 2010
presented by SunGard Relius

"401(k) Plan Workshop: Current Issues and New Developments" - Minneapolis
in Minnesota on May 13, 2010
presented by SunGard Relius

"Form 5500/EFAST2 Workshop" - Charlotte
in North Carolina on May 20, 2010
presented by SunGard Relius

"Form 5500/EFAST2 Workshop" - Dallas
in Texas on May 13, 2010
presented by SunGard Relius

"Form 5500/EFAST2 Workshop" - Detroit
in Michigan on May 13, 2010
presented by SunGard Relius

"Form 5500/EFAST2 Workshop" - Kansas City
in Kansas on May 20, 2010
presented by SunGard Relius

"Form 5500/EFAST2 Workshop" - Knoxville
in Tennessee on May 19, 2010
presented by SunGard Relius

"Form 5500/EFAST2 Workshop" - Minneapolis
in Minnesota on May 12, 2010
presented by SunGard Relius

Cut Costs and Simplify Open and Ongoing Benefits Enrollment (No-cost Webinar)
Nationwide on April 22, 2010
presented by Benefit Software Inc.

Health Care Reform Law Update Smartcast with Craig J. Davidson, CEBS
Nationwide on April 27, 2010
presented by FutureOffice Network

Postponed Deadline for Certain IRA Contributions - Complimentary Podcast
Nationwide on April 20, 2010
presented by Convergent Retirement Plan Solutions, LLC


Press Releases


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