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Health & Welfare Plans Newsletter

April 28, 2010

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Learn what single employers need to do now—both tactically and strategically. The May 6 webcast will provide timelines for employers, so they understand what to do now, next year and beyond. Explore the long-term strategies that will emerge as a result of this law’s passage. Topics include why employers provide coverage to associates and their families, competitive positioning of these benefits and cost containment actions to consider over the next few years.

[Guidance Overview]
IRS Issues Guidance on Health Care Coverage for Children Under Age 27 (Detailed Description)
Excerpt: "Employers may assume that an employee's tax year is the calendar year and may rely upon the employee's representation as to the child's date of birth."
(Wolters Kluwer Law & Business)

[Guidance Overview]
IRS Releases First Round of Health Care Reform Guidance on Taxation of Health Coverage for Adult Children
Excerpt: "The [gross income] exclusion [for coverage under a health plan] is effective for health coverage provided on or after March 30, 2010. Before March 30, coverage for the child will be excludable only if the child qualifies as a tax-code dependent. [Further, the] exclusion ceases to apply in the year in which the child turns 27. Thus, if a child will turn 27 on December 15, 2011, the exclusion applies to health coverage provided from March 30, 2010, through December 31, 2010."
(Ballard Spahr)

[Guidance Overview]
Administration-Issued 'Fact Sheet' on New IRS Guidance on Coverage of Children Younger than 27 (PDF)
1 page. Excerpt: "Today's announcement follows a series of steps taken by the Administration to move quickly expand health insurance coverage to young adults. On April 19, Health and Human Services Secretary Kathleen Sebelius called on leading insurance companies to begin covering young adults voluntarily before the September 23 implementation date required by the new health reform law."
(White House)

[Official Guidance]
DOL Updates COBRA Documents Available on Web Page
The Department of Labor's Employee Benefits Security Administration COBRA page now has available updated Model Notices, Application for Expedited Review of Denial of COBRA Premium Reduction, Fact Sheet, and Frequently Asked Questions (FAQs) that reflect the provisions of the Continuing Extension Act of 2010.
(U.S. Employee Benefits Security Administration)

[Guidance Overview]
Health Care Reform: What Employers Need to Know Now
Excerpt: "The principal changes effective for plan years beginning on or after September 23, 2010, that apply to both new and grandfathered plans are as follows. . . ."
(Hinshaw & Culbertson)

[Guidance Overview]
Health Care Reform: What Employers Need To Know for 2010 and 2011 (PDF)
3 pages. Excerpt: "The Act . . .'grandfathers' group health plans in existence on the date of enactment from application of some requirements. Reinhart Comment: The Act allows a plan to retain grandfathered status even if employees reenroll in a plan, or new family members or new employees join the plan. It is currently unclear what impact structural or design changes would have on a plan's grandfathered status."

[Guidance Overview]
Health Care Reform Implications for Public Employers (PDF)
6 pages. Excerpt: "While many of the new provisions address access and insurance practices in the small employer and individual markets, the laws will have an impact on larger public employer and public retirement system health plans. The following discussion summarizes some of the key provisions in the laws . . . ."
(Gabriel Roeder Smith & Company)

[Guidance Overview]
Health Care Reform: What Employers Need to Know
7 pages.
(Miller Johnson)

Financial Reporting Implications of Health Care Legislation
5 pages. Excerpt: "This [article] describes a number of potential implications of the new legislation for an employer's accounting for postretirement benefits other than pensions. . . . Although it can be challenging, employers are required to estimate the impact of the Act on their [accumulated postretirement benefit obligation]."

Many Healthcare Plans Fail Affordability Test
Excerpt: "Under a health care reform law provision that begins in 2014, employers are subject to stiff penalties if premiums paid by full-time employees exceed 9.5% of their household income."
(Business Insurance)

Small Business Owners Have Mixed Reviews On Health Law's Tax Credits
Excerpt: "The U.S. Chamber of Commerce and the National Federation of Independent Business say the tax credits, which will provide a credit worth 50 percent of an employer's contribution toward employee health insurance premiums for the smallest firms, will actually do little to help small businesses afford health insurance."
(Kaiser Health News)

Federal Employee Health Program Unlikely To Extend Young Adult Coverage On Parents' Plan This Year
Excerpt: "[T]he [federal] government, which is the largest employer in the nation, will not follow the lead of some private insurance companies that will begin offering such coverage to young adults by June 1."
(Kaiser Health News)

Is Putting Older Kids on Your Health Plan the Best Option?
Excerpt: "Find out how much it will cost to cover your child. Some employer-provided plans charge a flat family premium, while others base premiums on the number of dependents covered . . . ."

HIPAA Regulations Will Come Next Month
Excerpt: "The Department of Health & Human Services (HHS) released its semi-annual regulatory agenda in the Federal Register Monday and wrote that modifications to the HIPAA privacy, security and enforcement rules will be coming in May."

Executive Compensation; Benefits in General

[Guidance Overview]
Top 10 Tips for the New Form 5500 Electronic Filing Requirement
Excerpt: " EFAST (the version of the U.S. Department of Labor's electronic filing program that was implemented prior to EFAST2) will overlap with EFAST2 for six months and will continue to accept electronic filings through June 30, 2010. The following are the top 10 things you should know about filing your Form 5500 using EFAST2 . . . ."
(McDermott Will & Emery)

U.S. Supreme Court Hears Oral Arguments in ERISA Fees Case
Excerpt: "In Hardt v. Reliance Standard Life Insurance Co., the court heard arguments on whether § 502(g)(1) of [ERISA] provides a district court discretion to award reasonable attorney's fees only to a prevailing party, and whether a party is entitled to attorney's fees when she persuades a district court that a violation of ERISA has occurred, successfully secures a judicially-ordered remand requiring a redetermination of entitlement to benefits, and subsequently receives the benefits sought on remand."

6 Ways Couples Can Maximize Social Security Payouts
Excerpt: "Couples who are currently married, or who have stayed together at least 10 years, tie their working records -- and the resulting Social Security checks -- together as long as they both live. In the case of Social Security payments, the result is often better for the couple."
(U.S. News & World Report)

Employers Say Benefit Costs Trump Employee Retention
Excerpt: "For the first time since 2006, controlling benefit costs edge out employee retention as the top concern facing employers . . . .'"
(Employee Benefit Adviser; free registration required)

Study Says State and Local Government Employees Earn Less than Private Sector Employees
Excerpt: "Employees of state & local government earn an average of 11% and 12% less, respectively, than comparable private sector employees. An analysis spanning two decades shows the pay gap between public and private sector employees has widened in recent years. "
(National Institute on Retirement Security)

Webcasts and Conferences

COBRA Premium Subsidy Law Changes: What You Need to Know to Comply Webcast
Nationwide on May 6, 2010
presented by Thompson Interactive

Communicating Health Care Reform to Your Employees Webcast
Nationwide on May 25, 2010
presented by Findley Davies, Inc.

Press Releases

ASPPA Requests EFAST2 Extension From DOL
American Society of Pension Professionals & Actuaries (ASPPA)

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