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Health & Welfare Plans Newsletter

May 6, 2010

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[Guidance Overview]
Understanding the Grandfather Rules under Health Care Reform (PDF)
6 pages. Excerpt: "This Alert addresses the ten most frequently asked questions regarding grandfather protection for large employer-sponsored group health plans. The Alert also includes a quick-reference chart with details on key provisions that are applicable to grandfathered plans, as well a final section summarizing the rules that grandfathered plans are able to avoid - at least for the time being."
(Sutherland Asbill & Brennan LLP)

[Guidance Overview]
Early Retiree Reinsurance Program Starts June 1 -- First-Come, First-Served
Excerpt: "Given the expectation that claims for reimbursements will substantially exceed the $5 billion in funding allocated to the Program, speed is essential."
(Ballard Spahr)

AT&T, Verizon, Others, Thought About Dropping Health Plans
Excerpt: "Internal documents recently reviewed by Fortune, originally requested by Congress, show what the bill's critics predicted, and what its champions dreaded: many large companies are examining a course that was heretofore unthinkable, dumping the health care coverage they provide to their workers in exchange for paying penalty fees to the government."
(Cable News Network)

Health Care Law's Hidden Tax Change to Launch 1099 Avalanche
Excerpt: "Section 9006 of the health care bill . . . mandates that beginning in 2012 all companies will have to issue 1099 tax forms not just to contract workers but to any individual or corporation from which they buy more than $600 in goods or services in a tax year."
(Cable News Network)

Disability Insurance Coverage Harder to Get and Many Companies Have Ceased to Offer It to Employees
Excerpt: "A new survey by the Life Foundation shows 84 percent of Americans strongly agree they should insure their cars, and 80 percent feel it's critical to have homeowner's insurance. Yet only 48 percent believe that it's imperative to have disability insurance if they have a job."
(Pittsburgh Post-Gazette)

Health Care Reform Insurance Web Portal Interim Final Rule (PDF)
3 pages. Excerpt: "Because of the short time frame for its implementation, HHS has decided to launch the web portal in phases. The first phase will be implemented on July 1. The second phase will be implemented in October 2010. HHS plans annual and periodic updates to the web portal after the initial implementation and intends the web portal to evolve with time."
(Groom Law Group)

HHS Publishes Interim Final Rule on Health Insurance Web Portal
Excerpt: "The website will include information about: Private insurance; High-risk pools; Medicaid; and The Children's Health Insurance Program . . . ."
(California HealthCare Foundation)

2010 ERISA Advisory Council Issue Paper on Health Care Literacy (PDF)
2 pages. Excerpt: "The Council plans to study Health Care Literacy in order to (i) assist the Department of Labor . . . in its development of standards for use by group health plans and issuers, (ii) determine whether the Department should take proactive steps to assist employers in their innovative efforts to promote health care literacy and efficient employee use of available coverage outside of written disclosures or materials and/or (iii) whether the Department should provide tools or other resources to employees and retirees that promote health care literacy, and if so, in what form."
(U.S. Employee Benefits Security Administration)

Near-Term Changes In Health Insurance
Excerpt: "[In t]his new policy brief from Health Affairs and the Robert Wood Johnson Foundation, the near-term effects of the Patient Protection and Affordable Care Act are examined and enumerated, providing context for key immediate reforms to the private health insurance market that will take effect in 2010 and 2011. Early insurance market reforms are associated with two goals of health care reform: (1) reducing barriers to health insurance and (2) improving the availability of information in the health care marketplace."
(Robert Wood Johnson Foundation)

ERIC Comments on Interim Final Regulations Implementing Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (PDF)
16 pages. Excerpt: "The regulations should not require employers to aggregate separate plans."
(The ERISA Industry Committee)

ERISA Attorney Fees: An Unadulterated Rant on Conkright and Hardt
Excerpt: "[T]he smart money is that the Court will say that Hardt is entitled to ask for fees even though not receiving a Judgment for the benefits because a remand to the plan administrator is a substantive, not procedural, remedy. Then we'll all be able to go on with our daily lives as before."
(Pension & Benefits Blog)

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Executive Compensation; Benefits in General

[Guidance Overview]
'Plan/Prevent/Protect': The DOL's Program to Transform Employment Law Compliance for Businesses
Excerpt: "As a result of this new DOL initiative, employers will need to reexamine their practices and shift their focus regarding employment law compliance. No longer will businesses have the luxury of waiting until a potential problem arises to address and resolve the issue. Employers instead would have to develop, implement, and enforce policies that are designed to eliminate, not merely mitigate, employment, safety, and employee benefit law violations."
(Littler Mendelson P.C.)

Congress Still Threatening to Impose Confiscatory Tax Rates on Bonuses of Financial Institution Executives
Excerpt: "[Senator Jim] Webb's amendment . . . would add new Sections 280I and 4999A to the Internal Revenue Code, placing an additional 50% excise tax on (and denying the company's deduction for) any 'bonus' above $400,000 attributable to service in 2009 paid to any employee or director working for financial institutions that received at least $5 billion in government funds under TARP or the Housing and Economic Recovery Act of 2008."
(Michael Melbinger via Winston & Strawn LLP)

Financial Reform Bill Would Affect Executive Compensation and Corporate Governance
Excerpt: "The executive compensation and corporate governance provisions are similar to those in the Wall Street Reform and Consumer Protection Act approved by the House in December 2009. The bill is now cleared for action on the Senate floor, but reaching bipartisan agreement will not be easy. If the Senate approves the legislation, lawmakers must then negotiate a compromise between the House and Senate proposals."
(Towers Watson)

IASB Proposes Changes to Employers' Accounting for Pension and Retiree Medical Plans
Excerpt: "International accounting standards [for defined benefit] pension and retiree medical plans would change significantly under a new IASB proposal. These changes, which dovetail with an IASB project on financial statement presentation, would move both the upside and downside of risks taken by DB plans outside of profit and loss accounts and into other comprehensive income."
(Mercer LLC)

Clamping Down on Misclassification of Workers
Excerpt: "A proposed federal law -- that experts expect to pass -- will require employers to notify employees and others who do work for them of their employee-classification status. Noncompliance with the law would bring high penalties, while compliance might prompt workers to consider legal action on wage-and-hour issues."
(Human Resource Executive Online)

Qualified Tuition Reductions for School Employees
Excerpt: "The IRS recently clarified the availability of the income exclusion under IRC § 117(d) for qualified tuition reduction in the case of joint-degree programs, and where graduate-level courses are taken other than to fulfill a graduate degree."
(Deloitte via

2010 ERISA Advisory Council Issue Paper on Disparities for Women and Minorities in Retirement and Health Care (PDF)
2 pages. Excerpt: "The Council will assemble empirical information from multiple sources to help us establish a baseline for the state of retirement and health care for minorities and women and to understand the causation of the conditions discovered. Minority data is generally collected by using the population categories of White, African American, Hispanic and Asian. We also expect to solicit data to understand the differences between married women and unmarried women, as well as special issues facing divorced and widowed women."
(U.S. Employee Benefits Security Administration)

Webcasts and Conferences

"Form 5500 for 403(b) Plans" - A Two-Part Web Seminar
Nationwide on June 9, 2010
presented by SunGard Relius

"Fundamentals of 401(k) and Other Qualified Plans" - Dallas
in Texas on June 9, 2010
presented by SunGard Relius

"Fundamentals of 401(k) and Other Qualified Plans" - Denver
in Colorado on June 9, 2010
presented by SunGard Relius

Assigning and Loaning Money from US Retirement Plans
Nationwide on May 18, 2010
presented by Worldwide Employee Benefits Network

ERISA and Current Legislative Update with Sal Tripodi
in Illinois on May 12, 2010
presented by ASPPA Benefits Council of Chicago

Health Care Reform: The Most Pressing Issues For Employers
Nationwide on May 25, 2010
presented by ABA Joint Committee on Employee Benefits

Predictive Modeling Web Summit - 2010
Nationwide on June 17, 2010
presented by MCOL

Teleconference: The New Form 5500 Schedule C Reporting Requirements - What Investment Fund Managers and Plan Service Providers Need to Know
Nationwide on May 12, 2010
presented by New York City Bar Association - Employee Benefits and Executive Compensation Committee

Press Releases

PBGC Protects Meridian Automotive Systems Pension Plans
Pension Benefit Guaranty Corporation (PBGC)

Memo to Employers: Use Prescription Data to Cut Health Costs
Healthcare Performance Management Institute

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