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Health & Welfare Plans Newsletter

May 11, 2010

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Professionals across the U.S. are now charged with sorting through health care reform and complying with new health plan requirements. These must-have books provide comprehensive guidance and in-depth analysis of the new legislation. Choose from CCH’s Law, Explanation and Analysis (Volumes 1 & 2), RIA’s Complete Analysis of the Tax & Benefits Provisions and RIA’s Analysis of the Medicare, Medicaid & Other Health Care Provisions.

[Official Guidance]
Text of Interim Final Reg for Group Health Plans and Health Insurance Issuers Relating to Dependent Coverage of Children to Age 26 under the Patient Protection and Affordable Care Act (PDF)
As filed with the Office of the Federal Register; scheduled for publication on May 13. 69 pages. Excerpt: "These interim final regulations generally apply to group health plans and group health insurance issuers for plan years beginning on or after September 23, 2010. These interim final regulations generally apply to individual health insurance issuers for policy years beginning on or after September 23, 2010."
(U.S. Employee Benefits Security Administration; Internal Revenue Service; Department of Health and Human Services)

[Official Guidance]
EBSA Fact Sheet on Allowing Young Adults to Stay on a Parent's Health Plan Up to Age 26; Highlights of New Regulation
Excerpt: "The Departments of Health and Human Services, Labor, and Treasury have issued regulations implementing the Affordable Care Act by expanding dependent coverage for adult children up to age 26. Key elements include: . . ."
(U.S. Employee Benefits Security Administration)

[Guidance Overview]
Working Moms Battle for Breaks to Express Breast Milk (PDF)
Excerpt: "The Reform Act adds a new provision to the Fair Labor Standards Act (the 'FLSA') that addresses the needs of working women who breast-feed their infant children. Effective immediately, employers covered by the FLSA must provide 'reasonable' breaks (in terms of both time and number of breaks) to mothers to express milk for their infants who are up to one year old."
(Proskauer Rose LLP)

[Guidance Overview]
Tax Treatment of Employer-Provided Health Insurance Coverage in Wisconsin
Excerpt: "On Tuesday, March 30, 2010, President Obama signed into the law the Health Care and Education Reconciliation Act of 2010 . . . . The Act amended federal tax law (but not Wisconsin tax law . . .) so that employers can offer health insurance coverage that is tax-free for federal income tax purposes to adult children of employees . . . ."
(Michael Best & Friedrich LLP)

[Guidance Overview]
District Court Remands ERISA Subrogation Case
Excerpt: "The participant argued that the lien of $525,601 would 'consume his entire settlement.' The Order To Show Cause directed the ERISA plan to 'show cause why [it] should not substitute its draft in favor of the plaintiffs in the amount of [settlement]' offered by the tortfeasors."
(Roy Harmon via Health Plan Law)

[Guidance Overview]
HHS Guidance Addresses the New Early Retiree Reinsurance Program
Excerpt: "Because applications for reimbursements will be processed in the order received and funding for this program is limited, it is of paramount importance that plan sponsors be ready to act fast once applications are available in June."
(Proskauer Rose LLP)

[Guidance Overview]
Interim Final Regulations Address Retiree Reinsurance Provisions of Health Care Reform
Excerpt: "Early Retiree Defined. 'Early retirees' for this purpose generally are participants in an employer-sponsored health plan who are age 55 or older, are not active employees, and are not eligible for Medicare. The term includes the spouse and other dependents of the retiree, regardless of their age and Medicare eligibility."
(Employee Benefits Institute of America)

Some Families Face Higher Health Premiums to Insure Adult Children
Excerpt: "Until 2014, when health plans will be prohibited from charging higher premiums based on preexisting conditions, insurers in the individual market can take into account the young adult's medical condition when setting the family's premium. In addition, under certain circumstances, families could be required to pay extra to carry young adults on their policies."
(The Washington Post; free registration required)

Health Insurance Law Limits Premium Cost for Young Adults
Excerpt: "The law itself wasn't clear on whether companies had flexibility to set the price for covering young adults. But the new rules spell out that premiums must be the same for all dependents, regardless of their age."
(The Wall Street Journal)

Rules Let Youths Stay on Parents' Health Insurance
Excerpt: "Under the rules, an employer-sponsored health plan or a company selling individual insurance policies must offer coverage to subscribers' children up to the age of 26, regardless of whether a child lives with his or her parents, attends college, is a dependent for income-tax purposes or receives financial support from the parents."
(The New York Times; free registration required)

Quality Initiatives under Health Care Reform
Excerpt: "Health plans and insurers will be required to participate in quality reporting based on requirements that shall focus on improvement of health outcomes; implementation of activities to prevent hospital readmissions, improve patient safety and reduce medical errors; and implementation of wellness and health promotion activities."
(McDermott Will & Emery)

Does Staying Healthy Reduce Your Lifetime Health Care Costs?
Excerpt: "Our main finding is that although the current health care costs of healthy retirees are lower than those of the unhealthy, the healthy actually face higher total health care costs over their remaining lifetime."
(Center for Retirement Research at Boston College)

Grandfathered Health Plans under Health Reform
Excerpt: "Grandfathered plans are exempt from many of the provisions governing new plans . . . . [However, grandfathered plans] must comply with these reform provisions for plan years beginning on or after March 23, 2010: Requirements to provide uniform explanations of coverage and standardized definitions . . . . Requirements to provide loss-ratio reports and rebate premiums if loss ratios fall below 80% . . . ."
(Wolters Kluwer)

Florida Suit Challenges Health Care Law
Excerpt: "Some legal scholars, including some who normally lean to the left, believe the states have identified the law's weak spot and devised a credible theory for eviscerating it. The power of their argument lies in questioning whether Congress can regulate inactivity -- in this case by levying a tax penalty on those who do not obtain health insurance."
(The New York Times; free registration required)

HHS Requires Data for Its Web Portal from Insurers As Early As May 21, 2010
Excerpt: "The web portal must provide, at a minimum, information on eligibility, availability, premium rates, cost-sharing, and the percentage of total premium revenue expended on nonclinical costs with respect to these coverage options."
(Employee Benefits Institute of America)

Humorist Dave Barry on the State of Health Care
Excerpt: "The greatest Greek physician of all was Hippocrates, who is often called 'the father of modern medicine' because he invented the concept that remains the foundation of all medical care as we know it today: the receptionist. Prior to this invention, when patients came to see the doctor, the doctor had to actually see them . . . ."
(The Miami Herald)

Register now for the 2010 SPARK National Conference, June 13-15 at the Mandarin Oriental Hotel in Washington, DC. Join the top marketing, sales, administration and record keeping professionals at the retirement services industry’s leading educational and networking event. Gain insights into the latest business, marketing and sales strategies. Get updates on current market trends, regulatory and legislative issues. Attend sessions designed for TPAs, Financial Advisors and RIAs. Network with peers and earn Continuing Education Credits.

Executive Compensation; Benefits in General

Ownership Transitions: ESOPs Compared to Other Strategies
In a new article on the NCEO's Web site, Kelly Finnell discusses the three traditional ownership transition strategies and compares them to an employee stock ownership plan (ESOP).
(National Center for Employee Ownership)

Book Review: Steve Greenhut's 'Plunder! How Public Employee Unions are Raiding Treasuries, Controlling Our Lives and Bankrupting the Nation'
Excerpt: "Plunder! takes a look at the perverse incentives that bring together corrupt politicians and public unions to rape taxpayers."
(Mike Shedlock)

Webcasts and Conferences

403(b) Update
Nationwide on September 15, 2010
presented by McKay Hochman Co.

Advanced RMD Issues
Nationwide on June 23, 2010
presented by McKay Hochman Co.

Back-to-Basics Series
Nationwide on July 8, 2010
presented by McKay Hochman Co.

Employee Benefits Conference: Dawn of a New Decade
in Minnesota on June 16, 2010
presented by Employers Association, Inc.

EPCRS, Latest Release and Recent Years
Nationwide on June 30, 2010
presented by McKay Hochman Co.

Participant Loans
Nationwide on May 26, 2010
presented by McKay Hochman Co.

Safe Harbor 401(k)s: Design and Correction
Nationwide on July 21, 2010
presented by McKay Hochman Co.

What a 401(k) Administrator Needs to Know About IRAs
Nationwide on August 25, 2010
presented by McKay Hochman Co.

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