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Health & Welfare Plans Newsletter

June 1, 2010

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The Department of Health and Human Services recently published regulations explaining how plan sponsors may apply for the early retiree reinsurance program in the Affordable Care Act. The upcoming webcast, Early Retiree Reinsurance Program: Information You Need Now to Apply, will discuss the new regulations and focus on what plan sponsors need to do to participate.
Register now to attend this webcast on Thursday, June 10.

[Guidance Overview]
Limitation on Health FSAs Offered in Cafeteria Plans Under Health Reform
Excerpt: "Sec. 9005 of the Affordable Care Act concerns the limitations placed on health flexible spending arrangements (FSAs) offered in cafeteria plans. Effective for tax years beginning after Dec. 31, 2012, a health FSA will not be a qualified benefit under a cafeteria plan unless the plan provides for a $2,500 maximum annual salary reduction contribution to the FSA. If the plan does not specifically prohibit salary reductions in excess of $2,500, the benefit under the health FSA will not be qualified."
(Wolters Kluwer)

Employers Will Pass Obamacare Costs onto Employees, According to Survey
Excerpt: "90 percent [of benefit specialists surveyed] believe that Obamacare 'will increase their organization's health care benefit costs'; 88 percent intend to pass the increases onto employees by increasing employee premium contributions or other cost-sharing measures; 74 percent intend to 'reduce health benefits and programs' by using stingier health plans, restricting eligibility for health coverage, and using spousal waivers or surcharges."
(National Review)

Obama Administration Sides with City in San Francisco Health Coverage Law Lawsuit
Excerpt: "San Francisco Chronicle: 'The Obama administration took San Francisco's side Friday in a legal dispute over the city's groundbreaking health coverage law, urging the Supreme Court to reject an appeal by restaurant owners who objected to paying part of the cost. In a long-awaited filing, government lawyers said passage of national health insurance legislation 'has dramatically changed the landscape' and reduced the likelihood that cities and states would adopt laws like San Francisco's."
(Henry J. Kaiser Family Foundation)

Health Savings Accounts and Health Reimbursement Arrangements: Assets, Account Balances, and Rollovers, 2006-2009 (PDF)
32 pages. Excerpt: "Asset Levels Growing: In 2009, there was $7.1 billion in consumer-driven health plans (CDHPs), which include health savings accounts (or HSAs) and health reimbursement arrangements (or HRAs), spread across 5 million accounts. This is up from 2006, when there were 1.2 million accounts with $835.4 million in assets, and 2008, when 4.2 million accounts held $5.7 billion in assets."
(Employee Benefit Research Institute)

Jobs Bill Passes House with 'Doc Fix' but Jettisons COBRA Benefits, Extra State Medicaid Funding
Excerpt: "[U]nder pressure from fiscal conservatives, Democrats dropped a COBRA subsidy extension to help newly laid-off pay for health coverage . . . ."
(Henry J. Kaiser Family Foundation)

Graduates May See Health Insurance Coverage Gap After All
Excerpt: "[W]hen parents ask for details from their employers about how to keep their children on a family plan, many are learning that their employers have said 'no thank you' to their insurer's offer to make the change early. Instead of modifying health plans now, they plan to wait to provide the extended coverage until they are legally required to do so."
(The New York Times; free registration required)

Health Care Tax Credit Comes with Benefits and Strings for Small Businesses
Excerpt: "Critics say the credit is too complicated and doesn't solve the underlying problem for small business owners: the rising cost of insurance. 'As long as costs keep going up, the credit is going to become less valuable,' says Bill Rys, tax counsel for the National Federation of Independent Business."
(Henry J. Kaiser Family Foundation)

An employer writes:

"I have to tell you that of all the job boards Iíve ever used, this one has the best quality of candidates. I donít get flooded with tons of resumes, and even the candidates who arenít fit for the jobs we have donít miss the mark by much."

Executive Compensation; Benefits in General

[Guidance Overview]
Supreme Court Resolves Conflict on Awarding Attorney Fees in ERISA Cases in Hardt v. Reliance Standard Life
Excerpt: "Resolving a long-standing conflict in the Federal Circuits, the U.S. Supreme Court . . . has held that a party need not 'prevail' in its Employee Retiree Income Security Act (ERISA) litigation for a court to award the party attorneys' fees; rather, the Court held that a party in an ERISA case is eligible for a fee award if it achieves 'some degree of success on the merits' in the litigation."
(Littler Mendelson P.C.)

Employee Benefits Developments May 2010
A summary of March/April 2010 rulings, opinions, guidance, cases.
(Hodgson Russ LLP)

The Lessons of the GM Bankrup.tcy: Everybody Knew It Was Ridiculous and Unsustainable to Pay UAW Workers Not to Work
Excerpt: "[W]e, as a country, should take away some lessons from the experience. The following get my vote for the three most important: Problems denied and solutions delayed will result in a painful and costly day of reckoning. In corporate governance, the right people count more than the right structure. Appearances can be deceiving."
(The Wall Street Journal)

Webcasts and Conferences

20th Annual National Health Benefits Conference & Expo (HBCE)
in Florida on January 31, 2011
presented by Health Benefits Conference & Expo

HIPAA and Other Health Benefits Laws: Compliance Assistance Seminar
in New York on July 14, 2010
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

OTC Restrictions, Health FSA Limits, and Simple Plans: Health Care Reform Drill Down
in Washington on May 27, 2010
presented by EBIA / Thomson Reuters

The Basics and More Workshop
in Florida on June 24, 2010
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Press Releases

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Newly Posted Employee Benefits Jobs

RPS Manager (03010VBSFS)
for Goodman and Company
in VA

RPS Supervisor
for Goodman and Company
in VA

Defined Contribution Administrator
for Leon E. Werntz and Associates, Inc.
in LA

Director, Product Management
for Prudential
in NJ

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