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Health & Welfare Plans Newsletter

June 17, 2010

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[Official Guidance]
Interim Regs on Grandfathered Health Plans, in Federal Register (Typeset) Format (PDF)
34 pages, from the June 17, 2010 Federal Register.
(U.S. Employee Benefits Security Administration; Internal Revenue Service; U.S. Department of Health and Human Services)

[Guidance Overview]
Interim Final Regulations Issued on Grandfathering and Retiree-Only Plans Under Health Reform
Excerpt: "[N]ote that to maintain grandfathered status, an employer must include a statement in any plan-related materials distributed to participants that the plan believes it is a grandfathered health plan and providing contact information for questions and complaints; model language for this purpose is included in the regulations."
(Towers Watson)

[Guidance Overview]
Will Grandfathered Health Plans Become an Endangered Species?
Excerpt: "Although the Rules take a somewhat logical approach to grandfather status, the Rules limit many plan design changes if a plan sponsor desires to maintain grandfather plan status. Due to the cumulative effect of plan design changes, many plans will fall out of grandfather plan status over time."
(Kilpatrick Stockton LLP)

[Guidance Overview]
Interim Final Rule on 'Grandfather' Status Under Health Care Reform (PDF)
7 pages. Excerpt: "The Rule will be published in the Federal Register on June 17, 2010 and is effective immediately."
(Groom Law Group)

[Guidance Overview]
Grandfathered Plan Regs Provide Vital Compliance Information for Employer-Sponsored Health Plans (PDF)
4 pages. Excerpt: "The preamble provides important relief, unrelated to the grandfathering issue, for sponsors of self-funded retiree-only and stand-alone excepted benefit plans (such as stand-alone dental plans) subject to ERISA. Certain Public Health Service Act mandates do not apply to such plans. Accordingly, these plans do not have to: extend dependent coverage, remove lifetime limits or comply with many other mandates."
(Bryan Cave LLP)

[Guidance Overview]
Flexible Health Spending Accounts to Become Less Flexible Under Health Reform
Excerpt: "Under the new health care reform law, obtaining reimbursement for over-the-counter medications will become more difficult. The primary change: A doctor's prescription will be required beginning January 1."
(Workforce Management; free registration required)

Regulating the Use of Genetic Information: Perspectives from the U.S. Experience
Excerpt: "Although it is too early to evaluate the effectiveness of GINA's employment provisions in preventing genetic discrimination, an examination of the history and language of the statute offers some insights concerning the possibilities and challenges involved in regulating the use of genetic information in the workplace."
(Social Science Research Network)

Quality of Care, Individual and Group Markets, under Health Reform
Excerpt: "The Department of Health And Human Services [has two years] to develop the following: 1. Quality reporting requirements for group health plans and insurers offering individual or group coverage, 2. Regulations that provide criteria for health provider reimbursement structure."
(Wolters Kluwer)

Suit over Health Plan Denial Charge Cleared to Move Forward
Excerpt: "A federal judge in Virginia has cleared the way for a remodeling firm's only female worker to move forward with her suit alleging she was fired because she would not waive her health insurance rights under a new plan."

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Executive Compensation; Benefits in General

[Guidance Overview]
2009 Plan Financial Statements Require New Plan Asset Disclosures
5 pages. Excerpt: "The new valuation provisions were required to be applied to all Employee Benefit Plan assets in the employer's financial statements and those same values should be consistently applied in the Employee Benefit Plan's financial statements. The new required disclosures were not required in employers' 2009 year-end Employee Benefit Plan asset disclosures. However, the 2009 Plan financial statements should reflect both the valuation techniques and the extensive disclosures required by the new standards."
(PricewaterhouseCoopers LLP)

[Guidance Overview]
IRS Rulings Clarify Tax Treatment of Registered Domestic Partners
Excerpt: "On May 28, 2010, the Internal Revenue Service released Private Letter Ruling 201021048 . . . addressing several issues related to the federal income and gift taxation of registered domestic partners in California. Under the Ruling, income of registered domestic partners is treated consistently with California state law, and thus is treated as community property for federal income tax purposes."
(Pillsbury Winthrop Shaw Pittman LLP)

[Guidance Overview]
Health Care Reform Act Creates New, Lower Compensation Deduction Cap for Health Insurers (PDF)
3 pages. Excerpt: "For tax years beginning in 2013, covered health insurers will be denied federal income tax deductions for compensation they pay to any director, officer, employee or other service provider in excess of $500,000 annually."
(McGuireWoods LLP)

The Legal Framework for States As Employers-of-Choice in Workplace Flexibility: A Case Study of Arizona and Michigan (PDF)
27 pages. Excerpt: "In conclusion, both Arizona and Michigan have the potential to bolster their status as states as employers-of-choice. Both states have achieved a flexible workplace with strong executive leadership throughout the state workforce's management levels, and the support and use of flexible work arrangements, time off, and career flexibility to address emerging problems and changing demographics."
(Twiga Foundation)

Allocation Restrictions Triggered by a Section 1042 Sale to an ESOP
In Nancy Dittmer's latest column on the NCEO Web site, she completes her discussion of Internal Revenue Code Section 409(n) with the third and final installment of 'Allocation Restrictions Triggered by a Section 1042 Sale to an ESOP."
(National Center for Employee Ownership)

Webcasts and Conferences

Form 5500-SF: The Simplified Alternative to Form 5500
Nationwide on July 13, 2010
presented by SunGard Relius

HIPAA and Other Health Benefits Laws: Compliance Assistance Seminar
in Illinois on June 22, 2010
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Schedule C: C is for Confusion
Nationwide on June 17, 2010
presented by SunGard Relius

Schedule C: C is for Confusion
Nationwide on June 24, 2010
presented by SunGard Relius

The New form 5500-EZ: At Last!
Nationwide on June 29, 2010
presented by SunGard Relius

Voluntary Fiduciary Correction Program Workshop
in Maryland on July 13, 2010
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Press Releases

CalPERS Committee Approves State Pension Contribution Increase
CalPERS (California Public Employees' Retirement System)

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