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Health & Welfare Plans Newsletter

July 7, 2010

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This recorded webcast examines the new grandfathered health plan regulations which determine whether health plans have to comply with the full scope of the new health care reform law, or whether certain important provisions can be avoided. Learn the twelve main ways grandfathered status can be lost and what rules do (and do not) apply to grandfathered plans.

[Guidance Overview]
Employers Get More Time to Tweak Mental Health Coverage
Excerpt: "[F]ederal authorities will offer a temporary reprieve to employers that offer different levels of coverage for certain mental health outpatient services. Because many employers use copayments for medical office visits and coinsurance for all other outpatient medical services, neither one of those types of cost-sharing would not have met the 'substantially all' test that had been set in the interim final rules that . . . took effect for plan years beginning on or after July 1, 2010. As a result, many employers would likely not have been permitted to require any cost-sharing of outpatient mental health services . . . ."
(Business Insurance)

[Guidance Overview]
DOL Releases Guidance on Mental Health Parity 'Substantially All' Test
Excerpt: "Based on this new guidance, if all office visit services apply a copay, then copays would apply to substantially all outpatient office visit services. Therefore, a copay can apply to the outpatient MH/SUD benefit."

[Guidance Overview]
DOL Provides Limited Mental Health Parity Relief for Testing Outpatient Benefits
Excerpt: "The relief lets plans avoid the testing challenge of combining office visits, which often have copayments, with other outpatient services typically subject to coinsurance."

[Guidance Overview]
DOL FAQ Makes Mental Health Parity Compliance Easier for Plan Sponsors (PDF)
2 pages. Excerpt: "Late last week the DOL posted a new frequently asked question (FAQ) on its website that provides welcome relief to many plan sponsors who were attempting to comply with the interim final regulations under the 2008 mental health parity law. This important new guidance will make it easier for some plans to comply with the parity requirements without expanding mental health benefits to 100% coverage or losing grandfather status under the new health reform law."
(Buck Consultants)

[Guidance Overview]
Action Items for Human Resources Professionals with Fully-Insured Medical Plans (PDF)
3 pages. For implementation on next renewal date after September 23, 2010.
(William Gallagher Associates)

[Guidance Overview]
Final Regs on Annual and Lifetime Coverage Limits, Preexisting Condition Exclusions, Coverage Rescission, Emergency Coverage, and Provider Selection
Excerpt: "Caution: Grandfathered plans which have a higher annual limit than that established by the Secretary should not lower the limit to the HHS's thresholds. Doing so will cause the plan to lose grandfathered status. . . . Action Item: Group health plans and issuers must send notices to individuals who have lost coverage because they reached the lifetime limit, provided the individual would otherwise be eligible for coverage on the first day of the first plan year beginning on or after September 23, 2010."
(Michael Best & Friedrich)

[Guidance Overview]
DOL's 'Game-Changing' FMLA Revisions
Excerpt: "Last week, the U.S. Department of Labor expanded the definition of 'son and daughter' under the Family and Medical Leave Act (FMLA). The result could be a game changer for employers on a few levels."
(Human Resource Executive Online)

[Guidance Overview]
Model Notices Released For Dependent Coverage, Lifetime Limits Under Health Reform
Excerpt: "The regulations require a plan or issuer to give such a child an opportunity to enroll that continues for at least 30 days (including written notice of the opportunity to enroll). This enrollment opportunity (including the written notice) must be provided not later than the first day of the first plan year beginning on or after September 23, 2010."
(Wolters Kluwer Law & Business)

[Guidance Overview]
National Website on Health Insurance and Other Coverage Options Now Live
Excerpt: "Eventually, the site will provide resources on health plan eligibility, premiums, benefits and cost-sharing. Federal health reform announcements will also be posted on this site."

[Guidance Overview]
No 'Whistle Blower' Protection for Internal Complaints About ERISA Violations, Third Circuit Rules
Excerpt: "The court held that ERISA Section 510, which protects employees from retaliation for giving information in an 'inquiry or proceeding' relating to ERISA, does not extend to unsolicited communications to management. Other appellate courts are divided . . . ."

[Guidance Overview]
Early Retiree Reinsurance Program Now Accepting Applications
Excerpt: "Using the June 29 PDF form on the HHS website, sponsors must mail completed paper copies to the address on page 2 of the application. An agency spokesman cautions that employers may want to check HHS's new FAQs before applying."

[Guidance Overview]
DOL Issues Model Notices on Coverage to Age 26 Requirement, Lifetime Limits, and Patient Protections
Excerpt: "The DOL has issued model notices for three of the new health care reform requirements that take effect for plan years beginning on or after September 23, 2010 (i.e., January 1, 2011 for calendar-year plans): (1) extension of dependent coverage to age 26; (2) prohibition on lifetime limits; and (3) certain patient protections."
(Employee Benefits Institute of America)

[Guidance Overview]
HHS Announces Opening of Retiree Reinsurance Program, Posts New Guidance on HHS Website to Assist Applicants
Excerpt: "In an apparent attempt to reassure sponsors that they will not be locked out of the program because their applications are not filed immediately, the FAQs repeatedly state that all qualified applications will be accepted. While HHS retains the right to discontinue accepting applications if it appears that program funding is insufficient, the FAQs suggest that the Secretary will not stop accepting applications unless the program funding is actually spent before the program expires."
(Employee Benefits Institute of America)

Health Care Reform May Spur More Office Wellness Programs
Excerpt: "In the last few years, corporate wellness programs have been fueled by employers' desire to curb increases in health care costs, cut back on absenteeism and make employees more productive. . . . Now, with health care reform ready to kick in, more employers are poised to dangle financial incentives and use creative measures to get their workers healthier."

How Will the PPACA Impact Individual and Small Group Premiums in the Short and Long Term?
Excerpt: "This brief presents the central factors that will influence premiums for coverage and identifies the direction of that influence."
(Urban Institute)

Should a Small Business Offer Paid Maternity Leave?
Excerpt: "[T]he Society for Human Resource Management released a survey last week showing that just 12% of U.S. employers with fewer than 100 workers offer paid maternity leave. And among businesses of all sizes, 7% said they plan to reduce or eliminate the benefit within the next 12 months."
(Wall Street Journal)

'Domestic Medical Travel' Is Taking Off for Surgery Deals
Excerpt: "Forget about traveling to Thailand or India for low-cost surgery. More employers and insurers are offering financial incentives to encourage workers . . . to consider 'domestic medical travel.' By steering workers to facilities with high-quality care and lower prices, employers say they can reduce their costs 20% to 40% -- more than enough to cover the travel expenses."

HHS Announces New Preexisting Condition Insurance Plan
Excerpt: "To be eligible, an individual must be a U.S. citizen or legal U.S. resident, have been uninsured for at least six months, and have been unable to obtain health coverage because of a health condition. The PCIP is a temporary program lasting until January 1, 2014 . . . ."

World Congress is proud to present the World Congress 5th Annual Executive Forum on Pharmacy Benefit Management Strategies, July 12-13, 2010 in Philadelphia, PA. This year's forum identifies pertinent issues facing employers and plans, including developing Medication Therapy Management, overcoming barriers to diverse population drug challenges, Medicare Part D, changes to pharmacy in light of health reform and measuring the impact and effectiveness of existing pharmacy management programs.
Sponsored by World Congress

Executive Compensation; Benefits in General

[Guidance Overview]
House Approves Financial Regulatory Reform: Compensation and Retirement Implications
Excerpt: "The final conference report amended language that would have imposed restrictions on retirement plans' ability to use stable value funds by classifying stable value funds as swaps. After lawmakers received numerous requests from employers concerning the language in the original bills, Senate and House conferees reached the following agreement:"

[Guidance Overview]
House Passes Financial System Regulatory Reform Package
Excerpt: "Executive compensation provisions include: 1) shareholder votes on executive compensation, or 'say on pay'; 2) shareholder votes on executives' 'golden parachutes'; 3) requirements for public companies to disclose in their proxies the relationship between executive compensation actually paid and the financial performance of the company; 4) requirements for companies to adopt clawback provisions that would recoup incentive-based compensation, including stock options as awarded compensation, for current and former executive officers when the company is required to restate its financial statements."

Pension Funding Relief Will Affect Executive Pay Design
Excerpt: "The pension funding relief . . . comes with conditions. Relief recipients that pay 'excess employee compensation' or make certain dividend payments in stock redemptions must also make higher pension contributions. . . . A grandfather rule excludes NQDC, restricted stock, stock options and stock appreciation rights payable or granted under a written binding contract in effect on March 1, 2010, and there are a few other exclusions as well."
(Towers Watson)

Illinois Stops Paying Its Bills
Excerpt: "[T]here is the spectacularly mismanaged pension system, which is at least 50 percent underfunded and, analysts warn, could push Illinois into insolvency if the economy fails to pick up."
(New York Times; free registration required)

European Union Might Raise Retirement Age to 70
The proposal was made by the executive of the EU. Details are forthcoming in a paper to be issued today (Wednesday).
(AP via New York Times)

U.S. Supreme Court to Consider Remedy for Deficient SPD
Excerpt: "To recover benefits based on an inconsistency between an ERISA plan document and summary plan description (SPD), must participants show reliance on the SPD? Is it sufficient to show 'likely harm'? Or can participants prevail without any showing of harm? The US Supreme Court will tackle these questions . . . ."

Webcasts and Conferences

"Power Struggle - New Power of Attorney Rules for 2848" Web Seminar
Nationwide on July 15, 2010
presented by SunGard Relius

Annual Plan Administration & 401(k) Basics Seminars
in California on August 3, 2010
presented by Actuarial Consultants, Inc.

ERISA Litigation
in Illinois on November 11, 2010
presented by ABA Joint Committee on Employee Benefits

Health and Welfare Benefit Plans: Health Care Reform
in District of Columbia on October 25, 2010
presented by ABA Joint Committee on Employee Benefits

Press Releases

Statement of Assistant Secretary Phyllis C. Borzi on the Availability of the Subsidy after May 31, 2010
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

One-Day Regional Health Care Reform Seminars to Be Held In August
International Foundation of Employee Benefit Plans

ERPA Exam Registration Deadline Extended to Monday, July 19
AIRE, LLC (American Institute of Retirement Education)

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