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Health & Welfare Plans Newsletter

July 15, 2010

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No matter how benefits-savvy your employees may be, today’s health care environment can confuse the most sophisticated consumer. That’s why companies large and small use BeneCom for their benefits communication. We know benefits and we understand what employees need to know to make them work – for themselves and for you. And while we’re at it, we make your life a little easier, too.

For more information visit our site or call (860) 674-2626, Ext. 2001

[Guidance Overview]
Impact of Legislation and Guidance on Employer-Sponsored Grandfathered Plan Status (PDF)
8 pages. Excerpt: "Specifically, this bulletin addresses the definition of grandfathered group health plan, documentation and disclosure requirements applicable to grandfathered group health plans, the circumstances that cause a group health plan to lose grandfathered plan status, certain transition relief for group health plans that unintentionally lost grandfathered plan status, Reform Legislation requirements applicable only to non-grandfathered group health plans and special rules applicable to retiree-only and insured collectively bargained group health plans."
(Thompson Hine LLP)

[Guidance Overview]
Agencies Release Interim Final Rule on Preventive Care Services (PDF)
3 pages. Excerpt: "Under the Affordable Care Act, group health plans and health insurance issuers that are not grandfathered health plans or that lose their grandfathered health plan status are required to provide a wide array of preventive care items and services with no cost sharing."
(Hewitt Associates)

[Guidance Overview]
Visteon Must Follow the Rules before Terminating Retiree Benefits
Excerpt: "The 3rd U.S. Circuit Court of Appeals has reversed lower court rulings that Visteon Corp. can terminate retiree benefits during bankrup.tcy."

[Guidance Overview]
Moving from Theory to Implementation of Healthcare Reform: An Overview for Employers of New Guidance, Strategies and Case Studies (PDF)
18 pages. Slides from a presentation. Fabulous examples. Excerpt: "ACA changes impact notices typically distributed with open enrollment materials. 1. Notice of Special Enrollment Rights. 2. General Notice of Preexisting Condition Exclusion. [An MP3 recording of the presentation is available at]'
(Vorys, Sater, Seymour and Pease LLP)

[Guidance Overview]
President Obama Addresses Problem of Unaffordable Health Insurance Premium Increases; Unveils New 'Patients' Bill of Rights'
Excerpt: "[T]he President promised relief from unaffordable premium increases and other insurance industry practices through new regulations and various federal and state initiatives."
(Fox Rothschild LLP)

New Jersey Towns Will Shoulder Greater Burden of Public Employee Health Benefits
Excerpt: "Municipalities and school districts enrolled in the state's health insurance system will likely be asked to pay more for benefits next year, which would add further pressure on local governments and property taxes."
(Daily Record)

Health Care Reform and Collective Bargaining Issues (PDF)
29 pages. The presentation includes a checklist on Preparing for Collective Bargaining Negotiations.
(Morgan, Lewis & Bockius LLP)

More Small and Midsize Companies Looking at Self-Insurance for Health Care
Excerpt: "Conventional wisdom has long held that self-insurance works best for larger populations, because the claims tend to be more consistent across bigger groups of people. The rule of thumb has been that it takes a minimum of 1,000 'covered lives,' or employees and their dependents, to make the strategy work."

Handful of States, Now or in the Future, Will Require Their Public Retirees to Pay Full Cost of Health Insurance Premiums
Excerpt: "For state policymakers who must wrestle with the numbers, a common analogy surfaces. States' unfunded pension and retirement promises, many lawmakers believe, are similar to the generous employee perks that eventually helped drive Detroit automakers into bankrup.tcy. States, however, cannot declare bankrup.tcy in a legal sense. They must raise taxes or cut programs instead."
(The Pew Charitable Trusts)

New Health Care Rules Issued for Preventive Services
Excerpt: "Q: Will the added benefits drive up premiums? A: They could. The administration estimated that the new benefits may push up premiums by 1.5 percent on average."
(Los Angeles Times)

An employer writes:

"I have to tell you that of all the job boards I've ever used, this one has the best quality of candidates. I don't get flooded with tons of resumes, and even the candidates who aren't fit for the jobs we have don't miss the mark by much."

Benefits in General; Executive Compensation

[Guidance Overview]
Deduction Limit on Compensation Paid by Health Insurance Providers
Excerpt: "Although the Code already limited the deductibility of compensation paid to certain executive officers of publicly held companies in excess of $1,000,000, there are several key differences between the previous rules and the new limit . . ., as applicable to covered health insurance providers . . . ."
(Seyfarth Shaw LLP)

CFO Insights on Executive Compensation: Plan, Perform & Pay (PDF)
3 pages. Excerpt: "As a rule of thumb, the base salary constitutes 30% of total compensation, the annual incentive another 20%, the benefits about 10% and long-term incentives or the wealth creation portion of the compensation about 40%. Indeed, before the financial crisis, there was a lot of board attention to improving the relationship between pay and performance."
(Deloitte Development LLC via Financial Executives International)

ERISA's Statute of Limitations for Benefit Claims: Where To Begin?
Excerpt: "Plan designers have been able to alleviate somewhat the difficulties of defending dated claims by inserting shorter limitations periods into the plan documents. Courts have looked favorably on such provisions, provided that they are reasonable and communicated clearly. But these rules do not change the fact that, however short the limitations period is, the period ordinarily still will not begin to run until the administrative claim has been filed and denied."
(Bloomberg Finance L.P. via Proskauer Rose LLP)

Former Employees of New United Motor Manufacturing Co. Sued It and Toyota Motor Corp. Over Severance Packages
Excerpt: "They seek a revised severance agreement, restitution, lost compensation, other employee benefits and monetary damages in the suit filed in U.S. District Court in Oakland."
(San Jose Business Journal)

Webcasts and Conferences

"403(b) Plan Design Workshop" - August-September, in 7 Cities
Nationwide on August 12, 2010
presented by SunGard Relius

"Cross-Tested/Safe Harbor 401(k) Plan Design Workshop" - August - September, in 12 Cities
Nationwide on August 11, 2010
presented by SunGard Relius

Correcting Nonamenders: Restatement and Other Amendment Failures
Nationwide on July 27, 2010
presented by SunGard Relius

The Basics and More Workshop - Kansas City, Missouri
in Missouri on September 8, 2010
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

The Basics and More Workshop - St. Louis, Missouri
in Missouri on August 24, 2010
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Press Releases

ASPPA Supports DOL Fee Disclosure
American Society of Pension Professionals & Actuaries (ASPPA)

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