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Health & Welfare Plans Newsletter

September 9, 2010

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Thursday, September 16, 2010
On August 23, the Department of Labor and Health and Human Services released the new
model forms and interim guidance on the federal external review process under PPACA.
Register now for this Webcast and get up-to-date on the new guidance.

[Guidance Overview]
Guidance on Annual Dollar Limit Waivers for Health Insurance Plans
Excerpt: "The waiver is designed to ensure that individuals with certain coverage, including coverage under limited benefit or mini-med plans, would not be denied access to needed services or experience more than a minimal impact on premiums. The guidance notes that individuals in these type of plans may be part-time workers, seasonal employees, or volunteers who otherwise would not have health care coverage."
(The Segal Group, Inc.)

[Guidance Overview]
Flexible Spending Accounts Can't Reimburse OTC Drugs Without Prescription, Says IRS
Excerpt: "The rules issued September 3 involve a section of the health care reform law that sharply restricts FSA reimbursements for over-the-counter medications such as nonprescription pain relievers, cold medicines, antacids and allergy medications."
(Workforce Management; free registration required)

[Guidance Overview]
Preventive Care Provision Will Drive Increase in Health Care Consumption
Excerpt: "Plans that are not considered grandfathered under the law must provide these benefits at 100% beginning in plan years starting on or after Sept. 23, 2010."
(Wolters Kluwer)

[Guidance Overview]
Preexisting Condition, Lifetime and Annual Limit, and Other Health Plan Rules
Excerpt: "Most of the rules discussed in this memorandum are effective for plan years beginning on or after September 23, 2010. Employers that maintain group health plans, and insurers that maintain group or individual policies, should evaluate and determine the extent to which current plan or policy provisions may need to be updated to comply with the new rules by the applicable effective date."
(Bond, Schoeneck & King, PLLC)

[Guidance Overview]
Year-End Amendment Deadline for Group Health and Cafeteria Plans
Excerpt: "Recent health care reform legislation imposes additional coverage, notice and enrollment requirements on group health plans, including self-insured plans. These new obligations will require changes to open enrollment procedures and most group health and/or cafeteria plans will need to adopt conforming amendments by December 31, 2010."
(Buchanan Ingersoll & Rooney PC)

[Guidance Overview]
Trial Court Rules for San Francisco in ERISA Preemption Challenge to 'Fair Share' Law
Excerpt: "EBIA Comment: The enactment of federal health care reform may have impacted the final chapters of this nearly four-year litigation. According to an amicus brief filed by the Department of Justice (and reflecting the DOL's position) at the U.S. Supreme Court level, an appeal was not warranted because federal health care reform made it substantially unlikely that other state and local governments would enact laws like San Francisco's."
(Employee Benefits Institute of America)

Health Reform: What Employers Need to Consider (PDF)
25 pages. Reprinted from the Fall 2010, Employee Relations Law Journal.
(Steptoe & Johnson LLP)

How Does Obesity in Adults Affect Spending on Health Care?
Excerpt: "Spending per capita for obese adults exceeded spending for adults of normal weight by about 8 percent in 1987 and by about 38 percent in 2007. That increasing gap in spending between the two groups probably reflects a combination of factors, including changes in the average health status of the obese population and technological advances that offer new, costly treatments for conditions that are particularly common among obese individuals."
(U.S. Congressional Budget Office)

Cutting Health Costs Outweighs Grandfathered Status, According to Survey
Excerpt: "Forty-seven percent of U.S. employers expect one or more of their health care plans to lose grandfathered status in 2011 because of design and other changes they will make to help avoid double-digit cost increases, according to a survey released [yesterday]."
(Business Insurance)

Repeal Sought for FSA Cap
Excerpt: "New contribution limits imposed on health flexible spending accounts would be repealed under a pending House bill."
(Investment News; free registration required)

National Health Spending Projections: The Estimated Impact of Reform Through 2019
Excerpt: "This paper presents updated national health spending projections for 2009-2019 that take into account recent comprehensive health reform legislation and other relevant changes in law and regulations. Relative to our February 2010 projections under prior law, average annual growth in national health spending over the projection period is estimated to be 0.2 percentage point higher than our previous estimate."
(Health Affairs)

Health Overhaul Won't Significantly Increase Spending, According to Government Economists
Excerpt: "In all, the changes will increase annual growth in health spending by about 0.2 percentage points on average, bringing the rate to 6.3 percent, said the economists, who are members of the Office of the Actuary at the Centers for Medicare and Medicaid Services."
(Henry J. Kaiser Family Foundation)

Employee Wellness Affects Businesses Globally, According to Study
Excerpt: "Global companies that take an active approach to employee health and well-being can see a positive impact on their bottom line, according to a new MetLife white paper. However, The MetLife Study of Global Health and Wellness, reveals there are different issues at play in different cultures, requiring tailored solutions."

Employers Shift Health Care Costs to Employees
Excerpt: "Workers on average are paying nearly $4,000 this year toward the cost of family health coverage - an increase of 14 percent, or $482, above what they paid last year, according to the benchmark 2010 Employer Health Benefits Survey . . . ."

ERRP Update: DHHS Approved Applicants and Secure Web Site
Excerpt: "According to the DHHS, the approved applicants will be able to submit claims starting sometime in September and will begin to receive reinsurance payments on those claims starting in October. A separate secure Web site was established to facilitate the ERRP."
(Deloitte via

Ambiguity on Preventive Care Regulations Threatens to Increase Costs for New Mandates (PDF)
13 pages. Excerpt: "ERIC . . . urged that the Departments create an advisory task force that will give group health plans a voice in delineating the recommended preventive care mandates. The letter contends that the groups that develop recommendations and guidelines for preventive care consist mainly of health care providers and other professionals, who have a stake in specific procedures, and do not include representatives of the employer-group health plans that must cover, administer, and pay for these services."
(The ERISA Industry Committee)

Why Employers Will Keep Their Health Plans After 2013
Excerpt: "Despite continually rising health care costs, most employers will choose to retain their health plans after 2013 for several reasons: They will determine that eliminating their plans would not significantly reduce costs. They will realize that what little money they might save is not worth breaching the social contract they have established. They will understand that ending their plan would prevent them from realizing the total value of their insured population's health."
(Employee Benefit News; free registration required)

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Benefits in General; Executive Compensation

Independent Contractors: IRS Tips for Business Owners
Excerpt: "While addressed to small business owners, the rules summarized in 'Employee vs. Independent Contractor - Seven Tips for Business Owners' apply to employers of all sizes."
(Deloitte via

President's Advisory Board's Analysis on Tax Reform Options
Excerpt: "The President's Economic Recovery Advisory Board . . . has released its analysis of various options to change the current Federal tax system to achieve the three-part goal defined by the President: simplification of the tax system, compliance improvement, and reformation of the corporate tax system."
(Deloitte via

Webcasts and Conferences

"A 401(k) Practitioner's Guide to 457(b) Plans" Web Seminar
Nationwide on September 14, 2010
presented by SunGard Relius

Health Reform's Internal Claims and Appeals New Rules-Changes You Must Make Now
Nationwide on September 29, 2010
presented by Thompson Interactive

New Final Fee Disclosure Rules ó What Pension Plan Fiduciaries Need to Know
Nationwide on September 22, 2010
presented by Thompson Interactive

Press Releases

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