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Health & Welfare Plans Newsletter

September 10, 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.

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[Guidance Overview]
IRS Guidance on OTC Reimbursement Restrictions (PDF)
2 pages.
(Buck Consultants)

[Guidance Overview]
More Guidance on PPACA-Mandated Claims Review Procedures
Excerpt: "The Departments of Labor and Health and Human Services also released model forms by which group health plans will be able to provide claimants with notice of adverse benefit determinations consistent with the interim final regulations issued in July 2010."
(Deloitte via

[Guidance Overview]
HHS Waiver Process for Mini-Med Plans to Avoid Health Care Reform's Annual Limits
Excerpt: "Mini-med and other health plans now can apply for waivers from health care reform's restricted annual dollar limits on essential benefits, using a process set out by HHS Sept. 3."
(Mercer LLC)

[Guidance Overview]
Preventive Care Health Coverage Mandate under Health Care Reform
Excerpt: "Q.4 Can a plan impose limits on the frequency, method, treatment or setting for preventive care? A.4 Yes. The regulations allow a plan to impose reasonable medical management techniques with respect to preventive services. Therefore, a plan can limit the number of screenings it will cover without additional charges to the enrollee and can limit the preventive coverage to in-network providers."
(Leonard, Street and Deinard)

[Guidance Overview]
Health Care Reform Update: Changes Plan Sponsors Should Make This Year (PDF)
6 pages. Excerpt: "Employers that sponsor plans with lifetime limits are advised to amend their plan documents and summary plan descriptions now, so that this change will be in place in time for annual enrollment. Plan sponsors that want to retain lifetime limits on non-essential benefits should work with their administrators to implement a process to track those benefits separately. (Good-faith efforts to comply with a reasonable interpretation of 'essential health benefits,' if applied consistently, will be honored until regulations providing a more complete definition are issued.)"
(Pillsbury Winthrop Shaw Pittman LLP)

[Guidance Overview]
Voluntary Employee Wellness Programs: Hidden Legal Risk for Employers.
Excerpt: "[W]hat happens when there's a legal dispute between one or more of your personnel and the provider? In many cases, businesses unwittingly get dragged into court. The provider may argue that the plan is covered by ERISA, and the employee's lawsuit should instead be filed against his or her business."
(Employee Wellness Programs)

Federal Reimbursement for High-Cost Early Retirees Will Begin Soon
Excerpt: "For those who've been asleep at the switch, this is a friendly reminder that time is running out to file applications for federal assistance if your government pays early retirees more than $15,000 in medical benefits."

Business Groups Urge Senators to Back Repeal of Form 1099 Rules
Excerpt: "The U.S. Chamber of Commerce and the Coalition for Fairness in Tax Compliance warn senators ahead of two key small business bill votes set for Tuesday that the only pro-business stance lawmakers can take is to vote for a full repeal of new Form 1099 reporting requirements for businesses."
(Tax Management Inc.)

HHS's Early Retiree Reinsurance Program Website
Excerpt: "The early retiree reinsurance program (ERRP) now has a secure website, where health plan sponsors with approved applications soon will be able to submit claims and reimbursement requests."
(Mercer LLC)

Employer Groups Urge Regulators to Clarify Health Care Reform Rules on Annual Limits, Rescissions
Excerpt: "Employer groups called for clarifying guidance on health care reform group health plan standards taking effect for plan years starting after Sept. 23, 2010."
(Mercer LLC)

Health Insurance Costs to Rise Under Health Care Reform
Excerpt: "Under America's new health-care reform act, health-care spending will rise slightly faster than it would have otherwise, according to a new government study. But Americans will have to brace for a big jump in spending, especially on health insurance, in 2014, when major parts of the reform law go into effect."
(The Christian Science Monitor)

Setting the Record Straight on the W-2 Panic
Excerpt: "Specifically, W-2s for the 2011 tax year must include the 'aggregate cost' of employer-sponsored group health insurance coverage, excluding any salary reductions deferred to a flexible spending account. 'Aggregate cost' is the cost of the insurance to the employer. We are expecting further guidance from the IRS on the factors to be used to determine this aggregate cost.'
(Employee Benefit News; free registration required)

Obama Administration Rebukes Health Insurers for Premium Rate Increases
Excerpt: "The Wall Street Journal reported Wednesday that some carriers are asking for total premium hikes topping 20% starting this month, and the carriers are attributing one to nine percentage points of the increases to new benefit mandates in the law."
(The Wall Street Journal)

For Whom Does the Health Insurance Broker Work?
Excerpt: "From conversations with advocates of insurance brokers, I have learned that most brokers consider the insured as their principal, even though their commission is typically paid by the insurer. This raises the question of why the insured do not directly pay their health-insurance brokers, just as they pay accountants for help with their tax returns or lawyers who help them in legal matters."
(The New York Times; free registration required)

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Benefits in General; Executive Compensation

[Guidance Overview]
Corporate Governance and Executive Compensation Provisions of the Dodd-Frank Reform Act
Excerpt: "This alert highlights, in succinct chart form, the major areas of reform in the areas of corporate governance and executive compensation."
(Hodgson Russ LLP)

[Guidance Overview]
IRS Representatives' Unofficial 409A Views on Severance Pay and Other NQDC Features
Excerpt: "Separation pay arrangements continue to cause confusion, as practitioners struggle to understand when payments are subject to 409A and how standard conditions, such as a release of claims, interact with 409A rules. Other issues addressed by the unofficial guidance include small benefit cashouts, document errors in expiring agreements and NQDC plan terminations."
(Mercer LLC)

[Guidance Overview]
Year-End Roundup for Employee Benefit Plans: What Needs to Be Done Now?
Excerpt: "The [target page] is an overview of the top benefits issues that employers should consider."
(Proskauer Rose LLP)

[Guidance Overview]
Court Clarifies ERISA Benefits Disputes Discovery Rules
Excerpt: "A federal appellate court has ruled that parties in [ERISA] benefit plan suits have limits on their pre-trial discovery rights about plan administrators with conflicts of interest. The 10th U.S. Circuit Court of Appeals asserted that ERISA litigants are barred from such fact-finding when the issue is a plaintiff's benefits claims, but that plaintiffs can do limited fact-finding when it comes to the actions of plan officials who are both insurer and administrator."

Health Care Reform Could Impact Your Employment and Severance Agreements
Excerpt: "Many employment and severance/separation agreements provide that the company will pay all or a portion of health care premiums (including COBRA premiums) for a former or current executive that is more favorable than the level provided to other employees. If your agreements make this promise, this could be dangerous."
(McKenna Long & Aldridge LLP)

Press Releases

PenServ Announces New General Counsel
PenServ Plan Services, Inc.

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