BenefitsLink Health & Welfare Plans Newsletter for September 30, 2010

[Official Guidance]
Text of IRS Rev. Proc. 2010-39: Rules for Use of Per Diem Rates for Expenses Away from Home (PDF)
30 pages. Excerpt: "This revenue procedure updates Rev. Proc. 2009-47 . . . and provides rules for using a per diem rate to substantiate, under § 274(d) of the Internal Revenue Code . . . the amount of ordinary and necessary business expenses paid or incurred while traveling away from home. Taxpayers are not required to use a method described in this revenue procedure. A taxpayer may substantiate actual allowable expenses if the taxpayer maintains adequate records or other sufficient evidence."
(Internal Revenue Service)

[Guidance Overview]
Implications for Medical Plans Covering Expatriates under U.S. Health Care Reform Legislation
Excerpt: "This paper takes a closer look at which mandates in the reform legislation in particular may be most relevant for employers with medical plans that cover expatriates, and recommends action items for them to consider over the coming period."
(Towers Watson)

[Guidance Overview]
FAQs Address Definition of Dependent Child and Other Issues under Health Care Reform
Excerpt: "Under the FAQs, if a plan chooses to cover dependent children in categories other than natural child, adopted child, child placed with the employee for adoption, stepchild or foster child, it will now be permitted to impose additional conditions on the child's eligibility for health coverage, such as the condition that the child be dependent on the employee for income tax purposes."
(Miller, Johnson, Snell & Cumminsky, P.L.C.)

[Guidance Overview]
Impact of Health Care Reform on OTC Drugs
Excerpt: "Cafeteria plans must be amended to comply with the new rules regarding the reimbursement of OTC drugs. The amendment must be adopted no later than June 30, 2011, retroactive to January 1, 2011 (or January 16, 2011 for FSA and HRA debit card purchases)."
(Miller, Johnson, Snell & Cumminsky, P.L.C.)

[Guidance Overview]
Are Dental and Vision Plans Subject to Health Care Reform?
Excerpt: "If a dental or vision benefit qualifies as an excepted benefit, the insurance market reforms and other requirements of Health Care Reform do not apply."
(Miller, Johnson, Snell & Cumminsky, P.L.C.)

[Guidance Overview]
Federal Agencies Provide Notice on Nondiscrimination Rules and Clarify Previous Guidance Under Health Care Reform
Excerpt: "This WorkCite discusses guidance issued on September 20, 2010, by the DOL, IRS and HHS . . . . The guidance consists of: DOL Technical Release 2010-02, regarding the application of the new internal claims and appeals review process, A revised model notice for adverse claims determinations, IRS Notice 2010-63, which addresses the nondiscrimination requirements for fully insured plans, and A set of FAQs that clarify various pieces of prior guidance issued by the Departments."
(McGuireWoods LLP)

Health and Wealth in a Life-Cycle Model (PDF)
34 pages. Excerpt: "We analyze the interplay between consumption choices and investments in health by solving each household's dynamic optimization problem to obtain predictions on health investments and consumption choices over the lifecycle."
(University of Michigan Retirement Research Center)

Study Finds Benefits of Mammograms for Women in Their 40s, Sparking Disagreement
Excerpt: "The New York Times: 'Researchers reported Wednesday that mammograms can cut the breast cancer death rate by 26 percent for women in their 40s. But their results were greeted with skepticism by some experts who say they may have overestimated the benefit."
(Henry J. Kaiser Family Foundation)

Health Insurance Exchanges and the Affordable Care Act: Eight Difficult Issues
Excerpt: "The author analyzes eight of the most difficult issues that the states and federal government face in implementing the exchanges -- which are expected to play a major role in the purchase and sale of health insurance once they become fully operational in 2014 -- and offers recommendations for addressing them."
(The Commonwealth Fund)

The Application for Disability Insurance by Unemployed Workers: Theory and Evidence
Excerpt: "In this study, I examine the timing of disability insurance application by unemployed, health-impaired workers. In a dynamic model of job search and disability insurance application, I show how economic and institutional factors, such as unemployment benefits or the application success rate, may affect the decision to apply for disability insurance."
(Center for Retirement Research at Boston College)

IRS Guidance on Expanded Adoption Tax Credit
Excerpt: "[The IRS has issued] revenue procedures 2010-31 and 2010-35, along with Notice 2010-66, giving guidance on the expanded adoption credit included in the Patient Protection and Affordable Care Act. A draft version of Form 8839, Qualified Adoption Expenses, also was released by IRS."
(Tax Management Inc.)

Senate Turns Aside Health Plan Grandfathering Status Repeal
Excerpt: "The U.S. Senate has rebuffed an effort by a key Republican to overturn the provision of the recent health-care reform law exempting grandfathered health plans from following the law's mandates."
(PLANSPONSOR.com)

[Opinion]
Health Insurers Finally Get Some Oversight: In the Past, These Companies Ran Wild with No Accountability
Excerpt: "Over the past decade, Americans have seen what happens when insurance companies have free rein. The cost of health insurance has more than doubled, while millions of hard-working Americans lost their coverage or drained their savings to keep up with premiums. Employers -- big and small -- have struggled mightily to absorb these cost increases and have been losing the fight."
(Kathleen Sebelius via The Wall Street Journal)

Benefits in General; Executive Compensation

[Guidance Overview]
Congress 'De-Lists' Cell Phones: What Does That Mean for Employer-Provided Cell Phones? (PDF)
4 pages. Excerpt: "Hidden in [the Small Business Jobs Act] is much-needed relief to all businesses (small or large) and their employees concerning the business and personal use of employer-provided cell phones, including personal digital assistants (PDAs) with mobile communication features and smartphones (collectively, cell phones)."
(Morgan, Lewis & Bockius LLP)

Number of Contingent Workers Expected to Grow During Coming Decade As Companies Look for More Flexibility in Staffing and to Save Money on Benefits
Excerpt: "Contingent workers solve several HR staffing issues: They provide flexible hiring for major projects and seasonal rushes; they provide specific expertise; and they let HR audition new employees without actually hiring them. And in the long run, they save money because many expenses, from salary to benefits, are managed by the staffing firm."
(Human Resource Executive Online)

ERIC Amicus Brief Filed with Appeals Court to Uphold Ruling That Supplemental Unemployment Benefits Not Subject to FICA Taxes
Excerpt: "ERIC's brief argues that payments that meet the definition of 'supplemental unemployment compensation benefits' (SUB payments) under Internal Revenue Code section 3402(o)(2)(A) are not wages for purposes of imposing FICA taxes."
(The ERISA Industry Committee)

Focus on Compensation and Benefit Programs Key to Mergers and Acquisitions' Success
Excerpt: "According to a press release, Hewitt's July M&A survey of 103 companies around the world revealed those that exceeded their transaction goals exhibited four key characteristics for how they approached their total rewards strategies: focusing on liabilities in due diligence; looking at total rewards in aggregate; being deliberate about talent retention; and being well-equipped, highly-focused, and effective."
(PLANSPONSOR.com)

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