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Health & Welfare Plans Newsletter

December 29, 2010

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[Guidance Overview]
Tax Break Extension Legislation Includes Employee Benefits Provisions; IRS Delays Compliance with Nondiscrimination Rules for Insured Group Health Plans
Excerpt: "The Tax Relief Act extends the application of Code Section 127 through December 31, 2012, allowing employers to continue to provide tax-free educational assistance to their qualifying employees for an additional two years."

[Guidance Overview]
2010 Tax Relief Act Extends Various Benefits, Including Higher Transit/Vanpool Limit, Adoption, and Education Assistance
Excerpt: "Uncertainty regarding the amount or availability of these benefits and credits has presented challenges for employers, some of whom may have already planned their benefits for next year on the assumption that these extensions would not occur. Enactment of the 2010 Tax Relief Act may now lead those employers to reconsider their benefit levels, and will likely require many employers offering these benefits to make changes to their benefit summaries and other employee communications."
(Employee Benefits Institute of America)

[Guidance Overview]
The IRS 2010 Form 2441 and Instructions
Excerpt: "The expenses that can be used to calculate the [dependent care tax credit] for the 2010 tax year are limited to $3,000 for one qualifying individual and $6,000 for two or more; however, these limits are reduced by the amount of any [Dependent Care Assistance Program] reimbursements for the year."
(Employee Benefits Institute of America)

A Michigan County Cuts Insurance Costs by Investing in Workers' Well-Being
Excerpt: "Four years ago, the county government gambled on a new idea -- spending $400,000 a year to promote better health for its employees. After several years of double-digit increases in health insurance costs, the county's cost declined nearly 12% over 2008 and 2009."
(Detroit Free Press)

Cincinnati, Ohio, Retirees Argue in Court That City Can't Change Health Coverage
Excerpt: "Retired city of Cincinnati workers argued in court Tuesday that City Hall is obligated to provide them for the rest of their lives with an extremely generous health coverage plan that until this year cost many only nominal amounts such as a $50 annual deductible and $5 payments for brand-name prescriptions."

Top Health Industry Issues for 2011
Excerpt: "And of course, the issues identified on the agenda center on increasing health care costs, the Patient Protection and Affordable Care Act and U.S. competitiveness."
(Employee Benefit News; one-time free registration required)

Challenges to Health Care Law Shift to 'Necessary and Proper' Authority of Congress
Excerpt: "The cases, which are presumed to be headed to the Supreme Court, center on whether Congress's power to regulate interstate commerce is so expansive that it can require citizens to buy health insurance. But as the litigation advances, the 'necessary and proper' clause is taking on greater prominence in briefs and oral arguments, with the Obama administration asserting that it shelters the insurance mandate and state officials arguing that it buries it."
(The New York Times; one-time registration required)

More Decisions Address Health Reform's Individual Mandate, with One Finding That Provision Is Unconstitutional
Excerpt: "These cases will continue to move up through the courts, and, in all likelihood, the issues will require resolution by the Supreme Court, which earlier this year declined to review a trial court ruling on health reform provisions (see our Checkpoint Newsstand article). Also, given that at least one court has now found the individual mandate unconstitutional, the question of whether that provision is severable from the rest of health reform may take on greater significance."
(Employee Benefits Institute of America)

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Benefits in General; Executive Compensation

[Guidance Overview]
IRS Relief on PPACA $500,000 Compensation Deduction Limit (PDF)
4 pages. Excerpt: "The $500,000 deduction limitation applies to compensation for services provided during any year after 2009 in which a company is a 'covered health insurance provider.' All entities that are treated as members of the same controlled group under the qualified plan rules (Code section 414) will be treated as one employer for this purpose (with exceptions for brother-sister corporations and combined group arrangements)."
(Groom Law Group)

[Guidance Overview]
Court Finds Severance Plans Not ERISA Governed
Excerpt: "The employees alleged in their ERISA lawsuit that Alcatel-Lucent breached its ERISA fiduciary duties by not telling them that they would have received a greater amount of [Lucent Career Transition Option Program] benefits if they were involuntarily terminated by the company instead of voluntarily leaving the company."

Press Releases

NTSAA Issues 403(b) Compliance Resolution Summit Report
National Tax Sheltered Accounts Association

Newly Posted Employee Benefits Jobs

Vice President, Senior Counsel II # 10-0030
for American Bankers Association
in DC

Client Services Representative
for BeneTrends, Inc.
in PA

Retirement Plan Account Services Manager
for 401(k) Advisors - Arizona
in AZ

Manager Defined Contribution Plans
for ExpertPlan, Inc.
in NJ

Director, Marketing Management
for Prudential
in CT, NJ, PA

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