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January 17, 2011 Retirement Plans Newsletter  |  Advertise  |  Unsubscribe

[Guidance Overview]
IRS Modification of Rules on Paying for Over-the-Counter Medications with Debit Cards – "Plan sponsors may face challenges with debit-card administration in light of the fact that the prescription rule is new, and the implementation rules have been revised just before the beginning of the plan year. Plan sponsors with debit cards should ask their card providers for clear, easy-to-understand instructions for their participants, and assure that participants have access to the rules as soon after January 1, 2011 as possible." (The Segal Group, Inc.)

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[Guidance Overview]
The IRS 2010 Version of Publication 502 on Medical and Dental Expenses – "Pub. 502 provides valuable guidance on what qualifies as a medical expense under Code Section 213(d), and thus, certain information about the expenses that can be reimbursed or paid by health FSAs, HSAs, or HRAs. However, referring to Pub. 502 in connection with these tax-favored benefits vehicles must be done with caution because Pub. 502 addresses only the expenses that are deductible -- it doesn't describe the different rules for reimbursing medical expenses under health FSAs, HSAs, or HRAs." (Thomson Reuters/EBIA)

[Guidance Overview]
Form W-2 and Instructions for 2011: New Code for Optional Reporting of Cost of Coverage – "We hope to see guidance later this year on how to calculate the cost of employer-sponsored health coverage, which generally is to be determined 'under rules similar to' the rules used to determine the applicable premium for COBRA continuation purposes." (Thomson Reuters/EBIA)

[Guidance Overview]
GINA II Regulations Provide Welcome Clarification – "While Title I of the GINA left wellness proponents puzzled, GINA II spells out the rules and provides a specific exception for employers who incentivize employee participation in their wellness programs. The requirements are strict, but provide better guidance on how to handle sensitive health information." (Employee Benefit News; one-time free registration required)

[Guidance Overview]
Employee Health Benefits for Adult Children: Managing the Variations in State Income Tax – "In states that have not conformed to the Internal Revenue Code changes made by PPACA, coverage of adult children may be considered income for state income tax purposes unless the child also meets the applicable state definition of a tax dependent." (Pillsbury Winthrop Shaw Pittman LLP)

Screen Actors Guild Drops Mental-Health Benefits – "'It was surprising to see the analysis that was given to SAG,' . . . . 'Their actuaries projected the costs to equalize mental-health and substance-abuse coverage would double [their healthcare spend] -- while the Congressional Budget Office and PriceWaterhouse Coopers estimated premiums for group health insurance would increase by an average of 0.4 percent and less than 1 percent, [respectively].'" (Human Resource Executive Online)

Employers Adjusting to Mental-Health Parity Act – "Most of the adjustments . . ., are in reductions of the cost-sharing responsibilities for employees for mental-health providers. One-third of respondents, . . . 'are lowering the mental-health co-payment to equal that for the medical side.' Fourteen percent, however, are increasing their medical co-payments for employees 'to equal the mental-health side of the party equation,' . . . ." (Human Resource Executive Online)

CBO's Estimates of the Impact of Major Health Care Legislation – "The recent public discussion about the potential effects of repealing the major health care legislation enacted last March has revealed some misunderstandings about CBO's procedures in analyzing legislation." (U.S. Congressional Budget Office)

Health Care Reform Update, January 12, 2011 (PDF) – 3 pages. Dated entries on the Implementation of the Health Care Reform Law. (Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.)

Financial Incentives for Wellness Programs Per Worker Can Hit $3k – "But, on average, employers spend about $220 on each employee, up from $163 in 2009, according to a new survey on wellness programs." (Employee Benefit News; one-time free registration required)

Potential National and State Medical Care Savings from Primary Disease Prevention – "Nationally, we estimated that reducing diabetes and hypertension prevalence by 5% would save approximately $9 bil.lion annually in the near term. With resulting reductions in comorbidities and selected related conditions, savings could rise to approximately $24.7 bil.lion annually in the medium term. Returns were greatest in absolute terms for private payers, but greatest in percentage terms for public payers." (American Public Health Association)

The War on Logic Attacks Health Care Reform Numbers – "To be sure, the Republican analysis doesn't rely entirely on spurious attributions of cost -- it also relies on using three-card monte tricks to make money disappear. Health reform, says the budget office, will increase Social Security revenues and reduce Medicare costs. But the G.O.P. analysis says that these sums don't count, because some people have said that these savings would also extend the life of these programs' trust funds, so counting these savings as deficit reduction would be 'double-counting,' because -- well, actually it doesn't make any sense, but it sounds impressive." (The New York Times; one-time registration required)

Complete Benefits Law Guidance from Law Journal Press (advert.)

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Benefits in General; Executive Compensation

[Guidance Overview]
IRS Insight Into Unforeseeable Emergencies Under Section 457(b) Plans and Section 409A Nonqualified Deferred Compensation Plans (PDF) – "Sponsors of section 457(b) plans and section 409A nonqualified deferred compensation plans that permit unforeseeable emergency distributions should take note of these new examples. While they are only examples, they do illustrate the process that the IRS expects plan administrators to undertake when evaluating specific facts and circumstances in determining whether to permit a distribution under these provisions." (Prudential Retirement)

IRS Guidance on $500,000 Compensation Limitation Applicable to 'Health Insurance Providers' – "[U]nlike the rest of Code Section 162(m), this $500,000 limitation applies to both privately held and public traded companies. Additionally, the limitation applies to any employee of any employer that has a 'covered health insurance provider' within its controlled group of companies or group of trades or businesses under common control." (Michael S. Melbinger via Winston & Strawn LLP)

2010 Tax Act Summary – "This alert outlines the recently passed 'Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010' . . . . The Tax Act extends the Bush tax cuts for two more years, allows a 2% cut in payroll tax and self-employment tax for 2011, provides for a two-year patch on the Alternative Minimum Tax problem, extends the child tax credit and higher education tax credits [and extends several tax benefits set to expire.]" (Nixon Peabody LLP)

Employee Ownership Update for January 14 – The Eighth Circuit ruled an employee who sold stock at a profit lacked standing to sue even if alleged fiduciary violations in the offering of company stock in a 401(k) plan were true. The SEC has started looking into the trading of shares in private companies like Facebook. The NCEO is compiling a list of firms acquired by ESOP companies in recent years. Another large staffing company became almost 100% ESOP-owned. Principal's best practices guide for employee financial security is available. (National Center for Employee Ownership (NCEO))

Journal of Employee Ownership Law and Finance Back Issue Set – The NCEO's Journal of Employee Ownership Law and Finance, published from 1989 to 2010, was the only professional journal in the U.S. devoted to employee ownership, ranging from ESOPs to stock options and more. This is a set of the back issues that are still in print (see the link for a list). (National Center for Employee Ownership (NCEO))

Press Releases

Employee Benefits Jobs

Client Relationship Manager
for PensionTrend, Inc. in MI

Senior Defined Benefit Calculation Analyst
for Diversified Investment Advisors, Inc. in MA

Systems Analyst-Programmer
for July Business Services in TX

Retirement Plan Manager
for Capital Group Companies in TX

Senior Benefits Analyst
for Chugach Alaska Corporation in VA

Health and Welfare Benefit Specialist
for Swerdlin & Company in GA

ERISA Consultant
for Pension-Consultants, Inc. in MO

Webcasts and Conferences

401(k) Rekon Advisor Symposium- Raleigh-Durham
in North Carolina on February 15, 2011 401(k) Rekon

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