BenefitsLink
Health & Welfare Plans
Newsletter
October 16, 2008
Here are the Web's best new links about compliance and cost
aspects of plan operation, design and policy.
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[Guidance Overview] FMLA Amendments: Significant Changes and Their Impact (PDF)
27 pages. Powerpoint presentation. (Morgan, Lewis & Bockius LLP)
[Guidance Overview] Court Rule on San Francisco Employer Health Mandate
Excerpt: "Employers that determine their expenditures are not sufficient, at least for some groups of employees (e.g., certain part-time employees or leased employees), must make the required payments no later than 30 days after the end of each calendar quarter. The third quarterly payment for 2008 for employers with 50 or more employees is due by October 30, 2008. Employers that did not make the required payments for the first and/or second quarters of 2008 should take appropriate steps to catch up." (The Segal Group, Inc.)
[Guidance Overview] Reservists Don't Have to Use or Lose Their Health Flexible Spending Accounts (PDF)
1 page. Excerpt: "Taxation. Employers should report the [Qualified Reservist Distribution] on Form W-2 as wages for the year in which the QRD is paid to the employee. A QRD is also subject to employment taxes." (Seyfarth Shaw LLP)
[Guidance Overview] Presentation: Overview of Mental Health Parity Law (PDF)
9 pages. Excerpt: "What the new law does not do: It is not a mandate to provide mental health or substance use disorder benefits; It does not mandate coverage of all conditions/disorders in the DSM-IV; It does not undermine the ability to use medical management; It does not establish new state remedies for mental health benefits provided under employer plans; It does not apply to small employers (50 or fewer employees) or the individual market." (Blue Cross Blue Shield Association via American Benefits Council)
[Guidance Overview] New Law Requires Dependent Health Continuation During Medical Leave from College (PDF)
Excerpt: "President Bush has signed Michelle's Law, requiring group health plans (and insurers insuring group health plans) to continue dependent health coverage during a dependent's medically necessary leave of absence from post-secondary education that would otherwise cause the dependent to lose student status." (Buck Consultants)
[Guidance Overview] Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act
6 pages. Excerpt: "The Wellstone Act becomes effective the first day of the plan year beginning one year after the date of enactment, which means January 1, 2010, for calendar year plans. There is, however, a special rule for plans maintained pursuant to collective bargaining agreements (CBA) that could require compliance as early as January 1, 2009." (Alston & Bird LLP)
The Impact of the Economic Collapse of U.S. Employee Benefits
Excerpt: "One of the less followed stories during the economic collapse is its potential impact on the employee benefits of employees in the United States. Not only will workers lose a substantial part of their pensions because of the falling price of securities in their 401(k) accounts, but there might even be a bigger problem discussed in this article from Columbus Business First [at http://www.bizjournals.com/columbus/stories/2008/10/06/daily39.html?ana=from_rss.]" (Workplace Prof Blog)
Trends in Access to Care Among Working-Age Adults, 1997-2006 (PDF)
16 pages. Excerpt: "This policy brief finds about 39 million working-age adults nationally reported cost as a barrier to receiving needed health care in 2006, a number that grew by an average of 1 million people annually over the decade studied. Uninsured working-aged adults experienced the most consistent erosion over the 10 years, resulting in a widening gap in access to care between insured and uninsured adults." (Kaiser Family Foundation)
The Decline in the Uninsured in 2007: Why Did It Happen and Can It Last? (PDF)
20 pages. Excerpt: "This policy brief examines the underlying shifts in health insurance coverage in 2007, which resulted in a 1.5 million decrease in the number of uninsured people under age 65, due to increased public coverage. This includes about 300,000 in Massachusetts, which implemented its comprehensive health reform that year. The brief also projects that the current economic downturn and rising unemployment rate likely will cause the number of uninsured to grow by at least 2 million in 2008." (Kaiser Family Foundation)
How Engaged Are American Consumers in Their Health and Health Care, and Why Does It Matter
Excerpt: "Patient activation refers to a person's ability to manage their health and health care. Engaging or activating consumers has become a priority for employers, health plans and policy makers. The level of patient activation varies considerably in the U.S. population, with less than half of the adult population at the highest level of activation, according to a new study . . . ." (Center for Studying Health System Change)
High and Rising Health Care Costs: Demystifying U.S. Health Care Spending
Excerpt: "Key Findings: Health insurance is becoming increasingly difficult for workers -- and their employers -- to afford. Premiums increased 114 percent between 1999 and 2007, while workers' earnings increased only 27 percent. U.S. spending on health care -- as a percentage of Gross Domestic Product -- is more than six percentage points higher than the average for other developed countries. Technology -- not demographics or medical malpractice -- is the key driver of health spending, accounting for an estimated half to two-thirds of spending growth. Other important drivers of health care spending include health status (particularly obesity) and low productivity gains in the health care sector." (Robert Wood Johnson Foundation)
Health Benefit Costs by Occupation: An Employer's Perspective
Excerpt: "Through deductions in their paychecks, most workers know they pay a lot for health insurance. But they might not know that employers make even larger payments on their behalf. In March 2008, employers in private industry spent an average of $1.92 per hour per worker, according to data from the U.S. Bureau of Labor Statistics (BLS)." (U.S. Bureau of Labor Statistics)
2008 Update on Consumers' Views of Patient Safety and Quality Information
Excerpt: "An updated examination of consumers' views on health care quality information reveals major challenges remain in providing the public with comparative quality information and encouraging its use. [This update] finds that three in 10 (30%) Americans say they have seen health care quality comparisons of health insurance plans, hospitals, or doctors in the past year. Not all people make health care choices or decisions in a given year that would call for the use of quality information, but this is a downward trend from surveys in 2006 (36%) and 2004 (35%) and roughly equivalent to the level in 2000 (27%). Further, just one in seven (14%) Americans report that they 'saw' and 'used' comparative health quality information for health insurance plans, hospitals, or doctors in the past year, again down from roughly one in five in both 2006 (20%) and 2004 (19%)." (Kaiser Family Foundation)
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Links to Items on Executive Comp, Benefits in General
[Guidance Overview] Compensation and Benefits Provisions of the Financial Bailout Act (PDF)
5 pages. Excerpt: "The financial bailout bill signed into law . . . contains several provisions affecting executive compensation and employee benefits. These provisions include a requirement that health plans provide the same coverage for mental illnesses and substance abuse as for other conditions, limits on the amount of compensation that can be paid to the executives of companies that sell troubled assets to the Treasury, and a number of miscellaneous provisions." (Seyfarth Shaw LLP)
[Guidance Overview] Deferred Compensation Paid by Offshore Funds Limited by the Emergency Economic Stabilization Act (PDF)
3 pages. Excerpt: "In addition to its many other provisions, Section 801 of the Act adds Section 457A to the Internal Revenue Code which is intended to generally curtail the ability of investment fund managers to defer income recognition of management and incentive fees due from offshore funds organized in tax havens. The measure was included as a revenue-offset for the extension of a package of various tax incentives and tax credits, and is effective for fees for services performed after December 31, 2008. Existing deferrals for services provided before January 1, 2009 may continue to be deferred but must generally be included in gross income before 2018." (Paul, Hastings, Janofsky & Walker LLP)
[Guidance Overview] Congress Bailout Bill Shuts Down Deferred Compensation Tax Haven (PDF)
2 pages. Excerpt: "The Emergency Economic Stabilization Act of 2008 enacted two weeks ago added Section 457A to the U.S. Internal Revenue Code. Section 457A provides in general that US taxpayers cannot defer US income tax on compensation earned after December 31, 2008 for services performed for non-US employers located in certain tax haven jurisdictions. This marks the death knell of certain long-standing practices of offshore entities permitting US employees to defer compensation. Moreover, absent transition relief from the IRS, if existing deferred compensation arrangements subject to Section 457A are not amended by December 31, 2008 to accelerate payments to the year of income inclusion, subsequent discretionary accelerated payments could be subject to an additional 20 percent income tax." (Dewey & LeBoeuf LLP)
More Executive Compensation Guidance Under EESA
Summaries of four recent Notices and the Interim Final Rule on Treasury's Capital Purchase Program. (Attorney B. Janell Grenier via Benefitsblog.com)
Employee Ownership Update for October 15, 2008
NCEO Executive Director Corey Rosen discusses NCEO research for Innovest and the Herron Foundation finding that at least 29% of S&P 500 companies have some kind of broad-based employee ownership plan; a spate of stock-drop lawsuits following the financial sector's woes; 5 of the 15 winners of the Wall Street Journal/Winning Workplace Top Small Workplaces are ESOP companies; an AMT provision in the bailout bill that will affect stock option holders; and more. (National Center for Employee Ownership)
[Opinion] Is the Bailout Package a Template for Future Executive Compensation Regulation?
Excerpt: "We take a closer look at these new rules and forecast where we might be heading. But despite the possibility of new restrictions, we do not believe compensation committees need to overhaul their core pay-for-performance programs for the coming year. Rather, we advise our clients to take a good look at their existing severance and change-in-control provisions and reconsider their necessity in light of other compensation elements." (Watson Wyatt Worldwide)
Newly Posted Events
Florida Police, Fire & Public Pension Forum
in Florida on March 9, 2009
presented by Opal Financial Group
Public Funds Summit
in Arizona on January 7, 2009
presented by Opal Financial Group
Newly Posted Press Releases
Poll Finds Most People Did Not See or Use Comparative Health Care Quality Information Last Year
Kaiser Family Foundation
U.S. Department of Labor Updates Fiduciary Guidance On Exercising Shareholder Rights And Investing In Economically Targeted Investments
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Report Shows Small Business Owners Losing Confidence in Social Security, Seek More Control of Their Own Accounts
ING Group
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