February 2009
From the editors of CCH's BENE and BAN products, here are hot topics from
recent Employee Benefits Management Directions newsletters as well as
recent explanatory updates in Employee Benefits Management. Also included
are recent explanatory updates to the Benefits Answers Now product.
If you have any comments/suggestions concerning the information provided or the format used, we'd like to hear from you. Please contact me at tulay.turan@wolterskluwer.com.
Hot Topics in Employee Benefits Management:
President signs pension bill containing funding relief, technical corrections, Employee Benefits Management Directions newsletter, Issue No. 435, January 13, 2009 – On December 23, 2008, then-President George W. Bush signed the Worker, Retiree and Employer Recovery Act of 2008 (P.L. 110-458). The law makes a number of modifications to pension funding rules that are designed to enable pension plan sponsors to adjust to the current market downturn. In addition, the measure contains numerous provisions previously include in the Pension Protection Technical Corrections Bill of 2008 (H.R. 6382).
MA Health Connector guidance on minimum creditable coverage explains self-assessment, certification process, Employee Benefits Management Directions newsletter, Issue No. 435, January 13, 2009 – The Commonwealth Health Insurance Connector Authority has issued guidance regarding Massachusetts’ minimum creditable coverage requirements.
The Commonwealth Fund’s analysis of health care reform proposals shows several plans could result in lower total national health spending, Employee Benefits Management Directions newsletter, Issue No. 436, January 27, 2009 – With health reform high on the agenda of the incoming Congress and President, a new analysis of legislative proposals – including the plans of President Barack Obama and Senate Finance Committee Chairman Max Baucus (D-MT) – shows that several proposals already put forth could substantially reduce the number of uninsured Americans, and would either reduce health care spending or add only modestly to annual health care expenditures.
American Benefits Council issues health care reform proposal, Employee Benefits Management Directions newsletter, Issue No. 436, January 27, 2009 – The American Benefits Council (Council) has issued a report on health care reform that offers 44 specific recommendations for legislative consideration.
What's New in Employee Benefits Management:
Expanded mental health parity provisions – The new mental health parity requirements are discussed at ¶10,065.
State law – The minimum creditable coverage requirements in Massachusetts are discussed at ¶10,760.
IRS user fees – The IRS user fees for 2009 that are payable with each request for a determination letter, opinion letter, notification letter, or ruling have been updated at ¶6020.
Required minimum distributions – Pursuant to the Worker, Retiree and Employer Recovery Act of 2008 (P.L. 110-458), the required minimum distribution rules have been suspended for certain plans for 2009. This provision of the new law is discussed at ¶79,295.
Distributions from government pension plans – The Worker, Retiree and Employer Recovery Act of 2008 (P.L. 110-458) also makes changes to the rules for health insurance premiums of retired public safety officers. This provision of the new law is discussed at ¶86,540.
Final regulations on civil penalties – EBSA has issued final regulations that provide procedures for assessing civil penalties for the failure to disclose certain documents to participants, beneficiaries, and others as required by ERISA. The regulations are at ¶521,794.
What's New in Benefits Answers Now (BAN):
Pension bill containing funding relief,
technical corrections signed into law
On December 23, 2008, the Worker, Retiree and Employer Recovery Act of
2008 was signed into law. The law makes a number of modifications to pension
funding rules that are designed to enable pension plan sponsors to adjust
to the current market downturn. In addition, the measure contains numerous
provisions previously included in the Pension Protection Technical Corrections
Bill of 2008. Senate Finance Committee Chairman Max Baucus (D-MT) called
the legislation "important funding relief for families, seniors and
firms that needed to get done." Finance Ranking Member Chuck Grassley
(R-IA) said that "the economy dictates these stop-gap measures, and
it's good that Congress is acting to look out for retirees and for employers
and workers weathering the economic storm." To find out more about
the funding relief provisions of the Worker, Retiree and Employer Recovery
Act of 2008, see ¶12,360, ¶12,390, ¶14,550, and ¶14,970.
Promises to pay lifetime health benefits
in CBA are enforceable, CA-6 rules
Promises by an employer to pay lifetime health benefits to union retirees
are enforceable, according to the Sixth Circuit Court of Appeals (CA-6).
The health benefit provisions were contained in collective bargaining
agreements made between the employers and the United Automobile, Aerospace,
and Agricultural Implement Workers of America (the UAW). More information
about the case can be found at ¶22,920.
IRS provides guidance on 409A reporting
requirements for 2008
The IRS has extended the transition
rules for employers and payers regarding reporting and wage withholding
requirements with respect to deferrals of compensation and amounts includible
in gross income under Code Sec. 409A, and the transition rules for computing
amounts includible in gross income. The extension is good for 2008 and
will remain in effect for subsequent calendar years until the IRS issues
future guidance. See the discussions at ¶15,400 and ¶15,450
for more information about the 409A reporting requirements.
Increased litigation heightens awareness
of fiduciary responsibilities over qualified retirement programs
While a majority of board of directors or board-level committees retain
responsibility for appointing fiduciaries for qualified plans, an increasing
number are choosing to delegate that responsibility to company executives
and internal plan committees amid rising liability concerns, according
to a survey conducted by Towers Perrin. As indicated in Towers Perrin's
2008 Survey on Qualified Retirement Plan Governance, 54% of respondents
from U.S. companies said selecting a fiduciary is the responsibility of
a board member. This compares with 71% the last time the study was conducted
in 2005. Find out more about how fiduciaries are appointed at ¶13,685.
Employers cope with tracking employee
absences by centralizing leave of absence program administration
Employers are finding it increasingly difficult to effectively track employees'
collective absences, the reasons for those absences, the total costs associated
with lost productivity and health and disability benefits. In an effort
to simplify the leave of absence (LOA) process, a new survey by Hewitt
Associates reveals that more employers are streamlining the management
of employee absenteeism by shifting the administration of their LOA programs
to internal, dedicated groups or to an outsourcing partner. In addition,
a number of companies are adopting total absence management programs,
which bring together traditionally separate absence-related policies and
benefits programs that enable employers to gain a more comprehensive view
of the driving factors behind employee absenteeism. To learn more about
LOA administration, see the discussion at ¶31,320.