July 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:
Supreme Court upholds seniority system with differing pension service credits for pregnancy leave prior to Pregnancy Discrimination Act, Employee Benefits Management Directions newsletter, Issue No. 445, June 2, 2009 – An employer does not necessarily violate the Pregnancy Discrimination Act (PDA) when it pays pension benefits calculated in part under an accrual rule, applied only prior to the PDA, that gave less retirement service credit for pregnancy absences than for medical leave generally, the U.S. Supreme Court has ruled in a 7-2 decision.
Retroactive cancellation of former employee’s health insurance violated FMLA, Employee Benefits Management Directions newsletter, Issue No. 445, June 2, 2009 – A district court properly entered a judgment in favor of a former employee who sued her former employer for violating the Family and Medical Leave Act (FMLA), because a jury could reasonably conclude that the employer’s motivation in retroactively cancelling her insurance after she decided to take leave was retaliatory and that the employee was working full-time prior to taking leave, the Seventh Circuit Court of Appeals (CA-7) has held.
Expert details advantages, potential pitfalls of CDHPs, Employee Benefits Management Directions newsletter, Issue No. 442, June 16, 2009 – The cost-sharing features of consumer-directed health plans (CDHPs) have made them attractive to employers seeking new health care benefit options and ways to combat the impact of rising health care costs. How has the use of CDHPs increased in recent years, and what should employers thinking of implementing such plans keep in mind? CCH, a Wolters Kluwer business, interviewed Milan Yager, Executive Vice President of the National Association of Professional Employer Organizations (NAPEO), to find out.
IRS posts new Q&As on COBRA premium subsidy, Employee Benefits Management Directions newsletter, Issue No. 442, June 16, 2009 – The IRS has posted several new questions and answers on the COBRA premium subsidy requirements of the American Recovery and Reinvestment Act of 2009 (ARRA) (P. L. 111-5) on its website. The new Q&As, which are dated June 4, 2009, were added to the following sections: administration and eligibility, form preparation, and reporting and documentation.
What's New in Employee Benefits Management:
HSA amounts for 2010 – The IRS has issued inflation adjusted amounts under Code Sec. 223 for Health Savings Accounts (HSAs) for 2010. The amounts can be found at ¶39,067. In addition, Rev. Proc. 2009-29 is at ¶475,208.
Pension service credits – The Supreme Court’s decision in AT&T v. Hulteen (see story above) is discussed at ¶68,040.
Pending legislation – Proposed benefits-related legislation has been updated at ¶2820.
Domestic partners – The California Supreme Court has upheld the state’s ban on same-sex marriage. The discussion at ¶10,110 has been updated to reflect this ruling.
Life insurance – The IRS has issued guidance concerning the treatment of employer-owned life insurance contracts under Code Sec. 101(j) and Code Sec. 6039I. The guidance, IRS Notice 2009-48, is discussed at ¶110,380.
What's New in Benefits Answers Now (BAN):
IRS issues 2010 inflation adjusted amounts for HSAs. The IRS has issued inflation adjusted amounts for Health Savings Accounts (HSAs) for 2010. For calendar year 2010, the annual limitation on deductions for an individual with self-only coverage under a high deductible health plan is $3,050. For calendar year 2010, the limitation on deductions for an individual with family coverage under a high deductible health plan is $6,150. To find out more about the adjusted limits for 2010, see ¶23,700 and ¶23,715.
IRS, DOL both publish information on COBRA premium subsidy. The IRS has posted several new questions and answers on the COBRA premium subsidy requirements of the American Recovery and Reinvestment Act of 2009 on its website. The new Q&As, which are dated June 4, 2009, were added to the following sections: administration and eligibility, form preparation, and reporting and documentation. Also, the DOL has announced the appeal process individuals can use if they are denied a premium subsidy for their group health plan continuation coverage. Find out more about the COBRA subsidy at ¶22,515.
Proposed regulations would allow reduction or suspension of safe harbor nonelective contributions. The IRS has issued proposed regulations that would allow employers sponsoring a safe harbor 401(k) plan or 403(b) plan, including a qualified automatic contribution arrangement (QACA), to reduce or suspend required nonelective contributions, in the event they have incurred "substantial business hardship" during the plan year. The conditions of the relief are similar to those pursuant to which an employer may suspend safe harbor matching contributions. More information about suspending nonelective contributions can be found at ¶10,875.
Supreme Court upholds seniority system with differing pension service credits for pregnancy leave prior to Pregnancy Discrimination Act. An employer does not necessarily violate the Pregnancy Discrimination Act (PDA) when it pays pension benefits calculated in part under an accrual rule, applied only prior to the PDA, that gave less retirement service credit for pregnancy absences than for medical leave generally, the U.S. Supreme Court has ruled in a 7-2 decision. The employer's benefit calculation rule in this case is part of a bona fide seniority system under Title VII of the Civil Rights Act of 1964, and, as such, is insulated from challenge, the Court found. See the discussion at ¶80,830 for more information about health care cost increases.
Survey finds many Americans would consider pay cut for freedom to work from home. Nearly 75 percent of all workers want the freedom to work remotely from home or somewhere else away from the office, yet most workers don't have the option. This desire is so strong that 1 in 5 workers are willing to relinquish 5 percent of their salary to work offsite 1-2 days a week, according to a report on workplace trends issued by Citrix Online, a division of Citrix Systems, Inc. The survey findings illustrate the paradox between what businesses and workers perceive to be important to success and the realities of the workplace. To learn more about how employers and employees feel about telecommuting, see the discussion at ¶81,160.