June 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:

New HHS guidance specifies ways to render protected health information unusable to unauthorized individuals, Employee Benefits Management Directions newsletter, Issue No. 443, May 5, 2009 – The Department of Health and Human Services (HHS) has issued guidance and a request for comments regarding technologies and methodologies for purposes of rendering protected health information (PHI) unusable, unreadable, or indecipherable to unauthorized individuals. The guidance is being issued so that covered entities under HIPAA and their business associates may comply with the breach notification requirements under the Health Information Technology for Economic and Clinical Health Act (HITECH Act), as found in the American Recovery and Reinvestment Act of 2009 (ARRA).

IRS confirms no information-reporting requirement for COBRA subsidy, Employee Benefits Management Directions newsletter, Issue No. 443, May 5, 2009 – Employers will not need to report temporary COBRA premium assistance to eligible individuals on an information return or W-2, an IRS spokesperson has told CCH. Although there is no information-reporting requirement, entities that claim the credit must maintain records of the payments and supporting documentation.

Employers plan to make significant cost-saving changes in 2010 due to expected spike in 2009 health benefit costs, Mercer finds, Employee Benefits Management Directions newsletter, Issue No. 444, May 19, 2009 – Most employers had their health benefit programs locked and loaded for 2009 before the dramatic onset of the economic crisis in September 2008. Health benefit cost had risen by about 6 percent for four consecutive years and employers expected a similar increase for 2009. But a new survey of 428 employers conducted by Mercer finds that employers now foresee an increase of 7.4 percent in 2009, confirming fears that the recession would accelerate health cost increases.

Budget resolution includes reserve fund for health care reform, Employee Benefits Management Directions newsletter, Issue No. 444, May 19, 2009 – Congress has approved a $3.56 trillion budget resolution (S. Con. Res 13) that includes reserve funds for health care reform and a provision for using the budget process to pass health reform legislation. The agreement includes both a Senate and a House deficit-neutral reserve fund to accommodate comprehensive health reform legislation.

What's New in Employee Benefits Management:

Standard of review – The Third Circuit Court of Appeals’ decision in Estate of Kevin Schwing v. The Lilly Health Plan is discussed at ¶10,425. The court found that a plan administrator’s failure to investigate allegations of retaliation did not lead to a heightened level of scrutiny.

Annual funding notice – The discussion at ¶77,346 has been updated.

State laws – State health insurance laws in South Dakota and Utah have been updated at ¶10,760.

Investment advice – The discussion of investment advice provided by fiduciary advisers has been updated at ¶130,650.

State leave laws – State laws on parental and family leave have been updated at ¶68,080.

What's New in Benefits Answers Now (BAN):

New HHS guidance specifies ways to render protected health information unusable to unauthorized individuals. The Department of Health and Human Services (HHS) has issued guidance and a request for comments regarding technologies and methodologies for purposes of rendering protected health information (PHI) unusable, unreadable, or indecipherable to unauthorized individuals. The guidance is being issued so that covered entities under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and their business associates may comply with the breach notification requirements under the Health Information Technology for Economic and Clinical Health Act (HITECH Act), as found in the American Recovery and Reinvestment Act of 2009 (ARRA). To learn more about making PHI unusable, unreadable, or indecipherable, see the discussions at ¶22,087 and ¶22,107.

IRS confirms no information-reporting requirement for COBRA subsidy. Employers will not need to report temporary COBRA premium assistance to eligible individuals on an information return or Form W-2, an IRS spokesperson told CCH. Recent news reports had indicated that the Service would not require information reporting. The IRS intends to update frequently asked questions (FAQs) on its website to reflect this treatment, the spokesperson added. Find out more about the temporary COBRA subsidy at ¶22,515.

Employers plan to make significant cost-saving changes in 2010 due to expected spike in 2009 health benefit costs, Mercer finds. Most employers had their health benefit programs locked and loaded for 2009 before the dramatic onset of the economic crisis in September 2008. Health benefit cost had risen by about 6 percent for four consecutive years and employers expected a similar increase in 2009. But a new survey of 428 employers conducted by Mercer finds that employers now foresee an increase of 7.4 percent in 2009, confirming fears that the recession would accelerate health cost increases. See the discussion at ¶20,165 for more information about health care cost increases.

Employers and employees committed to retirement plans, surveys find. Despite the pressures of the economic crisis, most U.S. companies continue to view their retirement programs as a vital part of their workplace relationship with employees, even as they struggle to balance cost and talent management issues, according to a survey of close to 500 HR and benefit executives conducted by professional services firm Towers Perrin. Another survey, from Transamerica Center for Retirement Studies, found that American workers are still committed to saving for retirement. The survey found that the vast majority of workers (91%) value a company-sponsored retirement plan, such as a 401(k) plan, as an important employee benefit, and most continue to take advantage of their availability. More information about retirement plan confidence can be found at ¶10,010.

Companies continue to add wellness programs. Despite the recession and recent cutbacks in some benefit programs, companies continue to add wellness and health management programs to promote healthier behaviors among their workers. Additionally, companies are finding greater success by offering workers financial incentives for participation in these programs, according to a survey by Watson Wyatt and the National Business Group on Health (NBGH). To find out more about how many employers are offering wellness programs, see ¶81,600.