On October 9, 2008, President Bush signed “Michelle’s Law” (H.R. 2851) designed to ensure that dependent college students who take a medically necessary leave of absence do not lose health insurance coverage.

The law was named after Michelle Morse, a college student who suffered from cancer and continued her course load, against the advice of doctors, in order to remain covered by health insurance.

Michelle’s law provides that a group health plan may not terminate a college student’s health coverage simply because the child takes a medically necessary leave of absence from school or changes to part-time status. The leave of absence must:

• Be medically necessary;
• Commence while the child is suffering from a serious illness or injury; and
• Cause the child to lose coverage under the plan.

To take advantage of the extension, the child must have been enrolled in the group health plan on the basis of being a student at a post-secondary educational institution immediately before the first day of the leave. Coverage must extend for one year after the first day of the leave (or, if earlier, the date coverage would otherwise terminate under the plan). The student on leave is entitled to the same benefits as if they had not taken a leave. If coverage changes during the student’s leave, then this new law applies in the same manner as the prior coverage.

Physician’s Certification and Notice

The group health plan must receive written certification by the child’s treating physician stating the child is suffering from a serious illness or injury, and the leave (or change of enrollment) is medically necessary. In addition, when sending any notice describing the plan’s student certification requirements for coverage, the plan also must include a description of the terms for continued coverage under this law.

Michelle’s Law is effective for plan years beginning on or after October 9, 2009.

Learn more at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_bills&docid=f:h2851enr.txt.pdf

Exit interviews, when conducted properly, are a source of valuable information. They can tell us a lot about the quality of our hiring decisions, why people leave our organization, the state of employee morale, and the quality of supervision.

In order to draw valid conclusions from the information, exit interviews should be conducted with all separating employees, whether voluntary, discharged, or laid off. To ensure 100% participation, the best way to conduct an exit interview is in person, one on one. If the in-person contact is not feasible, the interview should be conducted by telephone. A third option, which is by far the least effective, is to have the former employee complete a mail-in questionnaire.

Whoever conducts the interview should be a member of management, but not involved in the employee’s day-to-day supervision if possible. Give the separating employee a copy of the questionnaire to follow as you ask the questions and write out the responses. Interpret the employee’s words objectively. Throughout the interview, clarify, summarize, and verify your understanding of the employees words. Upon completing the interview, have the employee read what youve written to verify accuracy or make changes.

When conducting an exit interview with a discharged employee, don’t ask why the employee is leaving, but do ask all questions that are appropriate. Begin the interview by asking, “How might we have prevented this situation? or What could management have done differently to prevent you from losing your job?” A discharged employee may give angry replies, but the information is no less important. In fact, discharged employees are often more candid in their feedback than those who voluntarily quit and are concerned about burning bridges.

Exit interviews provide important information about turnover statistics. Even if you lose only one person a year due to turnover, always conduct exit interviews so you can begin to establish a historical body of data. Group questionnaires by department or employee classification can be used to identify important trends.

To conduct an effective exit interview, keep the following suggestions in mind:

• Arrange the interview as one of the employee’s last activities.
• Ensure confidentiality and privacy.
• Encourage employees to speak candidly. If employees are hesitant, offer them the option of writing their thoughts.
• Collect all company property, such as keys, handbooks, uniforms, etc.
• Wish the employee well on future endeavors.

For assistance with terminations or exit interviews, contact your Staff One Client Service Executive.

From Kaiser Family Foundation

WASHINGTON, D.C.—Premiums for employer-sponsored health insurance rose to $13,375 annually for family coverage this year—with employees on average paying $3,515 and employers paying $9,860, according to the benchmark 2009 Employer Health Benefits Survey released today by the Kaiser Family Foundation and the Health Research & Educational Trust (HRET).

Family premiums rose about 5 percent this year, which is much more than general inflation (which fell 0.7 percent during the same period, mostly due to falling energy prices). Workers wages went up 3.1 percent during the same period. Since 1999, premiums have gone up a total of 131 percent, far more rapidly than workers’ wages (up 38 percent since 1999) or inflation (up 28 percent since 1999). For the past few years, the annual rise in premiums has been more moderate than the double-digit growth experienced earlier this decade.

Read the full press release at: http://www.kff.org/insurance/ehbs091509nr.cfm 
Read the complete survey analysis at: http://ehbs.kff.org/

Effective Sept. 23, employers with group health plans covering 50 or more participants that are subject to the privacy and security provisions under the federal Health Insurance Portability and Accountability Act of 1996 must provide notice when unsecured protected health information is accessed, used, or disclosed by unauthorized persons. In general, such notice must be provided to individuals who are affected by breaches of their protected health information by first-class mail or e-mail no later than 60 days after breaches are discovered. Notice also must be provided to the Secretary of Health and Human Services and, in some cases, to media.

The $856 billion health care reform proposal released Sept. 16 by Senate Finance Committee Chairman Max Baucus (D-Mont.) does not require that employers provide health care benefits. Starting in 2013, however, companies with more than 50 workers that do not offer health coverage would have to reimburse the federal government for each full-time employee receiving a health care affordability tax credit in the new health care exchanges designed to help individuals find affordable policies.

While there is no provision to prevent employers from dropping coverage, committee staff members said most employers believe that providing coverage gives them a competitive advantage in attracting and retaining the best workers.

Under the proposal, businesses with fewer than 25 employees and average annual wages of less than $40,000 could receive credits up to 35 percent for tax years 2011 and 2012. Annual contributions to flexible spending accounts would be limited to $2,000 and FSA funds could not be used to buy over-the-counter medications without a prescription.

The Senate Finance Committee is scheduled to start debating the proposal on Sept. 22.

For a copy of the legislation, click here.

From MHA

On September 5, 2009, President Obama and Treasury Secretary Timothy Geithner announced a set of new initiatives designed to encourage retirement savings. The new guidance expands opportunities for automatic enrollment in 401(k) and other retirement plans and enables employees to contribute amounts representing unused vacation or similar leave time to retirement plans (including 401(k) plans). The guidance also updates the IRS’s model rollover notice. The IRS also issued Special Edition Newsletters of both Employee Plans News and Retirement News for Employers with information about the changes.

Automatic Enrollment

• Revenue Ruling 2009-30. This ruling addresses automatic enrollment in 401(k) plans that contain a feature under which employee deferrals to the plan automatically increases each year without an affirmative election by the employee. The ruling describes two situations-one involving a basic automatic contribution arrangement and the other involving an arrangement intended to satisfy the requirements for a qualified automatic contribution arrangement (QACA) and an eligible automatic contribution arrangement (EACA).

Click here to view Revenue Ruling 2009-30

• Notice 2009-65. This notice contains two sample plan amendments to facilitate the use of automatic enrollment. The pre-approved automatic enrollment language will allow employers to amend their plans to adopt automatic enrollment more quickly-and without the need for case-by-case approval from the IRS. The notice states that plans are not required to adopt either amendment verbatim.

Click here to view Notice 2009-65

• Notice 2009-66 and Notice 2009-67. These companion notices provide guidance and a sample amendment, respectively, for including an automatic contribution arrangement in SIMPLE IRA plans.

Click here to view Notice 2009-66 or Click here to view Notice 2009-67

Unused Vacation or Other Similar Leave

• Revenue Ruling 2009-31. This guidance illustrates two situations in which the dollar equivalent of unused paid time off (PTO) can be contributed to an employer’s profit-sharing plan without adversely affecting the plan’s qualified status.

Revenue Ruling 2009-32. This guidance addresses similar contributions at termination of employment.

Click here to view Revenue Ruling 2009-32

Updated Model Rollover Notice under Code Section 402(f)

• Notice 2009-68. This notice simplifies the presentation of an employee’s options when receiving an eligible rollover distribution. It provides a rollover roadmap that satisfies the required notice that must be provided to employees taking their retirement assets. The notice also reflects law changes (such as information on a distribution from a designated Roth account under an employer plan) and explains rules that apply in special situations (such as when a distribution is made to a surviving spouse or other beneficiary).

Click here to view Notice 2009-68

The IRS issued guidelines on Sept. 9 that outline the conditions under which multiemployer plan sponsors can automatically revoke a funding status freeze requested under the Worker, Retiree, and Employer Recovery Act of 2008.

The act, which offered relief for defined benefit funding affected by last year’s financial markets collapse, allowed the plans to freeze their funding status from Oct. 1, 2008, to Sept. 30, 2009.

For more information, see http://www.irs.gov/pub/irs-il/2008-2009pgp.pdf.

From USCIS

On August 27th, U.S. Citizenship and Immigration Services (USCIS) announced that the Office of Management and Budget has extended its approval of Form I-9 (Employment Eligibility Verification) to Aug. 31, 2012. Consequently, USCIS has amended the form to reflect a new revision date of Aug. 7, 2009.

Employers may use the Form I-9 with the revision date of either Aug. 7, 2009 or Feb. 2, 2009. The revision dates are located on the bottom right-hand portion of the form.

Staff One clients should begin using the revised I-9 form for all new hires, effective immediately. The new form can be found at www.staffone.com

According to Hewitt Associates, COBRA enrollment has doubled since the enactment of The American Recovery and Reinvestment Act of 2009 (ARRA) earlier this year.

One of the provision of the ARRA provides COBRA premium assistance for employees who are involuntarily terminated from Sept. 1, 2008, to Dec. 31, 2009. Qualified participants pay 35 percent of the COBRA premium, with the remaining 65 percent subsidized by the employer and reimbursed by the federal credit to the employer’s payroll taxes.

“From March 2009 to June 2009, monthly COBRA enrollment rates for Americans eligible for the subsidy averaged 38 percent, up from 19 percent for the period of September 2008 through February 2009,” Hewitt said. Industrial manufacturers experienced an 800 percent increase in COBRA enrollments following enactment of the subsidy, while construction, leisure, and retail businesses experienced a 300 percent increase in enrollments, Hewitt found.

Find out more about the analysis here.