A majority of large U.S. employers are planning to change their 2011 health care benefit programs in the wake of both health care reform and expected large health care cost increases, according to a new survey by the National Business Group on Health (NBGH).NBGH, Washington, found that 53% of employers taking part in its survey were still planning to make changes to their benefit plans despite uncertainty about how to comply with the Patient Protection and Affordable Care Act (PPACA).

Another 19% are going to scale back changes they had planned to make, while an equal number are making no changes. Remaining respondents were still undecided as they continued to review the final regulations.

Among employers that said they would be making specific changes to their health benefit plans to comply with the new law, 70% said they would remove lifetime dollar limits on overall benefits, while 37% said they would change to annual or lifetime limits on specific benefits.

Also, 26% would remove annual dollar limits on overall benefits, while 13% would remove pre-existing condition exclusions for children.

The survey, covering 72 of the nation’s largest corporations with more than 3.7 million employees, was conducted in May and June.

Health care reform has forced employers to assess their health care benefit strategies and decide whether to comply with the law or lose grandfathered status, said Helen Darling, president of NGBH. But they are still mindful that controlling rising costs is among their highest priorities.

“They have to foot the bill, not the government,” Darling commented.

Surveyed employers estimated their health care benefit costs would rise an average of 8.9% next year, compared with an average increase of 7% this year. To help control those increases, 63% plan to boost the percentage employees contribute to the premium, up from 57% who did so this year, while 46% plan to raise out-of-pocket maximums next year, compared with 36% this year.

Other survey findings:

—61% will offer a consumer-directed health plan (CDHP) in 2011.

—64% will offer is a high-deductible plan combined with a health savings account.

—Among employers offering a CDHP, 20% will move to a full replacement plan in 2011, from 10% this year.

—5% plan to drop retiree health coverage in 2011, while 60% are considering doing so.

—41% offer premium discounts for completing health assessments, while 22% offer premium discounts for participating in stop-smoking programs.

—25% plan to raise the copay or coinsurance for retail pharmacy prescription drug benefits, while 21% plan to do the same for mail-order pharmacy benefits.

A copy of the survey by NBGH can be found here

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The American Recovery and Reinvestment Act (ARRA) provided a COBRA premium reduction for eligible individuals who were involuntarily terminated from employment through the end of May 2010. Due to the statutory sunset, the COBRA premium reduction under ARRA is not available for individuals who experience a qualifying event of involuntary termination of employment after May 31, 2010. However, individuals who qualified on or before May 31, 2010 may continue to pay reduced premiums for up to 15 months, as long as they are not eligible for another group health plan or Medicare.

On July 6, Assistant Secretary of Labor Phyllis C. Borzi issued a statement regarding the COBRA premium reduction under the American Recovery and Reinvestment Act (ARRA): For a copy of Assistant Secretary Phyllis Borzi’s statement, click on the following link:
http://www.dol.gov/ebsa/newsroom/2010/ebsa070610.html

The Unemployment Compensation Extension Act of 2010 signed by the President on July 22, 2010, did not include an extension of the COBRA premium reduction.

A model general notice and a model election notice for individuals with a qualifying event after May 31, 2010 can be obtained from the COBRA section on the DOL’s website at:
http://www.dol.gov/ebsa/COBRA.html

These notices are virtually unchanged from the pre-ARRA models provided by the DOL in 2004.

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In the past few years, a growing number of employers have added automatic features, especially automatic enrollment, to their 401(k) plans.  This national telephone survey of large employers with 401(k) plans was conducted in order to better understand large employer attitudes toward and experiences with two automatic 401(k) features: automatic enrollment and automatic escalation.

The survey’s key findings include the following:

• The vast majority (94%) of employers surveyed report that they are either “very familiar” or “somewhat familiar” with automatic enrollment in 401(k) plans.   While familiarity with automatic escalation is lower than familiarity with automatic enrollment, a majority (78%) of employers also report that they are familiar with automatic escalation.
• Although nearly all large employers with 401(k) plans are at least somewhat familiar with automatic enrollment, the majority have not adopted it for their own 401(k) plan.  Specifically, less than half (42%) of respondents report that their 401(k) plan includes automatic enrollment.  Fewer (28%) report that their 401(k) plans have an automatic escalation feature.
• The majority (58%) of employers with automatic enrollment report that they automatically enrolled only new hires when they first adopted automatic enrollment.  Just over one-third (35%) automatically enrolled all non-participating employees who were eligible for the plan.
• Of those employers who automatically enrolled only new hires at adoption, only about one in ten (11%) report that they have automatically enrolled all non-participating employees at least once since adopting automatic enrollment.
• Employers were most likely to identify the following as “major reasons” that companies offer automatic features: it helps employees save more for retirement (74%), it is easier to pass nondiscrimination testing (49%), and it demonstrates that we are a socially responsible company (35%)
• When asked why they do not have automatic enrollment for their 401(k) plan, employers without automatic enrollment most frequently cited employee-related challenges such as a concern that employees would not like automatic enrollment (30%), costs (20%), contentment with the status quo (14%), and a lack of information (10%).
• When employers without automatic escalation were asked to explain their reasons for not including this feature in their 401(k) plan, the most frequent responses also related to employees and included the company thinks employees would not like it (66%) and the company thinks employees would find it confusing (52%). Additionally, one-third of employers without automatic escalation (35%) indicated that the company is concerned about matching costs.
• Employers that automatically enroll only new hires were asked why they do not automatically enroll all non-participating employees who are eligible for the plan.  As with the reasons expressed for not having automatic features, employee-related challenges were also the reasons most frequently expressed for limiting automatic enrollment to new hires.

AARP commissioned Woelfel Research, Inc. to conduct this telephone survey of 806 large employers with 401(k) plans.  Partial funding was provided by Retirement Made Simpler, a coalition formed by AARP, the Financial Industry Regulatory Authority (FINRA), and the Retirement Security Project (RSP).  For more information, visit www.RetirementMadeSimpler.org.  The survey was fielded from December 15, 2009, to February 24, 2010, and results were weighted by company size.  For more information on the survey, please contact S. Kathi Brown of AARP Research & Strategic Analysis at 202-434-6296.

More Information at http://www.aarp.org/work/retirement-planning/info-06-2010/auto401k.html

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Wellness programs come in all shapes and sizes. But regardless of plan design there are five common components that set the successful programs apart from the rest.

At their core, wellness programs require constant monitoring and periodic adjustments. The programs that get mediocre results are the ones that are left to run on autopilot. That’s why it’s crucial to:

1. Know thine enemy. You have to know what’s driving your biggest claim costs on your healthcare plan – both among employees and their dependents.
2. Create realistic expectations. With wellness, what an employer gets will almost always depend on how much it spends, how well it plans and how well it sustains communications with participants and the vendor.
3. Maintain strong communications. The wellness initiatives that achieve the greatest success are those which are communicated aggressively from the get go and are sustained. Repetition is your friend when doing employee education.
4. Integrate wellness with other benefits. Real-life experience has shown that you should consider your employee assistance programs (EAPs) an extension of the wellness program. You should also consider issues like absenteeism, disability and worker’s compensation to be pieces of the wellness puzzle.
5. Practice what you preach. The key to ensuring employee buy-in is for management to lead the program by setting a positive example. If senior managers are unwilling to participate and address their own health issues, don’t expect many employees to take the program seriously.

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Although the DOL states that it is clarifying the definition of when an employee is considered to stand “in loco parentis,” this is the first time the agency has specifically stated that otherwise covered employees are entitled to take FMLA leave to care for the children of same-sex domestic partners.

Background

The FMLA allows an eligible employee to take up to 12 weeks of leave for the birth or placement of a child, to care for a newborn or newly placed child, or to care for a child with a serious health condition. The FMLA defines a “son or daughter” as a “biological, adopted or foster child, a stepchild, a legal ward, or a child of a person standing in loco parentis.”

The AI explains that Congress intended the definition of “son or daughter” to reflect the reality that many children in the Unites States today do not live in traditional “nuclear” families with their biological father and mother. Congress further stated that the definition was intended to be construed to ensure that an employee who has day-to-day responsibility for caring for a child is entitled to leave even if the employee does not have a biological or legal relationship to the child. Accordingly, Congress included the term “in loco parentis,” which is defined as “in the place of the parent” within the definition of “son or daughter.” The key in determining whether someone is “in loco parentis” is the intention of the person to assume the status of parent toward a child.

Interpretation

The DOL stated that whether an employee stands “in loco parentis” to a child is a fact issue dependent on multiple factors including:

• the age of the child;
• the degree to which the child is dependent on the person claiming to be standing “in loco parentis”;
• the amount of support, if any, provided; and
• the extent to which duties commonly associated with parenthood are exercised.

Further, the FMLA regulations define “in loco parentis” as including those with day-to- day responsibilities to care for and financially support a child. The AI interprets this regulation to require either day-to-day responsibilities for care or responsibility for financial support, but states that an employee is not required to show both factors to be considered standing “in loco parentis” for a child.

Thus, the AI states that employees with no legal or biological relationship to a child may nonetheless stand “in loco parentis” to a child and be entitled FMLA leave. Examples of persons who might fit the definition of “in loco parentis” include:

• an employee raising a child with the biological parent;
• same sex partners raising a child where the employee has no legal or biological relationship with the child;
• an employee who requests leave to bond with the adopted child of a same sex- partner; and
• a grandparent or other relative who has taken on the responsibility to raise a child but has not legally adopted the child.

It should be noted that the fact that a child has biological parents does not prevent a finding that the child is the “son or daughter” of an employee who lacks a legal relationship with the child because “neither the statute nor the regulations restrict the number of parents a child may have under the FMLA.” However, an employee who cares for a child while the child’s parents are on vacation would not be considered to be “in loco parentis” to the child. According to the Administrator, an employer who is not sure whether the employee is entitled to leave as standing “in loco parentis” should be satisfied with a simple statement asserting that the requisite family relationship exists.

Employers’ Bottom Line

Whether an employee’s relationship to a child is covered under the FMLA must be analyzed on a case by case basis. The fact that an employee provides either day-to-day care or financial support may be sufficient to establish an “in loco parentis” relationship where the employee intends to assume the responsibilities of a parent. Therefore, it is important to be aware of the broad interpretation the DOL gives this term and carefully analyze every request under the FMLA for leave to care for a child.

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The findings from the 8th Annual Study of Employee Benefits Trends point to the apparent resilience of workplace benefits in this recession, and reveal that, as employers and employees continue to deal with the effects of the economic downturn, they are focused on the long term. Most employers have not reneged on their benefits commitments and employees continue to depend on their workplace benefits for protection and stability.

However, this year’s Study also reveals a benefits landscape that has been altered as a result of the recession experience. Employees must deal with the financial risks that were exposed when their 401(k) balances precipitously declined and their jobs became uncertain. Employers must seek ways to maintain a competitive advantage for their benefits programs in the context of greater focus on employee productivity and cost control.

Despite these challenges, employers and employees appear to be working toward a common goal: Securing financial health & wellness. Through employer-sponsored wellness programs, automatic enrollment features for retirement savings plans, voluntary benefits and protection products, employers are taking steps to help their employees act on their best intentions.

This year’s Study provides new insights that can help employers identify opportunities to realize the full potential of their benefits programs and to maximize the return on their benefits investment.

Key Highlights from the Study.

Employers Say That:

1. The importance of controlling costs has increased and is now their most important
   benefits objective.
2. The focus on employee retention is somewhat reduced, but is still the second most
   important objective despite the weak job market.
3. Employee productivity remains the third most important objective, but the steady
   increase in importance since 2007 continues.
4. Programs that help foster employee health & wellness and financial security are
   effective in improving employee productivity.
5. Active employer engagement in their qualified retirement plans is increasing and is
   necessary to help employees realize adequate income in retirement. There is emerging
   interest in automatic enrollment, automatic escalation and default annuitization in larger
   companies to help employees act on their intentions to save.
6. They have not increased their focus on providing financial advice, guidance and
   retirement education, despite employee interest, perhaps reflecting the economic
   pressures of the last year.
7. Voluntary benefits can cost-effectively enhance a benefits program, yet few are increasing
   the number offered or prioritizing this as a strategy.

Employees Say That They:

1. Intend to delay retirement. A full 59% of employees now plan to work past age 65.
2. Did not cut back on their benefits participation in the workplace, despite tight budgets.
   They value benefits as part of their financial safety net, and the workplace is the primary
   source for obtaining those benefits.
3. Are more satisfied with their benefits than at any time since 2007, before the recession,
   and they accept that they may need to pay more to get more in the new economy.
4. Feel hopeful about their short-term financial outlook, but still have significant concerns
   about their personal financial situations and admit that those concerns affect their
   workplace productivity.
5. View wellness programs as very worthwhile and connect successful participation to
   better health and productivity.
6. Remain very interested in having their employers provide financial advice, guidance and
   retirement education as they seek ways to realize predictable income for retirement.
7. Are more cautious, and have an increasing appetite for investment options that offer
   more safety than the potential of high returns, at least for now.

Full study can be found here: http://www.metlife.com/assets/institutional/services/insights-and-tools/ebts/Employee-Benefits-Trends-Study.pdf

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When it comes to plan-related document storage, remember that your primary goal should be to preserve materials in a format allowing for quick and easy retrieval. It’s appropriate to store plan records electronically whenever possible. Also, be sure to retain an executed copy (or countersigned copy, as applicable) of each record, not the unsigned original that may have been sent to you for signature.

We encourage you to follow your company’s internal procedures for disaster recovery for your plan documentation. Disaster recovery plans may include protocol for offsite backup storage, retrieval, and inputting and tracking each document’s retention requirements.

While most vendors can provide reports and current plan documents, the plan administrator ultimately remains responsible for retaining adequate records that support the plan document reports and filings. In addition, you are required to maintain records sufficient to determine the amount of benefits accrued by each participant.

Document Type Retention Requirements:

• Plan Documents (including Basic Plan Document, Adoption Agreement, Amendments, Summary Plan Descriptions and Summary of Material Modifications). Should be retained for at least six years following plan termination.
• Annual Filings (including 5500, Summary Annual Reports, plan audits, distribution records and supporting materials for contributions and testing). Should be retained at least six years.
• Participant Records (including enrollment, beneficiary and distribution forms; QDROs). Should be retained at least six years after the participant’s termination.
• Loan Records should be retained at least six years after the loan is paid off.
• Retirement/Investment Committee meeting materials and notes should be retained for at least six years following plan termination.

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Here are some of the features of the legislation.

HOW MANY COVERED: 32 million uninsured. Major coverage expansion begins in 2014. When fully phased in, 94 percent of eligible non-elderly Americans would have coverage, compared with 83 percent today.

COST: $938 billion over 10 years, according to the Congressional Budget Office.

INSURANCE MANDATE: Almost everyone is required to be insured or else pay a fine, which takes effect in 2014. There is an exemption for low-income people.

INSURANCE MARKET REFORMS: Starting this year, insurers would be forbidden from placing lifetime dollar limits on policies, from denying coverage to children because of pre-existing conditions, and from canceling policies because someone gets sick. Parents would be able to keep older kids on their coverage up to age 26. A new high-risk pool would offer coverage to uninsured people with medical problems until 2014, when the coverage expansion goes into high gear. Major consumer safeguards would also take effect in 2014. Insurers would be prohibited from denying coverage to people with medical problems or charging them more. Insurers could not charge women more.

MEDICAID: Expands the federal-state Medicaid insurance program for the poor to cover people with incomes up to 133 percent of the federal poverty level, $29,327 a year for a family of four. Childless adults would be covered for the first time, starting in 2014. The federal government would pay 100 percent of costs for covering newly eligible individuals through 2016.

If the Senate approves a package of changes this week, a special deal that would have given Nebraska 100 percent federal financing for newly eligible Medicaid recipients in perpetuity would be eliminated. A different, one-time deal negotiated by Democratic Sen. Mary Landrieu for her state, Louisiana, worth as much as $300 million, remains.

TAXES: To make up for the lost revenue, the bill applies an increased Medicare payroll tax to the investment income and to the wages of individuals making more than $200,000, or married couples above $250,000. The tax on investment income would be 3.8 percent. If the Senate follows through, it would impose a 40 percent tax on high-cost insurance plans above the threshold of $10,200 for individuals and $27,500 for families. The tax would go into effect in 2018.

PRESCRIPTION DRUGS: Gradually closes the “doughnut hole” coverage gap in the Medicare prescription drug benefit that seniors fall into once they have spent $2,830. Seniors who hit the gap this year will receive a $250 rebate. Beginning in 2011, seniors in the gap receive a discount on brand name drugs, initially 50 percent off. When the gap is completely eliminated in 2020, seniors will still be responsible for 25 percent of the cost of their medications until Medicare’s catastrophic coverage kicks in.

EMPLOYER RESPONSIBILITY: Employers are hit with a fee if the government subsidizes their workers’ coverage. The $2,000-per-employee fee would be assessed on the company’s entire work force, minus an allowance. Companies with 50 or fewer workers are exempt from the requirement.

SUBSIDIES: The aid is available on a sliding scale for households making up to four times the federal poverty level, $88,200 for a family of four. Premiums for a family of four making $44,000 would be capped at around 6 percent of income.

HOW YOU CHOOSE YOUR HEALTH INSURANCE: Small businesses, the self-employed and the uninsured could pick a plan offered through new state-based purchasing pools called exchanges, opening for business in 2014. The exchanges would offer the same kind of purchasing power that employees of big companies benefit from. People working for medium-to-large firms would not see major changes. But if they lose their jobs or strike out on their own, they may be eligible for subsidized coverage through the exchange.

GOVERNMENT-RUN PLAN: No government-run insurance plan. People purchasing coverage through the new insurance exchanges would have the option of signing up for national plans overseen by the federal office that manages the health plans available to members of Congress. Those plans would be private, but one would have to be nonprofit.

ABORTION: The bill tries to maintain a strict separation between taxpayer dollars and private premiums that would pay for abortion coverage. No health plan would be required to offer coverage for abortion. In plans that do cover abortion, policyholders would have to pay for it separately, and that money would have to be kept in a separate account from taxpayer money. States could ban abortion coverage in plans offered through the exchange. Exceptions would be made for cases of rape, incest and danger to the life of the mother.

GOP HEALTH CARE SUMMIT IDEAS: Following a bipartisan health care summit last month, Obama announced he was open to incorporating several Republican ideas into his legislation. But two of the principle ones — hiring investigators to pose as patients and search for fraud at hospitals and increasing spending for medical malpractice reform initiatives — did not make it into the legislation. The legislation incorporates only one, an increase in payments to primary care physicians under Medicaid, an idea mentioned by Sen. Charles Grassley, R-Iowa.

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The Temporary Extension Act:

1. Extends the COBRA subsidy program that was enacted under the American Recovery and Reinvestment Act and
2. Extends unemployment benefits through April 5, 2010.

COBRA

The law’s COBRA provisions:

• Extend the eligibility period for the 15-month 65 percent premium subsidy to those involuntarily terminated from March 1 through March 31, 2010.

• Allow employees to receive the subsidy if they first lost group coverage due to a reduction in hours and then were terminated after enactment of the bill.

Unemployment Insurance

The law’s unemployment insurance benefit provisions:

• Extend the period during which individuals may file applications for Federal Emergency Unemployment Compensation (EUC) from the current end date of February 28, 2010 to April 5, 2010 and the period during which individuals may claim and be paid EUC is extended from July 31, 2010 to September 4, 2010.
• Extend the period during which individuals may qualify for the Federal Additional Compensation (FAC), the extra $25 weekly benefit amount on state and federal unemployment compensation, from the current end date of February 28, 2010 to April 5, 2010 with weekly payment provided during the phase out period for weeks ending October 5, 2010 instead of August 31, 2010.
• Extend the period during which 100% federal reimbursement for weeks of regular federal extended benefit payments to April 5, 2010, with the state option to continue the extended period from July 31, 2010 to September 4, 2010.

Additional Extension

These “short-term” extensions of the COBRA subsidy and unemployment benefits are intended to give Congress more time to consider legislation to extend these programs through 2010.  Under H.R. 4213, a bill the Senate is currently debating, both the COBRA subsidy program and unemployment benefits would be extended through December 31, 2010.

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The maximum value of employer provided vehicles first made available to employees for personal use in calendar year 2010 for which the vehicle cents-per-mile valuation rule (Treas. Reg. § 1.61-21(e)) may be applicable is $15,300 for a passenger automobile and $16,000 for a truck or van, IRS said.

The maximum value of employer provided vehicles first made available to employees for personal use in calendar year 2010 for which the fleet average valuation rule pertaining to 20 or more automobiles (Treas. Reg. § 1.61-21(d)) may be applicable is $20,300 for a passenger automobile and $21,000 for a truck or van.

According to the IRS, if an employer provides an employee with a vehicle that is available
to the employee for personal use, the value of the personal use must generally be included in the employee’s income and wages pursuant to Internal Revenue Code § 61.

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The federal Department of Labor’s Employee Benefits Security Administration establishes a final rule, effective Jan. 14, 2010, giving employers that have employee benefit plans with fewer than 100 participants a seven business day safe harbor period to deposit employee contributions to plans. Employers with retirement or welfare benefit plans subject to the federal Employee Retirement Income Security Act of 1974 must deposit employee contributions to plans on the earliest date that contributions reasonably can be separated from other employer assets. The safe harbor rule does not change ERISA’s requirement that employee contributions to welfare benefit plans must be made no later than 90 days after receipt, and employee contributions to retirement plans must be made by the 15th business day of the month following the month in which contributions are received.

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NASWA has released a survey of the state unemployment trust fund solvency and tax rates. The survey’s findings underscores the significant impact that the current economic recession is having on Unemployment Insurance (UI) costs for all employers.

A total of 24 states will increase their taxable wage base in 2010. Of these 24 states, seven states (AR, FL, IN, NH, TN, VT and WV) have enacted legislation to increase the state’s “taxable wage base,” the level of wages subject to a payroll tax on employers. The remaining 17 state programs (AK, HI, ID, IA, MN, MT, NV, NJ, NM, NC, ND, OK, OR, UT, VI, WA and WY) index their taxable wage bases to the state’s average wages and will automatically increase their taxable wage bases for 2010.

Of the 51 state programs surveyed, 28 states (AK, AL, AZ, CO, GA, HI, IA, ID, IL, KS, MA, MD, ME, MN, MT, ND, NE, NH, NJ, NY, OH, OR, PA, PR, VA, VT, WI and WY) indicated the tax schedule in their state will see an increase in 2010 compared to 2009. The majority of these increases will be automatic; adjustments often triggered by low levels of reserve funds in the state accounts used to finance unemployment benefits. While it is normal for states to recalculate tax rates each year, the magnitude of these rate increases for most states is unusual.

In addition, ten states (CA, CT, DE, KY, MI, MO, NC, RI, SC and TN) indicated their tax rate schedules were already at the highest tier, which would prevent them from automatically increasing in 2010. Consequently, the state legislatures would need to enact changes in state laws – either increasing the tax rates by changing tax rate schedules or increasing the state taxable wage bases.

Six of the 51 state programs surveyed (AR, CA, CT, FL, HI and MA) indicated they will automatically increase their tax rates due to a solvency tax already in state law. The majority of these solvency taxes also activate when states’ trust fund balances fall below specified levels.

Of the 51 state programs surveyed, 35 states estimated the level of UI tax revenue collected in 2010 would surpass the level collected in 2009; with a median projected increase of 27.5%. The range of these projected increases was 2.5% to 600%.

More information can be found at www.workforceatm.org

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Three annual notices must be given to all plan participants no later than 30 days prior to the beginning of each plan year. For calendar year plans, this deadline is Dec. 1. The notices listed below are each separate legal requirements, but a plan that is subject to more than one notice may use a single notice to satisfy the requirement.

• Safe Harbor Notice: A plan that uses a safe harbor method to avoid annual ADP/ACP nondiscrimination testing must provide a safe harbor notice to each participant and employee who is eligible to participate in the plan. The types of safe harbors includes dollar-for-dollar matching on the first 3 percent of deferrals and 50 percent on the next 2 percent, a 3 percent non-elective contribution, or the new qualified automatic contribution arrangement (QACA) created by the Pension Protection Act.
• Qualified Default Investment Alternative (QDIA) Notice: A plan that provides for participant-directed investments and has a default investment option must provide a QDIA notice if the plan fiduciaries are seeking protection from lawsuits by plan participants who are defaulted into this option.
• Eligible Automatic Contribution Arrangement (EACA): A plan that allows for automatic enrollment but includes a provision allowing participants to opt out and withdraw deferrals within the first 90 days after being enrolled must provide a notice describing the terms of the EACA.

Finally, defined contribution plans that implemented a waiver of the required minimum distributions for 2009 are reminded that the Internal Revenue Service (IRS) issued sample amendments, and transition relief for certain actions taken on or before Nov. 30, 2009. Beginning Dec. 1, 2009, each plan must have implemented a policy regarding the handling of minimum distributions, including adoption of plan amendments which is required at the end of the 2011 plan year.

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Employer and employees have a new resource that can be used to help battle obesity in the workforce. Earlier this year, the Centers for Disease Control and Prevention unveiled LEANworks!, a web site full of free resources for employers to develop wellness programs to address obesity. The site, www.cdc.gov/LEANWorks, includes research reports, case studies, ROI information, and an obesity calculator. It features how -to information about assessing the needs of the workforce, developing an effective program, setting goals, budgeting, and strategies for implementing and promoting the program.

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Achieving comprehensive health reform has emerged as a leading priority of the President and Congress. President Obama has outlined eight principles for health reform, seeking to address not only the 45 million people who lack health insurance, but also rising health care costs and lack of quality. In Congress, a number of comprehensive reform proposals have been announced as the debate proceeds over how to overhaul the health care system.

This interactive side-by-side compares the leading comprehensive reform proposals across a number of key characteristics and plan components. Included in this side-by-side are proposals for moving toward universal coverage that have been put forward by the President and Members of Congress. In an effort to capture the most important proposals, we have included those that have been formally introduced as legislation as well as those that have been offered as draft proposals or as policy options. It will be regularly updated to reflect changes in the proposals and to incorporate major new proposals as they are announced. This side-by-side offers a summary of the major components of these proposals; detailed descriptions of provisions relating to the Medicare and Medicaid programs can be found online.

Click here to access the comparison

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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

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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/

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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.

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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

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