May 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:
IRS issues guidance on COBRA premium subsidy, Employee Benefits Management Directions newsletter, Issue No. 441, April 7, 2009 – The IRS has issued guidance on the COBRA premium subsidy as provided in the American Recovery and Reinvestment Act of 2009 (P.L. 111-5) (ARRA). The guidance, issued as Notice 2009-27, is in the format of 58 questions and answers covering numerous issues, including involuntary terminations, assistance eligible individuals, the calculation of the premium reduction, coverage eligible for the premium reduction, the beginning and end of the premium reduction period, the extended election period, and related issues.
Treasury hopes to issue cafeteria plan regulations by June 30, official says, Employee Benefits Management Directions newsletter, Issue No. 441, April 7, 2009 – Kevin Knopf, an attorney with Treasury’s Office of Benefits Tax Counsel, said March 20 that the final cafeteria plan regulations are on the 2009 IRS-Treasury guidance plan and that Treasury hopes to issue the regulations by June 30, 2009.
Role of employee assistance programs continues to expand, need highlighted in tough economic times, expert explains, Employee Benefits Management Directions newsletter, Issue No. 442, April 21, 2009 – Just about everyone is feeling more stressed out these days. The stock market is down, foreclosures are up, and the future is more uncertain than ever. So it’s not surprising that more employees are enlisting the help of employee assistance programs (EAPs), which have expanded their role over the years. To get an update on the current EAP climate, CCH, a Wolters Kluwer business, interviewed Chris Cavazos, M.P.A., M.S.W., CEAP, Chief Operating Officer, Harris, Rothenberg International (HRI), LLC.
Help employees realize value of benefits before they’re no longer available, Employee Benefits Management Directions newsletter, Issue No. 442, April 21, 2009 – Helping employees recognize the value of their company-sponsored benefits is always smart and beneficial; doing so during tough economic times is imperative, according to Jennifer Benz, found and chief strategist of Benz Communications.
What's New in Employee Benefits Management:
Model COBRA notices – The Department of Labor has issued model COBRA notices to help employers quickly explain to former employees and their families how to take advantage of the premium subsidy as set forth in the American Recovery and Reinvestment Act of 2009 (ARRA). The model notices are reproduced at ¶226,105, ¶226,106, ¶226,107 and ¶226,108.
COBRA subsidy – IRS Notice 2009-27 (see newsletter story above) is discussed at ¶14,040, ¶14,060 and ¶14,070.
Disability benefits – The Fourth Circuit Court of Appeals’ ruling in Carden v. Aetna Life Insurance Company is discussed at ¶30,060. The court found that a disability plan could use worker’s compensation payments to offset disability benefit payments.
Domestic partners – Vermont and Iowa have legalized same-sex marriage. This affects what benefits must be provided to same-sex spouses. The discussion on coverage for domestic partners at ¶10,110 has been updated.
Medicare Part D – CMS has updated the Medicare Part D payment amounts for 2010. These amounts have been added at ¶10,360.
State laws – State mandates have been updated at ¶10,755.
What's New in Benefits Answers Now (BAN):
IRS issues guidance on COBRA premium subsidy. The IRS has issued guidance on the COBRA premium subsidy as provided in the American Recovery and Reinvestment Act of 2009 (ARRA). The guidance, issued as Notice 2009-27, is in the format of 58 questions and answers covering numerous issues, including involuntary terminations, assistance eligible individuals, the calculation of the premium reduction, coverage eligible for the premium reduction, the beginning and end of the premium reduction period, the extended election period, and related issues. Find out more about the temporary COBRA subsidy at ¶22,515.
Help employees realize value of benefits before they're no longer available. Helping employees recognize the value of their company-sponsored benefits is always smart and beneficial; doing so during tough economic times is imperative, according to Jennifer Benz, founder and chief strategist of Benz Communications. "Nothing better illustrates the value of company-offered health care plans than COBRA --especially now with all the media attention surrounding the 65 percent COBRA subsidy passed by Congress to help newly unemployed Americans afford the level of benefits they had while employed," said Benz. "Unfortunately, many companies neglect to tell their employees the true cost of their healthcare benefits. As a result, employees rarely realize what a great deal they're getting on their benefits --until they're paying for it themselves." See the discussion at ¶40,520 for more information about communicating the value of benefits to employees.
Mercer sees significant growth in eligibility audits. In the midst of unprecedented economic challenges and ever-increasing health care costs, Mercer has reported that it is seeing a dramatic rise in the number of inquiries and new business involving health plan dependent eligibility audits, which are designed to verify the eligibility of dependents covered by an employer's health plan. In fact, since 2006, the number of Mercer-conducted audits has more than doubled every year, with more growth expected this year. To learn more about dependent eligibility audits, see the discussion at ¶20,147.
Alteration of medical form means employee was not entitled to medical leave. An employee could not proceed with her claim against her employer under the Family and Medical Leave Act (FMLA) because her alteration of a medical form from her doctor made her application for leave fraudulent, according to the U.S. Court of Appeals for the Seventh Circuit. The employee had filed interference and retaliation claims under the FMLA. More information about the case can be found at ¶31,070.
EBSA issues final regulation extending effective/applicability date for investment advice final regulations. The Employee Benefits Security Administration (EBSA) has issued a final regulation that extends the effective and applicability date of final regulations on investment advice provided to participants and beneficiaries of 401(k) plans and IRAs. The final regulations were effective and applied to transactions occurring on or after March 23, 2009. EBSA is extending the effective and applicability date 60 days. To find out more about providing investment advice to employees, see ¶10,025.