COBRA Premium Subsidy Extended

Congress has passed, and the President has signed, the Fiscal Year 2010 Department of Defense Appropriations Act ("Act"), which includes important new changes to the COBRA premium subsidy that was created by the American Recovery and Reinvestment Act of 2009 (ARRA).  Click here for the highlights.

COBRA Subsidy Extension Complicates Benefits Administration

While eleventh-hour congressional action extending a COBRA premium subsidy law assures continuation of the subsidy for millions of laid-off workers and their families, it also means more work for employers.  Click here to continue.

Agencies Issue Additional Guidance on the COBRA Premium Subsidy

The DOL and IRS have issued updated information on the extended COBRA subsidy provision.  Draft DOL Model Notices on the extension that employers can send to qualified beneficiaries are available here.  Click here for additional guidance on the extended subsidy.

CMS Updates Creditable Coverage Guidance for Medicare Part D Plans

The updated guidance describes the procedures that Part D plan sponsors must use in making creditable coverage period determinations, reporting them to CMS, and collecting the Late Enrollment Penalty. Among other things, Part D plan sponsors must accept and retain creditable coverage information from group health plan sponsors, attesting to a Part D eligible individual's creditable coverage history. If both the Part D eligible individual and the group health plan sponsor provide evidence of creditable coverage, the Part D plan sponsor must use the information most favorable to the individual. The updated guidance includes numerous model forms and notices, and is effective for Part D enrollment applications received on or after April 1, 2010. CMS has also posted a short summary of the changes from the prior version of the manual.  Click here to access the CMS information.
 
Employers' Legal Obligations to Employees in the Military

While there are benefits in having a citizen soldier as an employee, employers must be prepared to address these difficult questions along with several others that flow from the Uniformed Services Employment and Re-Employment Rights Act of 1994 (USERRA).  Unlike some other federal laws that apply only if the employer has a certain number of employees, USERRA applies to all employers.  Click here to continue.

IRS Releases 2010 Version of Publication 15-B

The IRS has released the 2010 version of Publication 15-B (Employer's Tax Guide to Fringe Benefits), which contains information for employers on the employment tax treatment of various fringe benefits, including accident and health coverage, adoption assistance, company cars and other employer-provided vehicles, dependent care assistance, educational assistance, employee discount programs, group-term life insurance, moving expense reimbursements, HSAs, and transportation (commuting) benefits.  Click here to continue.

Question of the Month

QUESTION: Our company is closing down its operations, laying off all employees, and terminating our group health plan as of December 31. (All active employees and their covered dependents will lose coverage as of that date.) Must we continue to provide coverage to qualified beneficiaries already on COBRA? Must we provide COBRA coverage for employees laid off as part of the shutdown?  Click here for the answer.

 

 

 

Employers Watch and Wait as Health Reform Advances

A large majority (83 percent) of U.S. employers claim they are paying close attention to health care legislation developments, according to new research from benefits provider MetLife. Regardless of company size and whether or not they offer medical benefits, eight in 10 employers say they are on top of the legislation, although other findings in the study suggest more confusion than clarity about how the likely final legislation might affect the health care benefits they provide to their workers.  Click here to continue.

Recession Halts Health Care Spending

The U.S. government reports that health care spending reached 2.3 trillion in 2008. As a result, health care costs account for 16.2% of the gross domestic product, up from 15.9% in 2007.
According to federal officials, the recession, however, slowed the rate of growth on health care spending to 4.4%, down from 6% in 2007. The 2008 increase was the slowest growth rate in health spending since 1960, the year the government started tracking costs. Government researchers also note that national health spending averaged $7,681 a person in 2008, up 3.5% from the previous year.  Click here to continue.

 

 

Sex Harassment Law's Reach Widened by NJ Court

New Jersey laws barring sexual harassment and discrimination apply not only to employer-employee relations, but also to business owners and their clients, a state appeals court ruled recently.  Click here to continue.

 

 

 

Small Business Succession Planning - 2010 Provides a Prime Opportunity

Ninety percent of the 21 million US businesses are family owned. Yet only thirty percent of family run companies today succeed into the second generation, and only 15 percent survive into the third (Source SBA.gov). The reason for this significant failure is obvious; these businesses lack an orderly succession plan.  The current malaise of the US economy is of top concern for small business owners. However, this creates an excellent opportunity to execute your family succession plans and to reduce your taxable estate.  Click here to continue.

 

 

 

Medicare Traps for the Still-Working 65-Year-Old

Making the transition from an employer health plan to Medicare by way of COBRA coverage can be problematic.  Each decision point along the way is subject to very specific deadlines.  Miss one and you may find yourself in health insurance limbo.  Click here to continue.