DOL Addresses Exemption From HIPAA Portability Rules
In a recent Field Assistance Bulletin (FAB), the U.S. Department of Labor (DOL) differentiates exempt from nonexempt supplemental health coverage under the Health Insurance Portability and Accountability Act (HIPAA). The DOL is responding to concerns about some insurance products being improperly marketed as HIPAA-exempt supplemental plans. |
IRS Relaxes Restrictions on Payments for Cafeteria Plan Coverage
The IRS recently modified its position on the permissibility of pretax payments for health coverage under a cafeteria plan for domestic partners and others who are not tax dependents. Formerly, employees had to pay taxable health benefits with after-tax dollars. Now, employees may pay for both nontaxable and taxable health benefits with pretax dollars, and the cost of the taxable benefits will be imputed to employees’ gross incomes. EEOC Issues Final Rule Permitting Coordination of Retiree Medical and Medicare
The Equal Employment Opportunity Commission (EEOC) released final regulations that allow employers to coordinate retiree health benefits with Medicare benefits. Although the EEOC decided to approve this long-standing employer practice some time ago, the agency had been blocked from issuing these final rules by litigation brought by AARP. Under the final rules, employers can eliminate or reduce retiree health benefits when retirees become eligible for Medicare without violating the Age Discrimination in Employment Act (ADEA). IRS Provides Guidance on “Greater of” Cash Balance Conversions
The IRS recently released a revenue ruling that addresses whether “greater of” transitions in cash balance conversions violate the accrual rules. In a greater-of transition, participants receive benefits under whichever formula gives them the larger benefit – the previous plan formula or the cash balance formula. Partially Prefunding the Canadian Public Pension Plans: Lessons for the United States?
During the 1990s, both Canada and the United States were facing many of the same challenges to their Social Security programs. But while the United States has continued on the same course, with no changes made – despite continued projections of severe shortfalls ahead – Canada began partially prefunding its public pension plans with real assets in 1998. Would a similar approach be possible or appropriate for the financially challenged Social Security program in the United States? Pension Funding Improves Again in 2007
Pension plan funding has been up and down during the last seven years. In many firms, the pension plan surpluses of the late 1990s turned into deficits early in the next decade, as both the stock market and interest rates declined. Then in 2006, an inverse of the earlier “perfect storm” delivered strong asset returns and higher discount rates for pension liabilities. These market trends helped to bring pension plans’ aggregate funding status back to full financial health. Major Expansion of FMLA Allows Six-Month Leave to Care for Injured Servicemembers
Employees may take up to six months of job- and benefit-protected leave to care for family members injured in the line of active military duty. In certain other circumstances, workers may take up to 12 weeks of leave when a family member is on active duty or has been notified of an impending call to active duty.
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