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Congress Wraps Up Busy 2007-2008 Term, More Benefit Activity Ahead
The 2009-2010 congressional term promises to be another busy session for benefit- and compensation-related issues. During the 2007-2008 term, Congress enacted important laws affecting health care, retirement, executive compensation, and the Family and Medical Leave Act (FMLA), and considered new issues such as the investment of pension fund assets. Some of the legislation had been debated for years and received a final push from new Democratic majorities in the House and Senate. Other bills and efforts represent attempts to deal with trouble in the broader economy — such as the financial crisis and rising food and energy costs.

Stimulus Bill Provides Subsidized COBRA Coverage
On February 17, 2009, President Obama signed the American Recovery and Reinvestment Act (H.R. 1) into law. The massive stimulus package will subsidize COBRA coverage for some eligible qualified beneficiaries. The COBRA provisions will take effect soon after enactment and so require prompt attention and action from plan sponsors and administrators. Among other actions, employers must issue updated COBRA notices, provide new enrollment options and implement subsidy procedures.

Review of ‘Critical: What We Can Do About The Health-Care Crisis’ by Tom Daschle
In his book, “Critical,” published in 2008, Tom Daschle, former Senate majority leader, describes his views on the problems of the U.S. health care system and how they can be fixed. One of the co-authors of the book is Jeanne Lambrew, deputy director of the White House Office of Health Reform. The incoming Obama administration and the Democratic leadership in Congress have indicated strongly that health care reform is one of their top legislative priorities in the next year or so. The book sets out key analytical conclusions and proposals that might emerge during the upcoming health care reform debates.

President Signs Pension Funding Relief and Technical Corrections to PPA
The Worker, Retiree and Employer Recovery Act (WRERA), signed into law on Dec. 23, 2008, provides some funding relief to defined benefit (DB) sponsors affected by recent market declines, as well as temporarily waiving the minimum distribution rules for seniors. The act also makes permanent technical corrections to the Pension Protection Act of 2006 (PPA).

Dramatic Drops in Interest Rates Forecast Much Lower DB Plan Funding Status on Accounting Basis for 2008
An earlier Watson Wyatt analysis of pension funding in 450 Fortune 1000 firms projected an 8 percent decline in their defined benefit (DB) pension funding status under an assumption that the market conditions of Oct. 15 would persist through 2008. But interest rates have fallen by more than 200 basis points since then, and we are now projecting a much bigger 29 percent drop in funding status.

Early Start to 2009 Health Care Reform Debate
In the weeks following the Nov. 4 elections, some of the lawmakers hoping to steer health care reform legislation through the Senate this year got a head start. On Nov. 12, 2008, Senate Finance Committee Chairman Max Baucus (D-Mont.) released a policy paper outlining his vision for comprehensive health care reform. In addition, some members of the Senate Finance Committee and the Senate Health, Education, Labor and Pensions (HELP) Committee met to discuss health care reform. These endeavors capped a year in which Congress set the stage for a major health care reform debate and suggest that lawmakers plan to get to work on the issue early in 2009.

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