PlanAhead Direct Newsletter April 2010 Volume 10, Number 4

Health Reform Update

Although many details are yet unclear, the bulletin published through the Office of the Speaker of the House outlines eighteen provisions of health care reform which are scheduled to become effective within 90 days to one year of enactment.

PROVISIONS THAT TAKE EFFECT IMMEDIATELY

 

You may be asking "What Should We Do Next?" 

Michael Best prepared a summary that will help to identify changes that will likely affect you and your plans. Consider both the short-term changes (e.g., new mandates which are effective later this year or early next year) and long-term concerns (e.g., considering whether to modify the plan to avoid any "Cadillac tax" issues). Given the scope of the changes, you likely should discuss the situation with your benefits consultant / broker and legal counsel.  The table summarizes many (but not all) of the changes the PPACA introduced. The table generally focuses on the changes for large employers. The table provides section references to various changes. It may be helpful to review PPACA when reviewing this table. Please click to view the Summary of Changes Affecting Large Employers Under the PPACA

Congressional Extension and Expansion of COBRA Premium Subsidy Program

The COBRA subsidy applies to individuals involuntarily terminated between September 1, 2008 and March 31, 2010. It also now applies to individuals who: Experienced a COBRA qualifying event based upon a reduction of hours of employment (e.g., moved from full-time to part-time status which caused the employee to no longer be eligible under the group health plan) which occurred between September 1, 2008 and March 31, 2010; and were involuntarily terminated from employment on or after March 2, 2010.

HEART Act Guidance Includes Some Surprises

In June 2008, the Heroes Earning Assistance and Relief Tax ("HEART") Act became law. The Act made a number of significant changes to the treatment of military reservists under employee benefit plans. In an August 2008 article, we summarized those changes as they applied to qualified defined benefit and defined contribution plans, Section 403(b) plans, and Section 457(b) plans. In January of 2010, the IRS issued Notice 2010-15 (the "Notice"), which contains guidance on a number of the Act's provisions. This article summarizes the most significant and surprising elements of that guidance, which apply to differential wage payments, in "in-service" distributions on a reservist's deemed severance from employment, and the Act's mandatory death benefit provisions.