January 2012 - EMPLOYEE BENEFITS BLOG

HHS Provides Additional Guidance on Health Plan Coverage of Contraceptive Services by Nonprofit Religious Employers

by McDermott Will & Emery | Jan 30, 2012 | Employment, Health and Welfare Plans

The Patient Protection and Affordable Care Act (PPACA) requires non-grandfathered group health plans to provide coverage for certain preventive services on a first dollar basis (i.e. without deductibles, co-payments, co-insurance or other cost-sharing). Interim final regulations provide an exemption for a very narrow subset of religious employers with respect to coverage of contraceptive services. To qualify for the exemption the entity must be a nonprofit religious employer that offers insurance to its employees. Many entities affiliated with religious institutions, such as hospitals and universities, do not meet this narrow exception.

Now, the U.S. Department of Health and Human Services (HHS) has provided additional guidance for nonprofit employers that do not cover contraceptive services under their current plans because of religious beliefs and that do not fit within the previous exemption. These employers will have an additional year, until August 1, 2013, to comply with the new law. Employers wishing to take advantage of the additional year will have to certify that they are eligible for this delayed implementation. The announcement also indicates that employers that do not offer coverage of contraceptive services will be required to provide notice to employees stating that such services are available with income-based support at sites such as community health centers, public clinics and hospitals.

IRS Issues Revised Guidance on W-2 Reporting Requirements for Employer-Sponsored Health Plan Coverage

by McDermott Will & Emery | Jan 30, 2012 | Employment, Health and Welfare Plans

by Amy Gordon, Susan Nash and Ashley McCarthy

The Internal Revenue Service (IRS) has issued revised guidance, Notice 2011-28, regarding the requirement under the Patient Protection and Affordable Care Act (PPACA) that employers report to employees the cost of their employer-sponsored group health plan coverage on Forms W-2. This requirement applies to calendar year 2012 W-2s, which employees will receive from their employer in 2013.

The guidance provided assistance on calculating aggregate reportable cost. Aggregate cost may be calculated in accordance with one of several methods including the “COBRA applicable premium” method, the “premium charged” method (for fully-insured coverage), or a “modified COBRA premium” method.

In addition to medical coverage, employers must include in the cost of employer-sponsored group health plan coverage, coverage under an Employee Assistance Program, wellness program coverage, on-site medical clinic coverage (but only aggregate reportable cost to the extent that the coverage is provided under a group health plan and the employer charges a premium for such coverage to beneficiaries of federal continuation coverage [e.g., COBRA]), Health Flexible Spending Account coverage (FSA), but only where the employer itself contributes to the FSA or otherwise provides flex credits through a Internal Revenue Code Section 125 cafeteria plan, and coverage under a dental plan or vision plan if such plans are not excepted from the Health Insurance Portability and Accountability Act (HIPAA). Employers do not need to include in the cost of employer-sponsored group coverage the cost of coverage under a dental plan or vision plan if such plans are excepted from HIPAA, amounts contributed to an Archer medical savings account (MSA) or a Health Savings Account, amounts of any salary reduction election to an FSA, the cost of coverage under a multiemployer plan, cost of coverage under a Health Reimbursement Arrangement not included in aggregate reportable income, and the cost of coverage provided under a self-insured group health plan that is not subject to federal continuation coverage requirements (i.e., a church plan).

Acting General Counsel of the NLRB Issues Second Report on Social Media

by Jackie Sinn | Jan 27, 2012 | Employment, Labor, Privacy and Data Security

by Heather Egan Sussman, Linda Doyle and Sabrina Dunlap

On Wednesday, January 25, 2012, National Labor Relations Board (NLRB) acting General Counsel Lafe Solomon released a second report describing social media cases reviewed by his office. The report (Operations Management Memo) addresses 14 cases related to social media and employer social media policies.

Many of the cases reviewed involved employees who had been discharged after they posted comments on Facebook. The general counsel found that a number of the terminations were improper because employees had engaged in protected activity and their terminations arose from unlawful employer policies. However, the general counsel upheld several terminations – despite overly broad employer policies – where the employees involved were not engaged in protected activity and had merely posted general complaints or individual gripes unrelated to working conditions or wages.

The report emphasizes two key points made in an earlier report in August 2011: 1) Employer policies should not be so broad that they prohibit activity protected by federal labor law, such as the discussion of wages or working conditions; and 2) an employee’s comments on social media sites will generally not be protected if they are simply complaints unrelated to working conditions or wages that impact a group of employees.

There are three cases involving social media questions currently pending before the NLRB and those decisions will likely give further guidance on acceptable employer social media policies.

In addition, McDermott partner Heather Egan Sussman will be speaking with Lafe Solomon, and Edward Loughlin (EEOC) on this topic at the International Association of Privacy Professionals (IAPP) Global Privacy Summit, Wednesday, March 7, 2012.

Not Just a Tax Issue: Lawsuits Crop Up over IRS 162(m)

by Jackie Sinn | Jan 26, 2012 | Benefit Controversies, Executive Compensation

by Andrew Liazos

Proxy season is now upon us, and a key task is to evaluate whether shareholder approval is needed for any executive compensation plan. One of the typical reasons to seek shareholder approval is to qualify for tax-deduction relief under Section 162(m) of the Internal Revenue Code. By and large, seeking shareholder approval for that purpose has been viewed as a relatively routine task. However, recent shareholder derivative lawsuits suggest that public companies should take a careful look at disclosures that solicit Section 162(m) shareholder approval.

Read the full article on CFO.com.

HHS Proposes to Allow States to Define “Essential Health Benefits”

by McDermott Will & Emery | Jan 19, 2012 | Health and Welfare Plans

by Amy M. Gordon, Todd A. Solomon and Brian J. Tiemann

The U.S. Department of Health and Human Services (HHS) issued a bulletin on December 16, 2011, outlining and requesting comments on its proposed regulatory approach to allow states to define what is an “essential health benefit.”

To read the full article, please click here.

Deadline Approaching for Filing New IRS Form 8955-SSA

by McDermott Will & Emery | Jan 12, 2012 | Retirement Plans

by Natalie M. Nathanson, Stephen Pavlick and Adrienne Walker Porter

New Internal Revenue Service (IRS) Form 8955-SSA (the Annual Registration Statement Identifying Separated Participants with Deferred Vested Benefits) replaces the Schedule SSA of the Form 5500 annual report. Section 6057(a) of the Internal Revenue Code requires plan administrators of retirement plans subject to the vesting standards under the Employee Retirement Income Security Act of 1974 to report information on separated participants with deferred vested benefits that have not commenced. Starting with the 2009 plan year, plan administrators are required to provide information on separated participants with deferred vested benefits on the new IRS Form 8955-SSA. Form 8955-SSA will generally be required to be filed by the last day of the seventh month after the plan year ends, but the IRS extended the general filing deadline for the 2009 and 2010 plan years until the later of January 17, 2012, or the due date that generally applies for filing Form 8955-SSA for the 2010 plan year.

To read the full article, please click here.

ISS Updates Proxy Voting Guidelines for 2012

by McDermott Will & Emery | Jan 6, 2012 | Executive Compensation

by David A. Cifrino, Thomas P. Conaghan, Andrew C. Liazos, Anne G. Plimpton and Heidi Steele

ISS has released its annual update to its proxy voting guidelines for the 2012 proxy season. The update reflects changes in ISS’s pay-for-performance evaluation methodology, responses to say-on-pay votes and say-on-pay frequency votes and a number of social and environmental policies.

To read the full article, click here.