Benefits Update – February 2010

From the editors of CCH’s BENE and BAN products, here are hot topics from recent Employee Benefits Management Directions newsletters as well as recent explanatory updates in Employee Benefits Management. Also included are recent explanatory updates to the Benefits Answers Now product.

If you have any comments/suggestions concerning the information provided or the format used, we’d like to hear from you. Please contact me at tulay.turan@wolterskluwer.com.

Hot Topics in Employee Benefits Management:

President signs appropriations bill with COBRA subsidy extension, Employee Benefits Management Directions newsletter, Issue No. 459, January 12, 2010 – President Obama has signed the Department of Defense Appropriations Act, 2010 (P.L. 111-118), which extends the eligibility period for the COBRA premium subsidy to February 28, 2010, and the maximum period for receiving the subsidy to 15 months.

New law extending COBRA subsidy requires immediate action, expert advises, Employee Benefits Management Directions newsletter, Issue No. 460, January 26, 2010 – The Department of Defense Appropriations Act, 2010 (DDAA) extended and expanded the COBRA subsidy provisions established in the American Recovery and Reinvestment Act (ARRA). That’s good news for affected individuals, but because the new law is retroactive to ARRA’s enactment date, those administering the subsidy need to take immediate action. Charles K. (Chip) Kerby III, attorney at Liberte Group LLC, talked about the new law and the actions to take at a recent International Foundation of Employee Benefit Plans (IFEBP) teleweb.

New law gives FMLA coverage to flight crews, Employee Benefits Management Directions newsletter, Issue No. 459, January 12, 2010 – President Obama has signed into law the Airline Flight Crew Technical Corrections Act (P.L. 111-119), legislation that amends the FMLA to make sure that flight attendants and airline pilots are able to qualify for benefits under the FMLA.

States expand leave rights to include military, school activities, domestic violence, organ donation, Employee Benefits Management Directions newsletter, Issue No. 460, January 26, 2010 – In 2009, a handful of states enacted laws relating to leave rights. This article includes a summary of the new laws.

What’s New in Employee Benefits Management:

COBRA subsidy extension – The extension of the COBRA subsidy (see story above) is discussed at ¶14,040 and ¶14,060.

Model COBRA notices – The DOL has issued new model COBRA notices to reflect the COBRA subsidy extension requirements. The notices are at ¶226,105, ¶226,107 and ¶226,109.

Transportation benefits – The IRS has delayed the effective date of Rev. Rul. 2006-57, I.R.B. 2006-47, November 20, 2006, which provides guidance to employers on the use of smartcards, debit or credit cards, or other electronic media to provide qualified transportation benefits. IRS Notice 2009-95 is discussed at ¶150,795 and ¶154,200.

State disability laws – The taxable wage bases and contribution rates for states with disability laws have been updated at ¶30,100.

FMLA coverage for flight crews – P.L. 111-119 (see story above) is discussed at ¶68,054.

2010 vehicle valuations – The IRS has released the maximum allowable value of certain employer-provided automobiles, including trucks and vans, that are first made available to employees for personal used during calendar year 2010. These amounts have been updated at ¶150,595.

2010 withholding tables – The wage bracket and percentage method withholding tables for 2010 are available at ¶5520 and ¶5530. The 2010 advance earned income credit payment tables are at ¶5550.

What’s New in Benefits Answers Now (BAN):

President signs appropriations bill with COBRA subsidy extension. President Obama signed the Department of Defense Appropriations Act, 2010, which extends the eligibility period for the COBRA premium subsidy provided by the American Recovery and Reinvestment Act of 2009 (ARRA). The eligibility period will run through Feb. 28, 2010. In addition, the law extends the maximum period for receiving the subsidy to 15 months. ARRA had provided the subsidy for up to nine months. See the discussion at ¶22,515 for more information about the COBRA subsidy.

IRS extends deadline to adopt certain PPA plan amendments. The IRS has issued a notice extending the deadline for amending qualified retirement plans to meet certain requirements of the Internal Revenue Code that were added by the Pension Protection Act, and subsequently modified by the Worker, Retiree, and Employer Recovery Act. The deadline is extended to the last day of the first plan year that begins on or after January 1, 2010. The IRS makes clear that a plan must continue to satisfy the operational compliance requirements of the PPA as a condition of the extension of the deadline for adopting plan amendments. More information about these extensions can be found at ¶12,360.

More states recognize same-sex marriage or its equivalent. In 2009, a handful of states enacted laws relating to domestic partners. To find out more about these laws, see ¶20,720.

New law gives FMLA coverage to flight crews. President Obama has signed into law the Airline Flight Crew Technical Corrections Act, legislation that amends the FMLA to make sure that flight attendants and airline pilots are able to qualify for benefits under the FMLA. The law closes a loophole that, because of the way many aircrews’ hours are calculated, effectively excludes more than 200,000 flight attendants and pilots from coverage under the FMLA. To learn more about the new law, see the discussion at ¶30,980.

Employers anxious about retiree medical promises. A weak economy and uncertainty about the direction, timing, or impact of national health care reform have plan sponsors in a quandary as to how to address the rising cost and continuing administrative burden of their retiree medical plans. These findings are from a new survey from ISCEBS and Towers Perrin. The survey also revealed a sense of urgency about the need to make changes to costly retiree medical plans, an urgency compounded by the historical lack of marketplace solutions for pre-Medicare retirees, creating further anxiety among plan sponsors. Find out more about the employer and employee attitudes regarding retiree medical care at ¶22,910.