New COBRA Subsidy Twist - Enough To Give You A Headache

This is a great article from Employee Benefit News Legal Alert. It illustrates the complexity of the COBRA subsidy law with the newest twist of allowing a reduction in hours followed by a termination to trigger the COBRA subsidy. This twist is hard to explain, but the article does a good job of going through it and even has some examples. If you deal with COBRA as part of your job, this is a must read. For that reason, we have re-printed the entire article here as a way to archive it. Our thanks to the authors and Employee Benefits News for this information.

New law modifies COBRA subsidy rules

by John Hickman, Esq. and Ashley Gillihan, Esq.

On March 2, 2010, President Obama signed into law the Temporary Extension Act of 2010 (the “Act”). The Act contains several modifications to the COBRA subsidy rules originally included in the American Recovery and Reinvestment Act of 2009 and later modified by the Department of Defense Appropriations Act of 2010.

The following is a summary of those key modifications.

New sunset date

The Act changes the subsidy eligibility sunset date---the date on or before which the qualifying event that is an involuntary termination of employment must occur--from Feb. 28, 2010 to March 31, 2010.

Assistance eligible individuals

Typically, a qualified beneficiary will qualify as an assistance eligible individual (AEI) only if the qualifying event is an involuntary termination of employment occurring prior to the sunset date.

However, under the Act, qualified beneficiaries who experience/d a qualifying event that is a reduction in hours of employment occurring anytime on or after Sept. 1, 2008, followed by an involuntarily termination of employment between March 2, 2010, and March 31, 2010, qualify as AEIs even though the subsequent involuntary termination of employment is not the qualifying event for COBRA purposes.

Although it is not the qualifying event giving rise to COBRA, the Act treats the subsequent involuntary termination of employment as the “qualifying event” for purposes of determining eligibility for the subsidy (and for purposes of identifying the notice due date—see “Notices” below for more information).

This new subsidy rule only applies to periods of coverage beginning after March 2, 2010. Thus, if the COBRA periods typically begin on the first of the month, the first subsidized COBRA coverage period resulting solely from this new rule would begin April 1, 2010.

Practice Pointer: The rule does not operate to extend the qualified beneficiary’s COBRA coverage; the COBRA period is still measured based on the original qualifying event that was a reduction in hours of employment. It simply provides a subsidy for any remaining periods of COBRA coverage beginning after that involuntary termination of employment.

However, it does operate to provide a new election period for those who would be AEIs under this rule but failed to elect or elected and subsequently lost coverage. See “New election period” below for more information.

Illustration of the new rule:

#1: ABC, Inc. sponsors a group health plan that only covers full-time employees of the company. Prior to Jan. 15, 2010, Bob was a full-time employee of the company and a participant in ABC’s group health plan.

On Jan. 15, 2010, Bob changes from full-time status to part-time status. Assume for purposes of this illustration that the transition from full-time to part-time status was not a “material negative change” that would otherwise cause the reduction in hours to be treated as an involuntary termination of employment.

Under the terms of ABC’s plan, Bob’s coverage will continue until the end of the month, Jan. 31, 2010, after which he is offered an opportunity to elect 18 months of COBRA.

Bob elects COBRA continuation coverage but he must pay 102% of the applicable premium since the qualifying event was a reduction in hours of employment and not an involuntary termination of employment. On March 10, Bob is involuntarily terminated from the company due to a reduction in force.

Even though Bob’s COBRA qualifying event was a reduction in hours of employment, he is an AEI who may be eligible for up to 15 months of federally subsidized continuation coverage (assuming he is not eligible for other coverage).

Since ABC’s COBRA coverage periods begin on the first of each month, Bob’s first federally subsidized COBRA period will be April 1, 2010 (the first coverage period after the enactment date March 2).

New election period

Individuals who would be an AEI under the new rule described above, but who failed to elect COBRA or elected COBRA and subsequently lost coverage, are entitled to a new election.

Illustrations of this rule:

#2: Same facts as Illustration #1 above except that Bob did not elect COBRA continuation coverage following his qualifying event that was a reduction in hours of employment (i.e., transition from full-time to part-time). Bob is now an AEI entitled to a new election.

#3: Same facts as Illustration #1 above except that Bob’s spouse was also covered under ABC’s health plan on the date of the qualifying event. Although Bob chose COBRA, Bob’s spouse did not. Bob’s spouse is now an AEI entitled to a new election.

Practice Pointer: This new rule does not operate to give would-be AEIs whose COBRA period has already expired a new COBRA continuation period simply because they have an involuntary termination of employment between March 2 and March 31, 2010.

Although the involuntary termination of employment is treated as the qualifying event for purposes of determining eligibility for the new election and the subsidy, the maximum COBRA period is determined in this instance based on the original qualifying event that was a reduction in hours of employment (e.g., if COBRA is typically measured from the date of the qualifying event, COBRA will be measured here from the date of the reduction in hours of employment).

Also, any break in coverage between the reduction in hours and the involuntary termination of employment is not treated as a "break in coverage" for HIPAA portability purposes.

Thus, periods of creditable coverage preceding this break must be included on any certificate of creditable coverage otherwise required by HIPAA and applied towards any pre-existing condition exclusion or limitation period.

Practice Pointer: This new election period should operate similarly to the special extended election period provided under the original ARRA legislation to those would-be AEIs who experienced an involuntary termination of employment on or after Sept. 1, 2008, and who chose not to elect coverage or elected coverage but lost it prior to Feb.17, 2009.

Thus, the same procedures adopted to comply with that rule should, with appropriate modifications, apply here as well.

This new rule is only applicable for periods of coverage beginning after March 2, 2010. Thus, if the plan typically requires that COBRA continuation coverage be paid for on a calendar month basis, then the date that continuation coverage would begin in this instance is April 1, 2010 (see, e.g., Q-48 of IRS Notice 2009-27).

If, however, the plan typically requires COBRA continuation to be paid for on a monthly basis computed from the date coverage is lost, then the coverage start date is not as clear.

The date that COBRA coverage would appear to begin in this instance is the first day of the next COBRA period determined as though the qualified beneficiary elected COBRA following the reduction of hours in employment—and not the date that the subsequent involuntary termination of employment occurs.

This is because the maximum COBRA period is determined based on the qualifying event that is the reduction in hours of employment.

Illustration of this rule:

#4: Same facts as Illustration #2 except that ABC typically requires COBRA continuation coverage be paid for on a monthly basis computed from the date coverage is lost. In this illustration, Bob would have lost coverage on Jan. 15, 2010, and his monthly COBRA periods would run from the 15th of each month through the 14th of the next month. The next COBRA period following Bob’s March 10 termination, if Bob had elected COBRA following the reduction in hours, would begin March 15, 2010.

Arguably, this is the date that Bob’s subsidized COBRA continuation coverage would start under this new rule (although the maximum COBRA coverage period would be measured from the date of the reduction in hours of employment in this example).

Practice Pointer: Using prior IRS guidance, it would appear that plan sponsors may permit would-be AEIs entitled to a new election under this rule to choose a later start date.

Notices

The same general election rules applicable under ARRA and the Defense Act apply equally to qualified beneficiaries whose qualifying event occurs between March 1, 2010, and March 31, 2010. Election notices should be revised to reflect the new sunset date.

In addition, there are special notice rules for those individuals who are AEIs under the Act as a result of a reduction in hours of employment. If AEIs are already receiving COBRA, notice of the new rules must be furnished to such AEIs within 60 days of the date of the involuntary termination of employment.

Although not specifically stated in the Act, the DOL’s reasoning with respect to prior notices suggests that the notice must be furnished to those qualified beneficiaries who experience a voluntary or involuntary termination of employment.

If the would-be AEI is not currently enrolled but is entitled to a new election under the Act, then a revised election notice describing the availability of the subsidy (and the corresponding terms and conditions of eligibility) must be furnished within 60 days of the date of the involuntary termination of employment.

Practice Pointer: The Act refers to the relevant ARRA provisions to describe the notice contents. Under those ARRA rules, notice of the option to enroll in less expensive coverage, if available, had to be included.

Thus, it would appear that same opportunity may be offered would-be AEIs entitled to a new election under the Act.

Other issues

The Act allows the regulators to impose up to a $110/day penalty on plan sponsors who fail to implement the DOL's/Treasury's determination of eligibility within 10 days after receiving notice of the determination.

The Act revised the date that the now 15-month subsidy period begins. Under ARRA, the subsidy period began as of the “first of the month” that the COBRA subsidy period applied.

Thus, if the first COBRA period to which the subsidy applied was July 15, 2009, through August 14, 2009, the subsidy period was measured from July 1, 2009. The act deletes the “first of the month” language. Therefore, the 15-month COBRA subsidy period will be measured from the first day of the first COBRA coverage period to which the subsidy applies.

The Act codifies the clarifications made by the DOL in its model notices with respect to the transition period provided under the Defense Act.

John Hickman can be reached at john.hickman@alston.com and Ashley Gillihan can be reached at ashley.gillihan@alston.com.

Stimulus? What Stimulus?

President Obama seized on the one-year anniversary of the American Recovery and Reinvestment Act (ARRA) as an opportunity to take credit for the belated and tenuous economic recovery…

The bill was launched last year amid grandiose promises of "shovel ready" make-work projects.

_________________________

what was labeled a "stimulus" bill was actually
a stimulus to government transfer payments —
cash and benefits that are primarily rewards
for not working, or at least not working too hard…
_________________________

In reality, as the CBO explains, "five programs accounted for more than 80% of the outlays from ARRA in 2009: Medicaid, unemployment compensation, Social Security ... grants to state and local governments ... and student aid."

In other words, what was labeled a "stimulus" bill was actually a stimulus to government transfer payments — cash and benefits that are primarily rewards for not working, or at least not working too hard…

In 2010, as in 2009, the ARRA is mainly a stimulus to government. Shovel-ready or not, highway programs will get only $10 billion of the borrowed booty, about 2%. "Nearly half of the outlays resulting from ARRA in 2010," says the CBO, "will be for programs administered by Health and Human Services or the Department of Education."

From the CBO figures, it appears that 39% to 44% of the $862 billion will be for increased transfer payments, including refundable tax credits (checks to people who don't pay taxes).

Alan Reynolds

Health Care Common Sense

Arnold King, an economics professor at George Mason University has offered up some ideas for the Republicans to consider as conditions if they join President Obama in a discussion on health care. Here they are:

1. All Medicare savings must be used to shore up Medicare. None of those savings can be used to fund new insurance subsidies or entitlements. Medicare is unsustainable, and it is going to need every dollar that we can save, and more. There is nothing to spare for a new entitlement.

2. Medical savings accounts must not be killed.

3. Catastrophic health insurance must not be killed or heavily disadvantaged relative to comprehensive insurance.

4. All new subsidies that enable people to purchase health insurance must be on budget, rather than through insurance company regulations that are likely to result in cost-shifting.

5. The bill must provide for at least one of the following:
- Interstate competition in health insurance.
- greatly reduce (preferably eliminate) the tax inequity between obtaining health insurance on your own and getting it through your employer.

As far as I am concerned, any bill that fails to satisfy all five of those points deserves opposition.

Personally, I would not want to offer any new subsidies (item #4), believe we should ENCOURAGE medical savings accounts (item #2) - not just spare them, and would want to include both points in item #5.

The Wisdom of Thomas Sowell

"Whatever position people take on health care reform, there seems to be a bipartisan consensus— usually a sign of mushy thinking— that it is a good idea for the government to force insurance companies to insure people whom politicians want them to insure, and to insure them for things that politicians think should be insured. Contrary to what politicians expect us to do, let's stop and think.

Why aren't insurance companies already insuring the people and the conditions that they are now going to be forced to cover? Because that means additional costs— and because the insurance companies don't think their customers are willing to pay those particular costs for those particular coverages.

It costs politicians nothing to mandate more insurance coverage for more people. But that doesn't mean that the costs vanish into thin air. It simply means that both buyers and sellers of insurance are forced to pay costs that neither of them wants to pay. But, because political rhetoric leaves out such grubby things as costs, it sounds like a great deal."

Thomas Sowell

"Give Me Liberty..."

Virginia Senate bills say no to requiring health insurance
"Virginia's Democratic-controlled state Senate passed measures Monday that would make it illegal to require individuals to purchase health insurance, a direct challenge to the party's efforts in Washington to reform healthcare."

The bills, a top priority of Virginia's 'tea party' movement, were approved 23 to 17 as five Democrats who represent swing areas of the state joined all 18 Republicans in the chamber in backing the legislation.

The action in Virginia...could indicate that the president is failing to reassure members of his own party that current reform efforts remain worthwhile."

Washington Post

Market-based Solution #2

Here is an example of another affordable, convenient market-based solution to rising health care costs and an alternative to a government overhaul of the health care system - Retail labs with FULL TRANSPARENT PRICING, including 22 tests available for $49.00

"A growing number of Americans are bypassing doctors and going directly to online and storefront labs for diagnostic testing. Most often they pay for these tests out of their own pocket. The results may persuade the consumer to pursue the matter further with a personal physician but, in any case, the consumer is in charge of who sees the results.

The name of one fast-growing chain of walk-in labs encapsulates the field's business model, Any Lab Test Now. The company says it can generally have testing results within 24 hours and at a cost that is as much as 80% less than going through a doctor. The lab franchises offer up to 1,500 tests, from a simple cholesterol check to more sophisticated packages of tests that address complex medical issues.

There is no federal oversight over medical testing, other than requiring that the labs that do the actual testing for the storefronts be properly certified. State regulations vary widely. As so often happens, the consumers seem to be far out in front of the lawmakers and regulators." NewsChief.com

According to the website of Any Lab Test Now, they offer these advantages:

• No Insurance Needed.
• Doctor's Order Provided.
• No Appointment Necessary.
• Confidential and Anonymous.
• Most Results in 24-48 Hours.

We acknowledge there are limits to which non-medical professionals should be analyzing certain test results. But certainly there are many 'routine' tests that if taken correctly, the results can be used effectively by non-medical professionals. They could also be used to start a conversation with your physician about the need for further testing and treatment - that you otherwise would not have gotten because of the 'hassle-factor?

Market-based Solution #1

In our recent newsletter (you can subscribe here) we addressed two market-based solutions that are helping to bring down the cost of health care.

_________________________

Of the 119 million visits to hospital ERs in a
given year, 55% are for nonemergencies.
_________________________

We have talked about this before, but Americans need to be smart about when and where we go for medical care. We all know that hospital emergency rooms (ER) are not effective or efficient for non-emergency situations. However a recent study by the National Center for Policy Analysis found that often

"the ER is the only way to reach a physician after hours. As a result, patients overuse emergency rooms: Of the 119 million visits to hospital ERs in a given year, 55% are for nonemergencies. A 2006 survey of California hospitals found that nearly half of ER patients (46%) thought they could have resolved their medical problem with a visit to their primary care physician, but were unable to obtain timely access."

Market-based solution: Urgent-care clinics and the newer retail clinics that are starting to appear in drug stores and big-box retailers.

Alternate Universe?

I receive an email everyday with headlines from health care related stories. This morning, after the victory by Scott Brown in Massachusetts, I saw these two headlines:

(Click image to enlarge)

Editorial Cartoon

(Click on image to enlarge)

Michael Ramirez, Investors.com

Quote Of The Day

Now, let me get this straight.....
We are going to pass a health care plan written by a committee whose chairman says he doesn't understand it,
passed by a Congress that hasn't read it but exempts themselves from it,
to be signed by a president that also hasn't read it and who smokes,
with funding administered by a treasury chief who didn't pay his taxes…
all to be overseen by a surgeon general who is obese,
and financed by a country that's nearly broke.
What could possibly go wrong?

~Anonymous

From "The Gartman Letter" (subscription required)

COBRA Subsidy Extended

From the Department of Labor website:

Washington, DC – Phyllis C. Borzi, Assistant Secretary of the Employee Benefits Security Administration (EBSA):

"I am pleased Congress has acted and the President has signed the Fiscal Year 2010 Defense Appropriations Act. The act extends the eligibility period for the ARRA premium reduction for an additional two months (through Feb. 28, 2010) and the maximum period for receiving the subsidy for an additional six months (from nine to 15 months). Millions of unemployed Americans and their families will be better able to afford and keep their health benefit coverage because of this new law.

_________________________

The act extends the eligibility period
for an additional two months
and the maximum period for receiving the
subsidy for an additional six months.
_________________________

"Individuals who had reached the end of the reduced premium period before the legislation extended it to 15 months will have additional time to pay the reduced premiums related to the extension. To continue their coverage they must pay the 35% of premium costs by (60 days after date of enactment) or, if later, 30 days after notice of the extension is provided by their plan administrator.

"Individuals should contact their plan or health insurance provider for information regarding the extension under their health plan. If you need further assistance contact an EBSA Benefits Advisor toll-free at 1-866-444-3272."

We will post more details as they become available.

Abby at 2009 Speedo Tom Dolan Meet - Friday Prelims

Gotta love technology! Abby is swimming in a meet at George Mason University this weekend. Well, Swimming World TV (who knew) is recording the events. There is Live Streaming of the Friday, Saturday and Sunday Finals starting at 6.00pm each night. You can see those at this link. The preliminaries are on demand. You can find those at the same link but it is a chore to find the right event and heat. Being the magnanimous guy I am though, Abby's Friday events are linked below. Sorry, I cannot do anything about the commercials at the beginning.

In all of the videos, lane 1 is closest to the camera. Lane 1 is actually the second lane in the pool because they do not use the two outside lanes. Abby is in a dark knee-length suit with a red swim cap.

Below is the 400 IM. Abby is lane 2 (3rd lane from the bottom, second swimmer from the bottom)



Below is the 100 Butterfly. She is in Lane 6 - I think she wins this heat.



Below is the 100 Breast. Abby is in lane 4 (2nd swimmer from the bottom). She wins this heat.



We will try to update this through out the weekend. Stay tuned.

Kill The Bills. Do Health Reform Right.

The United States has the best health care in the world -- but because of its inefficiencies, also the most expensive. The fundamental problem with the 2,074-page Senate health-care bill (as with its 2,014-page House counterpart) is that it wildly compounds the complexity by adding hundreds of new provisions, regulations, mandates, committees and other arbitrary bureaucratic inventions.

_________________________

So why not allow interstate competition?
After all, you can buy oranges across state
lines. If you couldn't, oranges would be
extremely expensive in Wisconsin,
especially in winter.

_________________________

Worse, they are packed into a monstrous package without any regard to each other. The only thing linking these changes -- such as the 118 new boards, commissions and programs -- is political expediency. Each must be able to garner just enough votes to pass. There is not even a pretense of a unifying vision or conceptual harmony...

The bill is irredeemable. It should not only be defeated. It should be immolated, its ashes scattered over the Senate swimming pool.

Then do health care the right way -- one reform at a time, each simple and simplifying, aimed at reducing complexity, arbitrariness and inefficiency.

First, tort reform.
Second, even more simple and simplifying, abolish the prohibition against buying health insurance across state lines.
Third, tax employer-provided health insurance.
Read the rest of the article.

Charles Krauthammer

With HSAs, Mammogram Frequency Is A Non-Issue?

The NY Times blog has an article "The Uproar Over Mammography," which links to a WSJ op-ed "A Breast Cancer Preview: The mammogram decision is a sign of cost control to come."

In a world of consumer-driven health care that includes Health Savings Accounts (HSAs), wouldn't this "uproar" be a complete non-issue? In that world, patients spending their own money could make decisions on their own, in consultation with their physician, about the timing and frequency of their mammograms.

Think about oil changes for your car. If the manufacturer recommends oil changes every 5,000 miles, but you decide on a different frequency - say every 3,000 miles or every 10,000 - that's not a problem. Now if your car insurance covered routine oil changes, and then the government introduced "government car insurance reform" with a "public option," then the frequency of oil changes would become an issue and could lead to an "uproar."

But in a world of consumer-driven health or auto care where consumers pay for routine maintenance or health exams, there's no "uproar," since consumers make decisions on the frequency of their oil changes or mammograms, and are directly responsible for the cost.

Mark Perry

Southern Health To Drop HCA From Network?

In a letter to brokers on Monday, Southern Health indicated that effective January 4, 2010, HCA Health Systems may no longer be in their network. The letter is too long to go into detail here, but from the tone of the letter, it does not appear to be a case of “posturing” by one of the parties in a negotiation. We say that because
a) the date of the separation is so close, and that
b) the dispute involves three separate contracts.

Southern Health indicated that employer letters are scheduled to be mailed this week. If no resolution has been reached, member letters will be mailed on or about December 3, 2009. You can view the letters by using the links below:

* HCA Member Letter
* HCA Employer Letter

In additions, if you want to see the letter to brokers in its entirety, contact us and we will send it to you.

The following is a listing of HCA facilities that may no longer be participating as of January 4, 2010. In addition, we have provided a listing of facilities that will continue to be in the network. This list was prepared by Southern Health and included in its letter.

Richmond HCA Facilities
Henrico Doctors' Hospital
Chippenham and Johnston-Willis Hospital
John Randolph Hospital
Retreat Hospital

In-Network Richmond Facilities
MCV Hospital
St. Mary's Hospital
Children's Hospital
Richmond Community Hospital
Sheltering Arms Hospital
Bon Secours Memorial Regional Medical Center
Bon Secours St. Francis Medical Center
Southside Regional Medical Center
_________________________

Southwest Virginia HCA Facilities
Lewis Gale Medical Center
Montgomery Regional Hospital
Pulaski Community Hospital

In-Network Southwest Virginia Facilities
Carilion Roanoke Community Hospital
Carilion Roanoke Memorial Hospital
Carilion Franklin Memorial Hospital
Bedford Memorial Hospital
Carilion New River Valley Medical Center
Alleghany Regional Hospital
Carilion Giles Memorial Hospital
Memorial Hospital of Martinsville
_________________________

Northern Virginia HCA Facilities
Reston Hospital Center

In-Network Northern Virginia Facilities
Inova Fair Oaks Hospital
Inova Fairfax Hospital
Loudon Hospital Center

We will continue to monitor this situation and provide updates as necessary.

Independent Contractor Or Employee?

Remember that kids' game - Animal, Vegetable, or Mineral? Today in business, there is a similar question: Independent contractor or employee? But it's not a game. The misclassification of a worker can have serious financial consequences.

It's an issue that always comes to the forefront in an economic downturn. For every employee, employers must withhold income tax, withhold and pay Social Security and Medicare taxes, and pay unemployment tax. In addition, employees may be eligible to be included in benefit plans. However, employers generally do not have any of these obligations for an independent contractor.

The problem is that both penalties and interest can pile up if a worker is incorrectly treated as an independent contractor. In the case of a retirement plan, an employer who has misclassified an employee as an independent contractor eventually will be required to make up the benefits the individual would have received as an employee. That can end up being quite expensive.

For more information and a list of what the IRS considers when determining if someone should be a W2 employee or a 1099 employee, read the rest of the article here.

Small Group Claims Data

One of the carrier's provides some claims data from their pool of small groups in Virginia with certain size group renewals. We thought you might find some of the information interesting:

22% of Claims: Inpatient Services

• Surgery accounted for 52% of inpatient costs. Top “drivers” (as they called them) were cardiovascular and orthopedic procedures (including spine, knee and hip surgeries)

21% of Claims: Outpatient Services

• Surgery accounted for 23% of outpatient costs – Top driver was orthopedic surgery
• Emergency room accounted for 30% of outpatient costs
• Diagnostic procedures accounted for 37% of outpatient costs

36% of Claims: Professional Services

• Office and outpatient visits accounted for 30% of professional services
• Surgery accounted for 9% of professional services

21% of Claims: Prescriptions Drugs

• Brand name drugs account for 76% of total cost of prescription drugs
• Generic drugs are being dispensed at higher and higher rates
• People are asking for generic drugs and that is showing up in the data. Here is look at the percentage of drugs that are being dispensed as generic drugs over the last 4 years:

2005……………….51%
2006……………….57%
2007……………….62%
2008……………….67%

Despite What We Want, Congress Barrels Ahead...

Just 38% of voters now favor the health care plan proposed by President Obama and congressional Democrats. That’s the lowest level of support measured for the plan in nearly two dozen tracking polls conducted since June.

The latest Rasmussen Reports national telephone survey finds that 56% now oppose the plan.

Only 16% now believe passage of the plan will lead to lower health care costs. Nearly four times as many (60%) believe the plan will increase health care costs. Most (54%) also believe passage of the plan will hurt the quality of care.

Rasmussen Reports

IRS and SSA Announce New Contribution, Benefit, and Compensation Limits

The Internal Revenue Service and the Social Security Administration have announced 2010 cost-of-­living adjustments to limitations applicable to qualified retirement plans. Here is a summary of the new 2010 limitations:

The social security taxable wage base is unchanged at $108,800.

The limitation for defined contribution plans under Section 415(c)(1)(A) is unchanged for 2010 at $49,000.

The limitation on the annual benefit under a defined benefit plan under Section 415(b)(1)(A) remains unchanged at $195,000.

The annual compensation limit under Sections 401(a)(17) for qualified plans, 404(l) for deduction purposes, 408(k)(3)(C) for SEPs, and 408(k)(6)(D)(ii) for SARSEPs remains unchanged at $245,000.

The threshold used in the definition of highly compensated employee under Section 414(q)(1)(B) remains unchanged at $110,000.

The threshold concerning the definition of “Key Employee” in a top-heavy plan under Section 416(i)(1)(A)(i) remains unchanged at $160,000.

2010 year limitations mandated by the provisions of EGTRRA.

The limitation under Sections 402(g) for 401(k) plans, SARSEPs, and 403(b) plans, and 457(e) for 457 plans, for elective salary deferrals remains unchanged at $16,500.

The limitation under Section 408(p)(2)(E) regarding SIMPLE retirement accounts remains unchanged at $11,500.

The limitation for catch-up contributions to an applicable employer plan other than a plan described in Section 401(k)(11) or Section 408(p) for individuals aged 50 or over remains unchanged at $5,500.

The dollar limitation under Section 414(v)(2)(B)(ii) for catch-up contributions to an applicable employer plan described in Section 401(k)(11) or Section 408(p) for individuals aged 50 or over remains unchanged at $2,500

For more details, see the announcement on the IRS website.

Soak The Uninsured

"Here's a dirty little secret about health care reform that Democrats in Washington would prefer you didn't know: They're counting on people to stay uninsured.

The financing for House Speaker Nancy Pelosi includes $167 billion in penalty payments to the federal government. About $135 billion of that money would come from private employers who don't offer insurance to their workers; those employers would have to pay a tax equal to 8 percent of payroll.

The rest would come from individuals who decline to buy under the new individual mandate. Such individuals would have to pay a fine equal to 2.5 percent of gross income.

Of course, it's possible that the bean-counters are wrong, and both employers and individuals would pony up for insurance coverage in greater numbers than anticipated. But in that case, the total bill for Pelosicare would rise accordingly.

So the options are: bigger deficits, higher taxes -- or lots of companies and individuals paying hefty fines. Do the members of Virginia's congressional delegation like those choices?"

Richmond Times-Dispatch