Legislation To Exempt Health Benefits For Domestic Partners and Other Beneficiaries Introduced In House & Senate.

June 3, 2009

June 3, 2009

Domestic partner benefits provided under employer or union sponsored health plans no longer would be taxable to enrolling employees if Congress adopts legislation recently proposed in the House and Senate.

HR 2625, the Tax Equity for Health Plan Beneficiaries Act and a companion bill, S 1153 S 1153 would amend the Internal Revenue Code of 1986 to extend the exclusion from gross income for employer-provided health coverage for employees’ spouses and dependent children to coverage provided to other eligible designated beneficiaries of employees, including domestic partners. According to a press release from Rep. McDermott, the bill would eliminate federal income and payroll taxes on health benefits provided to domestic partners. 

Currently, the value of health benefits provided to domestic partners of employees under an employer’s group health plan typically are taxable income to the employee for purpose of the Internal Revenue Code.  Valuing and reporting taxable payments on domestic partner benefits can be a headache for employers that provide those benefits.

If you need help responding to these proposals or with other questions relating to compliance or risk management under other federal or state employment, employee benefits, compensation, or internal controls laws or regulations, please contact Curran Tomko Tarski LLP Labor & Employment Practice Group Chair, Cynthia Marcotte Stamer at (214) 270.2402 or via e-mail here.   Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization, “Cindy” works with businesses, speaks and publishes extensively on these and other labor and employment, employee benefit, internal controls and compensation matters.  For additional information about Curran Tomko Tarski LLP see the Curran Tomko Tarski Website.

Other Information & Resources

We hope that this information is useful to you. You can register to receive future updates and information about upcoming programs, access other publications by Ms. Stamer and access other helpful resources here. For additional information about Ms. Stamer and her experience, see here or contact Ms. Stamer directly. If you or someone else you know would like to receive updates about developments on these and other human resources and employee benefits concerns, please be sure that we have your current contact information – including your preferred e-mail- by creating or updating your profile at here.  If you would prefer not to receive these updates, please send a reply e-mail with “Remove” in the subject line to support@SolutionsLawyer.net. You also can register to participate in the distribution of these updates by registering to participate in the Solutions Law Press HR & Benefits Update Blog here.

 ©2009 Cynthia Marcotte Stamer. All rights reserved.

GM Not Terminating Pension Plans During Bankruptcy PBGC Says

June 3, 2009

The Pension Benefit Guaranty Corporation (PBGC) announced June 1, 2009 that General Motors Corp. plans to continue its two defined benefit pension plans even though it has filed for Chapter 11 bankruptcy protection.  Termination of defined benefit pension plans is a common action when companies sponsoring those plans file for Chapter 11 bankruptcy.

GM’s defined benefit plans cover more than 670,000 pension plan participants.

According to the PBGC, stakeholders in the bankruptcy, including GM, the United Auto Workers and the U.S. government, have stated their intent to maintain the plans under the sponsorship of a new corporate entity to be formed from the sale of GM’s productive assets.  The PBGC announced its commitment to work with all parties to achieve that outcome.

The PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974. It currently guarantees payment of basic pension benefits earned by 44 million American workers and retirees participating in over 29,000 private-sector defined benefit pension plans. The agency receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and by investment returns.

Individuals with questions about the PBGC and its benefit guarantees should consult the agency’s auto-sector Web page at PBGC.gov.  GM workers and retirees with specific questions about their GM pension benefit should call the GM Benefits & Services Center at 1-800-489-4646.