Legislative. Monitor. Disability. Absence Management. Long-Term Care. Compliments of Prudential s Group Insurance. State Mandated Disability Update

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1 Effective: 1/1/2011; varies by state. Six jurisdictions have statutorily mandated disability (SMD) benefit plans including California, Hawaii, New Jersey, New York, Puerto Rico, and Rhode Island. Read more. Genetic Information Nondiscrimination Act Update for Employers Federal regulations relating to the Genetic Information Nondiscrimination Act (GINA) prohibiting the collection of genetic information by employers and health plans provide some protection against the inadvertent collection of such information if the employer/plan uses safe harbor wording. Read more. Issued: 6/20/2010. The Department of Labor (DOL) issued an Administrator Interpretation regarding the definition of a child whether a son or daughter. Read more. Effective: Retroactive to 10/1/2009. The National Defense Authorization Act of 2008 made substantial strides in increasing opportunities for the family members of service personnel to provide support when there is a call to action. Read more. Legislative is designed to help keep you informed of some of the recent legislative and regulatory issues that may impact the group insurance and benefits industry. The Prudential Insurance Company of America (Prudential) regularly reviews legislative changes to stay current with applicable laws and rules. Effective: 1/1/2011. The state of Illinois has extended its family member military leave similar to federal FMLA exigency reasons to also include children or grandparents of the employees as qualified service members. Read more. Community Living Assistance Services and Supports Act Overview Effective: Legislation passed 3/10/2010, effective date to be determined. The Community Living Assistance Services and Supports (CLASS) Act was created under the health care reform legislation known as the Patient Protection and Affordable Care Act (PPACA). Read more. Content is derived from legislation or regulations from the fourth quarter of This newsletter is provided for informational purposes only. Prudential makes every effort to assure compliance with all applicable statutes, rules, and other regulatory provisions. The newsletter is not intended to provide legal advice or substitute for the compliance obligations of clients, brokers, or other non-prudential employees. Prudential makes no representations about the accuracy or completeness of the summaries provided. Publication of the newsletter is a complimentary activity of Prudential and Prudential reserves all rights concerning content, frequency, and distribution, as well as the right to cease publication at its discretion. The Prudential Insurance Company of America. GL

2 Six jurisdictions have statutorily mandated disability (SMD) benefit plans including California, Hawaii, New Jersey, New York, Puerto Rico, and Rhode Island. The benefit levels and contribution amounts vary by jurisdiction, and most states update these provisions annually. The information provided in the table below is a summary of provisions effective for 2011 and is not intended to provide a complete description of the SMD plans available in each jurisdiction. More detailed plan descriptions are available at the individual states websites listed in the chart below. SMD Jurisdiction California State Insurance (SDI)* Hawaii Temporary Insurance (TDI)* abouttdi.shtml New Jersey Temporary Benefits (TDB)* tdiindex.html New York Benefits Law (DBL) Puerto Rico Benefits Act (DBA) (Spanish language website) Rhode Island Temporary Insurance (TDI) * California, Hawaii, and New Jersey: Maximum benefit amounts and contribution rates are updated annually and become effective 1/1. New York: Contribution rates and the maximum weekly benefit are not updated annually. The current contribution rate has been in effect since 1950 and the maximum weekly benefit since Puerto Rico: The contribution rate and maximum weekly benefit shown above have been in effect since These rates are not updated annually. Rhode Island: Annual updates to the contribution rate are effective 1/1 and changes to the maximum benefit take effect in July. Prudential Action: Prudential is actively monitoring these changes Benefits Maximum Weekly Benefit Maximum Employee Contribution $ % of the first $93,316 in taxable wages (combined contribution for SDI and PFL) $513 Half the premium cost, but no more than 0.5% of average weekly wage, up to a weekly maximum of $4.42 $559 (TDB & FLI) : 0.5% of the first $29,600 in taxable wages $148 maximum FLI: 0.06% of the first $29,600 in taxable wages $17.76 maximum $170 Half of 1% of weekly wages, not to exceed $0.60 per week $113 ($55 for agricultural workers) 0.6% of eligible wages up to a $9,000 maximum or $54 per year $ % of the first $58,400 earned Client Action: Refer to the individual state websites provided above for any additional actions required. provisions. The newsletter is not intended to provide legal advice or substitute for the compliance obligations of clients, brokers, or other non-prudential employees. Prudential makes no representations about the accuracy or completeness of the summaries provided. Publication of the newsletter is a complimentary activity of Prudential and Prudential reserves all rights concerning content, frequency, and distribution, as well as the right to cease publication at its discretion.

3 Genetic Information Nondiscrimination Act Update for Employers Federal regulations relating to the Genetic Information Nondiscrimination Act (GINA) prohibiting the collection of genetic information by employers and health plans provide some protection against the inadvertent collection of such information if the employer/plan uses safe harbor wording. In order to address this concern, we are adding the following wording to forms requesting medical information: The Genetic Information Nondiscrimination Act of 2008 (GINA) prohibits employers and other entities covered by GINA Title II from requesting or requiring genetic information of an individual or family member of the individual, except as specifically allowed by this law. Genetic Information, as defined by GINA, includes an individual s family medical history, the results of an individual s or family member s genetic tests, the fact that an individual or an individual s family member sought or received genetic services, and genetic information of a fetus carried by an individual or an individual s family member or an embryo lawfully held by an individual or family member receiving assistive reproductive services. Prudential Action: Prudential has worked directly with legal counsel to ensure appropriate language is provided prominently and in a manner that will meet all requirements set forth by GINA. Prudential is currently redesigning our certification forms to include the language cited above.

4 The Department of Labor (DOL) recently issued an Administrator Interpretation regarding the definition of a child with regard to a son or daughter. This applies to employees covered under the FMLA, specifically an employee taking FMLA-protected leave for the birth or placement of a child, to care for a newborn or newly placed child, or to care for a child with a serious health condition. The Wage and Hour Division does not mandate that a legal or biological parent-child relationship is required. The Administrator is issuing this interpretation to provide needed guidance on this important area of law. The FMLA entitles an eligible employee to take up to 12 work weeks of job-protected leave, in part due to: n The birth of a son or daughter of the employee and in order to care for such son or daughter. n The placement of a son or daughter with the employee for adoption or foster care. n The care for a son or daughter with a serious health condition. (See 29 U.S.C. 2612(a)(1)(A) - (C); 29 C.F.R ) The FMLA defines a son or daughter as a biological, adopted, or foster child, a stepchild, a legal ward, or a child of a person standing in loco parentis, who is: n Under 18 years of age; or n 18 years of age or older and incapable of self-care because of a mental or physical disability. (See 29 U.S.C. 2611(12). See also 29 C.F.R (c), ) This interpretation letter further supports both same-sex and opposite sex domestic partners as valid relationships to bond with a new child or care for a child with a serious health condition. Prudential Action: Prudential is actively managing this interpretation.

5 The National Defense Authorization Act of 2008 made substantial strides in increasing opportunities for the family members of service personnel to provide support when there is a call to action. In 2010, there were additional amendments about which employers should be aware. Leave taken under the exigency provision now also covers, as a qualified family member, regular duty Armed Forces personnel who are deployed to a foreign country. Additionally, Veterans who left active military service within the previous five years may be considered qualified service members under the expansion. If a Veteran incurred a serious illness or injury while in the line of duty that became apparent either before or after the date of discharge, a family member may be able take 26 weeks of job-protected leave to care for that Veteran. Prudential Action: Prudential is actively managing these amendments.

6 The state of Illinois has extended its family member military leave similar to federal FMLA exigency reasons to also include children or grandparents of the employees as qualified service members. For more information regarding this change, refer to the Illinois Public Act Prudential Action: Prudential is actively managing this change.

7 Community Living Assistance Services and Supports Act Overview The Community Living Assistance Services and Supports (CLASS) Act was created under the health care reform legislation known as the Patient Protection and Affordable Care Act (PPACA). Intended to provide cash benefits for a number of non-medical services, the CLASS Act is a national program designed to assist working adults with functional limitations, so they can remain at home. The CLASS Act is not a formal long-term care program; instead, it is planned primarily to meet the needs of disabled workers. The Act is a voluntary program and coverage is issued on a guaranteed issue basis (i.e., no medical underwriting). Working adults would be automatically enrolled in the program but can opt out of participation, similar to what they can do today with Medicare Part B. Participants would be fully vested once they ve paid premiums for five years. An employer may elect not to participate in the automatic enrollment or payroll deduction processes, in which case alternative enrollment and premium collection processes for its employees will be offered by Health and Human Services (HHS). CLASS Act benefits will vary based on the level of disability or impairment, but are expected to be modest. For example, a benefit-eligible individual would receive an average of at least $50 a day in cash benefits, indexed to the Consumer Price Index. These cash benefits need to be used for nonmedical services and support, such as home modifications, assistive devices, personal care, homemaker services, and transportation. There is no lifetime benefit limit. In order to receive benefits, the participant would need to be assessed and a determination made that the individual has a functional limitation (i.e., unable to perform at least two or three activities of daily living without substantial assistance from another person for a continuous period of at least 90 days), or the individual requires substantial supervision to protect him/her from threats to health and safety due to substantial cognitive impairment. The CLASS Act provides limited benefits and requires the participant to pay premiums for five years before being able to collect benefits. The CLASS Act also requires that the participant be actively employed both at enrollment, as well as during, at least part of the five-year vesting period. Regulations still need to be written, and the Secretary of HHS has until October 2012 to do so. If adding the five-year vesting period, it could be at least six or seven years from now before participants become eligible to collect benefits and much about this program is still unknown at this time. Prudential Action: Prudential is actively monitoring developments The Prudential Insurance Company of America. Prudential, the Prudential logo and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide. GL