Compliance July 11, 2007

Court Allows 403(b) Bankruptcy Exclusion

July 11, 2007 (PLANSPONSOR.com) - A U.S. Bankruptcy Court judge has ruled that a bankrupt couple could keep the wife's 403(b) assets out of their bankruptcy estate.
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Noting that case law excluded 401(k) assets and assets of other Employee Retirement Income Security Act (ERISA) plans, Judge Colleen A. Brown of the U.S. Bankruptcy Court for the District of Vermont decided that 403(b) plans were also properly excludable.

Jean Leahy and her husband had filed for Chapter 7 bankruptcy protection for obligations stemming from her husband’s business debt, according to the ruling.

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T he bankruptcy trustee argued that Bankruptcy Code exclusion only applies to the “gap” period between the withholding of the debtor’s wages by the employer and the employer’s remittance to the debtor’s plan. Brown rejected the argument.

The case is In re Leahy,Bankr. D. Vt., No. 06-10574, 7/3/07.

Benefits July 10, 2007

NY Extends State Health Program to Private Employers

July 10, 2007 (PLANSPONSOR.com) - New York Governor Eliot Spitzer has approved legislation that would expand the state's Family Health Plus insurance program, once only available to low-income residents who lacked coverage, to include private employers and Taft-Hartley funds.
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According to a Business Insurance report, employersthat opt into the program will be required to pay 70% of the cost of their employees’ individual and/or dependent coverage and employees will be required to pay the balance.

This legislation went into effect July 1 and is expected to cost state taxpayers about $106 million to subsidize enrollees’ premiums.

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The plan currently has 513,000 New York residents enrolled.

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