Distributions from the LEO defined benefit pension plan cannot occur any sooner than third quarter 2009. You will be advised by City National Bank as soon as the legal requirements for terminating the LEO plan have been satisfied so that the benefits of the LEO plan may be distributed. At that time you will be able to elect lump sum distributions of cash or a tax deferred life annuity contract issued by an insurance company. Cash distributions will be eligible for tax deferred rollover treatment. The LEO plan's assets will continue to be managed by The Advisory Group of San Francisco under the current 60% equity-40% fixed income strategy during the plan termination process.
Please direct inquiries pertaining to Heller Ehrman LLP's Chapter 11 filing, including questions regarding the Verified List of Creditors, Statements of Financial Affairs and Schedules of Assets and Liabilities, to HellerEhrmanManagement@hellerehrman.com.
To Heller Ehrman Former Employees:
If you were a participant in the Firm's Flexible Spending Account Plan, your participation automatically ended on the date your employment with the Firm ended. The rules are different for the deadlines that apply to the submission of requests for reimbursement of Dependent Care and Health Care expenses.
Health Care Reimbursement Claims: Health care expenses you incurred after your employment with the Firm ended will not be reimbursed, unless you elected to continue to make contributions to the Plan on an after-tax basis pursuant to the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"). This election opportunity was provided to you in the COBRA election packet you received from PayFlex. If you did not elect COBRA continuation coverage for your health care reimbursement account, reimbursable expenses are limited to those you incurred while employed by the Firm, and you must submit health care reimbursement account claims within 90-days of the date on which your employment ended or by March 31, 2009, whichever date is earlier. Thus, if you did not elect to participate in the Plan after you left the Firm's employ and your last date of employment was October 15,2008, you must submit claims for reimbursement of health care expenses incurred on or before October 15, 2008 no later than 90 days after your last date of employment.
Dependent Care Reimbursement Claims: You must submit dependent care reimbursement account claims no later than March 31, 2009. You will only be reimbursed from your dependent care reimbursement account if you had a positive balance in the account when your employment terminated. You may also be reimbursed for eligible dependent care expenses you incurred during the remainder of the Plan Year in which your employment ended from amounts that you contributed prior to your termination of employment.
Please complete the attached forms to submit your claims and fax to WageWorks at 877-353-9236. If you have any questions, please contact Cheryl Vance at cheryl.vance@hellerehrman.com.
W2s will be sent out by the required deadline, January 31. If your address has changed since your departure, and you have not already advised Carol Budinger of your new address, please email your new address to carol.budinger@hellerehrman.com. Please do not copy any other person on your change of address email.
Effective December 22, 2008, the freeze on the distributions from the shareholder Pension and Profit Sharing Plans will lift. Look for a complete distribution package from City National Bank in your mail at home. It is published here for your convenience.
Entire package: Shareholder Pension and Profit Sharing Plans Distribution Package
Notice letter only: Shareholder Pension and Profit Sharing Plans Freeze Lift Notice
Distribution Forms only: Shareholder Pension and Profit Sharing Plans Distribution Forms
E*Trade IRA Information: E*Trade IRA Automatic Rollover Notice
Special Tax Notice: Special Tax Notice for the Shareholder Pension and Profit Sharing Plans
The 80-20 Fund: Schultz Collins Lawson Chambers
The 60-40 Fund: The Advisory Group
To All Former Shareholders of Heller Ehrman LLP:
We have been advised by City National Bank that the "freeze" on distributions from the shareholder defined contribution pension and profit sharing plans should end on or about December 22, 2008. At that time, distributions will resume pursuant to the plan termination process.
We understand that City National Bank will be sending a letter to all plan participants sometime next week. That letter will outline the distribution options available to you, one of which is a tax deferred rollover of all or part of your account balances to an IRA or another employers eligible retirement plan.
As we previously advised you, distributions from the LEO defined benefit pension plan will not be possible until later in 2009. You will be advised by City National Bank as soon as the legal requirements for terminating the LEO plan have been satisfied so that the benefits of the LEO plan may be distributed. At that time you will be able to elect lump sum distributions of cash or a tax deferred life annuity contract issued by an insurance company. Cash distributions will be eligible for tax deferred rollover treatment. The LEO plans assets will continue to be managed by The Advisory Group of San Francisco under the current 60% equity-40% fixed income strategy during the plan termination process.
Please do not request more information from the Dissolution Committee on this subject. At this point, we have told you everything we know.
IRS Determination Letter Shareholder Pension Plan
IRS Determination Letter Shareholder Profit Sharing Plan
A Notice of Termination of Coverage was included in all of the COBRA election packets sent to employees whose employment with the firm terminated during the month of October. If you did not see it, the notice is being posted here for your reference and also to serve as a reminder that CIGNA medical and dental benefits will terminate on November 30, 2008 for current employees, as well as all former employees who have elected COBRA continuation coverage.
It has been brought to the firm's attention that there is some confusion surrounding the language that "coverage may be continued for up to 18 months" included in the COBRA election letters sent by PayFlex, which appears to contradict the information given in the notice. This is the required regulatory language and under "normal" circumstances would be true. However, due to the termination of the firm's contract with CIGNA, no COBRA continuation coverage is available beyond November 30, 2008.
Some terminated participants have reported the following errors under the Plan Description column on the "Health Benefits Continuation Plan Enrollment Form" included with the COBRA election letters:
1) You were enrolled in CIGNA Dental coverage when your employment ended and your election letter includes HDHP instead of "CIGNA Dental Plan"
2) You were covered by the VSP vision plan upon termination and it is not included on the form
To obtain the correct cost information, please contact Cheryl Vance at (415) 772-6493 and include it with your enrollment form if you wish to elect COBRA continuation coverage under either of the plans. Please remember that all CIGNA coverage will terminate on November 30, 2008.
To clarify yesterday's memo about medical coverage, if your separation date from Heller Ehrman was during the month of October your coverage will end on October 31, 2008. You will be receiving an election packet from the firm's COBRA administrator, PayFlex, in the next week. If you wish to elect COBRA continuation coverage you must return the election form included in the packet. Once PayFlex receives your election form, your coverage will be reinstated retroactive to November 1, 2008. For those on the CIGNA plans, please note that your COBRA election will only be in effect for one month through November 30, 2008, at which time the CIGNA plans will terminate for ALL participants. No COBRA coverage will be available through CIGNA after November 30. Even if you decide to elect COBRA continuation coverage through CIGNA, you should begin exploring alternative coverage to be in effect on December 1, 2008.
Health Insurance
Coverage provided under our group health insurance plans with Kaiser and CIGNA remains in effect, including COBRA coverage available through those plans. Over the past month we have engaged in extensive negotiations with CIGNA that were complicated by the fact that the firm owes CIGNA a substantial amount of money. Those negotiations resulted in an agreement -- reached earlier this afternoon -- whereby CIGNA consented to continue health insurance coverage in force for all plan participants but only through November 30, 2008. We do not expect CIGNA to agree to continued coverage on a group basis beyond that date. Termination of the CIGNA plan effective November 30, 2008 will result in termination of COBRA coverage for CIGNA plan participants effective on that date, as well as termination of coverage for the spouses/partners of retired shareholders insured through CIGNA effective on that date.
If you are insured under the CIGNA group health insurance plan you will receive a separate formal communication from the firm announcing the termination of the CIGNA coverage. That communication will also outline health insurance options available to you, including options potentially available to you for converting your CIGNA coverage to an individual policy, as well as options available to you under HIPAA (the Health Insurance Portability and Accountability Act of 1996).
The Kaiser group health insurance plan remains in force. We are not able to predict at this time whether or when that plan might terminate, but under the plan Kaiser is obligated to provide the firm with at least 30 days notice of its intent to terminate coverage. We will promptly advise all Kaiser participants in the event we receive such termination notice.