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The BenefitsLink Newsletter -
Welfare Plans Edition
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March 12, 2002 - 6,505 subscribers
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(Help BenefitsLink to provide this newsletter at no charge to you -- our sponsors pay our way. Remember to visit them periodically; we try to make sure their products and services will be of interest to you. Thanks! --Editor)

Uninsured Americans Get No Relief From Economic Stimulus Bill
Excerpt: "Included in the package ... are tax breaks and incentives for businesses as well as extended unemployment insurance payments for workers. Left out were a variety of healthcare proposals that had kept the parties at odds for fear that they would alter the dynamics of debate over how to extend health coverage to nearly 40 million uninsured Americans." (Reuters Health via Medscape)

Petition Would Force House Vote on Legislation to Cover COBRA Premiums
Excerpt: "The legislation, sponsored by Rep. Jim McDermott (D-Wash.), would offer recently unemployed workers a one-year, 75% subsidy to purchase health insurance through COBRA ... House Republicans, who oppose the McDermott legislation, favor a proposal to provide one-year tax credits to cover up to 60% of the cost of health insurance for unemployed workers." (KaiserNetwork.org)

Mental Health Parity Debate Reopens
Excerpt: "A House subcommittee has scheduled hearings this week on federal and state laws governing the provision of mental health coverage in employee health-care benefit packages." (PLANSPONSOR.com; free registration required)

Health Costs Could Double by 2011
Excerpt: "By 2011, Americans are expected to spend $9,216 per person on health care, about double what they spent in 2000, the government says. A report by the Health and Human Services' Centers for Medicare and Medicaid Services said health costs are expected to grow at a rate of 7.3 percent annually between now and 2011." (AP via Yahoo! News)

Healthcare Costs Take Biggest Leap in Decade, Report Says
Excerpt: "Fueled by soaring hospital and prescription drug costs, medical spending is accelerating faster than government economists had expected, reaching 14 percent of the gross domestic product last year for the first time, according to new projections." (Knight Ridder-Tribune via International Foundation of Employee Benefit Plans)

National Health Expenditures Projections
Excerpt: "The National Health Expenditure Projections presented here are based on the 1999 release of the National Health Expenditures. The Projections are estimates of spending for health care in the U.S. for the years 2000-2010." (National Health Care Financing Administration)

List of Witnesses and Links to Written Statements to Health Subcommittee Hearing on Medical Errors
Hearing held on Thursday, March 7, 2002: 'Health Quality and Medical Errors.' Includes statements of James P. Gatian, M.D., P.E., Michigan Department of Veterans' Affairs; Donald M. Berwick, M.D., MPP, Institute for Healthcare Improvement; Karen Wolk Feinstein, Ph.D., Pittsburgh Regional Healthcare Initiative; Mary Foley, MS, RN, American Nurses Association; Matthew Miller, M.D., on behalf of the American Hospital Association. (U.S. House of Representatives, Committee on Ways and Means, Subcommittee on Health)

Defined Contribution Health Insurance Products: Development and Prospects
From the Jan./Feb. 2002 issue of Health Affairs. Excerpt: "In this paper we contrast several [Defined Contribution Plans, or DCPs] with respect to their characteristics and development processes ... The DCPs generally agree with this assessment and believe that they need to diffuse rapidly over the next three to five years, or they will be preempted by look-alike products offered by existing health plans. They have several factors in their favor." (Health Affairs via AHealthyMe.com)

Online Directory from Self-Insurance Institute: Who's Who in Self-Insurance
Excerpt: "This directory is intended to provide the reader with a handy resource for locating and contacting companies who provide professional services in the complex field of self-insurance.... The companies listed in this directory were charged a fee to offset the cost of providing this information to interested individuals free of charge. Individuals using this directory are expected to make their own evaluations ..." (Self-Insurance Institute of America, Inc.)

(Following items are in both editions of the BenefitsLink Newsletter)

Tapping a Silver Mine: Older Workers
Excerpt: "[Career counselor Patricia] Berg sees today what HR practitioners everywhere will see tomorrow: an older workforce, populated by employees who will stay on the job into their late 60s and beyond. These older employees will pose new challenges for HR. Everything that passes through HR's hands-- including flexible work arrangements, benefits, training and compensation policies-- will require updating, review and perhaps tailoring for older workers." (HR Magazine)

2001 Form 5500 Overview
Excerpt: "The EFAST Help Line is fully operational now and you can use the touch-tone system to confirm that a filing has been received (but not necessarily processed), or to reach someone at the Help Desk.... [On Schedule E, a] new question appears at line 15 ... While IRS did not issue any official instructions for the modified line 15, a 'Yes' response on this line may trip a red flag and cause the plan to be selected for audit." (Janice M. Wegesin on Form5500help.com)

Employee Equity Participation in Non-corporate Business Entities-- a New World of Tax Issues
Excerpt: "[T]here will be increased use of non-corporate entities such as limited liability companies, partnerships, limited partnerships, and limited liability partnerships. While similar, the tax rules that apply to equity compensation in these forms of business entities (hereafter, for brevity, 'Partnerships') are both different and evolving. This article provides a summary overview of the current rules as they apply to Partnerships." (Robert B. Webb, Esq. published by the Foundation for Enterprise Development)

Opinion: Don't Blame Enron's Collapse on Incentive Plans
Excerpt: "The company, as it turns out, was a pioneer in adopting incentive plans that were applauded -- and still are -- by the corporate-governance community.... [Vesting of stock options] could happen earlier [than under a graded vesting schedule] if the total return on the company's shares equaled at least 120 percent of the return on the Standard & Poor's 500 Index. These came to be known as performance-accelerated stock options. Many companies now use them ..." (Graef Crystal, on Bloomberg.com)

No Tax Deduction If No Expense for Stock Options - Part II (PDF)
February 28, 2002. Excerpt: "Senators Carl Levin (D-Michigan) [and others] have introduced legislation to prevent companies from taking a tax deduction for the gain at exercise on employee stock options unless the company also takes an accounting charge for that gain.... Not mentioned in the press releases accompanying the legislation is the fact that most stock option gains do not go untaxed." (Frederic W. Cook & Co., Inc.)

When Bad Things Happen to Good Plans: the Importance of Communication
Excerpt: "Communicating honestly, fully and frequently with participants whenever there's bad news can ease their minds and avoid serious legal problems for plan sponsors." (BusinessFinanceMag.com)

Forces To Overthrow Stock Option Accounting Gaining Strength (PDF)
Excerpt: "The purpose of this letter [from Frederic W. Cook & Co., Inc.] is to alert HR and compensation professionals that major forces are building to change current accounting standards for employee stock options and to quantify the effects of such a change. As a result of the Enron collapse and the complicity of loose accounting practices in that scandal, the current accounting practices for stock options have fallen under attack as well." (Frederic W. Cook & Co., Inc.)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
ERISA Attorney in Wonderland for The ERISA Law Group, P.A.
in ID
Business Analyst for CNA TRUST
in CA
Controller for Ingham Group
in FL
Service Center Director/Manager for a Strategic Leader in the Sale and Administration of Employee Benefits
in MN

Newly Posted Webcasts (Post Yours!)
2001 Form 5500 and Related Compliance Issues on March 18, 2002
presented by ASPA

Newly Posted Conferences (Post Yours!)
Bridges to Benefits: Annual Employee Benefits Seminarin OR on April 23, 2002
presented by Portland Chapter, Western Pension and Benefits Conference

Newly Posted Press Releases
CNA Trust Puts the Life Back in Life Insurance (CNA Trust)
Novo Nordisk Pharmaceutical Industries, Inc. Plans to Improve Communication with Integrated, Web-Enabled Technology from Empliant (Empliant)

Subscribe to the Retirement Plans Edition, too (click)

Copyright 2002 BenefitsLink.com, Inc., but you may freely distribute this email newsletter in whole. This newsletter is edited by David Rhett Baker, J.D.