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Computer Upgrade Went Haywire Here;
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June 25 and 6, 2002 - 6,490 subscribers
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In Notice 2002-45, IRS Explains Tax Treatment of Employer-Funded Health Reimbursement Arrangements (PDF)
Excerpt: "Part I ... describes HRAs and their general tax treatment. Part II ... outlines the benefits that may be offered under an HRA. Part III details who may be covered under an HRA. Part IV deals with the interaction between HRAs and cafeteria plans. Part V covers ordering rules for reimbursement from HRAs and § 125 ... arrangements. Part VI relates to the applicability of § 105(h) non-discrimination rules to HRAs. Part VII explains how to provide COBRA continuation coverage under HRAs." (Internal Revenue Service)
IRS: Use-It-Or-Lose-It Rule Doesn't Apply to Employer-Funded Health Reimbursement Arrangements (PDF)
Revenue Ruling 2002-41. Excerpt: "Whether ... medical care expense reimbursements made under a reimbursement arrangement that allows unused amounts to be carried forward ... are excludable from gross income under sections 106 and 105 of the Internal Revenue Code, respectively.... The [health reimbursement arrangement in question meets] the nondiscrimination requirements of § 105(h). The HRA is paid for by the employer and employees do not make any salary reduction election to pay for the HRA." (Internal Revenue Service)
Bush Signs Groundbreaking Benefits Law on Death Benefits for Domestic Partners
Excerpt: "President Bush has signed a bill allowing death benefits to be paid to domestic partners of firefighters and police officers who die in the line of duty, permanently extending a federal death benefit to same-sex couples for the first time." (StarTribune.com)
URAC Releases Next Generation of Standards For Public Comment
URAC has released draft versions of the next generation of its Health Plan Standards and Health Network Standards for public comment. The public comment period began June 15 and ends July 26, 2002. URAC plans to release the final revisions in late fall of this year. (Spencernet)
Consumer-Driven Health Plans Gaining Momentum
Excerpt: "Interest in the consumer-driven plans, which give workers a personal medical account to pay for the medical care they choose, was spurred when large, traditional insurers entered the market with new products, joining the start-up companies that introduced the concept ... The accounts are funded by employers at different levels, and additional coverage is provided for workers who exhaust their funds, after they meet their deductible." (Medscape; free registration required)
California Health Plan Will Tie Hospital Coverage To Quality Efforts
Excerpt: "Blue Shield of California announced today that it will begin linking coverage for hospital visits to data on each hospital's quality of care and patient satisfaction, as well as cost. Each hospital's position in Blue Shield's tiered payment system-- which in turn affects plan members' out-of-pocket costs to visit the hospital-- will depend in part on quality rankings provided by the Leapfrog Group ..." (iHealthBeat.com; free registration required)
Amendments Proposed by Some House Republicans Could Stall Action on GOP Medicare Package
Excerpt: "Although House Republican leadership aides 'insist' a floor vote will occur this week on a GOP-backed $350 billion Medicare reform package that includes a prescription drug benefit, objections from some House Republicans could 'imperil passage' of the bill, the Washington Times reports ..." (KaiserNetwork.org)
Opinion: When States' Rights Get in the Way
Excerpt: "The doctrine of states' rights, so often invoked as a principle, is almost always a pretext to deny the federal government authority to do things that conservatives dislike. These include expanding claims to individual rights ... Take last week's case testing the right of states to pass patients' bill of rights statutes. You would think that conservative justices ... would shudder at the idea of the federal government preempting the 42 states that have passed such laws." (Washington Post)
Poor Quality Health Care Accounts For 30% of Health Care Costs: MBGH Study
Poor quality health care, in the form of preventable errors and over-, under-, and misused tests, treatment, and procedures, costs the typical employer $1,700 to $2,000 per employee per year, according to a study recently released by the Midwest Business Group on Health (MBGH) and the Juran Institute, an independent research and performance improvement organization. Those costs include an average of $350 to $650 of indirect costs due to lost workdays. (Spencernet)
Links to Items on Executive Comp, Benefits in General
(These items appear in both editions of the BenefitsLink Newsletter)
IRS Delays Payroll Tax Rules on ESPPs, ISOs; House Votes to Make DC Limits Permanent
In a major development in the stock plan field, the IRS has indefinitely delayed implementation of its highly controversial proposal to impose payroll taxes on incentive stock options and Section 423 employee stock purchase plans. In other news, the House of Representatives voted to make permanent the higher limits on defined contribution plans (such as ESOPs and 401(k) plans) enacted in the 2001 tax bill. (National Center for Employee Ownership)
IRS Puts Stock Option Employment Taxes on Hold
Excerpt: "The Internal Revenue Service, bowing to pressure from Congress and corporations, [on Tuesday June 25] indefinitely postponed new rules to impose Social Security and other payroll taxes on the stock options that are often given to executives." (Washington Post)
Newly Posted or Renewed Job Openings -
| Qualified Plan Administrator | for Campbells Administration Inc. in CA |
| Retirement Plan Consultants | for RSM McGladrey, Inc. in CT, IA, IL, MN, WA |
| Employee Benefits Consultant | for Fidelity Investments in KY, MA, TX |
| Pension Sales | for Sentry Insurance - A Mutual Company in IN, OH |
| Sr. Operations Manager | for CitiStreet in FL |
| Implementation Specialist | for CitiStreet in FL |
| Director of Relationship Management-LLY | for A Prestigious Consulting Company in CA |
| Pension Administrator | for Pension Associates in CT |
| Defined Contribution Administrator | for Howard A. Feinstein & Associates, Inc. in IL |
| Senior 401(k) Administrator | for The Pension Group, Inc. in CA |
| Client Integration Senior Consultant | for Diversified Investment Advisors in NY |
| Account Manager | for National Retirement Services, Inc. in NC |
| Chief Accountant, ES-510 | for U.S. Department of Labor, Pension and Welfare Benefits Administration in DC |
| Corporate Benefits Administrator | for Phillips-Van Heusen Corporation in NJ |
| Senior Implementation Specialist | for Mellon HR Solutions in NJ |
| Sr Retirement Services Specialist | for Chemung Canal Trust Company in NY |
| Compliance Analyst | for Transamerica in CA |
| Client Services Consultant | for American United Life Insurance Company in FL |
| DC Administrator | for Northern CA TPA in CA |
| Plan Administrator | for Retirement Funding in MI |
Newly Posted Press Releases
| myCafeteriaPlan.com announces Flex Debit Card for 125 Cafeteria Plans (myCafeteriaPlan.com - a division of BusinessPlans, Inc.) |
| Captive Insurance Council of DC Supports Terrorism Insurance Legislation-Urges Cut Off Date Deletion (Captive Insurance Council of the District of Columbia, Inc.) |
| Unique Features in IRS-Approved DATAIR Defined Benefit Volume Submitter Plan (DATAIR Employee Benefit Systems, Inc.) |
| Arioso Corporation and Riverwood Solutions Combine Marketing Efforts to Better Automate Insurance Industry Tools. (Arioso) |
| Search401k Partners with 12 More 401(k) Plan Providers and Adviser Groups in 2002 (Search401K) |
| AHI’s Benefits Alert Releases New Free Report: Benefits Brouhahas: Legal Liabilities Abound In ERISA, HIPAA, COBRA, and FMLA (Alexander Hamilton Institute - AHI's Benefits Alert) |
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