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April 1, 2004 - 8,783 subscribers
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Complete Benefits Law Guidance from Law Journal Press
The nation's workforce and health care system are constantly evolving
and so are the legal issues.  Law Journal Press helps you handle any
benefits law question with up-to-date, authoritative books on all
aspects of the field.  Get legal and practical advice from leading
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(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
Differences Among HRAs, HSAs and FSAs: Beyond the Basics, After the Initial Guidance (PDF)
Superb; INCLUDES coverage of Rev. Rul. 2004-38, Rev. Proc. 2004-22, Notice 2004-23, and Notice 2004-25! Now you know what Mr. and Mrs. Cowart talk about over dinner in the evenings. (Attorneys Greta E. Cowart of Haynes and Boone, LLP and T. David Cowart of Jenkens & Gilchrist)

Overview: Extensive Guidance Provided on Health Savings Accounts
Excerpt: "Newly issued guidance on Health Savings Accounts (HSAs) clarifies the types of preventive care that can be provided under a high deductible health plan (HDHP) and the interaction between an HDHP and other pres.cription drug benefits. Also, transitional relief has been granted for pres.cription coverage interaction, and HSAs are permitted to reimburse medical costs incurred after the establishment of the HDHP." (CCH Tax News)

Overview: Health Savings Account Guidance and Transition Relief (PDF)
4 pages. (Kirkpatrick & Lockhart LLP)

State Regulators Argue Against New Federal Oversight System for Insurance
Excerpt: "State insurance regulators and consumer advocates on Wednesday criticized a proposal by House Committee on Financial Services Chair Michael Oxley (R-Ohio) that would eliminate state premium regulation and shift oversight of the industry to the federal government, the AP/Dallas Morning News reports." (KaiserNetwork.org)

New Hampshire Governor Receives Warning From FDA Over Pres.cription Drug Reimportation
Excerpt: "New Hampshire Gov. Craig Benson (R) on Wednesday presented the results of a study he authorized on samples of six common pres.cription drugs reimported from Canada compared with drugs obtained within the state, the Manchester Union Leader reports.... FDA on Wednesday responded to Benson's presentation of the report with 'a broad condemnation of his actions,' the Union Leader reports." (KaiserNetwork.org)

New Rule Requires Health Care Providers to Obtain Unique National Provider Identifiers (PDF)
3 pages. Excerpt: "The final rule establishing the unique national provider identifier or 'NPI' for health care providers was issued on January 23, 2004 ('NPI Rule'). The NPI Rule is required by the Administrative Simplification provisions of the Health Insurance Portability and Accountability Act of 1996 ('HIPAA'). Health care providers subject to HIPAA may obtain NPIs starting May 23, 2005 and must begin using them no later than May 23, 2007." (Neal, Gerber & Eisenberg LLP)

Are You Compliant? Next Phase of HIPAA Compliance Dates Starts April 14 (PDF)
Excerpt: "Every covered group health plan that is self-funded in part or whole or that creates or receives protected health information beyond enrollment data and summary health information (which is essentially aggregated claims data without individual identifiers) must comply fully with the Privacy Rule." (Neal, Gerber & Eisenberg LLP)

By April 14, 2004, All Group Health Plans Must Comply with HIPAA Privacy Rule (PDF)
Excerpt: "The employer-sponsored health benefit plans that must comply with the Privacy Rule include cafeteria plans with flexible spending health benefit accounts. The only health benefit plans that will not have to comply with the Privacy Rule after April 14 are those with less than 50 participants that are administered solely by their employer-sponsors. Those plans are not subject to HIPAA at all." (Neal, Gerber & Eisenberg LLP)

COBRA Programs Affected by IRS View That Medicare Entitlement Isn't Multiple Qualifying Event
Excerpt: "Significant changes in COBRA administration and documentation should be expected as a result of the IRS' new guidance finding that, essentially, Medicare entitlement is not a multiple qualifying event for most group health plans." (Thompson Publishing Group)

Some Employers Helping Workers Get Out of Debt
Excerpt: "Employee benefits programs rarely get this kind of glowing review: 'This has changed our life.' 'With the help this course has given us, we feel we are well on our way to financial independence.' 'I will tell anyone who has an opportunity to be sure and take this course.' These comments come from Cook's Pest Control employees in Georgia who have taken a 13-week personal finance course, paid for by the company." (Atlanta Business Chronicle via bizjournals.com; one-time registration required)

Caregiving and the American Workplace: State Surveys of Employers and Employees
Excerpt: "As parents and loved ones age, many employees find themselves becoming caregivers for their aging family members. This caregiving role may interfere with their roles as employees - through absenteeism, early departure from work, late arrival to work, personal phone calls, and emotional distraction. In such situations, what kind of support do workers receive from their employers?" (AARP Research)

Eli Lilly Requires Canadian Online Pharmacies To Obtain Company Approval of Orders
Excerpt: "Officials for Eli Lilly on March 22 informed a number of Canadian online pharmacies that they must have the company approve purchase orders for Lilly products before they submit them to Canadian pres.cription drug wholesalers as part of an effort to block the sale of the medications to U.S. residents, the AP/Newport News Daily Press reports." (KaiserNetwork.org)

Health Care Benefit Crisis: Cost Drivers and Strategic Solutions (PDF)
30 pages. (Grant Thornton LLP)

Schwarzenegger Takes No Position on Measure To Repeal Health Insurance Law
Excerpt: "In an interview on Tuesday, Gov. Arnold Schwarzenegger (R) said that he is not prepared to say whether he supports repealing a state law (SB 2) that would require some employers to provide health insurance to workers or pay into a state pool, the AP/Fresno Bee reports." (California Healthcare Foundation)

Cost Sharing in Medical Insurance Plans
Excerpt: "Changes in health plan features and required employee plan contributions provide insights into changes in health care cost sharing between employers and employees. BLS data on benefits show that employees increasingly were required to make contributions for their coverage, that these contribution amounts have risen, and that medical plan deductibles have increased over the years." (U.S. Department of Labor, Bureau of Labor Statistics)

CMS Launches Web Site for Medicare Drug Discount Cards
Excerpt: "The Bush administration on Thursday will officially launch a Web site that will allow Medicare beneficiaries to compare pres.cription drug discount cards endorsed by the program, CongressDaily reports." (KaiserNetwork.org)

Public Support for Medicare Drug Benefit Dropping, Polls Say
Excerpt: "Public support is dropping for the Medicare pres.cription-drug law pushed by President Bush and passed by the Republican-controlled Congress last year, a USA TODAY/CNN/Gallup Poll shows. The erosion follows months of criticism from Democrats and disclosures that the administration withheld higher cost estimates from Congress." (USA Today)

Overview: IRS Issues Ruling on Retiree Medical Funding
Excerpt: "A recent private letter ruling from the Internal Revenue Service (IRS) permits the use of a tax-effective method for funding retiree medical obligations. Due to the escalating costs of retiree medical obligations, many employers are searching for better ways to fund their obligations." (BNA Tax Management)

Privacy Compliance Deadline - April 2004
Federal privacy regulations under the Health Insurance Portability and Accountability Act of 1996 ('HIPAA') were effective for large health plans on April 14, 2003 and will be effective for small health plans on April 14, 2004. Small plans are those that pay less than $5 million annually in insurance premiums or (for self-insured plans) in claims. Employers with small health plans need to analyze their administrative arrangements and determine what steps must be taken for timely compliance ... (Sanders, Schnabel & Brandenburg, P.C., Washington, D.C.)

Modest Health Reforms More Likely to Generate Widespread Support: Pollsters
Excerpt: "Even if presumed Democratic presidential challenger Sen. John Kerry (D-Mass.) defeats President George Bush in November, there is no guarantee that he would be able to enact his health reform proposal, which aims to provide health insurance coverage to 27 million uninsured Americans, national pollsters predicted at a health forum here yesterday." (Medscape; one-time registration required)

How Federalism Could Spur Bipartisan Action On the Uninsured
Excerpt: "States should be allowed to try widely differing solutions with federal financial support under legislated guidelines, including specific protections and measurable goals. Congress would enact a 'policy toolbox' of federal initiatives that states could include, and funding to states would be linked to success in reaching the goals." (Health Affairs)

Institute of Medicine Committee's Clarion Call For Universal Coverage
Excerpt: "The concluding [report of the Institute of Medicine (IOM) Committee on the Consequences of Being Uninsured] presents a vision for universal coverage and describes four options for achieving it. The options include an incremental approach, employer and individual mandates, and a single-payer plan. We identify complications involving benefits and geographic variation in costs surrounding attempts to achieve universal coverage." (Health Affairs)

Covering the Health Uninsured: What's It Worth?
Excerpt: "We conclude that the estimated value of health forgone each year because of uninsurance ($65-$130 billion) constitutes a lower-bound estimate of economic losses resulting from the present level of uninsurance nationally." (Health Affairs)

Links to Items on Executive Comp, Benefits in General

Text of FASB Exposure Draft on Accounting for Stock Options
Excerpt: "On March 31, 2004, the Financial Accounting Standards Board (FASB) issued a proposed Statement, Share-Based Payment, that addresses the accounting for share-based payment transactions in which an enterprise receives employee services in exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the enterprise's equity instruments or that may be settled by the issuance of such equity instruments." (Financial Accounting Standards Board)

Accounting Board Wants Options to Be Reported as an Expense
Excerpt: "Addressing a concern of many investors, the Financial Accounting Standards Board proposed yesterday that companies be required to report as an expense the value of the stock options they give to employees and executives." (New York Times; one-time registration required)

Opinion: High-Tech Community Must Surrender on Stock Options Expensing
Excerpt: "The aftermath of the technology bubble has taught business many lessons. In the accounting realm, one stands out: No longer should public companies be allowed to incur massive annual costs in highly dilutive stock option grants to executives ... without an appropriate charge to earnings that makes these costs fully transparent to shareholders and the equity markets, as well as properly reflect true personnel costs." (Robert I. Schwimmer in the CPA Journal)

Proposed Legislation and Nonqualified Deferred Compensation Programs
Excerpt: "Over the past two years, Congress has been considering legislation that would require significant changes in the design and operation of nonqualified deferred compensation arrangements. While the details are always subject to change until final passage, the tax-writing committees in the House of Representatives and the Senate appear to have coalesced around several key proposals." (CPA Journal)

Hewitt Federal Legislation Quick Guide Updated to March 30, 2004
Excerpt: "Hewitt's Federal Legislation Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law, regarding health and welfare benefit plans, retirement plans, and human resources and employment law. Click ... to learn more about pending legislation in each area. These files have been updated on March 30, 2004." (Hewitt)

Newly Posted Press Releases

NFP Securities Selects The Newport Group as a Premier Qualified Plan Provider
(The Newport Group)

Prudential Financial Completes Acquisition of CIGNA's Retirement Business; Combined Business Will Deliver Exceptional Retirement Expertise and Capabilities
(Prudential Financial, Inc.)

Health Care Reform A Major Campaign Issue For Voters: New Survey
(Commonwealth Fund)

CIGNA Finalizes Sale of Retirement Benefits Business to Prudential Financial
(CIGNA Corporation)
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