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June 28, 2004
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Draft Form Issued by IRS: Model Health Savings Account for Use by Trustees (PDF)
3 pages; Form 5305-B. Excerpt: "The account owner named above is establishing this health savings account (HSA) exclusively for the purpose of paying or reimbursing qualified medical expenses of the account owner, his or her spouse, and dependents. The account owner represents that ..." (Internal Revenue Service)

Draft Form Issued by IRS: Model Health Savings Account for Use by Custodians (PDF)
3 pages; Form 5305-C. Excerpt: "The account owner named above is establishing this health savings account (HSA) exclusively for the purpose of paying or reimbursing qualified medical expenses of the account owner, his or her spouse, and dependents. The account owner represents that ..." (Internal Revenue Service)

American Benefits Council Urges Employers to Oppose Mental Health Parity Bill
Excerpt: "Action Requested: Call and contact Senators in opposition to the 'Senator Paul Wellstone Mental Health Equitable Treatment Act of 2004,' (S. 486) and state your preference for an extension of current law. Background: Senate Majority Leader Bill Frist (R-TN) has 'hotlined' a new version of S. 486, a bill that would significantly expand current law mental health parity requirements." (American Benefits Council)

Breast Pumps Used for General Health Do Not Constitute Medical Care
Excerpt: "A taxpayer wrote to the IRS to express concern that the cost of renting an electric breast pump was not reimbursable under a health FSA.... An official responded that health FSA funds can only be used to reimburse medical care, which includes the diagnosis, cure, mitigation, treatment or prevention of disease--goods and services that are merely beneficial to general health would not qualify." (Employee Benefits Institute of America Inc. (EBIA))

Overview: House Approves Legislation to Allow FSA Rollovers
Excerpt: "The House of Representatives approved legislation to allow up to $500 of unused money in a flexible spending account (FSA) to be carried forward or rolled over into a health savings account (HSA). The bill (H.R.4279) passed by a vote of 273 to 152 on May 12 ..." (Watson Wyatt)

Overview: DOL Issues Technical Corrections to Final COBRA Regulation and Model Election Notice
Excerpt: "Plan administrators wishing to use the DOL's model election notice should be sure to obtain a copy of the model that contains the correction noted above. This is an important, substantive correction, and use of the uncorrected model election notice could limit the circumstances in which a plan would be permitted to terminate COBRA coverage before the end of the maximum coverage period." (Employee Benefits Institute of America Inc. (EBIA))

Estrangement Is Not COBRA Qualifying Event
Excerpt: "A couple's estrangement is not a 'legal separation' or qualifying event under COBRA, and therefore a company cannot provide an election notice upon such a situation, and then deny election when divorce is finalized." (PLANSPONSOR.com; one-time registration required)

Federal Suit Charges Fraud In Health Benefits Financing Arrangement
Excerpt: "Court documents indicate the plans' financing arrangement leads employers to deduct the cost of health care benefits from employees' taxable wages and then reimburse employees the same amount without withholding required payroll and federal taxes. Such payments are 'simply wages disguised as reimbursements' and therefore are not allowed under tax law, according to the federal government." (BenefitNews.com)

Opinion: Supreme Court ERISA Preemption Ruling May Spawn Election Issue
Excerpt: "[T]he Supreme Court seemed to think that only the federal government can give the right to sue to Americans covered by HMOs. It will be interesting to see whether the issue is raised by the candidates in the upcoming election." (Anthony J. Sebok on FindLaw.com)

Opinion: Healthcare Solutions Through Tax Reform, Not More Federal Programs
Excerpt: "Some members of Congress are threatening to use a hatchet to fix a problem in the health sector that requires a scalpel. Rep. John Dingell (D-MI) has reintroduced the misguided patients' bill of rights in response to a U.S. Supreme Court decision this week saying that employees don't have the legal right to sue their health plans in state courts." (The Galen Institute)

Firms Turn to Religion to Keep Workers Happy
Excerpt: "Some companies are embracing the belief that a faith-friendly workplace will create higher profits -- or at least happier workers. At Atlanta-based HomeBanc Mortgage Company, employees can take part in prayer groups or speak with corporate chaplains. In the first of a three part series, NPR's Barbara Bradley Hagerty reports." (National Public Radio)

Wall Street Analysts Examine Impact of New Medicare Law
Excerpt: "Norm Fidel of Alliance Capital Management said that in part because Medicare Advantage plans can keep savings from effective use of prescription drugs, the plans will be able offer drug benefits that will be 'much more generous than most people are thinking' and that might be comparable to those offered in the under-65 commercial market." (KaiserNetwork.org)

Overview: Transition Relief for Health Plans Subject To State Benefit Mandates (PDF)
2 pages. Excerpt: "The Internal Revenue Service recently issued Notice 2004-43, which on a transitional basis will permit individuals enrolled in insured health plans that do not qualify as high-deductible health plans due to state benefit mandates to contribute to health savings accounts." (Mellon's Human Resources & Investor Solutions)

Lost Productivity Costs More Than Medical Benefits
Excerpt: "The common practice of focusing on health costs leads employers to ignore a more significant cost-driver: lost productivity from absence, a cautions the Integrated Benefits Institute." (BenefitNews.com)

The Choice for Voters: Health Care or Tax Cuts
Excerpt: "Republican strategists say they do not intend to allow Democrats to frame the election as tax cuts for the rich vs. health care for everybody else. Stephen Moore, president of the conservative political action committee Club for Growth, said Bush will instead portray the election as tax cuts vs. big government, then savage Kerry's health care plan as a return to the Clintons' disastrous health plan of 1993." (Washington Post; one-time registration required)

Links to Items on Executive Comp, Benefits in General

Shift Away from Stock Options Requires Companies to Reconsider Section 162(m) Compliance (PDF)
At pp. 1-2 of 6-page document. Excerpt: "If your company is considering a shift away from stock options to other forms of stock compensation, one of the issues that you need to address is how to ensure that 100% of the income recognized by the employees under these alternative stock compensation vehicles is deductible by the company." (Trucker Huss)

Overview: Congress Ready To Change Rules On Executive Compensation Programs (PDF)
3 pages. Excerpt: "An international tax bill (S.1637) approved by the Senate on May 11 and a similar bill (H.R. 4520) approved by the House on June 17 both include provisions that would significantly affect current nonqualified deferred compensation arrangements. The new requirements would subject future deferrals to immediate taxation if certain conditions are not satisfied." (Mellon's Human Resources & Investor Solutions)

IRS and Congress Target Exempt Organizations' Executive Compensation Practices
Excerpt: "The Internal Revenue Service recently announced its plans to contact hundreds of tax-exempt organizations (EOs) this summer regarding the compensation paid to their highest paid employees. The IRS has also announced that it will be reviewing transactions reported on the Form 990 by Section 501(c)(3) and 501(c)(4) tax-exempt organizations as 'excess benefit transactions,' as well as any failure of an EO to indicate on the Form 990 whether it has had any excess benefit transactions." (McDermott, Will & Emery)

FASB ED On Stock Option Accounting/Valuation Draws Comments
Excerpt: "Summary of FEI Committee on Corporate Reporting (CCR) Response To FASB Exposure Draft on Share-Based Payments" (Financial Executives International)

Newly Posted Press Releases
(Post Yours!)

Treasury and IRS Make It Easier To Design Health Savings Accounts
(Internal Revenue Service (IRS))

Snow Statement on the Introduction of the President's Retirement Savings Account Proposal
(Internal Revenue Service (IRS))

Managed Account Architect Launches MS&I Solutions
(MS&I Solutions)
Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Director of Benefits
for Ohio Public Employees Retirement System
in OH

Flex Plan Processor
for Leggette Actuaries, Inc.
in TX

Pension Analyst- Implementation
for CitiStreet - A State Street and Citigroup company
in MA

401(k) Client Relationship Manager
for Great-West Retirement Services
in FL

Benefit Plan Consultant – Experienced
for Hewitt Associates
in FL

Defined Benefits Consultant/Project Manager
for Lynchval Systems Worldwide, Inc.
in VA

Business Development Officer – Institutional Trust & Custody
for U.S. Bank
in UT

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