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July 6, 2004
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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)
Auditing for the Ineligibles
Excerpt: "Large employers looking for ways to reduce health-care costs are finding big savings right under their noses: ineligible dependents being carried on their health insurance plans. With potential savings running into millions of dollars for larger employers, the search for the ineligible is becoming as much a part of reducing health-care costs as mail-order prescription services." (Workforce.com)

Mother Seen As Link To Obesity
Excerpt: "Children born to obese women are more than twice as likely to be overweight by age 4, says study that dates the link as far back as -- or even before -- birth." (AP via Washington Times)

Maryland Health Insurance Consumers Wield the Power of Appeal
Excerpt: "Most claims sought from health insurers across the nation are processed and paid without a hitch. And insurance commissioners, including Maryland's Alfred W. Redmer Jr., often agree with insurers that they acted appropriately in denying claims. When they side with the patients, regulators usually resolve disputes within a few months." (Washington Post; one-time registration required)

Over the Counter But Out of the Insurance Plan
Excerpt: "While high prescription costs hog the spotlight, more and more consumers are being hit with another expense: over-the-counter drugs that aren't covered by insurance." (New York Times; one-time registration required)

More Find Employer-Sponsored Health Plans Too Costly
Excerpt: "Soaring premiums and copayments are squeezing a rising numbers of Americans unable to purchase health coverage offered by employers. People who have access to insurance, yet can't afford it, even when it's subsidized by an employer, are adding to the nation's population of 37 million uninsured, a new survey by the Urban Institute found." (Boston Globe)

It's the Economy, Right? Guess Again. Starts with an 'H'
Excerpt: "'Health care is sacrosanct,' Mr. Kerry said in a telephone interview, offering the most explicit commitment to date to a program that he estimates would cost $650 billion. That is an amount greater than the cost of all his other economic proposals combined." (New York Times; one-time registration required)

Tuition for Special School That Helps Children to Overcome Learning Disabilities Can Be Medical Care
IRS Information Letter 2004-0090 (Apr. 29, 2004). Excerpt: "In this Information Letter, the IRS responded to an inquiry regarding whether tuition for a private school that specializes in correcting a learning disorder with which a taxpayer's son had been diagnosed was deductible as a medical care expense.... This Information Letter is consistent with prior IRS guidance on whether special education expenses constitute medical care under Code Section 213(d)." (Employee Benefits Institute of America Inc. (EBIA))

Temporary Court Order in Divorce Is Not a COBRA Qualifying Event Because It's Not a Legal Separation
Excerpt: "Under COBRA, a qualifying event occurs when there is a divorce or a 'legal separation' resulting in a loss of coverage under the plan. In this case, the court found that because the couple's separation during divorce proceedings was not a 'legal separation,' the divorce itself was the COBRA qualifying event." (Employee Benefits Institute of America Inc. (EBIA))

Overview: IRS Releases Draft Model HSA Trust and Custodial Account Forms
Excerpt: "HSA trustees and custodians will be pleased that the forms require the individual to make detailed representations relating to HSA eligibility and clearly give the individual responsibility for complying with the contribution limit and for determining the taxability of distributions. The instructions to the forms also clarify that a married couple cannot establish a joint HSA." (Employee Benefits Institute of America Inc. (EBIA))

A Reward Money Can't Buy
Excerpt: "Procter & Gamble gave employees two extra vacations days are a reward for outstanding stock performance. It's a model that other companies can follow." (Workforce.com)

Massachusetts Paid $12.7 Million In Unused Sick Time
Excerpt: "The state paid $12.7 million last year for unused sick time to nearly 4,900 retiring employees, a practice taxpayer groups have criticized in Boston and other municipalities because of the burden the payments place on local budgets." (Boston Globe)

Opinion: Health Care Costs Darken Sunset Years
Excerpt: "The do-it-yourself trend in retirement -- and the low participation in 401(k) and similar plans -- is the heart of the problem, and has been getting some attention lately. But not widely appreciated is the impact of the disappearance of retiree health insurance." (Albert Crenshaw in the Washington Post; one-time registration required)

Links to Items on Executive Comp, Benefits in General

Prudential Deferred Comp Under Fire Again
Excerpt: "In recent years, Prudential Securities has fended off numerous challenges to the legality of its deferred compensation plan, known as MasterShare, but it might have more than the usual amount of trouble shaking Yaakov Holansky's case. Holansky, a former Pru broker, has successfully argued in the Federal Northern District Court of Illinois that MasterShare is an employee benefit pension plan ..." (Registered Rep)

Disability Pay for Firefighters, Police Worries New York Municipalities
Excerpt: "[I]n a ruling that surprised municipal officials and lawyers alike, the state's highest court ruled in December that any time a public safety worker is on the job and injured, he or she is eligible for the benefit. At the same time, the court ruled that a Greenburgh police dispatcher, David Wagman, was eligible for the benefits after he hurt his back trying to move a box of teletype paper with his foot." ([Binghamton, NY] PressConnects.com)

Executive Benefits Are Corporate Governance Issue
Excerpt: "It behooves all companies to evaluate their deferred compensation arrangements to understand how they fit within the total executive rewards strategy and to ensure that the costs – which are often hidden and substantial – are appropriate relative to the benefits provided. In fact, we believe compensation committees should be reviewing the proxy disclosure of these programs to meet shareholders' expectations about transparency of executive compensation and benefit programs." (Mercer)

Getting Value from Executive MBA Programs
Excerpt: "Programs that enable executives to earn a master's degree in business administration (MBA)--by accommodating students' working hours and recognizing their individual needs and experiences--are the hottest product in the growing MBA market." (HR Magazine)

Executive Greed? the Other Guy Started It
Excerpt: "Competition, a primal force of capitalism, can steer even the non-greedy executive down an unethical path. Andrei Shleifer, an economics professor at Harvard, argues that if unethical behavior drives down corporate costs, rivals will be compelled to do the same just to stay in business. In other words, companies will find the cost of ethical behavior too high." (New York Times; one-time registration required)

50 Best Small & Medium Places to Work
Excerpt: "Go to our feature article, 'Great Companies, Inspired Employees,' and you can start reading about a trait that's apparent among many of the companies on this year's list of the Best Small & Medium Companies to Work for in America: They excel at engaging and empowering employees. See how these businesses get employees excited about the prospect of coming to work--and reap big returns as a result." (HR Magazine)

Towers Perrin U.S. Legislative Tracking Charts as of July 1, 2004
Excerpt: "These charts summarize selected federal legislation that would affect employer [sic] benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors." (Towers Perrin)

Opinion: Fuzzy Math and Stock Options
Excerpt: "All seven members of the Financial Accounting Standards Board, all four of the big accounting firms and legions of investment professionals say the two proposals are nonsense. Nevertheless, many House members wish to ignore these informed voices and make Congress the Supreme Accounting Authority." (Warren Buffet in the Washington Post)

Newly Posted Events

Certificate of Achievement in Public Plan Policy (CAPPP)--Pension and Health Part II
in Louisiana on September 18, 2004
presented by International Foundation of Employee Benefit Plans
Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Regional Sales Director - Mid Atlantic Region & Pacific West Region
for The Newport Group
in CA, NC

Senior Health & Welfare Consultant
for Charles W. Cammack Associates, Inc.
in NJ, NY

Manager, Employee Benefits
for Vertex Pharmaceuticals
in MA

Senior Retirement Consultant
for Charles W. Cammack Associates, Inc.
in NJ, NY

Senior Compensation Analyst
for Vertex Pharmaceuticals
in MA

Senior Employee Benefit Trust Administrator
for The Bank of New York
in CA

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Editor and Publisher: David Rhett Baker, J.D.

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