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July 28, 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)
State Government Retiree Health Benefits: Status and Potential Impact of New Accounting Standards
Excerpt: "This research was undertaken to provide a snapshot of state governments' retiree health benefits under current accounting standards, describe current accounting rules and how they will change under the new standards, and explore the potential impact the new standards may have on state governments and retiree health benefits. The research found the following: ..." (AARP Research)

Prefunding Retiree Health Costs via VEBA-Purchased Insurance (PDF)
2 pages. Excerpt: "[A recently issued IRS private letter ruling], when considered in conjunction with the U.S. Tax Court's decision last year that allowed an employer to deduct its contributions to a VEBA for the full actuarial value of health benefits for persons already retired, potentially presents a unique opportunity for companies to fund their retiree health obligations on a fully tax-favored basis and thereby reduce the accounting impact of these benefits on their financial statements." (Milliman USA)

Overview: IRS Issues Final Rules for HSAs
Excerpt: "Probably the biggest news of the new regulations is the guidance on how family deductibles affect HSA contributions.... The new rules provide even more flexibility in coverage of preventive services.... Q&A 28 clarifies that anyone may contribute to a person's HSA - so church groups, charitable organizations, labor unions, and philanthropists could help a low-income person fund an HSA." (The Galen Institute)

HSA Guidance Generously Interprets Preventive Care
Excerpt: "The new guidance, offered as a series of 88 questions and answers in Notice 2004-50 ... states that employee assistance plans, disease management programs and wellness programs are preventive care and thus permitted to be covered under an HSA through first-dollar or copayment arrangements." (BenefitNews.com)

Notice 2004-50: a Summer Tsunami of HSA Guidance (PDF)
Excerpt: "[T]he release of Notice 2004-50 is like a belated half-year birthday party for health savings accounts (HSAs) ... The real question for employers is whether the Administration has cancelled their invitation to the party. This critical question is discussed at the end (see 'Are Employers Invited to the Party?'), and it concerns the permissibility of employer restricted HSAs-- or put more elegantly, 'employer supervised HSAs.'" (Kilpatrick Stockton LLP via American Benefits Council)

Final Model COBRA Notices Posted on DOL Website
Excerpt: "The DOL has posted on its website its final model initial COBRA notice (which the DOL calls the 'general notice') and final model election notice. These final model notices were issued as part of the DOL's May 2004 final regulations ... The final model election notice includes an important, substantive correction issued on June 23, 2004." (Employee Benefits Institute of America Inc. (EBIA))

First Circuit Reverses Earlier Determination That Election Notice Had Been Mailed
Excerpt: "The employer said that it sent an election notice via certified mail, return receipt requested (although no signed return receipt was ever received). The trial court ruled that the employer's method of delivering the election notice satisfied COBRA's requirements ... The employee appealed, and the First Circuit held that the trial court should not have ruled for the employer because there was not sufficient evidence that the notice had been mailed." (Employee Benefits Institute of America Inc. (EBIA))

Employers Accepting Advance Payments Under the HCTC Program Need Not File or Furnish 1099-H
Excerpt: "This Notice is welcome news for employers accepting HCTC Program payments for COBRA coverage because it removes an administrative obligation. Although the IRS posted a brief indication to this effect on its website last year (see our article cited above), it subsequently issued Instructions to the 2004 Form 1099-H that did not reflect this arrangement, causing concern ..." (Employee Benefits Institute of America Inc. (EBIA))

7th Circuit: Retiree Health Benefits Were Not Vested and Could Be Terminated
Excerpt: "They sued the employer for, among other things, wrongful denial of benefits and breach of fiduciary duty under ERISA, alleging that they had been told, both orally and in writing, that the health care allowance was a 'lifetime' benefit. The employer conceded that the benefit was a lifetime benefit but argued that it could be terminated because the plan documents reserved the right to amend or terminate benefits." (Employee Benefits Institute of America Inc. (EBIA))

Administrator's Email Response Was Enough to Exhaust Administrative Remedies, Court Rules
Excerpt: "US District Judge Colleen McMahon of the US District Court for the Southern District of New York, in denying the company's motion to dismiss the case, found the plan participant exhausted his administrative remedies by complying with plan requirements despite the insurance plan's assertions that the response to the participant's e-mail was not a denial of benefits." (PLANSPONSOR.com; one-time registration required)

ERISA Update: the Supreme Court Texas Decision and Other Recent Developments (PDF)
7 pages. Excerpt: "The purpose of the brief is to explore the U.S. Supreme Court's June 2004 decision that ERISA preempts the Texas HMO liability law and its effects on other state health plan liability laws. The brief also examines implications of ERISA preemption for state health insurance regulation, 'pay or play' health coverage laws, and premium assistance programs." (AcademyHealth)

IRS to Issue Combined Forms for HSA and Archer MSA Reporting by Trustees
Excerpt: "Beginning with 2004, trustees (and custodians) will use the same forms to satisfy their IRS reporting obligations for both HSAs and Archer MSAs, according to the 2004 General Instructions for Forms 1099, 1098, 5498, and W-2G." (Employee Benefits Institute of America Inc. (EBIA))

New Building Designs Promote Employees' Health
Excerpt: "Sprint is part of a small but growing movement that encourages business owners to construct or renovate buildings in ways that motivate - or require - employees to get more exercise. The premise is simple: Happier, healthier employees are more productive and reduce health care costs for their companies." (AP via Washington Post; one-time registration required)

Prescription Drug Costs and Your Employee Health Plan (PDF)
At page 8 of 11-page document. Excerpt: "Several opportunities exist to help you keep your employee health plan's prescription drug costs in control. Through careful analysis and consideration, and with the advice of your benefits consultant, you may decide that one or several of the following cost saving tools is right for your particular needs." (Hartwig Moss Benefits)

Increasing Healthcare Costs and Your Employee Health Plan (PDF)
7 pages. Excerpt: "The next few pages will discuss factors leading to the greatest increases in healthcare costs since the early 1990s, and some solutions that firms around the U.S. are undertaking to help soften the blow." (Hartwig Moss Benefits)

Medicare Will Foot the Bill for an Initial Exam at 65
Excerpt: "Tommy G. Thompson, the secretary of health and human services, said: 'Medicare had it backwards, spending 99 percent of its resources treating seniors after they got sick and only 1 percent on preventing illness and promoting wellness. With the new law, we are reversing this trend and focusing more on disease prevention and management.'" (New York Times; one-time registration required)

Businesses Wary About Kerry's Health Care Proposal
Excerpt: "Rather than 'cheering,' business groups are reacting to the 'centerpiece' of presumptive Democratic presidential nominee Sen. John Kerry's (Mass.) health care proposal, which would provide businesses with an estimated $290 billion over 10 years to share the costs of the most expensive medical cases in exchange for adding or maintaining health benefits, by 'raising concerns about what companies would have to do to qualify for the help,' the [Wall Street] Journal reports." (KaiserNetwork.org)

Few Medicare Beneficiaries Expect To Enroll In New Prescription Drug Plan
Only two in ten Medicare beneficiaries expect to enroll in the new Medicare drug benefit program in 2006, according to a study conducted by Market Strategies, a market research and strategic consulting firm in the health care industry. The study, The Prescription Drug and Medicare Modernization Act: Beneficiary Awareness, Perceptions, and Actions, also found that beneficiaries who purchase a Medicare-endorsed prescription drug discount card are more likely to enroll in the new drug benefit. (Spencer Benefits Reports)

Links to Items on Executive Comp, Benefits in General

Hewitt Federal Legislation Quick Guide: July 27, 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 were updated on July 27, 2004." (Hewitt)

Newly Posted Press Releases

Hewitt Study Shows Companies Underestimate Cost of Leaves of Absence
(Hewitt Associates LLC)

Newkirk Introduces Two All-new Retirement Payout Estimators
(Newkirk)

Court Upholds PBGC Order Protecting Hospital Employee Pensions
(Pension Benefit Guaranty Corporation (PBGC))

Fringe Facts® Communicator 6.31 Streamlines Benefit Communications
(Benefit Software Inc.)

Compliance Assistance Seminars
(U.S. Department of Labor, Employee Benefits Security Administration (EBSA))

Milliman Announces Free Internet Seminars for Employers; Series to Address Disease Management, Behavioral Health, and True Group Long-Term Care
(Milliman USA)

New Survey Results Highlight Annual Benefit Statements
(International Foundation of Employee Benefit Plans)

Medicare’s Proposed Regulation To Implement New Preventive Services Under Medicare Modernization Act
(Centers for Medicare & Medicaid Services (CMS))
Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Pension Consultants/Administrators
for Northern NJ Mid-Size Pension Consulting Firm
in NJ

401k Account Executive
for BISYS Retirement Services
in PA

Employee Benefits Associate
for Warner Norcross & Judd LLP
in MI

HR Service Center Representative
for OfficeMax--A Boise Company
in IL

Counsel - Disclosures
for American Express
in MN

Defined Contribution Plan Administrator
for Benefit Consulting Group LLC
in NY

401k Client Service Rep
for ADP Retirement Services
in NJ

Pension Administrator
for The Benefits Consulting Group
in IL

Employee Benefits Sales Officer
for CUNA Mutual Group
in AZ, CA, HI, NV, OR, WA

Director/Manager of Benefits
for Continuum Search
in TN

Manager, Benefits Outsourcing Team - COBRA and Flex
for Client of Jan Hufnell, Hufnell, Inc, Exec Recruiters Benefits and HR
in PA

ERISA Attorney
for LeBoeuf, Lamb, Greene & MacRae, L.L.P.
in FL

Marketing Specialist (Proposal Writer)
for ICMA Retirement Corporation...a mutual fund organization
in DC

Pension Analyst
for Fidelity Employer Services Company
in MA

Education Account Executive
for Principal Financial Group
in TX

Pension Legal Support
for Nyhart Retirement Division
in IN

Pension Administrators
for Associated Pension Consultants
in CA

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