| BenefitsLink Welfare Plans Newsletter |   |
October 8, 2004
Today's sponsor: Financial Research Associates, LLC
(Click on company name or banner to learn more.)
Made in America Taft Hartley Benefits Summit Financial Research Associates presents: The 2nd Annual Made in America Taft Hartley Benefits Summit February 6-9, 2005 in Palm Springs To Register call 800-280-8440 or visit www.frallc.com The summit will consist of concurrent tracks, one covering topical issues regarding DC/DB plans and the other covering current for health & welfare topics. Don't miss out, register today! All Administrators and Trustees save $1,000!
(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
American Benefits Council, Others Urge Treasury to Drop 'Use It or Lose It' Rule for Health FSAs (PDF)
Excerpt: "We are writing to urge the Treasury Department to use its authority to modify the 'use it or lose it' rule that applies to health flexible spending arrangements (FSAs). As you know, the 'use it or lose it' rule was created administratively through proposed regulations that were never finalized." (American Benefits Council)
ECFC Urges Treasury to Reexamine 'Use It or Lose It' Rule for Flexible Spending Accounts (PDF)
1-page letter dated October 5, 2004. (Employers Council on Flexible Compensation)
Overview: COBRA Election Notice Not Required for Termination of LTD Benefits
[Goldman v. Hartford Life & Accident Ins. Co., 2004 U.S. Dist. LEXIS 18266 (E.D. La. 2004)] Excerpt: "An employee who was injured at work applied for and was denied long-term disability (LTD) coverage because he was a temporary employee and consequently was ineligible for coverage." (Employee Benefits Institute of America)
Overview: Employer's Rejection of New Beneficiary Designation Form Upheld in Life Insurance Dispute
[Gassner v. Int'l Business Machines Corp., 2004 U.S. Dist. LEXIS 10869 (N.D. Ill. 2004)] Excerpt: "In another case involving a dispute over benefits from an ERISA life insurance plan, the participant's widow alleged that the employer breached its fiduciary duty by instructing the insurer to pay death benefits to the participant's children instead of to her." (Employee Benefits Institute of America)
Overview: SPD Created Vested Life Insurance Benefits for Lifetime of Retirees
[Abbruscato v. Empire Blue Cross & Blue Shield, 2004 U.S. Dist. LEXIS 18286 (S.D.N.Y. 2004)] Excerpt: "This case involved retirees who challenged the reduction of their life insurance benefits. The trial court initially determined that a 1987 summary plan description (SPD) did not serve to vest the benefits because it contained a clear reservation of rights to amend or terminate the plan." (Employee Benefits Institute of America)
Aetna Cannot Be Sued Under ERISA for Denying Benefits in Tythcott V. Aetna Life Insurance Co. (PDF)
11 pages. Aetna Life Insurance cannot be sued under ERISA because it is a third-party administrator. Judge Warren Eginton of the U.S. District Court of Connecticut ruled after considering the plan documents -- the master plan documents, the administrative services contract, and the summary plan description -- that Aetna was not a fiduciary. (United States District Court, District of Connecticut)
House Approves Federal Employee Bonuses, Comp Time for Travel
Excerpt: "Federal agencies would be able to give generous recruitment and retention bonuses when trying to hire and keep employees under legislation approved by the House. Rep. Thomas M. Davis III (R-Va.) called the bill, which also provides federal employees with time off for travel during off-duty hours, 'a momentous step toward effectively reforming the federal civil service system." (The Washington Post; one-time registration required)
Trends in Usual and Customary Prices for Drugs Commonly Used by Medicare and Non-Medicare Enrollees
9 pages. Excerpt: "We tracked monthly price trends from January 2000 through June 2004 for a total of 99 drugs, which include 77 drugs frequently used by Medicare enrollees in Blue Cross and Blue Shield Association's (BCBS) Federal Employee Program (FEP) and 79 drugs frequently used by non-Medicare enrollees in BCBS FEP." (U.S. Government Accountability Office)
Overview: Proposed Regulations Address Health Plan Continuation and Reinstatement under USERRA
Excerpt: "The DOL has issued proposed regulations to implement the requirements of the Uniformed Services Employment and Reemployment Rights Act (USERRA). Below, we highlight some of the key provisions of the proposed regulations that fall within the scope of our Group Health Plan Mandates manual." (Employee Benefits Institute of America)
More Health Care Doesn't Necessarily Mean Better Health Care
Excerpt: "An interview with John E. Wennberg, M.D., professor of Community and Family Medicine (Epidemiology) and of Medicine and director of the Center for the Evaluative Clinical Services at Dartmouth Medical School, and principal investigator of the Dartmouth Atlas of Health Care [in which he discusses studying health care systems and outcomes.]" (The Robert Wood Johnson Foundation)
Employment Policy Foundation Doesn't Want Retiree Health Benefits to Get Lost in the Shuffle
Excerpt: "Rising health-care costs--as well as the number of uninsured Americans--have received plenty of media attention of late. One conservative-leaning non-profit group is warning people not to forget the potential consequences of the huge corporate liability for retiree health benefits. The Employment Policy Foundation says that the Fortune 1000 are liable for about $471 billion in future retiree health costs." (Workforce Management; one-time registration required)
Analysis: Bush vs. Kerry: the Future of Health Care Reform (PDF)
Updated: September 2004. Excerpt: "To be sure, both candidates include other components to their plans. But Mr. Bush's past success in passing HSAs and his current support for tax credits and tort reform make his plan by far the better of the two." (The Council for Affordable Health Insurance)
Reimportation of Pres.cription Medicine: Less-Expensive Rx Available in United States
Excerpt: "A 13-member federal task force on pres.cription drug reimportation has found that 'if patients will shop around, they, very often, can beat the Canadian price' for medications, FDA Associate Commissioner for Policy and Planning William Hubbard said on Tuesday, the AP/Austin American-Statesman reports (Henderson, AP/Austin American-Statesman, 10/6)." (BlueCross BlueShield Association)
Patients Save As U.S. Pays Medicare Insurers More
Excerpt: "The Bush administration said Wednesday that extra money it is paying Medicare managed care plans is leading to lower costs and better services for patients. Insurers have submitted applications for 2005 that show an average 10% reduction in monthly premiums and co-payments, Health and Human Services Secretary Tommy Thompson said." (USA TODAY)
Overview: IRS Chief Counsel Issues Guidance on IRS Requests for Protected Health Information
Excerpt: "Sometimes the IRS needs information that falls within HIPAA's definition of protected health information (PHI). For example, when auditing a covered entity (such as a group health plan) or a covered entity's business associate (such as a group health plan's third-party administrator), or when attempting to collect a tax liability from a covered entity or business associate, some of the information sought by the IRS might be PHI." (Employee Benefits Institute of America)
Links to Items on Executive Comp, Benefits in General
Court Puts Off Ruling on US Airways' Dire Straits and Court-Imposed Pay Cut Request
Excerpt: "Judge Stephen Mitchell did not rule on the 23 percent pay cut, which US Airways asked to have imposed over the next six months, or on the $110 million employee pension payment the airline skipped in September. He delayed decisions on both until next Tuesday at the earliest. The airlines' unions want the judge to deny the temporary pay cut and force the airline to make the pension payment, which was due Sept. 15." (Pittsburgh Post-Gazette)
Airline Workers See Their Security Quickly Vanish
Excerpt: "As if times were not troubled enough in the airline industry, employees at US Airways, Delta and United are facing the stark realization that the security they hoped their jobs would provide is being quickly taken away." (The New York Times; one-time registration required)
Lawyer Explains G.ay Marriage Benefits to Employers
Excerpt: "'Employers are kind of all over the place with what they want to do, what they need to do,' said Attorney Robin S. Lazarow of Worcester. Lazarow ... explained the different standards for providing health insurance and benefits to same-sex families, according to both Massachusetts and federal laws. The two governing bodies have vastly different requirements, she said, so it's important to understand how to file each type of tax form." (Sentinel & Enterprise)
Lawmakers Reach Deal on Nonqualified Deferred Compensation Reform and Enactment Is Expected (PDF)
Excerpt: "House-Senate negotiators have agreed to sweeping restrictions on nonqualified deferred compensation (NQDC) that would become effective January 1, 2005 as part of a final corporate tax bill (HR 4520). The House is expected to approve the bill tonight; the Senate will likely follow suit tomorrow, October 8. The bill would impose new restrictions on the timing of deferral elections, as well as on the timing and form of distributions under all NQDC plans." (Mercer Human Resource Consulting)
Summary for the Conference Committee Report, HR 4520, Deferred Compensation Plans - Generally (PDF)
20 pages. Excerpt: "Under the House bill, all amounts deferred under a nonqualified deferred compensation plan for all taxable years are currently includible in gross income to the extent not subject to a substantial risk of forfeiture and not previously included in gross income, unless certain requirements are satisfied." (Thomas C. Walker)
October 6, 2004, Update on Nonqualified Deferred Compensation Provisions in Corporate Tax Bill
Excerpt: "The House and Senate Conferees to the corporate/international tax bill (H.R.4520) are continuing to meet today to try to reach agreement on a final bill. Nonqualified deferred compensation provisions have not yet been brought up for amendment. .... The Chairman's 'mark,' ... is the basis for the current deliberations, made some significant revisions to the nonqualified deferred compensation provisions of earlier bills but also leaves key issues unresolved." (The ERISA Industry Committee)
Opinion: Working for a Pittance and No Perks Is Plight of 9.2 Million Working Families
Excerpt: "The study, jointly sponsored by the Annie E. Casey, Ford and Rockefeller Foundations, will show that 9.2 million working families in the United States - one out of every four - earn wages that are so low they are barely able to survive financially. 'Our data is very solid and shows that this is a much bigger problem than most people imagine,' said Brandon Roberts, one of the authors of the report, which is to be formally released on Tuesday." (BOB HERBERT in The New York Times; one-time registration required)
HR 5154 Would Clarify Differential Pay Treatment for Military Personnel
Excerpt: "Reps. Michael Turner (R-OH) and John Kline (R-MN) introduced a bill (HR 5154) to clarify that military personnel who receive differential pay from employers can continue to participate in employers' retirement plans. .... The bill would also clarify withholding, nondiscrimination, and distribution rules." (Mercer Human Resource Consulting)
Working Paper: Changing the Retirement Paradigm with Labor Force Aging and Slow Workforce Growth (PDF)
20 pages. Excerpt: "Labor market changes are driving employers, employees, and policymakers to confront the need for a new retirement paradigm. .... When labor force growth was the norm, many firms favored hiring plentiful younger workers over retaining more costly older employees. It was in that context that employers developed defined benefit (DB) plans ...." (Pension Research Council, The Wharton School, University of Pennsylvania)
Newly Posted Press Releases
Study Shows That Health Industry Waste Could Fund Health Care
(Physicians for a National Health Program)
2004 CCH Unscheduled Absence Survey
(CCH Incorporated)
U.S. Labor Department Sponsors Workshops To Help Benefit Professionals Comply With Federal Pension Law
(U.S. Department of Labor, Office of Public Affairs, Boston)
MetLife's 'MetLink' Employee Portal Wins Standard of Excellence Award from Web Marketing Association
(MetLife)
United Steelworkers of America Calls for Expanded Protection of Retiree Benefits; Federal Government Takes Control of Kaiser Pension Plan
(United Steelworkers of America (USWA))
SunGard Helps TIAA-CREF Meet Customers' Evolving Needs
(SunGard Employee Benefit Systems)
CAHI Releases 2004 Voters’ Guide
(Council for Affordable Health Insurance)
Newly Posted or Renewed Job Openings
Defined Benefit Operations Manager
for New York Life Investment Management LLC
in MA
Actuarial Specialist II
for Louis Kravitz & Associates, Inc.
in CA
Pension Account Administrator
for Alerus Retirement Solutions
in MN
Senior Client Director
for CitiStreet TBO
in FL
Sr. Benefits Analyst - Health Care Data
for Target Corp.
in MN
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