| BenefitsLink Welfare Plans Newsletter |   |
November 1, 2004
Today's sponsor: IQPC
(Click on company name or banner to learn more.)
Conference on Curbing Obesity through Workplace Wellness Programs Utilizing Wellness Programs to Decrease Costs, Increase Productivity, and Combat Obesity December 14 - 15th, 2004 * InterContinental Hotel * New Orleans, LA - Recognize how introducing wellness programs results in healthier employees and a healthier bottom line - Reduce abstenteeism and increase productivity through wellness programs including weight management/loss plans - Integrate wellness programs into health plans for your employees - Get lower health insurance rates for your company by helping employees lose weight and maintain a healthier lifestyle - Investigate the current and future obesity issues faced by the healthcare industry and hear best practices on how your organization can most cost effectively react
(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
California State Lawmakers Call for Hearings on Wal-Mart's Health Benefits
Excerpt: "Democratic legislators on [October 28] said that next year they would hold budget hearings on Wal-Mart's health benefits, the AP/Contra Costa Times reports. Senate Budget Committee Chair Wes Chesbro (D-Santa Rosa) said he would call former Wal-Mart employees to testify before the committee about the company's employment practices, review internal Wal-Mart documents and call on Wal-Mart executives to testify on the issue (Chorneau, AP/Contra Costa Times, 10/29)." (California HealthCare Foundation)
States Are Battling Against Wal-Mart Over Health Care Coverage
Excerpt: "Now, Wal-Mart finds itself under attack for what critics see as its miserly approach to employee health care, which they say is forcing too many of its workers and their families into state insurance programs or making them rely on charity care by hospitals. Wal-Mart vigorously defends its health care policies, saying it offers affordable coverage for all employees." (The New York Times; one-time registration required)
Working Families Tax Relief Act & Benefit Plans Covering Domestic Partners and Same-Sex Spouses
Summary: The Working Families Tax Relief Act of 2004 will have an apparently unintentional effect on employers that sponsor employee benefit plans covering domestic partners or same-sex spouses of employees, and on employees whose domestic partners or same-sex spouses are covered by such plans. Because the relevant provisions of the Act will become effective starting in 2005, employers that sponsor such plans will have to act quickly to deal with the changes made by the Act. (Calhoun Law Group, P.C.)
New Definition of Dependent in Working Families Tax Relief Act of 2004 Affects Employee Benefits (PDF)
5 pages. Excerpt: "WFTRA essentially rewrites Section 152 of the Internal Revenue Code to create a uniform definition of 'qualifying child' for purposes of the federal dependency exemption, the child tax credit, the earned income credit, head of household filing status and the dependent care tax credit. Section 152 as amended also includes a new definition of 'qualifying relative.'" (Mellon)
COBRA Alert Overview: Time to Get Your Forms and Procedures in Shape
Excerpt: "As we reported in Employee Benefits Developments, May 17, 2004 to May 28, 2004, the Department of Labor published a set of final rules that require group health plan sponsors and administrators to review and update their COBRA administrative forms and procedures. The new rules are effective for plan years beginning on or after November 26, 2004." (Hodgson Russ LLP)
Spitzer Goes Hunting for His Next Trophy -- Aon Corporation
Excerpt: "The insurance business has no federal regulator. It is overseen by a patchwork of state regulators long considered too cozy with the industry, and it now finds Mr. Spitzer filling a regulatory void. Aon, although based in Chicago, has a sizable operation in New York, and over the past six months Mr. Spitzer's office has discovered evidence of what the attorney general's office believes are deceptive and coercive practices at the company, according to a person close to the inquiry." (The New York Times; one-time registration required)
Seventh Circuit Court Opinion Upholds Denial of Coverage for Gastric Bypass Surgery
Excerpt: "[T]he Seventh Circuit affirmed the trial court's decision and upheld the trustees' denial of coverage. The plan document gave the trustees discretionary authority to interpret the plan [so] the court applied the deferential 'arbitrary and capricious' standard of review ....' [Manny v. Cent. States, Southeast and Southwest Areas Pension and Health and Welfare Funds, 2004 U.S. App. LEXIS 22235] For a copy: http://www.ca7.uscourts.gov/op3.fwx?submit1=showop&caseno=04-1797.PDF (Employee Benefits Institute of America Inc.)
Ohio Court Holds That ERISA Trumps State Slayer Statute
Excerpt: "This decision is a logical extension of the Egelhoff holding. Although the decision comes from a state court and is not binding on federal courts or other state courts, plan administrators should welcome the decision because it continues to affirm their independence from most state laws, ....' [Ahmed v. Ahmed, 2004 Ohio App. LEXIS 4677 (Ohio Ct. App. 2004)] For a copy: http://www.sconet.state.oh.us/rod/newpdf/7/2004/2004-ohio-5120.pdf (Employee Benefits Institute of America Inc.)
The Principal Financial Well-Being Index - Executive Summary - Third Quarter 2004
Excerpt: "The Principal Financial Group, the nation's 401(k) leader, commissioned Harris Interactive® to conduct online research with employees (ages 18+) of small and mid-sized U.S. businesses (firm size 10 - 1,000 employees) about their attitudes and perceptions regarding their financial well being. Harris Interactive conducted The Principal Financial Well-Being Index survey with over 1200 employees online from August 19 to September 2, 2004." (Principal Financial)
EEOC Issues Guidance Addressing Intellectual Disabilities in the Workplace
Excerpt: "On October 20, 2004, the Equal Employment Opportunity Commission issued new enforcement guidelines titled: 'Questions & Answers About Persons with Intellectual Disabilities in the Workplace and the Americans with Disabilities Act.' This publication, the first ADA-related guidance in two years, addresses workplace issues concerning individuals with 'intellectual disabilities'- a condition once commonly referred to as 'mental retardation.'" (Dorsey & Whitney LLP)
Employees' Election Day Rights -- List of Links to State Laws Requiring Time Off Work to Vote
Excerpt: "[T]he majority of states have laws requiring companies to give employees time off to exercise their right to vote. What follows is a list of links to state laws requiring companies to provide time off to employees to vote, or which provide for other type of protections for employees participating in elections." (LaborProf Blog)
Layoffs Can Have an Aftershock: Exit Pay and Outplacement Help Aren't Mandatory
Excerpt: "Just about everyone out there knows someone -- or at least knows someone who knows someone -- who was laid off, downsized or fired or whose company disappeared during the last few years. And it seems that most of us assume that those friends or friends of friends (or ourselves) received a little padding on the way out, whether in the form of severance pay or even just outplacement help. But here's what may come as a surprise to many people: Severance pay is not a legal requirement." (The Washington Post; one-time registration required)
States Are Stretching Health Care Dollars in Imaginative Ways According to New Report Series
Excerpt: "Providing health insurance coverage to low-income and high-risk patients can be a tall challenge for states even in the best of economic times. But a new report series from The Commonwealth Fund and Economic and Social Research Institute shows how several states are leveraging private, federal, and state funds to enhance health care access, insurance coverage, and efficiency in spending.' There are four reports in the series. (The Commonwealth Fund)
Benchmarking Tool to Guide Health Benefit Purchasers
Excerpt: "Employers will get a new resource for evaluating health plan quality through a partnership announced yesterday by consulting firm Watson Wyatt Worldwide and the National Business Coalition on Health. Watson Wyatt and NBCH, a non-profit organization of employer-based health coalitions, will conduct annual evaluations of health plans for clients and coalition members using NBCH's request-for-information tool, eValue8 (http://www.evalue8.org/eValue8/)." (BenefitNews Connect)
A Leap Frog Into Better Health Care With Employer-Driven Health Initiative
Excerpt: "The organization's goal is two-pronged, she says. 'One is to help consumers make more informed health-care choices. The other is to reward providers that offer superior care.' By mid-2004, about 160 companies, unions, health plans and other purchasing coalitions were involved with the effort, representing some $63 billion in health spending annually. Hospitals in 23 regions of the country submit their data to the Leapfrog Web site (www.leapfroggroup.org)." (Workforce Management)
Does Payment Method Drive Procedure Rates?
Excerpt: "In a study involving three large HMOs, researchers reviewed encounter and claim data for specialty services associated with different rates of performance of invasive procedures." (Managed Care Magazine)
More Health Plans Discover Value of Health Risk Assessments
Excerpt: "Humana's recent announcement that it would begin offering employers a full menu of wellness programming options breaks new ground for the insurer, but at the core of the plan is a familiar tool -- the health risk assessment, or HRA. Like many large insurers, Humana already offers its members a basic HRA through its Web site. Members log onto MyHumana.com, answer health-related questions, and find out what areas of their health they should focus on improving." (Managed Care Magazine)
Consumer-Directed Health Care Plans Bet Against Human Nature; Medical Quality Decisions Difficult
Excerpt: "Some researchers who study consumer and patient behavior admit that everyone is different and that some personality types will appreciate the additional responsibility associated with CDHPs. Others say physicians who are working with patients in such plans can learn a lot from behavioral research, such as how best to deliver the information people need to navigate the plans. But many behaviorists are leery, claiming the tenets of CDHPs don't appear to add up." (Managed Care Magazine)
Employers Shaving Health Insurance Coverage and Pushing Individual Accountability
Excerpt: "Silicon Valley employers ... are struggling to control swiftly rising health-care costs by charging more to cover spouses, increasing employee deductibles by thousands of dollars and implementing programs that force employees to be more accountable for their medical spending. As health insurance premiums continue to rise at about five times the annual inflation rate, employers are worried about their ability to offer health insurance ...." (Silicon Valley/San Jose Business Journal; bizjournals.com; one-time registration required)
U.S. Drug Prices Highest of Eight Nations: Brand Name Study Shows Steep Rise Since 2000
Excerpt: "Americans on average paid 81 percent more for patented brand-name drugs last year than buyers in Can.ada and six western European countries, .... That gap represents a significant increase from 2000, when the cost differential between the United States and the seven other countries was 60 percent. The study by Boston University's School of Public Health relied on comparative data on the costs of drugs in the United States and European countries released earlier this month ...." (San Francisco Chronicle)
2004 Version of Publication 502 - Medical and Dental Expenses - Issued With Few Revisions
Excerpt: "The IRS has released the 2004 version of Publication 502 ('Pub. 502'), which taxpayers may use to determine what medical expenses are deductible on their tax returns. (Under Code Section 213(a), a taxpayer may claim a deduction for medical expenses to the extent that the expenses exceed 7.5% of the taxpayer's adjusted gross income.)'For a copy: http://www.irs.gov/pub/irs-pdf/p502.pdf (Employee Benefits Institute of America Inc.)
Working Paper: Behavioral Economics and Health Economics
Excerpt: "The health sector is filled with institutions and decision-making circumstances that create friction in markets and cognitive errors by decision makers. This paper examines the potential contributions to health economics of the ideas of behavioral economics. The discussion presented here focuses on the economics of doctor-patient interactions and some aspects of quality of care. It also touches on issues related to insurance and the demand for health care." (National Bureau of Economic Research)
Risk Management and HR Managers Must Combine Efforts When Changing Health Benefit Offerings
Excerpt: "Health benefits decisions made in one department can affect other areas of the company, and ultimately impact the company's bottom line in ways that may not have been foreseen. One example is the relationship between human resources and the person at the company responsible for risk management. .... Changes that happen with employee health benefits by human resources ultimately can impact costs trying to be controlled by the risk manager." (Puget Sound Business Journal via bizjournals.com; one-time registration required)
Manufacturer List Price Trends for Generic Pres.cription Drugs Used by Older Americans, 2001 - 2003 (PDF)
Excerpt: "This analysis reports on trends in generic manufacturer list prices over a three-year period (calendar years 2001, 2002, and 2003). The broad sample of drugs examined for this study--75 of the generic drugs most widely used by Americans age 50 and over--also allows for an analysis of differences in price changes by drug manufacturer and by therapeutic category. Finally, this report ... provides the baseline for assessing future changes in manufacturers' prices for pres.cription drugs." (AARP)
Trends in Manufacturer List Prices of Generic Pres.cription Drugs Used by Older Americans - Update (PDF)
Excerpt: "This Data Digest reports on changes in manufacturers' list prices during the first three months of 2004 (January through March) for the generic pres.cription drugs most widely used by Americans age 50 and over. It is the first quarterly update on generic drugs in an ongoing study of changes in manufacturer list prices--that is, manufacturers' list prices set for drugs sold to wholesalers." (AARP)
Those Who Need Medication the Most Should Pay the Least; Evidence That This Is Cost-Effective
Excerpt: "The benefit-based copayment model, which places individual consumers with established medical need on the lowest formulary tier, is a simple and humane concept: Keep chronically sick people from needing expensive care by making their medications inexpensive, perhaps even free. The model could become a standard of formulary design or it may be a utopian concept that will never be widespread." (Managed Care Magazine)
Small Businesses, Faced With Rising Insurance Premiums, Struggle to Cover Employees
Excerpt: "In 2005, health insurance is expected to cost at least 10 percent more -- marking five years of double-digit increases. A diminishing number of small businesses can offer health coverage to employees, according to studies by the Henry J. Kaiser Family Foundation, a nonprofit group that researches health care issues. The group found that 63 percent of small businesses offered health care coverage this year, down from 68 percent in 2001." (The Washington Post; one-time registration required)
Irreverent Opinion: It's the Taj Mahal of Health Insurance Schemes
Excerpt: "For those uninsured in need of hands-on medical care, here's an idea: What if some of those failing U.S. airlines converted to running medical air shuttle services between, say, New York and New Delhi, or Boston and Bombay? Uncle Sam could hire them as private contractors, then pay them to ferry the uninsured back and forth. It would be less risky than putting up taxpayer money for more loan guarantees, and it might even create a few new jobs here at home." (Susan Dentzer via The Washington Post; one-time registration required)
Health Care Industry Seeks a Role Model
Excerpt: "Can the Kaiser Permanente model be copied? Or is it mainly a creation of its own history and culture? Talk to Kaiser physicians and they invariably speak of the cooperative spirit in Kaiser hospitals and clinics, and how they practice team medicine. 'In most other places, people want to protect their specialties and they compete for patients,' said Dr. David Niver, a surgeon .... It is a distinctive culture, but one fostered by incentives and organization." (The New York Times; one-time registration required)
In American Health Care, Drug Shortages Are a Chronic Condition
Excerpt: "Angry about not getting a flu shot? Imagine being unable to find supplies of a medicine that limits damage from a spinal cord injury, a medicine that improves the health of a premature baby, or a medicine that fights systemic bacterial infectious. Each of these drugs, and dozens of others, are in shortage in the United States right now. On any given day, 50 to 80 drugs, many of them life-saving, may be difficult or impossible to find." (The New York Times; one-time registration required)
Is Kaiser the Future of American Health Care As It Manages Both Quality and Costs Effectively?
Excerpt: "Obviously, there is no single model for revamping the nation's costly, disjointed health care system, and Kaiser certainly has its share of problems. But according to economists and medical experts, Kaiser is a leader in the drive both to increase the quality of care and to spend health dollars more wisely, using technology and incentives tailored to those goals." (The New York Times; one-time registration required)
Protecting the 'CIA' of Electronic Health Data: Employers' Role in HIPAA Security Compliance (PDF)
Excerpt: "Employers that sponsor health plans must soon face a new compliance challenge associated with the Health Insurance Portability and Accountability Act (HIPAA): the security rules. These rules require group health plans and other 'covered entities' to protect the confidentiality, integrity and availability (CIA) of electronic protected health information (ePHI)...." (The Segal Company)
Report Says Pay Physicians to Adopt Health Information Technology in Their Medical Practices
Excerpt: "An expert analysis, conducted in part by the national health IT czar, says new policy and a better business case will be necessary to sustain the adoption of health IT in physician practices. 'The current business case for the adoption of health IT systems is not sufficient,' said a statement from the Markle Foundation, which initiated the analysis by a nine-member working group organized by the foundation's public-private collaborative, Connecting for Health." (eWEEK Enterprise News & Reviews)
Links to Items on Executive Comp, Benefits in General
Working Paper: Minimum Hours Constraints, Job Requirements and Retirement
Excerpt: "A structural retirement model estimated with data from the Health and Retirement Study is used to simulate the effects of policies firms might adopt to improve employment conditions for older workers and thereby encourage delayed retirement. Firm policies that effectively abolished minimum hours constraints would strongly increase the number partially retired, while reducing full time work and full retirement, resulting in only a small net increase in full-time equivalent employment." (National Bureau of Economic Research)
Framework to Evaluate Exceptions/Deficiencies in implementing Section 404 of the Sarbanes-Oxley Act (PDF)
13 pages. Excerpt: "This paper outlines a suggested framework for evaluating manual and automated process/transaction-level exceptions and deficiencies resulting from the evaluation of a company's internal control over financial reporting. This paper should be read in conjunction with Auditing Standard No. 2, An Audit of Internal Control Over Financial Reporting Performed in Conjunction With an Audit of Financial Statements (AS2), ...." (Financial Executives International)
Recent Company Stock Litigation: An Emerging Trend and One Bright Spot for Employers (PDF)
4 pages. Excerpt: "This Bulletin tries to put into context the ERISA company stock cases reported since [the] last [ERISA Fiduciary and Company Stock] Bulletin (June 2004), reports on the DOL's settlement with Global Crossing and WordCom's Bernie Ebbers, and features a short article on the DOL's Prohibited Transaction Class Exemption for plans involved in lawsuits against sponsoring companies." (Jenner & Block LLP)
Full Text of Benefits Report, October 2004 Edition Published by Trucker Huss (PDF)
8 pages. The October edition contains articles on The Automatic Rollover of Mandatory Cash-Outs: The Department of Labor's Safe Harbor Final Regulations; The Working Families Tax Relief Act of 2004: Changes to Tax Rules for Health Plans and Accident Insurance and to Other Employee Benefits; The Working Families Tax Relief Act of 2004 Changes to Dependent Care Flexible Spending Accounts; and, Pension Plan Limitations for 2005. (Trucker Huss)
Overview: Accounting Treatment of Stockbased Compensation Arrangements Due to Change in 2005 (PDF)
1 page. Excerpt: "As you are probably aware, on March 25, 2004, the Financial Standard Accounting Board ('FASB') issued an Exposure Draft of a proposed Statement of Financial Accounting Standards related to Share-Based Payments ('Exposure Draft'). The Exposure Draft relates to the accounting treatment of stockbased compensation arrangements, including employee stock purchase plans." (Snell & Wilmer LLP)
Bureau of Labor Statistics' Measure of Benefit Costs Shows 1.1% Quarterly Rise
Excerpt: "Employers' cost for providing benefits to their employees rose 1.1% in the third quarter ended Sept. 30, the smallest quarterly increase in two years, according to the Employment Cost Index, produced by the U.S. Bureau of Labor Statistics. The benefits portion of the index had risen 1.7% in the second quarter and 2.6% in the first quarter." (Modernhealthcare.com)
Newly Posted Events
Automatic Rollovers: DOL Guidance - The Final Word?
Nationwide on November 19, 2004
presented by ABA Joint Committee on Employee Benefits
Newly Posted Press Releases
Employers Seek Consultants Without Conflicts of Interests, PLANSPONSOR Survey Shows
(PLANSPONSOR)
Big "I" Addresses Agency Compensation
(Independent Insurance Agents & Brokers of America)
Newly Posted or Renewed Job Openings
Communications Consultant - Retirement Services
for MassMutual Financial Group
in MA
Retirement Plan Manager
for Benetrends Inc.
in CA
Document Design Specialist
for Kidder Benefits Consultants, Inc.
in IA
Customer Service Representative in Qualified Plans
for First Trust
in CO
AVP of Retirement Programs
for UnumProvident Corporation
in ME
System Director Healthcare Plans
for Covenant Healthcare
in WI
Senior Employee Benefits Attorney
for The Esquire Group
in MN
Employee Benefits Call Center Specialists
for Constantin Control Associates
in NJ
Compliance and Document Specialist
for Alliance Benefit Group
in MN
Plan Administrator
for Independent Pension Consultants, Ltd.
in MN
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