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November 18, 2004
Today's sponsor: William J. Stecker, CPA
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A Practical Guide To Substantially Equal Periodic Payments And Internal Revenue Code §72(t) New 4th edition by William J. Stecker, CPA with all of the updates needed to reflect the issuance of Revenue Ruling 2002-62 in October, 2002 as well as all Private Letter Rulings issued subsequently. This text is a must read for anyone under age 60 who is contemplating early retirement and has substantial 401(k) or IRA assets. This text will teach the reader everything they need to know about avoiding the 10% surtax on early withdrawals as defined in IRC 72(t). All computational methods are covered and how to plan and properly execute substantially equal periodic payments. This is the definitive text on IRS 72(t) including more than 190 footnotes citing all of the relevant legal authorities. Click above to purchase and download now
(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
Text of IRS Notice 2004-79 on Definition of 'Dependent' in Group Health Plans (PDF)
Excerpt: "This notice provides guidance regarding the effect of the Working Families Tax Relief Act of 2004 (WFTRA), Pub. L. No. 108-311, 118 Stat. 1166, on the exclusion from the gross income of an employee under § 106 of the Internal Revenue Code (Code) of employer-provided coverage under an accident or health plan." (Internal Revenue Service)
Overview: IRS Notice 2004-79 Clarifies WFTRA Confusion on Definition of "Dependent"
Excerpt: "The IRS has issued Notice 2004-79 clarifying some of the confusion over changes made to the definition of dependent by the Working Families Tax Relief Act of 2004 ('WFTRA'). WFTRA changed the definition of dependent under section 152 of the Code, but did not make conforming amendments to section 106 of the Code." (Attorney B. Janell Grenier via BenefitsBlog.com)
Health Plans Add Online Tools to Simplify Consumer-Directed Care Choices
Excerpt: "Health insurers have spent several years beefing up Web sites to make products more appealing to brokers, employers and customers in advance of the open-enrollment season. But the growing availability of consumer-directed health plans and accompanying spending and savings accounts have made insurers' Web sites more important than ever. And even some employers that don't offer products that feature high deductibles and optional savings accounts are still making more benefit-design ...." (MANAGED CARE WEEK via AISHealth.com)
Technical Tip: Calculating the First COBRA Premium Payment Amount and Due Date
Excerpt: "Scheduling the first COBRA premium payment and due date--and making sense of the results--can be a daunting task. The law and regulations are confusing at best, and misunderstandings about the rules governing the process are commonplace. This COBRA Tip discusses the critical issues that must be understood when tackling this thorny administrative challenge ...." (OnQue Technologies, Inc.)
Spitzer's Latest Target: Employee-Benefits Insurers Now in His Sights; Federal Probe Could Be Next
Excerpt: "The tangled web of insurers and the brokers who deliver them billions in premiums from Corporate America is being deciphered faster and faster. .... On Nov. 11, the Labor Dept. told BusinessWeek Online that it is investigating whether insurers are paying improper fees to brokers and how those fees are being disclosed to the federal government. It's the incestuous relationship between big underwriters and their preferred brokers that troubles some benefits advisers." (BusinessWeek Online)
California Regulator Is Suing Four Insurers and a Broker It Says Received Kickbacks
Excerpt: "On the eve of filing a lawsuit against a national insurance broker and four big insurers, accusing them of taking part in a kickback scheme, the California insurance commissioner said last night that the broker had agreed to cooperate in developing a case against the insurers. The insurance commissioner ... said he would ... file suit against the broker, Universal Life Resources, and the insurance companies - MetLife, Prudential Financial, the Cigna Corporation and UnumProvident ...." (The New York Times; one-time registration required)
State of Florida Investigating 11 Insurance Companies on Broker Compensation Arrangements
Excerpt: "Florida's Department of Financial Services, the Office of Insurance Regulation and the state attorney general have subpoenaed 11 insurance companies as part of an investigation of broker compensation arrangements. The 11 insurers are: National Union Fire Insurance Co. of Pittsburgh, Pa.; American International Specialty Lines Insurance Co.; Lexington Insurance Co.; Continental Casualty Co.; Scottsdale Insurance Co.; Federal Insurance Co.; ACE American Insurance Co.; ...." (Business Insurance)
Alabama Governor Riley's Plan to Cut State's Health Insurance Costs Passes
Excerpt: "State lawmakers took 90 minutes Tuesday to pass Gov. Bob Riley's plan to trim state government's health insurance costs, a plan Riley said would save the state more than $300 million over five years. .... The five bills that make up Riley's plan passed by wide margins with little debate in the Senate Tuesday. Then the House by wide margins reapproved the bills." (The Birmingham News)
Tennessee Elderly Who Qualify for Tenncare and Medicare Benefits Get Private Health-Care Option
Excerpt: "Elderly residents of 23 Tennessee counties who qualify for TennCare and Medicare benefits have a private option for their health insurance. Nashville-based HealthSpring received approval from federal regulators to offer its Total Care health insurance plan to those residents. The plan goes into effect Jan. 1. It offers enhanced preventive care and has no monthly premiums. The only copayment is for transportation to a pharmacy or doctor's office." (The Tennessean)
Slimmed-Down Health Plan Members Lower Medical Costs According to Research Estimates
Excerpt: "A regional health plan calculated that it saved nearly $850 overall in per-person medical costs the year after an overweight member lost 5% or more body weight in a voluntary program. Gregory A. Nichols, PhD, ... at Kaiser Permanente Northwest Center for Health Research in Portland, Oregon, reached the number by adding about $350 in lower net costs for the trimmed-down member to $480 in added net costs per person in a control group that failed to lose weight ...." (Medscape Medical News)
Question & Answer: Interaction of HIPAA with State and Other Federal Laws
Excerpt: "QUESTION: Our hospital organization continues to be confused by the whole issue of the HIPAA Privacy Rule versus our state privacy regulations. Should both be addressed in our privacy program, and, if so, what guidelines can you offer for appropriate integration of the two?" (HIPAAdvisory.com)
National Survey on Consumers' Experiences with Patient Safety and Quality Information
Excerpt: "This survey assesses Americans' perceptions about the quality of health care, their awareness and reported usage of information in making their health care choices, and their experiences with their health care providers five years after the Institute of Medicine's landmark report on medical errors. The Kaiser Family Foundation, the Agency for Healthcare Research and Quality and the Harvard School of Public Health collaborated on the survey." (Kaiser Family Foundation)
Hospital Safety Not Up to Standards, Says Watchdog -- the Leapfrog Group
Excerpt: "Many hospitals still need quality improvements, especially in adopting health information technology to prevent errors, according to The Leapfrog Group ... which released its hospital quality survey [November 16]. Only 4% of hospitals have implemented computer physician order entry, although another 16% plan to implement it by 2006. Among hospitals with ICUs, 19% have intensive care specia.lists on their ICU staff, and another 13% plan to do so by 2006, the survey demonstrates." (BenefitNews Connect via BenefitNews.com)
Catering to the 'Young Invincibles'-- New Blue Cross Health Plan Is Marketed to 19- to 29-Year-Olds
Excerpt: "The insurer Wednesday introduced Tonik, a new individual health plan intended primarily for young adults ages 19 to 29. It's being promoted with a hip Internet campaign and marketing tactics directed at a generation more familiar with snowboards than shuffleboards. The product is designed for people who can afford health insurance but think they can get away without it -- the so-called young invincibles. Blue Cross also says the plan will appeal to mature mavericks, those who may ...." (San Francisco Chronicle)
Not Everyone Sees Health Savings Accounts as a Panacea -- Wait and See Attitude Reported
Excerpt: "Health savings accounts are a favorite of pro-business politicians--and perhaps for good reason--but not all employers are rushing to adopt them. With a health savings account, an employee can save money tax-free for health-care expenses, and can roll over for next year what they don't spend. The Arizona Republic reports that 'the accounts have gotten a wait-and-see reaction among Arizona employers, meaning most employees aren't likely to soon see them as an option.'" (Workforce Management)
Blues Plans Climbing Aboard Health Savings Account Train
Excerpt: "By the end of next year, consumers in 49 states and the District of Columbia will be able to buy coverage from a Blue Cross-Blue Shield plan that they can combine with a Health Savings Account, the BlueCross BlueShield Association announced Wednesday. .... [T]he Blues products should be attractive to consumers because 'they are using the popular PPOs as a platform,' meaning that patients will have access to plan-negotiated discounts before they reach their deductible amounts." (Reuters Health via Medscape)
Issue Brief: Most Uninsured People Unaware of Health Care Safety Net Providers
Excerpt: "Less than half of uninsured Americans either typically use or are aware of a safety net provider in their community, according to a national study by the Center for Studying Health System Change (HSC). Among all uninsured people, those with lower-incomes, racial/ethnic minorities and people living closer to safety net providers are more likely to know of or use a safety net provider for medical care. Uninsured people identify physician offices and community health centers ...." (Center for Studying Health System Change)
Massachusetts State Leaders Aim at Healthcare Gap; Look to Cut Ranks of the Uninsured
Excerpt: "In a sign of a growing political consensus, Senate President Robert E. Travaglini and Governor Mitt Romney said yesterday in separate remarks that they want to focus next year's legislative session on dramatically cutting the number of people in Massachusetts without health insurance. Travaglini set a goal of providing healthcare coverage to at least half of the roughly 500,000 uninsured Massachusetts residents by the end of 2006, ...." (The Boston Globe)
Will Red Tape Seal Up Drug-Benefit Plans? Hurdle for the New Pres.cription-Drug Plan Is Bureaucratic
Excerpt: "But the major action will take place just over a year from now, when the drug-card program is replaced by a completely different drug benefit that takes effect Jan. 1, 2006. The program's biggest challenge isn't financial; it's bureaucratic. Medicare recipients must sign up for benefits. Critics doubt that vulnerable portions of society - the elderly, poor, and disabled - are up to the task of picking from a sophisticated array of options." (The Christian Science Monitor)
Arkansas State Provider Law Argued in Court
Excerpt: "The U.S. 8th Circuit Court of Appeals heard oral arguments Wednesday over whether Arkansas' 'any willing provider' law should be enforced. Both sides zeroed in on a 2003 U.S. Supreme Court ruling upholding a similar Kentucky statute, which, like Arkansas' 1995 Patient Protection Act, would force insurers to open their managed-care networks to any health-care provider willing to meet the terms. The three-judge panel did not indicate when it might hand down a ruling." (Arkansas Democrat-Gazette)
Large Businesses Are Saving Money with Health Reimbursement Accounts (HRAs)
Excerpt: "The following nine examples are of large companies and large groups of employees that have shown actual savings on health costs year over year by adopting health reimbursement arrangements (HRAs) in a consumer driven healthcare model. HRAs are accounts funded each year by large employers with money for employees to use for healthcare. Because any of the unused funds that an employer deposits in an employee's HRA can now roll over from year to year, HRAs provide an incentive ...." (Center for Health Transformation)
Owners Seek Health-Plan Alternatives: Offering Health Insurance More Difficult for Many Small Firms
Excerpt: "When Andrew Nordstrom bought Salem Emblem Shop seven years ago, he grandfathered in the previous owner's employee health-care plan. Then, as the business grew and Nordstrom added employees, he watched his premiums skyrocket. 'It seemed like rates were doubling every three or four years,' said Nordstrom, who has 15 employees. 'I got to the point where I was wondering, 'Can I even offer it?'' Nordstrom is not the only small-business owner asking himself that question." (Statesman Journal)
Small Businesses Saving 44% on Health Insurance Premiums with Health Savings Accounts
Revised Draft - October 25, 2004. Excerpt: "The following 31 examples are of small businesses or self-employed individuals saving money today on their health insurance premiums because they adopted health plans with Health Savings Accounts (HSAs). In 27 of these examples we have data to calculate the percentage that these companies are saving in 2004 by adopting HSA plans. For these 27 small businesses, they are saving an average of 44% on their health insurance premiums." (Center for Health Transformation)
Survey Shows Americans Fear Medical Errors in Hospitals
Excerpt: "Americans are increasingly worried about dangerous ... mistakes in hospitals, but an overwhelming majority say the solution lies in easy-to-read, published safety report cards, not more medical lawsuits, a national survey released yesterday found. Five years after the Institute of Medicine (IOM) issued a landmark report on widespread preventable deaths in U.S. hospitals, the new poll shows that confidence in the health care system has declined and pressure to reform it has grown." (The Washington Post; one-time registration required)
Gender Differences: Do Men and Women View Long-Term Care Differently? (PDF)
Excerpt: "The MetLife Mature Market Institute and AARP Health Care Options sought to examine older Americans' preferences, expectations, and preparation for long-term care, and to explore any gender differences in these factors. In a survey conducted by Mathew Greenwald & Associates, researchers submitted an online survey to a demographically balanced sample of panel members ages 50 and older." (Metropolitan Life Insurance Company)
Drugstores Guide Pretax Medical Account Spending As Customers Deal with Use-It-or-Lose-It Basis
Excerpt: "An end-of-the-year ritual for many American workers -- the sprint to spend every last dollar in their flexible spending accounts -- is about to begin. What makes this annual race of particular interest to drugstores is a ruling last year by the Treasury Department that lets people use the money for over-the-counter medications as well as pres.cription drugs. Eyeing a big potential fourth-quarter sales boost as customers stock up on things such as Advil and contact-lens solution, ...." (Wall Street Journal via SFGate.com)
Medicare Auditors, Prosecutors Crack Down on Infusion Billing
Excerpt: "Alarm bells are sounding for Medicare infusion billing. A major Medicare program safeguard contractor has detected a high error rate for infusion codes (Q0081 to Q0084), and at least one federal prosecutor is investigating hospitals with an aberrant infusion billing history. Some fiscal intermediaries are finding high error rates in infusion billing despite sending hospitals repeated communiques that clarify billing rules." (REPORT ON MEDICARE COMPLIANCE via AISHealth.com)
Links to Items on Executive Comp, Benefits in General
IRS Initiative to Examine the Compensation Practices of Exempt Organizations
Excerpt: "This IRS program focuses on curbing excessive officer and other insider compensation and benefits at some exempt organizations. This IRS enforcement initiative mainly serves as a reminder to all tax-exempt organizations that governing bodies must exercise diligence in establishing leadership team pay packages." (Hay Group; registration required)
FASB Board Meeting November 17th, 2004: Equity Based Compensation Discussion
Excerpt: "The Board discussed various issues that had been identified by the staff during the course of drafting a final revised standard for FAS123. Issues and decisions are described .... Issue 1: Calculated Value Method for Liability Awards of Nonpublic Companies. The staff recommended and the Board agreed that nonpublic entities should have the ability to use the calculated value method for liability awards, following the same measurement pattern established in the proposed Statement ...." (Financial Executives International)
What To Look For In Employee Benefits In the Next Four Years
Excerpt: "During the presidential campaign, President George W. Bush clearly outlined those employee benefits-related issues that he will promote in his second term. The following summary describes what to expect in terms of proposals from the Bush Administration." (Spencer Benefits Reports)
World Not Ready for Aging Boom, Says AARP Survey
Excerpt: "The impact of the aging boom is well known around the world but opinion leaders in the leading industrialized nations, especially Italy, Germany and Japan, to not believe their countries are prepared to deal with the consequences, according to a survey released yesterday by AARP. The study also found that these leaders see a higher cost for social services, possible labor shortages, and higher costs for pensions, and health care as probable outcomes from a larger older population." (Senior Journal)
Newly Posted Press Releases
The Season of Giving Does Not Include Holiday Bonuses, According to Hewitt Associates; More Companies Favor Pay-for-Performance as a Way to Award Bonuses
(Hewitt Associates LLC)
Benefit Advisors Network and D2Hawkeye Enter Strategic Alliance
(Benefit Advisors Network)
New Book Ties Effective Communication of Benefit Plans to Wiser Health Care and Investment Decisions
(International Foundation of Employee Benefit Plans)
Benefits & Compensation Digest Discusses Preparing an Investment Policy Statement
(International Foundation of Employee Benefit Plans)
Lifetime Achievement Fund Added to CPI Retirement Plan Platform
(CPI Qualified Plan Consultants, Inc.)
Dallas-Fort Worth Business Group On Health Elects New Board Members
(Dallas-Fort Worth Business Group on Health)
Newly Posted or Renewed Job Openings
Education Account Executive- Retirement Services
for Principal Financial Group
in OH
Plan Administrator
for Concannon, Miller & Co., P.C.
in FL
Compliance Analyst
for Great-West Life & Annuity
in CO
EB Field Wholesaler - 92452
for Evergreen Investments
in TX
Actuary
for The Mayer Benefits Advisory, LLC
in CT
EB Field Wholesaler - 92453
for Evergreen Investments
in OH
Benefits Analyst
for Hewitt Associates
in TX
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