| BenefitsLink Welfare Plans Newsletter |   |
November 22, 2004
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Growth Rate in Health Cost to Employers Slowed in '04
Excerpt: "After years of double-digit cost increases, the rate of growth in what employers pay for employee health insurance slowed significantly this year, according to an annual survey to be released today. The average employer cost for health benefits for an employee rose 7.5 percent in 2004, to $6,679, the lowest increase since 1999 in a survey of about 3,000 employers by Mercer Human Resource Consulting. Employers faced average increases of 10.1 percent in 2003." (The New York Times; one-time registration required)
Building a Medical Data Network Could Change the Entire Health Care System As We Know It
Excerpt: "At a conference last week at Rockefeller University, sponsored by IBM, a panel of health care experts discussed the innovations that promised to be the most intriguing and the most necessary over the next decade or so. They chose one grand pursuit in clinical care - the probable rise of 'predictive medicine.' The idea is that advances in genetics would make it possible to know from birth a person's genetic predisposition for, say, obesity, heart disease or cancer, and that ...." (The New York Times; one-time registration required)
Overview of 2004 IRS Forms 2441 and 1040a (Schedule 2)
Excerpt: "These forms are to be used in filing tax returns for 2004. But individuals who are evaluating their options for tax-favored dependent care expenses in 2005 should keep in mind that recent legislation (WFTRA) has changed the definition of qualifying individual and has eliminated the requirement that a taxpayer maintain a household; these changes will be effective for taxable years beginning after December 31, 2004." (Employee Benefits Institute of America Inc.)
Two N.C. Systems Sued Over Bills to Uninsured
Excerpt: "Carolinas HealthCare System ... and Wake Forest University Baptist Medical Center ... were named in class-action lawsuits brought by uninsured patients who claim the providers charged them too much for care compared with what publicly and privately insured patients would have paid. Officials for the systems were not available for comment. The breach-of-contract suits, filed in ... October and ... November, are the first of what will be a string of lawsuits against area hospitals ...." (Modernhealthcare.com)
Chartbook on Disability Insurance: a Missing Piece in the Financial Security Puzzle
Excerpt: "What are the chances of becoming disabled at some point during your working years, and what could happen to your personal finances if you become disabled? .... [The 44 page chartbook] is intended to provide general information about the likelihood of disability and what financial resources may be available to those who become disabled." (The Actuarial Foundation, Society of Actuaries, and America's Health Insurance Plans)
Summary of Findings: Disability Survey of Full-Time Employees -- Knowledge and Understanding
2 pages. Excerpt: "America's Health Insurance Plans (AHIP) released ... results from a nationwide survey of full–time employees conducted in August 2004 by Ayres, McHenry and Associates. The survey finds public understanding at odds with the most recent data about the likelihood of a disability, the nature of disability, and the resources available when employees experience disability.' The 4-page PDF of Survey results are at http://www.ahip.org/content/fileviewer.aspx?docid=4906&linkid=35019 (America’s Health Insurance Plans)
Assessing County Capacity to Meet the Needs of California's Uninsured: 2004 Survey Findings (PDF)
43 pages. Excerpt: "In 2002 and 2004, the University of California San Francisco conducted a survey of California counties on behalf of the California HealthCare Foundation. The study had two aims: to inventory county programs to increase access to health care for the uninsured; and assess constraints on, and opportunities for, insurance coverage programs. The survey report compares the 2002 and 2004 data and provides a detailed inventory of coverage expansions and their funding sources, ...." (California Healthcare Foundation)
September 21, 2004, Health and Welfare Update on HIPAA Privacy and Security; Plan Debit Cards (PDF)
2 pages. Excerpt: "[T]he Federal Reserve System issued a proposed amendment to Regulation E which adds to the definition of a 'consumer asset account.' Such an account would now include a payroll card account directly or indirectly established by an employer which receives on a recurring basis electronic fund transfers of the employee's wages, salary or other compensation. The proposed amendment would cover any electronic fund transfer that authorizes the debiting or crediting of an ...." (Haynes and Boone LLP)
Landmark Consensus Reached on Health Care Purchaser Guidelines for Performance Measures
Excerpt: "This week, HR Policy joined several employer groups, health care organizations, large corporations, consumer representatives, and labor unions in approving The Consumer-Purchaser Disclosure Project's Guidelines for Measurement of Health Care Provider Performance. The agreement is an important step toward avoiding confusing or wasteful measurement efforts and showing providers the purchasing community's commitment to recognizing excellence based on precise measurement and ...." (HR Policy Association)
Experts See Demand for Web-Based Health Insurance Bidding and Buying
Excerpt: "Customers in search of cheap airfare, antiques or a stock trade can scan the Web for good deals. But when it comes time for companies to buy group insurance policies, they've largely been beholden to brokers using fax, e-mail and the telephone to track down the best bargain. Some industry analysts say an ongoing insurance bid-rigging scandal -- combined with rising health care costs -- will build demand for online bidding on insurance policies." (AP via The New York Times; one-time registration required)
Opinion: the Promise and Peril of Heart Scans – Could Bankrupt the Health Care System?
Excerpt: "A seductive new diagnostic technology may be coming to a medical center near you. It is an advanced heart scanner that can produce sharply detailed pictures of every clogged artery that might be threatening to cause a heart attack. Some experts expect it to revolutionize the practice of cardiology, while others are warning that it could bankrupt the health care system." (The New York Times; one-time registration required)
Overview on IRS Announcement of 2005 Mileage Rate for Transportation to Obtain Medical Care
Excerpt: "Transportation expenses that are deductible medical expenses under Code Section 213 generally can be paid or reimbursed on a tax-free basis by a health FSA, HRA, HSA, or Archer MSA. To simplify administration, some employers exclude transportation expenses from the list of Code Section 213 expenses that their health FSAs or HRAs reimburse; if not excluded, medical transportation expenses may be reimbursed by health FSAs or HRAs at the 15 cents per mile rate for 2005." (Employee Benefits Institute of America Inc.)
Overview: Tax-Free Status of Employer-Provided Health Benefits for Dependents After WFTRA
Excerpt: "This Notice is welcome news for employers. With its conforming change, the definition of dependent under both Code Sections 105(b) and 106(a) will be the same--and will be similar to that under current law. But there will be a few rare situations where someone might be a dependent of an employee under current Code Section 152 but will be a dependent of a different person under the post-WFTRA definition." (Employee Benefits Institute of America Inc.)
Patients Cutting Health Care Usage: Higher Costs Force Workers to Make Difficult Decisions
Excerpt: "A nationwide push to make workers bear a bigger share of their rising medical bills is spurring Americans to do what their employers had hoped: spend less on drugs, cut down on doctor's visits and shop more smartly for less expensive care. But this pres.cription for the ailing health care system also has produced some unexpected side effects. Many workers are making concessions at the doctor's office, at work and at home that could compromise their health, happiness and financial ...." (The Mercury News; one-time registration required)
States' Tactics to Reduce Drug Spending by Medicaid Recipients, Public Employees, Prisoners, Others
Excerpt: "Alarmed at soaring pharmaceutical costs, states are trying a wide range of new tactics to curb spending on pres.cription drugs for Medicaid recipients, public employees, prisoners and other residents, bringing them into lobbying combat with the drug industry. A dozen states have joined purchasing pools in an attempt to use market power to reduce costs. Dozens more are requiring Medicaid recipients to use generic or lower-priced drugs from preferred lists." (The New York Times; one-time registration required)
New York State Regional Proposals to Tell Taxpayers of Medicaid Cost Falters
Excerpt: "Local elected officials across New York have been trying to explain to their constituents all year that in order to cover the soaring costs of Medicaid, services must often be pared down to avoid raising already-high property taxes. To that end, the Westchester County executive, Andrew J. Spano, floated an old idea of his. He wanted to put a line on each county property tax bill listing how many dollars each resident pays to cover the county's costs for Medicaid, ...." (The New York Times; one-time registration required)
TennCare, Once a Model Health Plan, Is Now Endangered
Excerpt: "A decade after Tennessee inaugurated a health care plan for the state's most vulnerable residents that was hailed as a model for the nation, the program is once more being held up as a model - of failure in an era of soaring medical costs and voters' aversion to higher taxes. Today the plan, TennCare, which sought to improve health care for Medicaid recipients while covering those who fall through the federal program's cracks, is on the ropes." (The New York Times; one-time registration required)
Consortium of Health Insurers and Other Businesses Demands Flexible Part D Drug Rules
Excerpt: "A consortium of health insurers and other businesses is calling for federal regulators to look to the private sector when crafting rules for the new Medicare pres.cription drug benefit. The new rules should give Medicare drug plan sponsors the ability to offer incentives for use of generic drugs and other cost-saving strategies, the consortium writes in a letter to Mark McClellan, administrator of the Centers for Medicare and Medicaid Services." (The National Underwriter Company)
Links to Items on Executive Comp, Benefits in General
New IRS W-2 Code for Reporting Annual Deferrals of Income Under a NQDC Plan (PDF)
Excerpt: "In Announcement 2004-96, the IRS unveiled a new code (Code Y) for use on the 2005 Form W–2 to identify annual deferrals of income under a nonqualified deferred compensation plan. The American Jobs Creation Act of 2004 (PL 108-357) added section 409A to the Internal Revenue Code. Section 409A generally takes effect after December 31, 2004, and requires employers to report annual deferrals under a nonqualified deferred compensation plan on each employee's Form W–2." (Internal Revenue Service via Mercer Human Resource Consulting)
A Due Diligence Review Checklist for Merging Companies
Excerpt: "This review is critical to ensure sound financial decisions and a smooth employee integration." (The M&A Transition Guide via Workforce Management)
Year-End Legislative and Regulatory Review for Plan Sponsors and Administrators of Benefit Plans (PDF)
Excerpt: "We have compiled a list of changes made by recent laws and regulatory pronouncements, as well as unfinished business in Congress, that affect employee benefit plans. Some of these items may require employer action, including plan amendments. In addition, other developments (e.g., inflation adjustment of key plan maximums, court decisions) may require some administrative changes to retirement and health and welfare plans." (Mellon)
A Chart to Use for Benefits Comparisons for Merging Companies
Excerpt: "Benefits is often a major clashing point for merging companies. Use this chart to help you summarize the major differences between the two organizations." ( The M&A Transition Guide via Workforce Management)
Description of the Tax Technical Corrections Act of 2004 (PDF)
7 pages. Excerpt: "This document, prepared by the staff of the Joint Committee on Taxation, provides a description of the 'Tax Technical Corrections Act of 2004.' The bill was introduced on November 19, 2004, as H.R. 5395 in the House of Representatives and as S. 3019 in the Senate." (U.S. Congress, Joint Committee on Taxation)
Presentation: the Sarbanes-Oxley Act of 2002 and the Impact on Public Employee Retirement Systems (PDF)
10 pages. Presentation at the State Association of County Retirement Systems, by Thomas A. Hickey III, on November 8-12, 2004, in bullet format (Kirkpatrick & Lockhart LLP)
Opinion: Ownership Society Would Still Need Rules in Health Care and Retirement Industries
Excerpt: "The Bush team's 'ownership society' is mainly about Social Security: It wants to convert part of this government program into private retirement accounts. But the administration is skeptical of corporate collectivism as well as the governmental variety. It's not sure that your employer should provide your health care or your retirement plan. And it may well be right. Corporations became the anchors of traditional benefit programs only by accident." (The Washington Post; one-time registration required)
Revised Dollar Limits for 2005 for Employee Benefit Plans with Commentary and Explanations (PDF)
2 pages. Excerpt: "On October 20, 2004, the Internal Revenue Service ... announced the 2005 cost of living adjustments applicable to dollar limits on benefits and contributions, annual compensation limits, and other dollar limits that will apply to tax-qualified retirement plans and Simplified Employee Pension plans ... for 2005 plan years. In addition, several pension plan limits that were set by the Economic Growth and Tax Relief Act of 2001 ... will increase in 2005 by statute, rather ...." (Pillsbury Winthrop LLP)
Revenue Procedure 2004-71 on 2005 COLAs Released by Treasury (PDF)
19 pages. Excerpt: "The U.S. Treasury Department and the Internal Revenue Service have released the amounts indexed for cost-of-living adjustments for 2005." (U.S. Department of the Treasury)
Newly Posted Events
Do your employees need an asset adjustment?
in New York on December 2, 2004
presented by Eisner Retirement Solutions LLC
Federal Securities Law Issues for Qualified Plan Lawyers
Nationwide on December 2, 2004
presented by ABA Joint Committee on Employee Benefits
Nonqualified Deferred Compensation: Treasury's Initial Guidance on Section 409A
Nationwide on December 16, 2004
presented by ABA Joint Committee on Employee Benefits
What California Employers Need to Know: Leave of Absence Laws
in California on December 1, 2004
presented by No. Calif. Chapter of Certified Employee Benefits Specialists (ISCEBS)
Newly Posted Press Releases
HSA Bank to Offer Health Savings Accounts to Unity Health Insurance Members
(HSA Bank)
Newly Posted or Renewed Job Openings
Defined Benefit Calculation Specialists
for Constantin Control Associates
in NJ
Pension Plan Administrator
for South Florida TPA
in FL
Senior Plan Administrator
for American National Insurance Company
in TX
Marketing/Sales/Enrollments
for South Florida RIA, TPA and Record Keeping Firm
in FL
Chief of Pension Education
for ASPA
in DC
TPA Specialist
for Transamerica
in CA
DCS Compliance Manager
for Boston Financial Data Services
in MA
Actuary
for Retirement System Group Inc. (www.rsgroup.com)
in NY
Benefit Plan Manager
for HEREIU Welfare-Pension Funds
in IL
Regional Retirement Wholesaler
for Legg Mason, Inc.
in MD
Retirement Services District Manager (SALES)
for ADP Retirement Services
in OH
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