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December 15, 2004
Today's sponsor: World Congress

(Click on company name or banner to learn more.) 

Innovation in the Cost-Appropriateness of Behavioral Health & Wellness
The Leadership Summit on Innovation in the Cost-Appropriateness
of Behavioral Health & Wellness explores the costs of behavioral
health to the Nation and the workplace. Stakeholders will discuss
economic incentives and present successful cost-effective
initiatives to provide quality, cost-appropriate behavioral health
and wellness services. Featuring employer and government driven
cost-reduction demands with health plan and provider collaboration
the Summit showcases innovative behavioral health, pharma and
wellness interventions and how to combine the best of both.

(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
More Children Received Health Insurance Via State Programs, Fewer Covered by Parents' Employers
Excerpt: "The number of children in [California] receiving health coverage under Healthy Families in 2003 increased by 500,000 from 2001, and the number of children covered under employer-sponsored health plans decreased by 300,000 over the same period, according to a University of California-Los Angeles Center for Health Policy Research study .... A 2 page fact sheet on the report is at http://www.healthpolicy.ucla.edu/pubs/files/Child_Insurance_FS_12132004.pdf." (California Healthcare Foundation)

'Mayhem in the Medical Marketplace' by David U. Himmelstein and Steffie Woolhandler
Excerpt: "Market theorists argue that the profit motive optimizes care and minimizes costs. But a growing body of evidence indicates that this dogma has no clothes." (Monthly Review via Physicians for a National Health Program)

Changing Medication Use in Managed Care: A Critical Review of the Available Evidence (PDF)
17 pages. Excerpt: "Objective: To review the effectiveness of strategies to improve the quality and efficiency of medication use in managed care organizations (MCOs)." (American Journal of Managed Care)

A Benefit-Based Copay for Pres.cription Drugs: Patient Contribution Based on Total Benefits (PDF)
7 pages. Excerpt: "Several managerial mechanisms have been used by MCOs to directly or indirectly affect pres.cription drug utilization and related expenditures. These mechanisms affect some combination of patient and physician incentives, as well as prices. Although approaches toward utilization management vary widely, one trait they have in common is that they do not recognize the heterogeneity in potential benefit among patients." (American Journal of Managed Care)

The Relationships Among Age, Chronic Conditions, and Healthcare Costs
Excerpt: "To understand patterns of resource use for treating chronic illness, we grouped patients by their most expensive condition. With veterans assigned to mutually exclusive groups, we then estimated costs by type of medical services actually used. We analyzed the differences in resource use between the younger patients and the oldest patients, particularly in long-term care." (American Journal of Managed Care)

Editorial: Economic Analysis in Healthcare Decisions (PDF)
4 pages. Excerpt: "The potential use of economic analysis in healthcare decision making has strong natural appeal as it becomes clear how an individual's healthcare decisions can affect, through insurance coverage, the ability of others to obtain the care they need." (American Journal of Managed Care)

Why Don't Americans Use Cost-Effectiveness Analysis in Health Policy Making? (PDF)
5 pages. Excerpt: "Cost-effectiveness analysis ... offers decision makers a structured, rational approach with which to improve the return on resources expended. But decades after its widespread promotion to the medical community, policy makers in the United States remain reluctant to use the approach formally. Indeed, the resistance to economic evidence in the United States in an era of evidence-based medicine in healthcare is perhaps the most notable development of all." (American Journal of Managed Care)

Full Text of Summary Judgment in Vallone v. CNA Fin. Corp., 7th Circuit Court of Appeals (PDF)
34 pages. Excerpt: "This story does not have a happy ending. What this case comes down to, in the end, is the distinction between 'lifetime' and 'vested' welfare benefits -- a legal distinction that understandably escaped many of Continental's employees who elected to take early retirement under the VSRP." (United States Court of Appeals for the Seventh Circuit)

Current Trends and Future Outlook for Retiree Health Benefits: Findings from a Kaiser/Hewitt Survey
Excerpt: "A new survey of large employers finds businesses and retirees experienced double-digit increase in retiree health costs, with further increases expected in 2005. The survey also includes an early look at employers' responses to the new Medicare drug law.' Full text of the report is at http://www.kff.org/medicare/7194/index.cfm. The chartpack is at http://www.kff.org/medicare/7224.cfm. (Kaiser Family Foundation/Hewitt Associates)

Study Says Retirees Are Paying More for Work-Based Health Benefit Premiums and Co-Payments
Excerpt: "Retirees who receive health benefits from their former employers saw premiums shoot up an average of 25 percent this year, a new study says. The study, issued Tuesday by the Kaiser Family Foundation and Hewitt Associates, showed a continued erosion of retiree health benefits among large employers. Companies are requiring retirees to pay a larger share of premiums and other health costs." (The New York Times; one-time registration required)

The Success of FedEx Ground Has Intrigued Analysts and Workplace Trend Watchers
Excerpt: "They see the use of contract drivers by FedEx Ground, a division of FedEx Corp., as a way for the company to cut costs and use that competitive edge to win market share from rival UPS. .... The independent-contractor method also raises questions about the role of corporations in protecting workers by contributing to health insurance, pensions, unemployment insurance and all the other elements of the safety net on which many American workers rely." (Workforce Management)

Towers Perrin Legislative Tracking Chart -- Health and Welfare -- Updated December 13, 2004 (PDF)
24 pages. Excerpt: "The 108th Congress adjourned December 9, 2004. Any bill not already enacted into law will need to be reintroduced for it to be considered by the 109th Congress. Congress will convene on January 4, 2005." (Towers Perrin)

Links to Items on Executive Comp, Benefits in General

What's On Your Calendar For 2005?
Excerpt: "A number of statutory and regulatory changes from 2004 take effect for employee benefit plans in 2005, and employers and plan administrators should be prepared for the modifications necessary to their own plans. Following is a list of the most pressing benefit items to be attended to for 2005, with related links to more detailed information." (Spencer Benefits Reports)

Aon Chart of 2005 Limits for Benefit Plans (Updated) (PDF)
Excerpt: "Our October ... Alert was published soon after IRS and the other federal agencies released their official inflation-adjusted benefit limits in mid-October. That Alert also estimated the inflation-adjusted amounts for income tax brackets, personal exemptions, standard deductions, and similarly adjusted items. In November, IRS released its second wave of official inflation-adjusted items and PBGC updated its maximum guaranteed benefit in December. We have updated our Alert accordingly." (Aon)

Firms Prepare for Complexities of New FASB Financial Reporting Standards for Stock Options
Excerpt: "The FASB gears up for a final ruling that would possibly force companies to recognize the fair value of an employee's stock options. It would require those companies to adopt the fair-based accounting method that requires that compensation costs for awards of share options be measured at their fair value on the date of grant. The goal of FASB's statement No. 123, Accounting for Stock-Based Compensation, is 'to recognize in an entity's financial statements the cost of employee ....'" (The Thompson Corporation and Financial-Planning.com)

Overview: American Jobs Creation Act Has Broad Range over Compensation and Benefits Provisions
Excerpt: "In addition to the highly publicized new rules for nonqualified deferred compensation plans, the American Jobs Creation Act includes several other compensation and benefit provisions. For example, the act excludes incentive stock options (ISOs) and employee stock purchase plans (ESPPs) from the definition of wages for employment tax purposes." (Watson Wyatt Worldwide)

The Internet to Facilitate Enrollment in Benefit Programs: Eligibility Screeners/Online Applications (PDF)
33 pages. Excerpt: "All states have websites that provide information about public benefit programs, including printable application forms for at least some of the major programs. A handful of state websites offer additional features as well, including 'screeners' that help families determine the benefit programs for which they may qualify and applications that can be filled out and submitted online. This paper explores the issues that states need to consider in designing these ...." (Center on Budget and Policy Priorities)

Records Retention: The Legal and Ethical Considerations (PDF)
37 pages. Excerpt: "This paper will review records retention in three parts: (1) an overview of the theory of records retention policy; (2) the impact of the Sarbanes-Oxley Act on records retention obligations and (3) examination of lawsuits where records retention has gone badly. In addition, attached is an example of a retention policy statement." (Haynes and Boone, LLP)

Staying Ahead of the Curve on Outsourcing: Legislative and Human Resource Issues Abound (PDF)
3 pages. Excerpt: "Because offshoring usually accompanies a decrease in the employer's U.S. work force, its effect will generally be to decrease employee benefit costs (U.S. law does not require benefit plan coverage of foreign employees). However, there may be less obvious effects." (GC NEW YORK, New York Law Review via Dechert LLP)

Text of ASPPA Comments on DOL's Proposed USERRA Regulation
Excerpt: "The proposed thirty-day deadline for employer contributions to a retirement plan that are not contingent on employee contributions or elective deferrals is too short.... The proposed deadline for employer contributions to a retirement plan that are derived from employee contributions or elective deferrals needs clarification. [More]" (American Society of Pension Professionals and Actuaries)

Towers Perrin U.S. Legislative Tracking Chart -- Human Resources -- December 13, 2004 (PDF)
Excerpt: "These charts summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors." (Towers Perrin)

DOL Official Reveals Flaws in Employee Benefit Plan Audits
Excerpt: "Choose your employee benefit plan auditor carefully. That's the upshot of a presentation given by a Department of Labor official at a meeting of the American Institute of Certified Public Accountants in Washington, D.C. [on December 14, 2004]. .... For the DOL's tips on selecting a plan auditor, see http://www.dol.gov/ebsa/publications/selectinganauditor.html." (BenefitNews Connect)

Newly Posted Events

COBRA Compliance for Group Health Plans
in Washington on April 1, 2004
presented by Employee Benefits Institute of America Inc. (EBIA)

COBRA Compliance for Group Health Plans
in Washington on April 1, 2005
presented by Employee Benefits Institute of America Inc. (EBIA)

ERISA Compliance for Health & Welfare Plans
in Washington on March 31, 2005
presented by Employee Benefits Institute of America Inc. (EBIA)

HIPAA Portability, Privacy & Security
in Washington on April 1, 2005
presented by Employee Benefits Institute of America Inc. (EBIA)

Retiree Health Benefit Survey Release
Nationwide on December 15, 2004
presented by Kaiser Family Foundation

Newly Posted Press Releases

PBGC Urges Bankruptcy Priority For UAL Pension Contributions
(Pension Benefit Guaranty Corporation (PBGC))

New Software Helps Financial Professionals Illustrate Contribution Allocations For Profit-Sharing, SEP, and SARSEP Plans
(GSL Galactic Consulting)

Still River Releases 2005 edition of the 403(b) Contribution Planner (R)
(Still River Retirement Planning Software, Inc.)

Center Announces New Advisory Board Members: Steven Kandarian and Michael Orszag
(Center for Retirement Research at Boston College)

New Workplace Options White Paper Helps Organizations Measure and Manage the Impact of an Aging Workforce
(Workplace Options)

American Express Retirement Services Expands Employee Education Seminars And One-On-One Programs - Workplace Education Curriculum Designed to Address Financial Education Needs of Employees
(American Express Retirement Services)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

401(k)/Defined Contribution or Defined Benefit Account Manager
for National Retirement Services, Inc. (NRS)
in CA, NC

Conversion Specialist
for The Newport Group
in NC

EB Consultant II - 93345
for Wachovia
in VA

OmniPlus Analysts and Project Managers
for Constantin Control Associates
in NJ

Trust Relationship Officer III (Retirement Plan Services)
for First Citizens Bank
in NC

Pension/401K Wholesaler
for Nationwide, Best of America
in OR, WA

Senior Product Analyst-Retirement Health Services
for ICMA Retirement Corporation
in DC



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