| BenefitsLink Welfare Plans Newsletter |   |
December 27, 2004
Today's sponsor: NCEO
(Click on company name or banner to learn more.)
Check out the new publications by the NCEO in the BenefitsLink Bookstore! The National Center for Employee Ownership (NCEO), a nonprofit membership and research organization that provides information on broad-based employee stock plans, now has over a dozen of its most popular publications available for purchase in the BenefitsLink bookstore. Topics range from employee stock ownership plans (ESOPs) to stock options to employee stock purchase plans (ESPPs).
(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
Predicting the Future of Health Savings Accounts (PDF)
5 pages. Excerpt: "As a followup to the Internal Revenue Service's guidance on health savings accounts (HSAs), the International Society decided to explore the future actions of employers regarding this new benefit. In September, e-mail surveys were sent to 888 Society members identified as plan sponsors and 196 surveys were completed (22% of those invited to participate)." (International Society of Certified Employee Benefit Specia.lists)
HSA Marketplace--Week Of Dec. 20, 2004
Excerpt: "Since the January 1 effective date for health savings accounts (HSAs), health insurers have flooded the HSA marketplace with different products and partnerships. Click here for a spotlight of the latest news." (Spencer Benefits Reports)
Consumers Will Not Use Health Plan Information They Cannot Understand
Excerpt: "Consumer-driven health requires consumers to be actively involved not only in their lifestyles and health care utilization but also in their choice of health plan benefits. But how can consumers choose the 'best' health plans if they can't understand information about those plans?" (Employee Benefit News)
False Alarms in Screening for Cancer Prove Costly
Excerpt: "A new study found that people spent an extra $1,000 or so on health care in the year after a test raised suspicions that later proved unfounded. 'The key here is to make sure that people are considering all the possible benefits and harms' when they go for a screening test, especially one not recommended by health officials, said Jennifer Elston Lafata, director of the Center for Health Services Research at the Henry Ford Health System in Detroit." (AP via The New York Times; one-time registration required)
Delawareans to Carry Medical History in Their Pocket
Excerpt: "[D]elaware will get $700,000 in federal money to start an electronic patient-information system for health care workers to use. The intent of the network is to connect doctors with labs, hospitals, pharmacies and nursing homes, and eliminate problems that come from trying to obtain information from facilities that aren't open around-the-clock. Patients would have a card that authorizes health care workers to obtain medical information." (The News Journal (Wilmington, DE) via The Foundation for Taxpayer & Consumer Rights)
Federal Government Program Coaxes Hospitals to See Treatments Being Overlooked for Patients
Excerpt: "The federal government is now telling patients whether their local hospitals are doing what they should. For now, the effort involves three common and deadly afflictions of the elderly - heart attacks, heart failure and pneumonia - and asks about lifesaving treatments that everyone agrees should be given but that hospitals and doctors often forget to give." (The New York Times; one-time registration required)
Overview: Department of Health and Human Services Task Force Report on Pres.cription Drug Importation (PDF)
4 pages. Excerpt: "Reiterating that access to safe and affordable pres.cription drugs is an important policy goal, the Task Force concluded that drug importation would be costly to implement, provide little overall savings and, if not restricted to commercial importation from Can.ada, could be dangerous to consumers. The Task Force advised that all aspects of achieving safety, quality and cost-effectiveness must be comprehensively examined before imported drugs can be considered safe." (Powell Goldstein LLP)
Medicare Pres.cription Drug Law Requires New Disclosures for Retiree Health Plans
Excerpt: "Medicare will soon provide a limited, voluntary benefit for outpatient pres.cription drugs, as authorized by the Medicare Pres.cription Drug, Improvement and Modernization Act of 2003, enacted on Dec. 8, 2003. Employer-sponsored retiree health plans that provide an 'actuarially equivalent' pres.cription drug benefit to Medicare beneficiaries will be eligible to receive a financial subsidy to help offset their costs." (Employee Benefit News)
Transparency in Pharmacy Benefit Managers Might Be Solution or Might Be New Set of Problems
Excerpt: "High drug prices have made pharmacy benefit managers one of the more visible components of health care. Charges of misdoing, including average wholesale price manipulation, rebate disguising and arbitrary formulary restrictions, have prompted calls for PBM industry reform, including placing limits on therapeutic interchange, drug management techniques and mail-service incentives and requiring greater disclosure and fiduciary responsibility." (Employee Benefit News)
Toyota Using Company Pharmacies for Employees' Medical Needs
Excerpt: "Toyota Motor Manufacturing has come up with an unusual approach to saving on health care costs: building its own employee pharmacies. The company pharmacies - to be expanded from one opened more than two years ago at its Georgetown, Ky., plant to its North American headquarters in Erlanger, Ohio, and other U.S. manufacturing sites - are part of an overhauled pharmacy benefit plan that takes effect Jan. 1." (Cincinnati Enquirer via The Arizona Republic)
Medicare to Add Help for Smokers
Excerpt: "The Bush administration said Thursday that Medicare would soon pay for counseling to help beneficiaries stop smoking, a major expansion of the services covered by the program." (The New York Times; one-time registration required)
Abstract: Tax Policy for Health Insurance
Excerpt: "Despite a $140 billion existing tax break for employer-provided health insurance, tax policy remains the tool of choice for many policy-makers in addressing the problem of the uninsured. In this paper, I use a microsimulation model to estimate the impact of various tax interventions to cover the uninsured, relative to an expansion of public insurance designed to accomplish the same goals." (National Bureau of Economic Research)
Governors Unite in Fight Against Medicaid Cuts
Excerpt: "Fearful that President Bush plans to shift more Medicaid costs to the states, the nation's governors are mounting a bipartisan lobbying effort to stave off new federal limits on the program." (The New York Times; one-time registration required)
Opinion: Truth in Medicine Would Dramatically Improve Cost, Quality
Excerpt: "If the president and Congress want to accomplish something truly important over the next four years, how about this: a fundamental change in the playing field for health care. I have a few suggestions. They are based on 40 years of work on health care policy and operations, including my current role as leader of a community effort in Pittsburgh to set the world benchmark for safety, quality and efficiency in health care delivery." (Paul H. O'Neill via The Washington Post; one-time registration required)
Opinion: How Technocrats are Taking Over the Practice of Medicine
Excerpt: "Extensively documented, the report ... shines a bright light of openness on the terms 'evidence-based medicine' and 'best practices,' including the purposes of proponents and the concerns of critics. 'The public needs to understand that evidence-based medicine is an attack on the patient-doctor relationship. EBM is not individualized care. It is group-think medicine,' says Twila Brase, president of CCHC and author of the report." (Citizens' Council on Health Care; registration required)
Opinion: Managed Care-Induced 'Entitlement Mentality' Might Be Money Down the Drain
Excerpt: "As of last October, 21 states now mandate insurance plan contraceptive coverage but, while hailed by women's rights groups, these mandates highlight a troubling reality. Fueled by an entitlement mentality among health-care consumers, state-mandated health insurance benefits have mushroomed to the point that they have significantly increased the costs of providing health insurance." (Plan Sponsor)
Opinion: Medicine and Market Forces Don't Mix
Excerpt: "Once again we are being told that a new health financing policy will unleash the power of the market in the health-care system. Because patients have no incentive to conserve health-care dollars, they overutilize health services leading to excess health costs, or so this market-oriented theory goes. Accordingly, these market proponents propose converting employee health benefits from indemnity or managed-care plans to individual health savings accounts (HSA) coupled with high ...." (The Salt Lake Tribune)
Opinion: Medicare is the Bigger Problem Than Social Security Reform
Excerpt: "The program now consumes one-eighth of the federal budget; in 10 years that share is expected to grow to one-fifth. It will consume more money this year than enters the Treasury through payroll taxes. By 2019, if current spending patterns hold, the trust fund that finances the biggest part of the program will be out of cash." (The Washington Post; one-time registration required)
Links to Items on Executive Comp, Benefits in General
Overview: New Deferred Comp Legislation Brings Less Flexibility and More Work
Excerpt: "'A very, very large percentage of these plans will have to be revised going forward,' says Susan Linder, Dallas-based general counsel in the executive benefits practice at Clark Consulting. 'There are few plans in existence now that would be compliant under this new rule.'" (Plan Sponsor)
Overview: IRS Eases Transition Into New Deferred Compensation Rules (PDF)
3 pages. Excerpt: "The IRS has issued its eagerly awaited guidance on the new nonqualified deferred compensation rules ... created under the American Jobs Creation Act .... The good news for employers is that this first transitional guidance ... allays any concerns over having to amend plans, change deferral elections or implement resolutions by the end of this year. The IRS has made it clear that although plans should be operated in good faith compliance with the new rules throughout ...." (Mellon)
Overview: IRS Guidance on Nonqualified Deferred Compensation Legislation (PDF)
3 pages. Excerpt: "The guidance did not cover several important areas, including: Distribution issues (including application of the 5 year delay to changes in form of distribution, availability of alternative distribution events and timing of key employee determination); Off shore plan and trust issues; Stock appreciation rights issued by non-public companies; and, Severance plans that do not meet the limited 2005 exemption." (Gardner Carton & Douglas LLP)
Overview: IRS Issues Guidance on Nonqualified Deferred Compensation Plans in Notice 2005-1 (PDF)
2 pages. Excerpt: "In Notice 2005-1, the IRS provides initial guidance and temporary relief from a number of new requirements imposed on many existing nonqualified deferred compensation (NQDC) arrangements by the American Jobs Creation Act .... Although transitional relief is provided through 2005, plan sponsors must still operate their NQDC plans in 'good-faith compliance' with provisions of the new Internal Revenue Code section 409A and the guidance contained in the IRS notice during 2005." (Milliman)
Overview: EBSA Releases Its Semiannual Regulatory Agenda
Excerpt: "The Employee Benefits Security Administration (EBSA) has released its semiannual regulatory agenda, which outlines regulations that have been selected for review or development during the next year, as well as any regulations that have been finalized during the last six months." (CCH Pension & Benefits News)
List of Expiring Federal Tax Provisions: 2004-2014 (PDF)
Excerpt: "This document ... provides a listing of tax provisions (other than those providing time-limited transition relief after the repeal of an underlying rule) that are currently scheduled to expire in 2004-2014 (with references to the applicable section of the Internal Revenue Code of 1986 or other applicable law). For purposes of compiling this list, the staff of the Joint Committee on Taxation considers a provision to be expiring if, at some statutorily specified date in the future ...." (House Joint Committee on Taxation)
Overview: Pennsylvania's Governor Rendell Signs Common Law Marriage Bill (PDF)
2 pages. Excerpt: "On November 23, 2004, Governor Rendell signed into law HB 2719, abolishing common law marriage. The new law states that '[n]o common law marriage, contracted after January 1, 2005, shall be valid.' The law further provides that it does not invalidate an otherwise lawful common law marriage contracted on or before that date. As a result, most, but not all of the issues presented by a series of court decisions relating to common law marriage have been resolved." (Ballard Spahr Andrews & Ingersoll, LLP)
New Jersey Domestic Partners Can Take Advantage of New Legal Status
Excerpt: "Domestic partners also are entitled to certain health and pension benefits. They qualify for limited state income-tax benefits regarding deductions and exemptions. They are exempt from the state's transfer inheritance tax on the same basis as married spouses. And partners of people working for the state have access to the same insurance and pension coverage as conventional spouses." (Daily Record)
Overview: Expansion and Acceleration of Reporting Requirements Under Current Reports on Form 8-K (PDF)
18 pages. Excerpt: "This memorandum provides a guide to the Form 8-K requirements and integrates the new amendments with the current disclosure scheme. The discussion opens with a brief overview of the new Form 8-K items and is followed by comprehensive exhibits designed to acquaint you with the expanded disclosure items introduced by the SEC final rule (the 'Final Rule') adopting the new amendments." (Powell Goldstein LLP)
Newly Posted or Renewed Job Openings
Benefit Plan Services Manager
for McDermott & Miller, P.C.
in NE
Benefits Administrator
for Jefferson County Public Schools
in CO
Senior Benefits Analyst
for Jefferson County Public Schools
in CO
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