March 8, 2005 Today's sponsor: William J. Stecker, CPA (Click on company name or banner to learn more.) 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) Many Group Disability Policies Allow Payments to End After Two Years Excerpt: "'Group policies are almost not worth the paper they're written on,' said ... lawyer Ben W. Glass, because they usually give the carrier 'discretion' in handling claims and because dissatisfied consumers can overturn a denial only by convincing a federal court the insurer's decision was 'arbitrary and capricious.' Discretion clauses 'offer a complete shield' to insurers, said Mila Kofman, an assistant research professor at Georgetown University's Health Policy Institute.'" (The Washington Post; one-time registration required) Lose Weight, Keep Cash -- Colorado Health Measure Would Give 10 Percent Discount to Fit Customers Excerpt: "Good drivers get a break on their auto insurance premiums, but people who keep themselves fit usually get no break on their medical insurance costs. Rep. John Witwer, R-Evergreen, wants to change that. He has introduced a bill that would allow small-company insurers to give a 10 percent discount to customers who keep the weight off. Senate Bill 72 ... would grant the 10 percent discounts if customers have healthy body weights for their height and age, ...." (Rocky Mountain News via BCBSHealthIssues.com) Employers in Connecticut Could Be Required to Fund or Provide Health Insurance Coverage Excerpt: "Connecticut lawmakers proposed a bill on Monday that would require employers to provide health care benefits to all full-time employees, or to pay into a government fund to do it for them. If passed, Connecticut would become the second state in the country to adopt such a measure." (Hartford Courant) Universal Health Care Measure Introduced in California Excerpt: "A California health insurance premium tax that now only applies to commercial insurers would be extended to self-funded programs offered by employers and nonprofit insurers under recently introduced universal health care coverage legislation. The measure, A.B. 1670, would require all Californians to have coverage under a plan with a deductible no greater than $5,000." (Business Insurance) ERISA Litigation Alert on Recent Cases Involving COBRA Notice Issues (PDF) 4 pages. Excerpt: "In light of the U.S. Department of Labor's new COBRA continuation coverage notice requirements, we dedicate the third installment of our ERISA Litigation Alert to recent cases involving COBRA notice issues. Additionally, it is designed to provide you with COBRA notification compliance tips." (Winston & Strawn LLP) Overview: HIPAA Portability Regulations Finalized (PDF) Pages 1-3 of 7 pages. Excerpt: "Applicable to plan years beginning on or after July 1, 2005 (i.e., January 1, 2006 for calendar year plans), the final regulations, for the most part, adopt the interim rules previously published in April 1997. [This overview] highlights some of the changes and clarifications made by the new regulations." (Trucker Huss) Industry Group Asks HHS to Modify Burdensome Patient Privacy Provision Excerpt: "The Confidentiality Coalition, in a Feb. 10 letter to HHS Secretary Michael Leavitt, asked that the accounting of disclosures requirement in HIPAA be modified. The coalition is a group of hospitals, health plans and pharmaceutical companies that was founded to achieve effective patient confidentiality protections." (REPORT ON PATIENT PRIVACY via AISHealth.com) Overview: The HIPAA Security Rule for Group Health Plans (PDF) 11 pages. Excerpt: "Two years ago, sweeping new medical privacy rules took effect ... protecting the confidentiality of certain health information stored or transmitted by group health plans. Now another phase of HIPAA compliance, the Electronic Security Rule ..., is poised to go into effect. Large health plans, health care providers and health care clearinghouses must take certain steps to ensure the security of electronic protected health information by April 20, 2005 or face penalties." (Neal, Gerber & Eisenberg LLP) HIPAA Reference and Best Practice Guide -- Portability Notices (PDF) 13 pages. Excerpt: "The information contained in this reference guide is intended to provide a summary of the final HIPAA portability notice requirements only." (ComplianceAid, LLC) Health Exchanges Hope to Offer All Patient Data Records in One Place Excerpt: "One of the main stumbling blocks in the American health care system, many experts say, is the inefficient use of computer technology to manage medical records. Now, in Santa Barbara County, a network of hospitals, laboratories, pharmacies and doctors is pioneering new technology that will allow medical professionals with different computer systems to share clinical information. The initiative may well be a first step toward the creation of a national patient-care data bank." (San Francisco Chronicle) More MCOs May Bring Behavioral Health Services In-House, Following Aetna's Lead Excerpt: "More health insurers may choose to build their own in-house behavioral health operations rather than purchasing such services from outside vendors, an analyst says. Such a move could have major implications for Magellan Health Services, Inc., the nation's largest behavioral health vendor, which provides services to many insurers." (MANAGED CARE WEEK via AISHealth.com) Health Insurance Costs Begin to Dawn on End Users Excerpt: "It's taken a sharp rise in out-of-pocket costs, combined with vigorous employee education, but a vital lesson seems to be making headway: Individual consumers with health benefits are the primary driver when it comes to rising insurance rates." (Memphis Business Journal via bizjournals.com; one-time registration required) Pharmaco-Actuarial Approach to PBM Formulary Decision Making (PDF) 7 pages. (Milliman) Text: Updated CBO Estimates of Spending for the Medicare Pres.cription Drug Program (PDF) 5 pages. Excerpt: "CBO currently estimates that net Medicare spending for the Part D program will total $593 billion over the 2004-2013 period. That is an increase of $41 billion over the original $552 billion estimate of net Medicare spending for Part D ...." (U.S. Congressional Budget Office) Health Insurance Is Getting More Hands-On: New Savings Accounts Transforming Industry Excerpt: "Although the overall numbers are still small -- about 2 percent of the market -- anecdotal evidence suggests a growing number of Americans are willing to take their medical costs into their own hands with a combination of health savings accounts and high-deductible medical insurance policies." (The Times-Picayune) Report Tries to Relieve Health Plan HSA-Related `Headaches' Excerpt: "Health plans that have not yet launched an HSA-compatible high-deductible health plan ... are 'behind the eight ball,' according to a new report from ... Forrester Research. And as health plans enter the increasingly competitive HSA market, they're likely to encounter problems as they try to assemble the pieces required to launch a successful product, Forrester says. The 15-page report, Health Plans' HSAs Headache, explains the components and technology behind HSA-based plans." (AISHealth.com via INSIDE CONSUMER-DIRECTED CARE) The Commonwealth Fund Health Care Opinion Leaders Survey, Part II Excerpt: "This survey focused on health insurance issues, including goals for the next 10 years, the future of employer-sponsored coverage, group purchasing options for small employers, individual mandates, health savings accounts, and state public program expansions. [The target page has links to the Press Release, Topline Results, Survey Tables, and the Survey Summary.]" (The Commonwealth Fund) Health Sites Found Lacking in Services Excerpt: "On a scale of 1 to 10, health care and pharmaceutical Web sites score a measly 5.8, according to an evaluation of more than 50 sites by research and consultancy company Consumer Research Group. But considering that a broader survey of almost 600 corporate sites averaged a 5.9 rating, maybe that's not too bad." (eWEEK) Delphi Cuts Health Benefits for Retirees Excerpt: "Delphi Corp., the world's largest automotive supplier, said it will stop paying medical insurance for 4,000 retired salaried workers in 2007. Delphi will drop coverage for retirees once they're eligible for Medicare benefits, which the parts maker will supplement with private health care accounts, the company told employees Monday in an e-mail." (AP via The Washington Post; one-time registration required) Links to Items on Executive Comp, Benefits in General Senator Bingaman Says Executive Compensation Limits Should be Toughened Excerpt: "A Democratic US senator used a hearing on the Administration's pension reform proposal last week to urge that the proposal's executive compensation limit go even farther. Senator Jeff Bingaman (D-New Mexico) suggested that all executive compensation should be capped - not just deferred compensation – when plans facing termination are prohibited from increasing benefits for rank-and-file workers, according to a news report on hrpolicy.org." (PLANSPONSOR.com; one-time registration required) Overview: Voluntary Deferral Elections for 2005 Must Be Made by March 15 (PDF) 5 pages. Excerpt: "[U]nder special transition relief provided by the IRS, an employee may make an election as late as March 15, 2005, to defer compensation for services performed on or before December 31, 2005. To be entitled to take advantage of this special rule, several conditions must be satisfied." (Utz & Miller, LLC) Overview: New Rules Governing Nonqualified Deferred Compensation Plans Excerpt: "On December 20, 2004, the Internal Revenue Service (IRS) issued the first round of guidance pertaining to the new Internal Revenue Code (IRC) §409A, which was added to the IRC last October as part of the American Jobs Creation Act (Jobs Act). As we reported last fall following enactment of the Jobs Act, IRC §409A imposes significant new restrictions on the design and operation of nonqualified deferred compensation plans and arrangements." (Hodgson Russ LLP) Overview: March 15, 2005, May Be Next Deadline for Deferred Compensation Plans (PDF) 2 pages. Excerpt: "By March 15, 2005, any individual who wishes to defer compensation still payable in 2005, but who has not yet made such an election, will have a final chance to make a valid deferral election for 2005." (Winston & Strawn LLP) Court Says Non-Fiduciary State Lawsuit not ERISA Barred Excerpt: "A federal appeals court has thrown out part of a lower court's ruling that a Ohio company's state law claims against its employee stock ownership plan's (ESOP) recordkeeper were preempted by federal law." (PLANSPONSOR.com; one-time registration required) Older Workers Demand Autonomy, Flexibility and Satisfaction on the Job Excerpt: "[R]andy Chambers is not a typical worker. He is the new Bonus Worker -- a person who has officially retired and is back in the workforce. But he's working on his own terms. Key is control over his time on the job. He wants to work part time and have a flexible schedule. He also wants to enjoy the work. He is not in it for the money." (The Washington Post; one-time registration required) Newly Posted Events 401(k) Compliance Seminar for HR and Benefits Professionals in Nebraska on March 29, 2005 presented by Manarin Investment Counsel, Ltd. HSA: One Year Later in Texas on March 29, 2005 presented by WEB (Worldwide Employee Benefits Network) Dallas Chapter Know Your Fiduciary Responsibilities and Other Compliance Issues in Pennsylvania on March 24, 2005 presented by Central Pennsylvania Chapter - ISCEBS Newly Posted Press Releases Disaster Relief Announcements 05-1 through 05-3 - PBGC Provides Guidance for Disaster Relief to Plan Administrators and Sponsors. (Pension Benefit Guaranty Corporation (PBGC)) Employers Unveil "10-Point Plan" to Promote the Health of the Nation's Pension System (ERIC (ERISA Industry Committee)) Prepare for Automatic Rollover Rules Compliance (Bell, Boyd & Lloyd LLC) Digital Documents, LLC Announces the Latest Version of Their dDSpeedScan ® 4.0 Document Scanning Software and Processes to Provide the Industry's Highest Level of Image and Data Quality. (Digital Documents, LLC--The Leader in Document Scanning and Imaging Services) Newly Posted or Renewed Job Openings Senior DC Tiered Plan Administrator for The Pension Group, Inc. in CA Benefit Analyst for OfficeMax in IL Benefits Manager for OfficeMax in IL Director, Employee Benefits for Howrey Simon Arnold & White, LLP in DC Contract Enroller for Professional Benefit Services, Inc. in ANY STATE Handy Links:
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