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April 7, 2005
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)
Voluntary Benefits Go by the Wayside Amid an Uncertain Economy
Excerpt: "Employers and workers both are focusing on more traditional offerings like dental, vision and some specialty insurance packages." (Workforce Management; one-time registration required)

April 20 is Coming: A 16-Point Checklist for HIPAA Security
Excerpt: "The last round of the Health Information Portability and Accountability Act of 1996 (HIPAA) regulations comes to a close on April 20, 2005 with the implementation of the security rule. Although most covered entities probably view the regulations as just another governmental mandate, the security rule embodies a consensus of best business practices." (HealthLeaders News)

Health Savings Account Vendors Focus on Real-Time Claims Substantiation
Excerpt: "As employers shift from copayment- to deductible-based health plans, the ability to adjudicate claims in real time at the point of service has become the Holy Grail for debit-card vendors. But as vendors inch closer to solving the problem, it's unclear if there will be enough cooperation between health plans and providers to make the technology useful." (INSIDE CONSUMER-DIRECTED CARE via AISHealth.com)

Diabetes Disease Management: Integrating Lessons from Clinical, Health Services, and Policy Research
Excerpt: "Our understanding of diabetes and its management is evolving rapidly based on information from researchers and the world of healthcare delivery about 'what works' to improve outcomes. This theme issue of the Journal includes studies that can inform efforts to improve diabetes care on many levels, including more effective clinical decision-making, improvements in health systems that promote treatment quality, and health policies that encourage the best disease management practices." (The American Journal of Managed Care)

Total Costs of Irritable Bowel Syndrome : Employer and Managed Care Perspective
Excerpt: "Irritable bowel syndrome (IBS) is a common gastrointestinal motility disorder that typically affects persons of working age and is costly to employers. The financial burden attributable to the direct (use of healthcare resources) and indirect (missed days from work [absenteeism] and loss of productivity while at work [presenteeism]) costs of IBS is similar to that of other common long-term medical disorders, such as asthma, migraine, hypertension, and congestive heart failure." (The American Journal of Managed Care)

Analysis Shows Surgical Treatment of the Severely Obese More Effective than Nonsurgical Treatment
Excerpt: "Conclusions: Surgery is more effective than nonsurgical treatment for weight loss and control of some comorbid conditions in patients with a BMI of 40 kg/m2 or greater. More data are needed to determine the efficacy of surgery relative to nonsurgical therapy for less severely obese people. Procedures differ in efficacy and incidence of complications." (Annals of Internal Medicine)

Magellan Health Services Offers New Care Management Services for Obese Patients
Excerpt: "Magellan Health Services, Inc. will provide care management services to obese patients in a program to be unveiled today. The four-tier program represents the next step in Magellan's evolution from a managed behavioral health company to a full-service disease management (DM) firm, the company says." (MANAGED CARE WEEK via AISHealth.com)

Working Paper Abstract: The Effects of Competition on Variation in Quality and Cost of Medical Care
Excerpt: "[The authors] estimate the effects of hospital competition on the level of and the variation in quality of care and hospital expenditures for elderly Medicare beneficiaries with heart attack. [The authors] compare competition's effects on more-severely ill patients, whom we assume value quality more highly, to the effects on less-severely ill, low-valuation patients." (National Bureau of Economic Research)

Market for Supplemental Medical, Hospital Indemnity and Limited Medical Plans Is Expected to Grow
Excerpt: "New sales premiums for hospital indemnity and supplemental medical policies increased 55% from 2002 to 2003, reaching $301 million, according to a report from Eastbridge Consulting. About 40% of carriers offer some type of hospital indemnity plan, and 43% of those who don't say they are 'somewhat likely' to develop one." (The Adviser)

Union Pacific Contraceptive Coverage Suit Gets Class Action Status in U.S. District Court Ruling
Excerpt: "A Nebraska federal judge has granted class action status to a lawsuit representing about 400 current and former Union Pacific Railroad workers who are fighting the company's policy to exclude contraception coverage in its union health plans." (PLANSPONSOR.com; one-time registration required)

An Examination of News Coverage of Pres.cription Drug Reimportation Developments in Three States
Excerpt: "Kansas: State Attorney General Phill Kline (R) last week issued a nonbinding legal opinion that states I-Save RX -- a multistate program that Kansas joined to allow state residents to purchase lower-cost pres.cription drugs from other nations -- does not violate state law, the AP/Topeka Capital-Journal reports .... " (Kaiser Family Foundation)

New Health Plan Products Target Greater Access for Dependents
Excerpt: "Two health plans have boosted coverage options for dependents, expanding child-only individual products and developing new benefit designs for dependents in group policies. Both insurers -- Beaverton, Ore.-based Providence Health Plans and Owings Mills, Md.-based CareFirst, Inc. -- say they're trying to expand access to dependents who don't qualify for public programs and for whom employer-sponsored coverage is too expensive." (MANAGED CARE WEEK via AISHealth.com)

IRS Rules Against Efforts to Tinker with Health Reimbursement Arrangements' Designs
Excerpt: "HRA programs that give unused HRA funds to beneficiaries of employees who die, pay unused HRA funds to departing employees, or let employees shift unused HRA funds into retirement plans 'do not meet the requirements for tax-favored treatment,' [according to] IRS Revenue Ruling 2005-24. .... The ruling applies to HRA programs for retirees as well as HRA programs that include active employees .... The IRS has posted the ruling ... at http://www.irs.gov/pub/irs-drop/rr-04-112.pdf." (National Underwriter)


Links to Items on Executive Comp, Benefits in General

Overview: SEC and FASB Guidance on Option Valuation under Statement 123(R) (PDF)
4 pages. Excerpt: "The Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB) have released additional guidance in regard to the new stock option expensing provisions of Statement 123(R) that are scheduled to become effective this July. While there have been recent press reports suggesting the SEC may be sympathetic to a further delay in Statement 123(R)'s effective date, neither the SEC nor the FASB to date have initiated steps to effect such a delay." (Frederic W. Cook & Co., Inc.)

Valuation of Employee Stock Options -- Models for FAS 123(R): Lattice vs. Black-Scholes
Excerpt: "The biggest problem with expensing stock options -- and the main objection of opponents of the revised standard -- is that the value of an option is in some fundamental sense speculative. Exchange-traded options have a value set by a (generally) liquid and transparent market. Participants in options markets have developed a set of tools (valuation formulas) for valuing options which are generally regarded as useful." (Chicago Consulting Actuaries)

American Bar Association March 28, 2005, Letter to the Internal Revenue Service on Code Section 409A (PDF)
18 pages. Comments on Code Section 409A Regarding the Definition of Nonqualified Deferred Compensation Focusing on Foreign Plan Issues (American Bar Association)

Court Rules At&t Did Not Violate Fiduciary Duty Over Voluntary Retirement Incentive Program
Excerpt: "AT&T has been cleared of violating its fiduciary duty by a federal appeals court in a case involving former employees who felt they were cheated out of retirement benefits. The US 3rd Circuit Court of Appeals has ruled that the communications giant did not violate its fiduciary duty under the Employee Retirement Income Security Act (ERISA) because a plan that gave workers an extra incentive to retire was not under serious consideration at the time of their retirement." (PLANSPONSOR.com; one-time registration required)

Towers Perrin's 23rd Benefits Survey of the Brazilian Market (PDF)
40 pages. Excerpt: "This report presents the results of the 23rd Benefits Survey, conducted by Towers Perrin in 2004. The survey involved the participation of 234 companies representing different business segments ofthe Brazilian market. The purpose of the survey is to identify the main trends in employee benefits offered in Brazil and to provide the participating companies with information to help them manage increasingly efficient benefit packages." (Towers Perrin)

Working Paper Abstract: Rethinking Social Insurance
Excerpt: "This paper begins by discussing the nature of and rationale for social insurance programs. I then consider three political principles and four economic principles that could guide the design and reform of social insurance programs. These ideas are then applied to unemployment insurance, Social Security pensions, health insurance and Medicare. A common theme is the advantage of incorporating investment based personal accounts in each of these programs." (National Bureau of Economic Research)


Newly Posted Events

How to Implement a Successful Consumer Driven Health Plan
in Illinois on May 3, 2005
presented by Principal Resource Group

The INs & OUTs of Cafeteria Plans
in Georgia on April 20, 2005
presented by Swerdlin & Company


Newly Posted Press Releases

State/Local Government Pay & Benefits Much Higher Than in Private Sector, But Jobs, Skills Differ
(Employee Benefit Research Institute (EBRI))

CPI Opens Cincinnati Consulting Office
(CPI Qualified Plan Consultants, Inc.)


Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Account Manager
for SunTrust Bank
in VA

ERISA Consultant
for BISYS Retirement Services
in MN

Account Executive
for Transamerica
in CA, GA

TPA Specialist-Eastern Region
for Transamerica
in MA, PA

Retirement Plan Specialist
for Diversified Investment Advisors
in MI

Benefit Administrator
for Independent Benefit Services
in MD




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