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April 14, 2005
Today's sponsor: William J. Stecker, CPA

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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 now

(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)

Bill Would Allow Cafeteria Health Plans at Small Firms
Excerpt: "A Senate bill that would amend the tax code to allow more employees of small businesses to purchase employer-provided health insurance with tax-free dollars is expected to be a topic of a hearing before the Senate Committee on Small Business and Entrepreneurship. The hearing, 'Solving the Small Business Health Care Crisis: Alternatives for Lowering Costs and Covering the Uninsured,' was scheduled for 10 a.m. April 20 in the Russell Senate Office Building in Washington, D.C." (Society for Human Resource Management)

Employee Health Care Information Important in Consumerism Drive
Excerpt: "Key information like costs, quality of care and communications tools like personalized benefits statements can make a real difference in how much workers understand about their health benefits. That was a key conclusion of a new survey by Wells Fargo, 2005 Trends in Employer Sponsored Health Benefits Survey Analysis, which also found an employer annual cost increase slowdown from 15% in 2003 to 12% in 2004." (PLANSPONSOR.com; one-time registration required)

Dollars and Sense of Backup Child Care: When Is It the Right Choice?
Excerpt: "Over the past decade, employers have looked at a host of new benefits to help working parents balance their work and family responsibilities. Once viewed as simply nice to have, child care benefits now are viewed increasingly as strategic tools for enhancing recruitment and retention as well as protecting employee productivity." (Employee Benefit News)

Comments on Request for Information on Benefit-Specific Waiting Periods Under HIPAA Titles I & IV
Excerpt: "On behalf of the undersigned organizations representing the interests of consumers covered by ERISA group health plans, Families USA, and the undersigned groups, submit the following comments on the Request for Information on Benefit-Specific Waiting Periods Under HIPAA Titles I and IV published by the Department of Labor on December 30, 2004." (Families USA)

Fed Medical Privacy Rule Can Undo Minnesota's Medical Privacy Laws & Patient Consent Requirements (PDF)
1 page. Excerpt: "The so-called 'Federal Medical Privacy Rule' (45 CFR Parts 160/164) -- from the 1996 Health Insurance Portability and Accountability Act (HIPAA) -- permits broad use and disclosure of individually-identifiable 'protected health information' without patient consent. It is often referred to as the 'HIPAA Privacy Rule' or just 'HIPAA.' Minnesota's medical privacy law (M.S. 144.335) more often requires patient consent before use and disclosure ...." (Citizens’ Council on Health Care)

Policy Brief: 'HIPAA Definitions: Treatment, Payment and Health Care Operations' (PDF)
1 page. Excerpt: "The so-called 'Federal Medical Privacy Rule' (45 CFR Parts 160/164) -- authorized by the 1996 Health Insurance Portability and Accountability Act (HIPAA), and often referred to as the 'HIPAA Privacy Rule' or just 'HIPAA' -- allows broad sharing of individually-identifiable 'protected health information' without patient consent for activities including treatment, payment and health care operations." (Citizens’ Council on Health Care)

Health Plans Use Decision Aids to Cut Unnecessary Hysterectomies
Excerpt: "As more consumers, insurers and providers embrace consumerism, some are hoping that more useful decision-support information could result in decreased utilization of inappropriate procedures. One example is hysterectomy, which shows broad regional variation and often is performed unnecessarily, some experts say." (MANAGED CARE WEEK via AISHealth.com)

Private Health Insurance Plans Haven't Delivered the Cure for America's Health System
Excerpt: "Bruce Bodaken, CEO of Blue Shield of California, warns that, unless we reduce health-care costs and provide coverage for the uninsured, we will likely turn to a government-run single-payer system [''Vicious cycle' of care,' Business, March 30]." (The Orange County Register via Physicians for a National Health Program)

Overview: MMA and Part D Decisions — More CMS Guidance for Employers Seeking Subsidy (PDF)
3 pages. Excerpt: "With seven months remaining until Part D enrollment begins on November 15, employers received yet more important guidance last week from the Centers for Medicare & Medicaid Services (CMS). The guidance is complex and a thorough description is beyond the objectives of this bulletin. It is important, however, to call attention to several high-level points." (Towers Perrin)

Pharmacy Benefits for Military Retirees: Controlling Costs Without Compromising Health
Excerpt: "At a time when the federal government is shaping the pres.cription drug benefit that will be offered to elderly Medicare recipients, the Department of Defense (DoD) asked researchers at the RAND Center for Military Health Care Policy to assist it in assessing factors contributing to the rising costs of pres.cription medications for military retirees and their families and proposing measures that might curb those costs without sacrificing patient safety or the quality of care." (RAND)

Health Wellness Plans Dangle Incentives to Encourage Healthy Behavior
Excerpt: "Cash, T-shirts, iPods, spa getaways. Such rewards are becoming more common in today's health plans as firms seek to encourage employees to take better care of themselves. 'A lot of employers who offered health promotion and wellness programs to their employees in the past were frustrated when they didn't see people participate,' ...." (Employee Benefit News)

IRS and Treasury Issue Health Savings Account Guidance for Spousal Contributions
Excerpt: "According to press releases from both agencies, Revenue Ruling 2005-25 Section 223 allows 'eligible individuals' to contribute to such accounts. Generally, such individuals are covered by a high deductible health plan (HDHP) and no other health plan. However, the ruling concludes that a married individual may contribute to an HSA even though his or her spouse has non-HDHP family coverage, so long as the individual is not covered by the spouse's non-HDHP." (PLANSPONSOR.com; one-time registration required)

Kansas Governor Sebelius Signs Bill Giving Health Care Tax Credit to Small Businesses
Excerpt: "Gov. Kathleen Sebelius signed into law Tuesday a bill that would give tax credits to small businesses that offer health savings accounts as a health care option to their employees." (Wichita Business Journal via bizjournals.com; one-time registration required)

States Looking at Myriad Ways to Get Employers to Cover the Uninsured -- Bills Pending in 30 States
Excerpt: "Well-publicized bills in Massachusetts and Maryland that would force employers to pay part of the cost of coverage for the uninsured are just the tip of the iceberg. The HR Policy Association, a lobbying group for senior human resources executives, says that bills are pending in 30 states that would require employers to foot at least part of the cost of health-care coverage." (Workforce Management; one-time registration required)

CBO Cost Estimate: H.R. 525, Small Business Health Fairness Act of 2005 (PDF)
Excerpt: "H.R. 525 would establish a regulatory framework and certification process for association health plans (AHPs). AHPs could be established by trade, industry, and professional associations as a vehicle for providing health care benefits to employees of businesses that are association members. AHPs would not, in general, have to offer coverage of state-mandated benefits and would be subject in a limited way to state rules that compress health insurance premiums across a state's ...." (U.S. Congressional Budget Office)

A New Call to Arms: Military Health Care
Excerpt: "The battle over the Pentagon's billions has traditionally been fought between two forces - those who want more new planes and ships and tanks, and those who want more money for troops. Now there is a third: military health care. The cost of the main military health care plan, Tricare, has doubled since 2001 and will soon reach $50 billion a year, more than a tenth of the Pentagon's budget. At least 75 percent of the benefits will go to veterans and retirees." (The New York Times; one-time registration required)


Links to Items on Executive Comp, Benefits in General

Securities and Exchange Commission Expected to Delay Options Expensing Rule Start Date
Excerpt: "Federal securities regulators are expected to give companies more time to comply with new rules requiring that stock options be counted as corporate expenses, according to a news report. The Wall Street Journal reported that the Securities and Exchange Commission (SEC) is expected as early as this week to approve a plan to make the rule effective for fiscal years starting after June 15 rather than the current requirement of fiscal quarters starting after that date." (PLANSPONSOR.com; one-time registration required)

New edition of Tax and Securities Sources for Equity Compensation
The NCEO presents the new (2005) edition of Tax and Securities Sources for Equity Compensation, a collection of tax and securities source materials relevant to the study of equity compensation. This is used as a required text in the Certified Equity Professional Institute (CEPI) curriculum, and the CEPI curriculum committee selected these source materials as being essential for those involved with equity compensation. (National Center for Employee Ownership)

New edition of Beyond Stock Options
The NCEO presents excerpts from the new (third) edition of its book Beyond Stock Options, which covers benefit plans such as phantom stock, SARs, and restricted stock. The book includes annotated sample plans, which are included on the accompanying CD. (National Center for Employee Ownership)

Overview: Appeals Court Strikes Down New York City's Law that Requires Domestic Partner Benefits (PDF)
3 pages. Excerpt: "On March 15, 2005, a five-Judge panel of the New York Appellate Division, First Department, unanimously overturned New York City's 'Equal Benefits Law.' The Equal Benefits Law ... was intended to become effective on October 26, 2004 and generally would have required certain employers contracting with the City to provide employment benefits to employees' 'domestic partners' on the same terms as they provide the benefits to employees' spouses." (Kirkpatrick & Lockhart Nicholson Graham LLP)

White Paper: Analysis of the New Deferred Compensation Rules Under Section 409A (PDF)
Excerpt: "[S]utherland's White Paper provides a detailed analysis of the rules and open issues under section 409A, as well as the guidance under Notice 2005-1 and its transition rules. In particular, we note that Q&As-19 and -20 of Notice 2005-1 generally permit, for 2005 only: cancellation or reduction of deferral elections; modification of payment elections; and immediate distribution of all or a part of deferred amounts." (Sutherland Asbill & Brennan LLP)

Overview: DOL Revises Voluntary Fiduciary Correction Program (PDF)
3 pages. Excerpt: "In 2002, the Department of Labor adopted the Voluntary Fiduciary Correction Program, under which a fiduciary of an employee benefit plan may voluntarily step forward and correct certain breaches of its fiduciary duty under ERISA. Now the DOL proposes to expand and simplify the VFC Program." (Dechert LLP)

IRS Strengthens Withholding Compliance Program; Reduces Paperwork for Employers with IR-2005-45
Excerpt: "Employers will no longer be required to send copies of potentially questionable W-4 withholding forms to the Internal Revenue Service, the IRS announced today. At the same time, the IRS will step up its withholding compliance program by making more effective use of information reported on W-2 wage statements to ensure that employees have enough federal income tax withheld from their paychecks." (Internal Revenue Service)

Overtime Offer Marks Shift in Silicon Valley Away from Stock Options
Excerpt: "The change mirrors a trend throughout the technology industry, which is increasingly rewarding workers with big paychecks instead of the kind of stock-option grants that in the 1990s often translated into vast wealth. [Published March 11, 2005]" (AP via SFGate.com)


Newly Posted Press Releases

Segal Lowers 2005 Rx Cost Trend Projections
(The Segal Company)

United Benefit Advisors (UBA) Introduces Powerful New Suite of Actuarial Tools
(United Benefit Advisors)

ICC Plan Solutions Announces New Participant Statement Offering
(Metrics Partners)

More Investment Options Translates Into More Competitive Customer Service
(CPI Qualified Plan Consultants, Inc.)


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