BenefitsLink Welfare Plans Newsletter May 24, 2005 Today's sponsor: ASPPA • Working for America's Retirement™ (Click on company name or banner to learn more.) Meeting Midway Conference July 24-27, 2005 * San Diego, CA Health and welfare issues * 401(k) plans Employee compensation * Actuarial pension issues Health Savings Accounts * Legal & fiduciary issues You don't want to miss this one! Register online today. Brought to you by WP&BC and ASPPA. (Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor) 12 Major HIPAA Security Landmines and How to Avoid Them Excerpt: "On March 3, 2005, AIS sponsored an audioconference on the 'How to Avoid the 12 Biggest HIPAA Security Landmines,' featuring HIPAA compliance consultant Chris Apgar, Apgar & Associates, Portland, Ore. (capgar@easystreet.com). Information [on the target page] is based on Apgar's March 3 presentation." (REPORT ON PATIENT PRIVACY via AISHealth.com) For Debit-Card Vendors, Real-Time HSA and FSA Claims Substantiation Is Holy Grail 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) Overview: IRS Provides Relief for the Flexible Spending Account 'Use It or Lose It' Rule Excerpt: "With the advent of health savings accounts and other types of consumer-directed health plans, there has been increasing pressure on the Internal Revenue Service (IRS) to eliminate its twenty-year-old 'use it or lose it' rule applicable to health and dependent care flexible spending accounts (FSAs) under cafeteria plans. .... The IRS has done just that with the issuance of IRS Notice 2005-42." (McDermott Will & Emery) Overview: IRS Liberalizes the 'Use-It-or-Lose-It' Rule for Cafeteria Plan Reimbursement Accounts Excerpt: "Action Items to Amend Cafeteria Plan's Use-It-Or-Lose-It Rule: Discuss implementation with third-party administrator and internal financial accounting department. Determine whether to implement new rule. Prepare communication to employees. Adopt plan amendment prior to the end of the plan year for which new rule is to be effective and distribute summary of material modifications or updated summary plan description unless employee communication serves that purpose." (Dorsey & Whitney LLP) Overview: Medical Reimbursement Plan 'Use It or Lose It' Rule Revised Excerpt: "Employers with medical reimbursement plans may choose to amend the 'use it or lose it' language based on IRS/Treasury Department Notice 2005-42 issued May 18, 2005. Under this ruling, for 2005 and later plan years, unused amounts allocated to a medical reimbursement account may be used after the end of the year for expenses incurred in the first 2-1/2 months of the next plan year. This old rule required forfeiture of contributions not used by the end of the plan year." (Briggs and Morgan) A Tasty Fringe Benefit -- Bonding in the Kitchen Excerpt: "As health-care costs have risen, 401(k) employer contributions have fallen and other perks have become more expensive, entrepreneurs have searched for inexpensive ways to boost staff morale. Now, some companies have found a way--in the kitchen. [A] number of companies [now offer] employee cooking classes ...." (Entrepreneur) Examining Pay-for-Performance Measures and Other Trends in Employer-Sponsored Health Care (PDF) 7 pages. Excerpt: "Pay-for-performance has significant positive potential in the health care sector, where reimbursement has traditionally been based only on utilization of services and patients are often not in a position to discern high quality from low. In this environment, incentives to deliver high-value health care are often absent or even negative .... Pay-for-performance is still new to health care, however, and payers face a number of challenges in implementing these programs." (The Commonwealth Fund) Same Treatment, Different Cost: State Law Opens Once-Secret Hospital Price Lists to Public Excerpt: "A Mercury News analysis of six Santa Clara County hospitals' prices for medical care reveals widely varying -- and costly -- rates for 10 common services such as colonoscopies and chest X-rays. Nearly everyone treated at a hospital receives a bill with these so-called 'list prices,' but what patients actually pay depends on whether they have insurance, and if so, what kind. While insured patients pay a portion of discounted rates negotiated by their health plans, ...." (The Mercury News; one-time registration required) Hospital Stay: Pay First As Health Systems Consider Requiring Prepayments of Out-of-Pocket Costs Excerpt: "Milwaukee-area hospital systems are considering a radical change in collecting payments for medical care: requiring patients to pay out-of-pocket expenses at the time of service." (The Business Journal of Milwaukee via bizjournals.com; one-time registration required) Specifications for Reform: Impacts on Health Care Spending and Federal Costs (PDF) 13 pages. [A] copy of Professor Kenneth E. Thorpe's PowerPoint Presentation at the National Press Club on May 23, 2005. (The National Coalition on Health Care) Former Oregon Governor Calls for Universal Health Care in the United States Excerpt: "The United States will never come to grips with its health care problems until it makes the opportunity to be healthy as universal as public education, former Oregon Democratic Gov. John Kitzhaber told a health policy conference ...." (Reuters Health via Medscape) Congressional Committee Told How CHROs Are Generating Health Care Reforms through Collaboration Excerpt: "[The week of May 20, 2005], Dr. Robert Galvin of GE, Director of Health Care Value Initiatives for the Health Care Policy Roundtable, explained to a congressional committee how senior HR executives recognize that 'deficiencies in the health care system will not be addressed unless the payers force a solution, which can only be done if they work together and exercise their leverage to achieve improvements.' " (HR Policy Association) Chairman Removes Health Care Provision from Defense Measure Excerpt: "House Armed Services Committee Chairman Duncan Hunter, R-Calif., has employed a rarely used authority to strike a provision in the committee-passed $441.6 billion defense authorization bill that would have opened the military's Tricare health care system to all National Guard members and reservists." (GovExec.com) New Legislation Would 'Turbocharge' Health Savings Accounts with Tax Breaks Excerpt: "Legislation introduced April 28 would 'turbocharge' health savings accounts by offering tax-deductible premiums and tax credits to small employers and purchasers of HSA-compatible health insurance, Republican lawmakers asserted at a May 11 press conference in Washington, D.C." (INSIDE CONSUMER-DIRECTED CARE via AISHealth.com) Links to Items on Executive Comp, Benefits in General Overview: New Bankrup.tcy Act Gives Increased Protection to Employee Benefits Excerpt: "On April 20, President Bush signed the Bankrup.tcy Abuse Prevention and Consumer Protection Act of 2005 into law. The Act has several provisions that give increased protection to employee benefits when an employer or employee files for bankrup.tcy. Plus, the Act has created strict standards regarding executive compensation while an employer is filing for bankrup.tcy." (Watson Wyatt Worldwide) Overview: New Bankrup.tcy Act: Employee Benefits and Executive Compensation Provisions Excerpt: "The Act clarifies how certain Bankrup.tcy Code rules apply to employee benefits and enhances the protection of plan benefits in bankrup.tcy and contains new restrictions on executive compensation that may be paid by an employer in (or prior to) bankrup.tcy. [On the target page] is a summary of the Act's principal provisions affecting employee benefits and executive compensation." (McDermott, Will & Emery via BNA Tax Management) Overview: Provisions of Bankrup.tcy Reform Act (S 256) Affecting Retirement Plans and Arrangements (PDF) 4 pages. Excerpt: "[T]he 'Bankrup.tcy Abuse Prevention and Consumer Protection Act of 2005' does provide significant new benefits to debtors who participate in tax-favored retirement plans and arrangements and/or have retirement savings in IRAs and Roth IRAs." (NAPPA Report via National Council on Teacher Retirement) Newly Posted Events The "New" Use-It-or-Lose-It Rule: How the May 2005 IRS Guidance Affects Employers, Health FSAs, and DCAPs Nationwide on June 1, 2005 presented by Employee Benefits Institute of America Inc. (EBIA) Newly Posted Press Releases Metrics Partners Announces More Than 20 Advertisers Have Signed Up For The Retirement Professionals Buyers Guide (Metrics Partners) Newly Posted or Renewed Job Openings Defined Contribution Professionals for John Mulligan & Associates in CA, CT, FL, GA, MA, MD, NJ, NY, SC, TX Defined Benefit Plan Administrator for The Pension People, Inc. in CA Dental Claims Supervisor for Growing Major Midtown Union Health Plan in NY Compliance/Conversion Specialist for Employee Benefits Firm in MD Retirement Actuarial Associate for Towers Perrin in CA, IL, MI, WA Pension Administrator for Stanton Group in MN Handy Links: View Today's Active Message Threads Search BenefitsLink Using the Web for Employee Benefits Research (hypertext article) Employee Benefits Library Copyright 2005 BenefitsLink.com, Inc.; except that you may reprint this newsletter in full (including this sentence) without obtaining our permission. 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