BenefitsLink Welfare Plans Newsletter May 26, 2005 Today's sponsor: World Congress (Click on company name or banner to learn more.) The World Congress 1st Annual Human Capital Management Congress The World Congress is proud to present the 1st Annual Human Capital Management Congress taking place this January 23 – 25, 2006 at the Ritz-Carlton Georgetown in Washington, DC. The HCMC will bring together the most innovative and knowledgeable industry experts addressing the most pertinent issues relating to health and human capital management. The event is uniquely designed to discuss the impact of benefits on employee productivity, healthcare costs and overall company competitiveness. (Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor) Treasury Tweak Will Not Have Much Impact on Flexible Spending Accounts Excerpt: "Experts say that the Treasury Department's decision to tweak the 'use-it-or-lose-it' date for flexible spending accounts will not have a sizable impact on the market for these products. Randall Abbott, a Boston-based senior consultant at Watson Wyatt, calls the Treasury decision a 'compromise' that will have little impact on whether more employees choose FSAs and will not lower forfeiture rates, which are already very low." (The Adviser) The Family and Medical Leave Act at Center of Hot Debate with Some Saying It Is too Vague Excerpt: "[DOL] is expected to come out shortly with proposals for revising parts of the law; some labor and family groups, such as the National Partnership for Women & Families, fear those changes will cause hard-won family leave protections to be lost. Business groups such as the U.S. Chamber of Commerce and the Society for Human Resource Management ... say the current law is too vague and vulnerable to employee abuse. Needed changes, they say, amount to little more than fine-tuning." (USA TODAY) Book Chapter: Accountability for Reasonable Limits to Health Care: Can We Meet the Challenges? (PDF) 11 pages. Excerpt: "In [this] chapter Norman Daniels addresses the crucial issue of how we can gain public legitimacy for necessary limits on the provision of health care. Most thoughtful people understand the need for limits in health care as in every other facet of life, but much of the public resists limits when their own health or that of their loved ones is at stake." (Policy Challenges in Modern Health Care via The Robert Wood Johnson Foundation) Investing in Ideas: New Health Care Book by Investigators Spotlights the Importance of Thinking Big Excerpt: "The book, [Policy Challenges in Modern Health Care] published by the Investigator Awards in Health Policy Research, aims to challenge perceptions about health care and to spark new thinking and discussion about some of the most complex issues facing this country." (The Robert Wood Johnson Foundation) Book Chapter: Entrepreneurial Challenges to Integrated Health Care (PDF) 16 pages. Excerpt: "Based on his study of large health care enterprises, Robinson describes a system of continuing turbulence. The earlier effort to develop integrated health systems has now lost momentum, and today U.S. medicine is seeing the rise of single-specialty hospitals and freestanding ambulatory facilities, with specific service chains expanding geographically. Robinson examines new hybrid organizational forms that provide some of the advantages of older organizational forms but ...." (Policy Challenges in Modern Health Care via The Robert Wood Johnson Foundation) Government Wants to Move Quickly on Healthcare Information Technology Standards Excerpt: "The government wants to move quickly on achieving agreement on standards that could help the healthcare industry exchange data, and it will build on work already under way in numerous standards organizations, .... National Coordinator for Health Information Technology David Brailer, MD, said a major challenge to the government's effort will be getting standards organizations to agree because there is a 'significant amount of divisiveness' among these groups." (Healthcare IT News) TelaDoc 'Practice' Aimed at Demanding, Time-Crunched People and Those Who Lack Health Insurance Excerpt: "A group of entrepreneurs is gambling that patients are willing to pay for fast, low-cost medical care -- by telephone, with doctors they've never met. .... The service's promoters say patients, both the insured and the uninsured, can save money by using TelaDoc instead of urgent care clinics or the emergency room. For individuals, the service costs $18 to join, and $4.25 a month. Each call to a doctor is $35." (USA TODAY) Medical Costs Rise to $12,214 Per Family, According to Study by Milliman Inc. Excerpt: "The typical American family of four will use $12,214 worth of medical products and services this year, according to a study released yesterday. .... The report focused on health care costs for consumers at the point of service. Those costs include doctor visits, hospital stays, pres.cription drugs and other medical needs. However, the study did not include the premiums that consumers pay for their health insurance." (The Washington Times) Employers and Health Plans Provide Employees New Incentives for Healthy Behavior Excerpt: "Many payers have positive and negative incentive programs in place, and are refining them with expanded audiences, high-profile partnerships and targeted interventions -- while ensuring that programs remain in compliance with federal regulations governing their use. Incentives programs are used to encourage behaviors ranging from quitting smoking and starting exercise programs to using more generic medications, joining disease management programs and improving treatment compliance." (MANAGED CARE WEEK via AISHealth.com) Book Chapter: The Employer-Based Health Insurance System: Mistake or Cornerstone? (PDF) 16 pages. Excerpt: "Many observers point to our employer-based system as one significant source of our difficulties with insurance coverage and argue that using employment as the core basis for health coverage is flawed. In contrast, Sherry Glied builds an impressive defense for the advantages of an employer-based system, although she recognizes the need to add other mechanisms for those who are not employed or employed in circumstances where employer coverage is unavailable or not affordable." (Policy Challenges in Modern Health Care via The Robert Wood Johnson Foundation) Kansas Lawmakers Increase Tax Credit for Small Business Health Insurance Coverage Excerpt: "Getting a law passed to defray the cost of health benefits to small businesses was the easy part; now Kansas has to get the word out.Before they adjourned this month, Kansas lawmakers approved a plan to double the tax credits given to small businesses that start offering health benefits to their employees. The move was heralded by small-business leaders and health care advocates as a giant step in enticing more businesses to offer insurance to employees." (The Kansas City Star; one-time registration required) Massachusetts Group Set to Push for Universal Health Care in State Excerpt: "A coalition of religious and community groups will launch a drive today to put universal healthcare on the 2006 state ballot, in a proposal that would raise the cigarette tax to buy coverage for more people and would require all but the smallest Massachusetts businesses to cover their workers." (The Boston Globe) Colleges Test New Health Program: Employees to Pre-Fund Supplemental Retirement Coverage Excerpt: "The latest invention to come out of American universities has nothing to do with science or technology. Instead, it's a new kind of health insurance. Worried that many employees were delaying retirement simply to keep their medical coverage, a group of colleges and universities has created a plan that lets both workers and employers contribute to a fund that can be tapped after retirement for medical expenses and for insurance to supplement Medicare." (Los Angeles Times via The Foundation for Taxpayer & Consumer Rights) Fidelity Investments Identifies the Keys to a Successful Health Savings Account Rollout Excerpt: "Fidelity Investments says employers that make sweeping changes to their health plan designs, require an 'active' enrollment and launch extensive communication and education programs prior to open enrollment see higher enrollment in HSA-based plans than do employers that take a less aggressive approach." (INSIDE CONSUMER-DIRECTED CARE via AISHealth.com) Links to Items on Executive Comp, Benefits in General Overview of the New Bankrup.tcy Law - Part Two and a Correction to an Earlier Bankrup.tcy Law Article Excerpt: "The new bankrup.tcy law provides clearly defined (and often enhanced) protection against creditors for retirement plan participants and IRA owners who have filed for bankrup.tcy. However, creditor protection for plan participants or IRA owners who have not filed for bankrup.tcy remains unchanged. .... In our earlier Bankrup.tcy Law article, we erroneously mixed up the bankrup.tcy and non-bankrup.tcy situations." (McKay Hochman Co.) Overview: Initial IRS Guidance on New Deferred Comp Rules Leaves Many Unanswered Questions (PDF) 5 pages. Excerpt: "Even though the IRS guidance is incomplete, employers must operate any plans they maintain that are subject to Section 409A in good faith compliance with Section 409A and Notice 2005-1. If an employer fails to do so, each plan participant covered by the non-compliant provision will be subject to a 20% penalty tax on the amount deferred at the time of deferral or vesting (if later) and interest on any resulting underpayment of tax, in addition to immediate income tax." (The Hay Group) Overview: DOL Clarifies the Reporting of Fees & Commissions on Form 5500 Excerpt: "The Schedule A (Form 5500) Information You Received From Your Insurance Company May Not Be Accurate. In response to allegations that some insurance companies have been underreporting commission and fee payments to brokers and agents, the Department of Labor (DOL) has issued an advisory opinion clarifying its views regarding the current Schedule A reporting requirements." (Ice Miller) Overview: U.K. Tax Authorities Publish Further Guidance on Share Options (PDF) 5 pages. Excerpt: "The comments [in the target document] are restricted to the matters of tax and NIC [national insurance contributions] on unapproved (i.e., not provided for by tax legislation in the United Kingdom which affords favorable tax treatment), 'American-style' share options." (KPMG LLP) Newly Posted Events 8th Annual Recruiting & Staffing Summit in Georgia on September 19, 2005 presented by International Quality & Productivity Center (IQPC) Newly Posted Press Releases Groundbreaking IRS Ruling Regarding FSA Claims: DataPath, Inc. conducts survey of plan providers regarding impact (DataPath, Inc.) DataPath issues online survey to gather industry response to IRS Notice 2005-42. (DataPath, Inc.) TE/GE Advisory Committee to Hold Public Meeting (Internal Revenue Service (IRS)) Mellon Financial Completes Transaction with ACS (Mellon Financial Corporation) The Principal Financial Group Unveils Trade-Specific Retirement Plan Programs for Taft-Hartley Market (Principal Financial Group) ACLI Unveils Retirement Security Agenda (American Council of Life Insurers) Treasury And IRS Propose Regulations On Retirement Plans - Proposed Rules Allow Members of the National Guard and Reserve to Contribute to Retirement Plans While on Active Duty (U.S. Treasury Department and Internal Revenue Service) The Bordeaux Group Launches Its Financial Benefits Packages (The Bordeaux Group) Newly Posted or Renewed Job Openings Compliance Consultant for Milliman, Inc. in TX Relationship Manager - Employee Benefits for Reliance Trust Company in GA Senior Relationship Associate for Reliance Trust Company in GA 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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