BenefitsLink Welfare Plans Newsletter June 2, 2005 Today's sponsor: Employee Benefits Institute of America (EBIA) (Click on company name or banner to learn more.) Explore the Seven Wonders of the Benefits Compliance World No HR or benefits professional's library would be complete without EBIA's compliance manuals. Save time and steer clear of compliance traps by joining thousands of professionals who rely on our manuals. "I know I can rely on your manuals, above and beyond any others, to be clear, concise, easy to understand, and accurate!" -Director of Flexible Benefits (Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor) CMS Honors Pledge to Streamline Medicare Part D Notice Obligation (PDF) 3 pages. Excerpt: "In guidance issued May 26, CMS will allow many sponsors to certify to a plan's Part D equivalence - without resorting to an actuary - by applying a simple test. The guidance also includes a pair of model notices that sponsors may use ..." (Lockton Benefit Group) Overview: CMS Issues Medicare Drug Notice Guidance for Employers Excerpt: "Newly released federal guidance will help employers comply with an upcoming requirement that they notify Medicare-eligible workers about whether their group pres.cription coverage measures up to the new Medicare pres.cription drug benefit. The new guidance, issued by the US Centers for Medicare and Medicaid Services, provides safe harbors under which employers' pres.cription drug plans automatically would be considered equal to Medicare coverage, ...." (PLANSPONSOR.com; one-time registration required) First Annual Milliman Medical Index -- 2005 Measures Average Family Health Spending (PDF) 6 pages. Excerpt: "Milliman Inc. has completed its first annual study of the total annual medical costs for a 'Typical American Family of Four.' The Milliman Medical Index (MMI) measures the average spending by such a family if covered by an employer-sponsored PPO program. It provides a benchmark by annually assessing the changes in those costs over a five-year period. The MMI also examines the key drivers and the components of actual medical spending." (Millman) California Workers' Health Benefits Shrink As Employer-Paid Insurance Coverage Rates Increase Excerpt: "Barely half of working Californians will have job-based health insurance in 2010 if rates keep rising at current levels, according to a study released Wednesday by UC Berkeley's Center for Labor Research and Education and Working Partnerships USA. Employer-paid coverage will drop to 53 percent of the state's working adult population in 2010 from 58 percent in 2004 if premiums continue to rise by 10 percent a year, researchers reported in the study, ...." (San Francisco Chronicle) To Help Employees Cope with Medical Choices, Employers Are Offering Health Education Excerpt: "Although employee-centered health education could be a plus for employers no matter what types of health plans they offer, it may be especially important, experts say, for employers offering consumer-directed plans. Those are the high-deductible plans that require employees to decide how to spend health care dollars that are, in effect, theirs." (Society for Human Resource Management) Democrats Fail to Expand National Guard Member Health Coverage under Military System Excerpt: "Democrats have failed to persuade their Republican colleagues to authorize all drilling Reservists and members of the National Guard to take part in the TriCare military health care system." (National Underwriter Life & Health; free one-time registration or paid subscription required) Wal-Mart Corporation Fights Employee Health Insurance Benefits Disclosure in Minnesota Excerpt: "Wal-Mart Stores Inc. does not want Minnesotans to know how many of its workers in this state receive public health care assistance. The world's largest retailer has denounced as a public-relations ploy legislation -- which some state legislators have dubbed the 'anti-Wal-Mart bill' -- that would create a public list of companies whose workers are enrolled in MinnesotaCare and other government-funded health care programs." (Star Tribune; one-time registration required) Wal-Mart Critics Attack Retailer's Health Care Coverage for Employees Excerpt: "The state's largest employer -- Wal Mart Stores Inc. -- is battling again with liberal and union critics. This time it's over health care. The United Food & Commercial Workers Union and the liberal Democracy for America political group Wednesday launched a campaign in Arizona and other states critical of Wal-Mart and its health care coverage for its employees." (The Business Journal of Phoenix via bizjournals.com; one-time registration required) Bill Would Force Insurance Companies to Pay for Home Births in New Hampshire Excerpt: "[The New Hampshire House] will consider a bill that would require insurance companies to cover midwives who deliver babies in their homes, birthing centers or their patients' homes. Currently several insurance companies only cover midwives who deliver babies in hospitals, known as nurse-midwives, and not home-based midwives, called New Hampshire Certified Midwives." (seacoastonline.com) May 5, 2005, Letter to the NIH Office of Biotechnology Activities on Genetic Testing Coverage Report (PDF) 4 pages. Excerpt: "This letter presents comments of the American Academy of Actuaries' Committee on Federal Health Issues regarding 'Coverage and Reimbursement of Genetic Tests and Services,' an April 2005 report of the Secretary's Advisory Committee on Genetics, Health, and Society. We raise issues pertaining to four areas -- genetic testing in general, health insurance markets, cost effectiveness data, and the Medicare and Medicaid programs." (American Academy of Actuaries) UnitedHealth Offers Pre-Age-65 Retiree Health Insurance Coverage Product Excerpt: "UnitedHealth Group will offer a new health coverage option allowing large employers to provide health benefits to their pre-65 retirees. [T]he new product includes health benefits provided through a group policy regardless of health status. The new plan also diminishes and caps employers' financial liability for providing retiree coverage, ...." (PLANSPONSOR.com; one-time registration required) Overview: 'Use-it-or-Lose-it' Rule for FSAs Is Relaxed Slightly (PDF) 2 pages. Excerpt: This issue discusses the recent decision by the Internal Revenue Service in Notice 2005-42 to revise the 'use-it-or-lose-it' rule for flexible spending arrangements (FSAs). Under the revised rule, employers may - but are not required to - permit employees to carry forward their FSA balances for 2½ months after the end of the end of the plan year/ and/ receive reimbursement for qualified expenses/ incurred during/ those months." (The Segal Company) Overview: IRS Modifies Flexible Spending Account 'Use-It-or-Lose-It' Rule (PDF) 1 page. Excerpt: "Immediately following the end of a plan year, an FSA plan may establish a Grace Period of up to two and one-half months. Expenses incurred during this Grace Period may be reimbursed from the previous plan year's FSA balance, in effect creating a fourteen and one-half month period of coverage. Once the previous plan year's FSA balance reaches zero, expenses incurred during the Grace Period are reimbursed from the next plan year's FSA balance." (Ceridian Corporation) Overview: IRS Permits Employers to Temper 'Use It or Lose It' Rule Excerpt: "In Notice 2005-42, the IRS modified its stance on the 'use it or lose it' rule. Previously, the IRS required forfeiture of unused balances in health and dependent care spending accounts at year-end. The IRS now permits employers to allow a grace period of two and one half months immediately following the end of each plan year, during which time unused benefits or contributions may be used by plan participants." (Buchanan Ingersoll PC) Links to Items on Executive Comp, Benefits in General Abstract of Book: Sarbanes-Oxley: Best Practices for Private and Nonprofit Health Care Entities Excerpt: "This 'how-to-do-it' workbook clarifies why private and nonprofit health care organizations need to pay very close attention to this revolutionary corporate responsibility law. It describes specific action steps and includes 16 highly useful templates (in print and on CD) you can adapt for use in your organization." (AISHealth.com) Over-60s Are Choosing the Workforce -- Retirement Is Not Dead, It's Just Being Redefined Excerpt: "According to the Bureau of Labor Statistics, more than 32 percent of men and 22 percent of women ages 65 to 69 are still working, full or part time, some for the money, others for the health insurance, still more for the satisfaction. 'Retirement is now a transition point,' said John Diehl, a certified financial planner with the Hartford Financial Services Group in Hartford, Conn. For the financially fit, he said, 'it can be a time to pursue a vocation you always dreamed of.'" (Knight Ridder Newspapers via Rutland Herald) Hay Benefits Advisor, Spring 2005 -- Information on Benefit Program Compliance and Developments (PDF) 12 pages. Contents: Social Security Financing -- The Real Story; IRS Grants 2½ Month Extension for Cafeteria Plan Claims; Complying with the New Deferred Compensation Rules; Prepare Now for Medicare Pres.cription Drug Part D Benefits; Bush Administration Proposes Major Overhaul of Pension Funding Law; The New Automatic Rollover Requirements. (The Hay Group) Providers Are Offering New Investment Options to Nonqualified Plans -- Mirroring 401(k) Options Excerpt: "It really is the DC-ification of the deferred comp industry,' says Tom Johnson, chief marketing officer at Springfield, Massachusetts-based MassMutual Financial Group, about what is happening with nonqualified plans these days. Many now have investment options a lot like those available in 401(k) plans. Nonqualified plans have seen a boom in recent years. Ninety-three percent of the Fortune 1000 had one of these plans in 2003, ...." (PLANSPONSOR.com; one-time registration required) New Regulations Could Dampen Enthusiasm for Deferred Compensation Programs Excerpt: "From the late 1990s through the end of 2004, there was phenomenal growth in the amount of executive compensation diverted into nonqualified deferred compensation (NQDC) plans. That growth, however, is unlikely to continue in light of new rules for NQDC plans by the American Jobs Creation Act of 2004 (AJCA), which added Section 409A to the Internal Revenue Code. The AJCA requires design changes to these plans and placed additional administrative burdens on companies that sponsor them." (PLANSPONSOR.com; one-time registration required) Incentive Programs Energize Employees — Just Ask HSBC – North America Excerpt: "Five- and six-figure cash awards aren't unusual for employees with great ideas that save the financial services firm money. And, says HSBC vice president of compensation Chuck Dwyer, you don't have to be a senior executive to win one." (Workforce Insights) Hewitt Federal Legislation Quick Guide Updated as of May 31, 2005 Excerpt: "Hewitt's Federal Legislation Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law regarding health and welfare benefit plans, retirement plans, and human resources and employment law." (Hewitt Associates) Microsoft Recants on Use of Stock Options and Now Has an Equity Ownership Program Excerpt: "In an interview with the Society of American Business Editors and Writers Conference on May 3rd, Microsoft's Bill Gates indicated that he regretted ever offering stock options as part of Microsoft's compensation package and that Microsoft's current approach was 'much better'." (Leading Companies Online Magazine via Beyster Institute) Newly Posted Events Deciphering the Laws on Employee Leaves of Absence in California on June 22, 2005 presented by Precept Human Capital Management Health and Welfare Cost Containment in New Jersey on June 15, 2005 presented by International Society of CEBS - Northern New Jersey Chapter Newly Posted or Renewed Job Openings Health Insurance National Account Executive for Great-West Healthcare in CA Retirement Plan Education Consultant for Charles Schwab in CA, CO, OH Client Relationship Manager for Great-West Retirement Services in FL Benefits Analyst for Siebel Systems in CA Enrollment Strategist/Specialist for Kaiser Permanente in MD Employee Benefits Trust Officer for Regions Financial Corporation in AL Sales Director, Financial Services for Employee Benefits Firm in MA Retirement Plan Specialist for American Funds in VA 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. Published by: BenefitsLink.com, Inc. https://benefitslink.com/about.html 1298 Minnesota Avenue, Suite H Winter Park FL 32789 (407) 644-4146 Fax: (407) 644-2151 Editor and Publisher: David Rhett Baker, J.D. Housekeeping: How to Sponsor an Issue Subscribe to a Daily Email Announcing Publication of Each Day's Newsletter Privacy Policy Archive of Previous Newsletters If you'd like to STOP this newsletter, just click on this link: STOP sending this newsletter to me