BenefitsLink Welfare Plans Newsletter June 3, 2005 Today's sponsor: WorldatWork (Click on company name or banner to learn more.) New WorldatWork publications added to the Bookstore WorldatWork, a not-for-profit professional association, is a leading publisher of compensation, benefits and total rewards information. With a portfolio of books, reports, survey briefs, booklets and online learning programs, WorldatWork creates, markets and distributes publications that are critical to improved organizational performance. WorldatWork has contributed to the education and development of business professionals worldwide since 1955. (Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor) Providers Rushing to Participate in Medicare's New Drug Benefit Program, Companies Cautious Excerpt: "Blame Uncle Sam for the latest anxiety overwhelming the health-care sector. For the better part of a year, health insurers and pharmacy benefit managers have been preparing bids to provide pres.cription drugs to the nation's 43 million seniors." (CFO Magazine) Part D Primer: Employers Opt for Medicare Pres.cription Drug Subsidy for Retiree Drug Plans Excerpt: "With deadlines related to the Medicare pres.cription drug benefit closing in, surveys are showing that most employers expect to take advantage of the government subsidy for retiree drug plans. Experts caution, however, that some might be disappointed to find that their plans won't qualify for the payment." (Employee Benefit News) Interview: Implementing Medicare Part D Could Get Ugly Transcript of an interview with founding executive director, Richard Stefanacci, of the new Health Policy Institute at the University of the Sciences in Philadelphia. (Managed Care Magazine) Chart with Key Dates for Medicare Part D Target page has link to the 1-page PDF of the chart. (Watson Wyatt Worldwide) Employers Should Promote EAPs to Maximize ROI Excerpt: "While most companies have employee assistance programs, nearly 20% of workers don't know if their companies offer them, according to a recent survey by the Hazelden Foundation, which provides drug and alcohol addiction treatments. Employers are missing an opportunity to save on health costs by downplaying their EAP offerings, .... EAPs help companies integrate their wellness and disease management programs to create a comprehensive approach to lowering health care costs, ...." (Employee Benefit News) Apprenticeship and Training Funds: Legal/Fiduciary Issues for Employers (PDF) 4 pages. Excerpt: "This article focuses on the legal and fiduciary issues arising out of the establishment, maintenance and administration of apprenticeship and training funds and the impact of ERISA on trustees who administer such funds.With due diligence and good recordkeeping, most apprenticeship programs can avoid the expense and potential damages involved in the litigation process." (Benefits & Compensation Digest) Faced with Worker Burnout, Employers Pay Employees to Get Away Excerpt: "One in three U.S. employees feels chronically overworked, and 54% have felt overwhelmed by work at some point in the past month, a study released this spring from the Families and Work Institute reveals. However, the Institute also found that although 79% of employees had access to paid vacation in 2004, 36% did not take advantage of their full slate of vacation days." (Employee Benefit News) Health Plans Prepare to Comply with HIPAA Provider Identifier Mandate Excerpt: "Providers on May 23 started submitting applications for a single national provider identifier (NPI) mandated by HIPAA. The new identifier is intended to simplify transactions between providers and payers, but implementing the system may create some operational challenges for health plans, one expert warns. The NPI rule requires each provider to use one unique number for all transactions with health insurers, employers, Medicaid programs and others." (MANAGED CARE WEEK via AISHealth.com) Insurers, Providers, Tech Companies Team Up to Develop Rules for Obtaining Patient Insurance Info Excerpt: "A group of 50 major health insurers, medical associations, hospitals and technology companies have partnered to develop the first set of information-exchange rules for obtaining patients' health insurance information, the Wall Street Journal reports. Currently, the medical industry has 'no single, easy way of checking whether a patient has a health plan and what it covers,' according to the Journal." (Kaiser Family Foundation) Quicken Software Keeps Track of Family Medical Bills, Pres.criptions Excerpt: " Intuit's Quicken Medical Expense Manager is designed to help you organize and keep track of health-related bills for each family member, including pets. The Windows-only software ... might prove to be a godsend whether someone in your clan has a chronic condition or the common cold. By providing a central location for logging doctor's visits, benefits notices and pres.criptions, you can keep tabs on whether bills are pending, or have been paid and/or reimbursed." (USA TODAY via Yahoo! News) Pressured Providers Take Their Case Directly to Employees Excerpt: "Looking for an advantage in their negotiations with insurers over reimbursement rates, physicians and hospitals have begun taking their case directly to consumers - a controversial strategy that could have an unintended effect." (Employee Benefit News) Opinion: Pay for Performance Not Ready for Prime Time in Health Care Industry Excerpt: "The premise of pay for performance is hard to disagree with: Doctors and institutions that provide better care should earn more money. This premise, however, is hampered by two facts: No one knows the best way to implement such a program, and if different health care payers implement different programs, the effects will be diluted." (CIO Insight) The Pharmacist: Partner in Providing Health Care Benefits (PDF) Excerpt: "The objective of this article is to show the evolving role of the pharmacist, whose expertise can lead to improved patient outcomes while decreasing health care costs. The work between a pharmacist and an IBEW local union, as well as other studies, demonstrate a unique approach." (Benefits & Compensation Digest) Consumers Drive Higher Generic Drug Utilization at Blues Plans Excerpt: "Consumers are becoming more willing to use generic medications as awareness grows about alternatives and their potential to save money. And several Blue Cross and Blue Shield plans are tapping into that willingness in an effort to increase their generic utilization rates and slow increases in pharmacy spending." (The AIS Report on Blue Cross and Blue Shield Plans via AISHealth.com) 'Transparency' Is More than Rebates and Discounts at Premera Blue Cross Excerpt: "While many pharmacy benefit managers (PBM)s are offering 'transparent' agreements that involve maximum rebate pass-through and increased visibility of revenue streams, Premera Blue Cross Pharmacy Director Ed Wong, Pharm.D., says transparency is not just about discounts and rebates. The outcome of the transparency process, he tells DBN, should be 'the right drugs preferred on the formulary.'" (DRUG BENEFIT NEWS via AISHealth.com) Are Consumer-Directed Health Plan Consumers Really Directing Their Own Care? Excerpt: "In theory, consumer-directed health plans put the reins of decision making into the hands of their members. But medical management departments are alive and well inside CDHPs -- and may even expand under these plan designs. [The article includes a chart on the Top 10 Consumer-Directed Health Plans.]" (Managed Care Magazine) Employee-Plus-Child Health Coverage Fills Benefits Need for Single-Parent Employees at AFLAC Excerpt: "Aflac knows well that revenues depend on satisfied employees. So the company implemented two changes in its own benefits and compensation plan in hopes of getting a more loyal, steady staff in return. The Columbus, Ga.-based provider of disability insurance, life insurance and benefit administration services has begun offering employee-plus-child health insurance and has revamped its system for promoting call center workers." (Employee Benefit News) Wisconsin Joins Other States in Trying to Force Wal-Mart to Increase Workers' Health Care Coverage Excerpt: "State Representative Terese Berceau has introduced a bill to tax every retailer in the state with gross receipts exceeding $20 million per year that pays less than 10% of the retailer's payroll towards health care costs for employees, .... The tax would apply only if the annual compensation that the retailer pays to each entry-level employee who holds a full-time job is less than $22,000, or if 25% of the employees do not hold full-time jobs, ...." (PLANSPONSOR.com; one-time registration required) Two Political Groups Lobby for Health Benefit Mandates in All 50 States Excerpt: "Two political groups launched a campaign Wednesday to lobby state lawmakers to propose 'fair share health care' legislation in all 50 states. The groups want large companies, like Wal-Mart Stores Inc., to provide health insurance to all their workers or reimburse the state when employees enroll in public assistance programs." (BenefitNews Connect) Evaporation of Retiree Benefits May Be Health Plan Opportunity for New Products Excerpt: "[R]ecent cases help illustrate the steady erosion of retiree health benefits in America. [O]ut-of-pocket expenses are being forced up -- 27 percent last year alone for early retirees ... -- while a host of companies are drawing the line against offering retiree health benefits to any new workers. Another new twist: a critical mass of companies is applying caps on retiree benefits, which in the not-very-long-term could well fuel an even more dramatic increase in personal coverage costs." (Managed Care Magazine) Opinion: Retiree Health Benefits as Deferred Compensation -- A View from the Real World Excerpt: "It's not easy to place oneself in another's shoes, but after years of reading letters from employees and retirees, I thought I'd give it a shot. Do you ever wonder what your retirees think? I do, a lot (and increasingly more as I get nearer being one). Here is one perspective to which we tend to turn a deaf ear." (Richard D. Quinn via Employee Benefit News) Overview of Health Savings Account Options (PDF) 4 pages. Excerpt: "This 'Executive Letter' describes the key features of HSAs and discusses characteristics that [attract employers]." (The Segal Company) NAIFA Affiliate Pushes for LTC Tax Break Excerpt: "The Association of Health Insurance Advisors is backing a new federal long term care insurance tax bill. The bill, H.R. 2682, would provide an above-the-line deduction for individual expenditures on LTC insurance premiums and a tax credit of up to $3,000 per year for caregivers. The bill also would permit employers to offer LTC policies through cafeteria plans and flexible spending accounts." (National Underwriter) Overview: IRS Modifies 'Use-It-or-Lose-It' Rule for Flexible Spending Accounts (PDF) 3 pages. Excerpt: "The modification to the 'use-it-or-lose-it' rule is effective immediately. In order to apply the modification to an FSA, an employer must amend the cafeteria plan under which the FSA is offered. Notice 2005-42 indicates that an employer may adopt a grace period for an FSA, effective for any plan year (including the current plan year), by amending the cafeteria plan before the end of that plan year." (Dechert LLP) Overview: IRS Allows Employers to Provide Grace Period for Flexible Spending Accounts Excerpt: "In order to implement this new provision, employers which sponsor FSAs must: Amend the plan document to provide for a grace period not to exceed 2½ months; Apply the grace period to all participants in the plan; Forfeit any unused benefits or contributions that exceed the amount of expenses incurred during the claims period (which now includes the plan year plus the grace period) at the end of the grace period." (Littler Mendelson, P.C.) Overview: New Flexible Spending Account Rule on 'Use It or Lose It' May Bring New Headaches Excerpt: "New government efforts to relax the flexible spending account 'use it or lose it' rule could create complications for FSA holders and FSA plan sponsors." (National Underwriter) Overview: Flex Plans Are Now More Flexible Excerpt: "An IRS notice ... issued last week provided relief from the 'use it or lose it' rule applicable to §125 cafeteria plans. Under proposed regulations issued in the 1980s, cafeteria plan participants have been prohibited from using contributions made during a plan year to purchase benefits in a subsequent plan year. The proposed regulations required the unused contributions or benefits remaining at the end of the plan year to be forfeited and ...." (BNA Tax Management) Links to Items on Executive Comp, Benefits in General News Summaries Developed to Inform Clients and Other Professionals in the Benefits Industry (PDF) 4 pages. Selected contents: Representative Cardin Introduces Pension Reform Legislation; Senate Committee on Aging Conducts Hearing on Redefining Retirement; IRS to Increase Enforcement Activities Related to Benefit Plans; IRS Publishes Revised Federal-State Reference Guide Online. (Gabriel, Roeder, Smith & Company) ERIC Comments to President's Advisory Panel on Federal Tax Reform Re: Employee Benefit Plans (PDF) 2 pages. Excerpt: "[ERIC] urges that the Advisory Panel consider the following proposals: Enact on a permanent basis the increased savings and funding limits applicable to tax qualified retirement plans that were included in EGTRRA (P.L. 107-16). Increase the amount of contributions that an employer can make to a defined benefit pension plan on a deductible basis; and eliminate penalties for contributions made above deductible limits [and other proposals regarding savings and health care]." (The ERISA Industry Committee) New York State Senate Approves Increased Benefits for Public Employees in the Military Excerpt: "A measure to make the death benefits given to the families of public employees who are killed while on active military duty the same as if they were killed while working for state or local governments received final legislative approval in the state Senate Wednesday. The Assembly passed the 'Patriot Plan III' by a unanimous vote Tuesday." (AP via Newsday) Smooth Transition: HR Input Can Prevent Benefits Blunders during Mergers and Acquisitions Excerpt: "Mergers and acquisitions open the door for changes in benefit levels and pose some unique challenges for HR professionals. Companies in that situation should take steps to avoid costly errors as they transition benefits for employees. The most common mistakes include not involving HR soon enough, not determining who's responsible for COBRA coverage, and communicating poorly to employees, experts say." (Employee Benefit News) Washington Regulatory Wrap Up, 2005, as of June 1, 2005 (PDF) 3 pages. Excerpt: "The chart of federal regulatory proposals concerning employee benefits of interest to NCTR members has been updated to be current as of June 1, 2005. The federal updates referenced in the chart are available at http://www.nctr.org/federal/index.html." (National Council on Teacher Retirement) Developing a Fraud Policy for Employee Benefit Plans (PDF) 4 pages. Excerpt: "To meet the requirements of today's business world, benefit plans will find it necessary to spell out and document certain basic procedures, such as a plan fraud policy statement. Such a statement helps create an atmosphere of honesty and ethical behavior and provides a thorough understanding of expectations of those working for or doing business with the plan." (Benefits & Compensation Digest) Benefit Plan Design for an Increasingly Complex Workforce Excerpt: "Many HR professionals are projecting what their workforce will look like 10 years down the road, but these workforce trends are affecting Corporate America right now. Each generation - Veterans, Boomers, Generation Xers and Millenials - has competing interests when it comes to benefits plan design and, therefore, each must be considered." (Employee Benefit News) Newly Posted Press Releases Assist America to Make Presentation at American College Health Association Annual Meeting (Assist America) Prudential Retirement Launches 'Signature Online'; Powerful Combination of Capabilities Produces New Web-Based Educational Resource for Plan Participants (Prudential Financial, Inc.) American Express Retirement Services Announces New Vice President For Northeastern Territory - New Addition To Retirement Plan and Investment Services Distribution: Greg Buzzell (American Express Retirement Services) Judge Finds Bosch Automotive Purposely Timed Lay Off of Hendersonville Plant Workers to Avoid Paying Benefits (Drescher & Sharp, P.C.) URAC Launches Consumer Education and Support Standards and Sets Stage for New Consumer-Centric Market (URAC) Newly Posted or Renewed Job Openings New Business Review Specialist for CitiStreet in NJ Retirement Plan Specialist for Diversified Investment Advisors in MO Sr. Benefits Analyst for Susquehanna Bancshares, Inc. in PA Retirement Plan Relationship Coordinator for Great-West Retirement Services in WI Benefit Analyst for Edward Hospital in IL Communications Consultant for New York Life Investment Management LLC in MA Investment Consultant/Client Service for MBO Cleary Advisors Inc. in WI Client Services Consultant- St. Louis Regional Office for American United Life Insurance in MO 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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