BenefitsLink Welfare Plans Newsletter June 7, 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) New Law Clarifies Treatment of Patient Information During Bankruptcies Excerpt: "Covered entities (CEs) under HIPAA must ensure the privacy of protected health information (PHI) by instituting formal procedures to dispose of records that are obsolete and no longer needed. Although the regulations don't specify any set procedures that must be used to dispose of PHI, the preamble to final HIPAA regulations includes examples of appropriate means, such as shredding documents before disposal. What happens when a CE is facing bankrup.tcy?" (REPORT ON PATIENT PRIVACY via AISHealth.com) Overview: Recent IRS Guidance on FSA/HSA/HRA Accounts (PDF) 6 pages. Excerpt: "The Internal Revenue Service ... recently issued guidance that impacts Flexible Spending Arrangements ..., Health Savings Accounts ..., and Health Reimbursement Arrangements ... as follows: Notice 2005-42 (May 18, 2005): .... Rev. Rul. 2005-25 (April 13, 2005): .... Rev. Rul. 2005-24 (April 5, 2005): ...." (Groom Law Group) Ruling Limits Prosecutions of People Who Violate Law on Privacy of Medical Records Excerpt: "An authoritative new ruling by the Justice Department sharply limits the government's ability to prosecute people for criminal violations of the law that protects the privacy of medical records. The criminal penalties, the department said, apply to insurers, doctors, hospitals and other providers - but not necessarily their employees or outsiders who steal personal health data." (The New York Times; one-time registration required) New HIPAA Requirements -- What the Final Portability Regs Mean for Your Plan Excerpt: "On Dec. 30, 2004, final regulations governing HIPAA's portability of health insurance coverage were published by the Employee Benefit Security Administration (EBSA), the Internal Revenue Service (IRS), and the Centers for Medicare and Medicaid Service (CMS). This regulation finalizes interim rules issued back in 1997." (Employee Benefit News) How to Determine Whether Universities Must Comply with HIPAA Excerpt: "Some confusion has evidently existed on the question of whether universities (or portions thereof) are 'covered entities' for purposes of HIPAA privacy compliance." (REPORT ON PATIENT PRIVACY via AISHealth.com) Overview: CMS Guidance on Creditable Coverage Notices Excerpt: "These notices are extremely important, because eligible Part D participants who do not enroll when first eligible will pay higher premiums if they enroll later, unless they can show they had 'creditable coverage' during that time. The guidance also addresses certain issues relating to determining whether a pres.cription drug plan provides creditable or noncreditable coverage ..." (Deloitte) Tips for Employers for 'Faring Well' with Welfare Plans Excerpt: "Employers frequently sponsor at least one - health insurance, dental insurance, a vision plan, disability programs. In employee benefits-speak, they are called 'welfare plans.' And in the realm of hot benefits topics, welfare plans are the hottest. Some of the most common 'hot spots' - and helpful suggestions - [are in the target article]." (Faegre & Benson via BNA Tax Management) Administration Takes Another Step toward Charting Health Data Electronically Excerpt: "The Bush administration plans to award $50 million in contracts to companies that can further its goal of creating a national health information network. The requests for proposals ... detail the government's priorities in health information technology. The contracts are intended to help overcome hurdles to building a health network that would make it possible to share information on patients and treatments, with approval by doctors, hospitals and public health agencies." (The New York Times; one-time registration required) HHS Will Announce Advisory Board to Assist Health Industry Implement Electronic Health Records Excerpt: "HHS Secretary Mike Leavitt on Monday is expected to announce that the department is creating an advisory panel composed of federal and private-sector members to steer national efforts to adopt a health care information technology system, the Wall Street Journal reports. The panel, called the American Health Information Community, will be formed in July and will provide a way for the government to work with the technology industry, health care providers and consumer groups." (Kaiser Family Foundation) Payer Demand for Disease Management, Therapy Management Programs Is on Rise Excerpt: "Specialty pharmacies increasingly are jumping into disease management or therapy management, often at the behest of clients who are beginning to realize the benefits of SPs working to ensure compliance and persistence for complex specialty therapies. And many in the industry predict that the trend is likely to accelerate as specialty products are approved for such common diseases as diabetes." (SPECIALTY PHARMACY NEWS via AISHealth.com) Generic Drug Substitution Could Save Billions of Dollars Annually, According to Study Excerpt: "Substituting generic drugs for brand-name drugs could save several billion dollars annually in the U.S., according to a report in the June 7th Annals of Internal Medicine. .... Dr. Haas and colleagues used data from the 1997-2000 Medical Expenditure Panel Survey Household Component to estimate the potential cost savings associated with broad generic substitution for all drugs that are currently available in a brand-name and at least one generic formulation." (Reuters Health via Medscape) CMS Guidance for Employer/Union Direct Contract PDPs Excerpt: "CMS released additional guidance relating to employer/union direct contract pres.cription drug plans, as well as Part C and Part D plans offering employer-only group plans. The purpose of this guidance is to provide information for the bidding process applicable to these arrangements, highlighting any differences in the bidding process for these entities." (The ERISA Industry Committee) More Americans Are Buying Low-Cost Health Plans -- But Limited Coverage Carries Some Big Risks Excerpt: "The bare-bones policies, known as 'limited-benefit' or 'mini-medical' plans, have been popular for several years with some small employers. Now more companies are embracing the leaner policies as a way to cajole uninsured workers to get coverage or to help struggling employees keep it. California-based Jack in the Box Inc. and Marie Callender's recently started offering limited-benefit health plans to their employees, joining companies such as Exxon Mobil Corp., Home Depot Inc. ...." (Los Angeles Times; one-time registration required) Vermont Legislature Approves Measure to Require Employers to Provide Health Coverage Excerpt: "The Vermont Legislature on Friday passed a health reform measure that is 'certain to draw a veto' from Gov. Jim Douglas (R), the AP/Bennington Banner reports. State senators voted 18-7 in favor of the bill, and the House followed four hours later with a 79-55 roll-call vote .... The health care reform plan would raise $43.8 million to provide primary and preventive health care services to 35,000 uninsured Vermont residents ...." (Kaiser Family Foundation) Only Two-Thirds of Small Businesses Can Offer Employees Health Insurance, Lawmaker Says Excerpt: "Only about two-thirds of U.S. small businesses can afford to offer employees health insurance, Rep. Jeff Fortenberry (R-Neb.) said Monday at a field hearing of the House Small Business Committee in Lincoln, Neb., the AP/Colorado Springs Gazette reports. Limited availability of coverage and the high cost of health insurance are the most common complaints of small business owners and employees, Fortenberry said." (Kaiser Family Foundation) Variations in the Impact of Health Coverage Expansion Proposals Across States Excerpt: "Most studies of health coverage expansion policies focus on their potential national impact. But a new ... study finds that diversity across states means that different federal strategies will have greatly varied effects across the nation. [The authors] examined variability among states with regard to numbers of uninsured, economic characteristics, and health care markets." (Health Affairs) Study Says States Need Help and More Options with Uninsured Issue Excerpt: "Federal lawmakers will have to offer states a variety of options to successfully reduce the number of uninsured Americans, according to a study being released today. The study, ... released in the online version of health policy journal Health Affairs, examined five federal health care proposals that have been considered but not implemented to try to reduce the uninsured rate." (The Washington Times) Opinion: Why Universal Health Care Vouchers Is the Next Big Idea Excerpt: "What would [a universal health care system] look like? To begin with, any comprehensive health-care reform should meet seven elemental tests. First, it should cover every American, no exceptions. Second, it should pay for covering those who are currently uninsured by cutting waste, not by increasing the total amount our country spends on health care. Third, it should hold down the rate of increase of future health-care costs. Fourth, it should give Americans more choice of health ...." (The Washington Monthly) Treasury Department's Flexible Savings Account Extension Provides 75 More Days to 'Use It' Excerpt: "While it will take an act of Congress to eliminate the 'use-it-or-lose-it' rule for flexible spending accounts (FSAs), the Treasury Dept. this month provided some relief in the form of a voluntary 75-day extension of the plan year. Notice 2005-42, issued by the Treasury Dept. May 18, says that qualified expenses incurred up to two and a half months after the close of the plan year can be reimbursed with FSA funds carried over from the previous year." (INSIDE CONSUMER-DIRECTED CARE via AISHealth.com) Overview of Health Savings Account Options – Corrected Online Version (PDF) 4 pages. Excerpt: "This 'Executive Letter' describes key features of HSAs and discusses characteristics that make employers attracted to – and also wary of – this new health plan design feature." (The Segal Company) Links to Items on Executive Comp, Benefits in General Overview: United States Supreme Court Approves 'Disparate Impact' Age Discrimination Claims (PDF) 2 pages.Excerpt: "On March 30, 2005, the U.S. Supreme Court, in Smith v. City of Jackson, concluded that, in addition to prohibiting intentional discrimination, the Age Discrimination in Employment Act ('ADEA') covers employee lawsuits challenging facially neutral plans or policies that have a disproportionate adverse impact on older workers. The Court, however, also afforded employers a broad defense to these 'disparate impact' claims. [Originally published April 8, 2005.]' (Haynes and Boone, LLP) Overview: New Bankrup.tcy Law Affects Benefit Plans Excerpt: "Effective date. The ... provisions of the new law will become effective on October 17, 2005. Bankruptcies filed before that date will be subject to existing law." (Faegre & Benson LLP) Workplace Improves Benefit Offerings for G.ay, Transgender Employees, Rights Group Says Excerpt: "The workplace is becoming friendlier for g.ay and transgender employees, according to a report released today by the Human Rights Campaign, a national advocacy group. According to the report, 'The State of the Workplace for Les.bian, G.ay, Bise.xual and Transgender Americans 2004,' at least 8,250 employers provided domestic partner benefits at the end of 2004, a 13 percent increase over the previous year." (The Washington Post; one-time registration required) Commentary: Right to Contribution or Indemnity under ERISA Excerpt: "Can a plan fiduciary who has been deemed liable under a plan seek either contribution or indemnification from a co-fiduciary of the plan under ERISA? The question was thoroughly discussed in the recent Opinion and Order issued by the federal district court in Houston approving the $85 million partial settlement on behalf of the Enron participants." (Attorney B. Janell Grenier via BenefitsBlog.com) Overview: ERISA Fiduciary Responsibility and Liability (PDF) 23 pages. Excerpt: "[The document is in question and answer format:] Who Is A Fiduciary? What Are Settlor Functions Versus Fiduciary Activity? What Is The Significance of Being A Fiduciary? What Is The Duty of Loyalty? What Is The Prudence Standard? What Is The Duty of Disclosure? What Is The Duty To Monitor? How To Select Plan Fiduciaries? What Special Issues Are Raised By Investing In Employer Stock? How Can You Limit Fiduciary Liability?" (Dechert LLP) Model Compensation Disclosure Schedule for Plan Sponsors Sent to EBSA Excerpt: "The disclosure schedule we have developed ... provides information about a service provider's receipt of compensation, including revenue sharing, in connection with its services to a 401(k) plan. The disclosure schedule is intended to address all service providers that are compensated by unaffiliated parties in connection with a plan. [The 2-page model is at http://www.ici.org/statements/cmltr/05_dol_disclos_sched.pdf.]" (Investment Company Institute) Newly Posted Events Avoiding Pitfalls in Medicare Part D Implementation: Audio Conference Nationwide on June 30, 2005 presented by MCOL Comparing Roth and Traditional IRAs Web/Telephone Seminar Nationwide on August 11, 2005 presented by BISYS Retirement Services Coverdell Education Savings Accounts Web/Telephone Seminar Nationwide on August 9, 2005 presented by BISYS Retirement Services Fall Forum in Georgia on September 26, 2005 presented by BISYS Retirement Services Fall Forum in Minnesota on October 10, 2005 presented by BISYS Retirement Services Fall Forum in Massachusetts on October 24, 2005 presented by BISYS Retirement Services Fall Forum in California on November 14, 2005 presented by BISYS Retirement Services General Traditional IRA Distributions Web/Telephone Seminar Nationwide on August 23, 2005 presented by BISYS Retirement Services HIPAA Portability Regulations, New FSA (temporary) Rollover and Potential Future Benefits Guidance: Audio Conference Nationwide on June 23, 2005 presented by MCOL Individual(k) Plans Web/Telephone Seminar Nationwide on August 17, 2005 presented by BISYS Retirement Services Introduction to 401(k) Plans Web/Telephone Seminar Nationwide on August 10, 2005 presented by BISYS Retirement Services Introduction to Deferral Programs for Governmental and Tax-Exempt Employers Web/Telephone Seminar Nationwide on August 31, 2005 presented by BISYS Retirement Services Introduction to Qualified Retirement Plan Distributions Web/Telephone Seminar Nationwide on August 24, 2005 presented by BISYS Retirement Services Introduction to Qualified Retirement Plans Web/Telephone Seminar Nationwide on August 3, 2005 presented by BISYS Retirement Services IRA Beneficiary Distributions Web/Telephone Seminar Nationwide on August 18, 2005 presented by BISYS Retirement Services Processing Claims and Appeals for Self-Funded Health Plans, Health FSAs, and HRAs: How to Make Plan Decisions That Stand Up to Scrutiny Nationwide on June 30, 2005 presented by Employee Benefits Institute of America Inc. (EBIA) Two-Day IRA Workshop in Kansas on June 9, 2005 presented by BISYS Retirement Services Two-Day IRA Workshop in Michigan on June 9, 2005 presented by BISYS Retirement Services Two-Day IRA Workshop in New Jersey on June 14, 2005 presented by BISYS Retirement Services Two-Day IRA Workshop in Oklahoma on June 14, 2005 presented by BISYS Retirement Services Two-Day IRA Workshop in Illinois on June 16, 2005 presented by BISYS Retirement Services Two-Day IRA Workshop in Texas on June 21, 2005 presented by BISYS Retirement Services Two-Day IRA Workshop in California on June 21, 2005 presented by BISYS Retirement Services Two-Day IRA Workshop in Texas on June 23, 2005 presented by BISYS Retirement Services Two-Day IRA Workshop in California on June 23, 2005 presented by BISYS Retirement Services U. S. Labor Department Sponsors Seminar To Help Pension Plan Professionals Comply With Federal Law in New York on June 24, 2005 presented by U.S. Department of Labor, Employee Benefits Security Administration Newly Posted Press Releases Health Savings Accounts Focus of June 8th NAGDCAST (NAGDCA (National Association of Government Defined Contribution Administrators, Inc.)) How an Initiative to Expand Health Care Coverage In Muskegon, MI, Has Fared After More Than 5 Years (Employee Benefit Research Institute (EBRI)) Council To Senate HELP Subpanel: Hybrid Plans Can Help Staunch The Defined Benefit System's Decline (American Benefits Council) The Haelan Group and Healthwise Join Forces to Inform and Empower At-Risk Healthcare Consumers (Haelan Group, The) Pittsburgh Business Group on Health's Prescription Drug Program Beats National Average (Pittsburgh Business Group on Health) July 21-22, 2005 The 3d Annual 412i Summit (412iCompany, The) Newly Posted or Renewed Job Openings Administrative Assistant for Small Chicago law firm and TPA firm in IL Pension Administrator for VPC Group in VA Benefits Manager for The Rosen Group Inc. in ANY STATE, PA Employee Benefit Administrator/Relationship Manager for The Trust Company of Knoxville in TN Benefits Administrator for The Rosen Group Inc. in ANY STATE, NJ Pension Account Administrator II for Alerus Retirement Solutions in MN Business Analyst for BISYS Retirement Services in PA Broker Sales Executive for a leading provider of products, services, and tools for brokers selling small-group employee benefits in AZ, CA, GA, IL ML Connect Director for Merrill Lynch in NJ Retirement Planning Contact Center Manager for LTSave, Inc. in MA VP, Business Development/Strategic Manager for Merrill Lynch in NJ Relationship Coordinator for Merrill Lynch in CA 401(k) Plan Administrator for Northeast Planning Services, Inc. in MA 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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