BenefitsLink Welfare Plans Newsletter June 27, 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) Flexible Spending Account Spending Deadline Extended for Federal Workers Excerpt: "The Office of Personnel Management followed the private sector this week by extending the 'use it or lose it' deadline for Flexible Spending Accounts." (National Journal Group Inc. via govexec.com) Overview: New CMS Guidance under Medicare Part D for Account-Based Health Arrangements Excerpt: "This guidance reminds us that sponsors of HRAs, whether or not they are seeking the retiree pres.cription drug subsidy, will need to determine (perhaps with the assistance of an actuary) whether creditable or non-creditable pres.cription drug coverage is offered and then must provide the appropriate disclosure notices to individuals eligible for Medicare Part D." (Employee Benefits Institute of America Inc.) In-Home Backup Caregiver Services Help Keep Workers on the Job Excerpt: "Mildly ill children or elders can be cared for and the hours covered are unlimited, including overnight and weekends. Snow days, sick kids, babysitters with the flu, elderly parents who unexpectedly need some short-term assistance: It's not really a secret that situations like these lead to more than a few missed days of work. Yet there are cost-effective steps that employers can take to reduce missed days of work, increase productivity and give a big boost to employee morale ...." (Workforce Management; one-time registration required) Firms Learn Time Off Pays Off: Sabbaticals, Paid or Not, More Common Excerpt: "Sabbaticals aren't just for college professors anymore. These days, a growing number of companies are giving their workers paid time off to volunteer, travel or reconnect with family in an effort to keep staffers happy and reduce turnover. Nationally, sabbatical rates are rising. In the 1990s, about 10 percent of companies had sabbatical programs, increasing to a high of 18 percent in 2000, according to the Society for Human Resource Management." (The Detroit News via The Fort Collins Coloradoan) Wider Health Coverage Pushed in Oregon: Bill Would Raise Tobacco Tax by 60 Cents Per Pack Excerpt: "More than five months into the 2005 session, lawmakers from both parties are proposing to extend health-insurance coverage to many of the 600,000 Oregonians without it. The plan unveiled this week by four lawmakers, including Rep. Billy Dalto of Salem, hinges on a cigarette-tax increase of 60 cents per pack to pay for it. They are asking their colleagues to put the tax on the November 2006 ballot for voters to decide." (Statesman Journal) Overview: IRS Notice on Health Coverage Tax Credit (HCTC) Excerpt: "This IRS notice confirms the rule regarding COBRA premium payments contained in the IRS COBRA regulations: Employers and plans must accept premium payments on behalf of a qualified beneficiary, regardless of who makes the payments (although COBRA coverage may in certain circumstances be terminated before the end of the maximum COBRA coverage period if premium payments are late or are for less than the full amount due)." (Employee Benefits Institute of America Inc.) An Examination of Health Insurer Coverage Decisions on Weight-Loss Surgeries Excerpt: "It's not unusual for doctors and insurance companies to clash over coverage. But when it comes to obesity surgery, insurance companies disagree even among themselves. Worried about the safety and costs of stomach stapling and similar weight-loss operations, many insurers have tightened eligibility rules, and a few have stopped covering the procedures altogether." (Los Angeles Times; one-time registration required) Health Spending Soars for Obesity Related Illnesses -- Tenfold Increase Since 1987 Excerpt: "Private health insurance spending on illnesses related to obesity has increased more than tenfold since 1987, according to the first research to quantify the trend. The growth in obesity has fueled a dramatic increase in the amount spent treating diabetes, heart disease, high cholesterol and other weight-related illnesses, says the study, which is published today in Health Affairs, an online journal of health policy and research." (USA TODAY) Company-Based Wellness Plans Face Employee Resistance Excerpt: "Executives who want healthier employees should make sure their actions match their words. Employee benefits managers delivered that message in responses to a survey conducted by the consulting arm of Aon Corp., Chicago. When Aon researchers talked to benefits managers at 205 large and midsize employers, they found that 43% of the companies already offer some form of wellness program." (National Underwriter Life & Health; free one-time registration or paid subscription required) Health Benefit Mandates Proposed in 31 States Excerpt: "Thirty-one states are considering health benefit mandates that would affect employers, according to an analysis by the HR Policy Association, an advocate for large employers. The bills fall into three general categories: ...." (Employee Benefit News) A Look at the Benefits and Limits of Health Savings Accounts Excerpt: "Employers can contribute through payroll cafeteria plans before Federal Income and FICA taxes are applied. These contributions will also reduce the employers' matching FICA taxes, adding up to significant savings. For example, an employee at the 28 percent Federal Income tax rate plus 7.625 percent FICA tax rate who contributes $2,600 annually would save $927 in taxes. The employer would save $199 in matching FICA taxes per contributing employee." (Nashville Business Journal via bizjournals.com; one-time registration required) Links to Items on Executive Comp, Benefits in General Overview: Currently Taxed Unvested Restricted Stock Counted for Some Golden Parachute Rules Excerpt: "A new revenue ruling concludes that unvested shares of restricted stock that are taxed currently as a result of a Code Sec. 83(b) election are treated as outstanding shares in determining whether (1) a corporation has experienced a change in ownership or control, and (2) a shareholder is a disqualified individual, under the Code Sec. 280G golden parachute rules. (Rev Rul 2005-39, 2005-27 IRB)" (Pension & Benefits Week via RIA) Employee Plans' Abusive Tax Transactions -- Listed Transactions Excerpt: "Recently, the IRS finalized regulations on abusive tax shelters. The regulations provide that a taxpayer must disclose certain transactions know as 'listed transactions' by filing a disclosure statement (Form 8886) with its tax return. A 'listed transaction' is a transaction that is the same as or substantially similar to one that the IRS has determined to be a tax avoidance transaction and identified by IRS notice or other form of published guidance." (U.S. Internal Revenue Service) New NQDC Guidance Expected by Late Summer Excerpt: "A second set of regulatory guidance about nonqualified deferred compensation programs under Internal Revenue Service (IRS) Code 409A could be out by August, according to a US Treasury Department official." (PLANSPONSOR.com; one-time registration required) Breach of Fiduciary Duty Claim Denied Class Certification by Federal Court for the District of Maine Excerpt: "A federal judge has turned down a request by a group of former employees of a paper and lumber company to certify as a class action their lawsuit that charges the company breached its fiduciary duty by not properly informing them that responsibility for their retiree benefits was being transferred to a new undercapitalized owner. US District Judge Gene Carter of the US District Court for the District of Maine, however, approved three other claims against Bowater Inc. ...." (PLANSPONSOR.com; one-time registration required) Highlights of Hewitt Report, Human Resource Outsourcing: Trends & Insights, 2005 (PDF) 6 pages. Excerpt: "Today, research confirms that HR outsourcing provides organizations with access to better expertise, better customer service, lower costs, and greater value. Freed from time-consuming administration, HR is more able to realize its full potential and deliver greater strategic value to the organization." (Hewitt Associates) Top 10 Mistakes When Outsourcing Benefit Plan Administration Excerpt: "The increasing interest in outsourcing benefits reflects a determination for businesses to focus on achieving core objectives rather than being tied up with overhead and administration. Any business can achieve this by leveraging the expertise and resources of external partners, who can provide more flexibility and expertise than would be possible to provide on their own internally." (Employee Benefit News) Letter to House Committee Re: Exclude Taxation of Deferral on Stock Option Gains from Conference (PDF) 2 pages. Excerpt: "On behalf of HR Policy Association, I am writing to urge you to reject section 5515 of the Senate passed version of H.R. 3 in the final conference report on the bill. Section 5515 requires immediate taxation of deferred stock option gains. A similar provision was deleted from the final version of the American Jobs Creation Act last year." (HR Policy Association) Newly Posted Events HIPAA Privacy and Security Regulations Nationwide on June 28, 2005 presented by Association of Trial Lawyers of America (ATLA) Teleweb: LM-30s--How DOL's New Enforcement Program Affects Your Funds Nationwide on June 29, 2005 presented by International Foundation of Employee Benefit Plans Newly Posted Press Releases Benefit Advisors Network Announces Strategic Alliance With Gen 4 (Benefit Advisors Network) Newly Posted or Renewed Job Openings Defined Benefit Plan Administrator for Ingham Group in FL Asset Allocation Specialist (Premier Services) for ICMA-RC in DC Investment Consultant for Stanley, Hunt, Dupree and Rhyne (a subsidiary of BB&T Corporation) in NC Retirement Plan Services Relationship Officer for First Citizens Bank in NC Regional Service Coordinator for Standard Insurance Company in OH Senior New Business Consultant for New York Life Investment Management LLC in MA Implementation Manager for Great-West Financial Services in CO 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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