BenefitsLink Welfare Plans Newsletter August 8, 2005 Today's sponsor: The National Underwriter Company (Click on company name or banner to learn more.) National Underwriter publications in the BenefitsLink Bookstore! The National Underwriter Company is regarded as one of the premiere publishers of professional references. A leader in publications and online services in the areas of Financial Planning, Employee Benefits & Retirement Planning as well as Life & Health and Risk Management since 1897. Click above to see the list of informative publications. (Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor) Salt Lake City May Offer Domestic Partner Benefits Excerpt: "Salt Lake City leaders, led by Mayor Rocky Anderson, are considering offering health benefits to domestic partners -- a move that would make the capital city the first government body in conservative Utah to adopt such a plan." (Deseret Morning News) ERISA Preempts State Mental Health Parity Law to Self-Funded Plans in Daley v. Marriott Int'l, Inc. Excerpt: "This case is a reminder that state laws mandating benefits generally do not apply to self-funded ERISA plans. However, plan sponsors should keep in mind that the federal Mental Health Parity Act (MHPA), which has been extended to December 31, 2005 ..., applies to self-funded as well as insured health plans." (Employee Benefits Institute of America Inc.) Different FMLA Rules for Men and Women Could Constitute Bias, According to Federal Court Excerpt: "The city of Albuquerque, N.M., may have engaged in se.xual discrimination when it let male police officers use compensatory time for their Family and Medical Leave Act leave but forced female officers to use up sick days, a federal appellate court ruled. The unanimous Aug. 2 decision by the three-judge panel of the 10th U.S. Circuit Court of Appeals in Orr vs. City of Albuquerque reversed a lower court ruling on this claim." (Business Insurance) Chaplains at Work -- At Some Firms, Employees Who Want Spiritual Advice Have Someone to Turn To Excerpt: "When Tammy Hubbell had surgery in April, she received the assistance of a somewhat unusual company benefit -- prayers offered by the workplace chaplain. Hubbell's employer, Winterwood Inc. in Lexington, is one of a growing number of companies that offer chaplaincy services as part of the employee benefits package." (Lexington Herald-Leader) Audio: Cafe Owner Sends Workers to See the World Excerpt: "David Ford owns Y.J.'s Snack Bar in Kansas City, Mo. After an employee has been on the job one year, Ford buys that worker a roundtrip plane ticket to a destination of his or her choice. He tells Scott Simon he wants people whose 'taste for the world is alive and vibrant.'" (Weekend Edition via National Public Radio) WSJ Survey Examines Workers' Opinions of Employer-Health Benefits Excerpt: "'Majority of Adults With Employer-Provided Health Insurance Would Forego a Pay Increase To Maintain Their Health Insurance Benefits,' .... Forty-three percent of adults with employer-sponsored health insurance say their health care benefits have become worse over the last two or three years, while 14% said their salary has become worse and 18% said their retirement benefits have worsened, according to a survey ... for the Wall Street Journal Online's Health Industry Edition." (Kaiser Family Foundation) Employer's Policy of Excluding Coverage for Contraceptives Violates the Pregnancy Discrimination Act Excerpt: "This is another significant development in the growing list of cases illustrating the risks employers run when excluding contraceptives from their health plans .... We were also intrigued by the court's creative attempt to 'reduce the gender gap-in-attitude' toward pregnancy with a detailed description of how the symptoms might be experienced by a man if a man could become pregnant." (Employee Benefits Institute of America Inc.) The War on Waiting for Hospital Treatment: What Has Labour Achieved and What Challenges Remain? 11 page summary. Excerpt: "Describes the task faced by the government, assesses the policy initiatives it has taken to address waiting list numbers and waiting times, and explores what it should do next." (King's Fund) The 2006 Segal Health Plan Cost Trend Survey (PDF) 4 pages. Excerpt: "The 2006 Segal Health Plan Cost Trend Survey compares historical forecasts to actual cost increases. The Survey reports projections for 2006 obtained from a survey of managed care organizations, health insurers, pharmacy benefit managers and third party administrators." (The Segal Company) Another Way to Cut Medical Costs: Split Your Pills -- More Health Insurers Endorsing the Practice Excerpt: "Although skeptics say the practice may be unsafe, a growing number of health insurers are encouraging patients to split pills as a way to combat the rising costs of pres.cription drugs. In June, UnitedHealthcare, one of the nation's largest managed-care companies, advised members in Wisconsin to discuss pill splitting with their physicians. The insurer plans to introduce the program nationwide before the end of the year." (Los Angeles Times; one-time registration required) Kaiser/Hewitt Retiree Health Care Survey Underway Excerpt: "To learn what other large companies are planning for 2006 and beyond, Hewitt Associates and The Henry J. Kaiser Family Foundation invite you to participate in the 2005 Retiree Health Benefits Survey, now in its fourth year. This year's survey focuses on the Medicare Modernization Act and age 65+ retiree health benefits and will answer such key questions as: ...." (Hewitt Associates) Hidden Effects of the Medicare Pres.cription Drug Improvement and Modernization Act's Regulations (PDF) 2 pages. Excerpt: "If an employer cannot use the four part test, or if a plan is not deemed actuarially equivalent under the four part test, an actuary must make the determination of actuarial equivalence under the Regulations. If the plan is not actuarially equivalent, the Notice must indicate that the plan's pres.cription drug coverage is not creditable coverage, and, if applicable, the employer would not be eligible for the Subsidy." (Haynes and Boone, LLP) The California Report -- A Rebuttal Excerpt: "California grabbed the spotlight this week with a report by the state's insurance commissioner, John Garamendi, blasting Health Savings Accounts and consumer-directed care and stressing his demand for a universal, government-run health care system. But he has a small problem with actual facts: ...." (Galen Institute) Overview: Health Savings Accounts & Mutual Funds Excerpt: "Uncle Sam wants to give you $1,900 a year and nobody gives a hoot. Investors could save thousands in taxes with new IRA-like accounts and the most they do is yawn. Even more surprising, fund companies aren't scampering about like saloon keepers near R&R ports for sailors trying to suck up all the easy money-- even though they have collectively made billions managing IRA accounts and should know better. We're talking about HSAs or Health Savings Accounts, ...." (MAXfunds.com Inc.) Overview: Health Savings Accounts Excerpt: "Some financial organizations are still hesitating about offering HSAs. This article's look at some of the basic HSA rules may help answer the questions a financial organization has in determining whether to enter the HSA market." (Bankers Systems Retirement Plan Services) Group Helps Companies Support Active-Duty Employees and Their Families Excerpt: "No matter what the personal feelings may be of U.S. military action, employee and company support of the troops and their families is critical, says Roger E. Herman, president of the nonprofit Employers United for a Stronger America." (The News-Press) Links to Items on Executive Comp, Benefits in General Stock Options: So Who's Counting? Excerpt: "For every Microsoft and I.B.M., embedding its options expense into earnings even though it necessarily depresses profits ..., there are many more companies that are playing games as the deadline draws near. One small example: ... some companies are quietly lowering the 'volatility' assumptions they had previously used to calculate their options expense. With stock volatility near historic lows, this move may not give investors a true long-term picture of a company's options burden." (The New York Times; one-time registration required) Employment During the 2001-2003 Recovery -- An Analysis with Reference to Employee Benefits (PDF) 23 pages. Excerpt: "Employers' costs for benefits, especially for health insurance, have grown rapidly over the past several years (see Figure 10).17 Such costs are essentially fixed per worker regardless of the number of hours worked, provided that the worker meets a minimum threshold for hours worked. Thus, any increase in those costs will induce some employers seeking to boost output to extend the hours of their current workforce rather than to hire additional workers." (U.S. Congressional Budget Office) August 2005 Human Resources Bulletin -- Overview of Recent Information on Employee Benefits (PDF) 9 pages. This issue includes articles titled: Pension Funding ReformLegislation Overview; New Guidance Addressing Potential Conflicts ofInterest of Pension Consultants; Taxation of Domestic Partner Benefits; and, Coming Soon: The Second Round of 409A Guidance. (Dow, Lohnes & Albertson, PLLC) Welcome to BenefitsLink advertiser About Your Benefits, Inc. Excerpt: "Your full-service provider for Employee Benefit Statements, Online Benefits Communication and other personalized communication for your employees. Extensive in-house resources and highly experienced staff assure a cost-effective and timely response to your benefit communication requirements. It's Only a Benefit If Your Employees Know About It!" (BenefitsLink.com) IRS Nixes Profit-Sharing Plan Providing Nontaxable Med. Exp. Reimbursement from Separate Med. Acct. Excerpt: "Employers sponsoring these types of plans will want to take prompt corrective action as outlined in the ruling, if it is available to them. Remember that profit-sharing plans can include in-service distribution provisions for medical expenses, but those distributions are subject to taxation; employers that are interested in making tax-advantaged medical reimbursement accounts available to employees might want to consider choosing from among various IRS-approved arrangements, ...." (Employee Benefits Institute of America Inc.) Stock Option Plans Draw New Fire from Foes Excerpt: "Here's some fresh ammunition for critics of companies that dole out stock options to top executives -- a new study has found a link between handsome option grants and financial shenanigans at businesses.When large option packages are handed out to chief executives, there's a greater likelihood that accounting misrepresentations will be uncovered at the company, according to the University of Minnesota study." (Reuters) Some Victories in CalPERS' War to Tie CEO Pay to Performance Excerpt: "In addition to pushing 'pay-for-performance,' CalPERS wants to eliminate some of the more outrageous CEO perks, such as accelerated vesting of options in takeovers and so-called 'gross-ups' that cover the owed taxes on those windfalls. The fund is also calling for vesting periods of at least four years on stock awards and wants to limit the top five officers of a company to a total of no more than 5% of the stock grants given each year." (BusinessWeek) Nominees Sought for Pension Benefit Advisory Council Excerpt: "Oct. 1 is the deadline to nominate people to fill five three-year vacancies on the Advisory Council on Employee Welfare and Pension Benefit Plans, also known as the ERISA Advisory Council." (Society for Human Resource Management) Overview: Plan Terms May Shorten Period for Giving Notice of a Material Modification Excerpt: "The employer in this case amended its severance plan to make its sales employees ineligible for benefits, but waited seven months to notify the sales employees, giving them notice of the amendment four days before terminating a number of them. The severance plan stated that employees would be notified of any material changes to the plan 'within a reasonable amount of time.'" (Employee Benefits Institute of America Inc.) Newly Posted Events Medicare Part D: The Next Steps (Teleweb) Nationwide on August 18, 2005 presented by International Foundation of Employee Benefit Plans Newly Posted Press Releases Health Care Access and Coverage Steady - From 1997-2002, EBRI Review Reports (Employee Benefit Research Institute (EBRI)) National Investment Managers Acquires Stephen H. Rosen & Associates, Inc. Retirement Consulting, Pension Plan Design And Administration Services (National Investment Managers Inc.) Newly Posted or Renewed Job Openings Benefits Manager for Capital Group Companies, Inc. in TX Qualified Plans Manager for Ralcorp Holding, Inc. in MO Pension Administrator/Consultant/Actuary for Chambers Benefit Group, APC in NM Customer Service Representative for Great-West Corporate in KS Sr. Relationship Manager for Principal Financial Group in IA Pension Service Representative for Milliman, Inc. in WA Senior Pension Analyst for Milliman, Inc. in WA Manager, Compliance and Benefits Administration for Kansas City Based Defined Benefits Plan Administrator in MO Director I for Fidelity Investments in MA Benefits Service Manager (HW) for Hewitt Associates in IL 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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