BenefitsLink Welfare Plans Newsletter August 9, 2005 Today's sponsor: BeneCom Associates, LLC (Click on company name or banner to learn more.) BeneCom Associates, LLC, for one-stop benefit communications Since 1992, BeneCom has provided one-stop benefit communications for organizations large and small, nationwide. Staffed by people who know benefits, we write, design and produce effective media, including SPDs, enrollment materials, newsletters, benefit statements and more. So whether you're an employer, plan administrator or consultant in need of traditional or online capabilities, we're here to help. Call (860) 674-2626 today. (Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor) GASB Issues Guide for Other Postemployment Benefits Statements Excerpt: "The Governmental Accounting Standards Board (GASB) has published a Guide to Implementation of GASB Statements 43 and 45 on Other Postemployment Benefits (OPEB). According to a GASB news release, the guide was prepared mainly for assisting preparers and auditors of governmental financial statements and those that advise them on implementing GASB's Statements 43 and 45 on accounting and reporting for health care and other non-pension postemployment benefits." (PLANSPONSOR.com: one-time registration required) New York Governor OKs Improved Death Benefits for Public Employees Killed While on Active Duty Excerpt: "The measure makes 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." (WGRZ.com) Report: Issues Related to State and Employer Innovations in Insurance Coverage (PDF) 8 pages. Excerpt: "States and employers use a number of different programs and techniques to increase rates of insurance coverage. Successful strategies -- whether based on Medicaid/SCHIP expansion, strengthening employer-based coverage, or regulating the individual market -- require both flexibility to tailor approaches that best serve their residents and employees and basic protections to ensure that new programs do not leave vulnerable groups behind." (The Commonwealth Fund) Directory of Multiemployer and Public Health Care Purchasing Coalitions (PDF) 49 pages. Excerpt: "The Directory aims to help trustees and administrators more efficiently utilize health plan dollars. 'It's useful for funds currently involved in coalitions in terms of networking and idea generation. It's also helpful for funds that are not currently involved in coalitions and are looking for options to help ...." (International Foundation of Employee Benefit Plans) California Public Agencies Facing Retiree Healthcare Cost Crisis Excerpt: "Cities, counties, school districts and state agencies across California face rapidly growing bills for retiree health benefits, but most have done little to get ready to pay them. The future costs, which run into the tens of billions of dollars, are equivalent to a massive mortgage that taxpayers have taken on with little public notice. The required payments threaten to put heavy financial pressure on governments that granted generous benefits in the past and now ...." (Los Angeles Times; one-time registration required) Government Scrutiny of Arrangements Between Physicians and Imaging Centers Continues (PDF) 1 page. Excerpt: "Turn-key arrangements, where the imaging center 'leases' all equipment, personnel and supplies necessary to provide imaging services to a referring physician's patients at the center's facility, are of particular interest to the government." (Powell Goldstein LLP) Opinion: Not Much of a Cure: A Healthcare Quality Act that's Worse than No Law at All Excerpt: "You'd think that those of us who have ceaselessly advocated better quality of care would be elated to see President Bush signing legislation creating a national medical-error reporting system. .... This law, however, isn't what the institute or independent quality advocates had in mind. While many legislators may have voted for it in good faith, they have instead achieved something worse than no law at all." (modernhealthcare.com) When The Price Isn't Right: How Inadvertent Payment Incentives Drive Medical Care Use and Cost 9 pages. Excerpt: "Unintended overpayment of some services, in combination with other market factors, is driving increased use of expensive care, which in turn could be an important driver of health care cost trends. Reimbursement systems are highly dependent on provider charge data that rarely provide accurate and up-to-date indicators of relative costs." (Health Affairs) Weighing Your Health Plan Choices -- Ratings of HMOs and PPOs Excerpt: "Obviously, your choice of managed-care plans can make a big difference in the quality of medical treatment you receive. That's why, every two years, we ask our readers to rate their plans. This year, in our Ratings of HMOs and PPOs, we present detailed information on 35 HMOs, plans that pay almost all expenses for patients who stick to providers within a network, and 41 PPOs, plans that cost more but allow more choice of doctors." (Consumer Reports) Uninsured Worsen Medical Inflation for Workers Excerpt: "You're probably aware that the uninsured add a chunk to the price of employer-provided health insurance, but did you ever wonder how big that chunk is? The answer is, pretty big-an average of $922 for family coverage and $341 for individual coverage, according to a new report from Families USA." (Employee Benefit News) Tax Reform Touted As Health Care Cost Remedy Excerpt: "As a cure for health care inflation, some health policy experts want to eliminate the employee tax subsidy for job-based health insurance, claiming it distorts the marketplace and discriminates against poor people. To make such a change revenue-neutral - and politically palatable - conservative public policy organizations suggest lowering taxes to compensate for eliminating the tax deduction or setting up a system of tax credits for individual health insurance." (Employee Benefit News) For Generic Drugs, the Price Is Right in U.S.: Plain-Label Medications Can Be 78% Costlier in Can.ada Excerpt: "'We have a system of government favoritism toward generic companies,' said Brett J. Skinner, director of pharma.ceutical and health policy research for the Fraser Institute in Toronto. .... Earlier this year, the institute released a study by Skinner of the 100 top-selling generic drugs. It found that Canadian prices were, on average, 78% higher than in the U.S." (Los Angeles Times; one-time registration required) Health Care Disparities: Preventive Care Found Lacking in the Overweight Excerpt: "Obesity is a well-established cause of health problems. But some problems may occur needlessly, suggests a new study that found that overweight people were given preventive medical care less often than other people." (The New York Times; one-time registration required) More Employers Looking for Ways to Encourage Workers to Stop Unhealthy Habits Like Smoking Excerpt: "The growing prevalence of no-smoking policies is not news. But recent practices in this area by some employers have raised challenging questions. When it comes to restricting the behavior of employees, just where do the boundaries lie?" (Human Resource Executive) CDH Pioneers Are Not Ready to Leave HRAs; HSAs Too Restrictive, Complicated, They Say Excerpt: "The rules surrounding HSA-based plans, early adopters say, are too complex for their employees to grasp. And unlike HRA-based plans, HSA-based plans allow for little plan-design flexibility. Others employers contend that funding an HSA with real -- and portable -- dollars will be more expensive than funding HRAs, which use notional ... dollars that are paid out only after a claim is submitted. And unused HRA dollars generally revert back to the employer if the employee switches jobs." (INSIDE CONSUMER-DIRECTED CARE via AISHealth.com) Issue Brief: Employment-Based Health Benefits -- Trends in Access and Coverage (PDF) 28 pages. Excerpt: "This Issue Brief examines the state of employment-based health benefits among workers with respect to offer rates, coverage rates, and take-up rates. It also examines how the state of employment-based health benefits has changed since the mid-1990s, reasons why workers do not have employment-based health benefits from their own employer, and how these reasons have changed since the 1990s." (Employee Benefit Research Institute) Report: Options for Federal Coverage of the Uninsured in 2005 (PDF) 12 pages. Excerpt: "Current approaches to reducing the number of uninsured include insurance tax credits for individuals and employers, expanding private group coverage, expanding eligibility for public programs, creating new public programs, and reforming insurance markets. Proposals vary in how they would expand coverage, how many uninsured would be covered, and how much they would cost." (The Commonwealth Fund) Opinion: Let Us Give Up -- It Is Time for National Health Care, Unless You Have a Better Idea Excerpt: "There are many good reasons to say NO to a national health care program. But there also seem to be few alternatives to support 'go away and leave it to the private sector.' Is it time to capitulate and accept the faults of a government-run system? Have all the options been tried and failed, are we constantly on the road to uncontrolled health care costs? Do we care about the uninsured and under-insured?" (Employee Benefit News) HSA Monthly Premiums Decreased By 15% In First Half Of 2005 Excerpt: "In the first half of 2005, monthly premiums for health savings account (HSA)-eligible high-deductible health plans (HDHPs) decreased by an average of 15% from 2004, according to research from eHealthInsurance. The report, Health Savings Accounts: the First Six Months of 2005, found that individual plan premiums have decreased by $316.44 annually, while family plan premiums have decreased by $160.32 annually. In addition, 62.6% of HSA purchasers pay $100 or less per month." (Spencer Benefits Reports) Broker Advice: Disclosure Protects Employers from Possible Long-Term Care Insurance Burns Excerpt: "As media and regulatory smoke continues to swirl around group long-term care products, at least one broker is adopting a proactive strategy to make sure neither he nor his clients get burned in the event of a fire. At issue is the type of inflation rider that most companies offer their employees. There are two basic types of inflation protection: future purchase option (FPO) and automatic benefit increase (ABI)." (Employee Benefit News) Pricing Worksite Voluntary Benefits: The Best Price Is Not Always the Lowest Excerpt: "Voluntary and worksite benefits have become an important part of the package you offer employees. You know - or at least, you are told - that the products your workforce has the option of buying are far less expensive than what they can get on the street. But are they? And how can you help keep the premiums low enough while at the same time ensuring that your employees receive adequate coverage?" (Employee Benefit News) Work-Life Benefits Do Not Guarantee Work-Life Balance Excerpt: "Visible backing from leaders can overcome psychological barriers that prevent workers from using their work-life benefits .... This can help employers to avoid program failures and wasteful spending. In a recent EBN QuickPoll, 19% of respondents said many employees at their organization worry that using work-life benefits would hurt their career advancement, while 50% said some employees worry about that, and 31% said their employees don't worry about it ...." (Employee Benefit News) Links to Items on Executive Comp, Benefits in General Congressional Delegation Championed Employee Benefit Protections in U.S. Bankrup.tcy Law Excerpt: "The need to reform the Bankrup.tcy Code's treatment of employee benefit plans was brought to light by two situations that arose in Wisconsin in the late 1980s: the Louis Allis Corp. bankrup.tcy and the Pabst Brewing Co.'s termination of its retiree health program. These incidents showed the extent to which workers' benefits are vulnerable when an employer becomes insolvent, and they motivated our state's congressional delegation to create better protections for our system ...." (Wisconsin Lawyer) Benefits in Brief -- August 2005 Edition from the ERISA Practice Group of Jenkens & Gilchrist (PDF) 8 pages. The contents include: New Deferred Compensation Law Update; COBRA-- Corporate Transactions...What Companies Need to Know When Negotiating a Deal; The IRS Published Proposed Code Section 415 Rules Explaining Which Benefits Distributed After a Severance of Employment Can Be Deferred; Uniformed Services Employment and Reemployment Rights Act 2005 Notice Requirements; and, HIPAA Portability New Certificate of Creditable Coverage. (Jenkens & Gilchrist) Teleconference -- January 12, 2005: Understanding the Nonqualified Deferred Compensation Guidance Excerpt: "Presentation [slides in PDF format] delivered via teleconference on January 12th, 2005. An mp3 audio file of this event is also available within." (Haynes and Boone, LLP) Overview: Pennsylvania Adopts Federal Treatment of Nonqualified Deferred Compensation Plans (PDF) 3 pages. Excerpt: "The new Pennsylvania law addresses only the Pennsylvania personal income tax, and does not apply to local taxes. As a result, there is uncertainty as to local tax treatment of elective deferrals under nonqualified plans (both pre- and post - House Bill 176). In particular, the City of Philadelphia seems to be taking the view that such elective deferrals remain subject to Philadelphia wage tax unless and until the Philadelphia tax act is amended." (Morgan, Lewis & Bockius LLP) IRS to Increase Scrutiny of Employee Benefit Plans Excerpt: "HR professionals may want to take a closer look at their benefit plans as the Internal Revenue Service prepares to increase its scrutiny of those plans. The IRS intends to boost the number of employee benefit plan audits by about 10% next year and has hired 50 examiners to tackle the job." (BenefitNews Connect) Washington Regulatory Wrap Up, As of August 5, 2005 (PDF) 3 pages. The chart of federal regulatory proposals concerning employee benefits of interest to NCTR members has been updated to be current as of August 5, 2005. The federal updates referenced in the chart are available at http://www.nctr.org/federal/index.html. (National Council on Teacher Retirement) Study Shows Stock Options May Still Be Best Driver of Performance Excerpt: "'There are a lot of tax and accounting ramifications to offering stock options, but if companies only look at it from that perspective, they may miss out on the bigger picture,' [says DolmatConnell & Partners]. A recent survey conducted by Dolmat-Connell shows that of the 100 largest technology companies, high-performing firms were 65 percent more likely than low-performing companies to grant stock options to their CEOs and 39 percent less likely to grant restricted stock." (Workforce Management; one-time registration required) Newly Posted Events 2nd Pharmaceutical Cost Management Congress 2005 in Florida on November 14, 2005 presented by International Quality & Productivity Center (IQPC) Washington Update in Ohio on August 23, 2005 presented by ASPPA Benefits Council of Greater Cincinnati Newly Posted Press Releases August EBRI Notes: Factors Threatening Retirement Security (Employee Benefit Research Institute (EBRI)) IRS, Treasury Issue Priority Guidance Plan for 2005-2006 (U.S. Treasury Department and Internal Revenue Service) Health Care Purchasing Coalitions Directory for Multiemployer and Public Funds Now Available (International Foundation of Employee Benefit Plans) GASB Publishes Implementation Guide to Statements 43 and 45 on Postemployment Benefits Other Than Pensions (Governmental Accounting Standards Board (GASB)) NASD Issues Guidance Regarding Equity Indexed Annuity Sales (NASD (National Association of Securities Dealers)) VALIC Introduces New 401(K) Platform - AIG VALIC SPECTRUM SM 401(k) Offers Best of Both Worlds (CPI Qualified Plan Consultants, Inc.) Newly Posted or Renewed Job Openings Assistant Mgr. Compliance (Securities Compliance) for Great-West Corporate in CO Pension Administrator for Growing Accounting/Pension Company in DC, MD Controller for GCC/IBT-SRDF in IL Plan Administrator for RSM McGladrey Retirement Resources in IL, MN Human Resources/Benefits Administrator for Craford Benefit Consultants in CA Retirement Plan Administrator for Independent Retirement Plan Administration Company in FL 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. 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