BenefitsLink Welfare Plans Newsletter August 15, 2005 Today's sponsor: ALM (Click on company name or banner to learn more.) Complete Benefits Law Guidance from Law Journal Press The nation's workforce and health care system are constantly evolving and so are the legal issues. Law Journal Press helps you handle any benefits law question with up-to-date, authoritative books on all aspects of the field. Get legal and practical advice from leading experts on everything from COBRA to ERISA, "contingent" employees to family and medical leave, and more. Browse our product listings for detailed information and special offers. (Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor) The Promise and the Pitfalls of Health Savings Accounts Excerpt: "Health savings accounts, a sort of I.R.A. for health care, let people set aside money tax-free to pay for medical expenses, both now and later. But the accounts have been controversial since their introduction in January 2004. Depending on whom you ask, they are either a wonderful tool to help Americans become wiser, more price-conscious health care consumers, or just another way for employers to pass along more health care expenses to their workers." (The New York Times; one-time registration required) Many Employers Act Quickly On New Sec. 125 Grace Period Excerpt: "Although only half of all employers have decided to implement the new two-and-one-half-month grace period to spend unused balances in IRC Sec. 125 flexible spending arrangements (FSAs), those companies that will implement the grace period quickly, with 73% making it available in 2005, and 21% making it available in 2006. In May, the Internal Revenue Service issued guidance providing some relief from the 'use-it-or-lose-it' rule." (Spencer Benefits Reports) More Guidance Forthcoming for Cafeteria & Welfare Plans Excerpt: "The Department of the Treasury and the IRS have issued their 2005-2006 Priority Guidance Plan, which lists various regulations and other guidance under development. Some significant items affecting cafeteria plans and consumer-driven health care and fringe benefits are ...." (Employee Benefits Institute of America Inc.) Extended Employer-Paid Coverage Caused Confusion about Qualifying Event Date Excerpt: "Employers providing extended employer-paid group health plan coverage should understand the COBRA consequences of such largesse and should carefully calculate and clearly communicate COBRA coverage dates in order to avoid disputes and potential COBRA liability. Note that the DOL's final COBRA regulations currently require a COBRA election notice to provide an explanation of 'the continuation coverage termination date.'" (Employee Benefits Institute of America Inc.) North Carolina House Bill 20 -- Health Insurance Credit for Small Business The legislation would cover eligible companies -- those employing no more than 25 workers -- who pay at least half of the premium for health insurance coverage. (North Carolina General Assembly) U.S. District Court Rules that COBRA Plan Was the Secondary Insurer Excerpt: "The US District Court for the Northern District of Ohio resolved the coordination of benefits between a COBRA plan and other group health coverage when it ruled that the COBRA plan was the secondary insurer since the other plan covered the individual longer." (PLANSPONSOR.com: one-time registration required) Workplace Health -- Inside the Numbers: Investment in Preventive Care Hits the Bottom Line Excerpt: "A public health crisis is looming just over the horizon because employee health insurance costs are rising so steeply. .... One approach is to invest in controlling the effects of chronic diseases in the workplace." (Baltimore Business Journal via bizjournals.com; one-time registration required) Patients Turn to Advocates, Support Groups and E-Mail, Too Excerpt: "Battle-hardened by the medical system, patients have become pretty good at taking care of one another. If they are not learning enough from their doctors about diagnoses and treatment options, they can turn to organizations that offer support and education programs for specific illnesses. Doctors can often make recommendations about which of these groups are reliable. Another worthy resource is the patient advocate, a relatively new role with fluid responsibilities." (The New York Times; one-time registration required) Awash in Information, Patients Face a Lonely, Uncertain Road of Treatment Options Excerpt: "A generation ago, patients argued for more information, more choice and more say about treatment. To a great extent, that is exactly what they have received: a superabundance of information, often several treatment options and the right to choose among them." (The New York Times; one-time registration required) Opinion: Direct Dental Benefits Are Better Choice Excerpt: "A recent article in the Denver Business Journal ('Opponents bare teeth over dental plan,' July 22-28) described direct reimbursement (DR), a dollar-based approach to employer-sponsored dental benefits, and responses from the benefit broker, dental insurer and dental communities about DR." (Denver Business Journal via bizjournals.com; one-time registration required) Health Insurance Companies May Try Paying Doctors Based on Performance Quality Excerpt: "Physicians and hospitals will likely soon be paid by insurers based on the quality of care they provide, rather than a flat negotiated fee." (The Business Journal of Milwaukee via bizjournals.com; one-time registration required) EBSA Advisory Opinion 2005-18A Excerpt: "[The opinion answers w]hether section 514(a) of ERISA preempts amendments to the Washington State Insurance Code that provide for a premium tax and high-risk pool assessment to be paid by self-funded multiple employer welfare arrangements (MEWAs)." (U.S. Employee Benefits Security Administration) Employers Seeking Cuts to Offset Rise in Health Insurance Premiums Excerpt: "In response to the continued increase in health care costs, employers have turned to a variety of tactics, from changing plan designs to cutting benefits to simply shopping around for a better deal. They're also trying to find ways to limit workers' health spending, in some cases even conducting audits to make sure, for example, that dependents employees claim really are dependents. Frequently, employers will use multiple strategies in an effort to trim employee health expenses." (The Business Journal of the Greater Triad Area via bizjournals.com; one-time registration required) Enter Your PIN, Get a Pres.cription -- Automated Dispensers Could Replace Interaction with Pharmacist Excerpt: "The lines at most pharmacies have gotten so frustratingly long in recent years that some people may want a Valium by the time they reach the counter. But in this day of self-serve gas pumps and airline ticket dispensers, a solution could be at hand. Two companies have begun to install automated drug-dispensing machines, which look and operate like ATMs, in a few California stores." (Los Angeles Times; one-time registration required) Drugmakers Balk at Rebates: Firms Say Pentagon Isn't Owed Discounts on Individual Purchases Excerpt: "The nation's leading drug manufacturers are refusing to pay hundreds of millions of dollars in pharmacy rebates that Pentagon officials say they have been counting on to help control soaring medical costs. The rebate program was designed in late 2002 to ensure that pres.cription drugs purchased at retail pharmacies by military personnel and their families would be sold at the same discount given to the Department of Defense for use in its hospitals, clinics and mail-order program." (The Washington Post; one-time registration required) Health Care: Universal Coverage -- Four Plans for Health Care Reform Excerpt: "[N]ew comprehensive [health care] reform plans have inspired a vigorous debate about what the priorities for reform should be, what kind of system we ultimately want, and what kind of comprehensive reform plan is best suited to survive the political gauntlet. For a July 2005 roundtable entitled 'Universal Coverage: Coming Sooner than You Think?' The Century Foundation invited four health care experts ... to discuss their own plans. Read the transcript of the discussion and learn ...." (The Century Foundation) The Blue Cross Blue Shield of Vermont HSA Success Story: Its Current and Future Metrics (PDF) 8 pages. Excerpt: "In all of New England, Blue Cross Blue Shield ofVermont is clearly the regional Blue leader in the HSA marketplace, and the rate of HSA adoption in Vermont proves it. [On the target page], HSA Insider interviews Mr. Richard Taylor, Corporate Product Developer, Blue Cross Blue Shield of Vermont, from their corporate offices in Berlin, Vermont." (The HSA Insider) Links to Items on Executive Comp, Benefits in General Staying Ahead of the Game with Your 457(f) Plan (PDF) 4 pages. Excerpt: "With the passing of Section 409A of the Internal Revenue Code last fall, the spotlight has turned to 457(f) plans and the definitions of 'substantial risk of forfeiture' used for deferral purposes. As a result, the viability and usefulness of 457(f) plans as effective deferral and retention devices has become an open question." (Gardner Carton & Douglas LLP & Sullivan Cotter & Associates, Inc.) Regulatory Update as Published in the August 2005 Employee Benefit Plan Review (PDF) 3 pages. Topics include pres.cription benefit notice requirements, the modified Voluntary Fiduciary Correction Program and the treatment of unvested restricted stock under Code Section 280G. (Employee Benefit Plan Review via Gardner Carton & Douglas) Stock Plan Administration Enters a New Phase with Focus on Accounting Excerpt: "While the implementation of the Financial Accounting Standards Board (FASB) rule regarding stock option expensing has been delayed -- again -- most firms have already bitten the bullet, and taken steps to deal with what now appears to be inevitable. In many cases, that will mean less stock-based compensation for non-executives. However, it also means that the task of administering these programs is now more difficult and complicated than ever before." (PLANSPONSOR.com: one-time registration required) FASB Changes Stock Option Grant Date Interpretation Creating an Accounting Nightmare Excerpt: "Officials at a national compensation manager trade group are warning of a potential problem with a new interpretation by the Financial Accounting Standards Board (FASB) defining a stock option's grant date. According to a WorldatWork report, FASB staff said in recent private discussions with major accounting firms that the option grant occurs when the terms of the award have been communicated to the affected employee." (PLANSPONSOR.com: one-time registration required) Newly Posted Events ERISA Workshop in Louisiana on October 18, 2005 presented by SunGard Corbel ERISA Workshop in Colorado on October 20, 2005 presented by SunGard Corbel ERISA Workshop in New Mexico on October 21, 2005 presented by SunGard Corbel ERISA Workshop in Wisconsin on October 25, 2005 presented by SunGard Corbel Regulatory and Legislative Update: Roth 401(k)s, Directed Trustees, Plan Expenses and Much More in California on September 21, 2005 presented by Western Pension & Benefits Conference, San Francisco Chapter Newly Posted Press Releases Meet the COBRApoint Team at the Nebraska SHRM Annual Conference (COBRApoint) Pittsburgh Business Group on Health Elects New Board (Pittsburgh Business Group on Health) Movers and Shakers: Newly Posted Announcements of Promotions and New Personnel (Post Yours!) John J. Gallagher (Sentinel Benefits Group) Newly Posted or Renewed Job Openings Defined Benefits Operations for Recruiting Firm in MA Vice President of Operations for Retirement Capital Group in CA Client Service Specialist for US Bank in OR Director, Advisor Services for Charles Schwab & Co, Inc. in AZ, CA Benefits Administrator for Toshiba America Medical Systems, Inc. in CA 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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