BenefitsLink Welfare Plans Newsletter September 6, 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) An S-Corporation Would Like to Set Up a Medical Reimbursement Plan -- How Should It Go About It? Excerpt: "Unfortunately, as an S-Corp, your company cannot legally establish a medical-reimbursement plan -- unless you want to set up a plan that covers only your employees and not yourself or your family. (This is something very few business owners want to do.) You must have a C-Corp in order to establish a medical-reimbursement plan." (BusinessWeek Online) Overview: Comparability Rules Applicable to Employer HSA Contributions and Cafeteria Plan Exception Excerpt: "The proposed regulations, which are extensive and full of examples, are intended to 'clarify and expand' previous guidance on comparability that was provided in IRS Notices 2004-2 and 2004-50. Until final regulations are issued, these proposed regulations may be relied on for guidance." (Employee Benefits Institute of America Inc.) Part D Rollout Will Come with a Batch of Communications Issues Excerpt: "As insurers and pharmacy benefit managers (PBMs) approach the Oct. 1 start of Medicare Part D marketing, having the right communication strategies is vital for avoiding loss of current beneficiaries and for obtaining new members, suggest two executives of Silverlink Communications, Inc., a Burlington, Mass.-based firm that provides automated voice technology to the health care market." (DRUG BENEFIT NEWS via AISHealth.com) Benefit Plans Open Enrollment: Beware - Dependent Definition May Not Be What You Intend (PDF) 2 pages. Excerpt: "The Working Families Tax Relief Act of 2004 ... changed the definition of 'dependent' under Section 152 of the Internal Revenue Code (Code) for various tax purposes. The changes, which took effect January 1, 2005, are forcing employers faced with upcoming enrollment periods for health and dependent care plans and health spending accounts to review coverage under their employee benefit programs with a careful eye for technical changes." (Seyfarth Shaw LLP) EAP Use Increasingly Centers Around Stress and Family Issues Excerpt: "Stress and personal relationships have eclipsed substance abuse as a focal point for employee assistance programs. EAP providers report that they're seeing the bulk of their activity around marital and relationship problems, stress and depression." (Employee Benefit News) EAPs Treat Hurricane Katrina Fallout Excerpt: "Employee assistance programs are busy helping people cope with the devastation that Hurricane Katrina dealt to New Orleans and other parts of the Gulf Coast. While clogged communications networks and flood damage make it difficult to reach those directly affected by the natural disaster, EAPs are assisting workers who evacuated their homes and employees trying to learn whether family members are safe." (BenefitNews Connect) Greater Vigilance Over Housing Benefits Needed Amid Market Explosion and Froth Talk Excerpt: "The froth frenzy also has begun to affect employers, particularly those that offer employees assistance in purchasing a home - 13% offer mortgage assistance and 9% offer down payment assistance, .... As riskier loan options, such as interest-only and option ARM mortgages, become more attractive to potential homebuyers, it behooves employers offering housing benefits to increase their vigilance over the consumer education employees receive about pitfalls in home buying." (Employee Benefit News) San Diego Focuses on Endangered Public Employee Retiree Health Care Excerpt: "After a meeting during which hundreds of current and retired county employees protested the possible loss of benefits, the San Diego county pension board agreed to pay another year of medical benefits for more than 11,000 retirees. The North County Times reports that the board has been providing health care benefits to retirees for 33 years in spite of the fact that medical coverage has never been a guaranteed 'vested' benefit." (PLANSPONSOR.com: one-time registration required) Administrator Not Required to Provide COBRA Election Notice After Plan Terminated Excerpt: "The court agreed with the owner/CEO that once this plan terminated, there was no obligation under COBRA to provide continuation coverage or to provide COBRA election notices. The court also rejected a claim for penalties under ERISA made by the employee who alleged that she received a misleading COBRA election notice." (Employee Benefits Institute of America Inc.) Embarking on a Bold Health Care Experiment to Improve Quality and Reduce Costs Excerpt: "If the recently formed Puget Sound Health Alliance manages to accomplish anything truly significant, the reason may lie with who's been hired to lead it. Two seasoned and highly regarded health-care experts have been chosen to lead the alliance, which aims to improve medical care and tame medical inflation in the Puget Sound region." (Puget Sound Business Journal via bizjournals.com; one-time registration required) Companies Turn to Health Care Education and Wellness Programs to Fight Rising Health Costs Excerpt: "Employee wellness, once viewed as a benefit to workers, is now a potential high return on investment for employers. .... The reason is simple: A November 2004 study by the Center for Prevention and Health Services shows that employers get $3.48 back in reduced health care costs and $5.82 in lower absenteeism costs for every dollar invested in employee wellness." (Wichita Business Journal via bizjournals.com; one-time registration required) As Health Care Costs Rise, New Jersey Lawmakers Offer Some Remedies for Business Excerpt: "Health insurance costs will rise again for most New Jersey employers this year. But proposed legislation could bring relief, said state business groups." (Philadelphia Business Journal via bizjournals.com; one-time registration required) Health Savings Accounts Guidebook -- Part 7: Distributions Excerpt: "Distributions from an HSA for 'qualified medical expenses' of the individual and his or her spouse or dependents generally can be excluded from gross income and can be made at anytime. In general, distributions can be made for 'qualified medical expenses' even if the individual is not currently eligible for contributions to an HSA. In addition, administrative and account maintenance fees withdrawn from HSAs are treated as non-taxable distributions." (Chicago Consulting Actuaries, LLC) Opinion: Treating Workers Justly Pays Off -- But Not in the Cold-Eyed Analysis of Wall Street Excerpt: "The race to the bottom in wages and employee benefits may not be any smarter than it is humane. Respected University of Pennsylvania labor-management professor Peter Cappelli made that point in analyzing U.S. airlines on PBS's 'NewsHour With Jim Lehrer': 'Southwest Airlines, which is seen as the low-cost carrier, now has the highest-paid pilots in the industry. Delta, which is the carrier probably in the most trouble, is largely non-union. US Airways ... has the lowest cost ....'" (CNN.com) Coping with the Aftermath of Hurricane Katrina: Ceridian Responds with Links to Resources Excerpt: "As a first public response, to help the general public and employees and managers at our client companies cope with this disaster, we are making a number of resources available to anyone who wishes help in coping with this tragedy or who is seeking information on emergency and volunteer services in the affected areas. You may access these materials by clicking on any of the links [on the target page]." (Ceridian Corporation) Offering Comforts, Firms Look for Their Hurricane-Impacted Employees Excerpt: "Chevron, BellSouth and other companies are setting up tent cities for homeless employees. Northrop Grumman handed out paychecks in a parking lot yesterday. Dow Chemical placed ads in at least 14 newspapers asking missing workers to make contact with the company. Marathon Oil is knocking on doors, looking for employees. Across the devastated Gulf Coast, big employers are trying to find, house, feed, pay and otherwise care for tens of thousands of workers chased from their homes ...." (The Washington Post; one-time registration required) Links to Items on Executive Comp, Benefits in General Online Message Board for Katrina Victims Created by ASPPA, American Academy of Actuaries Excerpt: "ASPPA and the American Academy of Actuaries have started this message board to allow the actuarial and ASPPA community to be able to communicate with those affected by Hurricane Katrina. We are encouraging all members of the community to post messages regarding needs, or offers of assistance, thoughts, or general messages. This is being offered as a courtesy to the community." (ASPPA and the American Academy of Actuaries) Regulatory Update Published in the September 2005 Edition of Employee Benefit Plan Review (PDF) 4 pages. Excerpt: "Topics include the proposed Code Section 415 regulations, the final regulations under Code Section 861 regarding compensation sourcing and the proposed electronic communications regulations for employee benefit plans." (Employee Benefit Plan Review via Gardner Carton & Douglas LLP) Participant Awarded Penalties for Employer's Failure to Comply with Information Request Excerpt: "An ERISA plan administrator must, on written request from a participant or beneficiary, furnish certain documents, including a copy of the latest SPD and any interim SMMs. This case is a useful reminder that ERISA's requirement to provide certain documents upon request is separate and in addition to the requirement to provide SMMs when there is a material modification to a plan (or to provide an updated SPD every five years)." (Employee Benefits Institute of America Inc.) Quitting Your Job? What to Know Before You Go Excerpt: "You're thinking about leaving your job, but first you want to explore your company's postemployment benefits. Should you ask your boss about them?" (The New York Times; one-time registration required) Commentary: Changing Times for Worker Benefits Excerpt: "The typical employment relationship has four main components: work, pay, health insurance and retirement security. The first two components are easy to understand. They're the foundation of the relationship." (The Denver Post) A Summary of Government Agency Katrina Relief Excerpt: "Here is a summary of some of the agency relief provided for plan sponsors and employers affected by Hurricane Katrina: ...." (Attorney B. Janell Grenier via Benefitsblog.com) Opinion: An Economy Raised on Pork Excerpt: "The old work-force compact is in shreds. Paychecks that rose with productivity gains through the middle decades of the 20th century no longer do so. [N]ational product per person has grown more than 75 percent, but the median wage of male workers has risen barely two cents, adjusted for inflation, from $15.24 in 1973 to just $15.26 last year. Family incomes are up only because wives have gone into paid work .... Job loss often means loss of health insurance and a tax-advantaged ...." (Robert B. Reich via The New York Times; one-time registration required) Newly Posted Events Retirement Plans: What Every Employer Must Know Nationwide on October 26, 2005 presented by SunGard Corbel Newly Posted Press Releases 2006 NCHS/AcademyHealth Fellowship Call for Applications (AcademyHealth) Stephen E. Barber Named Chief Administrative Officer At PBGC (Pension Benefit Guaranty Corporation (PBGC)) BAN Educational Conference Termed Extraordinary (Benefit Advisors Network) IRS Grants Relief on Minimum Funding Contributions to Employee Benefit Plans Affected by Hurricane Katrina (Internal Revenue Service (IRS)) Gary Lawson & Gus Fields join Godwin Gruber LLP (Godwin Gruber LLP) Fringe Benefit Administrators LTD Up and Running Despite Devastation of Katrina (Fringe Benefit Administrators, LTD) New Ameriprise Retirement Services Survey Finds Financial Stress Still a Factor This 401(k) Day, Despite a Stronger Economy (Ameriprise Retirement Services) Ameriprise Retirement Services Helps Clients Celebrate 401(k) Day 2005 (Ameriprise Retirement Services) Newly Posted or Renewed Job Openings Employee Benefit Recordkeeper/Tester for WySTAR Global Retirement Solutions in MN Defined Benefit Client Account Manager for New York Life Investment Management LLC in MA Benefits Project Manager for Publix Super Markets, Inc. in FL Compliance Administrator (Defined Contribution) for AIG VALIC in ANY STATE, TX Senior Benefits Consultant for Philips in NY Retirement Practice Compliance Administrator for TRI-AD in CA 401(k) Profit Sharing Administrator for The Pension Source, Inc. in FL Manager - Retirement Plans for Delta Air Lines in GA Plan Manager- Premier Account Services for American United Life Insurance Company in IN Transition Consultant for American United Life Insurance Company in IN Plan Services Consultants for American United Life Insurance Company in IN Plan Documents Specialist for Bay Area pension administration and consulting firm in CA Benefits Manager for Denver-based Fortune 500 global manufacturer in CO Pension Administrator for VPC Group in FL, VA Retirement Plan Administrator for RSM McGladrey Retirement Resources in IL Conversion (Implementation) Specialist for RSM McGladrey Retirement Resources in IL Plan Consultant for Small TPA in Alabama in AL Retirement Plan Consulting Manager for Invesmart, Inc. in OH Customer Service Representative for Elite Benefits in CA Compliance Testing Consultant for Diversified Investment Advisors in NY Implementation Specialist / Consultant 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. 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. Housekeeping: How to Sponsor an Issue Subscribe to a Daily Email Announcing Publication of Each Day's Newsletter Privacy Policy Archive of Previous Newsletters