BenefitsLink Welfare Plans Newsletter December 13 and 14, 2005 Today's sponsor: Lockton Benefit Group (Click on company name or banner to learn more.) Optimizing Employee Benefits...by Design Lockton is the nation's largest privately owned insurance brokerage and employee benefits consulting firm. Our private ownership allows us to deliver the most innovative and outstanding service with unwavering integrity. With 15 offices in 8 states and the District of Columbia, we are nationally positioned to meet our clients' every need. Our success is measured in our client retention rate, among the very highest in the industry. We live service! (Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor) Finances of Employee Benefits: Health Costs Drive Changing Trends, (PDF) At pp. 2-6 of 20-page document. Excerpt: "The most recent federal data provide further evidence that rising health costs are driving a major shift in the finances of employee benefits. For decades, retirement costs accounted for the bulk of total spending on benefits by employers, but health costs are rapidly catching up." (Employee Benefit Research Institute) U.S. Health Gains Hurt by Obesity, Smoking Excerpt: "Improvement in the overall health of Americans has stalled in the last five years as more people became obese and fewer quit smoking, according to a report released on Monday. The America's Health Rankings report, issued at the American Public Health Association's annual meeting, showed that 23.1 percent of the U.S. population is now considered obese, more than twice the level in 1990." (MSNBC via BlueCross BlueShield Association) U.S. Hospital Charges Continue to Rise Even After Changes in Medicare Payment Policy Excerpt: "The research is contained in the third annual report on charges by the Institute for Health and Socio-Economic Policy (IHSP), the research arm of the California Nurses Association." (California Nurses Association) Consumer-Directed Health Insurance: The Next Generation Excerpt: "Aetna CEO Jack Rowe discusses his firm's initiatives to moderate the cost of care for ill as well as healthy patients, including providing information on provider prices, contracting for narrow physician specialty networks, and promoting disease management and case management programs." (Health Affairs) Employer Must Reinstate Employee Released by Doctor Excerpt: "The US 6th Circuit Court of Appeals has reversed a lower court's ruling for an employer who terminated an employee for not providing more information after she supplied a doctor's note that she could return to work after taking Family and Medical Leave Act (FMLA) leave." (PLANSPONSOR.com; one-time registration required) Employers in Quebec Preparing for New Parental Insurance Program Excerpt: "Under the Quebec Parental Insurance Plan (QPIP), workers will receive more generous maternity and paternity benefits than other Canadians and will qualify for the program even if they are self-employed." (Watson Wyatt Worldwide) Older Workers Face Gender Income Gap Excerpt: "New research uncovers significant gender gaps in the income and personal needs of older workers." (Employee Benefit News) Federal Employees: Pay Into Health Plan Five Years before Retirement Excerpt: "Many feds make the mistake of piggybacking on a private-sector spouse's health plan -- which may be better, cheaper, whatever -- until their final year of federal service. Then they plan to switch to the FEHBP thinking they can cover themselves and their family for life. But they can't." (The Washington Times) More Stay on the Job While They Fight Cancer Excerpt: "Cancer is no longer the death sentence it used to be, and longer survival rates and better ways to manage the side effects of treatment mean more people ... are staying in the workforce during treatment. That's creating challenges for employers." (USA TODAY) Testimony: Pres.cription Drugs: Efforts and Coordination Needed to Address Illegal Importation 50 pages. Excerpt: "This testimony addresses (1) available data about the volume and safety of these drugs, (2) the procedures and practices used to inspect and interdict them, (3) factors affecting federal efforts to enforce the laws governing these drugs, and (4) federal agencies' efforts to coordinate enforcement of the prohibitions on personal importation of these drugs. [Highlights of the testimony are at http://www.gao.gov/highlights/d06175thigh.pdf.] (U.S. Government Accountability Office) Estimated Impact of Medicare Part D on Retiree Pres.cription Drug Costs Excerpt: "The Health Section Research Team is pleased to make available the following report that estimates the impact on plan sponsor retiree pharmacy costs when Medicare Part D is implemented in 2006. .... The report provides estimated savings measured over a 50 year time frame for several of the options that will be available to plan sponsors after implementation of the Medicare pres.cription drug program." (Society of Actuaries) Consumers Often Aren't Getting the Information They Need to Find the Best Health Care Deal Excerpt: "'Consumer-driven' health plans, which typically combine a high-deductible insurance plan with a savings account, are seen by many in government and industry as a way to slow the growth of healthcare costs. With their own bucks at stake, the theory goes, wise consumers will shop for the best deals, forcing providers to keep a lid on prices and improve quality. But supporters and critics alike say a crucial ingredient is missing: the information that consumers need to comparison-shop." (Los Angeles Times; one-time registration required) Deal in Works for Small Business Insurance Pools Excerpt: "The decade-long deadlock over association health plans is close to being broken, thanks to a compromise crafted by the chairman of the Senate committee that handles health care legislation." (The Business Journal of Phoenix via bizjournals.com; one-time registration required) Health Insurance Still Tops Employees' Benefits List Excerpt: "Employees still rank health insurance as the most important benefit, according to the Principal Financial Group's Well-Being Index." (PLANSPONSOR.com; one-time registration required) Links to Items on Executive Comp, Benefits in General New Book on Executive Compensation in ESOP Companies The NCEO presents excerpts from its new book Executive Compensation in ESOP Companies, which includes not only essays on compensating executives in companies with employee stock ownership plans (ESOPs) but also a survey of what companies are doing. An interesting survey result is that such executives earn less, on average, than their non-ESOP peers; however, their ESOP participation may make up for this. (National Center for Employee Ownership) Welcome to new BenefitsLink advertiser InvestLink Excerpt: "Profit Sharing, Money Purchase and Non-Qualified plans. Daily as well as traditional balance forward plans. The ASP platform means you have no expense or worry associated with hardware, security, disaster recovery, we take care of all that for one bundled price. We also have a unique offering called TPAAdvantage that provides clients with sales leads, plan referrals, and discounted bulk pricing on financial services offerings." (BenefitsLink.com) Welcome to new BenefitsLink advertiser Swerdlin & Company Excerpt: "Swerdlin & Company, an Atlanta-based actuarial and employee benefits consulting firm, was founded over 25 years ago. We provide actuarial, consulting, administrative and recordkeeping services for all types of retirement, health and welfare, and cafeteria plans. This includes ESOPs, 401(k) defined benefit, cross-tested, cash balance, flexible spending accounts, premium only plans and more. !" (BenefitsLink.com) Overview: IRS Suspension of W-2 Reporting for 2005 Nonqualified Deferred Compensation (PDF) 2 pages. Excerpt: "In the absence of §409A guidance on how to measure nonqualified deferred compensation for the new W-2 reporting requirement, IRS has suspended the reporting requirement for 2005 deferrals. While Notice 2005-94 provides some relief for 2005, find out why action may still be required before 2006." (Aon Consulting) Overview: IRS Suspension of Deferred Compensation Reporting and Withholding (PDF) 5 pages. Excerpt: "For the 2005 calendar year, Notice 2005-94 clearly provides welcome relief to employers from the Section 409A reporting requirements. Further guidance will be needed to provide the details as to how employers can meet the Section 409A reporting requirements for 2006 and future years and what, if anything, employers will need to report in later years with reference to the 2005 calendar year." (Morgan, Lewis & Bockius LLP) Overview: Suspension of Reporting and Withholding Requirements on Section 409A Deferred Comp (PDF) 2 pages. Excerpt: "IRS Notice 2005-94 suspends the employer's obligation to report both deferrals and amounts includible in income (which are not actually or constructively paid) under Section 409A for calendar year 2005 with respect to both employees and nonemployee service providers." (Kirkpatrick & Lockhart Nicholson Graham LLP) Overview: IRS Grants Relief on Form W-2 Reporting and Withholding Requirements for Section 409A Excerpt: "The Internal Revenue Service has granted employers welcome relief in their reporting and withholding requirements under section 409A of the Internal Revenue Code for calendar year 2005." (Dorsey & Whitney LLP) Federal Compensation Programs: Perspectives on Four Programs 51 pages. Excerpt: "[GAO's] objectives were to (1) provide information on the design of the programs, including their purpose, financing, administration, benefits, and eligibility criteria; (2) describe the length of time it took to establish the programs, the costs of establishing and administering them, and the initial estimates and actual costs of benefits paid to date; and (3) provide information on the claims histories of the programs, ...." (U.S. Government Accountability Office) Benefits Lacking for Globally Mobile Workforce Excerpt: "A new survey has found that, while short-term international assignments for employees are increasing, one-fourth of employers do not have a benefits policy in place for their global workforce. Mercer Human Resource Consulting's Expatriate and Third-Country Nationals Benefits Survey found that 60% of companies are increasing their use of short-term international assignments ...." (PLANSPONSOR.com; one-time registration required) Underwater Stock Options and Repricing Strategy (PDF) 16 pages. Excerpted from the book Selected Issues in Equity Compensation, 3rd ed., published by the National Center for Employee Ownership (NCEO). (Daniel N. Janich of the Janich Law Group) Newly Posted Events COBRA Compliance Workshop in Washington on January 24, 2006 presented by U.S. Department of Labor, Employee Benefits Security Administration COBRA; The Employer's Obligation in Pennsylvania on May 3, 2006 presented by The WolfInstitute FMLA, ADA, STD and WC in Pennsylvania on June 1, 2006 presented by The WolfInstitute HIPAA for the Information Officer in Pennsylvania on March 21, 2006 presented by The WolfInstitute IRA Essentials in Alabama on January 24, 2006 presented by BISYS Retirement Services Plan Design Workshop in Texas on February 9, 2006 presented by SunGard Corbel Plan Design Workshop in Minnesota on February 9, 2006 presented by SunGard Corbel The Contingent Workforce: Leased Employees, Temporary Employees and Independent Contractors in Pennsylvania on February 28, 2006 presented by The WolfInstitute What Employers Should Know About Their Group Health and Welfare Benefits in Pennsylvania on May 4, 2006 presented by The WolfInstitute Newly Posted Press Releases Institutional Investors Dissatisfied with U.S. Executive Pay System, Watson Wyatt Study Finds (Watson Wyatt) Legislative Alert - Immediate Action Required (Profit Sharing/401(k) Council of America (PSCA)) PRC's Letter To The House of Representatives (Pension Rights Center) New Online Course Explains Basics of HSAs and HRAs (International Foundation of Employee Benefit Plans) SHPS Announces CareWise(R) Health Portal to Support Consumer-Directed Healthcare (SHPS) Baby Boomers Turning 60 Usher in Major Business, Social Changes; Redefine Retirement (New Directions) Movers and Shakers: Newly Posted Announcements of Promotions and New Personnel (Post Yours!) John A. Nicolai, CRPS (Ladenburg Thalmann & Co., Inc.) Newly Posted or Renewed Job Openings Employee Benefits Tax (EB) Manager for Deloitte in FL Defined Benefit Client Account Manager for New York Life Investment Management LLC in MA Senior Retirement Plan Specialist for New York Life Investment Management LLC in MA Non-Qualified Plan Design and Administration Specialist for Lockton Companies, Inc. in MO Actuarial Analyst for New York Life Investment Management LLC in MA Internal Retirement Plan Wholesaler for New York Life Investment Management LLC in NJ Account Administrator-Executive Benefits for Lockton Companies, Inc. in MO DC Plan Administrator for E.A. Edberg Associates, Inc. in AZ Employee Benefits Sales Officer for CUNA Mutual Group in AZ, CA, NV, OR, WA Compliance Account Manager for Stanton Group in MN Participant Services Representative for New York LIfe Investment Managment LLC in MA, NJ Retirement Benefits Analyst for Lowe's Companies, Inc. in NC Compliance Administrator for BISYS Retirement Services in PA 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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