BenefitsLink Welfare Plans Newsletter December 19, 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) Financial Consequences of Health Problems, Marital Status Changes, and Job Layoffs at Older Ages Excerpt: "The risk of falling into poor health, losing the ability to work or live independently, becoming widowed, and experiencing other negative events that threaten financial security increase with age. This report computes the incidence of these negative events at older ages and examines their impact on economic well-being." (Center for Retirement Research at Boston College) New Rules Caused West Virginia's PEIA to Calculate Public Employee Retiree Health Care Liability Excerpt: "The recent revelation that PEIA's unfunded liability totaled a whopping $9 billion sent quivers down the spines of many. PEIA officials, however, expected a hike in the figure because of new financial reporting requirements. The Government Accounting Standards Board, a private, nonprofit group that sets standards of financial reporting for state and local governments, established new requirements that deal with post-employment benefits other than pension plans." (Charleston Daily Mail) Report on Proposed RBC Risk Factors to Address Medicare Part D Coverage (PDF) 73 pages. Excerpt: "The NAIC Capital Adequacy Task Force ... asked the American Academy of Actuaries ... to recommend an appropriate Risk-Based Capital ('RBC') treatment for the Medicare Part D coverage that will commence on January 1, 2006. For the purpose of responding to this request, the Academy's Task Force on Health Risk-Based Capital formed aMedicare Part D RBC Subgroup." (American Academy of Actuaries Medicare Part D Subgroup) Court Resolves Confusion on Identity of Plan Administrator Excerpt: "Accurate identification of the plan administrator is one of the basics of ERISA compliance. Most of the time, the employer that sponsors the plan is the plan administrator, even if a third-party administrator or other service provider handles administrative tasks. When the employer is the plan administrator, document requests received by any company representative might trigger the ERISA obligation." (Employee Benefits Institute of America Inc.) Release Agreements and the FMLA (PDF) Page 13 of 20. Excerpt: "In Taylor v. Progress Energy, Inc., the Fourth Circuit Court of Appeals ... recently held that an employee could sue her employer for alleged violations of the Family and Medical Leave Act of 1993 ('FMLA'), despite having previously entered into a general release agreement with her employer releasing all claims against it under federal, state, and local laws." (Troutman Sanders LLP) Shared Leave Policies -- A Good Idea? (PDF) Pages 14-15 of 20. Excerpt: "[E]mployees may sometimes develop a legitimate need for more leave than is available to them. What can an employer do? Many employers have turned to shared leave policies as a way of getting additional leave to employees for various life events." (Troutman Sanders LLP) More Workers Are Staying on the Job While They Fight Cancer Excerpt: "Employees can take time off for medical treatments under the Family and Medical Leave Act: The federal law provides for up to 12 weeks of unpaid time off in a year, and that time can be taken in short increments. .... Employers also are adopting more prevention and disease-management programs to combat cancer, and they're providing employee assistance or mental-health services that can assist employees who have a cancer diagnosis." (GANNETT NEWS SERVICE via Asbury Park Press) The Perks Are Hot, Please Stay in the Kitchen Excerpt: "To attract and keep employees, restaurants have been sweetening the pot with benefits like transportation allowances, English-language programs, dining discounts, adoption assistance, stock options and free cars." (The New York Times; one-time registration required) Survey Invitation: How Do You Make Health Benefit Decisions for Your Employees? Excerpt: "What's important to you when making health benefit decisions for your employees? Interested in the newest trends in the marketplace? Researchers at the University of Michigan are conducting a study, and are interested in your insights. This study is funded by the Robert Wood Johnson Foundation. No names or corporate affiliations will ever be used in any presentation or publication produced in the course of this study." (Matthew Davis and Dianne Singer of the University of Michigan) End-of-Life Care: The Struggle to Provide Quality Care while Containing Costs Excerpt: "As the baby boomer generation ages and approaches Medicare eligibility, new importance has been placed on the care provided to individuals at the end of life. During the final year of life, Medicare beneficiaries average nearly four major illnesses, while the average for surviving Medicare beneficiaries is only slightly more than one in a typical year. The additional illnesses help to account for the sharp increase in medical spending in the last year of life." (Changes in Health Care Financing and Organization) Setting Up a Pool in the Event of Critical Illness Excerpt: "People save for retirement, college expenses and even take out long-term-care insurance. But rarely do they set aside a segregated pool of assets to pay expenses in the event of a serious illness." (AP via The New York Times; one-time registration required) Tool Giant Black & Decker to Drop Drug Coverage for 3,000 Retirees Excerpt: "Black & Decker Corp. has decided to eliminate pres.cription drug coverage for about 3,000 retirees, saying they would be better off receiving benefits through the federal government." (Baltimore Business Journal via bizjournals.com; one-time registration required) Medicare: The Transition of Dual-Eligible Beneficiaries from Medicaid to Medicare Drug Coverage 48 pages. CORRESPONDENCE to The Honorable Max Baucus, Ranking Minority Member, Committee on Finance, United States Senate. Excerpt: "CMS, PDP, and state contingency plans address potential problems with the transition. Although each of these contingency plans is useful in mitigating risks for dual-eligible beneficiaries, their effectiveness is uncertain." (U.S. Government Accountability Office) Sick and Vulnerable, Workers Fear for Health and Their Jobs Excerpt: "Work takes on many meanings when illness strikes: a cause of added stress; a place to escape from that stress; a source of income, insurance, identity and normalcy; and a fear of losing all those and more." (The New York Times; one-time registration required) Opinion: The New World Economy -- Does It Include Employment-Based Health Insurance? Excerpt: "So what if Social Security and Medicaid functioned best in a world where most workers had company pensions and health insurance and spent their entire careers with one employer? The mere suggestion that these programs might be updated for a new, more consumer-driven economy sends Democratic leaders into fits of apoplexy." (The New York Times; one-time registration required) Editorial: The Long-Term Care Conundrum Excerpt: "Only the wealthy can easily afford to pay out of pocket for years of care in a high-cost nursing home. Unfortunately, private insurance has not had wide appeal. Only some 10 percent of the elderly have policies, and while that number is expected to rise, the policies are too expensive for many people, including those who most need protection." (The New York Times; one-time registration required) Opinion: Health Care for All, Just a BIG Step Away Excerpt: "You may find it shameful that some 45 million Americans lack health insurance. Well, by reallocating money already devoted to health insurance, the government could go along way toward solving the problem. But you may not like the solution." (The New York Times; one-time registration required) BenefitsRestoration November 2005 Newsletter Focuses on the IBM Retiree Health Plan Excerpt: "Well I spent the last month or two quietly waiting for the new 2006 Retiree Medical Plan with an understanding on my part that it would be pretty good. The more fool I!! Now to be straight, no one at IBM 'told me' that it would be a good plan; it was simply what I was led (or led myself) to believe." (BenefitsRestoration, Inc.) Overview: Private Letter Ruling on Collectively Bargained Retiree HRA Funded by Employer Excerpt: "Most HRAs are unfunded, with benefits paid out of the employer's general assets, leaving some risk that if the employer suffers financial difficulties, the benefits might not be paid. However, this HRA is funded, with employers making contributions to a trust, thereby helping to ensure that the benefits will be waiting for the employees when they become eligible for reimbursements." (Employee Benefits Institute of America Inc.) Links to Items on Executive Comp, Benefits in General Speeded-Up Stock Option Vesting Is a Way Around New Accounting Rule, but Some Cry Foul Excerpt: "At least 22 Washington area companies are among hundreds nationwide that have transformed millions of stock options, many of which would not have been available for executives to use until 2009, into fully vested shares. According to Wall Street estimates, the fast-forwarding could wipe away more than $4 billion in expenses that would otherwise have shown up on income statements starting in 2006 under a new accounting rule that goes into effect Jan. 1." (The Washington Post; one-time registration required) Principal Items Relating to Employee Benefits Compliance Published by the DOL In reverse chronological order (most recent documents first). Look what our new search engine can do! (U.S. Department of Labor) Principal Items Relating to Employee Benefits Compliance Published by the IRS In reverse chronological order (most recent documents first). Look what our new search engine can do! (Internal Revenue Service) Overview: Reporting/Withholding Requirements for Deferred Comp Arrangements under Section 409A (PDF) 2 pages. Excerpt: "Plan sponsors and administrators have been concerned that the IRS has not issued guidance on how to determine and report 2005 deferrals for these purposes. [December 8, 2005], the IRS finally issued Notice 2005-94, which suspends the reporting and wage withholding requirements for 2005." (Groom Law Group) Mercer Survey Examines Expatriate Benefits Excerpt: "Most multinational companies provide their expatriate employees with employee benefit programs, according to a survey by Mercer Human Resources Consulting. The Expatriate and Third Country National Benefits Survey, conducted during the first six months of 2005, looked into how companies provide expatriate employees with retirement, medical and disability benefits." (Business Insurance) Text of Corrections to Proposed Regs on Application of 409A to Nonqualified Deferred Comp Plans (PDF) 6 pages. (Internal Revenue Service) How Portfolios Evolve After Retirement: The Effect of Health Shocks Excerpt: "[The authors] investigate the influence of aging and health shocks on both a household's ownership of various assets and the dollar value and share of total assets held in each asset class." (Center for Retirement Research at Boston College) New Guidelines on Employee Stock Options and Exit Tax Issued in Sweden (PDF) 1 page. Excerpt: "Recently, the Swedish Tax Agency issued guidelines concerning the taxation of stock options, particularly when an employee who holds options leaves Sweden." (KPMG LLP) Job Rules Clarify Reservist Rights: Pre-Service Status Must Be Preserved Excerpt: "The Labor Department released final regulations [December 16] clarifying a 1994 law that protects the employment and re-employment rights and benefits of members of the armed forces. The regulations are the first that explain the Uniformed Services Employment and Reemployment Act. The law promises that service members will be able to return to their jobs at the same pay and benefits as if they had never been deployed." (The Washington Post; one-time registration required) IRS Abusive Transaction Settlement Initiative Open Until January 23, 2006 Excerpt: "The IRS recently announced a one-time opportunity for taxpayers to voluntarily disclose and resolve certain listed and potentially abusive transactions. Announcement 2005-80. Among the 21 transactions that can be settled pursuant to this initiative, four relate to retirement plans and at least three others may be of interest to the retirement plans community." (Deloitte's Washington Bulletin,) Newly Posted Press Releases Benefit Advisors Network Proudly Welcomes Benefit Foundations of America (Benefit Advisors Network) AIM Investments(R)selects ERISA Expertise Roth 401(k) Tools & Technology (ERISA Expertise LLC) Myron Kandel, Founding Financial Editor Of CNN, To Lead NH Initiative On Corporate Governance (New Hampshire Bureau of Securities Regulation) Newly Posted or Renewed Job Openings Pension Administrator for PENSERVCO, Inc. in FL 401(k) Employee Communications Specialist for 401(k) Advisors in CA 401(k) Enroller for 401(k) Advisors in CA Compliance Testing Manager for Diversified Investment Advisors in NY Retirement Plan Specialist Wanted! for SS&G Financial Services in OH Supervisor, Disability Programs for Southern California Edison in CA Junior DC Administrator for Hicks Pension Group - Honolulu in HI Qualified Plan Administrator for Trust Company of America in CO Retirement Plan Consultant for Limestone Pension Associates, LLC in DE ERISA Attorney for Employee Benefits Institute of America Inc. (EBIA) in WA 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