Welfare Plans
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January 9, 2006
Today's sponsor: Employee Benefits Institute of America Inc. (EBIA)

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Banner ad for Employee Benefits Institute of America Inc. (EBIA)

More information and to register

Do you need to update your group health plan notices and procedures for 2006? Let EBIA help! In this 90-minute web seminar, we will review the changes to notice requirements made by the final COBRA and HIPAA portability regulations, as well as notices for Medicare Part D, health FSA grace periods, and HIPAA privacy. There'll be plenty of practical advice for employers and third-party administrators.

Another great EBIA seminar!

(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)

Chart: 2006 Welfare Benefit Limits
Excerpt: "The IRS has released the 2006 cost-of-living adjustments to limits for the adoption credit, child tax credit, qualified transportation benefits, adoption assistance programs, medical savings accounts and health savings accounts." (Watson Wyatt Worldwide)

HSA/FSA Grace Period Guidance Restricts Employer Options but Provides Limited Transition Relief
Excerpt: "In Notice 2005-86, the IRS clarifies the effect of a health flexible spending account (FSA) grace period on health savings accounts (HSAs). Employees who participate in a health FSA with a grace period may not participate in an HSA until the first day of the first month after the grace period ends." (Watson Wyatt Worldwide)

Overview: IRS Corrects Dependent Definition and Allows for Grace Period Amounts on DCAP Form
Excerpt: "The IRS's 2005 Form 2441, Child and Dependent Care Instructions, quietly fixes a discrepancy for taxpayers claiming child and dependent care expenses for the care of a disabled dependent adult." (Watson Wyatt Worldwide)

Expanded EAPs Can Help Employers' Bottom Lines
Excerpt: "A broader range of services, including help with elder care and planning home purchases, can reduce absenteeism and bolster productivity." (Workforce Management; one-time registration required)

Eighth Circuit Denies COBRA Penalties, But Plaintiffs May Seek Unreimbursed Medical Expenses
Excerpt: "Plaintiffs were not entitled to recover statutory penalties for an employer's failure to provide notices of COBRA continuation of coverage because the plaintiffs' coverage under a health care plan never ceased. However, the plaintiffs may be entitled to recover unreimbursed medical expenses under ERISA. These were the conclusions of the Eighth Circuit U.S. Court of Appeals in Delcastillo v. Odyssey Resource Management, Inc., et al. (No. 04-3676)." (Spencer's Benefits Reports)

New York Employee Had Three Years in Which to File Lawsuit for COBRA Violation
Excerpt: "Because ERISA does not prescribe a specific limitations period for COBRA claims (or for benefit claims in general), ERISA plans are subject to varying statutes of limitations in different jurisdictions. Plans operating in more than one state must be aware of the possible range of limitations periods." (Employee Benefits Institute of America Inc.)

Middle-Market HR Outsourcing: Emerging Marketplace Trends
Excerpt: "Read about the specific advantages of outsourcing for mid-market employers, how to create a business case for outsourcing, and tips on selecting an outsourcing partner." (Aon Consulting)

Health Care Outlook 2006: Who'll Be Celebrating?
Excerpt: "The new year looks strong for many, including merger-ready hospitals and managed care, but challenges are coming on just as strong." (Modern Healthcare; one-time registration required)

Mental Health Parity Act Provisions Extended to December 31, 2006
Excerpt: "The MHPA prohibits a group health plan from applying a lower annual or aggregate lifetime dollar limit to mental health benefits than the plan applies to medical/surgical benefits. The MHPA is found in substantially similar provisions of ERISA, the Code, and the PHSA." (Employee Benefits Institute of America Inc.)

2005 Health Care Year in Review (PDF)
4 pages. Excerpt: "If you liked 2004, a busy and tumultuous year, you must have loved 2005. It began with providers responding to an international disaster and ended with the mop-up of a domestic catastrophe. Sandwiched between were lots of little misfortunes, with a sprinkling of good news to keep healthcare professionals from running for the exits." (Modern Healthcare; one-time registration required)

Association Captives: New Strategy for Small Business Health Care
Excerpt: "In spite of an unhelpful regulatory environment, some small business owners are finding innovative ways to purchase group welfare benefits coverage." (Aon Consulting)

The Consumer as Gatekeeper: Evidence Shows Consumer-Driven Health Care Working
Excerpt: "Even though an account-based CDH plan design is a relatively recent development, we have learned much about these plans during the last five years. Based on the research and results reported by health care industry sources, CDH programs appear to be working to control costs without shifting significant additional burden to employees." (Aon Consulting)

Retiree Health Care May Be Next Crisis
Excerpt: "Of the companies in the S&P 500, 337 offer some kind of medical benefits for retirees. According to Silverblatt's analysis, only 282 companies provide sufficient information for estimates about their retiree health-care plans. Those plans are scarily underfunded: Companies would have to set aside $292 billion to meet current obligations, according to the analysis." (Newark Star Ledger via BlueCross BlueShield Association)

Things Your Mother Never Told You about Health Savings Accounts
Excerpt: "In this article, [CCA Strategies reviews] the complexities, advantages and disadvantages of HSAs so that employers and employees will have a complete picture." (CCA Strategies, LLC)

Viva La VEBA! Benefit Trust Ready for a Comeback
Excerpt: "What sounds like it might be a species of exotic flower or an Italian liqueur is, in actuality, an acronym for a 'voluntary employees' beneficiary association.' In its present incarnation, 'VEBA' designates an IRS-approved, tax-exempt trust used to fund employees' welfare benefits such as health, life and disability insurance." (Employee Benefit News)

Links to Items on Executive Comp, Benefits in General

Milliman's Monthly Benefit News and Developments, January 2006 (PDF)
2 pages. The newsletter provides a summary of the previous month's legislative, regulatory, and judicial information on employee Benefits. (Milliman)

More Companies Ending Promises Made to Employees for Retirement
Excerpt: "The death knell for the traditional company pension has been tolling for some time now. Companies in ailing industries like steel, airlines and auto parts have thrown themselves into bankrup.tcy and turned over their ruined pension plans to the federal government." (The New York Times; one-time registration required)

Overview: DOL Issues Final USERRA Regulations and Employer Notice
Excerpt: "The final regulations provide detailed guidance in a question-and-answer format on important employer and employee obligations and rights under USERRA, .... This Legal Alert discusses some of the most significant employment and employee benefits issues addressed in the final regulations." (Kilpatrick Stockton LLP)

Securities and Exchange Commission January 17 Meeting to Address Compensation Disclosure
Excerpt: "The Commission will consider whether to propose amendments to the disclosure requirements for executive and director compensation, related party transactions, director independence and other corporate governance matters, and securities ownership of officers and directors." (U.S. Securities and Exchange Commission)

Worldwide Pay and Benefit Headlines -- December 2005 Edition (PDF)
12 pages. This edition covers international and European issues and includes items on Austria, Germany, India, Ireland, Netherlands, New Zealand, Switzerland, and the United Kingdom. (Towers Perrin)

Overview: Final USERRA Regulations Detailing the Reemployment Rights of Military Service Members
Excerpt: "While the DOL's final regulations under the USERRA clarify a number of previously uncertain areas, interpretation and application of the USERRA can still be confusing in a number of respects." (Littler Mendelson)

Newly Posted Events
(Post Yours!)

409A Regs At Last & How Employers Should React
in Georgia on January 19, 2006
presented by Worldwide Employee Benefits Network (WEB) - Atlanta Chapter

After Enron: Employer Stock in 401(k) Plans
Nationwide on January 10, 2006
presented by ABA Joint Committee on Employee Benefits

An Introduction to Health Savings Accounts
in Minnesota on January 19, 2006
presented by Wolters Kluwer Financial Services

An Introduction to Health Savings Accounts
in Minnesota on February 23, 2006
presented by Wolters Kluwer Financial Services

Benefits Boot Camp
in Georgia on February 9, 2006
presented by Worldwide Employee Benefits Network (WEB) - Atlanta Chapter

Domestic Relations Basics: QDROs and QMCSOs
Nationwide on January 24, 2006
presented by ABA Joint Committee on Employee Benefits

HCEs and Key Employees - Basics and Beyond
Nationwide on January 31, 2006
presented by SunGard Corbel

IRA Jump Start - An Introduction to IRA's
in Minnesota on January 11, 2006
presented by Wolters Kluwer Financial Services

Jump Start - An Introduction to IRA's
in Minnesota on February 8, 2006
presented by Wolters Kluwer Financial Services

Roth Final Regulations - For Now
Nationwide on January 24, 2006
presented by SunGard Corbel

Traditional and Roth IRA Contributions
in Minnesota on January 12, 2006
presented by Wolters Kluwer Financial Services

Traditional and Roth IRA Contributions
in Minnesota on February 22, 2006
presented by Wolters Kluwer Financial Services

Transfers, Rollovers, and Direct Rollovers
in Minnesota on January 18, 2006
presented by Wolters Kluwer Financial Services

Wellness Advisor-- It's More Than a Medical Plan-- Case Study - Teleweb
Nationwide on January 19, 2006
presented by International Foundation of Employee Benefit Plans

Newly Posted Press Releases
(Post Yours!)

American Bankers Association To Be Sponsor Of SPARK National Conference
(SPARK - the Society of Professional Administrators and Recordkeepers)

Assistant Secretary of Labor Addresses Ft. Wayne, Ind., Businesses on President's Retirement Security and Health Care Agenda
(U.S. Department of Labor, Employee Benefits Security Administration)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Pension Administrator
for Primark Benefits
in CA

Internal Sales Specialist
for Principal Financial
in IA, MA

Administrator, Retirement & Savings
for Ball Corporation
in CO

Client Service Manager
for Fidelity Investments
in KY

Retirement Plan Specialist II
for Raymond James Financial
in FL

Investor Services Technical Specialist
in DC

Tax Reporting Supervisor - PA
for Vanguard
in PA

Retirement Services District Manager ( Ft. Wayne/South Bend)
for ADP
in IN

Employee Benefits Administration
for Primary Consulting, Inc.

Junior Pension Administrator
for Established TPA firm in Northern NJ
in NJ

Team Leader / Relationship Manager
for Boyce & Associates, Inc
in AZ

Handy Links:

Copyright 2006, Inc.; except that you may reprint this newsletter in full (including this sentence) without obtaining our permission.

Published by:, Inc.
1298 Minnesota Avenue, Suite H
Winter Park FL 32789
(407) 644-4146
Fax: (407) 644-2151

Editor and Publisher: David Rhett Baker, J.D.