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January 11, 2006
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HIPAA Limits Curb Some Wellness Incentives
Excerpt: "As employers sweeten financial incentives for wellness programs, some worry such initiatives will run afoul of non-discrimination rules in the Health Insurance Portability and Accountability Act." (Employee Benefit News)

Medicare's Hidden Administrative Costs: A Comparison of Medicare and the Private Sector (PDF)
19 pages. Excerpt: "This study, based in part on a technical paper by Mark Litow of Milliman, Inc., finds that Medicare's actual administrative costs are 5.2 percent, when the hidden costs are included. In addition, the technical paper shows that average private sector administrative costs, about 8.9 percent-- and 16.7 percent when commission, premium tax, and profit are included-- are significantly lower than the numbers frequently cited." (Council for Affordable Health Insurance)

Trends & Practices in Medical Management: 2005 Industry Profile (PDF)
52 pages. Excerpt: "The research included industry surveys, focus groups, and more informal information gathering. This report summarizes the findings from that research and explores their implications. The report also highlights recent industry trends and projects those trends forward into the near term future, first by making comparisons to findings from the URAC 2001 industry study, but also by asking study participants to assess the industry's future direction." (URAC)

Web Site: Health Care Standards Landscape
Excerpt: "The Healthcare Standards Landscape was developed as part of the NIST Information Technology Laboratory's Health Information Technology (HIT) project ( As part of this project, NIST is pursuing critical measurements, standards, and technology to improve the quality, safety and cost-effectiveness of healthcare delivery systems and processes." (National Institute of Standards and Technology)

Microsoft Pilot Project to Test Online Physician Visits by Employees
Excerpt: "Microsoft has launched a pilot program to test reimbursing physicians for providing nonemergency care to its employees online, the Seattle Times reports. The project is expected to improve care and efficiency while saving money." (California HealthCare Foundation)

In the Treatment of Diabetes, Success Often Does Not Pay
Excerpt: "Insurers, for example, will often refuse to pay $150 for a diabetic to see a podiatrist, who can help prevent foot ailments associated with the disease. Nearly all of them, though, cover amputations, which typically cost more than $30,000." (The New York Times; one-time registration required)

Don't Let Employee Back Pain Strain the Profit Chain
Excerpt: "Next to the common cold, back pain is the leading cause of lost workdays, and employers are feeling it right where it hurts the most - the bottom line. In fact, the Mayo Clinic estimates the annual cost of back pain in terms of lost productivity, medical benefits, and workers compensation to be over $10 billion in the United States." (Employee Benefit News)

CMS Creditable Coverage Disclosure Form Only Available on Web Site
This page provides guidance documents relating to Creditable Coverage requirements for employer and union-sponsored plans and model notice documents. New guidance regarding an employer's disclosure obligations to CMS has been posted. Group health plan sponsors must submit the creditable coverage disclosure form electronically via the CMS website at (Centers for Medicare & Medicaid Services)

Overview: Group Health Plan Sponsors Required to Submit Annual Disclosure Form
Excerpt: "The Centers for Medicare & Medicaid Services (CMS) has released new guidance (please see regarding an employer's disclosure obligations to CMS under the new Medicare Part D regulations." (McDermott Will & Emery)

New Jersey Adds Contraceptives Coverage Mandate
Excerpt: "Acting New Jersey Governor Richard Codey has signed into a law a bill requiring that Garden State health insurance providers covering outpatient pres.cription drugs now have to likewise cover physician-prescribed contraceptives for women." (; one-time registration required)

Top 10 Pharmacy Benefits Management Strategies for 2006
Excerpt: "Pharmacy costs are expected to remain the fastest-growing component of health benefits spend this year. The challenge for employers and PBMs will be squeezing additional savings out of already carefully designed plans. Here are 10 cost-containment strategies that experts say will help cap costs and improve value to employees in 2006 and beyond." (Employee Benefit News)

Covering Birth Control Doesn't Cause Significant Increases in Employers' Health Insurance Premiums
Excerpt: "Employee education to encourage consistent, effective use of contraceptives may cut huge costs associated with pregnancies, births, abortions and hysterectomies related to gynecologic disorders, experts say." (Employee Benefit News)

Links to Items on Executive Comp, Benefits in General

Overview: Deferred Compensation and Section 409A -- Changes in Control
Excerpt: "Under Section 409A, a deferred compensation arrangement can provide for payouts only upon certain defined events. Under normal circumstances, payouts are triggered by a 'separation from service' or made pursuant to a payment schedule fixed at the time of the deferral. However, if provided in the deferred compensation arrangement, a 'change in control event,' as defined under Section 409A, can also trigger payouts." (O'Melveny & Myers LLP)

Court Considers Salt Lake City Domestic Partner Benefits
Excerpt: "A judge heard arguments Thursday on a proposal that would extend health care benefits to domestic partners of Salt Lake City employees. In September, Mayor Rocky Anderson signed an executive order to extend the benefits." (AP via

Overview: Further IRS Guidance on 409A with IRS Notice 2006-4
Excerpt: "On December 23, 2005, the Internal Revenue Service issued Notice 2006-4. Notice 2006-4 provides transition relief from the valuation rules applicable to private company stock option and stock appreciation rights ('Stock Rights'). Notice 2006-4 will be applicable until the effective date of the final regulations under Section 409A (which are expected to become effective on January 1, 2007)." (Orrick, Herrington & Sutcliffe LLP)

SEC to Vote on Executive Pay Disclosure Plan
Excerpt: "The five SEC commissioners are scheduled to vote at a public meeting next Tuesday on the plan, which makes the biggest changes in rules governing disclosure of executive compensation since 1992. The proposal would be opened to a public comment period and could be formally adopted by the SEC sometime afterward -- possibly in time for the spring company proxy season next year." (AP via

Audio: SEC Considers New Rules on Divulging Executive Pay
Excerpt: "The Securities and Exchange Commission will soon consider new rules governing the reporting of executive pay. In addition to salary information, companies would be required to divulge how much top executives earn in perks, bonuses and stock payouts." (Morning Edition via National Public Radio)

News Analysis: The Tax Opinions of Judge Alito -- Employee Benefits Cases on Pages 5-6 (PDF)
7 pages. Excerpt: "Lee A. Sheppard analyzes the tax opinions written by Third Circuit Judge Samuel Alito, whom President Bush has nominated to the Supreme Court, and concludes that the judge picks and chooses his arguments based on where he wants the law to go." (Tax Notes via TaxProf Blog)

Newly Posted Events
(Post Yours!)

Deferred Compensation for Non-Profits and Pass-Through Organizations
Nationwide on January 18, 2006
presented by Retirement Capital Group

Newly Posted Press Releases
(Post Yours!)

Tax Law Changes Related to Hurricanes Katrina, Rita and Wilma
(Internal Revenue Service (IRS))

New Health Cost Increase Figures Underscore Need To Accelerate Value Purchasing Practices
(American Benefits Council)

The New Retirement Mindscape(SM)
(Ameriprise Retirement Services)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Defined Contribution Client Account Manager
for New York Life Investment Management LLC
in NJ

Participant Services Center Supervisor
for New York Life Investment Management LLC
in NJ

Account Executive
for Transamerica
in IL

Account Service Representative
for CBIZ
in CO

Associate Attorney
for Kraw & Kraw
in CA

Handy Links:

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