Welfare Plans
To BenefitsLink home page Fill your job openings fast by advertising on BenefitsLink

January 30, 2006
Today's sponsor: Employee Benefits Institute of America Inc. (EBIA)

(Click on company name or banner to learn more.)
Banner ad for Employee Benefits Institute of America Inc. (EBIA)

Explore the Seven Wonders of the Benefits Compliance World

No HR or benefits professional's library would be complete without EBIA's compliance manuals. Save time and steer clear of compliance traps by joining thousands of professionals who rely on our manuals.

"I know I can rely on your manuals, above and beyond any others, to be clear, concise, easy to understand, and accurate!" -Director of Flexible Benefits

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

Rule Aims to Force Public Sector to Tally Future Health Spending
Excerpt: "It will take two to three years for the full effects of GASB 45, as the rule is known, to play out. But officials say it could lead to reduced benefits for retirees. Governments that don't have a plan for fully funding their obligations could have their bonds downgraded, limiting their ability to borrow at favorable rates and costing taxpayers millions in additional interest payments for new schools, roads and other capital improvements." (The Washington Post; one-time registration required)

Tips for Auditing Your Organization's Electronic Medical Records
Excerpt: "How can you assess whether there are ongoing privacy violations that may not be reaching you through your complaint process? That's what privacy audits are designed to address." (REPORT ON PATIENT PRIVACY via

Colonoscopy Recommendation Was Sufficient to Trigger Preexisting Condition Exclusion
Excerpt: "The health plan argued that the purpose of PCEs is to protect health plans 'from people electing not to purchase insurance until they suspect or know they have a medical problem, and then shift a known loss to the insurer/plan.' But that's not quite right: Under HIPAA's portability rules, to 'suspect or know' that there's a medical problem, without receiving medical advice, diagnosis, care, or treatment, is not enough to trigger a PCE." (Employee Benefits Institute of America Inc.)

Two Companies Combine Specialty Pharmacy and Disease Management
Excerpt: "The companies say that the new firm will offer an integrated health management approach, combining DM and specialty pharmacy. Services will include community-based care by pharmacists and nurses, medication delivery, and education and treatment strategies focused on a patient's specific therapy." (SPECIALTY PHARMACY NEWS via

Supreme Court Grants Petition for Review (PDF)
23 pages. Excerpt: "The narrow question presented in this case is whether the fiduciary of an employer-sponsored health plan may obtain an equitable lien or constructive trust under ERISA 502(a)(3) on specifically identifiable proceeds from a settlement between a plan participant and a third-party tortfeasor when the terms of the plan expressly provide that third-party recoveries must be used to reimburse the plan for medical expenses it paid on the participant's behalf." (Groom Law Group)

Opinion: A Health Care Pres.cription That's Hard to Swallow
Excerpt: "The only thing American politicians all agree on is this: The United States must at all costs avoid healthcare 'rationing.' One after another, they step forward to deplore this much-hated approach, insisting they will fight off efforts to deny the insured any beneficial service that their insurance covers. But it's too late for that. The truth is that sensible rationing may be the only way to make sure that fair access to healthcare for all remains affordable." (Los Angeles Times via BlueCross BlueShield Association)

The Uninsured and Rising Health Costs (PDF)
4 pages. Excerpt: "Several reports in 2005 documented the increase both in health care costs and the number of uninsured. The Uninsured and Rising Health Costs ties together these two issues, focusing on who is losing and who is gaining health coverage, and how employers and governments are responding to rising costs." (Alliance for Health Reform)

IRS Concludes That Costs of Gender Reassignment Surgery Can't Be Deducted as Medical Expenses
Excerpt: "Chief Counsel Advice is written advice from the IRS Office of Chief Counsel to other IRS personnel and may not be used or cited as precedent. Nevertheless, this Chief Counsel Advice may generate some controversy, at least in part because it focuses more on legislative history than on the statute's detailed and complex language or on the evidence from the taxpayer's medical professionals." (Employee Benefits Institute of America Inc.)

Why the Plans of a Major Drug Purchasing Coalition Did Not Work
Excerpt: "When a group of more than 50 FORTUNE 500 companies embarked on a widely publicized mission to remove the pharmacy benefit manager's (PBM)'s rebate-driven 'profit motive' and directly contract with pharma.ceutical manufacturers, drug makers responded to their proposal with a 'resounding 'no.'' [Originally published October 25, 2005]" (DRUG BENEFIT NEWS via

The Alternatives Are Few When Health Insurers Don't Want You
Excerpt: "In 2004, 12.5 percent of all applications for individual health coverage were denied, according to a national study by the trade association America's Health Insurance Plans. But the rejection rate climbed with the age of the applicant. For example, 25.5 percent of those ages 55 to 59 and 30.1 percent of those ages 60 to 64 were denied coverage." (

Commentary: Health Care Is Not an Issue to Just Tinker With
Excerpt: "When it comes to health care ... Bush's true failing, to this point, is not the poorly conceived pres.cription drug plan; it is a more general absence of ambition. In a climate of cresting urgency on health care, Bush has been handed a rare opportunity to achieve something truly transformational." (The New York Times; one-time registration required)

Health Care, Vexing to Clinton, Is Now at Top of Bush's Agenda
Excerpt: "More than 12 years after President Bill Clinton unveiled his plan to remake the nation's health care system, President Bush is moving the issue once again to the top of the national agenda and is expected to push a series of health care proposals in his State of the Union address on [January 30, 2006]." (The New York Times; one-time registration required)

Links to Items on Executive Comp, Benefits in General

Research Report: The State of 50+ America 2006 (PDF)
Excerpt: "Compared with a decade ago, the state of 50+ America seems to have improved, but AARP's third annual 'report card' on the quality of life of midlife and older Americans finds that the picture has become less favorable and the outlook more bleak during the most recent year." (AARP)

The Golden Years: Travels, Hobbies and a New Job, Too
Excerpt: "While many retirees are still focused on leisure activities, a growing number are returning to the work force. A recent study by Putnam Investments estimated that seven million previously retired people, or about 10 percent of the work force over the age of 40, are now back at work or looking for jobs." (The New York Times; one-time registration required)

Overview: Medicare Subsidy Disregarded in Determining Employer Deduction
Excerpt: "Employers that transfer excess pension plan assets to a retiree health account need not take into account the Medicare Part D pres.cription drug subsidy when demonstrating that the plan meets the minimum cost requirement that applies to such transfers. The IRS's Rev. Rul. 2005-60 confirms that the 28% federal subsidy is disregarded in determining the deductibility of employer healthcare expenditures." (BNA Tax Management)

Overview: USERRA Rules and Notice Requirements: Do the Final DOL Rules Affect You?
Excerpt: "The Department of Labor (DOL) published final regulations and issued a new notice under the Uniformed Services Employment and Reemployment Rights Act (USERRA), 38 U.S.C. 4301 et seq., that took effect on January 18, 2006. 70 Fed. Reg. 75246 (12/19/05)." (BNA Tax Management)

Blog: SEC Proposed Exec Comp Disclosures -- Pensions and Other Post-Employment Compensation
Excerpt: "The proposed regulations include significant revisions to disclosure of post-employment compensation covering named executive officers ...." (BeneBlog)

Text of 370-Page Proposed Regs from SEC on Executive Compensation Disclosure (PDF)
These were issued Friday, January 27, but have not yet appeared in the Federal Register. (Securities and Exchange Commission)

The New Corporate Outsourcing
Excerpt: "Under pressure from foreign competitors with lower labor costs, big companies have become more willing to pare away workers' health care and pensions, abandoning an informal social contract that existed for much of the 20th century." (The New York Times; one-time registration required)

EBSA Achieves Total Monetary Results Exceeding $1.7 Billion for FY 2005
Excerpt: "Through its enforcement of [ERISA], the Employee Benefits Security Administration ... is responsible for ensuring the integrity of the private employee benefit plan system in the United States. .... Total monetary results for FY 2005 were more than $1.7 billion .... Included in this figure is $709 million in assets restored to plans and benefits recovered for individual workers-- an increase of nearly 120% over FY 2004, and up 161% from FY 2001." (U.S. Employee Benefits Security Administration)

Incentive Stock Options Create Tax Bills
Excerpt: "When paying tax, it doesn't get much worse than racking up a tax bill on profits you never actually receive. But for holders of incentive stock options, that's a potential headache of the alternative minimum tax. The reasons are complicated, but a quirk in the AMT -- the parallel tax system conceived to prevent overuse of tax deductions, but which has instead trapped millions of middle-class taxpayers -- could create a huge tax bill on paper gains that never materialized." (AP via The New York Times; one-time registration required)

Newly Posted Events
(Post Yours!)

College for Advanced Management of Health Benefits
in Nevada on February 21, 2006
presented by National Business Coalition on Health

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Compliance Manager - AZ
for Vanguard
in AZ

Pension Assistant
for White Plains law firm with growing retirement plan administration and pension consulting department.
in NY

Pension Administrator
for Pension Parameters, Inc.
in NJ

Principal Consultant - Insurance
in VA

Client Integration Transition Manager
for Diversified Investment Advisors
in NY

Benefits Administrator (20 hours/week)
for City Colleges of Chicago
in IL

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.