Welfare Plans
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February 22, 2006
Overview: HHS's Final HIPAA Enforcement Rule (PDF)
2 pages. Excerpt: "Although the Rule contains detailed enforcement provisions, as in previous guidance, HHS continues to emphasize voluntary compliance with HIPAA. Thus, good faith efforts to comply with HIPAA's administrative simplification provisions provide covered entities with significant protections against enforcement actions." (Powell Goldstein LLP)

Commentary: Setbacks in Disease-Management Pilots Belie Optimism for Future
Excerpt: "In the end, we see not a failure of disease management in this news from PacifiCare, but rather a learning opportunity for how best to educate patients and providers about disease management's established clinical benefits. After all, demonstration projects are meant to be experiments that lead to innovation. In this case, valuable lessons were learned, and subsequent programs, such as MHS, have been designed with these lessons in mind." (ModernHealthcare; one-time registration required)

Why Doctors So Often Get It Wrong
Excerpt: "With all the tools available to modern medicine -- the blood tests and M.R.I.'s and endoscopes -- you might think that misdiagnosis has become a rare thing. But you would be wrong. Studies of autopsies have shown that doctors seriously misdiagnose fatal illnesses about 20 percent of the time. So millions of patients are being treated for the wrong disease." (The New York Times via BlueCross BlueShield Association)

On-Site Medical Treatment: Pres.cription for Some Cost-Anxious Employers (PDF)
3 pages. Excerpt: "With no silver bullet to the health care cost dilemma on the horizon, an increasing number of employers are exploring on-site medical centers and/or pharmacies as alternative approaches that offer cost relief." (Aon Consulting)

Health Spending Projections Through 2015: Changes on the Horizon
13 pages. Excerpt: "Growth in national health spending is projected to slow in 2005 to 7.4 percent, from a peak of 9.1 percent in 2002. Private health insurance premiums are projected to slow to 6.6 percent in 2005, with a rebound expected in 2007. The introduction of Medicare Part D drug coverage in 2006 produces a dramatic shift in spending across payers but has little net effect on aggregate spending growth." (Health Affairs)

WSJ Examines Negotiations by Amish, Mennonite Communities to Reduce Their Cost of Health Services
Excerpt: "The Wall Street Journal on Tuesday examined how the Amish and Mennonites -- members of the Anabaptist religious denomination -- have been able to 'organize and drive down the price of [their] medical care' in Pennsylvania." (Kaiser Family Foundation)

Pres.cription Drug Strategies Still Failing for Many Companies
Excerpt: "[T]he current PBM business model has some fundamental shortcomings. The multiple tier-based PBM approach to employee cost sharing sets up a dynamic in which PBMs receive maximum income from 'preferred brands' that offer the highest rebates. This system can quickly create blockbuster drugs out of preferred brands that offer great rebates as PBMs drive consumers to these brands over alternative products. This focus on brands limits the shift to lower-cost generics ...." (Towers Perrin)

Sponsors' Management of Medicare's Pres.cription Drug Discount Card & Transitional Assistance Benefit
GAO Correspondence. 23 pages. Excerpt: "[In response to the request of the Honorable Henry A. Waxman, GAO] examined drug card sponsors' management of the drug card and TA benefit and any challenges that sponsors experienced in meeting program requirements." (U.S. Government Accountability Office)

Medicare Backs Obesity Surgery
Excerpt: "Medicare endorsed three types of stomach-shrinking surgery yesterday, saying the controversial procedures can offer Americans safe and effective ways to treat obesity." (The Washington Post; one-time registration required)

Report: Declining Job-Based Health Coverage for Working Families in California and the United States (PDF)
12 pages. Excerpt: "This study analyzes health insurance trends for non-elderly adults (19-65 years of age)1 in the United States and California from 2000 to 2004, and estimates the impact of premium price increases on health insurance coverage over this period. Finally, it simulates future coverage rates for California between the years 2005 to 2010. [Published June 2005]" (UC Berkeley Center for Labor Research and Education)

2005/2006 State 'Pay or Play' Bills -- Related to Employer Health Insurance Benefits
Excerpt: "Note: Some bills refer to reporting requirements and do not directly address pay or play." (National Conference of State Legislatures)

2006 'Pay or Play' Bills -- Will States Mandate Employer Health Insurance Benefits?
Excerpt: "The term 'pay or play' relates to states requiring employers to provide some level of health care benefits to their employees or pay the state back for the costs incurred from treating the uninsured." (National Conference of State Legislatures)

Universal Health Care Coverage: 2006 Bills -- State Legislatures Fill in the Gaps
Excerpt: "While the legislative trend in the states is to fill in the gaps public and private systems leave behind, some states are still considering a single-payer, universal health insurance system that would cover every citizen within their borders. Thus far in 2006, at least five states are considering universal health care systems and five other states have commissioned studies to look at the possibility of such a system." (National Conference of State Legislatures)

HSA State Implementation Report
Excerpt: "Since the legislation and state environment can change quickly, the information included [on the target page] is subject to change. The information is derived from CAHI's legislative tracking vendors, HSA Working Group members and CAHI's state department of insurance surveys. This information should not be used as a compliance document, but rather as a guide for state legislators who want to ensure that citizens of their state have access to the full range of HSA opportunities." (Council for Affordable Health Insurance)

Commentary -- Outside View: The HSA Mirage
Excerpt: "Research [the authors] conducted at the RAND Corporation shows that HSAs will fail to accomplish the president's objectives, and also shows that fears expressed by some opponents that only healthy and wealthy people would take advantage of this tax break are unfounded." (United Press International, Inc.)

Links to Items on Executive Comp, Benefits in General

Towers Perrin February 2006 News Briefs: United States
This edition includes information on the following recent happenings: New Budget Law Raises Flat-Rate PBGC Premiums; Mandatory Electronic Filing of PBGC Premiums Planned in 2006; IRS Proposes Regulations for Roth 401(k) Plans; Final USERRA Regulations Issued; FASB Provides Accounting Relief for Options With a Contingent Cash Settlement Feature; and, CMS Issues Guidance on Medicare Part D Disclosure Rules. (Towers Perrin)

Letter Urges Regulators not to Implement SOX Exemption
Excerpt: "A letter from former Securities and Exchange Commission Chairman Arthur Levitt and former Federal Reserve Chairman Paul Volcker urges regulators to reject a proposal to exempt thousands of smaller public companies from Sarbanes-Oxley-imposed rules on internal controls." ( one-time registration required)

Tenth Circuit OWBPA Case Sets More Stringent Requirements for Reductions-in-Force
Excerpt: "According to a recent decision by the Tenth Circuit, employers need to provide more information to employees when they seek to have them waive their rights to bring Age Discrimination in Employment (ADEA) claims after they have been impacted by a reduction-in-force (RIF)." (Workplace Prof Blog)

Communication Article -- Putting Employees in Control of Their Benefits (PDF)
Excerpt: "There is no question that the time is ripe for changes to the way employees and employers approach benefits. But, is the American workforce ready to be given the wheel when it comes to managing their benefits? And, what can an employer expect in return for the investment in developing programs that prepare their workforce for these changes?" (Aon Consulting)

Overview: SEC Initiates Overhaul of Executive Compensation Disclosure Rules
Excerpt: "A new era in executive compensation disclosure -- one requiring companies to provide more information on how they reward their top people and directors -- may be coming soon ....... [T]he new rules would usher in a new look for disclosures and a new way of reporting executive compensation, including stock awards, company-provided perquisites and retirement benefits. Besides proxy statements, the SEC proposal would apply to annual reports and registration statements." (Towers Perrin)

Section 409A Compliance: Bonus Arrangements and Deferring Performance-Based Compensation
Excerpt: "This alert, ... regarding Section 409A compliance and the proposed 409A regulations, discusses the deferral election rules applicable to performance-based compensation and Section 409A application and considerations for bonus arrangements." (Poyner & Spruill LLP)

Employer Violated FMLA by Requiring Two-Week Notice for Employees Using Paid Vacation Time (PDF)
Page 5 of 6 pages. Excerpt: "An employer's leave policy that required employees to give two weeks' notice before taking paid vacation leave violated the Family Medical Leave Act (FMLA) because it discouraged employees from taking medical leave." (Seyfarth Shaw LLP)

Insurance Can Negate the Nefarious Effect of Lawsuits
Excerpt: "Standards and practices are only the first line of defense against liability. In our litigious times, even the most circumspect professionals may find themselves sued for breach of fiduciary duty or other misfeasance. Insurance is therefore of paramount importance as a defense against fiduciaries' liability exposure." (

Aon's Quarterly Update on HR Regulatory News, March 2006 (PDF)
4 pages. This edition includes information of general interest, and notes on retirement plans, health and welfare, and other HR practices. (Aon Consulting)

Overview of New Military Leave Rules: All Employers Must Act (PDF)
1 page. Excerpt: "This article highlights some of the important areas covered in the recently issued final regulations interpreting the Uniformed Services Employment and Reemployment Rights Act (USERRA)." (Aon Consulting)

Newly Posted Events
(Post Yours!)

Fiduciary and Investment Considerations for ESOP Companies and Trustees
Nationwide on June 1, 2006
presented by National Center for Employee Ownership

Jump Start - An Introduction to IRAs
Nationwide on March 9, 2006
presented by Wolters Kluwer Financial Services

Jump Start - An Introduction to IRAs
Nationwide on April 5, 2006
presented by Wolters Kluwer Financial Services

New SEC Disclosure Rules and Their Implications for Executive Compensation
Nationwide on February 28, 2006
presented by Thompson Interactive, A Division of Thompson Publishing Group

Traditional and Roth IRA Distributions
Nationwide on March 22, 2006
presented by Wolters Kluwer Financial Services

Newly Posted Press Releases
(Post Yours!)

Cali Joins Gilsbar As Company Continues To Promote Its Thought-Leading 360 Benefit Plan Management
(Gilsbar, Inc.)

Karl Senner, Inc. Selects Gilsbar, Inc. for Self-Funded Health Plan Management
(Gilsbar, Inc.)

CPI Announces Payroll Division
(CPI Qualified Plan Consultants, Inc.)

U. S. Labor Secretary Elaine L. Chao Announces Agenda for 2006 Saver Summit
(U.S. Department of Labor, Employee Benefits Security Administration)

Killbuck Savings Bank Exceeds All Expectations in Growth of Health Savings Account Program
(Wolters Kluwer Financial Services)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Employee Benefits Tax (EB) Manager
for Deloitte
in FL, GA

Retirement Plan Administrator
for Alliance Benefit Group of New England
in NH

Account Executive
for Transamerica
in IL

Health & Welfare Group Leader
for Towers Perrin
in CA

Record Keeping Specialist for Qualified Retirement Plans
for AKT Retirement Plan Services LLC
in OR

401(k) Administrator
for R-Tech Consultants, Inc.
in CA

Service Delivery Manager II
for Automatic Data Processing (ADP)
in GA, IA, UT

Defined Benefit Forms Specialist
for New York Life Investment Management LLC
in MA

Handy Links:

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

Published by:, Inc.
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Winter Park FL 32789
(407) 644-4146
Fax: (407) 644-2151

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