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July 3, 2006
Today's sponsor: The Center for Tax Law and Employee Benefits at The John Marshall Law School

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Are you working in human resources? Are you dealing with health insurance plans or pension benefits? Learn how you can broaden your experience with an M.S. degree (for non-lawyers) or LL.M degree (for attorneys) in employee benefits from The John Marshall Law School in Chicago during an information session from 5 to 7 p.m., Wednesday, August 2. Learn how these unique programs can help advance your career.

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

Pres.cription Drug Trends Fact Sheet -- June 2006 Update (PDF)
5 pages. Excerpt: "Spending in the US for pres.cription drugs was $188.5 billion in 2004, over 4-1/2 times more than the $40.3 billion spent in 1990. Although pres.cription drug spending has been a relatively small proportion of national health care spending compared to spending for hospital and physician services (10% in 2004, compared to 30% and 21%, respectively), it has been one of the fastest growing components ...." (Kaiser Family Foundation)

Implementing Employee Wellness Programs: Pitfalls and Practical Tips
Excerpt: "Implementing a wellness program post-HIPAA can be complicated, ..., and requires knowledge of several regulatory schemes." (BNA Tax Management)

CMS Staff Members Offer Informal Views on Medicare Part D Creditable Coverage Notices
Excerpt: "The Joint Committee on Employee Benefits (JCEB) of the American Bar Association (ABA) has issued a report of the May 2006 informal Q&A session between JCEB representatives and CMS staff. The [target page] summarizes answers to questions about creditable coverage notices under Medicare Part D that were discussed in the session." (Employee Benefits Institute of America Inc.)

Post-Sereboff, Court Refuses to Impose Constructive Trust
Excerpt: "Brenda Mote filed suit under ERISA seeking disability benefits. The defendant counter-claimed to recover an alleged overpayment resulting from Mote's receipt of Social Security disability benefits. Mote, represented by Mark DeBofsky, moved to dismiss the counter-claim, arguing that the Social Security funds held in a bank account are shielded from recovery under 42 U.S.C. § 407(a), which reads: ...." (erisa on the web, posted by John Wood)

Employer under McNamara-O'Hara Service Contract Act Must Pay for Health Benefits during FMLA Leave
Excerpt: "The DOL concluded that the employer was required to continue paying for group health plan coverage during an FMLA leave, even though the collective bargaining agreement only required employer contributions to the benefit plan based on an employee's paid hours." (Employee Benefits Institute of America Inc.)

Overview: IRS Provides Guidance on Tax Consequences of Major Disaster Leave-Sharing Plans
Excerpt: "The IRS has issued guidance on the federal tax consequences of arrangements under which employees may deposit leave in an employer-sponsored leave bank for use by other employees who are adversely affected by a 'major disaster' as declared by the President." (Employee Benefits Institute of America Inc.)

Milliman Medical Index 2006 Shows Costs for a 'Typical American Family of Four' (PDF)
8 pages. Excerpt: "Milliman has completed its second annual study of the total annual medical costs for a 'typical American family of four.' The Milliman Medical Index (MMI) measures the average spending for such a family if covered by an employer-sponsored PPO program. It provides a benchmark by annually assessing the changes in those costs over a 5-year period." (Milliman)

Opinion: Praising HDHP/HSAs--Enough Already!
Excerpt: "Claims about the value of the HSA abound, but few, if any are supported by facts. The June 1 issue of Employee Benefit News includes an article 'HSA Helps Wendy's grill health care costs.' Is there any meat on this bun?" (Richard D. Quinn via Employee Benefit News)

Health Sector Market Innovations
Excerpt: "Four speakers described 'Innovations in the Health Care Marketplace' during [a] standing-room-only briefing [last week] on Capitol Hill, jointly sponsored by the Galen Institute and the Council for Affordable Health Insurance. [The organizations] wanted to show legislators the incredible energy and imagination that are going into creating consumer-friendly options in the health sector including innovations in health insurance, long-term care and insurance, and banking: ...." (Galen Institute)

Web Site: Insure U
Excerpt: "The (NAIC) has created the Insure U -- Get Smart About [Health] Insurance program to help consumers make educated decisions." (National Association of Insurance Commissioners)

Conference Transcript: Tax-Free Healthcare-- Build It Up or Blow It Up?
The conference was held on June 16, 2006. Sponsored by Tax Analysts, the non-profit publisher of Tax Notes magazine. Participants included Katherine Baicker, a member of the President's Council of Economic Advisers, and Jason Furman, Special Assistant to President Clinton for Economic Policy. (Tax Analysts)

Links to Items on Executive Comp, Benefits in General

Perils and Pitfalls of ERISA Summary Plan Descriptions -- Part II
Excerpt: "The first part of this series appeared in the June 15 issue. It can be accessed online at The Summary Plan Description informs the plan participant of the benefit plan terms, one of which is that there is a plan administrator other than the employer. Many employee benefit plans, especially insured plans, delegate decision-making authority to a separate party, the claim administrator." (Employee Benefit News)

Court Says Employer Liable for ERISA 502(c) Penalty Due to Close Relationship to Plan Administrator
Excerpt: "The penalties for ignoring requests for information required by ERISA can be severe -- plan administrators that fail or refuse to furnish the information within 30 days after the request may be liable for up to $110 per day from the date of such failure or refusal." (Employee Benefits Institute of America Inc.)

CEOs Shell Out Nearly 6 Figures to Secure the Perfect Nanny
Excerpt: "Salaries of top nannies aren't the only thing being driven by the CEO search. Those at the high end also get benefits such as health insurance, meals at fine restaurants, country club passes, cars with free gasoline, education stipends, cellphones, working trips aboard corporate jets to places like Hawaii and personal trips compliments of the CEO's frequent-flier miles. All that, plus room and board in a mansion, can make leaving the profession a lifestyle decision." (USA TODAY)

Working Paper: Timing of Employee Stock Option Exercises and the Valuation of Stock Option Expense
Excerpt: "This study examines the degree to which employees' idiosyncratic early option exercise behavior affects firms' employee stock option valuation estimates. Prior research suggests that utility-based valuation models that account for early employee exercise do not yield different value estimates than models that simply adjust for coarse early exercise timing estimates. [The 56 page PDF of the paper may be downloaded from the target page.]" (Social Science Research Network)

Audio: Investigations Expanded into Back-Dating Stock Options
Excerpt: "A growing list of publicly-held companies are being asked by the government to re-examine their stock options programs. One area of concern is the practice of back-dating, .... NPR's Scott Simon talks to New York Times columnist Joe Nocera about the practice." (Weekend Edition via National Public Radio)

Newly Posted Press Releases
(Post Yours!)

ASPPA Fall EA-2(A) Review Courses

IRS Announces Temporary Change of Address for Determination Letter Requests, Ruling Requests
(Internal Revenue Service (IRS))

Putnam Introduces First Health Reimbursement Account Services for Labor Unions
(Putnam Investments)

The SPARK Institute Issues Best Practices for Frequent Trading Monitoring by Retirement Plan Recordkeepers
(SPARK Institute)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

401(k) Administrators
for Pension Development Corporation
in NY

Pension Administrator
for Moran & Associates, Inc. / G. Russell Knobel & Associates
in HI, WA

Group Employee Benefits Account Manager (Service)
for The Protector Group Insurance Agency, Inc.
in MA

Employee Benefit Consulting Champion
for Clifton Gunderson LLP
in IL

Director of Pension Operations
for 1199SEIU Benefit and Pension Funds
in NY

Senior Plan Administrator
for Advanced Benefits Consulting
in MO

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