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August 15, 2006
Today's sponsor: Health and Welfare Plan Management for Mid-Sized Employers

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Finding the Cure for What Ails Your Health Care Plan

Is your health care plan healthy? Discover that elusive elixir that promises to rejuvenate your program and bring back exceptional health care at an affordable price. Consumer directed plans, HSAs, HRAs, wellness programs and pharmacy benefit management services backed by well designed employee communication programs offer solutions-- but which features are right for your plan? Find out at the Health and Welfare Plan Management for Mid-Sized Employers conference, September 17-20, in Las Vegas, Nevada.

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

Text of Rev. Rul. 2006-36: Medical Reimbursement Plan Becomes Taxable Due to Beneficiary Clause (PDF)
7 pages; effective for plan years beginning after December 31, 2008, in the case of plans having such provisions. Excerpt: "Amounts paid to an employee under a reimbursement plan are not excludable from gross income under § 105(b) if the plan permits amounts to be paid as § 213(d) medical benefits to a designated beneficiary (other than the employee's spouse or dependents of the employee)." (Internal Revenue Service)

ERISA Benefits Termination Permitted Based on Employee's Alleged Workplace Policy Violation
Excerpt: "[A bank manager] filed a claim for short-term disability benefits under the bank's ERISA plan. The plan paid short-term disability benefits for over three months, up to January 27, 2002. The bank informed her that she was expected to return to work at the end of that period. During the payment of short-term disability benefits, the bank started investigating allegations that Roby had engaged in workplace misconduct." (ERISA on the web; posted by John Wood)

8th Circuit Affirms Reduction of ERISA Disability Benefits
Excerpt: "C. Michael Riddell, M.D., a physician, was diagnosed with multiple sclerosis in 1998. He made a claim for benefits under his employer's long-term disability ERISA plan. Unum Life Insurance Co. of America, which administered the plan, approved his claim." (ERISA on the web; posted by John Wood)

Another Court Permits ERISA Insurer to Recover Social Security-Based Overpayment
Excerpt: "As the district court ruled, 'Unum, like the life insurance company in Dillard's, seeks 'a particular share of a specifically identified fund'; namely, the amount it overpaid Gilcrest by not subtracting his Social Security award. Thus, the Court concludes that the relief Unum seeks is equitable and comes from an identifiable fund.'" (ERISA on the web; posted by John Wood)

ERISA Suit Barred by Statute of Limitations
Excerpt: "In Abdel v. US Bancorp, 2006 WL 2321182 (8th Cir. Aug. 11, 2006), the Eighth Circuit Court of Appeals affirmed the dismissal of an ERISA disability case based on the running of the statute of limitations." (ERISA on the web; posted by John Wood)

Audit Report of Computerized Tracking System Did Not Prove COBRA Election Notice Was Mailed
Excerpt: "EBIA Comment: The court in this case noted that COBRA does not require any particular system or specific approach to delivering notices. But plan administrators must be able to prove what was mailed and to whom." (Employee Benefits Institute of America Inc.)

Court of Appeals Holds Medical Malpractice Release Authorization Preempted by HIPAA (PDF)
2 pages. Excerpt: "The Georgia Court of Appeals has ruled that a Georgia statute requiring medical malpractice plaintiffs to attach to their complaint a medical record release is preempted by the Health Insurance Portability and Accountability Act of 1996." (Powell Goldstein LLP)

California Medical Association Finds Blue Cross Spends the Lowest Percentage of Revenue on Patients
Excerpt: "Blue Cross spent 78.9% of revenue on healthcare for more than 4.6 million members in 2005, according to the physician group's annual analysis of health plan finances reported to the Department of Managed Health Care, which regulates health maintenance organizations. Of the balance, Blue Cross spent 11% of revenue on overhead and put 10% of it toward profit." (Los Angeles Times; one-time registration required)

Judge Denies Preliminary Injunction in CHA Lawsuit over Procedure Fees
Excerpt: "Los Angeles County Superior Court Judge Carl J. West has rejected a request from the California Hospital Association (CHA) to prohibit Blue Cross of California (Blue Cross) from paying differing fees to physicians who perform colonoscopies in hospitals and ambulatory surgical centers (ASCs)." (Medical News TODAY)

California Nonprofit Drops Small Group Health Coalition
Excerpt: "The PBGH continues to run a $5 billion health coverage purchasing coalition for large employers, but it has stopped selling new PacAdvantage coverage, and it is working to help PacAdvantage small group customers, which all have 2 to 50 employees, find new sources of health coverage." (National Underwriter Life & Health; free one-time registration or paid subscription required)

Working Paper Abstract: Health Insurance Enrollment Decisions
Excerpt: "[The Authors] use data from the 2001 Medical Expenditure Panel Survey to examine the association between health insurance preferences and coverage status. [They] also consider the role of such preferences in decisions to seek out and enroll in employment-based coverage." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve full-text)

Towers Perrin U.S. Legislative Tracking Charts -- Health and Welfare -- Updated August 11, 2006 (PDF)
34 pages. Excerpt: "These charts summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors." (Towers Perrin)

Links to Items on Executive Comp, Benefits in General

Executive Compensation Disclosures: Pension Table
Excerpt: "Pension values should be determined as of the same pension plan measurement date used for the financial statements for the most recent fiscal year." (Pensions & Benefits Weblog)

Executive Pay Disclosure Rules: The Challenge of the Required Compensation Discussion and Analysis (PDF)
6 pages. Excerpt: "In a new report on the subject, Hay Group reviews the objectives of the CD&A and offers specific suggestions and actions to ease compliance with these disclosure standards." (Hay Group; one-time registration required)

Overview: Final SEC Rules on Proxy Disclosure of Executive and Director Compensation (PDF)
8 pages. Excerpt: "On August 11th, the SEC issued the text of final rules that make major revisions to the proxy disclosure of executive and director compensation. The rules are effective for proxy statements filed on or after December 15, 2006 for fiscal years ending on or after that date." (Frederic W. Cook & Co., Inc.)

SEC Posts Release Pertaining to New Executive Compensation Disclosure Requirements
Excerpt: "On [August 11], the SEC posted the 436-page adopting release for its executive compensation disclosure rules." (Attorney B. Janell Grenier via

SEC Executive Compensation Disclosures: Transition
Excerpt: "Disclosures under the new rules are not required to restate compensation or related party disclosures for prior fiscal years. For example, only the most recent fiscal year need be displayed in the revised Summary Compensation Table." (Pensions & Benefits Weblog)

IRS Updates List of Approved Nonbank Trustees and Custodians for HSAs and Other Tax-Exempt Trusts
Excerpt: "EBIA Comment: Extensive requirements must be met before an entity may be approved to serve as a trustee or custodian (such as minimum net worth, bonding, and annual audit requirements), which may explain why the list of approved nonbank trustees and custodians is so slow-growing. Note that in addition to HSAs, these entities are approved as trustees and custodians for Archer MSAs, a pilot project that expired on December 31, 2005." (Employee Benefits Institute of America Inc.)

Towers Perrin U.S. Legislative Tracking Charts -- Human Resources -- Updated August 11, 2006 (PDF)
11 pages. Excerpt: "These charts summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors." (Towers Perrin)

Newly Posted Events
(Post Yours!)

ERISA Litigation Forum
Nationwide on September 12, 2006
presented by Paul, Hastings, Janofsky & Walker LLP

Meeting of the Citizens' Health Care Working Group
in District of Columbia on August 28, 2006
presented by Agency for Healthcare Research and Quality

Mid-Atlantic Area Benefits Conference
in Pennsylvania on April 25, 2007
presented by American Society of Pension Professionals & Actuaries (ASPPA)

Newly Posted Press Releases
(Post Yours!)

S&P Reports On How Largest U.S. Cities Are Faring With Pension Liabilities
(Standard & Poor's)

New Publication: "The Oxford Handbook of Pensions and Retirement Income"
(Center for Retirement Research at Boston College)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Employee Benefits Tax Senior or Manager
for Deloitte
in CA

Conversion Specialist
for ePlan Services, Inc.
in CO

Relationship Manager II
for AST Trust Company
in AZ

Operations Specialist II
for AST Trust Company
in AZ

Benefits Specialist
for Chugach Alaska Corporation
in NV

Compliance Specialist
for MassMutual Financial Group
in MA

Relationship Manager
for Vanguard
in PA

Daily Compliance Manager
for Great-West Retirement Services
in WI

Regional Director, Retirement Services
for Great-West Retirement Services
in CO

Enrollment Specialist
for National Automobile Dealers Association Retirement Administrators, Inc
in VA

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