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October 18, 2006
Today's sponsor: Employee Benefits Institute of America Inc. (EBIA)

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Record Retention Requirements for Health & Welfare Plans

In Record Retention Requirements for Health & Welfare Plans, EBIA's experts analyze record retention requirements for ERISA health and welfare plans as well as other employer-provided health and welfare benefits not subject to ERISA. You'll find answers to your record retention questions for many benefits including cafeteria plans, DCAPs, qualified transportation plans, HSAs, group health plans (like major medical, dental, health FSAs, and HRAs), and other ERISA benefits.

Record Retention Requirements for Health & Welfare Plans is available now at the introductory price of $195.
Please enter priority code BL195. For more information and to order, visit

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

Text of Final Regs on Use of Electronic Media for Employee Benefit Notices, Elections and Consents (PDF)
50 pages. Excerpt: "These regulations generally apply to applicable notices provided, and participant elections made, on or after January 1, 2007. . . . The participant election rules in these regulations extend the use of electronic media to the notice and election rules applicable to plans that are subject to the QJSA requirements of section 417. . . . [T]heseregulations do not adopt the suggestion that spousal PINs be permitted in lieu of the physical presence requirement . . . ." (Internal Revenue Service)

City Councilor Finds Plan to Let Employees Sell Sick Leave Too Costly
Excerpt: "With some cost estimates exceeding $5 million during the next decade, City Councilor Matthew Ortiz has dropped his proposal to let city employees with more than 30 years on the job sell their accrued sick-leave hours to the city for a lump sum." (Santa Fe New Mexican)

Employer Wrongly Refused to Offer COBRA Based on Alleged Gross Misconduct by Employees
Excerpt: "EBIA Comment: Even though this employer avoided penalties, the case illustrates the COBRA pitfalls of gross misconduct terminations. With no statutory definition and widely divergent results in the case law, it is almost impossible to predict whether denying COBRA due to gross misconduct will stand up in court." (Employee Benefits Institute of America Inc.)

Correction: 2007 Medicare Part D Prescription Drug Creditable Coverage Notices Due By November 14
Excerpt: "This is a corrected version of an article that originally appeared in Washington Bulletin October 2, 2006. That article incorrectly suggested that Part D plans are required to provide creditable coverage notices to participants. We apologize for any confusion this may have caused." (Deloitte)

In Rush to Cut Medical Costs, Workers May Pay with Higher Premiums, Less Privacy, Less Free Choice
Excerpt: "How will privacy fare in the rush toward health-care efficiency? Federal law protects our medical records, but in the real world, what is actually private? If it is OK to discriminate against smokers or the heavy, how far behind are subtle steps to move aside the chronically ill or disabled? They cost a lot, too, even though many of them did not lead a lifestyle that 'asked for it.'" (Pacific Northwest Magazine via The Seattle Times)

USA Today Examines Back Surgery, Overuse of Medical Procedures
Excerpt: "In the second installment of its week-long 'Prescription for Change' series, USA Today . . . examines back surgery and how it 'reflects a larger issue in medicine': how to balance 'major drivers of health care inflation,' such as new technology and treatments, 'without overusing them.'" (Kaiser Family Foundation)

Court Denies Wal-Mart Administrative Committee's Motions In Subrogation Controversy
Excerpt: "Having been precluded from pursuing a participant's estate for reimbursement (see prior post), Wal-Mart recently renewed its battle for reimbursement of plan expenditures against the participant's widow in Administrative Committee of Wal-Mart Stores, Inc. v. Mooradian, 2006 WL 2793183 (M.D.Fla.) (2006)." (Health Plan Law)

A Lesson from Europe on Health Care and Costs
Excerpt: "The most obvious difference between their health care systems and ours -- that their governments provide universal insurance -- certainly plays a big role in the cost differences. " (The New York Times; one-time registration required)

New Tricare Secondary Payer Provisions Track Medicare Secondary Payer Provisions
Excerpt: "EBIA Comment: Everyone's trying to reduce health care costs, including the Department of Defense (DOD). This legislation is intended to limit the ability of employers to shift their health care costs to the TRICARE program." (Employee Benefits Institute of America Inc.)

Mexican Health Insurance Plan Has Helped Improve Health of Residents, Studies Find
Excerpt: "A relatively new health insurance plan implemented in Mexico in 2003 has begun to reduce infant mortality rates and the number childhood deaths from cancer, according to seven new studies of the plan published this month in the Lancet, the Long Island Newsday reports." (Kaiser Family Foundation)

Covering California's Uninsured: Three Practical Options
Excerpt: "Momentum is growing in California -- in both the public and private sectors -- to make health coverage affordable and available for all, or nearly all. To help inform the development of solutions, CHCF funded a project to identify workable coverage models. The results of this effort, available in both an executive summary and a detailed analysis, highlight three alternative approaches to coverage . . . ." (California HealthCare Foundation)

Medicare and You 2007 -- The Official Government Handbook (PDF)
116 pages. Excerpt: "'Medicare & You 2007' explains the Medicare Program. It isn't a legal document. The official Medicare Program provisions are contained in the relevant laws, regulations, and rulings." (Centers for Medicare & Medicaid Services)

Smart Small Companies Know How to Take Care of Their Workers
Excerpt: "Small firms can't compete head-to-head with large companies for benefits. But they should offer a package that meets employee needs and is competitive with other small companies." (San Francisco Chronicle)

Links to Items on Executive Comp, Benefits in General

Comments on the Ninth Circuit Decision in Glanton v. AdvancePCS Inc. that Plaintiffs Have No Claim
Excerpt: "Here, the plan clearly suffered an injury. Are the fiduciaries of the plan the only ones allowed to sue to redress that loss if there is no individual participant or beneficiary who is directly (as is true in most cases) affected by the loss?" (BNA Pension & Benefits Blog)

Summary: PCAOB Guidance on Auditing the Fair Value of Share Options Granted to Employees
Excerpt: "On Oct. 17, 2006, the Public Company Accounting Oversight Board . . . issued staff questions and answers applicable to audits of financial statements in circumstances in which a company has granted share options to employees that must be accounted for as compensation cost in conformity with Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment (FAS 123R)." (Financial Executives International)

GASB's Comprehensive Implementation Guide Update-- Project Plan, Updated October 17, 2006
Excerpt: "Primary Objective: The objective of this project is to update the 2005 Comprehensive Implementation Guide for the effects of the Other Postemployment Benefits and the Statistical Section Implementation Guides, for new pronouncements issued since June 2005, and for additional issues that have come to the attention of staff." (Governmental Accounting Standards Board)

Mandatory Binding Arbitration Clause Violates Claims Regulations
Excerpt: "EBIA Comment: Arbitration of benefit claims is specifically addressed in ERISA's claims regulations, which permit mandatory arbitration to be used for one of the required two levels of claims appeals, provided such arbitration is not binding. As this court points out, a claimant must be permitted to challenge an arbitrator's decision in court, so binding mandatory arbitration is effectively precluded under ERISA." (Employee Benefits Institute of America Inc.)

IRS Proposes Annuity Exchange Regulations
Excerpt: "The Internal Revenue Service wants to change the tax treatment of trades of property for annuities. The proposed regulations, 'Exchanges of Property for an Annuity,' apply the same rule to exchanges for both private annuities and commercial annuities." (National Underwriter Life & Health; free one-time registration or paid subscription required)

Summary of Executive Compensation Disclosure Tables (PDF)
15 pages. Excerpt: "This outline is intended to provide an overview of the new tabular disclosure requirements and does not discuss any of the other requirements including the new requirement to provide a Compensation Discussion & Analysis section or the new disclosure requirements with respect to Form 8-K or related party transactions." (Miller & Chevalier Chartered)

Experts Say 409A Regulations Delay Could Prove a 'Lifesaver' for Some
Excerpt: "Even though 409A non-qualified deferred compensation plan sponsors have been expected to have their Ps and Qs in order since late 2005, the latest year-long regulatory implementation delay could prove to be a lifesaver." (; one-time registration required)

Overview: SEC's New Executive Compensation Disclosure Requirements & Companies with Retirement Plans
Excerpt: "The changes to the rules for disclosure of executive and director compensation that the Securities and Exchange Commission (SEC) adopted this summer include requirements for additional reporting for companies with retirement plans. . . . This Compliance Alert focuses on the additional requirements and their implications." (The Segal Company)

Restorative Payment Stemming from Trustee's Embezzlement Deductible As Employee Business Expense
Excerpt: "This is the first time that IRS has ruled that a restorative payment made by a company owner is deductible as an employee business expense." (Pension & Benefits Week via RIA News Briefings)

Newly Posted Events
(Post Yours!)

Benefits Compliance Update 2007- webcast 2pm-3pm EDT
Nationwide on November 30, 2006
presented by

ERISA Litigation Forum - The Standard of Judicial Review Applicable to Benefit Claim Denials: Abatie and the Ninth Circuit's New "Middle Path"
Nationwide on November 14, 2006
presented by Paul, Hastings, Janofsky & Walker LLP

Fourth Quarter 2006 Update
Nationwide on November 17, 2006
presented by McKay Hochman Co., Inc.

Qualified Retirement Plan Seminar
in Wisconsin on November 14, 2006
presented by Gucciardi Benefit Resources, a Division of Summit Benefit & Actuarial Services, Inc.

Newly Posted Press Releases
(Post Yours!)

SPARK Institute Files SEC Comment Letter On The Proposed MFS Funds Distribution Plan
(SPARK - the Society of Professional Administrators and Recordkeepers)

IRS Announces Pension Plan Limitations for 2007
(Internal Revenue Service (IRS))

CONEXIS Launches Online FSA Quoting Engine

Wellmark Blue Cross and Blue Shield Announces Clinician-Centered, Information Support Program for Member Health and Productivity
(Wellmark Blue Cross and Blue Shield)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Director, Testing & Reporting Services
for Fidelity Investments
in TX

Defined Contribution/401(k) Administrator
for Third Party Administrator in Southeast Michigan
in MI

Life Benefits Service Representative: Columbia University
for Standard Insurance Company
in NY

Benefits & Compensation Specialist
for Telecare Corporation
in CA

Staff Counsel
for Nationwide Insurance
in OH

Senior Retirement Plan Administrator
for LarsonAllen
in MN

Account Executive - Compliance
for AAAA Benefits, Inc.
in NC

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

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