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November 13, 2006
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Complete Benefits Law Guidance from Law Journal Press

The nation's workforce and health care system are constantly evolving and so are the legal issues. Law Journal Press helps you handle any benefits law question with up-to-date, authoritative books on all aspects of the field. Get legal and practical advice from leading experts on everything from COBRA to ERISA, "contingent" employees to family and medical leave, and more. Browse our product listings for detailed information and special offers.

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Feds Look to Play Bigger Role in Cutting Health Costs; Group Plans Possibly Affected
Excerpt: "Plans by the new Democratic-controlled Congress to negotiate Medicare drug prices directly with manufacturers could lower the cost of the federal health insurance program for seniors and make it easier for employers to discontinue retiree health benefits. . . . Beyond retirees, any new legislation allowing for the federal government to negotiate drug prices directly with manufacturers could affect employers in their efforts to pay less for prescription drugs." (Workforce Management)

Bush Administration Opposes Democrats' Plan To Negotiate Medicare Drug Prices
Excerpt: "Rep. Nancy Pelosi (D-Calif.), who is expected to become House speaker, has said her party will take up legislation that would repeal the ban on negotiations within the first 100 hours of assuming the majority in the House. [HHS Secretary Mike] Leavitt said the Bush administration opposes that change and does not intend to compromise on the issue." (Kaiser Family Foundation)

Mounting Benefits Tab for California Public Employees Attracting Attention
Excerpt: "Revealing the true cost of health benefits is likely to focus new attention on whether health benefits promised to public-sector retirees are too generous and whether spending priorities need to be adjusted as growing numbers of Baby Boomers retire in an era of soaring health care costs." (San Francisco Chronicle)

Companies Try to Make Generic Drugs the Norm
Excerpt: "At prices often 80 percent cheaper than those of brand-name medicines, generics have become a key tool for health insurers and employers trying to hold back soaring medical costs. There's hardly a health plan today that doesn't use higher co-payments on branded drugs as a way to nudge employees toward less-expensive copycat versions. But as employees re-enroll in benefit plans this fall, many will encounter more-aggressive efforts to make generics the clear-cut choice." (

California Public Agencies Using Housing Allowances to Keep, Attract New Employees
Excerpt: "Most worrisome are the openings for jobs considered critical to communities: teachers, nurses, and especially public safety workers such as firefighters and police officers. . . . As the housing problem worsens -- in Ventura, the median home price was $686,730 in September -- public agencies are looking for new ways to address costs in an effort to keep critical workers in the community." (Ventura County [Calif.] Star)

Overview: 2007 COLAs for HSAs, Saver's Tax Credit, Transportation Benefits, Adoption Assistance
Excerpt: "The maximum amount that may be excluded from an employee's gross income under an employer-provided adoption assistance program (under Code Section 137) in connection with the adoption of a child will be $11,390 for 2007 (a $430 increase from 2006)." (Employee Benefits Institute of America)

IRS Releases 2006 IRS Forms 2441 and 1040A, Affecting Dependent Care Assistance Plan Participants
Excerpt: "The IRS has released Form 2441 ('Child and Dependent Care Expenses') and its accompanying Instructions for the 2006 tax year. . . . Crunching numbers . . . makes it clear that taxpayers who receive $5,000 of DCAP benefits in 2006 (the maximum calendar-year exclusion for married taxpayers filing jointly), and who use additional amounts during a 2006 grace period that were carried over from 2005, will end up including the additional amounts in taxable income for 2006." (Employee Benefits Institute of America)

Minnesota Supreme Court to Review Case Requiring Vesting of Unused Vacation Pay (PDF)
2 pages. Excerpt: "A recent [Minnesota] Court of Appeals ruling says that a policy denying a payout of earned vacation pay [under certain circumstances, such as a termination due to employee misconduct] is unenforceable." (Briggs and Morgan)

Knudson Decision Does Not Limit Plan's Right to Recover Overpayments by Reducing Future Benefits
Excerpt: "The Seventh Circuit has upheld the right of ERISA plans to recover overpaid benefits through reductions in future benefit payments. . . . [B]ecause the briefs in this case were filed before the Supreme Court issued its post-Knudson decision in the Sereboff case, the court did not address whether Sereboff might actually lend support to the plans' 'self help' approach to recovering benefits." (Employee Benefits Institute of America)

More Communities Exchanging Health Information
Excerpt: "A survey finds that local, state and regional initiatives for exchanging health information have matured significantly since a similar survey conducted in 2005, but most efforts are still in the planning stages. . . . Over 90 percent of the initiatives included hospitals and primary care physicians. Sixty-nine percent included health plans, and 54 percent included employers." (

Health Care Reform Options: Actuaries Can Play Important Role (PDF)
2 pages. Excerpt: "Actuaries can play a key role as the unbiased experts in risk assessment and health care financing." (Contingencies magazine from the American Academy of Actuaries)

Light Fines Might Hamper Massachusetts' New Health Coverage Law
Excerpt: "Experts say the penalties are so slight that relatively few additional Bay State companies will start offering health insurance. Similarly, thousands of individuals could refuse to sign up for health insurance, figuring they either can't afford the premiums or that it's cheaper to pay the fines." (Boston Business Journal)

AHIP Announces Proposal to Expand Access to Health Insurance Coverage to Every American
Press release. Excerpt: "More than 40 million uninsured Americans will have access to affordable health insurance coverage under a comprehensive new set of targeted policy proposals released today by America's Health Insurance Plans (AHIP). The plan would . . . enable all consumers to purchase health insurance with pre-tax dollars, provide financial assistance to help working families afford coverage, and encourage states to develop and implement access proposals." (America's Health Insurance Plans)

IRS Releases 2007 Reporting Forms and Instructions for HSA and Archer MSA Trustees and Custodians
Excerpt: "Trustees and custodians of HSAs and Archer MSAs must use Form 5498-SA to report contributions to (and the fair market value of) these accounts, and they must report distributions on Form 1099-SA. Both forms must be filed with the IRS, and a copy must be provided to the account holder." (Employee Benefits Institute of America)

Overview: DOL Guidance Provides Further Clarification on HSAs and ERISA (PDF)
5-page discussion of DOL Field Assistance Bulletin 2006-02. Excerpt: "DOL's guidance . . . suggests that an HSA may be exempt from ERISA either by: (1) complying with the terms of the group insurance safe harbor, which prohibits endorsement, or (2) by complying with FAB 2004-01. It further appears that FAB 2004-01 is more flexible than previously thought with respect to 'endorsement' and that the safe harbor may be met if . . . ." (Groom Law Group)

Links to Items on Executive Comp, Benefits in General

Understanding ERISA Plan Information Requests, Part 2
Excerpt: "This article constitutes the second part of the inquiry into what information is subject to the disclosure requirements. In this Unit 2, specific examples will be provided through reference to caselaw." (Health Plan Law blog by Attorney Roy F. Harmon III)

Ten Key Points About the SEC's New Disclosure Rules
Excerpt: "Companies must comply with [436 pages of executive compensation proxy disclosure rules] in their proxy statements for fiscal years ending on or after December 15, 2006. Watson Wyatt suggests 10 key issues to consider in preparing for 2007 proxy disclosures under the new reporting regime." (Watson Wyatt)

Executive Compensation Disclosure: Overview of the new Compensation Discussion and Analysis Section (PDF)
6 pages. (Powell Goldstein LLP)

Stock Option Backdating Brings Down CEO
Excerpt: "LOS ANGELES - Homebuilder KB Home announced Sunday that chairman and CEO Bruce Karatz is retiring after an internal investigation uncovered errors in the company's accounting of stock option grants." (AP via MSNBC)

UnitedHealth to Restate Past Earnings Due to Stock Options Fiasco
Excerpt: "UnitedHealth said it has found problems with its handling of stock options as late as the end of 2005. The company said it expects to take paper losses on prior earnings to account for stock options . . . . " (AP via Washington Post; free registration required)

New Jersey Taxpayers Want Government Employee Benefits Throttled Back to Private Industry Levels
Excerpt: "Lifetime pensions and nearly free health benefits should become a relic of the past, at least for new government employees, according to the poll released today. . . . According to 53 percent of those polled, newly hired employees should be enrolled in 401(k)-type retirement plans rather than the state's traditional pension system, which is based on an employee's highest three years of salary." (Ocean County [N.J.] Observer)

Impact of the 2006 Elections on HR Issues
Excerpt: "Hewitt has prepared a preliminary analysis of how the election is likely to impact HR-related issues, including minimum wage, health care, and immigration. This analysis discusses the issues that are expected to be raised, the likelihood of action on legislation addressing those issues, and the possible leadership roles of Democrats in House and Senate committees." (Hewitt)

Newly Posted Events
(Post Yours!)

Health Reform: What It Meant in the 2006 Election and What This Means for the Future
Nationwide on November 10, 2006
presented by Kaiser Family Foundation

Pension Protection Act of 2006 Part V: The Government Speaks
Nationwide on December 5, 2006
presented by ABA Joint Committee on Employee Benefits

Newly Posted Press Releases
(Post Yours!)

Putnam Investments Offers Report on Defined Contribution Default Options
(Putnam Investments)

Ben Stein's Message to America: Think about the “Retirement Planning Pendulum” During National Retirement Planning Week 2006
(National Retirement Planning Coalition (NRPC))

As Benefit Costs Rise, Employee Retirement Savings Decline
(Ameriprise Financial)

Newly Posted or Renewed Job Openings
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in GA

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in AK, AZ, CA, CO, HI, ID, MT, NM, NV, OR, TX, UT, WA, WY

Daily Plan Processor
for Scott, Tellier & Co., Inc./TPGR Daily, LLC
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in AL

Client Delivery Manager - Administration Software Solution
for SBC Systems Company
in GA

Supervisor (Benefits Administration - Health and Welfare)
for Southern California Edison
in CA

Pension Consultant
for Standard Insurance Company
in NJ

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