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| September 20, 2007 |
| Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. |
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New Compliance Rules; News
Senate Unanimously Approves Mental Health BillExcerpt: "The measure, the product of more than two years of negotiations among lawmakers, insurers, patient advocates and the business community, would require equality between mental health and medical/surgical benefits on treatment, costs and out-of-network coverage." (Workforce Management; free registration required)
Health Costs Are Key to GM-UAW Talks
Excerpt: "The United Auto Workers would become one of the nation's largest consumers of health care if it takes over retiree obligations from Detroit's automakers, a huge responsibility that would test the union's ability to control rising health care costs. Health care is at the heart of bargaining between the UAW and General Motors Corp., which was set to continue [today]. The union's contract with GM has been extended hour by hour since Friday." (The Washington Post; free registration required)
UAW/GM Contract Talks - Retiree Health Fund Stalled
Excerpt: "General Motors Corp. and the United Auto Workers [yesterday] temporarily tabled talks about creating a retiree health fund after a five-day deadlock on the issue, sources close to the bargaining said." (The Detroit News)
Compliance Rule Summaries/Analysis/Filed Comments
Overview: Disability Benefits Were Not Includible in Shareholder's Gross Income Even Though Employer Paid PremiumsExcerpt: "Disability benefits received by a lawyer under a group disability insurance policy were not includible in his gross income under Code Sec. 104(a)(3) because he paid the insurance premiums." (CCH INCORPORATED)
7th Circuit Says There Is No FMLA 'Light Duty'
Excerpt: "The 7th U.S. Circuit Court of Appeals has affirmed a lower court ruling that an employee who chose to work a light duty assignment rather than take leave after a work injury is not due her full hourly pay for the time period of the assignment." (PLANSPONSOR.com; free registration required)
Overview: IRS's Comprehensive Proposed Cafeteria Plan Regulations
Excerpt: "With the issuance of these proposed cafeteria plan regulations, the IRS and Treasury have ushered in a new era of cafeteria plan regulation. While the exact contours of this new era will not be known until the regulators react to public comments, most observers expect the basic framework of these newly proposed rules to survive pretty much in tact. This means that the adoption and operation of cafeteria plans will soon be more formal than under current law, particularly with respect to . . . ." (Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.)
Trends; Surveys; Research
Companies Cracking Down on Dependent Health CareExcerpt: "Companies are increasingly auditing the ranks of their health-care plan participants in an attempt to eliminate benefits to ineligible dependents, such as divorced spouses or non-full-time adult students. HR leaders need to decide, however, how stringent they want the company's efforts to be." (Human Resource Executive Online; free registration required)
U.S. Health Care Spending: Comparison with Other OECD Countries (PDF)
65 pages. Excerpt: "The OECD data and other research provide some insight as to why health care spending is higher in the United States than in other countries, although many difficult research issues remain. This report presents some of the available data and research and concludes with a summary of study findings." (Congressional Research Service)
Some Tips for Employers Eager to Help Employees Make Good Decisions About Benefits During Open-Enrollment
Excerpt: "Here are some tips and best practices for employers eager to help their employees make good decisions about benefits . . . ." (BusinessWeek)
Health Providers and Health Insurers Are at Odds Over Payments
Excerpt: "Joseph Crossett, administrator of Liberty Hospital, says much of the friction between insurers and providers is due to growing complexity. For example, he said hospitals often want to create special reimbursement levels for certain high-cost drugs. And insurers may want patients to have certain procedures performed at an outpatient clinic to save money. 'The contracts have become more and more complex,' Crossett said. 'It takes more time to go through that process.'" (The Kansas City Star)
Consternation Greets Bush Health Plan
Excerpt: "President Bush is causing consternation among the putative presidential candidates in both parties by letting it be known that he intends to encourage Congress to pass a bipartisan universal health care plan before he leaves the White House in January 2009." (The New York Sun)
Helping Caregivers Help Themselves
Excerpt: "Recognizing the toll that caregiving takes, some employers are adopting new programs and benefits to assist their employees who are caring for loved ones who are elderly or disabled. The latest additions include telephonic support groups, software for caregiving needs and seminars focused on the wellbeing of the caregiver." (Employee Benefit News; free registration required)
Working Paper: Health and Labor Market Consequences of Eliminating Federal Disability Benefits for Substance Abusers
Excerpt: "Using annual, repeated cross-sections from national household survey data, we estimate how the January 1997 termination of federal disability benefits for those with Drug Addiction and Alcoholism affected labor market outcomes, health insurance, health care utilization, and arrests among individuals targeted by the legislation." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve fulltext)
State Health System Performance and State Health Reform
Excerpt: "State policy officials are focusing on improving health insurance coverage, but other important dimensions of performance, including quality and cost, are receiving less attention. This paper explores the implications of new data on state personal health spending, quality, and health system performance." (Health Affairs)
What Happened to the Insurance Coverage of Children and Adults in 2006? (PDF)
11 pages. Excerpt: "In this paper, we examine changes in health insurance coverage between 2005 and 2006 by age and income . . . . " (Kaiser Family Foundation)
Policy; Opinion; Advocacy
Opinion: Truth on Clinton Health Plan Somewhere in MiddleExcerpt: "Clinton's proposal is not socialized medicine, as Republicans claim, but it has its flaws. Unlike a dozen years ago when she proposed a radical reworking of the nation's health care system, Sen. Hillary Rodham Clinton's latest health plan is notable for its tempered approach. People who are happy with their current health insurance can keep what they've got. People who haven't been able to afford insurance will get help paying their premiums and plenty of coverage options, from either private insurers or a Medicare-like plan." (St. Petersburg Times)
Perils and Pluses of 'Play or Pay' Insurance Mandates
Excerpt: "Jonathan Gruber, a professor of economics at the Massachusetts Institute of Technology who helped create the Massachusetts plan, said the best way to make sure a 'pay or play' plan works is to make sure the penalties are high enough." (Congressional Quarterly Inc.)
Opinion: Clinton's Prescription for Another Heath Care Reform Failure
Excerpt: "The Clinton plan maintains the current system of for-profit, insurance-industry defined health care delivery. The only real change is that, in return for minimal requirements regarding coverage of those with preexisting conditions, the government would pump hundreds of billions in federal dollars into the accounts of some of the country's wealthiest corporations." (The Nation via Physicians for a National Health Program)
Links to Items on Executive Comp, Benefits in General
IRS Developing 457 Plan Guidance, Official Says
Excerpt: "The IRS is involved in several guidance projects affecting Code Sec. 457 deferred compensation plans, according to a senior IRS attorney. The IRS projects include developing guidance on the definition of a governmental plan under Code Sec. 414(d) and the relationship between Code Sec. 457 and the Code Sec. 409A deferred compensation rules, said senior IRS attorney Cheryl Press of the Office of Associate Chief Counsel (Tax Exempt and Government Entities)." (Wolters Kluwer Law & Business)
Stock Option Experience Study to Investigate the Motivating Factors Contributing to the Exercise of Stock Options
SOA is seeking data contributions from companies that offer stock option plans as part of their compensation packages. The target page has information on contributing data. (Society of Actuaries)
Overview: Extension of Section 409A Documentation Deadline – Action Still Required by December 31, 2007
Excerpt: "Significantly, Notice 2007-78 extends only the date for documentary compliance. As a result, with respect to certain plan rules, there is the need for certain written terms to be in place before 2008. Further, the Notice does not extend the date upon which full operational compliance with these rules is required – that is still January 1, 2008. In other words, the good faith compliance period ends December 31, 2007." (Littler Mendelson P.C.)
Overview: Limited Code Section 409A Transitional Relief (PDF)
Excerpt: "A plan is treated as being amended to comply with Code Section 409A retroactively to January 1, 2008, only if the written plan, as amended, contains all the provisions required by the final regulations and accurately reflects the operation of the plan on and after January 1, 2008, through the date of the amendment." (Dechert LLP)
Option Rewards in 2006 Among CEOs of 465 U.S. Companies
Excerpt: "I looked at the 465 companies with market caps of $3 billion or more to find the gains from exercising options and how much unexercised options increased paper profits for CEOs, or what I call option wealth-change." (Graef Crystal via Bloomberg News)
Former American Home Employees Fight to Save Deferred Compensation Funds
Excerpt: "Some highly paid former employees of bankrupt American Home Mortgage are fighting the company's attempt to seize millions they set aside in a non-qualified deferred compensation plan. Newsday reports the case is being brought by 43 employees who had a total of $11.6 million in the retirement trust." (PLANSPONSOR.com; free registration required)
Overview: Additional Section 409A Transition Relief and Guidance
Excerpt: "The Notice provides detailed transition rules for designating a compliant time and form of payment designation made by December 31, 2007. There is no extension of transition relief beyond the existing compliance deadline of December 31, 2007 for taxpayers (or the existing December 31, 2006 deadline for certain compensation amounts paid to certain Section 16 insiders)." (Deloitte via BenefitsLink.com)
Study of Employee Benefits: 2007 and Beyond (PDF)
52 pages. Excerpt: "[From Business Wire] As companies grapple with competing objectives--managing benefits costs while attracting and retaining skilled talent--the link between employee benefits strategies and business and financial goals is expected to increase by 2012, according to . . . a new report . . . by Prudential Financial, Inc. . . . that explores current and future employee needs and how employers plan to respond to those needs. The report highlights employers' need to improve the perceived value of the benefits . . . ." (Prudential Financial)
Newly Posted Events
Annual Fall Employee Benefits Law and Practice Update - Webcast
Nationwide on November 8, 2007
presented by ALI-ABA (American Law Institute-American Bar Association)
New IRS Cafeteria Plan Rules: What You Need To Know
Nationwide on October 16, 2007
presented by Thompson Interactive, A Division of Thompson Publishing Group
Pension Protection Act of 2006 - Are You Ready?
in District of Columbia on October 18, 2007
presented by Capital Chapter ISCEBS
Newly Posted Press Releases
Older Hispanics Rely on Social Security as Primary Source of Retirement Income
AARP
Great-West Retirement Services Appoints Three To Regional Sales Staff
Great-West Retirement Services
The SPARK Institute Issues Analysis Of "401(k) Fair Disclosure For Retirement Security Act”
SPARK Institute
Retailers Welcome Senate Passage of Mental Health Parity Bill, Urge House to Adopt Senate Version at Subcommittee Markup
National Retail Federation
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