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| October 3, 2007 |
| Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. |
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(a) New Guidance Documents
(None today.)
(b) News
Audio: GM's New Hires Will Earn Fewer Benefits
Excerpt: "A combination of an aging workforce and a new tentative union contract has given General Motors the opportunity to accelerate its buyout offers to longtime workers and create a second tier of workers with far fewer benefits. GM is expected to hire thousands of workers." (Morning Edition via National Public Radio)
San Jose City Workers Protest Over Health Care Threat: Cash-Strapped City Could Cut Retiree Benefits
Excerpt: "The city and its workers, who split the costs of retiree health care, would have to spend an additional $57 million a year to fully fund the benefit - more than twice the expected deficit in next year's budget. The city sets aside money in its retirement funds to pay expected retiree health care costs over the next 10 to 15 years, but not enough to cover the full cost for everyone on the payroll." (San Jose Mercury News)
(c) Summaries of Guidance; Filed Comments
Supreme Court Lets Ruling on Religious Private Employers and State-Mandated Birth Control Law Stand
Excerpt: "Not surprisingly, . . . the Supreme Court did not grant cert. this past Monday in a case decided by the New York Appeals Court with significant implications for constitutional rights of private religious employers, employee benefits, and employment discrimination against women." (Workplace Prof Blog)
State Supreme Court Holds ERISA Subrogation Provisions Unenforceable
Excerpt: "The recent decision in In Re Holmes extends a line of decisions which confuses the application of state and federal statutes in the enforcement of ERISA plan subrogation rights. Succinctly stated, the issue was whether a state law requiring Chancery Court approval to validly assign minor's right to insurance proceeds is preempted by ERISA." (Health Plan Law blog by Attorney Roy F. Harmon III)
Multi-Class Group Insurance Contract Is Single Plan Subject to ERISA
Excerpt: "EBIA Comment: There are no hard-and-fast rules for determining how many plans an employer sponsors. As this case illustrates, where insured benefits are involved, each insurance contract typically will be considered a separate welfare benefit plan. The outcome of this case might have been otherwise if the partner-class coverage had been purchased as a separate contract from a different insurer, at a different time, and for a different purpose than the other two classes." (Employee Benefits Institute of America)
Lawsuit Can Be Brought Under California Law for Violation of HIPAA Privacy Rules
Excerpt: "EBIA Comment: Despite the fact that HIPAA does not provide a private right of action, attorneys and their clients increasingly are finding avenues under state law to sue covered entities for violations of HIPAA's privacy and security rules. Although the covered entity won in this case, other courts may not read the HIPAA regulation as narrowly as this court did." (Employee Benefits Institute of America)
(d) Trends, Surveys, Research
Studies by Cigna and Humana Challenge Some Long-Held Assumptions About High-Deductible Plans
Excerpt: "Cutting out unnecessary expenses would help rein in galloping health care inflation. But if the plan design exposed people to too much financial risk, the great fear was that they would go without needed care -- and wind up in much worse physical condition that would demand far higher costs to treat. For a number of analysts, the data already clearly suggest that the greater the cost of care, the more likely that people will go without. New research at Rand has found a direct link between drug costs and avoidance . . . ." (Managed Care)
Couple Has Separate High Deductible Health Insurance Policies. Do They Need Separate HSAs?
Excerpt: "Each Health Savings Account (HSA) can have only one owner. Joint HSAs are not allowed, even if the underlying high deductible health insurance policy provides family coverage." (Wolters Kluwer Financial Services)
Health Care - A Hot Button Issue for the '08 Election
Excerpt: "[On the target page, you can c]lick on a candidate's name for a summary of their proposed health care plan, their voting record on health issues, as well as additional multimedia clips (photo, video, speeches) about health-related topics." (Employee Benefit News; free registration required)
Health Benefit Costs to Rise Again in '08: Companies May Look to Save by Switching to 'Consumer-Driven' Plans
Excerpt: "Companies continue to spend more on employee health benefits and can expect the rate of increase to rise slightly next year, according to several new studies, but some will try to shift more of the cost burden onto their workers." (CFO.com)
Brief: Medicare Costs and Retirement Security
Excerpt: "This brief focuses on just one component of retiree health care costs -- the Medicare program. It discusses the impact on future retirees of both rising out-of-pocket payments and higher taxes that will be needed to cover future health care expenditures." (Center for Retirement Research at Boston College)
(e) Policy, Opinion, Advocacy
Genetic Testing Raises Bias Worries: People Fear Being Denied Jobs, Insurance Based on Their Results
Excerpt: "Hoping to encourage more people to get tested, health advocates have waged a long battle to enact a federal law forbidding insurers and employers from treating those with a genetic condition unfairly. The measure has languished in Congress for 12 years. But now, those lobbying for the law believe this may be the year they finally succeed." (San Jose Mercury News)
Opinion: VEBA Will Keep Costs Down, Enlists Retirees in the Effort
Excerpt: "Although not yet ratified, this agreement will substantially reshape the thinking in corporate America about how to deal with employees' health insurance costs. It has significant political import as well." (HUMAN EVENTS)
Opinion: UAW-GM Deal Means More Plant Closings
Excerpt: "In addition to drastic wage cuts and attacks on long-standing gains such as employer-paid retiree health-care benefits, the agreement signed by the United Auto Workers union to end last week's walkout by 73,000 General Motors workers allows the auto giant to shut at least three plants and slash thousands of additional jobs over the course of the four-year deal." (World Socialist Web Site)
Opinion: General Motors Strike Was Yet Another Health Care Story
Excerpt: "The nation got a vivid reminder of the forces working their way through the American economy with the pending agreement between UAW and General Motors to end a strike against the company. Almost everything seems to come back to the cost of health care these days." (tennessean.com)
Opinion: Health Savings Accounts Could Save Michigan $194 Million
Excerpt: "The upside of the budget stalemate in Lansing is that many legislators are searching for innovative policy solutions. One idea they should consider is health savings accounts, which combine tax-free savings accounts with high-deductible insurance policies. By moving more than 52,000 classified state employees into HSAs, the state could save more than $194 million a year." (Mackinac Center for Public Policy)
Links to Items on Executive Comp, Benefits in General
The Supreme Court Outlook for 2007-2008 (PDF)
3 pages. Excerpt: "This term the United States Supreme Court will consider a number of cases that may impact employers and employees. These cases are briefly summarized [on the target page]." (Winston & Strawn LLP)
Overview: Action Required by Dec. 31, 2007 Despite Limited Extension for Written Compliance with Code Sec. 409A (PDF)
4 pages. Excerpt: "The failure to comply with the applicable requirements of Section 409A can result in significant income tax consequences. Generally, vested deferred amounts of the employee, director, or independent contractor will be immediately taxable and will be subject to an additional 20% tax, plus interest. The employer providing the deferred compensation could be subject to penalties if it fails to withhold taxes or report the income." (Powell Goldstein LLP)
Equilar Releases New Studies on Executive 10b5-1 Trading Plans and Clawback Policies
Excerpt: "Equilar, the market leader for executive compensation benchmarking solutions, today published its latest issue of Executive Compensation Trends. This month's issue includes studies on Rule 10b5-1 stock trading plans for executive officers at Fortune 500 companies and clawback policies at Fortune 100 companies." (Market Wire via Human Resource Executive Online; free registration required)
Fast Facts & Figures About Social Security, 2007
Excerpt: "Fast Facts & Figures answers the most frequently asked questions about the programs SSA administers. It highlights basic program data for the Social Security (retirement, survivors, and disability) and Supplemental Security Income programs." (U.S. Social Security Administration)
Bill Seeks Restrictions on COLI Policies
Excerpt: "Corporate-owned life insurance would face new restrictions under a bill sitting in a House subcommittee." (Investment News; free registration required)
Overview: SEC Guidance on Forthcoming Report on 2007 Executive Compensation Disclosures (PDF)
3 pages. Excerpt: "Benchmarks. The Staff will expect companies that benchmark executive compensation against other companies to identify, where material, the benchmark companies, how the issuer used the comparative information, and how decision-making was affected." (Dechert LLP)
Newly Posted Events
Pension Benefit Restrictions under PPA: What Do Employers Need to Know and When Must They Know It?
Nationwide on October 23, 2007
presented by ABA Joint Committee on Employee Benefits
Newly Posted Press Releases
Hewitt Offers Employees Tips to Maximize Benefit Options During Open Enrollment Season
Hewitt Associates LLC
ExpertPlan Develops Private Label 401(k) Program with Priority Pay Payroll
ExpertPlan
Nearly Three-Fourths of Employers Offer Retiree Health Benefits, New Survey Reports
International Foundation of Employee Benefit Plans
Fidelity Launches Innovative Investment Products That Make It Easier To Create Retirement Income That Can Last A Lifetime
Fidelity Investments
Wells Fargo Helps Consumers Measure Retirement Readiness with the 'Retire Secure Index'
Wells Fargo
Insider’s Guide to DOL Audits from Aspen Publishers Gives Detailed, Practical Advice
Wolters Kluwer Law & Business
Fiduciary Benchmarks Launches New Service For Retirement Plan Industry
Fiduciary Benchmarks, Inc.
AIG Employee Benefit Solutions® Launches AIG Group Limited HealthCareSM Insurance Plan
AIG American General
GM To Inject $35 Billion Into UAW Health-Care Trust
Dow Jones Newswires
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