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| October 17, 2007 |
| Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. |
Today's sponsor is International Foundation of Employee Benefit Plans
(Click on company name or banner to learn more.)
| Meet Licensing and Recertification Requirements with the International Foundation |
| The International Foundation's suite of e-learning courses provides numerous options for those needing continuing education/recertification. There is a suite of courses which have been approved by HRCI -- and we're adding more options everyday. All courses deliver the quality content you'd expect from the International Foundation and are written by experienced benefit and compensation professionals. Topics range from introductory level to specific compliance issues. Watch for one-hour courses coming soon. |
(a) New Guidance Documents
Three New Rulings; IRS Warns Taxpayers About Certain Trust Arrangements Sold As Welfare Benefit Funds
Excerpt: "The Internal Revenue Service and the Treasury Department cautioned taxpayers about participating in certain trust arrangements being sold to professional corporations and other small businesses as welfare benefit funds and identified some of the arrangements as listed transactions. There are many legitimate welfare benefit funds that provide benefits, such as health insurance and life insurance, to employees and retirees. However, the arrangements the IRS is cautioning employers about primarily benefit the owners or other key employees of businesses, sometimes in the form of distributions of cash, loans, or life insurance policies." (Internal Revenue Service)
(b) News
Trust Fund Proposed for Los Angeles County Retirees' Care
Excerpt: "The trust fund would be used to begin pre-funding the massive liabilities the county faces to pay for its retirees' health care costs - estimated at $13billion to $20billion." (LA Daily News)
GM Releases Details of New Contract With UAW
Excerpt: "General Motors on Monday announced details of its new contract with United Auto Workers, which will save the automaker billions of dollars in retiree health care liabilities through the creation of a union-run voluntary employees' beneficiary association, the Detroit Free Press reports." (Kaiser Family Foundation)
Unions Give Up on California Governor's Health Plan
Excerpt: "Abandoning their facade of cooperation, a coalition of California labor unions and consumer groups says it is gearing up a campaign to discredit Gov. Arnold Schwarzenegger's healthcare proposal as too expensive for many workers." (Los Angeles Times; free registration required)
(c) Summaries of Guidance; Filed Comments
Addition of Recertification Requirement in Group Disability Did Not Apply to Already-Disabled Participant
Excerpt: "One of the provisions added in the 2002 restated plan was for a 2-year recertification by Albertson's Medical Review Committee. In 2003, [the participant's] LTD benefits were discontinued when, as part of the 2-year recertification, the Medical Review Committee decided that she no longer met the plan's definition of Total Disability. . . . The 9th Circuit affirmed the district court's decision to reverse Albertson's decision to terminate Shane's benefits . . . ." (Pension Protection Act Blog)
Bauhaus v. Copeland: Mississippi Supreme Court Holds that State Common Law Anti-Subrogation Law Not Preempted by ERISA
Excerpt: "Since Sereboff, there have not been many decisions that cover new ground; Bauhaus is one of the exceptions. On September 27, 2007, the Mississippi Supreme Court affirmed a Chancery Court's determination that Mississippi's state common law rule that, in effect, a self-funded, ERISA-covered health plan may not pursue subrogation or reimbursement from a minor plan participant is not preempted by ERISA." (Benefit Recovery Inc.)
Question on HSA Distribution Not Used for Qualified Medical Expenses
Excerpt: "May an individual who has not made an excess HSA contribution treat an HSA distribution that is not used for qualified medical expenses as the return of an excess HSA contribution?" (Wolters Kluwer Financial Services)
Hewitt Federal Legislation Quick Guide Updated October 10, 2007, for Health and Welfare Plans (PDF)
9 pages. This Federal Legislation Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law regarding health and welfare benefit plans. (Hewitt Associates)
Ninth Circuit Applies 'Time of Death' Rule for Evaluating ERISA Participant Status of Deceased Employee
Excerpt: "In Miller v. Rite Aid Corp., the Ninth Circuit addressed the scope of ERISA preemption where the participant died before commencement of litigation. The case presents the interesting question . . . wherein an employer has promised benefits only to find that the anticipated insurance coverage for the benefits is unavailable at the point of claim." (Health Plan Law blog by Attorney Roy F. Harmon III)
Overview: California Leave Guarantee for Military Spouses (PDF)
2 pages. Excerpt: "On October 9, 2007, California Governor Arnold Schwarzenegger signed into law Assembly Bill No. 392 (AB 392) requiring covered employers to provide unpaid leave for qualified employees to spend with their military spouses." (Buck Consultants)
IRS Releases 2007 Version of Form 3903 for Use by Individuals Reporting Deductible Moving Expenses
Excerpt: "EBIA Comment: To pay or reimburse an employee's 'qualified' work-related moving expenses on a tax-free basis under Code Section 132(g), an employer must do so under an accountable plan. . . . These nontaxable employer-paid moving expenses are then reported by the employer on the individual's W-2 in box 12, using code P. Employers may choose instead to provide a fixed-dollar stipend for moving expenses or to pay expenses that may not be eligible for a tax deduction." (Employee Benefits Institute of America)
Overview: 2008 Medicare Premiums, Deductibles and Coinsurance
Excerpt: "Plan sponsors that pay the Medicare Part B premium or deductible should carefully review their plan documents and communications to assure that they are accurately stating the amount that the plan intends to pay. For example, plans that simply promise to pay the 'Part B deductible' may want to set that payment at a firm amount or maximum." (The Segal Group, Inc.)
(d) Trends, Surveys, Research
(e) Policy, Opinion, Advocacy
Markets and Medical Care: The United States, 1993-2005
Excerpt: "This article looks at the experience in the American medical marketplace over more than a decade, showing how markets function as institutions in which participants who are self-seeking, but not perfectly rational, exercise power over other participants in the market. Cost experience here was driven more by market power over prices than by management of utilization. Instead of following any logic of efficiency or equity, system transformations were driven by beliefs about investment strategies." (Milbank Memorial Fund)
Overview: The 2008 Presidential Candidates on Health Care Reform, Updated Oct. 16, 2007 (PDF)
14 pages. Excerpt: "While it is still early in the campaign process and plan details are incomplete for most candidates, these summaries provide a snapshot of the candidates and their blueprint for reform. Our intent is to be thorough and accurate in compiling what they have said or indicated they want to do." (Council for Affordable Health Insurance)
Commonwealth Fund Recommends Revised Payment Strategies to Improve Health Care Quality and Cut Costs
Excerpt: "The paper, Creating Payment Systems to Accelerate Value-Driven Health Care: Issues and Options for Policy Reform, points out that providers are not adequately compensated for keeping patients healthy or for ensuring that they follow up with patients after hospital discharge or for monitoring patient compliance with their treatments. Instead, the existing payment system rewards medical providers for volume of services and results in uncoordinated and duplicative care from multiple, different providers, the study observed." (Wolters Kluwer Financial Services)
Fidelity Survey Shows Employees Lack Thorough Health Plan Understanding
Excerpt: "Fifteen percent of employees say they have a strong understanding of the terms of their health care benefits, while about 60% say they have a general understanding, according to a survey by Fidelity Investments." (PLANSPONSOR.com; free registration required)
Interactive Online Tool Provides Side-by-Side Comparisons of Presidential Candidate Health Care Proposals
Excerpt: "This side-by-side comparison of the candidates' positions on health care . . . is based on information appearing on the candidates' websites as supplemented by information from candidate speeches, the campaign debates and news reports. The sources of information are identified for each candidate's summary (with links to the Internet). The comparison highlights information on the candidates' positions related to access to health care coverage, cost containment, improving the quality of care and financing." (Kaiser Family Foundation)
Group Letter to Energy and Commerce Committee on Mental Health Parity Bills (PDF)
Excerpt: "We write in joint and strong opposition to H.R. 1424, the Paul Wellstone Mental Health and Addiction Equity Act of 2007. We urge you to adopt the language of the Senate-passed parity bill, S. 558, the Mental Health Parity Act, in its stead." (American Benefits Council)
Links to Items on Executive Comp, Benefits in General
Overview: EBSA Offers Online Penalty Calculator for Form 5500 Delinquent Filer Voluntary Correction Program
Excerpt: "The EBSA's Web site provides the following description of 'How the Calculator Works': The calculator is designed to calculate the DFVCP penalty for each plan that is submitted under the program. After entering the required fields the calculator will determine the amount owed on each individual plan filing, then provide a final amount due for all the filings being submitted for that plan. The calculator is intended to be used for only one plan at a time." (Deloitte via BenefitsLink.com)
Social Security Payments to Increase 2.3 Percent in 2008
Excerpt: "Payments to Social Security retirement and disability recipients and millions of federal retirees will increase 2.3 percent in January, the lowest cost of living adjustment since 2003 as the pace of inflation eased." (The Washington Post; free registration required)
Select Tax and Social Security Benefit Issues Relating to Military Personnel, Volunteer Firefighters, Peace Corps Volunteers, and AmeriCorps Volunteers (PDF)
Excerpt: "The Subcommittee on Select Revenue Measures and the Subcommittee on Income Security and Family Support of the House Committee on Ways and Means has scheduled a joint public hearing for Wednesday, October 17, 2007, on a bill to provide tax relief to military personnel, volunteer firefighters, Peace Corps volunteers, and AmeriCorps volunteers. This document, prepared by the staff of the Joint Committee on Taxation, provides a description of select issues in present law relating to the taxation of these groups." (U.S. Joint Committee on Taxation)
Hewitt Federal Legislation Quick Guide for October 10, 2007, on Human Resources & Employment Law (PDF)
11 pages. This Federal Legislation Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law regarding human resources and employment law. (Hewitt Associates)
Overview: SEC Observations on 2007 Executive Compensation Disclosures (PDF)
Excerpt: "On October 9, 2007, the SEC's Division of Corporation Finance released its much-awaited report, based on its review of 2007 executive compensation disclosures in 350 proxy statements filed by public companies. On the same day, the SEC's Director of the Division of Corporation Finance, John White, was the keynote speaker at the 2nd Annual Proxy Disclosure conference. This DechertOnPoint update summarizes the report and Mr. White's observations." (Dechert LLP)
Opinion: Large Stock Options Grants May Hurt Investors
Excerpt: "A large stock option may motivate a chief executive officer to such great risks that he ends up making decisions that can backfire for shareholders. That's the conclusion of two business school professors in their paper published by the Academy of Management Journal: ``Swinging for the Fences: The Effects of CEO Stock Options on Company Risk-Taking and Performance.''" (Bloomberg News)
$117.5 Million Settlement Reported in Options Case
Excerpt: "Hewlett-Packard has agreed to settle a shareholder lawsuit for $117.5 million in a two-year-old case related to stock options backdating at Mercury Interactive, the business software company H.P. acquired last year, a lawyer for the plaintiffs said . . . ." (The New York Times; free registration required)
Definition of Spouse Overview Updated October 5, 2007
Excerpt: "What happens when a state law permitting same-sex marriages conflicts with the Federal Defense of Marriage Act?" (McKay Hochman Co., Inc.)
Say-on-Pay -- Executive Pay -- Law Could Mean Lawsuits Galore, Oxley Says
Excerpt: "Proposed legislation to give investors an advisory vote on executive pay, if passed, would lead to the unintended consequences of messy litigation and more lawmaking from Congress, according to Michael Oxley, vice chairman of Nasdaq and a former Republican representative from Ohio." (Financial Week; free registration required)
Severance Plan Lacking a Sufficient 'Ongoing Administrative Scheme' Is Not Subject to ERISA
Excerpt: "[T]he decision illustrates the difficulty in predicting litigation outcomes on this issue. Employers sponsoring severance arrangements should consider up front whether ERISA applies, keeping in mind the significant advantages ERISA can confer, like protection from otherwise applicable state-law claims and attendant larger damage awards (including possible consequential and punitive damages)." (Employee Benefits Institute of America)
Brief: Working Wives Reduce Social Security Replacement Rates
Excerpt: "[T]o understand the role of Social Security in the nation's retirement income system, it . . . is crucial to consider the replacement rate of couples . . . and how that rate has changed over time. Indeed, the increasing labor force participation of married women has led to a significant reduction in the replacement rates for couples." (Center for Retirement Research at Boston College)
First U.S. Baby Boomer Applies for Social Security
Excerpt: "Retired school teacher Kathleen Casey-Kirschling on Monday became the first ripple in a 'silver tsunami' of retiring baby boomers applying for pension benefits that threatens to overwhelm U.S. government finances." (Reuters)
Newly Posted Events
Applying Health Plan Standards for Improved Performance - eValue8 and Employer Success Stories
in Connecticut on October 31, 2007
presented by Southern New England Chapter ISCEBS
Health Savings Accounts 2007 HSA Consumer Basics Webinar
Nationwide on October 18, 2007
presented by Collin W. Fritz & Associates, Ltd.
Health Savings Accounts 2007, HSA Consumer Basics Webinar
Nationwide on October 18, 2007
presented by Collin W. Fritz & Associates, Ltd.
PBM Auditing Webinar
Nationwide on November 7, 2007
presented by The Seneca Group
Newly Posted Press Releases
PSCA Elects 2007-2008 Board of Directors; G. Dawn Anderson Elected to Second Term as Chairperson
Profit Sharing/401(k) Council of America (PSCA)
IRS Warns Taxpayers About Certain Trust Arrangements Sold As Welfare Benefit Funds
Internal Revenue Service (IRS)
myCafeteriaPlan, Third Party Administrator - TPA, Introduces New Improved Web Site at www.myCafeteriaPlan.com!
BusinessPlans, Inc. - myCafeteriaPlan.com
Department of Labor Presentation Helps Employers Learn about Their Responsibilities as 401(k) Plan Sponsors
Foundation for Fiduciary Studies
J.D. Power Reports: Tips For Open Enrollment
J.D. Power and Associates
Legal Advantage, LLC Announces Expansion to Further Solidify Position as Premier Provider of Legal Support Services
Legal Advantage, LLC
Newly Posted or Renewed Job Openings
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401(k) Sales
for A.N. Ansay & Associates, Inc.
in WI
Senior Retirement Plan Coordinator
for ERAS, LLC
in KY
Daily Record Keeping Specialist
for AKT Retirement Plan Services LLC
in OR
401(k)/DC Administrator
for Levy & Associates
in FL
Senior DC Plan Consultant\Administrator
for Simpkins & Associates (a regional administrative firm with Dallas opening)
in TX
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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