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| October 23, 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: UAW Contract with Chrysler May be in Trouble
Excerpt: "A proposed contract between Chrysler and the United Auto Workers could be in jeopardy. Workers in several large assembly plants have already voted against the four-year deal. The union is about half-way through the balloting, and the vote is too close to call right now." (Morning Edition via National Public Radio)
Google Health to Let People Create Profile Including Information About Medications and Medical Records
Excerpt: "Marissa Mayer, vice president of search products and user experience, took the stage at the Web 2.0 Summit in San Francisco Wednesday to explain Google's motivations for its health initiative, going over some points her predecessor on the health team and other executives have made in the past." (The Washington Post; free registration required)
(c) Summaries of Guidance; Filed Comments
Fifth Circuit Rejects Claim for Death Benefits As Impermissible Attempt to Recovery Money Damages
Excerpt: "Amschwand ex rel. Estate of Amschwand v. Spherion Corp. epitomizes the quandary created by the approach taken in ERISA jurisprudence by the federal judiciary. In this case, a widow of deceased plan participant brought suit against his employer for loss of life insurance benefits caused by employer's breach of fiduciary duty. As noted by in the concurring opinion of Judge Benavides, the outcome of the case was unpalatable not only for the plaintiff, but perhaps for the court as well." (Health Plan Law blog by Attorney Roy F. Harmon III)
Overview: Changes to Medicare Part D Prescription Drug Creditable Coverage Standards and Notice Requirements (PDF)
Pages 1-3 of 4 pages. Excerpt: "Before November 14, 2007, employers should review their creditable coverage notices to determine if revisions are necessary and to determine whether other alternative disclosure choices are preferable." (Dow Lohnes PLLC)
Overview: Changes to Medicare Part D Prescription Drug Creditable Coverage Standards and Notice Requirements (PDF)
Pages 1-3 of 4 pages. Excerpt: "Before November 14, 2007, employers should review their creditable coverage notices to determine if revisions are necessary and to determine whether other alternative disclosure choices are preferable." (Dow Lohnes PLLC)
Statute of Limitations for COBRA Penalties Claims Begins to Run When Election Notice Deadline Expires
Excerpt: "EBIA Comment: In a claim for COBRA coverage (as distinguished from a claim for statutory penalties like this one), the statute of limitations period does not necessarily begin to run immediately after the date that the election notice was (or should have been) provided, but rather, it often begins to run sometime later, when the qualified beneficiary has reason to know that he or she has a claim for coverage." (Employee Benefits Institute of America)
(d) Trends, Surveys, Research
Cost Not as Big a Barrier to Electronic Records, Survey Shows
Excerpt: "The cost of adopting electronic health records remains the largest obstacle to widespread adoption, although cost might be less of a factor, according to the Medical Record Institute's Ninth Annual Survey of Electronic Medical Records Trends and Usage, Health Data Management reports." (California HealthCare Foundation)
Union Contracts with Automakers May Put Other Industries on the Road to Creating Trusts
Excerpt: "Next up in the VEBA queue likely will be either steel companies or auto suppliers. The steel companies in the Rust Belt, for one, often tend to mirror the auto companies when it comes to labor issues, said Dale Yamamoto, chief health care actuary for Hewitt Associates of Lincolnshire, Illinois. Both industries have strong unions, offer generous benefits and have heavy pension and health care obligations to their retirees -- obligations that could inhibit these companies financially, he added." (Workforce Management; free registration required)
CIGNA HealthCare's Recently Completed Two-Year Study of Health Care Claims Experience (PDF)
4 pages. Excerpt: "The study examined the total cost of claims for both employers and consumers to isolate behavior changes associated with enrollment in consumer-driven plans. Observed differences were not the result of changes in benefits or increases in consumer cost-sharing." (CIGNA)
Equity in Private Insurance Coverage for Substance Abuse: A Perspective on Parity
Excerpt: "Congress is considering enactment of comprehensive parity legislation. The intent of parity is to equalize private coverage of behavioral and general medical care, thereby improving efficiency and fairness in insurance markets. One issue is whether to extend parity to substance abuse (SA) benefits. In the past, inclusion of substance abuse has been a hurdle to passage of parity. We examine the politics of SA parity, compare coverage trends for substance abuse and mental health, and assess the rationale for equalizing benefits. We conclude that the justification for SA parity is as compelling as it is for mental health parity." (Health Affairs)
Predicting the Impact of Medical Tourism
Excerpt: "[T]he aggregate impact will be underwhelming. If every U.S. resident who could go abroad for treatment actually went, the savings on total medical costs would be about five percent. That's still a big number, especially compared to other initiatives that are available. But to look at it another way, if healthcare costs are increasing by 10 percent per year, taking full advantage of medical tourism only buys us about half a year." (HealthLeaders Media)
Links to Items on Executive Comp, Benefits in General
IRS Notice 2007-86: Additional 409A Transition Relief; 2007 Year-End Deadline Extended to 2008 Year-End (PDF)
14 pages. Excerpt: "On September 10, 2007, the Treasury Department and the IRS issued Notice 2007-78, granting certain transition relief intended to facilitate compliance with the written plan requirements set forth in the final regulations. See §1.409A-1(c). Commentators stated that although the Notice 2007-78 transition relief was helpful, the transition relief in that notice did not adequately address the need for additional time for service recipients and service providers to analyze all of their plans and make informed and reasoned decisions regarding the changes that would be necessary to bring existing arrangements into compliance with the final regulations. This notice addresses these concerns by generally extending the transition relief currently scheduled to expire on December 31, 2007 through December 31, 2008." (Internal Revenue Service)
Overview: IRS Extension of 409A Transition Relief until December 31, 2008 (PDF)
1 page. Excerpt: "The IRS and Treasury issued Notice 2007-86 [on October 22, 2007], generally providing for an extension of the Section 409A transition relief until the end of 2008. This Notice affords a much more meaningful extension than the extension previously granted in Notice 2007-78, which was modified by [this latest] guidance." (Miller & Chevalier Chartered)
Opinion: Another 409A Extension But We All Lose
Excerpt: "How do companies comply when the government can't finish rules in more than three years? Too much intellect, and not enough wisdom, has made this whole process as silly as that which surrounded the ill-fated Section 89. Old hands recall that Congress finally repealed Section 89, but not before industry had invested millions in a multi-year regulatory and compliance effort which is chillingly similar to the 409A process today." (Rackemann, Sawyer & Brewster)
New Legislation that Would Link Stock Option Accounting and Tax Rules
Excerpt: "Senator Carl Levin (D-Michigan) introduced the Ending Corporate Tax Favors for Stock Options Act (S.2116) on September 28." (Watson Wyatt Worldwide)
Ernst and Young's 2007 Aging U.S. Workforce Survey: Challenges and Responses -- An Ongoing Review (PDF)
75 pages. Excerpt: "Further evidence that companies are not prepared for the effects of the aging workforce: 68% of survey respondents said the single greatest organizational risk is retaining key employees and maintaining intellectual talent, but 15% said they did not know what percentage of their workforce would be eligible to retire in the next five years." (Ernst and Young via PLANSPONSOR.com; free registration required)
A Random Walk Down the Final Section 409A Regulations (PDF)
4 pages. Excerpt: "Slogging through the nearly 400 pages of final Section 409A regulations is like walking away from a horrible auto accident, thinking 'it could have been worse.' It certainly is an improvement over the October 2005 proposed regulations. On the positive side, a lot of ambiguity was removed and some of the more unworkable rules, such as a lack of a good reason standard for a severance plan or the definition of service provider stock for private companies, are cleaned up." (Benefits Law Journal via Kirkpatrick & Lockhart Preston Gates Ellis LLP)
District Court Imposes $179,960 ERISA Fine in Dispute Over Physician Practice's Break-Up
Excerpt: "Though it is certainly unusual to see a penalty award that is nearly 20 times the amount of the benefits at stake in an ERISA lawsuit, this case illustrates that a court confronted with an egregious set of facts may choose to use the statutory disclosure penalty as a way of punishing a breach of fiduciary duty. Obviously, other plan administrators will want to draw a cautionary lesson from this decision." (Spencer Fane Britt & Browne LLP)
Overview: Advance Form 5500 Released for Reporting on 2007 Plan Year
Excerpt: "EBIA Comment: The DOL news release cautions that advance copies of the 2007 Form 5500 cannot be used when filing Form 5500 for the 2006 plan year -- the Form 5500 for 2006 must be used for this purpose." (Employee Benefits Institute of America)
(e) Policy, Opinion, Advocacy
2008 Presidential Candidates' Announced Positions on Health Care/Insurance Reform
Excerpt: "Americans identify health care as one of the most important issues in the 2008 presidential election, and the AMA is pleased to see so many of the declared presidential candidates making health care a top priority. Listed [are] links to the Web sites of each declared candidate. We invite you to review the key advocacy priorities of the AMA, and to keep these issues in mind when evaluating the proposals and platforms of the presidential candidates." (American Medical Association)
Proposed HIPSA Legislation Would Add Urgency to Enforcement of HIPAA Rules
Excerpt: "The Standards for Privacy of Individually Identifiable Health Information (known as the 'Privacy Rule') established, for the first time in 1996, a set of national standards for the protection of certain health information. Adopted to implement provisions of the Health Insurance Portability and Accountability Act of 1996, the privacy rule brought consistency and standardization to the patchwork of state laws affecting privacy, security and administrative procedures." (Memphis Business Journal via bizjournals.com; free registration required)
Newly Posted Events
412(i) Plans and Estate Planning - Free Audioconference
Nationwide on October 26, 2007
presented by Executive Benefits Design Group
Automatic Enrollment: Is it appropriate for your clients?
Nationwide on October 30, 2007
presented by McKay Hochman Co., Inc.
Changing the Culture and Improving Quality: Innovations in Long-Term Care - Webcast
Nationwide on October 24, 2007
presented by KaiserNetwork.org
ERISA Advisory Council November Meeting
in District of Columbia on November 6, 2007
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Mid-Sized Retirement & Pension Plan Management Conference
in Florida on January 27, 2008
presented by University Conference Services
Newly Posted Press Releases
ASPPA Develops Standards Of Practice For Recordkeepers Certification
ASPPA (American Society of Pension Professionals & Actuaries)
Companies Worldwide Struggle to Attract, Retain Workers
Watson Wyatt
PBGC Protects U.S. Pension Plans Of Varig S.A.
Pension Benefit Guaranty Corporation (PBGC)
The Principal Financial Group Picks Up the Tab On Health Savings Account Fees
Principal Financial Group
Treasury, IRS Extends Transition Relief For Deferred Compensation Plans
U.S. Treasury Department and Internal Revenue Service
Sharp Health Plan Chooses Assist America for Global Emergency Medical Assistance Services
Assist America, Inc.
CPI Opens Boston Consulting Office
CPI Qualified Plan Consultants, Inc.
Poll Finds Public Sector Employees Confident in Their Retirement Plans
ICMA-RC
John Hancock Study of 401(K) Participants Investment Outcomes Reveals Common Investing Behaviors
John Hancock Retirement Plan Services
Modest Social Security Increase Is Still Larger Than Expected, CCH Says
CCH, a Wolters Kluwer business
Newly Posted or Renewed Job Openings
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Daily Valuation/Recordkeeper
for Pension Specialists, Inc
in CA
Account Executive
for MetLife
in NJ
Records Analyst
for CitiStreet
in MA
401(k) Pension Coordinator Specialist (PT 20-25 hours/week)
for John L. Scott
in AZ
Defined Contribution/401(k) Administrator
for Boyce & Associates, Inc.
in AZ
Defined Benefit Administrator and DB/DC Combo Administrator
for Boyce & Associates, Inc.
in AZ
Senior Relationship Manager -- Client Services
for Boyce & Associates, Inc.
in AZ
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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