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| October 24, 2007 |
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Features:
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(a) New Guidance Documents
(None today.)
(b) News
Executives Tout Universal Health Coverage: Business Panel Sees an End to Employer Plans
Excerpt: "A group that includes executives from some of the country's largest corporations, including chief executives of Manpower and Northwestern Mutual Life Insurance Co., has concluded that the system of providing health insurance through employers is failing and must be scrapped. The Committee for Economic Development proposes replacing the current system with one that would provide universal coverage and remake the way health insurance is bought and sold.' (Milwaukee Journal Sentinel; free registration required)
Warwick, Rhode Island, City Council Studies City's Health-Care Buybacks
Excerpt: "With City Council members looking for creative ways to save on health-care costs, the latest benefit to come under fire is the health-care buyback option. 'Buybacks,' as they've become known, are a community's way of compensating employees who opt not to accept medial and dental coverage. Essentially, the community pays employees to buy back the coverage they've declined." (The Providence Journal)
Benefits Audits Turn Up Signs of Anger in Workers
Excerpt: "It's the hot topic in benefits, and no one is hotter about it than workers: employers demanding proof that family members qualify for insurance coverage. Workers often are offended that their company seems to be questioning their honesty. Others are just irritated at having to dig out old tax returns, birth and marriage certificates, or college transcripts. Some don't respond to requests for documents." (Chicago Tribune)
(c) Summaries of Guidance; Filed Comments
Understanding Disclosures of Postretirement Healthcare Obligations
Excerpt: "[The target page] is a summary of the accounting rules for the [retiree] healthcare obligation, a simplified demonstration of how to interpret the information, and an analysis of an actual (Target Corporation) OPEB disclosure." (The New York State Society of CPAs)
A Corporate Take on the GM/UAW VEBA
Excerpt: "Larry Cunningham (George Washington), guest-blogging over at the Conglomerate Blog, has an insightful analysis of the voluntary employee benefit associations being set up by GM to have unions handle retiree health liabilities." (Workplace Prof Blog)
Health Care Provider Due Diligence: Anti-Assignment Clause Defeats Claim for Payment
Excerpt: "This recent case out of the Utah United States District Court highlights the problem that ERISA creates for health care providers. In this case, the provider billed for services based upon an assignment of benefits - only to find that the plan document contained an anti-assignment provision. Health care providers are thus on notice that providing services to plan participants or beneficiaries may be uncompensated if the plan contains a provision preventing assignment of benefits." (Health Plan Law blog by Attorney Roy F. Harmon III)
Overview: 2008 Cost-of-Living Adjustments for Transportation Benefits, Adoption Assistance, and More
Excerpt: "EBIA Comment: Employers with transportation or adoption benefit plans must confirm annually whether their plans automatically apply the latest limits or whether an amendment is needed to recognize the cost-of-living increases. If employers are applying the higher limits, they will want to communicate the increase to employees. We note that, although 2008 parameters are released for Archer MSAs, the Archer MSA pilot program is scheduled to expire at the end of 2007, which means that no new Archer MSAs can be established after that date unless Congress acts to extend the program again." (Employee Benefits Institute of America)
(d) Trends, Surveys, Research
Trailblazing San Francisco Health Plan Provides Services Regardless of Residents' Immigration Status or Medical History
Excerpt: "The city's initiative is a first-of-its-kind local solution to what has become a pressing issue nationwide: how to provide the poor and middle class with affordable healthcare." (Los Angeles Times; free registration required)
2007 Health Confidence Survey: Rising Costs Changing the Ways Americans Use Health Care System (PDF)
Pages 1-11 of 12 pages. Excerpt: "Perhaps because of rising costs, Americans with employment-based health benefits value it above the actual dollar amount that employers pay toward the coverage, and many favor an employer mandate (meaning a law requiring employers to offer or contribute to health insurance coverage for their workers) that includes all employers, regardless of size." (Employee Benefit Research Institute)
HIPAA: Impacts and Actions by States -- Medical Record Privacy, Security and Electronic Transactions
Excerpt: "[The target page, updated October 16 consists of] brief updates and resources of potential interest to state legislatures." (National Conference of State Legislatures)
Meditation on the Job Makes for Healthy, Productive Workers
Excerpt: "Scientific studies show that meditation reduces blood pressure, boosts the immune system, and helps people manage pain associated with chronic disease. Long-term meditation actually changes the physical brain, in ways some researchers say may increase attention span and improve memory." (Newhouse News Service)
(e) Policy, Opinion, Advocacy
Report Says Drug Coverage Option Under Original Medicare Better Than Part D (PDF)
23 pages. (Medicare Rights Center and Consumer's Union)
Opinion: Health Care Costs in the Eye of the Beholder
Excerpt: "Without joining any of the camps battling in the big blame game; without so much as touching the well-raked topics of medical malpractice premiums, tort reform, increasing access and quality without raising costs; without opining on the effectiveness of the current healthcare system in the U.S.; I aim to simply present comparisons between certain healthcare-related costs and certain nonhealthcare-related costs in an effort to show just how rational at times and irrational at other times healthcare costs are when measured against other kinds of costs." (Modern Healthcare Online; free registration required)
Opinion: Health Care: Insurance Premiums Are Up 78 Percent Since 2001
Excerpt: "A recent Kaiser Family Foundation report sadly confirms what most public-sector executives know only too well: health care insurance costs have surged way beyond inflation and wages. Over the past six years, health insurance premiums have increased 78 percent. During this period, inflation and wages grew 17 to 19 percent in total, only one-fourth as fast. (The report, incidentally, is a treasure trove of statistics on health care costs over the past 10 years, and well worth reading by anybody who wants to get up to speed on this vital topic.)" (Governing via Congressional Quarterly, Inc.)
Links to Items on Executive Comp, Benefits in General
IRS Notice 2007-89: 2007 Reporting and Wage Withholding Under Internal Revenue Code Section 409A (PDF)
19 pages; provides interim guidance to employers and payers on their reporting and wage withholding requirements for calendar year 2007 with respect to deferrals of compensation and amounts includible in gross income under § 409A. The notice also provides interim rules on calculating amounts includible in gross income under § 409A. (Internal Revenue Service)
Overview: IRS Notice 2007-86 Provides General Extension of §409A Transition Relief Through 2008 (PDF)
3 pages. Excerpt: "The extended transition period provides the relief that was needed to allow employers, their advisors and the IRS to address thoughtfully the unresolved issues encountered in attempting to apply the final regulations. The Notice extends the period for adopting amendments to nonqualified deferred compensation arrangements subject to Code section 409A and allows continued good faith operational compliance in the interim." (Sutherland Asbill & Brennan LLP)
Overview: IRS Extension of Section 409A Transition Relief and Deadlines to December 31, 2008
Excerpt: "Under the extended transition relief, executives, directors and other service providers subject to Section 409A may elect, through December 31, 2008, to change the time and form of payment of their nonqualified deferred compensation benefits without regard to the Section 409A restrictions." (Ballard Spahr Andrews & Ingersoll, LLP)
Overview: IRS Rules on Section 419 Funds Utilizing Cash Value Life Insurance (PDF)
2 pages. Excerpt: "On October 17, 2007, the Internal Revenue Service issued a revenue ruling taking the position that an employer's contribution to a welfare benefit fund may not be deductible, in whole or in part, under section 419 to the extent the fund pays premiums on cash value life insurance policies." (Sutherland Asbill & Brennan LLP)
Overview: IRS Challenges Section 419(e) 'Single Employer' Plans (PDF)
2 pages. Excerpt: "On October 17, 2007, the Internal Revenue Service issued two notices notifying taxpayers that it intended to challenge, retrospectively as well as prospectively, the claimed tax treatment of certain welfare benefit funds involving cash value life insurance promoted typically to small businesses as 'section 419(e)' or 'single employer' plans, and identified some of these arrangements as 'listed transactions.'" (Sutherland Asbill & Brennan LLP)
Executive Pay Disclosure in 2007: How Well the Tabular Disclosure Met Investor Needs
Excerpt: "[This newsletter answers the following:] Did the new disclosure requirements enhance investors' understanding of executive pay? Was the new total compensation figure useful to investors? What challenges did the plan-based and equity award tables present? What made comparisons of pension benefits across companies difficult? Why were disclosures of severance and change-in-control payments inconsistent?" (Mercer LLC; free registration required)
Navigating the International Provisions of Code §409A
Excerpt: " The final regulations contain numerous exceptions that permit both U.S. citizens and resident aliens working abroad, and non-resident alien individuals working within the United States, to accrue benefits under foreign plans that do not meet the Code 409A requirements. Where no exception applies, it will be necessary to amend the foreign arrangement to comply with the §409A requirements in order to avoid the §409A sanctions. This article summarizes the available exceptions and the requirements that must be met for them to apply." (McDermott Will & Emery)
Recent Study Shows Stock Options Affected CEO Behavior in Ways That Led to Extreme Wins and Losses
Excerpt: "[A] new study by a pair of business professors, Wm. Gerard Sanders of Brigham Young University and Donald Hambrick of The Pennsylvania State University, takes an in-depth look at stock options and how they affected CEO behavior . . . . What Sanders and Hambrick found, not unexpectedly, is that while stock option compensation did in fact promote increased risk-taking by CEOs as intended, the results were more often negative than positive." (Human Resource Executive Online; free registration required)
How Tax Code Will Be Adjusted for Inflation Next Year
Excerpt: "Last week, the government announced inflation adjustments for 2008. They affect a wide range of federal taxes and tax benefits including the standard deduction, personal exemption, tax brackets, retirement plan contributions and Social Security tax. Most inflation adjustments reduce your tax bill, although a few increase it." (San Francisco Chronicle)
Overview: SEC Comment Letters on Executive Compensation Disclosures
Excerpt: "On August 21, the Securities and Exchange Commission (SEC) asked the CEOs of roughly 300 large public companies to submit additional information for their fiscal year 2007 Compensation Discussion and Analysis (CDA) and proxy disclosures by September 21. While many of the SEC's comments may not warrant a restatement of either the proxy or the company's 2007 10-K, they suggest a significant gap between what the SEC expected and what was filed. This article outlines the substance of the SEC's comments and offers suggestions for responding to comments and for preparing next year's proxy filings." (Watson Wyatt Worldwide)
Newly Posted Press Releases
U.S. Department of Labor's ERISA Advisory Council to Hold November 2007 Meetings
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Labor Department Sues to Compel Trustees to Manage Abandoned 401k Plan
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
DOL Action Clears Way to Distribute $60,000 in 401k Assets
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
U.S. Department of Labor Announces Final Rule on Default Investment Alternatives for Participant-directed Plans
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Principal Helps Fiduciaries Navigate Complex Requirements
Principal Financial Group
ACLI Responds To Labor Department's 'Default Investment' Rule
American Council of Life Insurers
First Mercantile Launches LifeStyle Target Date Fund Series
First Mercantile
The FutureOffice Network Announces FutureOffice Payroll In Partnership With TruPay Corporation
FutureOffice Network
Commonwealth Partners with 401k Producer Services
Commonwealth Financial Network
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