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| November 27, 2007 |
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(a) New Guidance Documents
(None today.)
(b) News
Some Massachusetts Employers Choose to Pay Fine Rather Than Provide Health Coverage
Excerpt: "About 500 Massachusetts companies -- out of tens of thousands covered by the state's new health insurance law -- will pay a penalty rather than offer insurance to some of their workers, the state said . . . . Lawmakers authorized the penalty - $295 per employee this year -- to help subsidize state insurance for low-income residents and to spread financial responsibility for the coverage initiative among individuals, government, and businesses." (Boston Globe)
... But Most Employers Meet Massachusetts Health Coverage Mandate
Excerpt: "The overwhelming majority of employers with at least 11 employees in Massachusetts will offer health insurance coverage that meets state requirements rather than pay an assessment mandated under the state's health care reform law, according to state officials." (Business Insurance)
(c) Summaries of Guidance; Filed Comments
Overview: House Approves New COBRA Entitlements and Tax Credits for 'Displaced Workers'
Excerpt: "The bill now moves to the Senate. President Bush has threatened a veto if the current version of the legislation reaches his desk." (Watson Wyatt)
Disability Insurer's Claims Processing Guidelines Were Not 'Relevant' to Claim, So Did Not Need to Be Provided
Excerpt: "The issue in this case was whether an insurer's claims management guidelines should have been provided to an ERISA plan participant who unsuccessfully appealed the insurer's termination of her disability benefits. Under the DOL claims procedure regulations, plan participants and beneficiaries have a right to receive copies of 'relevant' documents when appealing a denied claim." (Employee Benefits Institute of America)
ERISA Preemption Defense Was Lost by Waiver
Excerpt: "Aside from the issues of whether a case is removable and the procedural requirements attending proper removal based upon federal question jurisdiction, a recent district court case reminds us that the ERISA preemption defense may simply be waived altogether under Fed. R. Civ. P. 8(c)." (Health Plan Law blog by Attorney Roy F. Harmon III)
(d) Trends, Surveys, Research
Ball State University Points to Success of Its 30-Year-Old VEBA for Payment of Retiree Healthcare Costs
Excerpt: "Ball State has about $150 million set aside in its VEBA. The money in the trust is that which -- legally -- can only be used for retiree health care benefits, [Ball State's vice president for business affairs] explained. 'We get people who hear that figure and ask us, 'Well, if you have all that money in an account somewhere, why can't you use some of it to increase your faculty salaries?'' Morrison said. 'It's just not an option.'" (The Star Press (Muncie IN))
HR Executives Increasingly Focusing on Financial Fitness of Employees
Excerpt: "Hundreds of organizations are putting together plans for the last week of February 2008 to help employees test themselves for financial fitness. . . . Recent reports indicate that more and more employers are changing their 401(k) plans to provide for 'automatic' default actions on participation, contributions and asset allocation, but that does not decrease the need for employees to know financial basics if they are to be financially comfortable during their lifetimes." (Dallas Salisbury in Human Resource Executive)
For Lawyers, Perks to Fit a Lifestyle
Excerpt: "The benefits for lawyers have burgeoned in recent years as firms pull out the stops to attract top-notch talent. While perks for the partners have always been common, many are now finding their way to associates -- young lawyers who have not yet made partner. And with those associates routinely jumping ship to go elsewhere, law firms are trying to create a workplace that caters to their young recruits' wants and needs, while freeing them to bill 60 hours or more a week. (New York Times)
HSAs and HRAs Not As Alike As They Sound
Excerpt: "Even though 61 percent of workers polled in a recent Fidelity Investments survey said they have a good working knowledge of their health care benefits, more than half did not know what HSAs or HRAs are." (Houston Chronicle)
Sec. 125 All-Or-Nothing Penalties Criticized
Excerpt: "The all-or-nothing penalties in the proposed Sec. 125 regulations are overly burdensome, according to several speakers at a November 15 IRS hearing on the regulations. 'Any slip up will cause a plan to be disqualified,' John Hickman, partner at Employers Council of Flexible Compensation said . . . ." (CCH Benefits)
Fresh Pain for the Uninsured: Hospitals Step Up Collection Efforts by Turning to Finance Firms
Excerpt: "BusinessWeek's investigation of the fast-expanding medical-finance field has uncovered hazards, however. Many patients say they don't realize their debts are being shifted to such interest-charging middlemen as GE Money Bank, the unit that issues the Care-Credit card. . . . The GE card typically comes with an introductory 0% interest rate, but after [Alice Diltz] didn't make her initial payment, the rate leapt to 26.99% on an annual basis. In August, 2006, GE Money Bank sued her in state court in Queens." (Business Week via California Nurses Association)
(e) Policy, Opinion, Advocacy
Opinion: Healthcare Reform Has Much to Learn from Other Countries
Excerpt: "Only 5 percent of adults in the Netherlands and 8 percent in the U.K., reported problems accessing care due to costs." (Commonwealth Fund)
New York Times Examines Massachusetts Individual Health Insurance Mandate
Excerpt: "Some advocates have called for stricter rules on businesses, saying that employers should be required to provide coverage to at least half of their work forces and contribute more to premiums. John McDonough, executive director of Health Care for All, said the rules set forth by the administration of former Gov. Mitt Romney (R) have 'permitted many employers providing little or no coverage to their workers to escape fair share responsibility. . . ." (KaiserNetwork.org)
Cancer Treatments: Balancing Innovation and Costs
Excerpt: "New drugs for cancer, targeted at the specific genetic profile of various tumors, are revolutionizing cancer therapy, but at a very high cost. Most carry a price tag of $50,000 or more per patient per year. Lee Newcomer examines the medical and policy issues from his perspective at UnitedHealthcare and from his experience as an oncologist." (Lee Newcomer of UnitedHealthcare, published by Health Affairs)
Democratic Presidential Candidates Clinton, Obama Criticize Each Other's Health Care Proposals
Excerpt: "Clinton on Sunday in an interview with the Associated Press said, 'The difference is my health care plan covers every American and Sen. Obama's plan will not. He leaves 15 million people uncovered' because his proposal would not require all U.S. residents to obtain health insurance." (KaiserNetwork.org)
New York Times Examines Medicare Drug Benefit's Doughnut Hole Coverage Gap
Excerpt: "According to the Times, the least-expensive approach 'in the short run' for beneficiaries who are able to 'rely solely on generic drugs' might be to forgo enrolling in a Medicare drug plan altogether and instead purchase drugs at discount stores -- such as Wal-Mart, Costco and Target -- that offer generic drugs for as little as $4 per prescription." (KaiserNetwork.org)
Links to Items on Executive Comp, Benefits in General
Suit Dismissed Against Apple over Backdated Stock Options; Statute of Limitations Applied
Excerpt: "Judge Jeremy D. Fogel of Federal District Court in San Jose, Calif., said in his ruling that he dismissed the suit because it was based on statements made more than three years before the case was filed. Apple, maker of the iPod and iPhone music and video players, said last year that it backdated 6,428 stock-option grants issued from 1997 to 2002, according to the order. Changing the date on a grant can provide added gains." (Bloomberg News via New York Times)
'Yes, We Have Good Benefits, But ...' -- How Some Companies Screen for Jerks
Excerpt: "Businesses in fields where jobs are highly coveted -- or just sound like fun -- are stepping up efforts to weed out people who might have the right credentials but the wrong personality. . . . In the mating dance of job interviews, employers traditionally put their best feet forward, too, trumpeting their wonderful benefits packages while leaving out the bit about working late, eating cold pizza. Not [Lindblad, an adventure cruise company]. It sends job applicants a DVD showing not one, but two shots of a crew member cleaning toilets." (HeraldNet)
Corporate Governance Watchdog to Focus on Exec Compensation, Disclosure in 2008
Excerpt: "Investor research firm RiskMetrics plans to increase its scrutiny of poor executive compensation practices among corporations next year and for the first time focus specifically on weak disclosure of compensation." (Workforce Management)
Summary of 409A Compliance Deadline Extensions
Very nice; includes a detailed table. Excerpt: "During the past few months, the IRS has issued three notices extending the deadlines for complying with various rules under section 409A. Because the guidance has been issued piecemeal and the effective date for the final regulations has been delayed, it is difficult to reconcile all the implications. . . ." (Watson Wyatt)
Overview: SEC Issues Executive Compensation Report
Excerpt: "The SEC's official report highlights the two principal themes that emerged from the staff's review of the executive compensation disclosures. First, the SEC stated that the Compensation Discussion and Analysis often lacked sufficient analysis regarding 'how' and 'why' a company arrived at its executive compensation policies and decisions. Second, the SEC stated that companies must focus on presenting the disclosures in a way that is clear, concise and understandable to the reader." (Troutman Sanders)
Link to Application Form for Membership on IRS Committee on Tax Exempt and Government Entities (ACT)
Excerpt: "The ACT is an organized public forum for the IRS and representatives who deal with employee plans, exempt organizations, tax-exempt bonds, and federal, state, local and Indian tribal governments. The ACT allows IRS to receive regular input on administrative policy and procedures of the Tax Exempt and Government Entities Division. Applications will be accepted through December 3, 2007." (Internal Revenue Service)
List of Decisions/Actions Now Required for Deferred Compensation Plans by December 31, 2008 (PDF)
4 pages. Excerpt: "Under the new extension, employers now have until the end of 2008 to make the following major decisions about how their DCPs will operate and to reduce those decisions to writing . . . ." (Drinker Biddle & Reath LLP)
GAO Report (Full Report): Social Security Reform: Issues for Disability and Dependent Benefits
71 pages. Excerpt: "We considered several reform elements that could improve Social Security Trust Fund solvency by reducing the initial benefits received or the growth of individual benefits over time. According to our simulations, these reform elements would reduce median lifetime benefits for disabled workers by up to 27 percent (see graph) and dependents by up to 30 percent of currently scheduled levels. While the size of the benefit reduction could vary across individuals, it could be substantial for the vast majority of these beneficiaries, depending upon the reform element." (U.S. Government Accountability Office)
GAO Report (Highlights): Social Security Reform: Issues for Disability and Dependent Benefits (PDF)
Excerpt: "This report examines (1) how certain elements of Social Security reform proposals could affect disability and dependent benefits, (2) options for protecting these benefits and how they might affect disabled workers and dependents, and (3) how protecting benefits could affect the Social Security program." (U.S. Government Accountability Office)
Healthcare Costs Hurting Governmental Pension Systems
Excerpt: "The [Ohio] State Teachers Retirement System has seen its health-care bills soar from $259 million in 2001 to $490 million in 2006. Under current trends, the system will run out of money to cover health-care expenses of retired teachers around 2021." (Columbus Dispatch)
Newly Posted Events
Know Your Fiduciary Responsibilities - An Update on Pension Protection Act and Related Guidance for Practitioners - Free Webcast
Nationwide on December 6, 2007
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Newly Posted Press Releases
ExpertPlan Partners with AccountantsWorld to Launch Retirement Relief 401(k) Platform
ExpertPlan
Benefit Software Inc. Helps Emanuel Medical Center Support Healthy Employee Retention Rates with Customized Benefit Statements
Benefit Software Inc.
Automatic Features Are Driving 401(k) Plan Participation at U.S. Companies, Reveals Diversified Investment Advisors, Inc. Survey
Diversified Investment Advisors
RBC Dain Rauscher And Fi360 Announce Partnership
Fiduciary360 (fi360)
Software and IT Services Firms Combine to Offer Expanded, Cost-Effective Services for the Pension, Financial and Insurance Industries
Arrowpoint Technologies Inc.
Newly Posted or Renewed Job Openings
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Public Policy Analyst
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Pension Specialist
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