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February 26, 2008

Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy.

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[Guidance Overview] DOL Issues Guidance on Wellness Programs (PDF)
2 pages. Excerpt: "The DOL provided examples of how employers should review all their wellness program rewards to ensure that the total reward offered under the programs is limited to 20% of the applicable cost of coverage (e.g., 20% of the cost of employee-only coverage)." (Dechert LLP)

[Guidance Overview] HIPAA Privacy Check Up
Excerpt: "It may be hard to believe, but the HIPAA Privacy rules have been in effect for nearly five years!! Is it time for a Compliance Check-up? Although the Group Health Plan is the covered entity under HIPAA, many TPAs provide HIPAA Privacy related services on behalf of the Plan Sponsor/Employer." (SunGard Corbel LLC)

[Guidance Overview] Family and Medical Leave Act Amended to Broaden Employment Rights for Family and 'Next of Kin' of Military Personnel (PDF)
3 pages. Excerpt: "In the first expansion of the Family and Medical Leave Act since its enactment in 1993, President Bush has signed the National Defense Authorization Act of 2008, which amends the FMLA to broaden the leave rights of the families of military personnel. The amendment became effective January 28, 2008, and employers must quickly educate their managers and human resources staff regarding its provisions." (Pillsbury Winthrop Shaw Pittman LLP)

[Guidance Overview] Labor Department Proposes New FMLA Regulations
Excerpt: "Although the proposal presents an extensive rewrite of the existing regulations, many of the changes merely clarify current practice." (Faegre & Benson LLP)

[Guidance Overview] ERISA Preempts State Law Requiring Employers to Obtain Employees' Written Consent Before Withholding for Health Plan Benefits
Excerpt: "EBIA Comment: This isn't the first time the DOL has issued an advisory opinion finding a state wage withholding law to be preempted by ERISA. But it is important to remember that an advisory opinion may be relied upon only by the parties identified in the request and that state wage withholding laws come in various forms." (Employee Benefits Institute of America)

How Collusion Is Keeping Generic Drugs Off the Shelves
Excerpt: "Getting health-care costs under control is a daunting and multifaceted challenge. But one simple approach could save consumers billions of dollars annually: stopping pharma.ceutical companies from colluding with competitors to keep lower-cost generic alternatives to prescription drugs off the market." (The Washington Post; free registration required)

Employers Taking Action Against Costly Cancer Drugs
Excerpt: "Employers are reacting to expensive cancer drug treatments that are more frequently being transferred from provincial health care plans to private ones, a recent online survey provided exclusively to EBNC by Hewitt Associates found." (Employee Benefit News; free registration required)

Audio: San Francisco Tries New Sick Leave Policy
Excerpt: "San Francisco began the nation's only mandatory paid sick leave policy one year ago. Now, a dozen states and the District of Columbia are watching San Francisco's progress as they consider whether to adopt similar policies." (Morning Edition via National Public Radio)

Tired Workers Opting for Naps Over Coffee Breaks
Excerpt: "A growing number of authors, doctors and entrepreneurs are promoting guilt-free daytime naps as studies show both that napping can improve productivity, and that Americans are sleeping less and less at night, getting only 6.9 hours on average, according to the National Sleep Foundation. More and more companies are embracing the trend as well. Google famously offers a massage parlor, where employees can nap and rejuvenate. Pizza Hut has instituted a policy allowing its employees to nap on their breaks, no questions asked. Union Pacific permits one member per crew to take a 45-minute nap while working." (The Ledger)

San Francisco Supervisors to Vote on Retiree Health Care Curb
Excerpt: "The Board of Supervisors is expected to vote today on a proposed ballot measure to dramatically curtail the city's retirement health care benefits for future employees who join San Francisco's municipal government workforce in the years to come." (San Francisco Chronicle)

UAW Retirees Settle Dispute with GM Over Trust Fund
Excerpt: "The agreement includes a two-page code of ethics that says the trust and all employees who work for the trust must manage the voluntary employees' beneficiary association's money and its affairs in the best interest of UAW retirees." (Workforce Management; free registration required)

In Austria, Changes in Child Care Benefits Encourage Parents to Return to Work
Excerpt: "Recently approved changes to the parental benefit system offer incentives to parents of young children to return to work sooner. The new law offers greater compensation for workers who take a shorter parental leave." (Watson Wyatt Worldwide)

Health Spending Projections Through 2017: The Baby-Boom Generation Is Coming to Medicare
Excerpt: "The outlook for national health spending calls for continued steady growth. Spending growth is projected to be 6.7 percent in 2007, similar to its rate in 2006. Average annual growth over the projection period is expected to be 6.7 percent. Slower growth in private spending toward the end of the period is expected to be offset by stronger growth in public spending. The health share of gross domestic product (GDP) is expected to increase to 16.3 percent in 2007 and then rise throughout the projection period, reaching 19.5 percent of GDP by 2017." (Health Affairs)

UnitedHealth and WellPoint Add More Than 1.2 Million Lives to Their Consumer-Directed Health Plans
Excerpt: "Alexander Domaszewicz, a consultant in Mercer Health & Benefit 's Newport Beach, Calif., office, agrees that CDH plans have become more common among employers. The plans also have become more popular among employees, he adds. Last year, Mercer surveyed 77 large employers that have had an optional CDH plan since 2005. The average enrollment, according to survey results, increased from 21% in 2005, to 25% in 2006 and to 29% in 2007, according to the study." (

Biggest Employee Goal for 2008 Is to Take Off Pounds, According to Survey
Excerpt: "The biggest goal for employees in 2008 – at least at client companies of employee assistance program provider ComPsych Corporation – is to shed some pounds." (; free registration required)

Sponsored by: University Conference Services

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How Do Your Medical Plan’s Vital Signs Look?

Are you searching for a new strategy that will contain your health care costs yet distinguish you as an employer of choice? The Health and Welfare Plan Management for Mid-Sized Employers, April 27-30, 2008, in Boston, offers practical, reality-based solutions that will ensure the "health" of your benefit plans.

(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)

Links to Items on Executive Comp, Benefits in General

[Guidance Overview] Court Finds No 'Bright Line' Test for Eliminating Duplicative ERISA Claims
Excerpt: "Noting a split of authority as to whether a plaintiff may simultaneously pursue claims for benefits under § 502(a)(1)(B) and for breach of fiduciary duty under § 502(a)(3), a federal district court refused to dismiss the plaintiff's claims under § 502(a)(3). The case arose out of a dispute over the terms of insurance contracts issued by Aetna and subject to ERISA." (Health Plan Law blog by Attorney Roy F. Harmon III)

[Guidance Overview] IRS Grants Retroactive Relief From §162(m) Letter Ruling (PDF)
2 pages. Excerpt: "The IRS has announced that its controversial letter ruling holding that some common bonus arrangements do not qualify for the performance-based compensation exception to the $1,000,000 annual cap on deductible compensation will be applied prospectively only." (Seyfarth Shaw LLP)

[Guidance Overview] Six-Month Deferral Elections and Performance-Based Pay Under Section 409A (PDF)
Excerpt: "In addition to focusing on rules governing performance-based compensation under Section 409A of the tax code, this article also takes into account a recent Internal Revenue Service private letter ruling that may undermine the validity of performance-based compensation arrangements subject to Section 162(m) that are commonly found at many public companies. The authors also review Section 409A transition relief available during 2008 that allows employees to make deferral elections on a more liberal basis." (Pension & Benefits Reporter via Groom Law Group)

[Guidance Overview] 2007 – The Year in Review for Executive Compensation (PDF)
13 pages. Excerpt: "This summary provides highlights of the major regulatory and technical developments in 2007, as well as emerging executive compensation issues for U.S. corporations. The specifics details may be found in the related 'alert' letters listed at the end of this memo and are accessible via our web site at" (Frederic W. Cook & Co., Inc.)

[Guidance Overview] Revenue Ruling 2008-13 Provides Prospective Application of New IRS Position on Performance-Based Compensation Exemption under Code Section 162(m) (PDF)
4 pages. Excerpt: "Under a new Revenue Ruling issued on February 21, 2008 (Rev. Rul. 2008-13), the Internal Revenue Service confirmed its reversal (as expressed in a January 2008 private letter ruling) of its prior position as to the effect of common severance provisions on the performance-based compensation exemption from Code Section 162(m) and, most significantly, provided a transition period for application of this new position." (Alston & Bird LLP)

Employers Increasing Internal Communications to Engage Workers in Benefits Plans - Better Targeting of Messages Is Necessary As Well
Excerpt: "One size does not fit all when it comes to communicating with your employees about their benefits. Maybe a memo describing Plan A versus Plan B was once all that workers needed. But that was in the days before wellness plans and before baby boomers were more interested in retirement planning than vacation time." (Human Resource Executive Online)

Ford Is Pushing Buyouts to Workers
Excerpt: "[Ford] is pitching a buffet of buyout packages that are easily among the richest ever offered to factory workers, including one-time cash payments of $140,000 or college tuition plans for an entire family." (The New York Times; free registration required)

Report of the Taskforce on the Aging of the American Workforce (PDF)
48 pages. Excerpt: "The aging of the American people will affect many aspects of our society, from the health care system to financial markets, and has many implications for the U.S. labor market. Employers rely on the skills and experience of this skilled labor pool, and as the population ages and more people retire, many industries could face worker and skill shortages." (U.S. Department of Labor Employment and Training Administration)

German Corporations Trim Retired Executives' Perks
Excerpt: "After decades of extending such perks as chauffeurs and secretaries to retired executives, Germany Inc. has begun tapping the brakes. That represents a behind-the-scenes revolution in Europe's largest economy, where the old guard traditionally enjoys plenty of privilege and pull long after leaving the executive suite." (The Wall Street Journal)

Newly Posted Events
(Post Yours!)

2008 Spring Conference
in Arizona on April 29, 2008
presented by Western Pension & Benefits Conference - Phoenix Chapter

New EEOC Guidelines on Treatment of Caregivers: How to Avoid Liabilities?
Nationwide on March 5, 2008
presented by Thompson Interactive, A Division of Thompson Publishing Group

The Supreme Court's LaRue Decision: What's the Next Generation of 401(k) Litigation?
Nationwide on April 8, 2008
presented by ABA Joint Committee on Employee Benefits

Top 10 Mistakes Companies Make When Using Independent Contractors - And How to Avoid Them!
Nationwide on March 6, 2008
presented by Thompson Interactive, A Division of Thompson Publishing Group

Newly Posted Press Releases
(Post Yours!)

ExpertPlan Hires Two Business Development Veterans to Expand National Presence

Great-West Retirement Services® Appoints Regional Sales Directors To Focus On Advisors, Consultants And TPAs
Great-West Retirement Services

Extreme Weather Wreaking Havoc on Employee Attendance
Kronos Incorporated

Legal Advantage, LLC appoints Louis A. Charest, Vice President, Document Review
Legal Advantage, LLC

Legal Advantage, LLC Establishes “Customer Bill of Rights”
Legal Advantage, LLC

Health Care Spending Expected To Double By 2017, Reaching $4.3 Trillion And Consuming Nearly One-Fifth Of The Economy, Federal Report Says
Health Affairs

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401(k) Administration Manager
for Malcolm Thompson & Associates, Inc.
in TX

Senior Plan Administrator
for The Allocation Company, Inc.
in TX

Relationship Manager, Health and Benefits
for Mercer
in MA, TX

Human Resources Benefits Administrator
for The Orphanage
in CA

Retirement Plan Administrator
for Valley Forge Pension Managment, Inc.
in PA

Pension Account Manager Sales Consultant
for First Niagara Benefits Consulting
in NY

Benefits Manager
for SUNY Upstate Medical University
in NY

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