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March 17, 2008

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

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Do Out-of-Pocket Health Care Costs Delay Retirement? (PDF)
48 pages. Excerpt: "Rising health care costs threaten financial security at older ages and lead many older Americans to delay retirement. Continued work reduces the risk of high out-of-pocket health care costs for workers receiving health benefits from their employers. Working longer also increases retirement incomes, making health care costs more affordable. This report shows that men with very high expected health care costs after age 65 retire 11 months later than those with very low health care costs. For women, the difference is 12 months." (Urban Institute)

House Mental Parity Bill Faces Wall of Opposition
Excerpt: "While supporters of the more expansive House version of legislation establishing parity for coverage of mental as well as physical illnesses when insurance policies cover both are lauding the bill as superior to a narrower one passed by the Senate, the House version faces strong opposition." (The National Underwriter Company; free registration or paid subscription required)

Health Care Financing, Efficiency, and Equity
Excerpt: "This paper examines the efficiency and equity implications of alternative health care system financing strategies. Using data across the OECD, I find that almost all financing choices are compatible with efficiency in the delivery of health care, and that there has been no consistent and systematic relationship between financing and cost containment." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve fulltext)

Universal Public Health Insurance and Private Coverage: Externalities in Health Care Consumption
Excerpt: "Inequality in access to health care services, through private purchase, appears to pose policy challenges greater than inequality in other spheres. This paper explores how inequality in access to health care services relates to social welfare. I examine the sources of private demand for health insurance and the ramifications of this demand for health, for patterns for government spending on health care services, and for individual and social well-being. Finally, I evaluate the implications of a health tax as a response to the externalities of health service consumption, and provide a rough measure of the tax in the context of the Canadian publicly-financed health care system." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve fulltext)

Healthcare's Prescription Is IT's Headache
Excerpt: "Patients and caregivers are demanding more cutting-edge healthcare technology than ever before, but the support and administration tasks required for this new care model are challenging some hospitals." (

Extra Time Off Can Foster Healthier Lifestyles
Excerpt: "Employers may wonder exactly what would get their reluctant workers to choose healthy foods, exercise consistently and get the necessary preventive care. How about a leisurely day off to bake cookies with their kids? Or a long weekend to travel to a music festival with a best friend? Cash may be the prevailing incentive in workplace wellness programs, but some employers are taking another look at paid time off as a potentially powerful motivator." (Employee Benefit News; free registration required)

Health Reform, Democratic-Style in 2008
Excerpt: "Healthcare proposals by Democratic presidential candidates Hillary Clinton and Barack Obama are almost clones of each other. And both would require employers to provide coverage for workers -- or to contribute to the cost of coverage." (Dallas Salisbury via Human Resource Executive Online)

Cutting Dosage of Costly Drug Spurs a Debate
Excerpt: "When a drug can cost more than $300,000 a year, the right dose becomes a matter of public debate. The drug in question, Cerezyme, is used to treat a rare inherited enzyme deficiency called Gaucher disease. Some experts say that for most patients, as little as one-fourth the standard top dose would work, saving the health care system more than $200,000 a year per Gaucher patient." (The New York Times; free registration required)

Health Insurance Company Bosses Make Bigtime Bucks - Nonprofits Defend Executives' Pay
Excerpt: "Bay State health insurance bosses are raking in multimillion-dollar pay packages - and politically wired powerbrokers get tens of thousands as part-time directors - even as the state and its taxpayers struggle to pay skyrocketing health care costs, a Herald review shows." (Boston Herald)

[Opinion] Denver's Sick Leave Scandal
Excerpt: "'You don't change horses in midstream.' With that comment in Tuesday's Rocky, Mayor John Hickenlooper succinctly explained why Denver has an out-of-control problem with career service employees' accumulated sick leave and the burdensome debt it represents, seemingly forever, for the city." (Rocky Mountain News)

[Opinion] Allocating the Costs of Life's Misfortunes - The Economics at Work Behind Health Insurance Policy Exclusions
Excerpt: "When insurance carriers do not pay claims, the costs must be allocated among other payers. In some cases, the financial burden will fall entirely on the plan participant. In others, and I think more often the case, the costs of non-payment will fall on a broader group. For example, if a carrier does not pay benefits and the insured has limited means, who pays the health care providers for services rendered?" (Health Plan Law blog by Attorney Roy F. Harmon III)

[Opinion] A Gold Standard for Health Policy
Excerpt: "The Asheville Project began several years ago, enlisting local pharmacists to monitor and help manage the health of diabetes patients and coach them about using their medicines properly. In exchange for these regular visits, patients' co-payments are waived for their diabetes medicines. The results have been impressive: Patients' health improved dramatically, and their employer -- the City of Asheville, North Carolina -- saved money." (Galen Institute)

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Visit to learn more about the magazine and our new social networking site which is exclusive in the field. Now you are even closer to the cutting-edge solutions and conversations discussed in CDHC Solutions magazine. No more one-way, top-down consumer-directed healthcare information from brochures, media kits, lectures and Web sites. Now you can put the power of virtual networking to use in real time. And most importantly, now you can interact easily with your peers and experts in the field about topics featured in the site or your own interests. Also, please check out our Virtual Events where you can attend keynotes; workshops and view Exhibitors all from your desk.

(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

[Opinion] What's the Size, Role & Future of TPAs' Marketplace?
Excerpt: "The estimates used in this report are intended for guidance to understand what is really going on in the marketplace...not to be used as 'gospel' or plugged into statistical formulas. Basic differences in vocabulary means every number has a built-in 1,000% potential distortion factor. For example, a family of parents and 10 children are variously described as 1, 2, 3, 4, or 12 'lives', so even simple counting of heads will be distorted." (Frederick D Hunt, Jr. via Society of Professional Benefit Administrators)

[Guidance Overview] Federal Circuit Rejects Blanket SUB Pay FICA Tax Exemption in CSX Corp. v. United States (PDF)
Excerpt: "The lower court had held that all severance payments satisfying the definition of supplemental unemployment benefits ('SUB'), as defined in section 3402(o) of the Internal Revenue Code (the 'Code'), are non-wages and, therefore, not subject to Federal Insurance Contribution Act ('FICA') taxes." (Miller & Chevalier Chartered)

[Guidance Overview] DOL Proposes Full Disclosure of Compensation and Conflicts from Service Providers
Excerpt: "Providers of services to employee benefit plans governed by the Employee Retirement Income Security Act might soon be called upon to tell the truth, the whole truth and nothing but the truth about key business practices, and stand ready to be held accountable for the veracity of their representations." (Investment News; free registration required)

[Guidance Overview] Preparing for the Code section 409A Compliance Deadline
Excerpt: "The extension for amending plans for compliance with Code section 409A and the final regulations thereunder under Notice 2007-86 does not mean that companies or individuals should wait to address these issues until later this year. During the course of an IRS examination, one company received an information and document request from the IRS agent inquiring regarding what the company was doing to comply with Code section 409A." (The Bureau of National Affairs, Inc.)

How to Get Workers to Think and Act Like Owners
Excerpt: "[J]ust establishing an ESOP often isn't enough to get employees to think like owners. Companies that want to create an ownership culture need to make an explicit effort to teach employees about their stake and keep them focused on increasing stock value, says Corey Rosen, executive director of the National Center for Employee Ownership. To that end, they should give workers the freedom to take initiatives to cut costs and boost a company's bottom line. Companies should 'push decision-making down,' he says." (The Wall Street Journal)

The Role of Severance in Today's Employment Environment (PDF)
4 pages. Excerpt: "This 'InsightOut' addresses three issues related to severance benefits: Do some severance programs currently miss their mark? How can employers implement the kind of severance program that would be cost effective for them and equitable for employees? (The three options presented can be used separately or in combination.) What savings might employers achieve by implementing each of the three severance program options presented?" (Buck Consultants)

Newly Posted Events
(Post Yours!)

2008 Web/Telephone Seminar: Coverdell Education Savings Accounts
Nationwide on April 1, 2008
presented by Ascensus

2008 Web/Telephone Seminar: HSA Market Entry
Nationwide on April 1, 2008
presented by Ascensus

2008 Web/Telephone Seminar: Advanced HSAs
Nationwide on April 17, 2008
presented by Ascensus

2008 Web/Telephone Seminar: Basic IRAs
Nationwide on April 3, 2008
presented by Ascensus

2008 Web/Telephone Seminar: HSA Basics
Nationwide on April 10, 2008
presented by Ascensus

2008 Web/Telephone Seminar: IRA Excess Contributions
Nationwide on April 10, 2008
presented by Ascensus

2008 Web/Telephone Seminar: PPA Update
Nationwide on April 22, 2008
presented by Ascensus

2008 Web/Telephone Seminar: Selecting the Best 401(k) Plan Design
Nationwide on April 8, 2008
presented by Ascensus

Avoid a Hidden Liability: Your Cafeteria Plan Needs a Checkup Now
Nationwide on April 1, 2008
presented by Osler, Hoskin & Harcourt LLP

Newly Posted Press Releases
(Post Yours!)

The SPARK Institute Continues Work On 403(b) Plan Issues, Schedules Meeting To Address Technology Issues
SPARK Institute

ING Releases Findings from Retirement Number Study
ING Group

Looking Beneath the Surface: Plan Sponsor Perspectives on Fee Disclosure
Chatham Partners

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