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April 16, 2008

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


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[Official Guidance] Final IRS Regs: Employer Comparable Contributions to Health Savings Accounts under Section 4980G (PDF)
Effective April 17, 2008. These regulations supplement the final regulations on comparability that were issued in 2006. One item in the 2006 regulations reserved the issue of employees who have not established an HSA by the end of the calendar year. Proposed regulations released in 2007 addressed that issue. These final regulations adopt the 2007 proposed regulations, according to the IRS, 'without substantive revision." (Internal Revenue Service)


[Guidance Overview] Stop Loss Carrier Averts ERISA Preemption in Dispute Over 'Fronted' Claims Reimbursement
Excerpt: "With [a] sentence of Faulknerian length, the Fourth Circuit framed the question of possible ERISA preemption of a claims administrator against a plan sponsor. The case forms a interesting addition to the growing body of law to the effect that contractual disputes between plan sponsors and claims administrators are subject to state, not federal, law." (Health Plan Law blog by Attorney Roy F. Harmon III)


[Guidance Overview] No Statutory Penalty for Failure to Supply Requested Benefit Claims Forms
Excerpt: "It is important to get the meaning of this particular statute right - at $110 per day, the Latin lesson could get expensive. That's the potential penalty, of course, for failure to provided requested information under 29 U.S.C. § 1024(b)(4). . . . A recent district court decision holds that claims forms do not rank inclusion in the plan information subject to the statute." (Health Plan Law blog by Attorney Roy F. Harmon III)


[Guidance Overview] Use of Power of Attorney on a Health Savings Account
Excerpt: "We've been told that we should use a power of attorney (POA) on a Health Savings Account (HSA) because you cannot have an authorized signer on a revocable trust account. Is that true?" (Wolters Kluwer)


[Guidance Overview] The Inaugural Issue of Proskauer Rose's ERISA Litigation Newsletter (PDF)
Excerpt: "Our goal is a modest, but we hope, helpful one: To provide monthly an analysis of ERISA cases and developments that may be of interest, or that may reflect emerging trends, including how they can impact you as an employer, plan fiduciary, plan administrator, trustee or plan service provider. . . . This month's articles illustrate that ERISA litigation 'follows the money.'" (Proskauer Rose LLP)


[Guidance Overview] Flexible Spending Account Administrator Breached ERISA by Applying IRC § 125 Requirements
Excerpt: "In a decision that underscores the importance of complying with ERISA's Title I requirements, the U.S. District Court of New Jersey held that the administrator of a Flexible Spending Account violated ERISA by applying the IRC § 125 definition of when a medical expense is 'incurred' when the relevant plan documents were silent on the issue. O'Meara v. _________, Civil Action No. 07-CV-4429 DMC (April 1, 2008)." (Deloitte via BenefitsLink.com)


[Guidance Overview] ERISA Plan's Prior Authorization and Plan Limits Requirements Preempt State Medicaid Demands for Payment If Procedures Not Followed
Excerpt: "Employer health plans that require prior authorization or impose plan limits on certain types of care need not repay State Medicaid plans when those state plans pay for Medicaid recipients' treatments that the employer plan would not have paid unless the plan participant had received prior authorization under the employer plan. But this rule applies only if the plan participant first files the claim with the employer health plan and receives the employer plan's denial of payment, according to U.S. Department of Labor Advisory Opinion 2008-03A, March 31, 2008." (Deloitte via BenefitsLink.com)


[Guidance Overview] Multiemployer Bulletin on FMLA Amendments (PDF)
Excerpt: "Multiemployer plan sponsors should review their FMLA policies, plan provisions and employer reporting rules to assure that the policies accurately reflect the needs of the plan with respect to FMLA implementation." (The Segal Group, Inc.)


The Erosion of Employer-Provided Health Care in the United States and California, 1995-2006
Excerpt: "This report examines what role changes in the composition of employment have played in this decline. To what extent, for example, has this negative trend been driven by the loss of jobs with high rates of coverage? Conversely, what has been the role of diminished coverage rates within existing jobs?" (Economic Policy Institute)


Online Service Aims to Help Firms Assess Workers' Health Needs
Excerpt: "The service, called Limeade, will provide employers with online surveys to measure a number of health care issues within their companies. The service is intended to help employers develop new policies to cut health care costs, such as smoking cessation programs." (California HealthCare Foundation; free registration may be required)


Taiwan Takes Fast Track to Universal Health Care
Excerpt: "At the end of the 20th century, Taiwan became a rich country, almost overnight. But it still had a poor country's health care -- about half the population had no coverage at all. So Taiwan set out to design a national health care system from scratch. What makes Taiwan unique is the way the country figured out how to cover everyone." (All Things Considered via National Public Radio)


House Passes Tax Bill with HSA Expense Provision
Excerpt: "Members of the U.S. House of Representatives [April 15, 2008] voted 238-179 to pass H.R. 5719, a tax package that could set expense substantiation requirements for health savings account trustees. " (The National Underwriter Company; free registration or paid subscription required)


Family Insurance Coverage Declines, Dependent Coverage Better in Large Firms, Says SBA Study
Excerpt: "Family health insurance coverage among all employers is declining and firms are shifting costs for their workers' coverage to other employers, both large and small, according to a survey recently released by the U.S. Small Business Administration's (SBA) Office of Advocacy." (Wolters Kluwer)


Findings From the 2007 EBRI/Commonwealth Fund Consumerism in Health Care Survey: Implications for Plan Sponsors (PDF)
Pages 1-5 of 12 pages. Excerpt: "This article provides reaction to and analysis of the 2007 EBRI/Commonwealth Fund 'Consumerism in Health Care Survey,' published in the March 2008 EBRI Issue Brief and available online at www.ebri.org" (Employee Benefit Research Institute)


The Massachusetts Health Reform Survey
Excerpt: "In April 2006, Massachusetts enacted a health care reform bill that seeks to move the state to (almost) universal coverage through a combination of Medicaid expansions, subsidized private health insurance coverage, and insurance reforms. As part of an evaluation of the impacts of the state's reform effort, we conducted surveys of adults aged 18 to 64 years old in Massachusetts in Fall 2006 and Fall 2007. This document provides an overview of the surveys approach and the two survey instruments." (Urban Institute)


WSJ Examines How Health Care Sector Has Become 'Employer of Last Resort'
Excerpt: "Health care 'has emerged as the employer of last resort,' as the number of manufacturing jobs declines nationally, the Wall Street Journal reports. According to the Journal, there were 48,000 fewer manufacturing jobs in March and 310,000 fewer over the past 12 months, while the number of health care jobs increased by 23,000 in March and by 363,000 over the past 12 months." (Kaiser Family Foundation)


White House Threatens To Veto Tax Bill in Part Because of Provision on HSAs
Excerpt: "The White House on Monday threatened to veto a tax bill (HR 5719) because of a provision under which individuals with tax-free health savings accounts would have to provide evidence that they used funds in the accounts for medical purposes, CQ Today reports. Under the provision, individuals with HSAs after Dec. 31, 2010, would have to provide evidence that they used funds in the accounts for medical purposes." (Kaiser Family Foundation)


Health Care Trust Fund for Goodyear Retirees on Hold
Excerpt: "A federal judge is in no hurry to approve the proposed $1 billion-plus independent health-care trust that would pay benefits for about 30,000 United Steelworkers who retired from Goodyear. U.S. District Court Judge John R. Adams on Friday afternoon told lawyers representing the union, Goodyear and parties to a class-action lawsuit that he needed more and better information on the long-term financial viability of the Voluntary Employees Beneficiary Association, or VEBA. The Steelworkers and Goodyear agreed to create the VEBA as part of a settlement to the union's 85-day strike in 2006." (Akron Beacon Journal)


[Opinion] BCBS Message to Capitol Hill: Changing Payment Incentives 'Crucial Step' in Health Care Reform
Excerpt: "'We need to change incentives in the healthcare delivery system to encourage and reward providers for delivering high-quality, coordinated care,' said Scott P. Serota, BCBSA president and CEO. 'As healthcare leaders for nearly 80 years, the Blues are committed to building a well-functioning and totally integrated healthcare system based on proven clinical outcomes and economic value that will better serve the needs of American consumers -- safely, efficiently and consistently.'" (Blue Cross and Blue Shield Association)


[Opinion] ERIC Urges Full Court of Appeals Rehearing of Decision on Retiree Health Coverage Vesting When Tied to Eligibility for Pension Benefits
Excerpt: "ERIC on April 11 filed with the Sixth Circuit Court of Appeals an amicus brief urging the court to reconsider en banc its decision that effectively declares that by operation of law employees become vested in retiree health care coverage when eligibility for retiree health coverage is tied to eligibility for pension benefits under a collective bargaining agreement, unless the agreement expressly states that retiree health care coverage terminates at a particular date or does not vest at all." (The ERISA Industry Committee)


[Opinion] American Benefits Council Letter Opposing HSA Provision in H.R. 5719 (PDF)
2 pages. Excerpt: "Section 17 of H.R. 5719 would provide that distributions from an HSA for qualified medical expenses would be excludable from income only if they are substantiated in a manner similar to the requirements that apply to flexible spending arrangements (FSAs). This provision will unnecessarily increase administrative costs and complexity and adversely affect individuals who depend on high deductible health plans, coupled with HSAs, for health coverage." (American Benefits Council)


[Opinion] Bush Administration Statement of Administration Policy on H.R. 5719, Taxpayer Assistance and Simplification Act of 2008 (PDF)
1 page. Excerpt: "The Administration strongly opposes H.R. 5719, the so-called 'Taxpayer Assistance and Simplification Act of 2008.' The bill includes provisions that would impose new administrative burdens on the trustees of Health Savings Accounts (HSAs)." (U.S. Office of Management and Budget)


[Opinion] ERISA Preemption and State/City Health Care Reform
Excerpt: "If states really want to get into the health care reform battle, they should follow the ERISA example, which provides employers with a lot of flexibility to design good plans that are affordable. San Francisco and the states may think that what they are doing will decrease the number of uninsured. The truth is they will almost surely undermine employers' efforts to provide good comprehensive health coverage." (The Washington Times)


[Opinion] Tax Bill Provision Meant to Hinder Tax Evasion Could Boost HSA Administration Costs
Excerpt: "HSAs are a tax scheme in which we taxpayers subsidize the health care of individuals with incomes high enough to qualify for the tax relief. It would be inappropriate if these taxpayer-subsidized funds were used to purchase entertainment centers or expensive vacation trips. Unfortunately, the only way to ensure that these funds are used for health care is to establish an administrative process to clear each payment made out of the accounts." (Physicians for a National Health Program)



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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] Deduction Limit for Meals/Incidental Expenses Paid to Leased Employees Addressed
Excerpt: "The IRS has issued a ruling addressing which party is subject to the percentage limitation for the deduction of meal and incidental expenses (M&IE) paid to leased employees. The ruling holds that the percentage limit applies to the party that ultimately bears the per diem expense, regardless of which party is the employer under the common law rules." (CCH Incorporated)




Newly Posted Events
(Post Yours!)

401(k) Fees in the Spotlight Webcast
Nationwide on April 24, 2008
presented by International Foundation of Employee Benefit Plans

Corporate Retirement Plan Seminar - McCormick & Schmicks
in District of Columbia on May 6, 2008
presented by AFS Financial Group



Newly Posted Press Releases
(Post Yours!)

San Francisco Case Represents Threat to ERISA; Preemption Standard Essential for Plan Sponsors
American Benefits Council



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