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| May 1, 2008 |
| Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. |
Today's sponsor is International Foundation of Employee Benefit Plans
(Click on company name or banner to learn more.)
| E-learning Benefit Courses From the International Foundation |
| You don't need a navy suit to get ahead at your job. Put on those fuzzy slippers, grab your computer mouse and learn with the International Foundation. The International Foundation’s e-learning courses provide the highest quality education covering all employee benefit topics, from the basics to compliance technicalities. Prove you know your stuff and get to the next level with the International Foundation’s e-learning courses. And bring your pink bunny slippers along for the ride. |
[Guidance Overview] Failure to Furnish SPD Can Lead to Loss of Deferential Standard of Review
Excerpt: "Getting to an abuse of discretion standard of review is actually a two-step task. First, the plan or SPD must actually have an appropriately drafted clause. Second, the document must actually get to the plan participant. While the outcome in this case was not affected by the standard of review, the case is nonetheless interesting for its focus on what often seems overlooked in benefit claims cases, i.e., were the plan documents actually distributed to the plan participants in the form present to the court as a part of the administrative record." (Health Plan Law blog by Attorney Roy F. Harmon III)
[Guidance Overview] Claims Administrator's Handling of Claim Satisfies Urgent Care Regulations
Excerpt: "The facts of this sad case illustrate the tragic conflict that can arise when families trying to obtain medical care for loved ones confront the claims administration mechanisms that operate as cogs and wheels within the larger mechanical apparatus of the ERISA remedial system. One of the salient facts that undoubtedly frustrated the plaintiff was that the defendant refused to approve a drug that it had previously approved and had evidently proved efficacious. Nonetheless, in the view of the district court, ERISA offers no relief for the Plaintiff's claims." (Health Plan Law blog by Attorney Roy F. Harmon III)
[Guidance Overview] Wages Paid in Lieu of Health Care Benefits Are Subject to FICA Taxation
Excerpt: "Two recent Internal Revenue Service information letters clarify that amounts paid directly to employees in lieu of health care coverage are wages for employment tax (Federal Insurance Contributions Act (FICA)) purposes." (Wolters Kluwer)
[Guidance Overview] DOL's New 'Military Leave' FMLA Notice
Excerpt: "A new 'Military Family Leave Notice' was issued by the U.S. Department of Labor to describe the expanded Family and Medical Leave Act rights related to military service. Designed to supplement the existing FMLA poster, all employers covered by the FMLA are required to post notice of the new provisions. The new Notice can be found at: www.dol.gov/esa/whd/fmla/NDAAAmndmnts.pdf." (Deloitte via BenefitsLink.com)
[Opinion] Cities and States Usurping Federal Law with Health Insurance by Mandates
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." (State Policy Blog)
6.1 Million People Covered by HSA/High-Deductible Health Plans (PDF)
16 pages. Excerpt: "An annual census by America's Health Insurance Plans (AHIP) of U.S. health insurance carriers shows that the number of people covered by health savings account/high-deductible health plans (HSA/HDHPs) totaled 6.1 million in January 2008." (America's Health Insurance Plans)
In Italy, Private Medical Benefits Part of Most Reward Packages
Excerpt: "More than 85 percent of companies provide additional medical benefits to employees covered by national contractual labor agreements as a retention and attraction tool, a recent survey has found. While employers appear committed to providing private healthcare benefits, most predict the rate of medical cost increases will accelerate in coming years. Many will be looking to review plan design and benefits levels in an effort to control the cost of their plans." (Watson Wyatt Worldwide)
Comments on Judge Easterbrook, an Oral Argument Analysis, and the Pending Decision in Glenn
Excerpt: "Hey, Did Easterbrook Read My Glenn ERISA Analysis? Apparently not. Consider his lack of interest (pun intended) in the structural conflict of interest argument at stake in MetLife v. Glenn in this case, Williams v. The Interpublic Severance Pay Plan, 07-3146 (7th Cir. Apr. 29, 2008): Williams contends nonetheless that we should review the decision de novo because the Plan is unfunded . . . ." (Workplace Prof Blog)
HSA Users Find Hassles Amid Savings
Excerpt: "Among other problems some HSA users cite: The savings accounts can only be owned individually, which can prevent a spouse from raising questions about reimbursements or shifting investments. And reimbursements from HSAs for out-of-pocket expenses can take time, creating cash-flow problems for some individuals." (The Wall Street Journal)
Cost-Effective Medical Treatment: Putting an Updated Dollar Value on Human Life
Excerpt: "How much is human life worth? New research from Wharton and Stanford based on Medicare kidney dialysis data shows that the average figure -- $129,090 per additional year of quality life -- is higher than prior studies have shown. Perhaps more important, the study also puts a value on the cost-effectiveness of treatment across percentiles of the entire dialysis population in an attempt to develop a benchmark for health care coverage decisions." (Wharton School of the University of Pennsylvania)
Health Plan Details Elude Most Americans
Excerpt: "Fifty-five percent of U.S. health-plan members don't fully understand 'critical details' of their insurance coverage, including prescription benefits, how to find the right doctor and appeal-coverage denials, a survey found. The majority of respondents rated their insurer lowest on communications and information provided to help them understand their plans, according to the survey released Wednesday by J.D. Power & Associates." (Bloomberg News via Arizona Daily Star)
Senate Passes Genetic Nondiscrimination Bill 95 to 0
Excerpt: "According to House Rules Committee Chairman Louise Slaughter (D-NY), who sponsored the bill in the House, the House will vote on the amended bill during the week of April 28 and it is expected to be enacted without controversy." (Deloitte via BenefitsLink.com)
Montana State Auditor Files Brief for Consumers in MetLife v. Wanda Glen
Excerpt: "The Supreme Court agreed to hear the case -- Met Life v. Wanda Glen -- to address a question that has divided the U.S. courts of appeal: whether insurance companies that deny group health or disability insurance claims should be given deference by courts reviewing the claim denial, or whether such insurers are operating under a 'conflict of interest' that precludes deference. The issue involves interpretation of the expansive and complicated federal law known as ERISA." (DailyInsurer)
PBS' 'NewsHour' Examines Effects of Massachusetts Health Insurance Law Two Years After Enactment
Excerpt: "According to 'NewsHour,' since the law was enacted about two years ago, higher-than-expected enrollment and costs 'have made Massachusetts a real-life Rorschach test about attitudes toward health reform at the state and national levels.' The state predicts the program will cost about 10% more than previously estimated for the next fiscal year, creating a revenue gap of about $150 million." (Kaiser Family Foundation)
Health Savings Accounts: Participation Increased and Was More Common among Individuals with Higher Incomes (PDF)
15 pages. Excerpt: "In a 2006 report, we described individuals' early experiences with HSA-eligible plans and HSAs and certain characteristics of HSA account holders. You asked us to update certain information from that report with more recently available data. For this report, we examined 1. participation in HSA-eligible high-deductible health plans and HSAs, 2. the income characteristics of HSA account holders, and 3. contributions made to and withdrawals made from HSAs." (U.S. Government Accountability Office)
Congressional Leaders Leery of HSAs
Excerpt: "Wealthy Americans are the primary users of health savings accounts, according to a report from the Government Accountability Office. Tax filers with HSA activity have higher incomes on average than others, earning about $139,000, compared to $57,000 for other filers." (Investment News; free registration required)
HSA Enrollment Nearly Doubles in Two Years
Excerpt: "Roughly 6.1 million people are now enrolled in these accounts, first introduced in 2004, according to a new census released earlier today by America's Health Insurance Plans' Center for policy and research. That's a 35% increase over last year, and nearly double the number of people who were enrolled in HSAs in 2006." (Financial Week; free registration required)
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Links to Items on Executive Comp, Benefits in General
[Official Guidance] IRS Announcement 2008-44: No Penalty for Withdrawing Stimulus Payment That Was Deposited Directly Into IRA, HSA or Similar Accounts (PDF)
4 pages. Excerpt: "The account specified by the taxpayer could be a checking or saving account, or an account that is given favorable tax treatment under the Code, such as an IRA, a health savings account (HSA), an Archer MSA, a Coverdell education savings account (CESA), or a qualified tuition program account (QTP or section 529 program) . . . . An individual may withdraw from a tax-favored account an amount less than or equal to the amount of the Economic Stimulus Payment directly deposited into such account, notwithstanding any restrictions in the Code. To the extent that the withdrawal is made no later than the time for filing the taxpayer's income tax return for 2008, plus extensions (or in the case of a CESA, the later of May 31, 2009, or the time for filing the taxpayer's income tax return for 2008, plus extensions), the amount withdrawn is treated as neither contributed to nor distributed from the account. Thus, the amount withdrawn will not be subject to regular federal income tax nor to any additional tax or penalty under the Code." (Internal Revenue Service)
[Opinion] Social Security and Medicare Projections: 2008
Excerpt: "The 2008 Social Security and Medicare Trustees Reports show the combined unfunded liability of these two programs has reached $101.7 trillion in today's dollars! That is more than seven times the size of the U.S. economy and 10 times the size of the outstanding national debt. The unfunded liability is the difference between the benefits that have been promised to retirees and what will be collected in dedicated taxes and Medicare premiums." (National Center for Policy Analysis)
[Opinion] Who, if Not Immigrants, Will Pay for the Baby Boomers' Retirement?
Excerpt: "Lost in the developed world's heated debate over immigration is a stark demographic reality: As their populations age over the coming decades, the United States, Western Europe, and vast swaths of Asia will grow increasingly dependent upon immigrants to join their workforces, prop up their economies, and help fund social welfare programs." (RAND)
[Guidance Overview] DOL Guidance on Compliance for Wellness Programs and Safe Harbor for Deposit of Employee Contributions
Excerpt: "The Department of Labor recently issued guidance on two issues that will help many employers navigate its regulations." (Winston & Strawn LLP)
[Guidance Overview] Economic Stimulus Payments to IRAs/Health Savings Accounts Can Be Withdrawn
Excerpt: "According to Announcement 2008-44, if the taxpayer withdraws the payment 'no later than the time for filing the taxpayer's income tax return for 2008, plus extensions,' the amount withdrawn will be treated as 'neither contributed to nor distributed from the account.' Therefore, according to the IRS, 'the amount withdrawn will not be subject to regular federal income tax nor to any additional tax or penalty under the Code.'" (Attorney B. Janell Grenier via Benefitsblog.com)
[Guidance Overview] IRS Guidance on Deduction for Leased Employees' Meals and Incidental Expenses – and Dismissal of 'Common Law Employee' Relevance
Excerpt: "The most recent travel and entertainment expense issue involves deductions for meals and incidental expenses as covered in IRC §274(d)(1). That provision dictates the substantiation required to use that deduction and IRC § 274(n) generally limits that deduction to only 50 percent of meals and incidental expenses (M&IE) actually incurred . . . ." (Deloitte via BenefitsLink.com)
SEC Sees Monster-ous Backdating Scheme
Excerpt: "The Securities and Exchange Commission today charged two former Monster Worldwide Inc. senior executives for their alleged participation in a scheme to secretly backdate stock options granted to thousands of company officers, directors and employees." (Investment News; free registration required)
[Guidance Overview] IRS Changes the Rules for Performance-Based Compensation
Excerpt: "Recent changes to the way in which the Internal Revenue Service (IRS) interprets 'performance-based compensation' under Internal Revenue Code (IRC) Section 162(m) have narrowed the types of arrangements that may be classified as performance-based and will require publicly-held companies to reexamine these arrangements or jeopardize the financial soundness of current tax and financial planning methodologies." (Littler Mendelson P.C.)
[Guidance Overview] Understanding the Option Dating Controversies
Excerpt: "The world of options, and equity compensation in general, operates within a number of different and often esoteric spheres of law, including corporate, securities, and tax law. Unfortunately, the rhetoric generated by this controversy has, in some cases, melded, obfuscated, or even obscured completely the applicable legal and practical issues. This article, one in a series, will attempt to explain the legal underpinnings of the option dating controversy, highlight a number of legal and practical issues faced by employers generally, and suggest best practices for ongoing equity compensation plans.' (International Foundation of Employee Benefit Plans via Blank Rome LLP)
Employee Ownership Update for May 1, 2008
NCEO Executive Director Corey Rosen discusses the NCEO's new survey of equity compensation practices in private companies and invites private companies to participate. He also recommends six principles for making messages stick (for example, in communicating an ESOP to employees). Finally, he addresses the impact of the ESOP repurchase obligation on valuation. (National Center for Employee Ownership)
Few States Hold All the Assets They Should to Pay for Future Retirement and Health Care Benefits
Excerpt: "Very few states hold all the assets they should have on hand to prepare for future retirement benefits. All states invest in order to meet future obligations, but even allowing for future investment return, some state trust funds hold less than half what they should. And a substantial number are below the 80 percent figure that the public retirement community regards as adequate. The Pew Center on the States recently estimated that state pension systems (not including locally run systems) are about $360 billion short of the assets they should ideally hold for future retirees." (State Legislatures Magazine)
Employers Lax in Managing Flexible Work Programs
Excerpt: "Employers are embracing flexible work arrangements as a way to meet the needs of a diverse workforce, but most have not structured their programs to maximize the benefits, Hewitt Associates found." (PLANSPONSOR.com; free registration required)
Newly Posted Events
2008 Web/Telephone Seminar: Conducting Your Own Compliance Audit
Nationwide on June 19, 2008
presented by Ascensus
2008 Web/Telephone Seminar: IRA Beneficiary Distributions
Nationwide on June 12, 2008
presented by Ascensus
2008 Web/Telephone Seminar: PPA Update
Nationwide on June 10, 2008
presented by Ascensus
2008 Web/Telephone Seminar: QRP Nonspouse Beneficiary Rollovers to Inherited IRAs
Nationwide on June 17, 2008
presented by Ascensus
2008 Web/Telephone Seminar: Roth 401(k)/403(b) Provisions
Nationwide on June 12, 2008
presented by Ascensus
401(k) Employee Communications and Enrollment Education
in Georgia on May 15, 2008
presented by WEB (Worldwide Employee Benefit Network) Atlanta Chapter
Consumer Driven Healthcare – Is It Working?
in Illinois on May 22, 2008
presented by WEB - Chicago West
Newly Posted Press Releases
Friedman Named General Counsel For The Segal Company
The Segal Company
U.S. Department of Labor Obtains Judgment Barring D.C. Attorney from Advising or Serving Employee Benefit Plans
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Relief for Stimulus Payments Withdrawn from IRAs and Tax-Favored Accounts
Internal Revenue Service (IRS)
For First Time, Participation in UnitedHealthcare Health Savings Accounts Exceeds Health Reimbursement Accounts
UnitedHealth Group
Investing In Turbulent Times: Alliance For Investor Education Highlights Eight Resources For Wary Savers and Investors
Alliance for Investor Education
Dave Thomas Foundation for Adoption Announces Top 100 Adoption-Friendly Workplaces in America
Dave Thomas Foundation for Adoption
America Saves Week Reaches Millions with Wealth-Building Messages
America Saves
UAL Shareholders to Vote on Executive Compensation
Association of Flight Attendants-CWA
Newly Posted or Renewed Job Openings
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Manager of Compliance, Testing, & 5500
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Director, Client Interface Group
for Diversified Investment Advisors, Inc.
in MA
Field Account Manager
for Lincoln Financial Group
in IA, IL, KS, MN, MO
Senior Defined Benefit Calculation Analyst
for Constantin Control Associates
in NJ
Project Manager, Product Management
for Prudential Financial
in CT
Retirement Plan Administrator
for MidAmerica Administrative & Retirement Solutions, Inc.
in FL
Consultant TPA - Southeast
for Towers Perrin
in GA
Actuary
for Swerdlin and Company
in GA
RPSS Compliance Specialist
for Associated Bank
in WI
Administrative Assistant/Trust Accountant
for The Nolan Company
in KS
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