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May 5, 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.)
Banner ad for International Foundation of Employee Benefit Plans

Be Smart by Association with the International Foundation

Smart is not a permanent state of being. What's your maintenance plan? Take advantage of the education and information available through the International Foundation of Employee Benefit Plans, a nonprofit educational association, and find out why over 35,000 industry professionals like Cindy Conway rely on the Foundation to stay informed and educated. Make sure you have the most comprehensive information on health, pension and compensation issues. Be smart by association.

[Guidance Overview]  Hewitt Federal Legislation Quick Guide Updated April 30, 2008, for Health and Welfare Plans (PDF)
14 pages. This Federal Legislation Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law regarding health and welfare benefit plans. (Hewitt Associates)

[Guidance Overview]  Reversal of Benefits Decision on Remand to Plan Administrator Warrants Attorneys' Fees Award
Excerpt: "In this case, the district court denied the plaintiff's motion, but the Ninth Circuit reversed based upon the fact that the district court had remanded the case to the plan administrator and the remand did effect a change in his legal relationship with the plan." (Health Plan Law blog by Attorney Roy F. Harmon III)

[Guidance Overview]  CMS Issues Medicare Part D Benefit Parameters for 2009
Excerpt: "EBIA Comment: The new parameters will help group health plan sponsors determine whether their plans' prescription drug coverage is creditable for 2009. This information is needed for the disclosures that must be made annually and at other specified times to Part D eligible individuals and to CMS." (Employee Benefits Institute of America)

[Guidance Overview]  Side-by-Side Comparisons of Current and 'HIPAA 2' EDI Standards Posted on CMS Website
Excerpt: "EBIA Comment: Health plans are required to comply with the EDI standards that apply to all covered entities, as well as some additional requirements specific to health plans. Covered entities (including health plans) and their business associates may find the side-by-side comparisons helpful in assessing the potential impact of the HIPAA 2 changes." (Employee Benefits Institute of America)

Revving Up the Big Three's Retiree VEBA
Excerpt: "The union-run fund, known as a voluntary employees' beneficiary association, or VEBA, is quickly taking shape, with several key outsiders recently tapped to help oversee the health-care trust. In addition, General Motors, Ford and Chrysler have been tweaking their balance sheets so they can fund the VEBA, which will allow them to offload billions of dollars in medical benefits owed to hundreds of thousands of retirees. And just last Monday, Ford gained preliminary approval from a federal judge over its VEBA agreement with the UAW, making it the last of the automakers to gain such court approval." (Financial Week; free registration required)

J.D. Power and Associates Reports Satisfaction with Health Plans Varies Dramatically from Region to Region
Comment by Don McCanne. Excerpt: "Although this was a J.D. Power study of consumer satisfaction, it does reveal a very important point. Only 45 percent of health plan members self-reported that they understood their health insurance coverage. The other half didn't, and that was correlated with lower satisfaction ratings." (Physicians for a National Health Program)

Study Finds Direct Correlation Between CDHP Enrollment and Cost Trends
Excerpt: "A key finding of this year's study is the direct correlation between consumer-driven health plan enrollment and cost trends. Best performers are almost 50 percent more likely than the poorest performers (50 percent vs. 34 percent) to offer a CDHP. Moreover, companies with at least 50 percent of their employees enrolled in a CDHP have a two-year median cost increase that's about half that of companies that do not offer these plans (3.6 percent vs. 7 percent)." (Human Resource Executive Online)

Banning Genetic Discrimination - Unintended Consequences of the Bill
Excerpt: "The final version leaves open the possibility that employers could be sued for receiving an employee's genetic information, even if that information is never used." (Human Resource Executive Online)

San Francisco Firms Adjust to Health Care Law
Excerpt: "Despite the challenges, public-health experts say San Francisco's ordinance is making headway. About 18,000 people -- one-quarter of the uninsured -- have enrolled in the city's health-services program, and local businesses are seeking ways to cover health-care costs for hard-to-insure workers." (The Wall Street Journal)

The Candidates' Health Care Proposals
The compiled information is presented in table form. (Detroit Free Press)

New Jersey Governor Signs Paid Family Leave Bill
Excerpt: "Under the new law, which will go into effect next year, parents can take paid leave any time during the first year after a child's birth or adoption. Employees also can take leave to care for a seriously ill child, spouse, parent or domestic partner receiving inpatient care in a health care facility or under continuing supervision of a health care provider." (Business Insurance)

States Look to Rein In Private Medicare Plans
Excerpt: "In the draft of a report prepared by the National Association of Insurance Commissioners, state officials say they have received large numbers of complaints but, in most cases, cannot provide direct assistance to beneficiaries or hold insurers accountable. In the report, the state officials propose setting common standards for marketing the private plans, which could then be enforced by states that adopt them. 'The current federal regulatory framework does not adequately protect consumers from marketing and sales abuses,' and consumers are often left to fend for themselves in 'a bifurcated regulatory system,' the draft report says." (The New York Times; free registration required)

Studies Suggest $45B Taxpayer Cost from Dropoff of Employer Health Coverage
Excerpt: "Two new studies presented by the Commonwealth Fund suggest that falling rates of employer-sponsored coverage are placing an increasing burden on taxpayers, public health insurance programs, and workers themselves - particularly low-wage earners." (; free registration required)

Even the Insured Feel Strain of Health Costs
Excerpt: "Many of the 158 million people covered by employer health insurance are struggling to meet medical expenses that are much higher than they used to be -- often because of some combination of higher premiums, less extensive coverage, and bigger out-of-pocket deductibles and co-payments." (The New York Times; free registration required)

Aetna to Prod Vendors to Offer Health Insurance
Excerpt: "Aetna Inc. announced Thursday it will begin requiring its more than 1,300 vendors to provide employees with health insurance. more stories like thisChief Executive Ronald Williams said the Hartford-based health insurer sees 'both an opportunity and an obligation' to help reduce the number of uninsured workers. 'We expect nothing less from the companies that do business with Aetna,' he said in a letter to shareholders in the company's annual report." (AP via The Boston Globe)

[Opinion]  Attorney Albert Feuer on MetLife v. Glenn ERISA Case
Excerpt: "Prominent ERISA attorney, Albert Feuer, writes . . . about the Court's recent oral argument in the structural conflict of interest ERISA case of MetLife v. Glenn: What is the basic review standard if there is no conflict? Arbitrary and capricious, abuse of discretion, or reasonableness. Counsel for Glenn kept referring to reasonableness as illustrated in the blog. Counsel for Metropolitan Life kept referring to arbitrary and capricious, which he asserted was the same as abuse of discretion . . . ." (Workplace Prof Blog)

[Opinion]  Obama's Health Care Voting Record
Excerpt: "By my count, during Mr. Obama's tenure in the state Senate, 18 different laws came up for a vote and passed that imposed new mandates on private health insurance. Mr. Obama voted for all of them." (Scott Gottlieb via The Wall Street Journal)

[Opinion]  Debating the Road to Universal Coverage
Excerpt: "Can we reach a consensus on what we need to do to achieve meaningful health care reform in the U.S.?" (The Century Foundation)

Sponsored by: University Conference Services

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Walking the Benefits Management Tightrope

Do you sometimes feel like a high wire acrobat performing without a net? That's how it can seem as you try to span the chasm between managing an attractive benefits program and reigning in costs. The Health and Welfare Plan Management for Mid-Sized Employers, June 8-11, 2008, in Chicago, guides you through today's complex benefit issues and offers solutions to help you master your technique.

(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]  Understanding the Option Dating Controversies: An Overview of the Law and Legal Issues
Excerpt: "The prior installment [on this issue] introduced the option backdating controversy . . . . This part provides a brief overview of the more salient direct and indirect legal issues, as well as some of the key questions and complications raised by the option backdating controversy. These practices touch on a number of different and complex laws and rules, including securities, corporate, tax, employee benefits, contract, and criminal laws, as well as accounting and auditing standards and rules applicable to companies that issue options and other equity awards." (Employee Benefit Plan Review via Blank Rome LLP)

[Guidance Overview]  IRS's Revised Form 990 Draft Instructions (PDF)
3 pages. Excerpt: "In response to the increasing size, diversity, and complexity of the exempt sector, the Internal Revenue Service recently completed the first major overhaul since 1979 of the Form 990 filed by exempt organizations." (Winston & Strawn LLP)

[Guidance Overview]  Hewitt Federal Legislation Quick Guide Updated April 30, 2008, on Human Resources & Employment Law (PDF)
17 pages. This Federal Legislation Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law regarding human resources and employment law. (Hewitt Associates)

[Guidance Overview]  Relief Allows Penalty-Free Withdrawal of Economic Stimulus Payments from Certain Tax-Favored Accounts
Excerpt: "For taxpayers who choose to leave the directly deposited amounts in their HSAs, IRAs, or other tax-favored accounts, the directly deposited amounts will count toward their contribution limits and will be subject to otherwise-applicable tax consequences, including any penalties resulting from excess contributions that are not timely corrected." (Employee Benefits Institute of America)

Senate Bill Would Impose Greater Restrictions on Executive Compensation
Excerpt: "Sen. Harry Reid (Nev.) has introduced the Corporate Executive Compensation Accountability and Transparency Act (S. 2866), which would require greater disclosure of senior corporate officer compensation; empower shareholders and investors to protect themselves from fraud; limit conflicts of interest in determining senior corporate officer compensation; and close corporate tax loopholes utilized to subsidize senior corporate officer compensation." (Wolters Kluwer)

An Effective Annual Incentive Plan for Executive Compenation -- It Starts with the Design Process
Excerpt: "Short-term variable compensation has become a critical component of most employers' total reward programs. Diverse perceptions exist regarding the use of variable pay; its advantages and disadvantages include . . . ." (Hay Group)

Executive Salary - The Foundation of Total Compensation
Excerpt: "Base salary is the least complex form of compensation, yet some would argue it is the most important when viewing pay in the workforce. For top executives in larger organizations, base salary generally is not the most significant form of compensation in terms of value, but it can have a significant bearing on the actual value of other remuneration components." (Hay Group)

The Wall Street Journal / Hay Group CEO Compensation Study
Excerpt: "Hay Group recently partnered with The Wall Street Journal to conduct The Wall Street Journal / Hay Group CEO Compensation Study of the largest companies in the United States. Our purpose was to examine how CEOs were compensated across all forms of pay in fiscal 2007. The study focused on 200 companies with more than $5 billion in annual revenue that filed their proxy statements after October 1, 2007. Hay Group researched these public filings, examining all primary components of CEO compensation." (Hay Group)

DOL Offers Free Web Cast on Plan Filing Requirements
Excerpt: "The U.S. Department of Labor's Employee Benefits Security Administration (EBSA) will host a free webcast on May 8 to help employers and plan administrators understand and comply with the Form 5500 Series reporting requirements under the Employee Retirement Income Security Act (ERISA)." (planadviser)

Educational Tax Credits Need Simplification, Lawmakers Told
Excerpt: "Educational tax credits are too complex to benefit low income families and students, according to government and industry witnesses testifying at a hearing of the House Ways and Means Select Revenue Measures Subcommittee on May 1." (CCH Incorporated)

[Opinion]  The Age of Tinkering with the Framework of Entitlements Has Begun
Excerpt: "The age of guaranteed benefits is hardly over, but anxiety over the fraying of the safety net -- private as well as public -- is palpable. It is true that not one of the three White House contenders has offered a comprehensive solution. And except for Barack Obama's proposal that the wealthy pay more in payroll taxes, none have been so bold as to suggest that the government meet its entitlement obligations by raising its take on them. But each has suggested some intriguing fixes that, while differing in the details, all seek to alleviate the entitlement problem by stimulating individual savings." (The New York Times; free registration required)

Newly Posted Events
(Post Yours!)

401(k) Automatic Deferrals and Default Investments: The Latest on ACAs, EACAs, QACAs and QDIAs
Nationwide on June 12, 2008
presented by Employee Benefits Institute of America (EBIA)/Thomson Tax & Accounting

ERISA Legal Update & Fiduciary Responsibility Webcast
Nationwide on May 20, 2008
presented by Davidson Marketing Group -- FutureOffice Network

P4P Web Summit 2008
in California on May 8, 2008
presented by Healthcare Web Summit

Planning for Open Enrollment: Compliance Solutions for Cafeteria Plans and Component Benefits
Nationwide on May 29, 2008
presented by Employee Benefits Institute of America (EBIA)/Thomson Tax & Accounting

Newly Posted Press Releases
(Post Yours!)

Judge Sentences Company Owner To Probation For Embezzling From Profit Sharing Plan
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Ballard Spahr Lawyers Issue Alert About New Jersey Paid Leave Bill
Ballard Spahr Andrews & Ingersoll, LLP

Fiduciary360's Enhanced Analytical and Reporting Software Lets Users Create Highly Customized Due Diligence Reports
Fiduciary360 (fi360)

Synapses Launches Total Benefit Statement Service for Financial Advisors
Synapses Inc.

Satisfaction with Health Plans Varies Dramatically From Region To Region, Largely Due to Poor Communication From Insurance Providers
J.D. Power and Associates

Wilmington Trust Completes Acquisition of AST Capital Trust Company
Wilmington Trust

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401(k) Administrator
for Redwood Administrators, Inc.
in NJ

Retirement Plan Administrator
for Tax Sheltered Compensation, Inc.
in MN

Assistant Manager Pension Operations
for Zenith Administrators
in IL

Pension & Retirement Plan Administrator
for RPC
in IL

DC Senior Administrator
for Benefit Planning, Inc.
in CA

Senior Defined Benefit Administrator
for Benefit Planning, Inc.
in CA

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