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July 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] Prop. IRS Regs: Employer Comparable Contributions to Health Savings Accounts and Requirement of Return for Filing of the Excise Tax (PDF)
7 pages. Excerpt: "New paragraph (d) of section 4980G provides an exception to the comparability rules that allows, but does not require, employers to make larger contributions to the HSAs of nonhighly compensated employees than the employer makes to the HSAs of highly compensated employees. These proposed regulations interpret that requirement. . . . With respect to the excise tax under section 4980B or 4980D for employers and third parties such as insurers or third party administrators, the return is due on or before the due date for filing the person's federal income tax return. An extension to file the person's income tax return does not extend the date for filing Form 8928." (Internal Revenue Service)

[Guidance Overview] IRS's Question-and-Answer Guidance on HSAs
Excerpt: "The guidance clarifies which onsite health clinic services cancel out HSA eligibility and when employers can recoup HSA contributions, as well as addressing other eligibility issues, high-deductible health plans (HDHPs), contributions, distributions and prohibited transactions. While some of the information restates earlier guidance, the notice fills in some gaps and provides new guidance as well." (Watson Wyatt Worldwide)

[Guidance Overview] Further HSA Guidance Released
Excerpt: "As health care costs continue to escalate, more and more employers are turning to health improvement programs in The IRS recently released Notice 2008-5. The notice provides guidance on health savings accounts in a number of areas, including contribution limits, eligibility, and administration and maintenance fees. The notice is provided in a question and answer format covering 42 items. The . . . article reviews those aspects of HSAs that are not covered in other guidance." (JPMorgan Chase & Co.)

Health Care and the Economy in Two Swing States: A Look at Ohio and Florida
Excerpt: "Two new surveys by NPR, the Kaiser Family Foundation and the Harvard School of Public Health examine the pocketbook problems facing people in Ohio and Florida -- two presidential swing states -- including their struggles with gas prices, getting and keeping a well-paying job and affording health care." (Kaiser Family Foundation)

Large Employers Accepting Medical Tourism
Excerpt: "Americans with limited or no health insurance have for years sought elective surgery in foreign hospitals, pioneering so-called medical tourism in places like India, Thailand and Costa Rica where patients recover in five-star hotels and beach resorts. Now, the cost savings offered by overseas hospitals have won over several large employers." (Workforce Management; free registration required)

Graphs Show HMO Rate Increases by Region (PDF)
2 pages. Excerpt: "As U.S. companies begin to negotiate HMO plan rates for 2009, data from Hewitt Health Resource™ (HHR) -- a Web site that captures HMO rate information for 160 large companies representing approximately 1 million participants -- shows that initial 2009 HMO rate increases are averaging 11.8 percent, compared with estimates of 13.2 percent in 2008 and 11.7 percent in 2007." (Hewitt Associates)

A Concise ERISA Counterclaim Review Checklist
Excerpt: "From a survey of the post-Sereboff counterclaim cases, here's a list of key recurring issues . . . ." (Health Plan Law blog by Attorney Roy F. Harmon III)

How Much Do Older Workers Value Employee Health Insurance?
Excerpt: "This brief seeks to answer the question in the title by analyzing data from the Health and Retirement Study (HRS), a nationally representative survey of older Americans. New questions in the HRS enable researchers to compare the value that workers place on health insurance with their perceptions about the cost of coverage." (Center for Retirement Research at Boston College)

Effect of Much-Touted Health Care Price Transparency Might Be 'Ambiguous,' According to CBO
Excerpt: "The effect of price transparency on spending for health care services and pharma.ceuticals is, at best, ambiguous, and, depending on the local market conditions, could raise costs instead of reduce costs, the Congressional Budget Office (CBO) concluded in its June 5 CBO Economic and Budget Issue Brief." (Wolters Kluwer)

GM Plans to End Medical Coverage for Many 65 and Over As their Pensions to Increase
Excerpt: "Beginning in January, even former [salaried] employees who are already in retirement will lose their benefits, which most of the company's retirees use to supplement gaps in their traditional Medicare coverage. The auto maker will boost monthly pension payouts to help offset the cuts. The company's unionized workers aren't affected by the cut to retiree health benefits." (The Wall Street Journal)

True Group Long-Term Care Insurance As Part of an Employee Benefit Plan
Excerpt: "A rich long-term care benefit with full vesting, no waiting period, and in which the employer makes all contributions could represent a significant cost to the employer. We estimate that a rich plan would increase the total cost of compensation by about 3% to 4%. However, long-term care is a benefit where the payout is expected a long time after employees are hired. Vesting and waiting period rules for group long-term care benefits would allocate full benefit dollars only to the most loyal and experienced employees, thereby keeping costs down." (Milliman)

Dutch Rate Their Health Care System the Most Favorably of 10 Industrialized Nations
Excerpt: "International comparisons of health-care systems can be tricky to tease out, but the Dutch appear most satisfied with their system and Americans the least satisfied, according to a new survey of 10 industrialized countries. The Dutch system was most popular with its citizens while adults in the U.S. were itching for national reform the most, according to Harris Interactive, which cited three separate data sets." (MarketWatch via Physicians for a National Health Program)

GM Halts Retiree Health Care VEBA
Excerpt: "Efforts by General Motors Corp. to boost liquidity include putting a halt on the establishment of a Voluntary Employees Beneficiary Association (VEBA) trust for retiree health care. In a statement, GM said it 'will defer approximately $1.7 billion of payments that had been scheduled to be made to a temporary asset account over the balance of 2008 and 2009 for the establishment of the new UAW (United Auto Workers) VEBA.'" (; free registration required)

2009 HMO Cost Hikes Down from 2008
Excerpt: "The good news for employers is that the rate of cost increases for health maintenance organizations (HMOs) is predicted to slow for 2009, but it is still out in front of inflation. That was the word from Hewitt Associates which gathered HMO rate data from its Hewitt Health Resource site, which features data from 160 large companies with about 1 million participants." (; free registration required)

Is Hawaii's Health Care System a Model for Other States?
Excerpt: "With Congress considering whether to make it easier for states to adopt comprehensive health insurance reform in the face of federal inertia, one such experiment that just officially marked its silver anniversary could very well provide a glimpse of things to come. Hawaii's Prepaid Health Care Act (PHCA) was enacted in June 1974, just three months before the Employee Retirement Income Security Act (ERISA) was signed into law." (; free registration required)

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Links to Items on Executive Comp, Benefits in General

[Guidance Overview] State Laws on Marriage: Implications for Employee Benefit Plans (PDF)
2 pages. (Milliman)

[Guidance Overview] Supreme Court Provides Further Guidance on Judicial Review of Benefit Claim Denials
Excerpt: "Last month, in a case closely watched by those who sponsor and administer ERISA plans, the Supreme Court provided additional guidance regarding what constitutes a conflict of interest and how courts should weigh such conflicts. The Supreme Court 's decision potentially affects benefit claims under all types of retirement and welfare plans subject to ERISA." (Faegre & Benson LLP)

[Guidance Overview] Supreme Court Issues Two Significant Employee Benefits Decisions, But Uncertainty Remains (PDF)
4 pages. Excerpt: "In its recent decisions in Kentucky Retirement Systems v. E.E.O.C. and Metropolitan Life Insurance Company v. Glenn, the United States Supreme Court addressed several important issues regarding the design of employee benefit plans and related litigation. Both decisions, however, have unfortunately left a number of significant issues undecided and may lead to confusion and uncertainty for litigants and courts alike." (Dechert LLP)

Milliman's Monthly Benefit News and Developments, July 2008 (PDF)
2 pages. The newsletter provides a summary of the previous month's legislative, regulatory, and judicial information on employee benefits. (Milliman)

Employee Ownership Update for July 15, 2008
NCEO Executive Director Corey Rosen discusses innovative ideas in compensation, including an ESOP company that allows managers to choose between fixed and incentive-based compensation; a suit against Sovereign Bank by employees over the company's ESOP and company stock in the 401(k) plan; a restricted stock/stock unit practice guide from the CEP Institute; and the final opportunity to take the NCEO's new survey on equity compensation practices in closely held companies. (National Center for Employee Ownership)

[Opinion] Understanding ERISA Preemption as a Legitimate Congressional Policy Determination
Excerpt: "[Preemption] was a legitimate policy choice by the Congress that passed ERISA to maintain one consistent federal policy and body of law for purposes of employee benefits. It is worth noting that, some thirty years, countless judicial decisions enforcing preemption, and even more countless numbers of critics later, Congress still has never acted to change that - to, in effect, preempt preemption." (Stephen Rosenberg of The McCormack Firm, LLC)

Newly Posted Events
(Post Yours!)

Plan Administrator Year-end "To-Dos" for 401(k) and 403(b) Retirement Plans Webcast
Nationwide on July 31, 2008
presented by ALI-ABA (American Law Institute-American Bar Association)

Newly Posted Press Releases
(Post Yours!)

U.S. Labor Department Protects 401(k) Plan Assets of Former American Systems Consulting Inc. Employees in Dublin, Ohio
U.S. Department of Labor, Employee Benefits Security Administration (EBSA) announces the release of its 409A Plan Document Software

Alabama Service Provider Joins Select Group of ASPPA Certified Firms
Roland|Criss Fiduciary Services

Mercer’s Enterprise Momentum™ Brings State-of-the-Art, Affordable Benefits Management to Small, Medium Employers

Center for Health Value Innovation Cites HEREIU’s Dramatic Achievements In Value-based Design
Center for Health Value Innovation

Firms Team Up to Provide 401k Sales Education to Regional Banks

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401(k) / Defined Contribution Administrator
for DATAIR Employee Benefit Systems, Inc.
in IL

Retirement Plan Analyst
for BeneTrends, Inc.
in PA

Account Executive - Retirement Services
for Principal Financial Group
in TX

Attorney- Associate General Counsel, 403(b)
for Leading Financial Services Company
in TX

Financial Analyst - Corporate Insurance
for M Benefit Solutions
in OR

Relationship Manager
for Vanguard
in AZ

Financial Consultant - Corporate Insurance
for M Benefit Solutions
in OR

Insurance Analyst - BOLI
for M Benefit Solutions
in OR

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