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August 25, 2008

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


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[Guidance Overview] Trial Court Permits Limited Discovery Regarding Insurer's Alleged Conflict of Interest
Excerpt: "EBIA Comment: We don't normally report on discovery disputes in ERISA benefits litigation. But this case caught our eye because it illustrates how claimants may try to use the Glenn decision as a springboard for seeking discovery of information regarding possible conflicts of interest, making ERISA litigation even more burdensome and expensive for ERISA plan sponsors, insurers, and other claims decisionmakers. Though it remains to be seen how receptive the courts will be to such attempts, we anticipate more such cases in the future." (Employee Benefits Institute of America)


[Guidance Overview] Healthcare Provider May Assert State-Law Claims Against Plan for Failure to Disclose Patient's COBRA Coverage Status
Excerpt: "EBIA Comment: Many reported cases address the difficult issue of when claims against ERISA plans by service providers and other third parties should be treated as preempted, and the results are difficult to reconcile. The Seventh Circuit did not address the merits of the case in this opinion, but its legal conclusions are troubling as they open up potential liability under state law for amounts not payable under the terms of the plan document. Of course, COBRA plans are already required by the IRS COBRA regulations to provide complete information to inquiring healthcare providers about COBRA status . . . ." (Employee Benefits Institute of America)


[Guidance Overview] IRS's Additional Guidance on Health and Fringe Benefit Exclusions for Children of Divorced or Separated Parents
Excerpt: "EBIA Comment: The new guidance should clear up the confusion created by the amendments to Code Section 152(e) in situations where a child's custodial parent does not release the claim to the exemption. Employers and administrators need to know about these rules in order to provide appropriate tax treatment under their benefit programs." (Employee Benefits Institute of America)


[Guidance Overview] New Genetic Nondiscrimination Law Applies to Employers and Health Insurers
Excerpt: "The Genetic Information Nondiscrimination Act of 2008 (GINA), signed by President Bush on May 21, amends several statutes regarding employment and health insurance. According to supporters of the law, many Americans have declined genetic testing and services for fear that information about genetic findings could affect their health insurance and employment. GINA is designed to relieve these fears by protecting the public from discrimination based on genetic information. A supplement to this article, GINA Questions and Answers, [at http://www.faegre.com/showarticle.aspx?Show=8218] is a convenient reference regarding these requirements." (Faegre & Benson LLP)


Election Center 2008 - The Health Care Issue
Excerpt: "Democratic and Republican presidential hopefuls propose solutions to deal with one of the most critical issues facing millions of Americans." (CNN.com)


Covering the Uninsured in 2008: Current Costs, Sources of Payment, and Incremental Costs
Excerpt: "Government programs finance about 75 percent of uncompensated care. If all uninsured people were fully covered, their medical spending would increase by $122.6 billion. The increase represents 5 percent of current national health spending and 0.8 percent of gross domestic product. However, it is neither the cost of a specific plan nor necessarily the same as the government's costs, which could be higher, depending on plans' financing structures and the extent of crowd-out." (Health Affairs)


Court OKs Trust to Handle Goodyear Retiree Health Care Benefits, Company Says
Excerpt: "Goodyear Tire & Rubber Co. has announced that the voluntary employees' beneficiary association trust that's intended to take responsibility for much of the company's retiree health care benefits has been approved by U.S. District Court Judge John R. Adams. Under the terms of a settlement, Goodyear will make a $1 billion cash contribution to the trust, which will provide health care benefits to the company's current and future retirees who are members of the United Steelworkers union." (Workforce Management; free registration required)


New Study Examines Current Health Care Spending on Uninsured and Projects Cost If the Population Were Insured
Excerpt: "The study is an update of a previous Kaiser study and also projects the additional cost to the nation's health care system if all the uninsured were covered by insurance. If everyone were covered, overall costs would increase by $123 billion dollars, or an additional five percent of national health spending. The analysis does not assess how much a universal coverage plan would cost the government, which would vary depending on the details of the approach." (Kaiser Family Foundation)


Americans Who Lack Health Insurance Will Spend About $30 Billion Out of Pocket on Medical Care This Year
Excerpt: "The new study estimates the government pays 75%, or $42.9 billion, of the amount uninsured patients can't pay -- through Medicaid, the federal-state health-insurance for the poor and Medicare, the federal program for the elderly and disabled, as well as state and local taxes." (The Wall Street Journal)


Total Incapacitation Not Only Proof of Disability in Wyoming
Excerpt: "The Wyoming State Supreme Court has decided that an employee's education and training level, and not just total incapacitation, can cause the worker to be eligible for permanent and total disability." (PLANSPONSOR.com; free registration required)


Audio and Text: Candidates' Plans to Cut Health Costs May Not Pay Off
Excerpt: "Plans by both Democratic Sen. Barack Obama and Republican Sen. John McCain aim to hold down costs and improve the quality of care. And both candidates propose to do so through the existing private health insurance system. The idea is that with more customers, insurers will compete for business by offering good policies and finding ways to make care more efficient and thus cheaper." (Morning Edition via National Public Radio)


[Opinion] Stronger 'Other Post-Employment Benefits' Laws Needed
Excerpt: "What haven't been mentioned anywhere are the structural deficiencies of most states' laws -- or the total absence of laws -- under which public employers must operate their OPEB plans. In most states, the only statutes that govern long-term benefits plans and investment portfolios were written years ago for pension funds only, before anybody even thought about OPEB as a separate and similar category." (Governing.com)



Links to Items on Executive Comp, Benefits in General

[Guidance Overview] Sixth Circuit Rejects Claim for Statutory Penalties
Excerpt: "This recent unpublished Sixth Circuit opinion provides a good overview of the limited scope of the disclosure requirements of 29 U.S.C. 1024(b)(4). The case follows existing Sixth Circuit precedent on the reach of the statute, so there are no real surprises. The prejudice requirement for imposition of the penalty, while again not novel, is formulated in a manner that is nonetheless of interest." (Health Plan Law blog by Attorney Roy F. Harmon III)


[Guidance Overview] Revisions to the Standard of Care Rule Book, Unit 1
Excerpt: "I have some work to do in updating the standard of review section of the ERISA Toolkit after the MetLife v. Glenn decision. As I develop these segments, I will post them as independent units. Ultimately they will be incorporated into the Toolkit page. Here's the first revision . . . ." (Health Plan Law blog by Attorney Roy F. Harmon III)


[Guidance Overview] Final Deadline for Section 409A Amendments
Excerpt: "Identifying and updating every deferred compensation arrangement subject to Section 409A is time-consuming. These amendments often require the consent of affected participants, the review and approval of the employer's board of directors (or compensation committee) and, for public companies, disclosure of the amendments in SEC filings. Because the amendments need to be completed by December 31, 2008 and because year-end board agendas will fill up quickly, employers need to complete their compliance initiatives now." (Pepper Hamilton LLP)


Fair Value Transfer: Measuring the Costs of Aggregate Long-Term Incentive Grant Practices (PDF)
22 pages. Excerpt: "We are pleased to present our fourth survey of aggregate fair value transfer ('FVT'), measuring the total value transferred from shareholders to employees through grants of long-term incentive compensation. Our research of 240 companies, spread across four broad industry sectors, revealed that aggregate FVT rates leveled off in 2006 and 2007 following previous declines from 2003 to 2005. In the following pages, we present a detailed explanation of our analysis, along with other key findings." (Frederic W. Cook & Co., Inc.)


Appellate Panel Backs Staples Options Cutoff for Fired Employee
Excerpt: "The Staples office supply company has been cleared of wrongdoing in refusing to allow an ex-employee the right to exercise his stock options after he was fired for cause. The 1st U.S. Circuit Court of Appeals upheld an earlier ruling by U.S. District Judge Morris E. Lasker of the U.S. District Court for the District of Massachusetts that Staples' cutoff of Alan S. Noonan's options rights was within its discretion. The company made the move because Noonan had been fired for lying on his company travel expense reports." (PLANSPONSOR.com; free registration required)


More Education Needed on Equity Compensation
Excerpt: "New research from Fidelity indicates equity compensation plans encourage employee loyalty and productivity, but many employees are not reaping the total rewards from this incentive due to lack of understanding. Overall, the study from Fidelity Stock Plan Services suggests 16% of the U.S. work force is enrolled in at least one type of stock plan, while 9% are enrolled in multiple plans." (PLANSPONSOR.com; free registration required)


DOL Helps Employers with Injured Veteran Issues
Excerpt: "The U.S. Department of Labor announced a new online resource to help employers in their employment of veterans with traumatic brain injury (TBI) and post-traumatic stress disorder (PTSD), two increasingly common battlefield conditions. Managed jointly by the Department of Labor's Office of Disability Employment Policy and Veterans' Employment and Training Service, in collaboration with other federal agencies, the America's Heroes at Work Web site (www.AmericasHeroesAtWork.gov) provides information about TBI and PTSD as well as tools and guidance on how to implement workplace accommodations and other services that benefit affected individuals." (PLANSPONSOR.com; free registration required)


40% of Stock Options Are Underwater
Excerpt: "Stock options are currently underwater at nearly 40% of Fortune 500 companies, compared with about one-third that had worthless options during the first quarter, according to data compiled for Financial Week by compensation consultants Steven Hall & Partners. And many of those options are well into the abyss: One in every 10 companies now has options that are more than 50% underwater." (Financial Week; free registration required)




Newly Posted Events
(Post Yours!)

DOL's Proposed 408(b)(2) Fee Disclosure Regulations
Nationwide on September 9, 2008
presented by American Society of Pension Professionals & Actuaries (ASPPA)

Investing IRAs and Qualified Plan Rollovers in Real Estate, Franchises, Start-Ups and Other Private Investments - Techniques and Risks
in California on September 23, 2008
presented by Lorman Education Services

The Consequences of Plan Disqualification
in Illinois on September 17, 2008
presented by ASPPA Benefits Council of Chicago

Who Gets In The White House? How State And National Public Policies Will Be Impacted
in Maryland on September 11, 2008
presented by Worldwide Employee Benefits Network -- Baltimore chapter



Newly Posted Press Releases
(Post Yours!)

Fees Are Now Top Reason Retirement Plan Sponsors Switch Providers
Spectrem Group



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