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September 2, 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] Solving Small Employers' GASB 45 Puzzle
Excerpt: "GASB 45 has already placed requirements on large government entities. Now smaller public employers face their own deadlines. GASB 45 poses a particular challenge to these entities because of the cost of valuing the liability and the potential size of the liability relative to their overall budget. This article outlines a sensible approach for these smaller public employers." (Milliman)

[Guidance Overview] TPA-Provided EOBs That Failed to Inform Former Employee of Claim Denial Did Not Comply with Claims Regulations
Excerpt: "EBIA Comment: To the extent it denies payment of submitted expenses, an EOB is an 'adverse benefit determination' triggering the plan's appeal procedures and requiring a detailed notification of adverse benefit determination. When an EOB fails to contain all of the required bells and whistles under ERISA's claims procedure regulations, a claimant may be allowed to go to court without completing a plan's claims procedures." (Employee Benefits Institute of America)

[Guidance Overview] HHS Proposes That Electronic Transaction Standards and Updated Code Sets Be in Place Between 2010 and 2011
Excerpt: "EBIA Comment: The electronic transaction standards and code sets, part of HIPAA's administrative simplification provisions, contain rules that must be followed when health plans, other covered entities, and their business associates conduct HIPAA-covered electronic transactions. It can be expected that updates and additions to these transaction standards and code sets will occur periodically as they (and related computer technology) are improved or modified to accommodate changes in the health care and health plan areas." (Employee Benefits Institute of America)

Group Purchasing Organizations Are Feeling Pressure of Higher Material Costs for Health Products
Excerpt: "One fact stood out as Modern Healthcare spoke with purchasing organizations in follow-up conversations to our annual Group Purchasing Survey: The increased cost of raw materials used in the production and transportation of medical products has trickled down the supply chain, forcing GPOs to work harder than ever this past year to hold down pricing on healthcare products." (; free registration required)

Long-Term Care Insurance and Tax Planning
Excerpt: "The number of baby boomers in or near retirement is rising, and so too is the demand for long-term care (LTC) insurance. Depending on the age of the insured, such coverage can be expensive, but fortunately for them, Congress and some states have provided income tax incentives for the purchase of certain LTC insurance policies -- called 'qualified' LTC contracts -- in IRC 7702B." (American Institute of Certified Public Accountants)

Employers Seek to Gain from Weight-Loss Surgery
Excerpt: "With six in 10 American adults overweight or obese, benefit managers are desperately looking for ways to save money on the long-term costs associated with obesity-related diseases such as heart failure, high blood pressure and diabetes." (Workforce Management; free registration required)

State Differences in Offer Rates and Enrollment in Employer-Sponsored Health Insurance Plans Requiring No Employee Contribution to the Premium Cost, 2005 (PDF)
6 pages. Excerpt: "This Statistical Brief presents estimates of offer rates and enrollment in employer-sponsored health insurance plans requiring no employee contribution in the ten most populous states in 2005. The availability of such plans varies considerably by state and firm size, among other factors. State variations from the national average are discussed." (U.S. Agency for Healthcare Research and Quality)

Marriage, Civil Unions, Domestic Partnerships and Health Insurance Benefits
Excerpt: "Employers, especially those that maintain multistate operations, are challenged now more than ever by the changing landscape of health benefits offered to same-sex couples. In light of these changes, employers are well-advised to consult with legal counsel regarding potential ERISA pre-emption of state laws, laws regarding employment discrimination and the administrative and implementation of benefits to same-sex partners." (The Metropolitan Corporate Counsel, Inc.)

Value-Based Health Insurance Design: Questions Adopters Should Ask (PDF)
12 pages. (Milliman)

[Opinion] Mother's Day - May 2008: Addendum to the 2007 Mother's Day Report - Medicare for All
4 page Microsoft document. (Older Women's League)

[Opinion] The Pioneering Massachusetts Program to Provide Health Insurance for All Citizens
Excerpt: "The number of uninsured has dropped -- Massachusetts now has the lowest rate in the nation -- and so have the number of those who turn to costly emergency rooms for routine care. And while the state has had to seek additional sources of revenue -- mainly because of the program's popularity -- the gains in the first 21 months suggest that the plan could become a model for universal health coverage for other states or the nation." (The New York Times; free registration required)

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Links to Items on Executive Comp, Benefits in General

[Guidance Overview] IRS's Retirement News for Employers, Special Edition, August 29, 2008 (PDF)
Excerpt: "The Treasury Department and IRS released Notice 2008-62 in advance of the forthcoming Code 457(f) proposed regulations to provide relief to schools as they begin their 2008/2009 school year. The use of a 12-month pay period that spans two calendar years for employees that actually only work for 9 or 10 months results in compensation earned in one year being deferred to a second year. The notice establishes criteria which, if met, excludes arrangements in which school employees are compensated on a 12-month pay period in lieu of the 9 or 10-month actual work period from being considered as deferred compensation and, therefore, not subject to the rules under Code 457(f) and 409A." (Internal Revenue Service)

[Guidance Overview] The Supreme Court Strikes Twice (but Misses the Mark) (PDF)
4 pages. Excerpt: "In its recently completed term, the Supreme Court issued two ERISA-related opinions that address questions left unanswered by earlier Supreme Court decisions and that are of critical importance for plan administration (and litigation that may result from fiduciary missteps). . . . If the Court's intention was to entertain us with a series of interesting (but not that interesting) and thought-provoking essays . . ., then it hit the target both times. If, on the other hand, the Court's goal was to supply clear and sensible guidance in an area that is generating more (not less) litigation, its aim was not true." (Adams and Reese LLP)

[Guidance Overview] 3rd Circuit Appeals Court Rules Death Benefits Not Protected Under ERISA
Excerpt: "Former employees of AT&T Corp. and Lucent Technologies who claimed they were cheated out of death benefits have lost their bid to revive an ERISA suit now that the 3rd U.S. Circuit Court of Appeals has ruled that the benefits were unvested and therefore could be terminated by Lucent." (South Florida Personal Injury Lawyers)

Cut Commuting Costs by Using Employer Benefits
Excerpt: "High cost of gasoline getting you down? Your employer may be willing to help. 'Companies are embracing techniques to reduce commuting time and expense,' said Mitch Barnes, principal at Mercer, a New York-based benefits consulting firm. 'It used to be that they did this to balance work-life issues. Now it's becoming more of an employee-driven economic issue.'" (Los Angeles Times)

Employers to Offer Benefits to Offset Higher Fuel Prices, New Study Shows
Excerpt: "Some employers plan to offer various benefits to employees to alleviate the impact of higher gasoline prices, including a compressed workweek and increased use of telecommuting, a new study has revealed. Within the next six months, 22 percent of employers plan to offer at least some of their employees the option of a four-day workweek, and 24 percent plan to allow more employees to telecommute, according to Mercer's 2008 Gas Price Impact SnapShot Survey." (Workforce Management; free registration required)

Social Security and Medicare and Americans' Confidence in Their Retirement Future
Excerpt: "Academics, policymakers and the media have been sounding alarms about shortfalls ahead for Social Security and Medicare for some time now. And many Americans have taken their warnings to heart, according to Watson Wyatt's 2007 U.S. Survey of Older Employees' Attitudes Toward Lump Sum and Annuity Distributions From Retirement Plans. Roughly 61 percent of older workers -- those 50 to 64 years old -- are not confident of receiving unreduced Medicare benefits, and 52 percent are not confident of receiving unreduced Social Security benefits, according to the survey." (Watson Wyatt Worldwide)

GM Offers More Buyouts - Extends Deal to 9,000 Salaried Workers
Excerpt: "About 9,000 workers have been offered the deal, according to a source familiar with the plan. If they all accepted, it would trim about 28 percent of GM's salaried work force and shave about 20 percent of its white-collar costs. The voluntary offers, which GM started making in recent weeks, come a month after GM said it wanted to trim its salaried work force expenses by more than 20 percent in the U.S. and Can.ada. That includes ending its salaried retirement health coverage for employees over 65 starting Jan. 1 and eliminating salaried raises through the end of 2009." (AP via The Detroit News)

Employee Ownership Update for August 29, 2008
NCEO Executive Director Corey Rosen discusses a study of 328 majority ESOP-owned companies finding that they have sales per employee that are 8.8% greater than comparable non-ESOP companies; a new NCEO issue brief on the state of broad-based employee equity plans; a new IRS analysis finding that the top 47,000 families in the U.S. own $1.196 trillion in public and private corporate equity; and a correction to a prior story on Appleton, Inc. (National Center for Employee Ownership)

NCEO Issues Issue Brief on the Future of Broad-Based Equity Plans
The NCEO presents excerpts from its revised Issue Brief on the Future of Broad-Based Equity Plans, written by NCEO Executive Director Corey Rosen. The issue brief looks at how the markets will react to stock option expensing, how expensing and greater concern about dilution are affecting broad-based equity plans, and the impact of broad-based plans on corporate performance. (National Center for Employee Ownership)

[Opinion] Renewing America's 'Contract with the Middle Class'
Excerpt: "[O]ver the last 25 years -- especially over the last decade -- what is good for America and what is good for much of corporate America have gotten way out of sync. Our current business culture too often emphasizes only short-term corporate profits and shareholder returns -- however and wherever they are generated -- and in the process, what is good for America is being pushed aside." (Los Angeles Times)

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401(k) Plan Fees: What a Plan Sponsor Must Know
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TPA Channel Manager - Retirement Services- East Coast
for MassMutual Financial Group
in AL, AR, CT, FL, GA, LA, MA, ME, MS, NC, NH, NY, RI, SC, TN, VA, VT

Pension Specialist
for The Seattle Times Company
in WA

401(k) Pension Administrator
for IPA Northeast, LLC
in NJ

DC / 401(k) Administrator
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