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September 30, 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] Text of IRS Notice 2008-82: Use It or Lose It HSA Rule Inapplicable to Reservists Called to Active Duty (PDF)
7 pages. The Heroes Earnings Assistance and Relief Tax Act of 2008, enacted June 17, 2008, provided a special rule allowing 'qualified reservist distributions' (QRDs) of unused amounts in a health FSA to reservists called to active duty. Under the existing rules for health FSAs, distributions could only be made to reimburse substantiated medical expenses, and any funds left unspent at the end of the plan year would be lost. This special rule allows reservists to make a distribution before leaving for active duty so as not to lose those savings. (Internal Revenue Service)

[Guidance Overview] 9th Circuit Decides No Issue Exhaustion in ERISA
Excerpt: "The 9th Circuit distinguishes between issue exhaustion and remedy exhaustion, and decided this morning that ERISA requires the latter but not the former. Thus, a participant's failure to argue reasons in an internal appeal does not prevent her or him from arguing [those] reasons before the District Court." (Alaska Employment Law)

[Guidance Overview] CMS Provides Additional Medicare Secondary Payer Mandatory Reporting Guidance on Website
Excerpt: "Beginning January 1, 2009, insurers or TPAs of group health plans (and plan administrators or fiduciaries of self-insured and self-administered group health plans) will be required to gather and report information from plan sponsors and plan participants to help CMS identify situations in which the plans are (or have been) primary to Medicare. In August 2008, CMS posted information on its website regarding these new mandatory reporting requirements, which arise under Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 . . . ." (Employee Benefits Institute of America)

[Guidance Overview] Treasury Dept. and IRS 2008-2009 Priority Guidance Plan Includes Guidance for Cafeteria and Health Plans
Excerpt: "EBIA Comment: This Priority Guidance Plan covers the twelve-month period ending June 30, 2009, but we are hoping to see final cafeteria plan regulations by the end of 2008. Guidance on GINA will also be welcome as employers, administrators, and insurers begin to familiarize themselves with the requirements of this new law and to consider its impact." (Employee Benefits Institute of America)

Important Information Workers Need to Know to Protect their Health Coverage after Job Loss (PDF)
Excerpt: "When facing job loss or a reduction in hours, workers need to know their options ahead of time to prevent loss of health coverage. There may be several options available to individuals who are losing their health coverage when they lose their jobs . . . ." (U.S. Employee Benefits Security Administration)

Congress OKs Extending Health Cover for Ill Students
Excerpt: "The measure would allow college students to retain coverage for up to 12 months after they take a leave of absence. It was modeled after a New Hampshire law named for a student who continued her studies while battling cancer to maintain health insurance coverage." (Workforce Management; free registration required)

Forecasting the Cost of U.S. Health Care in 2040
Excerpt: "[I]ncome expenditures on health care in the U.S. are likely to rise from a current level of about 15 percent to about 29 percent of GDP in 2040." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve fulltext)

Paying Workers to Go Abroad for Health Care
Excerpt: "In an effort to control rising costs, a small but growing number of insurers and employers are giving people the choice to seek treatment in other countries, a practice known as medical tourism. Until recently, most Americans who traveled abroad for medical care were uninsured, or were seeking procedures not covered by insurance, such as cosmetic dentistry or aesthetic surgery. Now, a handful of plans are beginning to cover treatment overseas for heart surgery, hip and knee replacements and other major surgical procedures." (The Wall Street Journal)

Employees Will Open HSAs - if Their Bosses Kick In
Excerpt: "UnitedHealthcare came out with a survey of its customers . . . that showed 86% of people opened an HSA if their employer offered up a contribution. That's compared to 27% when the employers kept their purse-strings tight, according to United. About two thirds of employers contribute to the accounts." (The Wall Street Journal)

Problems Paying Medical Bills Increase for U.S. Families, 2003-2007
Excerpt: "About 57 million Americans were in families with problems paying medical bills in 2007 -- an increase of 14 million people since 2003, according to a new national study by the Center for Studying Health System Change (HSC). Problems paying medical bills increased for both nonelderly insured and uninsured people. Although the rate of medical bill problems is much higher for uninsured people, most people with medical bill problems -- 42.5 million -- had insurance coverage." (Center for Studying Health System Change)

Congress Passes Mental Health Parity Bills, Final Enactment May Be Near
Excerpt: "The House and Senate each passed mental health parity legislation, bringing months of negotiation to a near close. While the legislation would expand current parity rules, employers could define the mental health and substance abuse conditions covered by their plans and use medical management techniques. States could establish stricter rules for insured health plans. Although House and Senate provisions are identical, because they are contained in different bills, it's not clear yet how the two will be reconciled." (Mercer LLC)

Update: Employer Health Plans Face Medicare Secondary Payer Reporting Requirements
Excerpt: "Starting in 2009, group health plans must report information about plan participants to the Centers for Medicare and Medicaid Services. To enforce Medicare secondary payer (MSP) rules, CMS will use the new reports to determine who has dual coverage. The MSP program makes employer group health plans the primary payers of claims from active employees and family members also covered by Medicare." (Mercer LLC)

House Panel Mulls Bill to Bar Retiree Health Cuts
Excerpt: "Senior and employer groups squared off at a House committee hearing over a bill to bar employers from reducing or eliminating retiree health benefits for current retirees. We want 'companies to live up to the promises they made,' testified C. William Jones of ProtectSeniors.Org, which is pressing for the bill's enactment." (Mercer LLC)

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Complete Benefits Law Guidance from Law Journal Press

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Links to Items on Executive Comp, Benefits in General

[Guidance Overview] Considerations for Accelerating Deferrals Under 409A Transition Rules
Excerpt: "As companies enter the final stage of bringing nonqualified deferred compensation arrangements into compliance with Section 409A of the Internal Revenue Code, several transition opportunities expiring at the end of 2008 merit attention. One interesting opportunity is the ability to accelerate payment of deferred compensation into 2009. This option may deserve close consideration, given the upcoming presidential election and the potential for higher individual tax rates under a new administration. This Update reviews this issue and addresses factors to consider in deciding a strategy." (Mercer LLC)

Curbs on Foreign-Paid Nonqualified Deferred Compensation Pass Senate; Enactment May Be Near
Excerpt: "A Senate-passed tax 'extenders' package would impose harsh tax rules on nonqualified deferred compensation (NQDC) paid by some foreign companies to US taxpayers, generally effective for services performed after 2008. The bill would cover NQDC paid by a foreign company unless substantially all of its income is effectively connected with a US trade or business or subject to a comprehensive foreign income tax. US taxpayers would be taxed when the NQDC vests, even if payments are not yet due. Though the House favors an extenders bill that offsets tax breaks, the NQDC curbs may yet pass Congress." (Mercer LLC)

What Happens When We Forget To Diversify
Excerpt: "When you diversify, all you're really doing is hedging against a future unknown. It's like using crutches after you break your leg. You have to distribute your weight just right to keep from falling or putting too much pressure on any one side of your body. The same is true with your money. You have to be strategic about accumulating cash, debt and assets. If the distribution of any one of those areas is way off, you can fall." (The Washington Post; free registration required)

Fact Sheet: Your Employer's Bankrup.tcy - How It Affects Your Employee Benefits (PDF)
Excerpt: "This information sheet focuses on bankrup.tcy's effect on pension plans and group health plans." (U.S. Employee Benefits Security Administration)

New Jersey Pension Bill Signed Into Law
Excerpt: "Legislation aimed at reducing the state's pension and health-care costs in an effort to save both taxpayer money and the benefits system on which public workers rely was signed into law Monday. The bipartisan Public Employee Pension and Benefits Reform Act of 2008 . . . is projected to save the state $150 million in benefits expenses over the next 14 years." (Asbury Park Press)

Newly Posted Events
(Post Yours!)

Fiduciary Education Seminar - "Getting It Right – Know Your Fiduciary Responsibilities"
in Pennsylvania on October 30, 2008
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Newly Posted Press Releases
(Post Yours!)

PBGC Assumes Pension Plan Of Marcal Paper Mills Inc.
Pension Benefit Guaranty Corporation (PBGC)

ExpertPlan Enters Defined Benefit Market with “ExpertPlan OnePersonPlus®"

Treasury Releases New Guidance Helping Soldiers Keep Health FSAs Funds
U.S. Treasury Department

The Economy's Latest Victim: Employee Retirement Savings, Says Aon Consulting
Aon Consulting

Introducing the New Payden/Kravitz Cash Balance Mutual Fund

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Project Manager Health & Welfare Vendor Management
for Discover Financial Services
in IL

EBS Associate Actuary
for EBS Benefit Solutions (an Excellus Company)
in NY

Account Manager
for The Standard
in MA

Employee Benefits and Executive Compensation Attorney
for Leonard, Street and Deinard, P.A.
in MN

for Transamerica Life Insurance Company, an AEGON company
in IA

Director, Plan Administration
for Public Service Pensions Board of the Cayman Islands

Development Analyst
for Diversified Investment Advisors, Inc.
in MA

Manager, Contracts
for Prudential
in NJ

Assistant Director - Medical Claims
for 1199SEIU Family of Funds
in NY

COBRA Processor/Administrator
for A Progressive Growing Organization in Northwest Suburbs Of Chicago
in IL

Retirement Plan Administrator
for Creative Retirement Solutions, LLC
in CA

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