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October 27, 2008

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

Today's sponsor is BeneCom Associates, LLC

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Reenrollment is over. Now, is your SPD up-to-date?

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[Guidance Overview] Massachusetts Final Guidance on Minimum Creditable Coverage Requirements (PDF)
Excerpt: "Starting January 1, 2009, Massachusetts residents age 18 and older who do not have health coverage that satisfies certain minimum creditable coverage requirements may be subject to tax penalties that could exceed $900 per person. Massachusetts recently issued final regulations on these requirements, which may enable employers to establish that their plans satisfy the minimum creditable coverage standards through demonstrating actuarial equivalence. They also provide a delayed effective date for collectively bargained plans and liberalize rules for high deductible health plans offered in conjunction with health savings accounts." (Buck Consultants)

[Guidance Overview] Michelle's Law for Public Sector and Multiemployer Plans (PDF)
2 pages. Excerpt: "Plan sponsors should consider taking the following actions to be in compliance with Michelle's Law: Reviewing plan documents to determine if the plan needs to comply with the new law, Amending plan documents, enrollment materials and forms, and student certification forms to comply, Developing participant communications to inform them of the extended coverage requirement, and Determining if extended coverage may be provided on a tax-free basis and to impute income where required." (The Segal Group, Inc.)

[Guidance Overview] IRS Explains That Certain Legal Fees and Mileage Qualify as Medical Care Expenses, but Infant Formula Does Not
Excerpt: "The IRS has issued two information letters about medical care expenses. The first letter responds to a taxpayer who asked whether legal fees and mileage expenses to establish a guardianship for her husband (who has Alzheimer's disease) could be deducted as medical care expenses. . . . The second information letter responds to an individual who asked why a health FSA could not provide tax-free reimbursement for infant formula for the baby of a woman who could not breastfeed due to a double mastectomy. The letter explains that food, including infant formula, that satisfies nutritional requirements is a personal expenditure, not a medical care expense, and cannot be reimbursed on a tax-free basis under a health FSA." (Employee Benefits Institute of America)

[Guidance Overview] Retirement Plan Manager Breached Fiduciary Duty by Secretly Increasing Retirees' Medical Insurance Premiums
Excerpt: "A retirement plan manager breached its fiduciary duty under ERISA by increasing without notice to the plan's participants that their medical insurance premium was being increased the United States Court of Appeals ruled in Orth v. Wisconsin State Employees Union, No. 07-2778 (7th Cir. October 22, 2008)." (Kentucky Employment law Blog)

[Guidance Overview] Sixth Circuit Rejects Reverse Preemption Argument
Excerpt: "Brown v. Cassens, 2008 U.S. App. LEXIS 21990, *; 2008 FED App. 0385P (6th Cir.), (October 23, 2008) might not first appear as a likely choice for this board's case review, but it actually is quite pertinent. At the outset, note that the preemption under discussion here is not ERISA preemption, but preemption under the McCarran-Ferguson Act. One of the key issues before the Sixth Circuit in Cassens was whether the McCarran-Ferguson Act, 15U.S.C. § 1012 'reverse preempted' the plaintiffs' RICO claims." (

Survey Finds Cost Is Main Barrier to Offering Health Plans
Excerpt: "Many employers do not offer health care benefits to their employees because of the high cost, and a large percentage of employers are unwilling to contribute more than $50 a month for those benefits, according to a Mercer survey." (Workforce Management; free registration required)

Present Law Tax Treatment of the Cost of Health Care (PDF)
19 pages. Excerpt: "The House Committee on Ways and Means has scheduled a public hearing for October 29, 2008, on economic recovery, job creation, and investment in America. Among the issues the Committee will consider is the increase in the cost of health care. This document ,1 prepared by the staff of the Joint Committee on Taxation, provides a description of the rules relating to the taxation of health insurance and healthcare related expenses." (U.S. Congress, Joint Committee on Taxation)

Businesses Wary of Details in Obama Health Plan
Excerpt: "Though Mr. Obama has not released details [of his plan to provide affordable coverage for the uninsured], economists believe he might require large and medium companies to contribute as much as 6 percent of their payrolls." (The New York Times; free registration required)

[Opinion] Assigning Blame for Rising Medical Costs
Excerpt: "The conventional wisdom about skyrocketing healthcare costs tends to blame someone: patients who demand too much care; doctors who practice defensive medicine because they fear being sued; aging boomers, and finally, everyone's favorite, 'the insurance companies.' In fact, none of the above is the driving force behind the nation's spiraling health care bill, according to a brand new report from the Center for Studying Health System Change (HSC) titled 'High and Rising Health Care Costs: Demystifying Health Care Spending.'" (The Century Foundation)

[Opinion] Americans Scrimping on Medical Care
Excerpt: "The economic crisis is exposing further weaknesses in this country's health care system. With family finances strained, many Americans are skimping on medications, physician visits and preventive screening in order to pay other household bills. This could be dangerous to their health and costly for the economy if more Americans lose work time or end up in the hospital." (The New York Times; free registration required)

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Links to Items on Executive Comp, Benefits in General

[Guidance Overview] New Bicycle Commuter Benefit in Bailout Bill (PDF)
2 pages. Excerpt: "One provision of the financial bailout legislation enacted earlier this month creates a new tax-favored bicycle commuter benefit for employees. This new benefit may be offered by employers beginning in 2009." (Buck Consultants)

Employers Cut Perks, But Some May Go Too Far
Excerpt: "In a recent survey, the Chicago-based consulting firm Challenger, Gray and Christmas Inc. found that 20 percent of businesses already have cut employee perks, and another 10 percent are considering doing so. John Challenger, CEO of the firm, says that companies should consider some low-cost perks, such as allowing casual attire, early Friday dismissals or making the office pet-friendly." (The Hartford Courant)

Obama vs. McCain: It's About Your Money
Excerpt: "As the financial crisis has worsened and the economy has deteriorated, basic pocketbook issues -- taxes, jobs, retirement -- have taken center stage in the presidential race between Democrat Barack Obama and Republican John McCain. When the new president 'comes to town in January, he'll have to work on the short-term stimulus to the economy, and the longer-term plans may get deferred,' says Clint Stretch, managing principal of tax policy at Deloitte Tax. 'But the issue isn't the economic-recovery package and what the budget looks like in 2009, but what it will look like come 2012.'" (The Wall Street Journal)

Newly Posted Events
(Post Yours!)

18th Annual National Health Benefits Conference & Expo (HBCE)
in Florida on February 3, 2009
presented by Health Benefits Conference & Expo

ASPPA C-4 Preparation Series
Nationwide on October 28, 2008
presented by Amy L. Cavanaugh, CPC

Seminar -- Save the Date!
in Connecticut on December 3, 2008
presented by National Institute of Pension Administrators-CT Chapter

Newly Posted Press Releases
(Post Yours!)

The Flowers Group Announces the Launch of The Perks Company
Flowers Group

"Bender's Federal Income Taxation of Retirement Plans” Released by LexisNexis® Matthew Bender®
LexisNexis Matthew Bender

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Pension Administrator
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in CA

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for Hewitt Associates
in CT, FL, GA, IL, NJ

401(k) Pension Administrator for DC Balance Forward Plans
for Ingham Retirement Group
in FL, SC

Retirement Plan Administrator
for Growing Employee Benefits Consulting Firm
in NJ

Relationship Manager
for Premiere Qualified Plan Provider
in CA

ERISA Attorney
for O'Neil, Cannon, Hollman, DeJong S.C.
in WI

Participant Services Representative
for The Standard
in TX

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