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November 3, 2008

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

Today's sponsor is Health Benefits Conference & Expo (HBCE)

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Banner ad for Health Benefits Conference & Expo (HBCE)

Nat'l Health Benefits Conference & Expo (HBCE), Feb. 3-4, Tampa, FL

Sessions by: Intel, Corning, Toyota, TECO Energy, State of Florida, Burger King, SAS, Gulf Power/Southern Company, Pinellas County Schools, Univ. of Pittsburgh Medical Center, U.S. Xpress, PSEG, Mayo Clinic, University of Rochester, Pinellas County, CEO Roundtable on Cancer, City of Clearwater, C-Change...and more, including the Impact of the Election on Health Benefits. Best Value in Health Benefits Continuing Education (HBCE) - highest quality and registration only $295 - $345. SHRM credits.

[Guidance Overview] ERISA Does Not Require Claimants to Exhaust All Issues Before Filing Suit
Excerpt: "EBIA Comment: The majority's conclusion that issue exhaustion does not apply in the ERISA context is consistent with other courts that have considered the issue. But the practical lesson may be one that the majority opinion emphasizes, that procedural errors in a plan's handling of a benefits denial can support a claimant's request to have the denial reviewed on appeal. The plan in this case might have been better served by simply providing the claimant an appeal-level determination -- thereby avoiding gray-area judgments about whether the claimant's objections were 'procedural' or 'substantive' -- and creating a plan decision on appeal to which a reviewing court likely would have been required to give deference." (Employee Benefits Institute of America)

[Guidance Overview] CMS Posts Group Health Plan User Guide on Its MSP Mandatory Reporting Website
Excerpt: "EBIA Comment: CMS has indicated that it expects to issue revised versions of the User Guide from time to time. Consequently, it encourages ['responsible reporting entities'] to check the website often for the latest version of the guide and other important information. Note: Although the User Guide incorporates portions of other guidance on the website (e.g., information related to the small employer exception and the statutory language), these items (and other items that have not been incorporated in the User Guide) still appear on the website. Thus, while the User Guide seems to be the best place to start learning about the reporting process, RREs may need to consult other items of guidance as well." (Employee Benefits Institute of America)

Few Options Remain When Job-Based Health Insurance Disappears
Excerpt: "The Indiana insurance pool is one of the limited possibilities for people who lose their jobs and are searching for health insurance. It's a problem more Americans will face as more people lose jobs in the economic downturn. ''There are not adequate options,'' said Cheryl Fish-Parcham, deputy director of health policy at the nonprofit Families USA, which advocates health care reform. ''People may face prices that are totally unaffordable, and they often can't get the same benefits they had before.'" (AP via The New York Times; free registration required)

When Does Improving Health Raise GDP?
Excerpt: "We assess quantitatively the effect of exogenous health improvements on output per capita. Our simulation model allows for a direct effect of health on worker productivity, as well as indirect effects that run through schooling, the size and age-structure of the population, capital accumulation, and crowding of fixed natural resources. . . . We find that the effects of health improvements on income per capita are substantially lower than those that are often quoted by policy-makers, and may not emerge at all for three decades or more after the initial improvement in health." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve fulltext)

Unhealthy Insurance Markets: Search Frictions and the Cost and Quality of Health Insurance
Excerpt: "Health insurance is a complex, multi-attribute product and this creates search frictions that can distort market outcomes. We study the effect of frictions in the market for employer based health insurance. We find that frictions are most severe in the 'fully insured' part of the group health insurance market and we estimate that frictions in this market segment cause a quarter of the consumer surplus to shift from policy-holders to insurers (a transfer of 32.5 billion dollars in 1997). Our analysis also suggests that frictions in insurance markets also reduce incentives to invest in future health." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve fulltext)

Number of American Children on Medication Jumps
Excerpt: "The number of children who take medication for chronic diseases has jumped dramatically, another troubling sign that many of the youngest Americans are struggling with obesity, doctors say. . . . Doctors also saw big increases in prescriptions for high cholesterol, asthma and attention deficit and hyperactivity. There was smaller growth for drugs for depression and high blood pressure." (USA TODAY)

Employees Skimping on Health Care Feared in Tough Times
Excerpt: "Concerned that some employees may be scrimping on essential health care during the current economic downturn, experts advise employers to step up benefit communications to emphasize the importance of getting preventive screenings and taking prescription medications for chronic conditions. They warn that employees who forgo necessary care now could end up costing their employers more later in both additional health care expenditures and increased absenteeism should a serious health threat go untreated or a chronic condition get worse. Meanwhile, some employers are using incentives to ensure that their employees get the care they need at low or no cost." (Business Insurance)

In Arizona, a Proposition That Could Change the Health Care Debate
Excerpt: "On Tuesday Arizonans will vote on a ballot initiative that could resonate in the national debate over the future of health care. Proposition 101, the Freedom of Choice in Health Care Act, has set off a storm of opposition, though its language hardly seems controversial. It reads that 'no law shall be passed that restricts a person's freedom of choice of private heath care systems or private plans of any type.' Also: 'No law shall interfere with a person's right to pay directly for lawful medical services . . .'" (The Wall Street Journal)

An Innovative Approach to Health Care - Pay More
Excerpt: "[A] coal producer says it has found an unconventional way to cut health costs: Seek out the nation's best care and give workers incentives to use it. About two-thirds of operations have proven to be cheaper at better-rated hospitals out of state. Even when the price was higher, the Linthicum Heights, Maryland-based company saved money by reducing misdiagnoses, complications and repeat procedures." (Attorney B. Janell Grenier via

Reshaping Retiree Health Benefits in a More Sustainable Mold
Excerpt: "Instead of dropping their coverage, some employers are trying Emeriti Retirement Health Solutions and Retiree Health Access, which aim to keep costs down and release the employers from having to report the benefits as financial liabilities. The first approach focuses on a trust called a Voluntary Employees' Beneficiary Association, and the second approach leverages the combined size of many employers' retiree populations." (Employee Benefit News; free registration required)

State Governments Have the Greatest Incentive to Offer True Group Long-Term Care (PDF)
1 page. (Milliman)

Heart Hospital in India Performing Surgery for $6,000; Cost Is $100,000 in U.S.
Excerpt: "Recent discussions in health reform circles have pinned great hopes on the prospect of innovation as the solution to the high-cost, inadequate-quality U.S. health system. But U.S. health care institutions - insurers, providers, and specialists - have ceded leadership in innovation to Indian hospitals such as Care Hospital in Hyderabad and the Fortis Hospitals around New Delhi, which have U.S.-trained doctors and can perform open heart surgery for $6,000 (compared to $100,000 in the United States). The Indian success is a window into America's stalemate with inflating costs and stagnant innovation." (Social Science Research Network)

Connecticut Employers Face Mandate to Cover Kids to Age 26
Excerpt: "Many area employers will be hit with higher health care costs next year due to a new state law that requires them to extend health benefits to covered employees' children until they reach age 26. Effective Jan. 1, children under their parents' group health insurance will remain eligible until that age even if they are not enrolled in college as long as they don't marry, leave the state or obtain their own health coverage. The state legislature originally passed the law in 2007 and revised it earlier this year." (Hartford Business Journal)

[Opinion] Waste in the U.S. Health Care System (PDF)
3 pages. Excerpt: "That a first-class health system can be run for less than the United States spends -- or a better system for what we actually spend -- is undeniable. But what, really, do we mean by waste? Do we have the means to curtail it? How fast can savings be realized?" (The New England Journal of Medicine)

[Opinion] Gouging Women on Health Insurance Premiums
Excerpt: "The inequities in the health insurance market were described in a recent report by the National Women's Law Center and in an article by Robert Pear in The Times. If women are covered by an employer's group policy, they are usually protected by federal antidiscrimination laws. The states, however, regulate the market for individually bought policies, and most offer women few protections against discrimination. New York is a notable exception." (The New York Times; free registration required)

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Links to Items on Executive Comp, Benefits in General

[Guidance Overview] Recent Developments Related to the Emergency Economic Stabilization Act of 2008 (PDF)
13 pages. Excerpt: "On October 6, 2008, Seyfarth Shaw LLP provided a Management Alert to clients and friends of the firm detailing generally the provisions of the Act (the 'Original Alert'). Since such time, there have been a number of developments that have reshaped or clarified the way in which certain provisions of the Act will be implemented. For your convenience, set forth below is a summary of these recent developments and this Alert acts as a supplement to the Original Alert." (Seyfarth Shaw LLP)

60 Minutes Report on USERRA
Excerpt: "A primary focus was on USERRA's costs to employers given the frequent and long tours of active duty that many Reservists now face in Iraq. There's the normal share of simply bad employers, but also an example of an employer that continually went beyond the call of duty in supporting its employees who were called up. That employer, while continuing that support, was frank about the growing burdens on losing its employees so frequently and for unknown periods of time." (Workplace Prof Blog)

Federal Labor Law Compliance by Size of Company
Excerpt: "Companies are required to comply with Federal, State and Local Labor Laws. Our most recent 'Human Capital' show discussed labor law compliance by size of company. I thought you might want to have this handy list of labor legislation by company size in case you were wondering what regulations applied to your business." (Birchtree-HR, LLC)

[Opinion] Suddenly it Seems to be All TARP – All the Time
Excerpt: "Now, flooding the press are reports of outrage and threats of Congressional action over the possibility of financial institutions paying bonuses to employees shortly after accepting TARP funding. The Wall Street Journal alone had three separate articles on this topic this morning. Congress' renewed focus on executive compensation suggests that it the limits imposed by TARP are only the beginning of its legislative meddling in this area. Next stop: the rest of corporate America. Now THAT is really scary. Obviously, we will have to monitor the political developments very carefully. However, in the meantime, among the important issues we are facing under TARP are the following . . . ." (Winston & Strawn LLP)

Newly Posted Events
(Post Yours!)

5th HR Shared Services Summit
in Georgia on December 8, 2008
presented by IQPC

Debit Card Programs: Legal, Administrative, and Marketplace Update
Nationwide on October 30, 2008
presented by EBIA / Thomson Reuters

Health Benefits Laws Compliance in Texas - Webcast
Nationwide on November 6, 2008
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Newly Posted Press Releases
(Post Yours!)

PBGC Announces Maximum Insurance Benefit for 2009
Pension Benefit Guaranty Corporation (PBGC)

Employers “Vote” on Presidential Candidates’ Health Care Platforms: Prefer Middle Ground Between the Two Approaches
Buck Consultants, an ACS Company

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DC Plan Administrator
for Campbell Albrecht
in CA

DC / 401(k) Administrator
for TPA Company
in OK

Health and Welfare Senior Consultant
for Towers Perrin
in NY

Health and Welfare Senior Actuarial Consultant
for Towers Perrin
in NY

Data Management Analyst
for MassMutual Financial Group
in MA

Virtual Group Medical Specialist / Consultant
for Healthy Halo Insurance Services

Account Manager/Sales Representative
for Westchester Risk Management/Benefits Consulting Firm
in NY

Actuarial Consultant
for Hewitt Associates
in IL, MA, NC, OH, TX

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