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November 10, 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)

(Click on company name or banner to learn more.)
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] No Penalties for Late COBRA Notice Where Employer Acted in Good Faith and Qualified Beneficiary Was Not Prejudiced
Excerpt: "EBIA Comment: While it is difficult to reconcile the reported cases in this area, we think other judges might have weighed the equities differently and awarded some penalty. We also think that certain courts might have been more disapproving of the employer's lump-sum premium demand. As a practical matter, a qualified beneficiary may be unable to afford the large initial premium occasioned by an election notice that is very late . . . . For this reason, when correcting very late notice failures, employers might consider offering some kind of payment plan to the qualified beneficiary. Nevertheless, the main lesson is that notice failures should be corrected promptly when discovered; in the event of a later lawsuit, good-faith correction efforts can only reflect favorably on the plan and employer." (Employee Benefits Institute of America)

[Guidance Overview] No Remedy Under ERISA for Employer's Failure to Mail Life Insurance Conversion Forms to Correct Address
Excerpt: "EBIA Comment: We continue to see a steady trickle of fiduciary breach cases addressing alleged failures by employers to properly notify participants of their conversion rights under ERISA life insurance plans. In many of these cases -- including this one -- the courts conclude that ERISA does not provide a remedy. But because the exercise of conversion rights typically is time-sensitive, employers and insurers that provide conversion notices should nonetheless ensure that any communications describing conversion rights are timely, accurate, complete, and sent to the correct address." (Employee Benefits Institute of America)

[Guidance Overview] UK Employment Alert: The Necessity of Time Off for Dependant Care
Excerpt: "The key question in deciding whether an employee can take time off for dependants is therefore whether the time off is 'necessary'. In deciding what is necessary, an Employment Tribunal will look at all the circumstances, including the time between the employee learning of the disruption and the date of the disruption, the availability of alternatives, the nature of the disruption and finance." (McDermott Will & Emery)

The Mini-Medical Market Offers Minor Benefits, Major Questions
Excerpt: "Employers continue to search for relief from higher health care costs. Medical premium trends continue at or near double digits and many companies have found the limits of cost-shifting. Participation continues to erode. The number of employers providing coverage declines annually. Some say the mini-medical and limited-benefit medical market offers both employers and employees refuge - replacing comprehensive coverage with a limited-benefit arrangement. Others caution against such an application." (Employee Benefit Advisor; free registration required)

Rising Use of Medical Imaging Raises Costs and Health Concerns
Excerpt: "Medical advances such as CT scans that offer doctors highly detailed images of the body's inner workings are overused, increasing costs and patients' exposure to radiation, according to a new study. The provocative conclusion by a University of California-San Francisco research team challenges the more-is-better conventional wisdom of many consumers and their doctors. The use of innovative imaging tests like computed tomography (CT) and magnetic resonance imaging (MRI) nearly doubled over the past decade, rising from 260 to 478 tests per thousand patients, according to research . . . . The average annual imaging cost per patient also doubled, from $229 to $443, the team found." (Contra Costa Times)

Some G.M. Retirees Are in a Health Care Squeeze
Excerpt: "To conserve its dwindling cash reserves, G.M. is eliminating lifetime health care coverage for its legions of retirees at the end of this year . . . . In fact, paying the cost of hospital stays, surgeries and expensive drugs for retirees, a group now larger than G.M.'s active work force, is a major reason the company's financial woes are so great. G.M. says it spent $4.6 billion in 2007 on health care for its one million employees and retirees and their dependents. Many retirees say they are aware of the burden these costs represent to the company, so they do not blame G.M. for cutting them off. Even so, they lament the demise of such a valuable perk." (The New York Times; free registration required)

With HMO Rate Increases Higher Than Those of PPOs and POSs, Plan Sponsors Switching to Other Health Care Options
Excerpt: "An accelerating trend . . . is a shift away from the once economical health maintenance organizations (HMOs) to now cheaper preferred provider organizations (PPOs). This year, Hewitt pegs the average per person HMO cost for large companies at $9,117, up from $8,442 in 2007. The hybrid point of service (POS) plans will rise to $9,480 from $8,986. PPOs will be the least expensive, at $8,491, from $8,048. At the other end of the scale are traditional indemnity plans, which Hewitt says will average $9,900, from $9,296." (Treasury & Risk)

Wellness Programs Lead to Savings - Money and Lives
Excerpt: "'The evidence has been out there for at least 25 years in the corporate world that the most economical way to manage health-care costs is through the prevention of negative health conditions,' said author and former Olympic runner Jeff Galloway. Corporate executives are making the connection between healthy employees and healthy workplaces. They are now turning their attention to wellness and early detection." (Atlanta Business Chronicle via; free registration required)

Book: The Health Care Delivery System: A Blueprint for Reform
Excerpt: "This book offers recommendations and pathways to systematically promote quality, efficiency, patient-centeredness, and other salient characteristics of a high-performing health system. The blueprint it lays out is a vision of how different parts of the system should be structured and how they should function. Even more specifically, it proposes policies that the next administration and Congress could enact over the next five years to improve our health system. [Links to the full book and to individual chapters are on the target page.]" (Center for American Progress)

State High Risk Pools for Health Coverage Information Page, September 2008
Excerpt: "The NCSL Health Committee took an in-depth look at this topic in April 2008, inviting two national experts to describe latest activities and future proposals. The description and speakers' resources are linked [on the target page]. (National Conference of State Legislatures)

Wisconsin Commissioner of Insurance Welcomes the Passage of H.R. 2851, Known As 'Michelle's Law'
Excerpt: "Wisconsin has had it's own version of Michelle's law since Wisconsin Act 36 was signed by Governor Jim Doyle in November of 2007. While both laws offered similar language, Wisconsin Act 36 did not cover self-funded employer health plans, also known as ERISA plans, because of pre-emption by federal law. Enactment of Michelle's law at the federal level extends this coverage to those ERISA plans." (The Daily Kenoshan)

[Opinion] Health Reform in a New Era: Options for the Obama Administration
Excerpt: "While President-elect Obama has set forth the substance of his health reform agenda, he has not yet revealed his overarching strategy or precisely when and how he would move on health reform, but there are a number of courses of action open to his Administration." (The Commonwealth Fund)

[Opinion] With Democratic Win, What Happens Now In Health Care?
Excerpt: "Mr. Obama's policy statements during the election campaign provide a guide to the direction of employee benefits legislation in the next few years, and the [target page] provides some suggestions for the future in health care." (Wolters Kluwer)

Sponsored by: WorldatWork

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Banner ad for WorldatWork

WorldatWork publications in the BenefitsLink Bookstore

WorldatWork, a not-for-profit professional association, is a leading publisher of compensation, benefits and total rewards information. With a portfolio of books, reports, survey briefs, booklets and online learning programs, WorldatWork creates, markets and distributes publications that are critical to improved organizational performance. WorldatWork has contributed to the education and development of business professionals worldwide since 1955.

(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)

Links to Items on Executive Comp, Benefits in General

[Guidance Overview] Section 409A: International Implications
Excerpt: "Section 409A does not contain a general exemption for foreign plans. Failure to bring these plans into compliance by December 31, 2008, means that participants who are subject to tax in the U.S. (i.e., U.S. citizens and residents working abroad and certain nonresidents working in the U.S.) may be subject to substantial Section 409A penalties. Under Section 409A, there are limited, specific exceptions that allow individuals to accrue benefits under foreign plans that do not meet the Section 409A requirements. Where no exception applies, however, companies need to amend their foreign plans to avoid the penalties under 409A for those subject to tax in the U.S." (Jones Day)

U.S. Treasury Subjects AIG to Executive Pay Curbs
Excerpt: "The U.S. Treasury said on Monday its $40 billion investment in American International Group Inc. will subject the firm to the same curbs on executive bonuses and golden parachutes as other financial institutions that receive government capital injections." (Reuters via Business Insurance)

Paper Company Executive Loses Severance Benefit Fight
Excerpt: "A federal appellate court has cleared a paper company of wrongdoing in denying severance benefits of about $300,000 from a top hat plan to its former president over allegations he was disloyal to the firm during a business deal. The 6th U.S. Circuit Court of Appeals upheld a lower court decision against plaintiff Richard Whitescarver who was fired in 2003 'for cause' -- a determination Sabin Robbins Paper Co. said precluded him from receiving benefits from its Supplemental Executive Retirement Plan." (; free registration required)

A New Political Environment for Labor and Employment Issues (PDF)
4 pages. There are brief comments on Pay Discrimination, Executive Compensation, Pension Protection, and 401(k) Fiduciary Liabilities. (Morgan, Lewis & Bockius LLP)

Outlook for the 111th Congress & President-Elect Barack Obama (PDF)
35 pages. See pages 4, 18, 23, and 32 for items on taxes, employee benefits, pensions, health care, and Health Information Technology (HIT) Privacy Legislation. (Alston & Bird LLP)

[Opinion] Election Produces Little Change So Far on the Hill
Excerpt: "Despite the undeniable impact the 'change' element had in the Presidential election, as BNA reported this morning, the leadership of the key Congressional committees with jurisdiction over employee benefit matters in both the House and Senate will likely remain the same next year. At least in terms of benefits-related issues, then, it would appear that we can pretty much know what to expect." (Baker & Daniels)

[Opinion] The Real Mandate Is to Bridge the Wealth Gap
Excerpt: "THE new president will have a clear mandate to redress economic inequality. During the campaign, John McCain made sure that voters clearly heard Barack Obama say 'spread the wealth around,' and they elected him anyway. Indeed, there has been a significant, decades-long trend toward greater inequality that needs to be corrected. The president-elect needs to seize the opportunity and to do something really effective to prevent inequality from getting much worse." (Robert J. Shiller via The New York Times; free registration required)

Newly Posted Events
(Post Yours!)

403(b) plan documents on
Nationwide on November 25, 2008
presented by

Are You Ready For EGTRRA Restatements?
Nationwide on November 12, 2008
presented by

Learn how to use's plan document software
Nationwide on November 11, 2008
presented by

Plan Design, Testing Techniques and Cross-Tested Plans
in Connecticut on December 3, 2008
presented by National Institute of Pension Administrators-CT Chapter

Year End Distribution Issues and 1099R Reporting Webcast
Nationwide on December 2, 2008
presented by National Institute of Pension Administrators

Newly Posted Press Releases
(Post Yours!)

Newport Appoints Two New Regional Directors
Newport Group, The

U.S. Labor Department Sues To Appoint Independent Fiduciaries To Protect Assets Of Abandoned 401(k) Plans Of Bay Area Companies
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Aon Consulting Survey Reveals Economy's Impact on Pension Funding and Expense
Aon Consulting

Metlife Resources Releases 403(b) Specimen Plan Document

The Retirement Advantage, Inc. Acquires DML Benefits, LLC.
The Retirement Advantage (TRA)

ASPPA Sees Opportunity in Change
American Society of Pension Professionals & Actuaries (ASPPA)

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OmniPlus Consultants
for Chesapeake Benefit Partners

Client Relationship Manager - Chicago, Minneapolis or St. Louis
for Transamerica Retirement Services
in IL, MN, MO

Business Development Advisor - Insurance Plans
in VA

Director of Benefits
for Weill Cornell Medical College
in NY

Senior Retirement Plan Coordinator
for Benefits Administrators, LLC
in KY

Consultant, Retirement Plans
for Cammack LaRhette Consulting
in NY

Account Manager, Retirement Plans
for Cammack LaRhette Consulting
in NY

Plan Consultant Opportunity
for Weaver Partners, Inc.

Attorney: ERISA and Employee Benefit Funds
for Blitman & King LLP
in NY

Retirement Services Consultant
for Administaff
in TX

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