Interested in writing a Benefits & Compensation Digest Web Exclusive article? We'd like to hear from you.
If you have trouble opening any of these articles, please download the latest version of Adobe Reader.
Six Steps for Cutting Spending for Multiemployer Self-Funded Health Plansby David J. GibsonBased on the analysis of multiemployer self-funded health plans across multiple markets, the author estimates that these plans spend approximately $50 per member per month more than is appropriate to provide high-quality medical services. This breaks down as $10 for ambulatory diagnostic and therapeutic services, $20 for inpatient services and $20 for provider cost shifting to the health plan. This $50 represents a 27% overpayment for health care services within the typical reactively managed preferred provider organization (PPO) or self-funded health plan. This article discusses this issue and provides six recommendations that directly address the overpayment problem.
Physicians and Pharmacists Collaborate at Workplace to Improve Valueby Sharon Glave Frazee, Raymond Fabius, Pamela Ryan,Rochelle Broome and James ManfredThe burden of prescription drug costs to employers has risen precipitously over the past few decades, without evidence that it has produced better health outcomes. This has led employers, insurers, benefit plan consulting companies and the health care industry at large to use benefit changes to promote effective, lower cost options. This article focuses on one illustrative area, antibiotic prescribing, and describes an approach that improves the value of prescription drug spending through collaboration between physicians and pharmacists dedicated to serving patients at a workplace health center. This collaboration can effect real change in prescribing behaviors of physicians to optimize the quality and value of prescription drug dollars.Moving beyond pharmacy benefit management to pharmacy clinical leadership can change prescribing patterns to improve health care quality and clinical outcomes, manage costs and align health care delivery to best serve an employer’s community.
Automatic Contribution Arrangements in Government DC Plans by John J. (Jamie) KalamaridesAutomatic contribution arrangements can be one step in a sound retirement plan. How does one know if an automatic contribution arrangement is right for a particular plan? This article explains automatic contribution arrangements and offers key points to consider when determining if such an arrangement is the right way to go.
Vol. 44, No. 1
Vol. 43, No. 12The Battle for ID Security by Richard KamIdentity theft and identity fraud mean any type of crime in which someone wrongfully obtains and uses another person’s individual data in some way that involves fraud or deception, typically for economic gain. Employer liability for identity theft may be growing, and human resource departments are continually implementing new protection methods.We list several strategies for protecting your employee and customer information.
Vol. 43, No. 11Prepaid Legal Services Plans by Jacquelyn Frazier-Lyde, Robert C. Cohen, Catherine Autrey and Paul B. HimmelPrepaid legal services plans can be an important benefit that enhances quality of life in the workplace. The plans are fringe benefit funds to which signatory employers make contributions via collective bargaining agreements. Prepaid legal services plans covered under the Employee Retirement Income Security Act of 1974 (ERISA) are considered employee welfare benefits plans and must comply with Department of Labor (DOL) regulations. The plans offer legal services that address topics from criminal matters to traffic tickets, from domestic relations matters to consumer matters. This is one plan’s story.
Vol. 43, No. 10 True Transparency: PBM Cost-Control Model of the Future by Allan ZimmermanSome traditional pharmacy benefit management companies have attempted to define and embrace the concept of transparency. Purchasers of pharmacy benefits are beginning to recognize the value and meaning of true transparency.
Vol. 43, No. 9 Retirement Horizon Looking Better Research on Plan Design, Other Trends by Laura WhiteA national investment advisory firm specializing in retirement plans surveyed some of the nation’s leading authorities on employer- and trustee-sponsored retirement benefits. Survey results showed an optimistic view of the future on a range of topics, including plan design and communication trends as well as fiduciary and regulatory issues. Results run contrary to much recent research, which painted a largely dismal retirement savings forecast.
Vol. 43, No. 8Fiduciary Investment Issues in Defined Contribution Plans by Joseph L. Paller Jr.The recent emergence of multiemployer 401(k), profit-sharing and money purchase plans as important retirement tools has led to a reexamination of the respective roles and responsibilities of trustees, money managers, consultants, brokers and other service providers. This article reviews trustee fiduciary duties relating to DC plan investments; shielding trustees from fiduciary liability for poor investment performance; and controlling investment costs and fees.
Vol. 43, No. 7Health Insurance Premium Audits: A Cost-Cutting Solutionby Dixon GreerA health insurance premium audit is a complete, unbiased “re-underwriting” of a company’s health care package, that reviews the underlying assumptions of risk made by the insurance carriers and examines the underwriting formulas carriers use to set a company’s premium rates. Audits find discrepancies such as math errors, incorrect or unreasonable assumptions and subjective rating practices. In today’s high-cost health care world, health insurance premium audits can provide a financially risk-free method of ensuring the best possible benefits plans at the best possible prices.
Vol. 43, No. 3 Lessons From the Social Security Debate by Christian E. WellerThe debate over Social Security’s future highlighted the crucial role it plays in ensuring the basic income needs of middle-class families; it illustrated the different possible paths to improving Social Security solvency; and it raised the profile of a national debate over ways to increase retirement wealth in addition to Social Security. The outlook for its long-term finances shows no cost explosion, but rather a gradually widening gap between income and expenditures that can be addressed by a sensible combination of additional revenue and small benefit reductions.
Vol. 43, No. 2Defined Benefit and Defined Contribution Plans: A History, Market Overview and Comparative Analysis by Stephen P. McCourtThis article describes the historical evolution of defined benefit and defined contribution plans, discusses the current utilization of employer-sponsored defined benefit and defined contribution plans, and investigates the efficacy of the two types of retirement plans. The article then highlights some potential risks in the current trends of our employer-sponsored retirement plans.
Vol. 42, No. 12 Investing in Private Equity by Peter C. ArnoldWhether in Canada or the United States, private equity is an investment in a private company or a portfolio of private companies. This article gives the reader perspective on private equity, not only as an asset class but also how it integrates within a pension plan’s investment governance process.
Human Behavior: The Other Side of Controlling Drug Costs by David J. M. WhitehouseUnderstanding how human psychology and health psychology impact compliance with medication regimens and drug-related costs can control expenses and attain the best possible outcomes for patients.
Apprenticeship Programs and Federal Employment Law by Sandra Rae BensonAn apprenticeship program is both an employer and a training institution and is therefore governed by many employment-related laws. This article provides an overview of laws affecting the most common issues that apprenticeship programs will face.
Vol. 42, No. 11Employment Law: What Every Trustee and JATC Member Should Knowby Robert E. JesingerA Joint Apprenticeship and Training Committee (JATC) is subject to numerous federal and state laws. JATC members should review the committee’s hiring practices and employment contracts and establish job descriptions and essential job functions for apprentices.
The Auditor’s Written Communication to Trustees by David P. DorseyAn auditor of an employee benefit plan is required to communicate in a management letter to the board of trustees any reportable conditions or material weaknesses found during the audit. Auditors can often make useful suggestions for operational improvements.
Advanced Bankruptcy Proceedings by Scott GrahamTrustees responsible for collection of delinquent contributions often will deal with bankruptcy. Some of the important terms and issues that arise under Chapter 7 and Chapter 11 of the Bankruptcy Code are the automatic stay, the bankruptcy estate, liquidation and the plan of reorganization. Trustees must know their rights. Valuable information can be obtained from government Web sites.
Vol. 42, No. 10Educating Tomorrow’s Workforce: The Impact of Demographics on Training and Education by Steve GundersonThe workplace of today and tomorrow presents the challenges of demand, diversity and delivery. The increasing demands for worker training, the diversity in the workplace, and the delivery methods of educational and training programs will help to implement successful workforce development policies.
Disability Law Affecting Training and Education Funds by Robert E. JesingerThis article presents an overview of disability law as it affects training and education funds. It defines types of disability, discusses “essential functions” and differentiates them from across-the-board standards, and explains disability law regarding preemployment examinations and inquiries and reasonable accommodations in selecting and retaining apprentices.
Alternative Investments: An Introduction by Edward D. PatchettAlternative investments are complex and often present unique investment and fiduciary risks for trustees. This article provides a brief overview of the alternative investments class and highlights some key investment characteristics and risks associated with alternative investments.
Vol. 42, No. 9 Primer on Withdrawal Liabilityby Ira R. Mitzner and Stanley I. GoldfarbTrustees of multiemployer plans have a fiduciary duty to understand and collect withdrawal liability, monitor the plan professionals that provide advice and counsel, make the decisions for their plans and assume responsibility under Employment Retirement Income Security Act of 1974 (ERISA).This article helps trustees and administrators carry out their responsibilities.
Japan—Is the Sun Finally Rising?by Patricia A. CroftIf Japan, the United States and China form a team that drives the world economy today, Japan is the financier of the team.This article looks at Japan’s economic history over the past 60 years, highlighting its real estate and stock market bubble of the 1980s; examines the aftermath of the bubble; and asks “what we can learn” from Japan’s experience.
Union Self-Directed Annuity Plans: Present Trends and Future Directions by Edmond F. RyanTrustees who manage retirement plans for union members have the financial future of every union member in their hands. Trustees, especially those recently elected, need to understand the basics of pension plans and the reasons for benefit trends.
Vol. 42, No. 8Canadian Labour and Employment Law: An Introductionby Stewart D. SaxeIn Canada, employment relationships are most often governed by provincial laws. There are federal statutes governing private sector employment relationships, but they apply only to work that falls within the legislative authority of the Federal Parliament, such as banking and interprovincial transportation. This article discusses the nonunion employment relationship, termination of the employment relationship, written employment agreements and other provincial legislation.
Avoiding Imminent Minimum Funding Violations for Multiemployer Plans by Lee A. TruckerPension plans must satisfy certain “minimum” funding standards under the Internal Revenue Code and ERISA. This article explains the three principal ways provided by the Code to avoid, or at least delay, an imminent violation. Trustees or professionals of multiemployer plans should consider the practical implications of each method on the plan, the participants and the bargaining parties.
Skilled Trades Mentoring by Howard Hipes and Ann MarinoniMentoring is an investment in workers, rather than an expense. A mentor program is a strategic plan to cultivate and retain skilled craftworkers. This article describes such a program within a union local that was formed with the assistance of a state university.
Vol. 42, No. 7Developing a Fraud Policy by Lawrence R. BeebeTo meet the requirements of today’s business world, benefit plans will find it necessary to spell out and document certain basic procedures, such as a plan fraud policy statement. Such a statement helps create an atmosphere of honesty and ethical behavior and provides a thorough understanding of expectations of those working for or doing business with the plan.
The Pharmacist: Partner in Providing Health Care Benefits by Ellena A. Anagnostis and Kimberly D. GriegoThe objective of this article is to show the evolving role of the pharmacist, whose expertise can lead to improved patient outcomes while decreasing health care costs. The work between a pharmacist and an International Brotherhood fo Electrical Workers (IBEW) local union, as well as other studies, demonstrate a unique approach.
Apprenticeship and Training Funds: Legal/Fiduciary Issues by Harold G. KorbeeThis article focuses on the legal and fiduciary issues arising out of the establishment, maintenance and administration of apprenticeship and training funds and the impact of ERISA on trustees who administer such funds. With due diligence and good recordkeeping, most apprenticeship programs can avoid the expense and potential damages involved in the litigation process.
Vol. 42, No. 6 Selecting and Monitoring Investment Professionals by Rory Judd AlbertERISA imposes a variety of technical and, in some cases, extremely complex rules with which employee benefit plan fiduciaries must comply when investing ERISA plan assets. These rules are applicable to all plan fiduciaries responsible for effectuating or monitoring ERISA plan assets including, among others, boards of trustees of collectively bargained plans; boards of directors of corporations sponsoring ERISA-covered plans and plan administrators, as well as investment; managers, investment consultants, broker-dealers, banks, custodians and similar financial institutions. If you are one of these, it behooves you to obtain at least a rudimentary understanding of ERISA’s fiduciary responsibility rules, burgeoning regulations and evolving unique case law. This article addresses salient legal issues confronting plan fiduciaries today in connection with the investment of employee benefit plan assets.
Vol. 42, No. 5 The Brave New World of Deferred Compensation by Jay Dorsch, Karen E. Gelula and Paul M. RitterThe American Jobs Creation Act of 2004 established a new tax regime for nonqualified deferred compensation arrangements, effective January 1, 2005. Until the act, there was a general consensus as to the tax treatment of nonqualified deferred compensation arrangements except, perhaps, for arrangements that were on the outer edge of common practice. Under applicable tax rules and doctrines prior to the act, there was substantial flexibility in designing, funding and operating nonqualified deferred compensation arrangements. The act added Section 409A to the Internal Revenue Code and imposed strict new requirements that such arrangements must satisfy in order to avoid Draconian tax consequences and penalties. This article will first provide a summary of the tax rules and doctrines applicable to deferred compensation practices that led to the provisions of the act. It will then provide an overview of the major aspects of the new rules, taking into account Notice 2005-1.
New Pharmacy Benefit Strategies for Union Trusts by Sheela AndrewsDeveloping attractive and affordable pharmacy benefit programs has become a significant challenge for union trusts today. Issues such as collective bargaining and demands from members for access to a wide array of prescription drugs are coming into conflict with the reality of rising pharmacy costs and the difficult job of managing union resources. What’s more, external issues such as the growth of consumerism, Medicare legislation and uncertainties over pending legislation serve to further complicate the task of developing cost-efficient and member-attractive pharmacy benefit programs. While the current health care environment is challenging, there are steps plan sponsors can take to ensure their pharmacy benefit program is focused on securing the best outcomes at the lowest possible cost and still keep union members satisfied with their benefit.
Vol. 42, No. 3 Creating Benefit Value Statements by Dennis R. AckleyMany employees do not understand the fundamental economics of employer-sponsored, self-funded health plans. They may think “insurance” pays the costs of health care, when costs are actually paid by the employer and employees themselves. Benefits statements need to show employees the value of their benefits, not just the estimated individual cost to employees—which could lead to unintended consequences. Statements should also shatter the “insurance illusion” and tell employees what they can do to help control the medical plan’s costs.
Vol. 42, No. 2 Making 401(k) Plans a Win-Win Proposition: Getting Participants to Help Themselves and Fiduciaries to Fulfill Their Responsibilities by Richard D. Glass, CEBS401(k) plan fiduciaries and providers may face countless lawsuits in the future as participants realize that their 401(k) accounts are not large enough to provide them with the retirement lifestyle they have anticipated. Plan sponsors, plan fiduciaries and service providers themselves will be the cause of many of these lawsuits, because they have not presented to employees a realistic picture of what it takes to achieve the retirement lifestyle of their dreams. This paper discusses the actions that should be taken to minimize the risk of such lawsuits and also help participants achieve financial security. Plan sponsors must tell their participants the whole, hard truth— Employees, not employers, are responsible for their retirement security and must make full use of their 401(k) plans.
Exploring Retiree Benefit Plans by Brian FreibergHow are many employers that want to offer retiree health plans doing so in light of increased expense? The good news is that employers now have additional means of controlling expenses, thanks in part to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.
Vol. 42, No. 1Workers’ Compensation Managed Care Pharmacy Benefit Program: Cost Savings by Shadi Saleh and Stephanie Washington The burden of prescription drug costs to the workers’ compensation (WC) program is increasing. This article is a followup to an article in the December 2003 Employee Benefits Journal. It reports on a study of New York State government employees who filed workers’- compensation-related prescription drug claims through a recently established WC/managed care prescription drug benefit: ONECARD Rx. Study results showed that the use of ONECARD Rx produced total cost savings of $322,067 ($48.04 per claim) in 2002. Integrated WC/managed care prescription drug programs have the potential to produce significant cost savings for employers.
Vol. 41, No. 12
The Next FronTIER in Tiered Pharmacy Plan Design by Glen StettinMultitiered pharmacy plans can provide financial incentives for plan members to choose lower cost prescription drug options. The next frontier in plan design is beyond the third tier, in some cases reaching six tiers or more.
Class Action Suits Are Changing the Pension and Benefits Landscape in Canada by Murray CampbellLitigation has become a fact of life for pension and employee benefit plan administrators and sponsors since the mid-1980s, and the scope and frequency of such litigation is increasing. This paper examines this increase and comments on the related role of class action legislation.
Vol. 41, No. 11Institutional Investors, Shareholder Activism and Class Actions: The Preservation of Market Integrity by Dimitri LascarisRecent developments in the capital markets have caused an erosion of investor confidence. The ability of securities regulators to restore investor confidence is limited by regulatory resources. In this context, a private right of action is an indispensable means of enhancing investor protection and restoring investor confidence. Moreover, fund managers are subject to a duty of reasonable care which, in appropriate circumstances, may oblige them to prosecute claims against violators of the securities laws. In the global economy, class actions are frequently the optimal method of procuring a remedy for large groups of parties who have been damaged in similar ways. Because of their size and sophistication, institutional investors are particularly well suited to act as lead plaintiffs and to prosecute class-based claims on behalf of aggrieved investors.
Vol. 41, No. 10Background Checks in Hiring and Compensation: The Next Generation by Doug Eisenschenk and Elaine DavisConcern over workplace security has increased since September 11 and the emergence of corporate corruption scandals. Background checks are more common as employers increase the rigors of screening. Until recently the process of completing a background check has been manual and time-consuming. Screening processes are now conducted through technical applications integrated with enterprise system providers and allow organizations to make better hiring decisions.
Vol. 41, No. 9Chronic Disease Management in a Taft-Hartley Indemnity Plan: An Overview by Susan Manning One plan's story of how a mobile health-screening program evolved into a chronic disease management program, helping members live with diabetes and heart disease. Patient-driven and clinically managed disease management programs can provide significant return on investment in quality of life and in clinical and economic outcomes. This article is based on Susan Manning's presentation at the Foundation's Trustees and Administrators Institute held in February 2004 in Orlando, Florida.