Welfare Plans Edition
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August 22, 2000
Retiree Health Benefits Under the Knife
Excerpt: "In a decision that could cause major disruptions in retirees' health insurance, [the Court of Appeals for the Third Circuit] has ruled that plans that provide different levels of coverage to younger retirees and those eligible for Medicare are violating a federal age-discrimination law.... [E]mployers and benefits experts, who have long operated on the assumption that the Age Discrimination in Employment Act (ADEA) applied only to active workers, not to retirees." (Washington Post)
Electronic Signatures Act May Help COBRA Administration
Excerpt: "A recently enacted law that gives legal authority to electronic signatures may affect COBRA administration by extending this authority to COBRA notices and elections." (Thompson Publishing Group)
'Net Plans' Use Web to Help Patients Buy Health Insurance
Excerpt: "A new breed of health plans is emerging via the Internet, promising a solution to ... rising costs and growing dissatisfaction with managed care. Consumerism is the driving force behind these Net plans, which transcend traditional labels such as 'insurer' or 'third-party administrator.' In fact, analysts still are not sure how to categorize them or what to include in the grouping. New models have been unveiled in recent weeks, and more are in development." (Medscape; free registration required)
Employer Cannot Re-Open Benefit Denial to Add New Evidence After TPA's Claims Process is Done
Excerpt: "Under the plan document, a third-party claims administrator had final authority and discretion to make eligibility determinations and to interpret the plan (with the employer agreeing to be bound by the administrator's decisions)." (EBIA Weekly)
Make-Whole Rule Applied Where Plan's Subrogation Clause Ambiguous
Lamp v. Community Insurance Co. (S.D. Ohio 2000). Excerpt: "This case provides helpful guidance for drafting a broad subrogation clause: use language clearly specifying that the right of subrogation takes priority over a participant's right to be made whole, and that all sources of possible recovery against third-party tortfeasors are included as amounts that are subject to subrogation." (EBIA Weekly)
Managed Care Companies Seek to Build on a Legal Victory
Excerpt: "Heartened by a federal court victory in Philadelphia last week in the managed care wars, lawyers for several major health insurance companies are seeking to consolidate a host of lawsuits accusing managed care companies of misleading customers. They also hope to transfer the suits from Miami to Philadelphia." (New York Times; free registration required)
New Jersey Newspaper Questions Payment of Accrued Sick Leave to Terminated Gov't Employees
Excerpt: "A series of stories in The Record detailed how years of sick-time deals many struck out of the public eye have saddled governments across the state with more than $1 billion in debt. In Bergen County government alone, the total sick-time liability is more than $10 million, county officials said. Much of the taxpayer frustration has been focused on six-figure deals so-called golden parachutes received by high-ranking officials such as a business administrator or school superintendent." (The Record)
Shift in Allocation of Benefit Costs Requires Enhanced Variety of Benefits
RIA attorney Theresa Markley discusses the rise in HMO choices, voluntary benefits, alternative health care, flexible working conditions, and work/life benefits. (RIA Pension & Benefits Week)
Selecting the Right Health Plan Requires Research
Good basic article for employers on the selection of health programs for employees. Describes indemnity plans (traditional insurance), HMOs, PPOs, POS plans, more. (Knight-Ridder / Tribune Business News)
Countdown Begins for Compliance With Electronic Transaction Rules
Excerpt: "The healthcare industry has until October 2002 to implement new national standards for the electronic exchange of administration and financial data. The clock began ticking on Thursday when the US Department of Health and Human Services issued final regulations spelling out the requirements for providers, health plans, and healthcare clearinghouses." (Medscape; free registration required)
HMOs Continue to Raise Premiums in Move to Restore Profitability
Excerpt: "For years, HMOs kept premiums at a flat rate, while medical and prescription costs rose and the use of medical care increased. As a result, HMO profits fell steadily since 1994." (Knight-Ridder / Tribune Business News)
(Following also appears in Retirement Plans Edition)
Statistics for Employee Benefit Actuaries
Lots of Excel tables, including Social Security Wage Index and Maximum PIA, Consumer Price Index, Railroad Retirement Earnings Base and Payroll Tax Rates, and National Health Expenditures by Type of Service and Source of Funds. (Society of Actuaries)
9th Cir. Requires Disclosure of Potential Plan Changes Under Serious Consideration, If Asked
Bins v. Exxon. Excerpt: "[An] employer-fiduciary has a duty to provide complete and truthful information about plan changes that are under serious consideration only in response to participant inquiries. Thus, when there is no inquiry, the employer has no duty to volunteer information before changes are adopted. " (EBIA Weekly)
New issue online of the Pension & Benefits Update email newsletter by Tax Analysts: August 21, 2000
(Tax Analysts, Inc.--see www.taxbase.org)
3d Circuit Finds CBS-Westinghouse Illegally Cut Back 'Job Separation Benefits' From Its Pension Plan
Excerpt: The case addresses "whether a permanent job separation benefit contained within a pension plan constitutes an early retirement benefit or retirement-type subsidy protected by the anti- cutback provisions of [section 204(g) of] the Employee Retirement Income Security Act of 1974." (FindLaw.com)
| 401(k) Administrator | for Associated Pension Consultants in CA |
| Business Analysts | for CitiStreet - A State Street and Citigroup Company in MA |
| International Compensation and Benefits Consultant | for Microsoft in WA |
| 401(k) Pension Administrator | for Kibble & Prentice, Inc. in WA |
| Benefits Technician | for Helzberg Diamonds: Corporate Office in MO |
| ERISA Paralegal | for Arnall Golden & Gregory, LLP in GA |
| Plan Services Representative | for MetLife in CO |
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