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The BenefitsLink Newsletter -
Welfare Plans Edition

December 5, 2000

Today's sponsor is 2e Corporation (click on banner for more information)
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E-Health, HIPAA and Beyond
Excerpt: "A bright future where health information systems can revolutionize the doctor/patient encounter on a vast scale is within our reach. However, two obstacles stand in the way: concerns over privacy and lack of uniform standards. The National Committee on Vital and Health Statistics (NCVHS), a congressionally appointed advisory body on e-health, has begun to address both of these barriers." (Medscape; free registration required)

Fitness club memberships eligible for reimbursement under a cafeteria plan?
Interesting discussion thread on our message boards. Join in! (BenefitsBoards.net)

IRS Issues Revised Publication 503 (Child and Dependent Care Expenses)
Excerpt: "The IRS has just released a revised version of Publication 503 for use in preparing 2000 tax returns. Publication 503 explains the tests that a taxpayer must meet in order to claim the Code Section 21 tax credit for child and dependent care expenses. The same tests must be met for an expense to be reimbursable under a dependent care assistance plan (DCAP)." (EBIA Weekly)

Third Circuit Reverses Madison Decision on Flex Credit/Overtime Pay But Leaves Issue Unresolved
Excerpt: "[In Madison v. Resources for Human Dev. Inc. (3d Cir. 2000), the] Third Circuit Court of Appeals has set aside the decision of the lower court ... which held that unrestricted (or 'cashable') employer credits under a cafeteria plan must be included for purposes of determining overtime compensation under the Fair Labor Standards Act (FLSA)." (EBIA Weekly)

Corpus Christi [Tex.] Doctor Takes on HMO Giant, Wins in Court
Excerpt: "The nearly $20 million verdict capped a two-year legal battle by Dr. Schulze to clear his name after Humana accused him of providing substandard care, including not reading an EKG properly.... On one level, it has drawn extraordinary attention to the confidentiality of peer review ... On another level, the case underscores the tensions in American medicine over the practice of using hospitalists, doctors who take over the care of patients in the hospital from primary care physicians." (Dallas Morning News)

No Automatic Duty to Disclose Physician Financial Incentives Under Health Plans
Peterson v. Connecticut General Life Ins. Co. (E.D. Pa. 2000). Excerpt: "The plaintiff ... alleged that CIGNA had breached its fiduciary duty by failing to disclose its compensation agreements with physicians (e.g., incentives and disincentives), the use of treatment and hospitalization guidelines, and other internal limitations that could affect the coverage actually available to subscribers." (EBIA Weekly)

Benefiting From Adoption
Excerpt: "Gain employees' goodwill at a low cost by adding adoption benefits, such as time off and reimbursement for certain expenses." (HR magazine)

Employers Get Schooled on Sec. 529 Plans
Excerpt: "Employers, in conjunction with their state governments, are trying to make saving for college easier by offering their employees chances to enroll in college savings plans. While such plans, similar to defined contribution retirement plans, have been around for several years, companies recently have begun letting their workers deduct savings from their paychecks." (Employee Benefit News)

New Respect Boosts Chiropractic As An Alternative Therapy
Excerpt: "They're licensed in all 50 states and are reimbursed by many insurance plans. The change came, in part, as a result of aggressive legal action on the part of the chiropractic profession, who resisted attempts to squelch their profession and fought for the right to use X-rays and other medical procedures. But mostly, acceptance came up from a grassroots level." (Chicago Tribune)

Unless Congress Acts, Medical Savings Account (MSA) Program Ends on December 31
Excerpt: "A two-year extension of the MSA program-- to December 31, 2002-- is included in the Taxpayer Relief Act of 2000 (H.R. 5542), which is currently pending in the Senate. Should this bill make it out of Congress, and should the President made good on his threat to veto this bill when it reaches his desk, it is uncertain whether Republicans would push for a stand-alone extension of the program by December 31." (Practioners Publishing Company)

Managing Benefits: Let Workers Do It
Excerpt: "Choosing health care plans, negotiating rates and fighting claims add up to an expensive and irritating burden for most companies.... That is why many employers are eager to try a benefits approach that emulates the 401(k) retirement plan. Under such a program, known as defined contribution, employers would simply give their employees a certain amount of money to buy insurance, and leave the rest to ." (New York Times; free registration required)

Medical Savings Account Program Scheduled to Expire December 31, 2000; 2001 MSA Forms Released
Excerpt: "If the Senate (scheduled to reconvene December 5, 2000) does not pass the bill, expiration of the program will mean that no new MSAs can be established after December 31, 2000." (EBIA Weekly)

Some HMOs Return To Fee For Service Model
Excerpt: "Some large health maintenance organizations are going back to paying doctors and hospitals a fee for each service rendered, rather than a flat fee, or 'capitation fee,' for each patient served. Providers are celebrating, but managed care experts worry the shift will increase HMO costs." (National Underwriter Company)

(Following also appears in Retirement Plans Edition)

Survey of CEBS Members: Top Five Benefit Priorities for 2000 (PDF)
Excerpt: "[After the cost of healthcare, the] remaining priorities in order of importance are: evaluating/implementing/ expanding the use of Internet/intranet applications, providing financial/retirement planning tools and information, providing increased investment education, and emphasizing/improving quality of employee communication materials." (Deloitte & Touche)

No Reward Without Risk -- Some Companies Rethinking Broad-Based Stock Options
Excerpt: "Volatility in the markets has forced companies to take a closer look at their basket of total compensation rather than just focusing on stock options. If stock options start replacing base pay, then employees will leave as soon as they can when the options look like they've lost their long-term value." (Employee Benefit News)

Job Openings Newly Posted or Reposted on EmployeeBenefitsJobs.com

Defined Contribution Account Administratorfor The Vanguard Group
in PA
National Account Executivefor The GlobalQuest Group
in CA, GA, IL, MA, MI, NY, PA, TX
DC Pension Plan Administratorfor Employee Benefits Group, Inc.
in MN
Defined Contribution Recordkeeperfor ATR, Inc.
in PA
Pension Compliance Specialistfor CNA TRUST
in CA
Sales Support Managerfor Benefits Recruiting Firm
in NY

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