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The BenefitsLink Newsletter -
Welfare Plans Edition

December 21, 2000

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New Privacy Rules Are Challenged
Excerpt: "Leaders of the health care industry said today that they would immediately ask President-elect George W. Bush to revise new rules issued by President Clinton to protect the privacy of medical records. But Clinton administration officials said broad public support for such safeguards would lead the Bush administration to accept the rules." (New York Times; free registration required)

Transcript of HHS Secretary Donna Shalala's Announcement of HIPAA Medical Privacy Rules
Excerpt: "The purpose here is to ensure that people are not discouraged from getting the health care they need because of some concern, real or otherwise, that that information will be used improperly, [said OMB Deputy Director Sally Katzen]." (U.S. Newswire)

Clinton, Regulators Issue Sweeping New Health Privacy Rules
Excerpt: "The rules -- which sharply limit doctors, hospitals and insurance companies from sharing confidential knowledge on patients -- come in response to growing concerns about medical information being used to sell products, screen job applicants or affect employment." (CNN)

Clinton Issues New Medical Privacy Rules
Excerpt: "President Clinton announced sweeping new rules to protect the privacy of patients, requiring doctors and hospitals to keep sensitive medical records private and punishing firms that improperly sell them for profit." (Reuters via Excite! News)

Publication 503: Kindergarten Example Update
Excerpt: "In an article we wrote on Publication 503 in the 11/30/00 WEEKLY, we noted that the most significant change to the 2000 version of Publication 503 was the elimination of the example regarding kindergarten expenses. The example had illustrated that the cost of sending a child to kindergarten was not an eligible dependent care expense. After speaking with officials in the IRS's Chief Counsel's Office, we have confirmed that not too much should be read into the deletion of the example." (EBIA Weekly)

When Coverage for Active Employees Changed, COBRA Coverage Changed the Same Way
Besing v. America West Holdings Corp. Inc. (10th Cir. 2000). Excerpt: "The employer in this case, according to the court, changed its group health plan from a preferred provider organization (PPO) health plan to a point of service (POS) health plan, with a different type of coverage. Two qualified beneficiaries, whose COBRA coverage began under the PPO plan, sued the employer and the insurer." (EBIA Weekly)

Termination of Disability Benefits Affirmed Even Though Plan Did Not Respond to Employee's Appeal
McGarrah v. Hartford Life Ins. Co., 2000 U.S. App. LEXIS 31388 (8th Cir. 2000. Excerpt: "The employee timely requested review [of the denial of his LTD claim], providing additional information, but the insurer did not respond to his appeal. In the employee's subsequent lawsuit, the trial court awarded summary judgment to the insurer, applying a deferential abuse of discretion standard." (EBIA Weekly)

Supplemental Employee-Paid Life Insurance Is Subject to ERISA as Part of Larger Employer-Paid "Plan"
Armstrong v. Columbia/HCA Healthcare Corp. (S.D. Tex. 2000). Excerpt: "The issue of whether a particular benefit arrangement is an ERISA plan often arises when an aggrieved employee attempts to sue under state law for benefit-related claims. The threshold question in determining whether such an employee may pursue state law claims is whether the employer-provided group policy is an ERISA plan so that ERISA preemption principles apply." (EBIA Weekly)

HMO Issues Sent to Arbitrator in South Florida Class Action
Excerpt: "In a significant development in the class-action lawsuit against the nation's major HMOs, U.S. District Judge Federico Moreno has ruled that doctors at war with managed care plans must arbitrate their financial disputes. But Moreno also determined that allegations of conspiracy and racketeering lodged against six managed care companies by three doctors must remain in federal court." (Miami Herald)

Transportation Benefit Limits for Parking Raised for 2001
Excerpt: "[According to recently-published IRS Publication 15-B, entitled Employer's Tax Guide to Fringe Benefits for Benefits Provided in 2001], employers can exclude the value of transportation benefits provided to an employee for qualified parking in 2001 up to $180 per month, a $5 increase from the existing limit." (EBIA Weekly)

Privacy Rules Pose Difficult Implementation Issues for Health Industry
Excerpt: "The Clinton Administration's release today of sweeping new regulations to protect patient confidentiality is considered a boon for all Americans but opens up a minefield of compliance hazards and a potential legal quagmire for doctors, hospitals, HMOs and pharmaceutical companies alike." (Medscape; free registration required)

ERIC: Undoable Medical Privacy Rules Pose Major Threat To Employment-Based Health Care System
Excerpt: "The ERISA Industry Committee (ERIC), representing America's largest employers, warned that today's sweeping new federal rules governing the privacy of health-related information will subject employers to unworkable rules and litigation hazards and severely cripple employers' ability to operate their health plans and provide employees with disease management and other employee assistance programs." (ERISA Industry Committee)

Advocates to Release New California HMO Patient Guide
Excerpt: "The Foundation for Taxpayer and Consumer Rights (FTCR) will be releasing a guide to help Californians understand and utilize their rights as managed care patients under health care laws. The patient guide explains the provisions of landmark HMO reform laws to take effect January 1, 2001, including those allowing patients the right to sue their HMO and have independent reviews of treatment denials." (Foundation for Taxpayer and Consumer Rights)

American Benefits Council Health Policy Paper Submitted to Bush Transition Team (PDF)
Excerpt: "The Council urges the Bush Administration to resist expanded financial liability for health coverage decisions-- especially under differing state law standards. Near the end of the regular session of the 106th Congress, Senators John Breaux (D-LA) and Susan Collins (R-ME) recommended future Patients' Bill of Rights legislation be based on the many consensus provisions the House and Senate bills have in common, including a strong, enforceable independent external review process." (American Benefits Council)

(Following also appears in Retirement Plans Edition)

Microsoft Concludes 8-Year Lesson on Using Temporary Workers and Drafting Plan Eligibility Language
Excerpt: "... the case has caused 401(k) and other ERISA plan sponsors to carefully consider the nature and identity of all workers in their workforce, and to then carefully draft plan eligibility provisions and exclusions in accordance with (1) a defensible characterization of the common law employee status of the workers and (2) the plan sponsor's inclusion versus exclusion preferences, subject to full compliance with the Code's qualification standards and ERISA's fiduciary obligations." (EBIA Weekly)

EEOC Issues New Section For Its Compliance Manual On Discrimination In Compensation
Excerpt: "The new Compliance Manual section explains that the anti-discrimination laws cover all forms of compensation, including salary, overtime pay, bonuses, stock options, profit-sharing plans, life insurance, vacation and holiday pay, reimbursement for travel expenses, and other fringe benefits." (Spencernet)

Job Openings Newly Posted or Reposted on EmployeeBenefitsJobs.com

VP Client Advisorfor American Century Investments
in MO
Manager, Disbursement Servicesfor ICMA Retirement Corporation
in DC
Manager, Plan Service Teamfor ICMA Retirement Corporation
in DC
in HI

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