| The BenefitsLink Newsletter - Welfare Plans Edition |  |
February 27, 2001
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HHS Secretary Delays HIPAA Medical Records Rules
Excerpt: "Tommy G. Thompson, the new secretary of health and human services, said today that he would delay and reconsider rules that President Bill Clinton issued in late December to protect the privacy of people's medical records." (New York Times; free registration required)
Bush Delays Sweeping Medical Privacy Rules
Excerpt: "In a victory for the health care industry, the Bush administration will at least temporarily delay sweeping new regulations proposed by former President Clinton aimed at protecting the privacy of patients, officials said on Monday." (Reuters via Excite! News)
Analysis of Final HIPAA Privacy Rules
Excerpt: "The Department of Health and Human Services (HHS) has issued regulations governing the use and disclosure of personal medical information. These complex and controversial regulations constitute the first comprehensive federal standards for protecting the privacy of health information. They will govern the way health plans, health care providers and health care clearinghouses obtain, store, use and share participants' health care information." (Watson Wyatt)
HHS Secretary Expresses Sympathy With Managed Care's Privacy Rules Concerns
Excerpt: "Health and Human Services Secretary Tommy G. Thompson signaled managed care organizations on Monday that the Bush Administration may make the changes the industry wants to medical records privacy regulations ordered by President Clinton last year." (Medscape; free registration required)
Cafeteria Plans: IRS Issues One Final Change of Election Regulation
Excerpt: "On January 10, 2001, the IRS issued final regulations relating to the circumstances under which employees may change elections under a cafeteria plan ... [C]afeteria plans may permit employees to change elections due to [HIPPA] special enrollment events; status changes; Medicare or Medicaid enrollment (or disenrollment); a judgment, decree or order requiring health coverage for a dependent; certain significant cost and coverage changes; and special requirements relating to the [FMLA]." (Watson Wyatt)
W.R. Grace Takes $75 Million Provision Due to Court Case on Deductibility of Insurance Policy Loans
Excerpt: "Grace said it acquired corporate owned life insurance polices in 1988 and 1990 to fund post retirement benefits and other long-term liabilities. To fund part of premiums, it took policy loans and claimed interest deductions through 1998, when such deductions were no longer allowed." (New York Times; free registration required)
Plaintiffs' Lawyer Warns HMOs About Suits
Excerpt: "One of the nation's top plaintiffs' attorneys warned managed care plans Monday that if they do not change their practices, they may be bankrupted by the class action suits being filed against them." (New York Times; free registration required)
Domestic Partners Bill Was Right Thing To Do, Says Baltimore City Councilman
Excerpt: "On the morning that his bill came out of the legislative closet, City Councilman Nick D'Adamo's telephone began to ring. The bill would let homosexual couples in Baltimore register as domestic partners." (Baltimore Sun)
Analysis: IRS Issues Guidance on Taxation of Split-DOLlar Life Insurance
Excerpt: "In a move that surprised industry insiders, the IRS recently issued guidance on taxation of 'split-dollar' insurance arrangements. Split dollar is a method of splitting the cost, ownership, cash values or death benefits of a life insurance policy between an employer and an employee, usually in order to provide a tax-deferred benefit to the employee at minimal cost to the employer." (Watson Wyatt)
Getting Ready for Older Workers
Excerpt: "Aging workers are in your future, whether you realize it or not. According to figures from the AARP, from now through 2004, the percentage of the population that is in the workforce will grow by a minuscule 0.1 percent annually. At the same time, the pool of male workers age 55-64 will grow by 43 percent and the pool of female workers in the same age range will increase by 63 percent." (Workforce)
Analysis: IRS Proposes Cost Maintenance Rule for Excess Asset Transfers for Retiree Health Accounts
Excerpt: "The IRS has released proposed regulations dealing with the requirement that an employer who has transferred defined benefit excess assets to a section 401(h) account pursuant to section 420 must provide retiree health benefits that satisfy the minimum cost requirement for a five-year period after the transfer." (Watson Wyatt)
Analysis: Bona Fide Wellness Programs Finally Defined Under HIPAA
Excerpt: "The Health Insurance Portability and Accountability Act of 1996 (HIPAA) requires portability and continuity of health coverage, and prohibits discrimination in health coverage based on health status. However, HIPAA's nondiscrimination provisions do not prevent health plans or issuers from establishing wellness incentives to encourage participants to participate in health promotion and disease prevention programs and to attain specific outcomes." (Watson Wyatt)
Analysis: Interim Final Regulations on HIPAA Nondiscrimination Provisions
Excerpt: "The regulations address how to apply the nondiscrimination rules; discuss preexisting condition exclusion limitations, and actively-at-work and nonconfinement clauses; and describe 'similarly situated individuals.' They clarify that more favorable treatment of individuals with medical needs generally is permitted, and provide transitional rules for individuals who were previously denied coverage due to a health factor." (Watson Wyatt)
Prescription Contraceptives and the Pregnancy Discrimination Act
Excerpt: "The Equal Employment Opportunity Commission (EEOC) recently expressed an opinion in a "Commission Decision" that could affect many employers' health plans. The EEOC found that an employer who excluded prescription contraceptive drugs from its group health plan had violated the Pregnancy Discrimination Act (PDA)." (Watson Wyatt)
Health Plan Regulation in the 21st Century: What Role Will States Play?
A session from the American Association of Health Plans 2001 National Policy Conference, "Charting a New Course in Washington: The Agenda for Change" (February 26, 2001). Features: Donald W. Moran, President, The Moran Company; Dan Zingale, Director, California Department of Managed Health Care; and Arnold I. Menchel, Assistant Attorney General of Connecticut. (KaiserNetwork.org)
Families USA Analysis of Proposed Federal Tax Credits to Expand Health Coverage
Excerpt: "Individual tax credits are not an effective way to expand health coverage for low-wage workers and their families." (Families USA)
Think Tank Says Tax Credits For Individuals To Buy Health Insurance
Excerpt: "Helping uninsured people obtain health coverage is an important goal and an appropriate use of public funds. Public funds devoted to this purpose should be used efficiently and effectively. Unfortunately, the research and evidence suggests that the type of individual tax credits now under discussion are unlikely to help many uninsured families obtain quality health care and could erode coverage for substantial numbers of currently insured families." (Center for Budget Policies and Priorities)
California To Fine PacifiCare HMO For Alleged Late Payments
Excerpt: "State regulators will fine PacifiCare of California for [allegedly] delinquent payments to doctors and hospitals, and have sent an on-site examiner to make sure the Cypress-based HMO pays the late bills in full with interest." (Orange County [Calif.] Register)
72-Page Outline of Employee Benefits and Executive Compensation Arrangements (PDF) - Corrected URL
This prominent law firm's publication provides a splendid overview of all of the principal kinds of deferred compensation, equity compensation, qualified retirement plans and welfare benefit plans. (Venable, Baetjer, Howard & Civiletti, LLP)
Graef Crystal: 'Fearsome Five' Wall Street CEOs Count Their Millions
Excerpt: "This favorite expression of politicians comes to mind after reviewing the pay of five Wall Street chief executives for fiscal 2000. The 'Fearsome Five' earned a staggering $154 million for their efforts, about 20 percent more than in fiscal 1999. Three surpassed $30 million in pay." (Graef Crystal, on Bloomberg.com)
Many Options Besides Downsizing
Excerpt: "Even though the economy may be slowing and it looks like a quick way to save money, downsizing is not the answer, warns Rick Maurer, an expert in leadership and change and author of two books on the subjects. Maurer advocates alternatives that he says would not have the same deleterious effects on an organization." (Sacramento Bee)
Analysis: IRS Provides Payroll Tax Relief for Stock Plans
Excerpt: "The IRS recently released Notice 2001-14, providing interim guidance relating to FICA, FUTA and income tax withholding on statutory options. Incentive stock option exercises or Section 423 Employee Stock Purchase Plan exercises before January 1, 2003, will not be subject to FICA or FUTA tax, and disposition of the stock will not be subject to income tax withholding. (Watson Wyatt)
Legislative Activity on the Benefits Front: February 2001 (PDF)
Excerpt: "Pension reforms/retirement savings initiatives that almost made it through Congress last year are expected to be revived, with the chief House and Senate sponsors of last year's bill vowing to introduce their popular, bipartisan proposals in February. The bill's provisions will closely resemble those that were approved in the House and Senate Finance Committee in 2000. Whether the measure will be able to move on its own, however, cannot be determined at this time ..." (Milliman & Robertson)
Report on Proposed SEC Disclosure Rules for Equity Compensation Plans
Excerpt: "The SEC is proposing that companies disclose, at least annually, summary information about the total number of securities that have been authorized for issuance, granted and those that remain available for grant under equity compensation plans in effect as of the end of the last completed fiscal year, whether or not approved by shareholders. The disclosure would follow the format below ..." (Frederic W. Cook & Co., Inc.)
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