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The BenefitsLink Newsletter -
Welfare Plans Edition
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March 12, 2001
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IRS Corrects Cafeteria Plan Election Change Regulations
Excerpt: "The special consistency rule for dependent care assistance plans and adoption assistance plans that was contained in the 2000 proposed regulations but was inadvertently omitted from the 2001 final regulations has been inserted into the final regulations." (EBIA Weekly)

Separated Spouse Could Not Elect COBRA Where No Timely Notice Provided to Plan
Johnson v. Northwest Airlines, Inc. (N.D. Cal. 2001). Excerpt: "[T]he employee and his wife stopped cohabiting and the wife filed for legal separation, obtaining judgment to that effect two years later. Neither the participant nor the spouse notified the employer of their ceasing to live together, legal separation or change in addresses. During open enrollment after the separation, the employee elected not to renew coverage for his wife." (EBIA Weekly)

Supreme Court Denies Review in Erie County Case Under ADEA
Erie County, PA v. Erie Co. Retirees Assoc. (S. Ct. 2001). Excerpt: "[T]he Third Circuit held that retirees were covered under the Age Discrimination in Employment Act (ADEA), and that they satisfied the threshold for establishing an ADEA claim when they alleged that the plan offered less valuable health benefits to Medicare-eligible retirees than to non-Medicare-eligible retirees. The Supreme Court has now denied certiorari ... bringing the issue to a close, at least in the Third Circuit." (EBIA Weekly)

Plaintiff Loses Because of Failure to Exhaust Administrative Remedies
Getting v. Fortis Benefits Ins. Co. (10th Cir. 2001). Excerpt: "The Tenth Circuit ruled that the plaintiff had failed to exhaust her administrative remedies by not filing for a third-level review. The court rejected the plaintiff's argument that the insurer's failure to give her a copy of the summary plan description excused her from filing for the additional review ... the plaintiff apparently knew that [the third-level review] existed..." (EBIA Weekly)

Sole Prop's Deduction for Family Medical Expenses Denied Where Spouse Not Bona Fide Employee
Haeder v. Commissioner of Internal Revenue, T.C. Memo 2001-7 (2001). Excerpt: "Mr. Haeder was a sole proprietor attorney who practiced law in his home. He claimed several deductions on his tax return based on the assumption that his wife was an employee of the business.... But Mrs. Haeder had no employment contract, no set work schedule, did not maintain any time records, and did not receive her salary directly or on a regular basis." (EBIA Weekly)

Ergonomic Debate
Excerpt: "REP. CHARLIE NORWOOD: OSHA has made it nearly impossible in this rule for an employer to claim that injury is not work-related. Any MSD injury, no matter how caused, no matter how caused, will be considered work-related if work makes it hurt." (Online News Hour, PBS)

Medical Bill for Nation is Soaring
Excerpt: "The nation's annual bill for health care has risen to a record $1.2 trillion, with prescription drugs accounting for nearly 10 percent of the costs and expected to grab an even larger share of what Americans pay to get or stay healthy, government estimates show.... The drug-spending boom ... comes not only with an aging population, but as more patients ask for newer, high-priced drugs marketed to them on television ..." (Seattle Times)

Sixth Annual Survey Report on Purchasing Value In Health Care
Excerpt: "Against a backdrop of health care cost increases of roughly 10 percent per year, employers continue to signal the beginning of a new era in the delivery and management of health benefits and their expenses. These employers, while very much interested in continuing to play the role of program manager, are taking steps to better educate and inform employees about health care, and thereby make them more effective health care consumers." (Watson Wyatt)

Wisconsin Law Mandates Group Health Plan Coverage For Immunizations (PDF)
Excerpt: "The State of Wisconsin has adopted a new mandated benefit which must be incorporated into all health insurance plans and self-insured group health plans which are sponsored by the state, a county, city, town, village or school district in the State of Wisconsin." (Davis & Kuelthau, s.c.)

New Wisconsin Law May Require Additional Health Insurance Options (PDF)
Excerpt: "Effective April 1, many employers and health insurance companies will need to provide a new option for employees throughout Wisconsin. Under the newly amended law, employers with more than 25 employees (and some smaller employers) who provide health insurance plans may need to offer a Point-of-Service and a "standard plan" option if they maintain an HMO (Health Maintenance Organization) or a PPO (Preferred Provider Organization) plan." (Davis & Kuelthau, s.c.)

Drug Costs Vs. Your Health: How To Cope?
Excerpt: "Unlike many seniors who lack drug coverage, [Virginia] West has a supplemental Medicare managed care plan to help minimize her out-of-pocket prescription costs. But as her drug regimen grew to 10 pills to combat diabetes, hypertension and high cholesterol, West, 73, found her meager income from Social Security barely sufficient to cover annual drug bills of $1,800." (Sacramento Bee)

Drugs Are Driving Rising Health Costs
Excerpt: "Spending for prescription drugs grew faster than any other category of health care expenditures in 1999 and is expected to be a major factor driving the increase in U.S. health care costs over the next decade, according to a new report by government economists." (Washington Post)

Kid-Sized Health Insurance: Covering Children When You're Single
Excerpt: "The plans might be difficult to find, but you can buy health insurance specifically for your children, even as young as 6 months old. Experts say these kids-only plans are especially attractive options if you're divorced or if your kids spend lengthy summer vacations with your ex or relatives half-way across the country, where your health plan might not have a network of doctors." (insure.com)

(Following items also appear in Retirement Plans Edition)


'Seasoning' Compensation Package Helps One TV Operation Improve Employee Morale
Excerpt: "The company found that its compensation structure was not just unfair, it was often counterproductive. Some people accepted promotions to jobs they were not equipped for, while others tried to switch to more generous departments in the company. And so, in early 1998, Discovery began an overhaul of its compensation policy, switching to a pay-for-performance system that allowed for both big raises and bonuses." (New York Times; free registration required)




Newly Posted or Renewed Job Openings (Post Yours!)
Senior Benefits Consultant for CB Richard Ellis
in CA
401k/DC Administrator (FT or PT) for Sacramento Area TPA
in CA
PENSION ADMINISTRATOR / DC PLANS for CNA Trust Corporation
in IL
Defined Benefit Project Manager - Lk-000717-010 for Hewitt Associates LLC
in IL



Newly Posted Press Releases
Brokerville.com partners with PensionOnline.com to Offer Community Members 401(K) Analysis and Design Tools for Qualified Plans (Brokerville)

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