| The BenefitsLink Newsletter - Welfare Plans Edition |  |
May 10, 2001
Today's sponsor: Employee Benefits Webcast (click)
Determination of Required Minimum Retirement and Death Distributions from Qualified Plans, IRAs, 457(b) Plans and 403(b) Plans Presented LIVE on Monday May 14th at 1 p.m. EST. Instructor: Larry Grudzien of Buck Consultants
"As Seen On TV" Blockbuster Drugs Drive Up Prescription Costs
Excerpt: "A select group of pricey best-selling prescription drugs is driving the double-digit increases in overall prescription costs, according to a study by the National Institute for Health Care Management Research and Educational Foundation (NIHCM)." (insure.com)
California Releases Patients' Rights Guide for Dealing with HMOs
Excerpt: "Consumers puzzled by the increasingly dense thicket of regulations surrounding HMOs now have a new place to turn for help resolving health care disputes. The state Tuesday released a patients' rights guide that explains how to file formal complaints against HMOs and request second opinions when care is denied." (The Sacramento Bee)
Report: Labor Crisis Looms for Long-Term Care
Excerpt: "The long-term-care industry won't have enough workers to care for the elderly within 10 years unless it acts now to avoid the crisis, according to a report released today by a blue-ribbon panel on healthcare's manpower needs for the next decade." (Modern Healthcare)
Tech Firms See New Medical Privacy Rules as Boon
Excerpt: "'It's a big opportunity,' says Dave Mahoney of eMed, a Massachusetts-based company that provides imaging services for radiologists. 'It's kind of like Y2K in that regard. You're either compliant or you're not.' But in the meantime, technology companies figure to flood the medical market with devices they say will provide efficient and secure means for doctors to swap confidential information from coast to coast, or even around the globe." (ABCNews.com)
2001 FICA, FUTA, and Income Tax Withholding on Selected Employee Benefits: Health, Welfare, Fringe
Excerpt: "This month's BenefitsSpectrum features an updated table that provides a basic guide on the general 2001 FICA, FUTA, and withholding treatment of health and welfare benefits and other miscellaneous fringe benefits in ordinary circumstances." (KPMG)
Companion Bills Would Provide Tax Credit For Medicare Buy-In, COBRA For Those Under Age 65
Companion bills introduced in the House and Senate (H.R. 1255 and S. 623) would allow individuals ages 55 through 64 that meet certain requirements to buy Medicare coverage and to claim a tax credit for up to half of the premiums paid. (SpencerNet)
Fourth Circuit Affirms Award of Life Insurance Benefits To Last Named Beneficiary
The Fourth Circuit U.S. Court of Appeals has affirmed a district court ruling that an employee's mother, who was the last named beneficiary of the employee's life insurance benefits, was entitled to those benefits. The case is Steamship Trade Association International Longshoremen's Association (AFL-CIO) Benefits Trust Fund v. Bowman. (SpencerNet)
Physicians Win Right to Discovery in HMO Suit
Excerpt: "A federal judge in Florida gave physicians suing the nation's largest health maintenance organizations the green light Wednesday to proceed in collecting evidence to prove their case. In doing so, U.S. District Judge Federico Moreno of Miami said lawyers in the case need more information and evidence before showing whether the case should proceed as one large trial or as hundreds of individual trials all across the country." (The Dallas Morning News)
Federal Judge Orders Discovery in Landmark HMO Case
Press release. Excerpt: "'This order is a major step forward for America's physicians,' said Archie Lamb, lead co-counsel for the doctors. 'For years, doctors have fought the HMOs daily as they put corporate profits ahead of patient care. The discovery order will allow us the opportunity to prove that these companies engage in systemic attempts to cheat doctors, control medical decisions through non-payment, and manipulate the amount and kind of necessary care provided.'" (U.S. Newswire)
Court Says H.M.O.'s Must Give More Data
Excerpt: "Aetna Inc., Humana Inc., the Cigna Corporation and other health insurers have to turn over more documents to the doctors suing them, a judge has ruled. The physicians say the companies engaged in racketeering and broke contracts by not paying claims on time." (Bloomberg via New York Times; free registration required)
New Erie County Decision On Retiree Medical Benefits
Excerpt: "The Third Circuit rejected the argument that ADEA did not apply to the county's decision to provide Medicare eligible county retirees with health benefits under a managed care product and to provide non-Medicare eligible retirees, with a purportedly better benefit structure. Now, on remand back to the district court, the decision ties up a key issue left open by the Third Circuit's decision." (Kilpatrick Stockton LLP)
Ninth Circuit Finds Fiduciary Breached Duty By Not Informing Beneficiary of Arbitration Rights
Chappel v. Laboratory Corporation of America, 232 F. 3d 719 (November 14, 2000). Excerpt: "The Ninth Circuit Court of Appeals has held that an ERISA fiduciary breached his duty by not notifying a health plan beneficiary of the plan's arbitration procedure for denied claims in writing when the claim was denied. The court made this finding even though the plan's summary plan description contained the arbitration procedure." (KPMG)
Milwaukee Decides Not to Fund Domestic Partner Benefits
Excerpt: "City officials voted against a labor contract that would have granted health benefits to same-sex partners of city workers. Tuesday's vote marked the first time in at least 40 years the Common Council rejected an agreement reached by city and union negotiators. Supporters of the pact used a procedural move to delay final action until a meeting May 29." (Associated Press)
Many Managers Must Make Tough Choices on Flexibility in Work Hours
Excerpt: "Of course, few managers would expect someone with a true crisis, such as a medical emergency or a death in the family, to keep working. The 1993 Federal family-leave law requires employers to allow 12 weeks of unpaid leave in some such cases. But less crucial matters force a choice between two legitimate needs." (CareerJournal.com)
U.S. Employers Not Cutting Benefits in Harder Times, Study Says
Excerpt: "Even though bad economic times are forcing many companies to cut workers and impose hiring freezes, they are not cutting back on benefits and perks for their remaining employees, a new study finds. More than 1,000 major U.S. employers, including more than half of the Fortune 500, reported increasing their coterie of benefits such as child care and educational assistance in 2000, according to a new report from Hewitt Associates, global consulting and outsourcing firm." (The Fort Worth Star-Telegram)
HMO Group Hits Web for Doctors' Support
Excerpt: "The American Association of Health Plans, which represents HMOs and other managed-care plans, is using 'Webcasts' to bypass the American Medical Association and seek the support of individual doctors in its fight against legislation that would give patients greater freedom to sue their health plans." (Washington Post)
Employers May Balk at Absorbing Increased Health Care Costs
Excerpt: "The increases of the past 3 years did not prompt much cost-management activity on the part of employers in 2000; rather, employers simply absorbed the higher cost.... [M]any more employers may, however, take action in 2001 to control runaway expenses. That's because Mercer expects the average health benefit cost to increase a whopping 11% in 2001, with an estimated 13% of employers facing increases of 20% or more." (Drug Benefit Trends via Medscape; free registration required)
Federal Bill Would Expand Health Insurance Purchasing Pools
Excerpt: "Bipartisan lawmakers today introduced a bill to expand so-called 'association health plans,' which allow small businesses to band together to form health insurance purchasing pools." (Reuters via Medscape; free registration required)
Fortune 500 Passing Along Insurance Costs But Not Information
Excerpt: "As the price of health care continues to spiral upward, many of the nation's largest employers are looking for ways contain the escalating costs of health insurance premiums, and most are considering passing the buck to their employees." (insure.com)
DOL Letter Discusses Treatment of Welfare Plans on Demutualization
Excerpt: "The Department of Labor has issued guidance on the treatment of stock received by a welfare benefit plan (or by an employer on behalf of the plan) in the demutualization of an insurance company. In an unnumbered letter dated February 15, 2001, the DOL provided practical solutions to the problems faced by welfare benefit plans receiving stock under a demutualization." (KPMG)
Financing Long-Term Care Can Be Difficult
Excerpt: "Tom Burke, a spokesman for the American Health Care Association, said that many elderly assisted-living and nursing home residents are eventually forced to turn to Medicaid to pay for their long-term care expenses, but that approach has its drawbacks.... Because Medicaid was originally intended to pay for nursing facilities for poor patients, he said, those wishing to apply for Medicaid have to reduce their assets to near poverty level ..." (The Dallas Morning News)
Shifting U.S. Population Calls for New Approaches to Employee Benefits
Excerpt: "Except for the over-65 segment, each age cohort will have about the same population by the year 2020. For the first time in the history of the United States, because people are now living longer than they used to, 'we will be moving from a population pyramid to a pillar,' said Martha Farnsworth Riche, a fellow of the American Statistical Association and former director of the U.S. Census Bureau." (Knowledge @ Wharton)
Troubleshooter's Guide to Filing the ERISA Annual Report (Form 5500)
53 pages. Excerpt: "In an effort to assist filers in the preparation of the 2000 Form 5500 (including accompanying schedules, statements and attachments), DOL has prepared this publication which focuses on the changes in reporting under EFAST and how to avoid reporting errors most likely to be made by filers. Although EFAST processes the IRS Form 5500-EZ, Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan, this guide does not cover the Form 5500-EZ." (U.S. Department of Labor, Pension and Welfare Benefits Administration)
Opinion: Colgate's Mark Gets Rich Satisfying Shareholders
Excerpt: "Here is how the system is supposed to work: The chief executive risks his pay betting on his leadership of the company. Then he hits the ball out of the park. Shareholders get great satisfaction -- and he gets seriously rich." (Graef Crystal, on Bloomberg.com)
IRS Offers Free E-Mail News For Pension Plan Practitioners
The Internal Revenue Service has launched a free e-mail news service called the Employee Plans News, which will be issued periodically during the year with retirement plan information. The news service is provided by the IRS's Employee Plans office, an operating unit of the agency's Tax Exempt and Government Entities Division. (SpencerNet)
Newly Posted or Renewed Job Openings (Post Yours!)
| Consulting - Pension Actuary & Administrators | for Louis Kravitz & Associates, Inc. in CA |
| Benefits Attorney | for ERNST & YOUNG LLP in GA, IL, MN, OH, PA, TX |
| Senior Service Consultant | for Transamerica Retirement Services - The Winning Organization in IL |
Newly Posted Conferences (Post Yours!)
| Monthly Lunch Meeting | in CO on May 15, 2001 presented by Denver Chapter of the Western Pension & Benefits Conference |
| An Update from the Department of Labor and Internal Revenue Service | in VA on May 24, 2001 presented by Richmond Chapter - ISCEBS |
Newly Posted Press Releases
| Radical Innovation in 401(k) Advice Business (MUTUALS.com) |
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