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The BenefitsLink Newsletter -
Welfare Plans Edition
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June 14, 2001
Today's sponsor: DATAIR (click)


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Patients' Rights Debate Brews, Tests New Power Structure
Excerpt: "There may be no bigger test of the new political order than a bill that aims to give patients added leverage in their disputes with managed care companies. Republicans and Senate Majority Leader Tom Daschle, S.D., take very different approaches to the long-deferred patients' bill of rights that Democrats next week will make their first order of business next week after taking control of the Senate June 6." (Knight Ridder / Tribune)

Differing Patients Rights Bills in Senate Have Much in Common
Excerpt: "The patients' bill of rights is a managed care reform proposal to guarantee by law enhanced consumer protection for Americans covered by private health plans." (Knight Ridder/Tribune)

GOP Support Helps Bipartisan Kennedy-Edwards-McCain HMO Plan
Excerpt: "Several House Republicans bucked White House opposition Wednesday and endorsed broader rights for Americans to sue their health plans. The development came amid planning by Senate Democrats, who now control the chamber, for work next week on similar patients' rights legislation. They quickly welcomed the support." (Associated Press)

White Paper: Kennedy-McCain Patients' Rights Proposal Leaves Employers Vulnerable to Lawsuits (PDF)
Excerpt: "... the bill specifically authorizes certain types of lawsuits to be brought against employers and opens the door for expansive employer liability in many other ways based on other provisions that are unclear until they are interpreted by the courts on a case-by-case basis. Employers would be subject to the risk of lawsuits and, in many cases the possibility of unlimited damages, in the following ways: ..." (American Benefits Council)

Norwood Endorses Kennedy-Edwards-McCain Bill
Excerpt: "Norwood, who has supported broad rights for injured patients to sue their HMOs, said the bipartisan measure is 'the only bill that guarantees a patient will find justice if they are injured or killed from improperly denied care.'" (CNN.com)

Senate Ponders Two Patients' Rights Bills
Excerpt: "Both ... call for the creation of independent panels to review HMO decisions denying care. [The Frist bill] calls for exhausting of the review process before a lawsuit can be initiated. Such a suit would have to be filed in federal court, and pain and suffering awards would be capped at $500,000 ... there would be no punitive damage awards. [The Kennedy bill] would allow patients easier access to [federal or state] courts, even if the independent review process has not been exhausted." (CNN.com)

HMOs Are Democratic Acid Test
Excerpt: "There may be no bigger test of the new political order than a bill that aims to give patients added leverage in their disputes with managed-care companies.... Democrats will make the long-debated patients bill of rights their first order of business since taking control of the Senate on June 6." (Detroit Free Press)

Hospital Association Scolds Norwood for Backing Bill Containing Liability Provisions
Excerpt: "AAHP President and CEO Karen Ignagni today expressed disappointment that Rep. Charlie Norwood (R-GA) has bypassed an opportunity to provide leadership in the patient protection debate, by endorsing the same extremist approach that has led to gridlock for the last five years.... 'We are disappointed that Congressman Norwood has passed up the opportunity to show leadership on patient protection, choosing instead to follow the same path to gridlock in this debate...'" (Associated Press via Excite News)

Norwood Rejoins Colleagues on Patients' Rights Bill
Excerpt: "Retired dentist and patient's rights leader in the House of Representatives, Charlie Norwood, R-Ga., Tuesday officially added his name to the bill he helped write, signaling the failure of efforts to reach a compromise with the White House before the bill comes to the Senate floor in the coming days." (Medscape; free registration required)

Fewer Workers in Manufacturing Jobs Covered by Health Insurance
Excerpt: "U.S. workers are less likely to be offered health insurance than they were in 1979 if they work for manufacturers or in low-wage jobs, according to a study that suggests benefits could erode further. The share of workers with health insurance through their jobs fell to 54 percent in 1998 from 66 percent in 1979, the study by the Center for National Policy found, with the biggest decline in manufacturing." (The Denver Post)

White House Will Discuss Patients' Rights Bill
Excerpt: "With the Senate nearing debate on a patients' protection bill pushed by Democrats, White House officials are to meet with key lawmakers today in a last-minute bid to head off a potentially damaging political showdown on the health care issue." (Los Angeles Times)

Hearing Testimony for "ERISA: the Foundation of Employee Health Coverage"
June 12, 2001. Includes testimony by Gary M. Ford, Esq. of Groom Law Group, Chartered; Thomas R. Harter of The Segal Company; James A. Klein of the American Benefits Council; and Alice M. Weiss of the National Partnership for Women & Families. (U.S. House of Representatives, Committee on Education and the Workforce, Subcommittee on Employer-Employee Relations)

Federal Retirees: "Why Can't Our Health Premiums Be Pre-Tax, Too?"
Excerpt: "On Tuesday, two area members of Congress moved to restore equity. Sen. John W. Warner (R-Va.) and Rep. Thomas M. Davis III (R-Va.) introduced bills to amend the tax code and allow federal retirees to pay their FEHBP premiums and military retirees to pay their Tricare insurance premiums on a pretax basis." (Washington Post)

Bills Introduced to Allow Pre-Tax Health Insurance Premium Payments by Retirees
Excerpt: "This week, Sen. John Warner, R-Va., introduced a bill (S. 1022) in the Senate and Rep. Tom Davis, R-Va., introduced an identical bill (H.R. 2125) in the House that would convert retirees' premiums." (GovExec.com)

Opinion: Likely MSA Amendment to Patients' Bill of Rights Could Drive Up Health Premiums
Excerpt: "When the Senate considers the Patients' Bill of Rights ... a floor amendment may well be offered that would make Medical Savings accounts (MSAs) universally available and substantially alter MSA policy in a number of other ways, with the goal of dramatically expanding use of MSAs.... Supporters ... are expected to argue, as they have in the past, that expanding MSAs will expand health care coverage and reduce the ranks of the uninsured. Most health analysts disagree." (Center on Budget and Policy Priorities)

Officials, Advocates Say California HMO Law Should Be National Model
Excerpt: "A new state law allowing patients to sue health maintenance organizations has not resulted in a flood of lawsuits as insurance companies had feared, according to state regulators and a consumer group. Two laws regulating HMOs went into effect in January, requiring independent medical review of complaints when judged warranted by the state's Department of Managed Health Care and allowing patients to sue if they are not satisfied with the result." (Associated Press via the Foundation for Taxpayer and Consumer Rights)

(Following items also appear in Retirement Plans Edition)


EGTRRA! EGTRRA! Read All About It! (PDF)
4 page summary of the new tax act. (Milliman USA)

Economic Growth and Tax Relief Reconciliation Act of 2001 Employee Benefits Provisions
Excerpt: "The Act increases contribution and benefit limits, facilitates portability, and alleviates regulatory burdens. President Bush signed the Act into law this week. This Legal Alert summarizes the most significant EGTRRA changes." (Kilpatrick Stockton, LLP)

Overview of the Economic Growth and Tax Relief Reconciliation Act of 2001
The June 2001 issue of the law firm's Compensation, Benefits and Employment Law Focus publication. Excerpt: "The Act does not contain a deadline for amending tax-qualified plans with respect to the changes made to existing law by the Act ... However, as is always the case, tax-qualified retirement plans will need to be brought into operational compliance with the Act-mandated changes ..." (White & Case, LLP)

Prudential's Plan to Demutualize May Have Fiduciary Impact on Benefit Plans and their Sponsors (PDF)
Excerpt: "The impending conversion of Prudential Insurance Company of America from a mutual company to a publicly traded corporation raises important considerations for employee benefit plans and plan sponsors. Pursuant to Prudential's plan of demutualization, certain eligible policyholders will receive compensation in the form of shares of Prudential stock, cash or policy credits (i.e., enhancements to policy value)." (Proskauer Rose LLP)

EEOC Announces Victory in ADEA Reduction-in-Force Case
Excerpt: "The suit, filed jointly with the Office of the Attorney General for the Commonwealth of Massachusetts, charged [Bull HN Information Systems, Inc. of Billerica, Mass.] with discriminating against older workers in connection with a series of reductions-in-force (RIFs) by requiring them to sign unlawful waivers of claims in violation of the Age Discrimination in Employment Act of 1967 (ADEA), as amended." (Equal Employment Opportunity Commission)

Analysis: IRS Will Assess Employment Taxes on Statutory Stock Options Exercised Beginning in 2003
Excerpt: "The Internal Revenue Service announced on January 18 (Notice 2001-14) that employers will have to pay FICA and FUTA taxes on the gains their employees realize when they exercise incentive stock options or options granted under qualified employee stock purchase plans (which, together, will be referred to as 'statutory options'). However, the notice also announces that the IRS is not going to assess employment taxes on exercises of statutory options that occur before January 1, 2003." (White & Case, LLP)




Newly Posted or Renewed Job Openings (Post Yours!)
Health & Welfare Associate for Aon Consulting, Inc.
in MD
Qualified Retirement Plans Manager for National City
in OH
Plan Administrator for Matthews Benefit Group, Inc.
in FL
401(k) Compliance Specialist for Inner Dependent, In-House Compliance Department
in CA
401(k) Senior Administrator for A family-oriented environment that is stable yet on the cutting edge!
in CA
Benefits Researcher for LIMRA International
in CT
Employee Benefit Analyst for Watson Wyatt & Company
in MA



Newly Posted Conferences (Post Yours!)
Advanced Cafeteria Plans in OR on July 19, 2001
presented by Employee Benefits Institute of America LLC (EBIA)

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