| The BenefitsLink Newsletter - Welfare Plans Edition |  |
August 8, 2001 - 6,210 subscribers
Today's sponsor: The ERISA Health and Welfare Handbook: Questions and Answers on ERISA Compliance (click)
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California, Texas Fear House Bill Would Weaken State Patients' Rights Laws
Excerpt: "According to Jamie Court, executive director of the Foundation for Taxpayer and Consumer Rights, both the House bill and the Senate bill would extend patient protections to more than five million Californians who do not fall under the state review procedures because their employers are self-insured. However, the House bill would 'take rights away from about 20 million Californians,' he said." (KaiserNetwork.org)
House, Senate Patients' Rights Bills Will Be 'Hard to Reconcile,' Commentator Says
Excerpt: "The patients' bill of rights (HR 2563) passed by the House on Aug. 2 will be 'hard to reconcile' with a 'much stronger' bill (S 1052) that passed the Senate in June, Congressional Quarterly's Samuel Goldreich says in a kaisernetwork.org HealthCast on the Hill report [available online]." (KaiserNetwork.org)
Further Roundup of Editorial Reaction to House-Passed Patients' Rights Bill
Excerpt: "The House of Representatives last week passed a patients' rights bill, opening the door for a potential compromise with the Senate, which passed its version of the legislation in June. Editorial pages today revisit the issues of contention and bring attention to other health-care issues." (Washington Post)
Fees for Specific Medical Treatments at Health Club (But Not Membership Dues) May Be Deductible
IRS Information Letter 2001-0105 (Mar. 30, 2001). Excerpt: "[F]ees for specific services (such as on a per-session basis) at a health club may be deductible (and, if other conditions are met, reimbursable under a health FSA) if the individual is under a physician's care for a specific medical condition and the physician prescribed the session as being primarily for and essential to the treatment of the specific medical condition (e.g., rehab after knee surgery)." (EBIA Weekly)
ERISA Preempts State Law Requiring Employers to Provide Notice of Termination of Health Benefits
Thompson v. Bridgeport Hospital (Conn. Sup. Ct. 2001). Excerpt: "[A terminated employee] sued her former employer in state court, claiming that the employer had failed to comply with a state law requiring employers to provide 15 days advance notice of cancellation or discontinuation of group health insurance coverage. She also sued under ERISA for penalties, fines and damages for the employer's failure to provide her with a COBRA election notice." (EBIA Weekly)
Life Insurance Proceeds Awarded Under SPD That Conflicted With Formal Plan Document
Estate of Fields v. Provident Life and Accident Ins. Co. (E.D. Pa. 2001). Excerpt: "[T]he employer had decided to amend the plan to add a list of default beneficiaries to be paid in the event of no beneficiary designation.... However, the plan had not been formally amended before the [employee's] death, even though a new SPD containing the amended provision had been distributed to plan participants. When the conflicting provisions came to light, the proper beneficiary was no longer clear." (EBIA Weekly)
Conflict of Interest and Procedural Irregularities Bring Court Scrutiny of Severance Benefit Denial
Frieberg v. First Union Bank of Delaware (D. Del. 2001). Excerpt: "The issue in this severance dispute was whether the plaintiff had been offered comparable employment when her job position was eliminated as part of a business reorganization. The reorganization followed the merger of two banks.... The plaintiff [alleged] that, at the time of the job offer, a significant, future reduction in compensation for the new position was planned as part of the bank's reorganization." (EBIA Weekly)
Disability Plan with Lower Mental Health Benefits Violated Minnesota Antidiscrimination Law
Kolton v. Anoka (Ct. App. Minn. 2001). Excerpt: "The employee in this case, disabled as a result of a mental illness, challenged her employer's long-term disability plan because it provided a shorter period of covered disability for mental illnesses than for other types of disabilities. The employee claimed that the plan's distinction between mental health disabilities and physical disabilities violated the Minnesota Human Rights Act (MHRA) ..." (EBIA Weekly)
IRS Rules Favorably on Vacation Pay Cash Out Option (No Constructive Receipt)
Priv. Ltr. Rul. 200130015 (Apr. 26, 2001). Excerpt: "In a Private Letter Ruling (PLR) directed only to the taxpayer that requested it, the IRS concluded that giving employees an option to cash out future vacation days would not, under the constructive receipt doctrine, result in taxable income to employees who did not elect the cash-out option." (EBIA Weekly)
Analysis: Severance Pay Plans of State and Local Government and Tax-Exempt Employers (PDF)
Excerpt: "This article will examine those plans which are not subject to the requirements of section 457, and specifically those plans which are classified as 'bona fide severance pay plans' within the meaning of section 457(e)(11). The purpose of this article is to identify the differences between a severance pay plan, which is exempt from section 457, and a section 457 plan providing for the deferral of compensation." (Cheryl Press and A. Thomas Brisendine, published by the Internal Revenue Service)
Analysis: New Requirements for Health Plan SPDs (PDF)
Today's link should work better for many readers than the link published yesterday on BenefitsLink. Excerpt: "This article provides a discussion of the practical implications of the new [DOL regulation's] requirements for group health plan SPDs, checklists to determine the level of SPD compliance, and a discussion of optional compliance methods." (Milliman USA)
EEOC Reexamining Position on Benefit Reductions for Retirees Who Become Entitled to Medicare
Excerpt: "The EEOC [previously has taken] the position, consistent with the Third Circuit's decision in Erie, that reducing retiree benefits as a result of Medicare entitlement is a violation of the ADEA unless the plan can satisfy the equal cost/equal benefit test.... Now the EEOC tells us that it is reexamining its position on this issue in light of 'legitimate concerns' that have been raised by various groups impacted by this interpretation of the ADEA." (EBIA Weekly)
Another Question is Answered in the Stock Options, Restricted Stock and Other Long-Term Employment Incentives Q&A Column
In a Section 423 stock purchase plan, is it possible for the plan to provide that the employee will lose the 15% discount if he or she sells the stock within 6 months of purchase? (BenefitsLink.com)
August 1 Issue of Andersen's Human Capital Compensation and Benefits News Brief
Articles include: nondiscrimination rules for church and government plans delayed again; Section 530 employment-tax relief applied on entity-by-entity basis; nonaccountable plan per diems held to be 100 percent deductible; Weller bill would limit use of 10-or-more employer plan exception; wellness programs found to reduce workers' compensation costs; Congress approves renaming of education IRAs; administration supports allowing federal employees to keep frequent flier miles. (Andersen)
Table of Computer, Software CEO Pay
Excerpt: "The following table shows 23 U.S. chief executives in the computer and software industries who, after taking account of differences in company size, earned more than 100 percent above industry averages during 2000. Another table shows the seven industry CEOs who turned out to be the lowest paid." (Graef Crystal, on Bloomberg.com)
Key Factors in the Evolution of Employee Benefit Regulation (PDF)
Thoughtful and timely; the article starts on page 4. Excerpt: "Stepping back from the statutory and regulatory details and looking at the major forces and trends affecting employee benefits may be helpful in understanding government policy. Moreover, the insight gained may help plan sponsors better manage the difficult issues and competing interests involved in the design of their benefit programs." (Milliman USA)
Prudential Policyholders Vote Overwhelmingly In Favor of Demutualization
Press release. Excerpt: "Nearly 92 percent voted to approve the Plan of Reorganization. The policyholder vote, which ended July 31, was a critical milestone on Prudential's journey to become a publicly-held company." (Business Wire via Yahoo! News)
ASPA Provides Comments to DOL on Use of Electronic Media for Plan Disclosures
Excerpt: "On June 30, 2000, the Electronic Signatures in Global and National Commerce Act ... became law. We urge the Department to actively support the implementation of the Act on behalf of participants, beneficiaries, plan sponsors, and employers by recognizing that employee benefit plans and their participants will benefit from the ability to convert, to the extent it is prudent to do so, to electronic, paperless plan administration." (American Society of Pension Actuaries, Government Affairs Committee)
Think Tank: President's Criticism of Us on Cost of the Tax Cut Falls Short
Excerpt: "In short, the Administration's estimate that the cost of the full tax cut is 1.0 percent of GDP relies upon gimmicks embedded in the tax bill to make that cost appear lower than it actually is. The Center's estimate, which reflects the Joint Tax Committee's estimate of the cost of the tax cut if all provisions of the tax cut are extended, is the legitimate estimate of the tax cut's long-term cost if it is made permanent." (Center on Budget and Policy Priorities)
Newly Posted or Renewed Job Openings (Post Yours!)
| Actuarial Analyst | for Watson Wyatt in CA |
| 401(k) / Retirement Plan Administrator | for Howard Simon & Associates, Inc. in IL |
| Employee Benefit Legal Assistant | for Smith, Underwood & Perkins, P.C. in TX |
| Defined Contribution and General Pension Administrator or Trainee | for Small Consulting Firm in Ormond Beach, FL in FL |
| DC Plan Administrator | for Markley Actuarial Services, Inc. in PA |
| Benefits Manager | for S.J. Wexler Associates, Inc. in CT |
| Account Manager | for McGraw Wentworth in MI |
Newly Posted Conferences (Post Yours!)
| C-1, C-2(DB), C-2(DC), C-3, and C-4 Weekend Classes | in IL on November 10, 2001 presented by ASPA |
| Pension (EA-2 Segment A) Examination Preparation Course | in CA on September 29, 2001 presented by ASPA |
| Pension (EA-2 Segment A) Examination Preparation Course | in IL on October 5, 2001 presented by ASPA |
| Pension (EA-2 Segment A) Examination Preparation Course | in DC on October 12, 2001 presented by ASPA |
| FMLA; Coordinating FMLA, ADA, and Workers' Comp; COBRA; HIPAA; and Section 125 - Richmond, VA | in VA on November 6, 2001 presented by A.E. Roberts Company |
| FMLA; Coordinating FMLA, ADA, and Workers' Comp; COBRA; HIPAA; and Section 125 - Tallahassee, FL | in FL on November 6, 2001 presented by A.E. Roberts Company |
| FMLA; Coordinating FMLA, ADA, and Workers' Comp; COBRA; HIPAA; and Section 125 - Syracuse, NY | in NY on November 6, 2001 presented by A.E. Roberts Company |
| FMLA; Coordinating FMLA, ADA, and Workers' Comp; COBRA; HIPAA; and Section 125 - Philadelphia, PA | in PA on November 6, 2001 presented by A.E. Roberts Company |
| FMLA; Coordinating FMLA, ADA, and Workers' Comp; COBRA; HIPAA; and Section 125 - Tampa, FL | in FL on November 6, 2001 presented by A.E. Roberts Company |
| FMLA; Coordinating FMLA, ADA, and Workers' Comp; COBRA; HIPAA; and Section 125 - Boston, MA | in MA on November 6, 2001 presented by A.E. Roberts Company |
| FMLA; Coordinating FMLA, ADA, and Workers' Comp; COBRA; HIPAA; and Section 125 - Providence, RI | in RI on November 13, 2001 presented by A.E. Roberts Company |
| FMLA; Coordinating FMLA, ADA, and Workers' Comp; COBRA; HIPAA; and Section 125 - Albany, NY | in NY on November 13, 2001 presented by A.E. Roberts Company |
| FMLA; Coordinating FMLA, ADA, and Workers' Comp; COBRA; HIPAA; and Section 125 - St. Louis, MO | in MO on November 13, 2001 presented by A.E. Roberts Company |
| FMLA; Coordinating FMLA, ADA, and Workers' Comp; COBRA; HIPAA; and Section 125 - Orlando, FL | in FL on November 13, 2001 presented by A.E. Roberts Company |
| FMLA; Coordinating FMLA, ADA, and Workers' Comp; COBRA; HIPAA; and Section 125 - Virginia Beach, VA | in VA on November 27, 2001 presented by A.E. Roberts Company |
| FMLA; Coordinating FMLA, ADA, and Workers' Comp; COBRA; HIPAA; and Section 125 - Buffalo, NY | in NY on November 27, 2001 presented by A.E. Roberts Company |
| FMLA; Coordinating FMLA, ADA, and Workers' Comp; COBRA; HIPAA; and Section 125 - Wilmington, DE | in DE on November 27, 2001 presented by A.E. Roberts Company |
| FMLA; Coordinating FMLA, ADA, and Workers' Comp; COBRA; HIPAA; and Section 125 - Jacksonville, FL | in FL on November 27, 2001 presented by A.E. Roberts Company |
| FMLA; Coordinating FMLA, ADA, and Workers' Comp; COBRA; HIPAA; and Section 125 - Kansas City, MO | in MO on November 27, 2001 presented by A.E. Roberts Company |
Newly Posted Press Releases
| SYSCOM Launches PERSpectives™ Pension Information Administration Product; Fully Integrated Information System Provides Host of Benefits to Retirement and Pension Programs (SYSCOM, Inc.) |
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Copyright 2001 BenefitsLink.com, Inc., but you may freely distribute this email newsletter in whole. This newsletter is edited by David Rhett Baker, J.D.
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