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The BenefitsLink Newsletter -
Welfare Plans Edition
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August 21, 2001 - 6,189 subscribers
Today's sponsor: The ERISA Health and Welfare Handbook: Questions and Answers on ERISA Compliance (click)

(Please help us continue to provide this valuable newsletter at no charge to you -- our sponsors pay our way. Remember to visit them periodically; we try to make sure their products and services will be of interest to you. Thanks! --Editor)


   Offers guidance on more than 30 key issues involving
   ERISA and employee welfare plans, including benefits
   entitlement, HIPAA, plan document language,
   discrimination issues and employer obligations under
   managed care plans.   Written by veteran benefits consultant Terry Humo, Esq.,
   of Intermountain Administrators. Click to learn more!

EEOC Rescinds Policy on Retiree Health Coverage
Press release. Excerpt: "The [EEOC] announced [August 20, 2001] that it has begun a review of its policy concerning the application of the Age Discrimination in Employment Act (ADEA) to employer-sponsored retiree health benefit plans ... That policy had provided that retiree health plans that are reduced or eliminated on the basis of age or Medicare-eligibility violate the ADEA." (U.S. Equal Employment Opportunity Commission)

Text of Rescinded Portion of EEOC Compliance Manual
Excerpt of rescinded text: 'If it reduces health benefits to older retirees on the basis of Medicare eligibility, an employer may avoid liability for age discrimination by showing either: that the benefit is equal ... or that it expends an equal cost for benefits for older and younger retirees, and the reductions in benefits for older retirees are actuarially justified." (U.S. Equal Opportunity Commission)

ERISA Preempts Bad Faith Claim But Wisconsin State Insurance Notice Statute Upheld
Excerpt: "[T]he court found that the state insurance notice statute, which requires insurance providers and employers to give notice of the state's insurance plan to plan beneficiaries when their existing benefits are discontinued, was not preempted. However, it dismissed the claim based on the statute because it contained no enforcement provisions enabling a private right of action." (EBIA Weekly)

COBRA Election Notice Claim Dismissed Where Employer Continued to Provide Coverage After Employment
Wilcock v. National Distributors, Inc. (D. Me. 2001). Excerpt: "[EBIA Comment:] If, as seems likely to us, the plan provided that termination of employment caused a loss of coverage, then there was a COBRA qualifying event and an election notice should have been provided within the statutory period following termination. COBRA does have an alternative rule that permits the employer (if the plan so provides) to delay providing a notice of qualifying event to the plan administrator ..." (EBIA Weekly)

TPA May Be Liable For Paying Medical Expenses It Shouldn't Have
SGI/Argis Employee Benefit Trust Plan v. The Canada Life Assurance Co. (E.D. Ark. 2001). Excerpt: "In this case, the plan sued its third party administrator (TPA) for paying medical expenses it shouldn't have.... The plan brought suit against the TPA for breach of contract and breach of fiduciary duty for paying benefits not authorized by the plan." (EBIA Weekly)

Failure to Enroll Makes Employee Ineligible for LTD Benefits Even Though Plan Provided No Forms
Thompson v. J.C. Penney Co., Inc. (6th Cir. 2001). Excerpt: "To continue coverage, the employee had to file an enrollment form and pay required premiums through payroll deductions. At this time, however, the company did not give him the necessary enrollment form ... The employee's main argument in support of his claim was based on the language of the plan itself, which provided that employees ... had to 'elect or reject' coverage." (EBIA Weekly)

ERISA Preempts State Law Claims of Independent Contractor Covered Under Employer's LTD Plan
Hollis v. Provident Life and Accident Ins. Co. (5th Cir. 2001). Excerpt: "[EBIA Comment:] The Fifth Circuit joins several other courts in holding that a non-employee, such as an independent contractor, may be a beneficiary under an ERISA plan, whose claims may consequently be limited.... This principle is important not only for plan sponsors that cover independent contractors under their ERISA plans, but also for businesses such as partnerships and LLCs that cover owners." (EBIA Weekly)

ERISA Preempted Firm Owner's State Law Claims Seeking To Recover Disability Benefits
ERISA preempted state law claims filed by the co-owner of a corporation seeking to recover benefits under an individual disability insurance policy because the owner was an 'employee' for ERISA purposes and the policy constituted an 'employee welfare benefit plan' within the meaning of ERISA. This was the ruling of the Tenth Circuit U.S. Court of Appeals in Sipma v. Massachusetts Casualty Insurance Company (No. 00-1289). (Spencernet)

Designing a Consumer Health Assistance Program (PDF)
Excerpt: "Consumer health assistance programs (sometimes called 'health care ombudsman programs' or 'health consumer advocates') provide critically important services to today's consumers ... Independent of health facilities or health plans, these programs have two primary purposes: (1) to educate consumers about their rights and responsibilities, and (2) to identify, investigate, and help resolve consumers' complaints about health care services." (Families USA)

(Following items are in both editions of the BenefitsLink Newsletter)


An Update On the Continuing EITF Deliberations on Accounting for Stock Compensation (PDF)
Excerpt: "The project is referred to as EITF Issue No. 00-23 and it has become unprecedented in scope, with 47 specific issues and subissues deliberated as of this writing and at least 30 additional issues remaining to be discussed. Since our last mailing on the project, the EITF has met twice on April 19 and July 19, 2001 to discuss several issues which are briefly summarized below." (Frederic W. Cook & Co., Inc.)




Newly Posted or Renewed Job Openings (Post Yours!)
Participant Education Specialist/Consultant for Illinois Hospital & HealthSystems Association
in IL
Compliance Consultant for American Century Investments
in MO
Senior Benefits Associates for Cap Gemini Ernst & Young
in NJ
Pension Plan Administrator for The Angell Pension Group, Inc.
in ALL STATES
Customer Service Representative for Leggette Actuaries, Inc.
in TX
Team Leader - Recordkeeping for INVESCO Retirement, Inc.
in GA



Newly Posted Conferences (Post Yours!)
Employee Benefits Conference for Practitioners and Plan Sponsors in TX on October 21, 2001
presented by Southwest Benefits Association and IRS-Employee Plans
Pacific Region Investment Conference 2001: Empowering Employees To Save For Retirement in on September 4, 2001
presented by Guam Business and Salomon Smith Barney Consulting Group



Newly Posted Press Releases
MyBenefitSource "Chips Away" at Meadowbrook Golf's Payroll Administration Costs (MyBenefitSource)
Valmark Joins with 401kExchange! (401kExchange.com)
PBGC Publishes Updated Data Book (Pension Benefit Guaranty Corporation)

Subscribe to the Retirement Plans Edition, too (click)


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.