If this message looks garbled to you or if the headlines in this message don't connect you to Web pages when you click on them, please request the "plain text" version of this newsletter ("Welfare Plans Edition") by emailing your request to publisher Dave Baker
Jobs | Today's Messages | Topical News | Q&A Columns | Services & Products | Search | Reference

The BenefitsLink Newsletter -
Welfare Plans Edition
BenefitsLink logo

August 27, 2001 - 6,288 subscribers
Today's sponsor: EmployeeBenefitsJobs.com

(Click on company name or banner to learn more.)

   Fill your employee benefits job openings fast by
   advertising on BenefitsLink.  What better place to find
   qualified candidates?   Your help wanted ad will be
   listed in the BenefitsLink Newsletter (over 19,000
   subscribers to the two editions), will be seen by
   thousands of candidates who view our listings online,
   and will be emailed to over 2,000 job-seekers.   Click to
   see how easy it is to place an ad!  We thank you.

(Help us to provide this 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)
Congress to Review Medical Savings Accounts
Excerpt: "About five years ago Congress created medical savings accounts in a test program that is to expire in 2003. Results have been mixed but Congress is forging ahead: The patients' rights bill the House has passed would make these accounts permanent. The issue will come up in negotiations this fall with the Senate." (Associated Press via Excite News)

Health Insurance Prices to Soar
Excerpt: "Health insurance premiums are expected to surge at double-digit rates again next year, a sign that rising medical inflation isn't just a temporary blip but the beginning of a new era that will force employers and workers to make tough and costly choices. Spurred by increased costs for drugs, hospital care and doctors, health insurers are seeking premium increases next year of 13%, 20%, even 50% -- the highest in a decade." (USA Today)

Washington State Supreme Court Rejects Claim That Domestic Partner Benefits Are Unconstitutional
Excerpt: "The [city of Vancouver's] policy allows domestic partners, including same-sex partners, to receive health insurance benefits. It also allows employees to use their sick leave to care for partners or partners' children. Vancouver resident Roni Heinsma [argued] that the city was creating a kind of mini-marriage in violation of the state law against same-sex marriage. But the justices agreed with the city's argument that regulation of employee benefits is a local matter." (Seattle Post-Intelligencer)

State Law Claims Arising Under Conversion Policy Are Not Preempted by ERISA
Waks v. Empire Blue Cross/Blue Shield (9th Cir. 2001). Excerpt: "[T]he Ninth Circuit falls into line with several other courts (the courts are divided) in holding that once 'an individual has exercised her right to convert from a group policy under an ERISA plan to an individual policy, the new policy is no longer regulated by ERISA, and state-law claims under that policy are not preempted by ERISA.'" (EBIA Weekly)

8th Circuit: HMOs Are "Insurance Companies" for Purposes of ERISA's "Savings Clause"
Express Scripts, Inc. v. Wenzel (8th Cir. 2001). Excerpt: "In this case, a company that maintained a mail-order pharmacy sought an injunction to prevent enforcement of a Missouri law that imposed certain requirements on HMOs that provided prescription benefits.... [T]he court found that the law satisfied all three factors of the McCarran-Ferguson test. Therefore, the law fell within the savings clause and was not preempted by ERISA." (EBIA Weekly)

Plan Covering Just the Business Owner Is Subject to ERISA; Stepdaughter Owned Part of the Business
Leckey v. Stefano (3d Cir. 2001). Excerpt: "[EBIA Comment:] When a business is owned by anyone other than an individual and his or her spouse, the owner-employees are considered employees and even a plan covering just one of those owner-employees will be subject to ERISA." (EBIA Weekly)

Blue Cross Agrees to Review of Behavioral Health Claim Denials
Excerpt: "As part of a settlement of a law-suit against Blue Cross and Blue Shield of Minnesota over access to coverage for addictions and mental illness, the state attorney general's office has won a concession that it believes is unprecedented in behavioral managed care. Blue Cross has agreed to the formation of a review committee that will have broad discretion to overturn denials of service imposed by Blue Cross and its affiliates." (Medscape; free registration required)

Total Benefits: Coping with the Slowdown
Excerpt: "This time around, to avoid cutting too deeply, companies such as Charles Schwab, Sun Microsystems, and Hewlett-Packard are asking, or insisting, that employees take time off-- frequently without pay." (PLANSPONSOR.com; free registration required)

Business Takes on the Job of Improving Health Care
Excerpt: "Reducing medical errors and improving patient safety have become major concerns in health care, following the release last year of the Institute of Medicine's (IOM) report To Err Is Human ... Corporate America's largest purchasers of health care have taken up the challenge.... [M]ore employers are showing an intense interest in quality and patient safety." (Healthplan via Medscape; free registration required)

Opinion: AMA Prepares for Conference Committee Meetings on Patients' Rights Bills
Excerpt: "While the HMO industry is concentrating on misinformation advertising, the AMA is preparing detailed comparisons of the legislation that make clear why the Senate-passed bill is far superior. Furthermore, the AMA is working hard to ensure Congress, physicians and patients know just what those differences are." (American Medical Association)

Medical Savings Accounts: An Answer to Health Costs?
Excerpt: "There are many worries about defined contribution health insurance, generally mirroring the debate over medical savings accounts. There is also the question of shifting risk onto the employee, as has happened in the pension arena. Thus, few employers seem ready to move beyond the existing system.... But, if the past is any guide, employers will become increasingly willing to try new strategies as costs continue to surge." (Washington Post)

In Massachusetts Few Are Using New Patients' Rights Under State Law
Excerpt: "A review of the 31 appeals under the state's patients bill of rights, which went into effect Jan. 1, shows that most were for relatively nonthreatening medical conditions." (Boston Globe)

Another Question is Answered in the Cafeteria Plans Q&A Column
Our company is laying off a group of workers. Their last day of employment is August 31st. The company has agreed to pay severance benefits based on the number of years of employment. The terminated employees will receive their severance in a stream of payments through the end of 2001. May the employees participate in the company's cafeteria plan and 401(k) plan through the end of the year? (BenefitsLink.com)

Another Question is Answered in the Cafeteria Plans Q&A Column
Our company wants to establish a premium-only plan (POP) allowing employees who elect health insurance benefits to pay for their share of the premiums with pre-tax dollars. I know that some employers let their employees pay for health insurance on an after-tax basis, but we don't want to do that. Can we require employees who elect health insurance to pay for their share of the premiums with pre-tax dollars, or must we offer them an after-tax option, too? (BenefitsLink.com)

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


Advisory Opinion 2001-08A Finds Water District Is "Agency or Instrumentality of Local Government"
Excerpt: "The SWS [water district] and SSSD [sewer district] were created pursuant to state statutes, are governed by the SWS Board and SSSD Commission which are comprised of publicly elected officials, exercise governmental powers, and the property and revenues of the SWS and SSSD are exempt from federal and state taxes. The SWS Board and SSSD Commission established the Plans by resolution and control the operation and administration of the Plans." (U.S. Department of Labor, Pension and Welfare Benefits Administration)

New from EBRI: Compensation Costs in Private Industry March 1987 to March 2001
The August 2001 issue of Facts from EBRI, a monthly publication providing timely statistics on a variety of employee benefit issues. (Employee Benefit Research Institute)




Newly Posted or Renewed Job Openings (Post Yours!)
Marketing Consultant (Conversion & Case Management) for WESPAC Plan Services, Inc.
in CA
401(k) Administrator, Daily Valuation Plans for CNA TRUST
in CA
Implementation Project Manager for INVESCO Retirement, Inc.
in GA
Senior Pension Consultant for McKay Hochman Co., Inc
in NJ
Account Manager for Zenith Administrators
in MD



Newly Posted Webcasts (Post Yours!)
Contraceptive Coverage on September 10, 2001
presented by United States Senate



Newly Posted Conferences (Post Yours!)
IDM...Get Ready! in OH on September 20, 2001
presented by DMEC Ohio Chapter
Integrated Disability Management...The Latest Research, Findings, Strategies and Solutions in OH on October 18, 2001
presented by DMEC Ohio Chapter
401(k) Sales Summit in AZ on February 28, 2002
presented by ASPA



Newly Posted Press Releases
LifeMark Securites Corp. Joins with 401kExchange! (401kExchange.com)
ExpertPlan Selects esävio and SunGard for Managed Services and Hosting (ExpertPlan)
DailyAccess.Com launches new branding and marketing initiative (DailyAccess.Com)
Santorum Introduces 419A(f)(6) Reform legislation (PennMont Benefit Services, Inc.)



Newly Posted Announcements of Promotions and New Personnel (Post Yours!)
Amy L. Cavanaugh, CPC, QPA, QKA (McKay Hochman)

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.