BenefitsLink Health & Welfare Plans Newsletter for November 13, 2001

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The BenefitsLink Newsletter -
Welfare Plans Edition

November 12-13, 2001 - 6,549 subscribers

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Mileage Allowance Increased for Transportation to Obtain Medical Care
Excerpt: "The IRS has announced that the standard mileage rate for use of an automobile to obtain medical care, as described in Code Section 213, will increase from $0.12 to $0.13 per mile for 2002." (EBIA Weekly)

ERISA Statutory Penalties Not Available in Connection With COBRA Benefit Claim
Moreno v. St. Francis Hospital & Health Center (N.D. Ill. 2001). Excerpt: "[T]he court ruled that ERISA statutory penalties were not available in a lawsuit for a denial of benefits. Rather, these statutory penalties could be awarded under ERISA Section 502(c) when a plan administrator failed or refused to provide information requested by a plan participant. The employee did not raise the issue of the plan administrator's failure to provide information ..." (EBIA Weekly)

Sagging Economy Threatens Health Coverage
Excerpt: "Sixty-five percent of Americans under 65 get insurance through their employer, meaning that the loss of a full-time job can quickly translate into the loss of health benefits. A 1986 federal law allows people to keep their health insurance even after they lose their jobs, but they must pick up the full cost of the premiums -- a huge burden for someone laid off, as much as $500 or $600 a month for coverage of a family, according to the Kaiser Family Foundation." (New York Times; free registration required)

Opinion: Congress Should Help Laid-off Workers in Wake of September 11
Excerpt: "Hundreds of thousands of people have lost their jobs since the September 11 attacks. Most of them are facing a double challenge. They have to deal with no health coverage on top of no paychecks. If Congress is serious about boosting our economy, now is the time to devote a substantial portion of the economic stimulus package to cover the health premiums for displaced Americans." (Consumers Union)

Big Trouble for Employer Failing to Coordinate Offer of Enhanced Benefits With Language of Plans
Gerlib v. R.R. Donnelly & Sons Co. (N.D. Ill. 2001). Excerpt: "EBIA Comment: we highly recommend the case to any employer (or advisor) considering a program of enhanced layoff benefits--careful planning and clear documentation can prevent the misunderstandings and resulting benefit liability that occurred here." (EBIA Weekly)

Individual Who Assisted Someone Else to Wrongfully Obtain ERISA Benefits Must Repay Plan
Chicago District Council of Carpenters Welfare Fund v. Angulo (N.D. Ill. 2001). Excerpt: "Later, when the plan discovered the deception, it sued in federal court for restitution (repayment of the amount paid in benefits) arguing that the couple had been unjustly enriched at the plan's expense. The court agreed that the plan could sue for restitution under ERISA." (EBIA Weekly)

Supreme Court To Rule on HMO Review Law
Excerpt: "Texas Attorney General John Cornyn asked the U.S. Supreme Court on Thursday to preserve a provision of Texas' HMO reform law that allows patients to seek an independent medical opinion if their insurers deny a treatment or test. A federal appeals court struck down the provision-- but upheld the right of patients to sue their HMOs-- in a June 2000 ruling. Four months later, a different federal appeals court upheld the right to an independent review in a similar case in Illinois." (The Dallas Morning News)

Ambiguity Not Construed Against Health Plan Administrator With Discretion to Interpret Plan Document
Mitchell v. Dialysis Clinic Inc. (6th Cir., Aug. 24, 2001). Excerpt: "The court said that the claim that the contract should be construed against the drafter -- a state law concept -- was preempted by the fiduciary grant of discretionary authority, a creature of ERISA federal law." (Thompson Publishing Group)

Court Improperly Dismissed State Insurance Law Claims Against Health Care Provider
A federal district court improperly dismissed plaintiffs' state insurance law claims against a health care provider because the claims did not arise under ERISA and, hence, the case was within the jurisdiction of the state court. This was the ruling of the Eleventh Circuit U.S. Court of Appeals in Hobbs, et al. v. Blue Cross and Blue Shield of Alabama (No. 01-10019). (Spencernet)

DOD To Launch Demonstration Project For Health Care For Families of Activated Reservists
The Department of Defense (DOD) has issued a notice in which it announces that it is implementing a nationwide TRICARE demonstration project to test the ability of the Military Health System (MHS) to address unreasonable impediments to the continuity of health care encountered by family members of activated reservists and National Guardsmen. Notice of the demonstration project was published in the November 5 Federal Register. (Spencernet)

How to Choose a Health Plan During Open Enrollment
Excerpt: "The open enrollment period for your health insurance plan comes once every year, usually during the fall. The corresponding paperwork typically generates as much enthusiasm as your yearly tax forms. But don't be tempted to just put a check mark next to your current plan." (insure.com)

Health Care Industry as the Main Economic Engine: Is That So Bad?
Excerpt: "For the last few months, the business of keeping people healthy has been one of the only parts of the $10 trillion American economy that has remained healthy, and many economists now say that the sprawling health care industry may be the only driver of growth in the near term." (New York Times; free registration required)

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

Employer Not Required to Provide Historical Annual Reports to Plan Participant
Staib v. Vaughn Industries (N.D. Ohio 2001). Excerpt: "As to the historical summary annual reports and annual reports (i.e., Form 5500s), the court noted that ERISA Section 104(b)(4) requires production of only the 'latest' annual report and summary plan description (SPD). Therefore, it held that the company had already complied with ERISA by turning over the annual reports for the most recent plan year." (EBIA Weekly)

Worker Not on Company Payroll Was Ineligible for Benefits Even If Common-Law Employee
Gustafson v. Bell Atlantic Corp. (S.D.N.Y. 2001). Excerpt: "Even though the court agreed that the plaintiff might have been misclassified as an independent contractor (given the high degree of control exercised by the company over his work), it dismissed the benefit claims based on the eligibility clauses of the pension and health plans." (EBIA Weekly)

Newly Posted or Renewed Job Openings (Post Yours!)

Pension Administration Systems Specialist

for Unifi Network LLC, a Subsidiary of PricewaterhouseCoopers LLP
in NJ

Manager, Retirement Plans Administration

for HSBC Bank, USA
in NY

Client Relationship Manager

for Pension Third Party Administrator
in MI

Newly Posted Conferences (Post Yours!)

Fundamentals of Money Management Workshop

in PA on October 7, 2002
presented by International Foundation of Employee Benefit Plans

Health Care Management Conference

in NV on November 10, 2002
presented by International Foundation of Employee Benefit Plans

Investments Institute

in NV on May 6, 2002
presented by International Foundation of Employee Benefit Plans

Washington Legislative Update

in DC on May 20, 2002
presented by International Foundation of Employee Benefit Plans

Learning and Development/Work Environment Basics

in CA on April 9, 2002
presented by International Foundation of Employee Benefit Plans

Learning and Development/Work Environment Basics

in IL on August 22, 2002
presented by International Foundation of Employee Benefit Plans

Creating High-Performance Organizations

in CA on April 11, 2002
presented by International Foundation of Employee Benefit Plans

Creating High-Performance Organizations

in IL on August 26, 2002
presented by International Foundation of Employee Benefit Plans

Total Compensation and Organizational Strategies

in FL on March 4, 2002
presented by International Foundation of Employee Benefit Plans

Total Compensation and Organizational Strategies

in CA on April 15, 2002
presented by International Foundation of Employee Benefit Plans

Total Compensation and Organizational Strategies

in IL on August 20, 2002
presented by International Foundation of Employee Benefit Plans