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The BenefitsLink Newsletter -
Welfare Plans Edition
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November 15, 2001 - 6,549 subscribers
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Proving COBRA Notices and Elections Were Sent on Time When Mail Disruptions Strain Administration
Excerpt: "With COBRA administration, one day could make all the difference between a qualified beneficiary gaining or losing coverage for thousands of dollars of medical expenses. Such a system is particularly vulnerable to the recent disruptions in U.S. mail delivery. Therefore, plan administrators (and qualified beneficiaries) must understand how best to protect their interests in light of this disruption." (Thompson Publishing Group)

Eleventh Circuit Affirms Award of Penalties To Participant For Failure To Provide COBRA Notice
The Eleventh Circuit U.S. Court of Appeals has affirmed an award of penalties in the amount of $75 per day to a participant whose former employer failed to provide him a notice of rights to continued health care coverage under COBRA. However, the appellate court reversed an award of penalties to the participant's wife and two minor children. The case is Wright v. Hanna Steel Corporation (No. 01-10371). (Spencernet)

Nasser Gets Golden Parachute from Ford
Excerpt: "A month before his departure on Oct. 29, Nasser worked out a deal with Ford, in case of his early retirement, that entitled him to receive the maximum number of annual stock awards he would be eligible to receive, as well as full retirement and pension benefits." (The Detroit News)

Overview: Employee Contributions of Unused Leave under Employer's Donation Program Are Not Income
Excerpt: "In the aftermath of the September 11, 2001 terrorist attacks, many employers have adopted or are considering adopting leave-based donation programs, which allow employees to forgo vacation, sick, or personal leave in exchange for their employer contributing the value of that leave to charity." (Practitioners Publishing Company)

Learning and the Value of Information: the Case of Health Plan Report Cards
Excerpt: "We estimate a Bayesian learning model in order to assess the value of health plan performance information and the extent to which the explicit provision of information about product quality alters consumer behavior. We take advantage of a natural experiment in which health plan performance information for HMOs was released to employees of a Fortune 50 company for the first time. Our empirical work indicates that the release of information affected health plan choices." (National Bureau of Economic Research)

Tracking Health Care Costs
Excerpt: "This paper provides an update on trends in health care costs since 1999. Although the growth rate in overall costs has been stable since 1999, the trend in costs for hospital services rose, while that for prescription drugs declined, although it remains extremely high. Increased growth in hospital costs reflects the retreat from tightly managed care and labor shortages." (Health Affairs)

Comparison Chart of Provisions of Managed Care Bills Passed by House, Senate
'107th Congress Managed Care Legislation,' prepared by Jon W. Breyfogle. (Groom Law Group)

ERIC Publishes Comparison of Previous Mental Health Parity Rules to Proposed Expanded Set of Rules (PDF)
Reviews provisions contained in the Labor-HHS appropriations bill, H.R. 3061. Excerpt: "Domenici-Wellstone Not A Simple Reauthorization - It Would Significantly Expand Current Law Requirements." (ERISA Industry Committee)

Those Who Decline Employer-Sponsored Coverage Are In Worse Health Than Employees Who Take
Excerpt: "People who turn down employer-sponsored coverage are generally in worse health than those who participate in employer plans, according to a study in the latest issue of Health Affairs." (KaiserNetwork.org)

Americans' Health Priorities: Curing Cancer and Controlling Costs
Excerpt: "In this paper we provide a comprehensive examination of Americans' priorities within both health and health care. We find that Americans do have a clear set of priorities in each of these areas.... However, they did not rank many leading causes of death very high as serious problems." (Health Affairs)

How the Slowing U.S. Economy Threatens Employer-Based Health Insurance (PDF)
34 pages. Excerpt: "This report summarizes recent findings of other reports and provides new analysis of job-based health insurance, unemployment, and the economic consequences of the lack of health coverage. It also discusses policy options and issues." (Jeanne M. Lambrew, Ph.D., published by The Commonwealth Fund)

Enron Chief Will Give Up Severance Package
Excerpt: "Trying to quell a furious reaction from employees outraged that he stood to profit from a merger with Dynegy Inc., Kenneth L. Lay, the chairman and chief executive of the Enron Corporation, decided ... to give up a severance package worth more than $60 million." (New York Times; free registration required)

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


The Benefits of Portals
Excerpt: "Web portals are the latest development in the wired world of benefits. They offer advantages to plan sponsors and members, including real-time information in a self-service environment." (Benefits Canada)

Andersen's U.S. Compensation and Benefits News Briefs, November 5, 2001 Issue
Articles include: IRS final regulations on FMLA and cafeteria plans; IRS proposed regulations on 'catch up' contributions; IRS guidance on EGTRRA qualified plan limits; IRS blesses employer leave-based charitable donation programs-- for now; IRS allows redesignation of estimated tax payments; DOL advises 9-11 victims on loss of health benefits; Court holds 'mailbox rule' controls timely receipt if no contrary plan language. (Andersen)

Compensation vs. Benefits Professionals: Who Gets Paid More?
Excerpt: "There is a discrepancy in pay between benefits and compensation professionals. These authors report on the results of a survey that measured the discrepancy and suggest possible reasons for the difference. They observe that, if benefits professionals are to reach pay equity with their compensation counterparts, they may need to play a strong role in helping organizations recognize the importance of benefits as a component of total reward strategy." (International Foundation of Employee Benefit Plans)

Demutualization of Life Insurance Companies
The Prudential Insurance Company of America and the Principal Financial Group recently joined the growing group of mutual life insurance companies electing to 'demutualize,' converting from ownership by policyholders to ownership by public shareholders. When benefit plans or employers sponsoring benefit plans receive demutualization proceeds, they face decisions with significant legal and economic implications. This article lists many issues facing those who must handle demutualization proceeds. (Sanders, Schnabel & Brandenburg, P.C.)

Opinion: In Defense of Stock Option Accounting (PDF)
Excerpt: "The premise of [a recent article by Gretchen Morgenson of the New York Times] is that anyone with any intelligence and some understanding of accounting principles knows that current stock option accounting is wrong. She further infers that defenders of current accounting standards have two objectives: to protect large grants to top executives, and to insulate the companies' bottom lines from option costs. This letter both details her charges and outlines our response." (Frederic W. Cook & Co., Inc.)




Newly Posted or Renewed Job Openings (Post Yours!)
Global Compensation Manager for Towers Perrin
in
CT
ERISA Attorney for Law Firm
in
MN
Pension Administrative Consultant for PenSys, Inc.
in
NC
DC Plan Administrator for Lincoln Benefits Group, Jenkintown, PA
in
PA



Newly Posted Press Releases
S&P's Participant Newsletters Are Penny Wise, Plan Prudent (Standard & Poor's)
ERIC Side-by-Side Comparison Demonstrates Expansive Nature of Domenici-Wellstone Mental Health Parity Provision (The ERISA Industry Committee)
California State Rate to Remain at 0.9% for 2002 (VPA, 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.