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The BenefitsLink Newsletter -
Welfare Plans Edition
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December 24 - 26, 2001 - 6,470 subscribers
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Health Plan Contest California's Authority to Order Coverage
Excerpt: "In a case that reflects insurers' growing aggression against government interference, California Physicians Services, San Francisco, which does business as Blue Shield of California, has filed a civil lawsuit alleging the California Department of Managed Health Care exceeded its authority by ordering the plan to pay for a noncovered drug." (Modern Healthcare)

IRS Rules "Reimbursements" to Employees for Health Coverage Already Paid by Employer Is Not Tax-Free
Rev. Rul. 2002-3. Excerpt: "Under the rationale of Rev. Rul. 61-146, §106 allows an employee to exclude employer reimbursements for health insurance premiums, but only if those premiums are actually paid by the employee. Under both alternative arrangements described above, when [the employer] applies the amount of employees' salary reduction to pay health insurance premiums, the premium payments are paid by [the employer], not the employees ...." (Internal Revenue Service)

One-Time Stay-on Bonus Not an ERISA Severance Plan
Crews v. General American Life Ins. Co. (8th Cir. 2001). Excerpt: "In response to the loss of a major contract, the employer allegedly promised employees who remained with the company through a fixed date eight weeks of severance pay plus one week of severance pay for each completed year of service. The employer apparently made this severance pay promise without mentioning its existing, discretionary ERISA severance plan." (EBIA Weekly)

Ninth Circuit Holds That Individuals May Sue State for FMLA Violations
Hibbs v. Dept of Human Resources (9th Cir. 2001). Excerpt: "Breaking rank with the seven other federal circuits that have addressed the issue, the Ninth Circuit in this case recognizes an individual's right to sue a state under the Family and Medical Leave Act (FMLA)." (EBIA Weekly)

Health Care Costs Creep Out of Reach for Many
Excerpt: "It's starting to feel as though the managed care revolution never happened. As in 1992, health care expenses are rising faster than 10% a year. Employers are pushing more of the soaring costs onto their workers. And the recession is throwing millions of people out of work, costing them their health insurance as well as their paychecks." (Los Angeles Times)

Opinion: HMOs Ought to Accept Independent Medical Review of Claim Denials
Excerpt: "Independent review benefits both sides. The panels' specialists ensure that good medical judgments prevail for the patient, and HMOs benefit because the panels discourage costly lawsuits and establish an informal body of 'case law''--a consensus on right and wrong that helps HMOs shield themselves from future lawsuits. However, many HMOs are fighting independent review, both in California and in the other 40 states that have adopted it." (Los Angeles Times)

Marsh & McLennan Criticized by Victims' Families for Paying Health Benefits from Charitable Fund
Excerpt: "Marsh & McLennan ... announced that it would extend health coverage to the families for three years. But if anything, the announcement has only intensified the anger for many widows and widowers. They were dismayed to learn that the company planned to pay for the coverage not from corporate accounts, but from the MMC Victims Relief Fund, a charity established by the company to help provide for the families of the 295 employees who died." (New York Times; free registration required)

CalPERS 'Aggressive Financial Turnaround Plan' for Self-Insured Health Plans Has 'Positive Effects'
Excerpt: "The turnaround program included 'substantial hikes' in copayments for doctor visits and prescription drugs for members of two of CalPERS' self-insured health plans.... Under the program ... CalPERS: Raised the annual deductible two fold to $500 per individual and $1,000 per family; established a three-tier prescription drug benefit with $5, $15 and $30 copayments for generic, formulary and nonformulary drugs, respectively ..." (KaiserNetwork.org)

The Uninsured: How Health Plans Can Do Well By Doing Good
Excerpt: "While health plans battle for market share, 38 million Americans are uninsured. At least some could be signed up, but pursuing them is not without risk." (Managed Care Magazine)

Surgeries to Remove Loose Skin After Massive Weight Loss Found to Be Deductible Medical Expense
Al-Murshidi v. Commissioner (T.C. 2001). Excerpt: "[M]edical care expenses may be deducted to the extent that they exceed 7.5% of adjusted gross income. However, medical care doesn't include 'cosmetic surgery or other similar procedures' ... The IRS denied Ms. Al-Murshidi's deduction, finding that the procedures were cosmetic and didn't fall within the statutory exception for ameliorating a disfiguring disease, etc. Ms. Al-Murshidi sued." (EBIA Weekly)




Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Retirement Plans Administrator for Security Benefit Group of Companies
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Flexible Spending Account Assistant for Leggette Actuaries, Inc.
in
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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.