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The BenefitsLink Newsletter -
Welfare Plans Edition
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January 16, 2002 - 6,377 subscribers
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Justices to Rule in HMO Case
Excerpt: "The court's decision will affect approximately 119 million people with insurance plans like Moran's. It will probably settle a question that Congress has not yet answered in patient-rights legislation: Who gets to make the decision when a patient and an insurer disagree over the proper treatment?" (New York Times; free registration required)

Supreme Court to Rule on HMO External Review Case
Excerpt: "[Plaintiff Debra] Moran's case goes before the high court Wednesday and will settle whether states can force managed care health plans to accept an independent second opinion when there is a dispute with a patient." (Los Angeles Times)

Amicus Brief of the AAHP and American Benefits Council in Supreme Court HMO External Review Case (PDF)
38 pages. Argues that the Illinois law mandating external review of HMO denials is not saved from preemption a law that regulates insurance, but instead constitutes an impermissible alternative enforcement mechanism. (American Benefits Council)

Amicus Brief of the United States in Supreme Court HMO External Review Case (PDF)
38 pages. The U.S. argues that the Illinois law mandating external review of HMO denials is saved from preemption because it is a law that regulates insurance, under ERISA's insurance savings clause. (U.S. Supreme Court via FindLaw.com)

Petitioner's Brief in Supreme Court HMO External Review Case (PDF)
29 pages. (U.S. Supreme Court via FindLaw.com)

Petitioner's Reply Brief in Supreme Court HMO External Review Case (PDF)
14 pages. (U.S. Supreme Court via FindLaw.com)

Analysis: Eleventh Circuit Finds Sole Shareholder to Be Beneficiary of ERISA Plan
Excerpt: "This is the first time the Eleventh Circuit has ruled on the question of whether the owner of a corporation may be a beneficiary under an ERISA plan. Other federal circuits have come to various conclusions on whether a business owner who is covered by an ERISA plan is subject to ERISA when claiming benefits under the plan." (EBIA Weekly)

Most Americans Happy with Their Health Plans, Harris Poll Says
Excerpt: "Although previous surveys have found that most Americans have 'negative views' of managed care, and therefore favor patients' rights legislation, the majority of American adults with health coverage continue to 'think well' of their own health plans, including employer-provided plans, Medicare and Medicaid, a new Harris Poll finds." (KaiserNetwork.org)

California Health Plans Pledge $100 Million in Performance Incentives
Excerpt: "California's six largest health plans have agreed to support a single physician performance scorecard and a new Pay for Performance initiative that should deliver $100 million in incentives next year to doctors who contract with their HMO plans." (Medscape; free registration required)

Health Plans to Pay Bonuses for Quality
Excerpt: "Six of California's largest health insurers said Tuesday they will begin paying bonuses to doctors for providing superior treatment, giving further evidence that the current system of fixed HMO payments for patient care rapidly is coming unglued." (Los Angeles Times)

Advocacy Organization Says HMO Industry's 'Pay for Performance' is Mirage
Press release. Excerpt: "The Foundation for Taxpayer and Consumer Rights (FTCR) stated that the HMO industry's announcement today that it would pay doctors a bonus based on health quality is illusory. FTCR noted that the main mechanism by which HMOs will continue to pay physicians provides them more money for providing less medical care for patients." (U.S. Newswire via Yahoo! News)

IRS Discusses Whether Amounts Paid for Cayenne Pepper to Treat Disease Are Deductible
IRS Information Letter 2001-0297 (December 31, 2001). Excerpt: "EBIA Comment: This letter is a useful summary of the circumstances under which non-traditional healing treatments can be deducted under Code Section 213--and therefore reimbursed by a health FSA. But it also illustrates why health FSA administrators sometimes tear their hair out in frustration." (EBIA Weekly)

Overview: FMLA and Cafeteria Plans: IRS Final Regulations
Recent IRS final regulations concerning FMLA's effect on the operation of cafeteria plans are effective for plan years beginning on or after January 1, 2002. Treas. Reg. § 1.125-3 (Oct. 17, 2001). This article discusses key differences between the final regulations and the proposed regulations issued in 1995. It also highlights two important related tasks: amending cafeteria plans to comply with the new rules, and complying operationally with the new rules. (Sanders, Schnabel & Brandenburg, P.C.)

Court Won't Dismiss COBRA Claim Based on Employer's Gross Misconduct Defense
Excerpt: "EBIA Comment: As this case demonstrates, even when an employer believes that there has been gross misconduct, any resulting litigation is not likely to be resolved in the early stages and may have to be pursued all the way through an expensive trial." (EBIA Weekly)

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

Summary of Final Regulation on Requests by DOL for SPDs, Plan Documents
Link to a brief article and discussion on our message boards; please join in if you have a comment about the final regulation. (BenefitsLink Message Boards)

Analysis: DOL Finalizes Regulations With Penalties for Failure to Produce Documents on DOL's Request
Excerpt: "The DOL's request for documents is limited to documents that a participant or beneficiary could examine and obtain ... 'Participant or beneficiary' is broadly defined for this purpose, specifically including even prospective alternate payees (under a qualified domestic relations order), prospective COBRA qualified beneficiaries, and prospective alternate recipients (under a qualified medical child support order)." (EBIA Weekly)

Quick Action Needed for Split-Dollar Tax Savings Opportunities
Excerpt: "With its release of Notice 2002-8, the IRS again announced its intent to change the tax treatment of split-dollar arrangements. Employers with existing split-dollar arrangements and those contemplating new arrangements need to act quickly. This Alert describes ways to take advantage of the grandfathering rules and executive benefit planning opportunities before the January 28, 2002 deadline." (Aon)

Analysis: IRS Takes Notice and Revokes Notice 2001-10 on Split-Dollar Arrangements
Excerpt: "A year after issuing the controversial Notice 2001-10, 2001-5 IRB 459 on split-dollar life insurance, the Internal Revenue Service has revoked the notice and reissued interim guidance. While Notice 2002-8, 2002-4 IRB 1, is not a complete reversal of last year's guidance, it does include changes that reflect an acknowledgement of the spate of criticism that Notice 2001-10 unleashed." (Tax Notes)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Defined Contribution Enrollment Specialist for Diversified Investment Advisors
Benefits Attorney for Jackson Lewis Schnitzler & Krupman
Business Retirement Specialist for Franklin Templeton Investments
Defined Contribution/401(k) Administrator/Consultant for Berlin, Ramos & Co., CPA's, Rockville, Maryland
Director of Sales - 401(k) and Benefits Plans for Hand Benefits & Trust
Defined Benefit Analyst for Paragon Consulting Group
Senior DC Consultant - Fun and Challenging! for Louis Kravitz & Associates, Inc.

Newly Posted Conferences (Post Yours!)
SunGard Corbel Advanced Pension Conferencein FL on September 11, 2002
presented by SunGard Corbel

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.