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The BenefitsLink Newsletter -
Welfare Plans Edition
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February 19, 2002 - 6,496 subscribers
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Many Companies Moving from HMOs to Self-Funded Health Plans
Excerpt: "Faced with health insurance cost increases of as much as 20% this year, many companies are dumping their traditional HMOs and switching to self-insurance to better manage costs while providing medical care for their employees." (Los Angeles Times)

Children of Separated Parents Not Dependents of Father Who Didn't Have Custody
Jeter v. Commissioner (4th Cir. 2002). Excerpt: "This case reminds us that deciding who is a dependent under Code Section 152 isn't always a slam dunk. That's important because cafeteria plans can only provide benefits for tax dependents." (EBIA Weekly)

State Court Must Decide Whether Payroll Deductions Can Be Used to Recover ERISA Plan Overpayments
Excerpt: "Several employee-participants alleged that payroll deductions to recoup overpayments [from a short-term disability plan] had been taken without their authorization in violation of state law ... [T]he court concluded that the participant's state wage claims affected the administration of the ERISA plan in too tenuous a way for the claims to be preempted." (EBIA Weekly)

Two Courts Allow That a QDRO May Trump a Welfare Plan's Beneficiary Designation
Excerpt: "The ERISA rules of qualified domestic relations orders (QDROs) apply, by their terms, only to pension plans. Nevertheless, some courts have found welfare plans subject to the QDRO rules ... In each of the cases discussed below, the issue was whether a divorce agreement mandating that a participant's children receive life insurance benefits constituted a QDRO and thus superseded the ERISA plan's valid beneficiary designation form." (EBIA Weekly)

Second Circuit Orders Coverage of "Experimental" Treatment For Breast Cancer Patient
Finding that 'each day was crucial' in the case, the Second Circuit U.S. Court of Appeals has ordered a health insurer to cover an 'experimental' medical treatment for an insured who suffers from breast cancer. The case is Zervos v. Verizon New York, Inc. and Empire HealthChoice, Inc. (Nos. 01-9213 and 01-9234). (Spencernet)

Captive Move Could Alter Long-Term Disability Benefits Market
Excerpt: "A second company has applied for federal approval to provide long-term disability insurance through a captive-- a move that could open a 'flood gate' and spur many more risk managers to handle their employee benefits in the same way, industry experts declared ... In 2000, the Labor Department gave approval to Columbia Energy Group to use the Vermont branch of Columbia Insurance Corp. Ltd. in Bermuda to reinsure long-term disability benefits, ending a process that took eight months." (National Underwriter via International Foundation of Employee Benefit Plans)

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

Despite Labor Shortage, Few Employers Tapping Into Pool of Experienced Older Workers
Excerpt: "In the next 25 years, the American economy will be dealt a blow so devastating it could slash productivity and put a stop to growth. It's not an attack from outside, but the aging of our own workforce. And few employers have given any thought to how they are going to deal with the crisis ..." (Chicago Tribune)

Opinion: Enron Questions and Answers; Was Lay Duped?
Excerpt: "His 2001 option exercises also seemed to show that he was serenely unaware of the abyss in which his company was hurtling." (Graef Crystal, on Bloomberg.com)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
401(k) /Pension Administrator for Great Lakes Pension Administrators, Inc.

Newly Posted Webcasts (Post Yours!)
Health Care Tax Credits to Decrease the Number of Uninsured on February 13, 2002
presented by KaiserNetwork.org

Newly Posted Press Releases
FlexCorpUSA Rolls Out Turn-Key Section 125 Compliance Services (FlexCorpUSA, Inc.)

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Copyright 2002 BenefitsLink.com, Inc., but you may freely distribute this email newsletter in whole. This newsletter is edited by David Rhett Baker, J.D.