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The BenefitsLink Newsletter -
Welfare Plans Edition
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March 5, 2002 - 6,505 subscribers
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Bush Won't Seek Bailout of Steel Industry Retiree Health Benefits
Excerpt: "President Bush won't push for a $10 billion bailout for hundreds of thousands of steel retirees, according to industry and government officials close to the administration.... [R]etirees stand to lose virtually all of their health-care and life-insurance benefits and some of their pensions as their former employers seek to unload these so-called legacy costs in bankruptcy court." (Wall Street Journal via Yahoo! News)

Health Care Has a Relapse
Excerpt: "Costs are soaring. States are struggling. People are losing their coverage. Has Washington even noticed?" (Time.com)

First Circuit Overturns Jury Verdict For Retirees Seeking Enhanced Severance Benefits
In its second ruling in the case, the First Circuit U.S. Court of Appeals has vacated a jury verdict in favor of retirees who claimed that their former employer violated state law against misrepresentation in connection with the implementation of an enhanced severance package. The case is Rodowicz, et al. v. Massachusetts Mutual Life Insurance Company (Nos. 00-2077 and 00-2078). (Spencernet)

ERISA Does Not Permit Recovery of Life Insurance Benefits Allegedly Lost Due to Misinformation
Kishter v. Principal Life Ins. Co. (S.D.N.Y. 2002). Excerpt: "[S]everal months before the employee died, she had been told by the benefits administrator of the purchasing corporation that she was covered by the new insurance. On that basis, the employee's estate sued the purchaser, claiming that the miscommunication was a fiduciary breach that entitled the estate to recover the value of the life insurance proceeds that would have been paid." (EBIA Weekly)

Court Awards Statutory Penalties for Employer's Failure to Timely Provide Requested Documents
Neuma, Inc. v. AMP, Inc. (N.D. Ill. 2002). Excerpt: "In deciding whether penalties should be assessed, the trial court considered several factors, including the presence of bad faith or intentional misconduct on the part of the employer, the length of the delay, the number of requests made and documents withheld, and the existence of any prejudice to the participant or beneficiary.... [T]he court ... awarded $80 per day for the 53 days that the employer was late." (EBIA Weekly)

Bipolar Disorder Ruled Physical Disability Where Benefits Plan Language Is Ambiguous
Excerpt: "Bipolar disorder is a physical, not a mental illness under the long-term disability benefit plan covering employees of the Federal National Mortgage Association, the U.S. District Court for the District of Columbia ruled Feb. 26, allowing a bipolar plan participant to receive benefits beyond the 24-month limitation for mental illnesses ..." (BNA Daily Labor Report via Society for Human Resource Management)

New York Lawsuit Raises Question of HMO Accountability
Excerpt: "The AMA's Litigation Center and the Medical Society of the State of New York have filed a friend-of-the-court brief in a case against a health plan, Vytra Healthcare, that is now before the 2nd U.S. Circuit Court of Appeals. In it, the physician groups say the New York-based plan should have to answer for going against a physician's recommendation that a patient receive an aggressive cancer treatment." (American Medical News)

Discharge of Pregnant Employee Due To Excessive Absenteeism Did Not Violate PDA, Court Rules
The Fifth Circuit U.S. Court of Appeals has ruled that the termination of a pregnant employee due to excessive absenteeism did not violate the Pregnancy Discrimination Act (PDA). The ruling came in Stout v. Baxter Healthcare Corp. (No. 00-60542). (Spencernet)

Employer's FMLA Notice Provided Sufficient Notice of Potential Cancellation of Employee's Insurance
Excerpt: "The notice must detail the specific expectations and obligations of the employee and explain any consequences of a failure to meet these obligations, including, among other things, any requirement for the employee to make premium payments in order to maintain insurance coverage during an FMLA leave, the arrangements for making such payments, and the possible consequences of failure to make such payments on a timely basis (that is, the circumstances under which coverage may lapse)." (EBIA Weekly)

Commuters' Benefits on Way to Becoming Accepted
Excerpt: "The Internal Revenue Code allows employers to provide work-related transportation benefits to employees on a pretax basis--similar in many ways to pre-tax deductions for dependent care and medical costs--of up to $100 a month for public transportation and $185 for parking." (Chicago Tribune)

EEOC Enforcement Statistics For Fiscal Year 2001 Show Increase In Discrimination Charges
The Equal Employment Opportunity Commission has released comprehensive enforcement and litigation statistics for fiscal year 2001 (which ran from Oct. 1, 2000, through Sept. 30, 2001). According to the new data, which is posted on the EEOC's Web site at http://www.eeoc.gov, total discrimination charges filed against private employers increased 1% from the previous year to 80,840--the highest level since the mid-1990s. (Spencernet)

IRS Releases 2002 Version of Publication 15-B, Employer's Tax Guide to Fringe Benefits
Excerpt: "If you haven't previously used Publication 15-B, you may want to take a look. It's a helpful summary of the tax rules that apply to many benefits ... One particularly useful item is a Table that summarizes how special employment tax rules (income tax withholding, Social Security and Medicare, and federal unemployment taxes) apply on a per-fringe-benefit basis." (EBIA Weekly)

Survey: Health Insurance Carries Heaviest Price Tag
Excerpt: "A third of US company payrolls in 2000 were dedicated to employee benefits with health insurance the most expensive part of those costs, according to a new US Chamber of Commerce study." (PLANSPONSOR.com; free registration required)

Gold-Plated Medicine
Excerpt: "When two Harvard doctors decided to open a 'concierge' practice-- charging patients $4,000 a year in return for same-day appointments and 24-hour cellphone access-- not everyone in Boston's medical circles was delighted.... Concierge practices are controversial not just because they exclude the poor. They also rattle the core relationship that Americans have with the health-care system-- that between patient and primary-care doctor." (Boston Globe)

New Guy in the Black Hat: Drug Companies
Excerpt: "HMOs are not as despised as they once were. While they are a long way from popular, they are no longer the Al Qaeda of the business world. Fewer people complain about them; fewer news stories chronicle their horrors; fewer politicians attack them. In Washington, the patient's bill of rights is languishing... [C]onsumers say the top priority of government should be to keep medical care affordable and to do something about drug prices." (Boston Globe)

HMO Hostages? Medical Organizations, Patients Debate 'John Q.' Movie's Reflection of Reality
Excerpt: "Much of the film is pure Hollywood especially the hostage storyline but the film's demonizing of HMOs and the health-care system in general seems to have resonated with many Americans. The film opened at No. 1 three weeks ago. But is the film plausible? Could a John Q. scenario really happen?" (Las Vegas Sun)

House Republicans Seek to Attach Extension of Jobless Benefits to Health Care Tax Credit
Excerpt: "Democrats say lawmakers should simply extend unemployment benefits by an additional 13 weeks. But GOP leaders say their bill, likely to be considered by the House later this week, is needed to tackle the biggest problem faced by many laid-off people.... Under the House GOP bill, jobless benefits would be extended by 13 weeks and laid-off workers could obtain a tax credit for up to 60 percent of their health insurance premiums." (AP via Yahoo! News)

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

Enron's Troubles Bolster Critics of Chief Executive Officers' High Pay
Excerpt: "[A] Business Week magazine analysis found that the average chief executive officer at one of the nation's 365 largest corporations made $13.1 million in 2000. Total pay was up 6.3 percent and cash compensation rose 18 percent ... [T]he increase in 2000 was in a year when stock prices, a key measure of executive performance, fell significantly." (Knight Ridder/Tribune Business News via Society for Human Resource Management)

Opinion: AOL Time Warner Shows Another Way to Pay Plenty
Excerpt: "When times are tough, as they were last year, companies cut the cash and put the pedal to the metal on stock-option grants. The result: Total pay actually rises after bad performance." (Graef Crystal, on Bloomberg.com)

For Executives, Nest Egg Is Wrapped in a Security Blanket
Excerpt: "The boom in executive pensions began in the 1980's, after the federal government enacted a law limiting the amount of an employee's salary that a company can consider when contributing to pension coffers. Executives quickly flipped the purpose of the law by establishing separate retirement plans for themselves, divorcing their financial interests from company pensions." (New York Times; free registration required)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Document and Compliance Specialist for Louis Kravitz & Associates, Inc.
in CA
Business Retirement Specialist for Franklin Templeton Investments
in CA
CIT Manager for Diversified Investment Advisors
in NY
Defined Contribution Team Lead for CitiStreet
in FL
Plan Administrator for Arizona Qualified Plan Services, Inc.
in AZ
Qualified Pension Administrator for B & B Benefits Administration, Inc.
in CA
Relationship Manager for Ceridian
in FL
Client Consultant for Brandywine Benefits Corporation
in DE, NJ, PA

Newly Posted Conferences (Post Yours!)
Implementing an Effective Disease Management Programin ALL STATES on March 19, 2002
presented by International Foundation of Employee Benefit Plans

Newly Posted Press Releases
First NAGDCAST Gets Rave Reviews (National Association of Government Defined Contribution Administrators, Inc.)
SunGard Corbel Appoints New Vice Presidents (SunGard Corbel)
Medical Rehabilitation Consultants, Inc., Launches Its New Elder Care Management Benefit Program (Medical Rehabilitation Consultants, 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.