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The BenefitsLink Newsletter -
Welfare Plans Edition
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March 13, 2002 - 6,505 subscribers
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COBRA Election Notice Sent by First-Class Mail Is Sufficient
Gibbs v. A. Finkl & Sons Co. (N.D. Ill. 2002). Excerpt: "This decision is consistent with many others holding that a plan administrator must make a good faith effort to provide a COBRA election notice that is reasonably calculated to reach each qualified beneficiary but need not prove actual receipt by the qualified beneficiaries.... When a plan administrator uses only first-class mail, it will, as in this case, need to provide other evidence that the notice was actually mailed." (EBIA Weekly)

Court Refuses to Consider Reason for Benefit Denial First Offered by Plan After Lawsuit Filed
Thompson v. Life Ins. Co. of North America (4th Cir. 2002). Excerpt: "After the employee filed suit, the insurer raised for the first time the plan's 'active service' provision as another basis for the denial of [long-term disability] benefits. The lower court entered judgment for the insurer, agreeing that the denial was proper under that provision. In this opinion, the Fourth Circuit reversed the lower court ..." (EBIA Weekly)

Employee's Disability Benefits Must Continue After Job Termination Where Plan Did Not Provide Cutoff
Stoltz v. Fenn Manuf. Co. (D. Conn. 2002). Excerpt: "While on disability leave, he was receiving benefits under his employer's ERISA-covered short-term disability (STD) plan, which provided up to 26 weeks of benefits. The employer stopped paying benefits as of the termination date, and the employee filed suit ... The court found nothing in the employee handbook or any other potentially relevant document to indicate that benefits would cease with termination of employment." (EBIA Weekly)

Court Awards LTD Benefits to Claimant Where UnumProvident Based Denial on Wrong Records (PDF)
17 pages; Watson v. UnumProvident Corp. (February 19, 2002). Excerpt: "Unum not only failed to review what its in-house reviewers had every reason to believe were Watson's records from Dr. Perry during the initial review of Watson's continuing eligibility, but Unum also failed to examine what its reviewers reasonably should have believed were Dr. Perry's records for Watson during the appeal process ... Unum's behavior in this case ... bordered on outright fraud." (U.S. District Court for the District of Maryland via FindLaw.com)

8th Cir. Upholds LTD Benefits Denial Even Though Claimant Qualified for Social Security Disability (PDF)
12 pages; Coker v. Metropolitan Life Insurance Company (February 28, 2002). Excerpt: "The determination that Coker suffers from a pain-based disability under Social Security regulations does not require MetLife to reach the same conclusion.... [S]ee also Ciulla v. USAble Life ... ('ERISA plans are not bound by Social Security determinations, and this court owes no deference to findings made under the Social Security Act.')." (U.S. Court of Appeals for the Eighth Circuit via FindLaw.com)

Mental Illness Definition in LTD Policy Was Ambiguous; Court Finds Bipolar Disease Not Mental (PDF)
18 pages; Fitts v. Federal National Mortgage Corporation (Feb. 26, 2002). Excerpt: "This is not to say that limitations in employee benefit contracts regarding 'mental' infirmities could never pass muster. The court holds only that an employee contract that defines mental illness no more specifically than as 'mental, nervous, or emotional disease or disorders of any type' is ambiguous. Better drafting is the key." (U.S. District Court for the District of Columbia)

Survey of Fortune 500 Company Benefits Policies for Reserve and National Guard Member Callups (PDF)
From the organization's 'The Officer' publication, January/February 2002 issue. (Reserve Officers Association of the United States)

Workers' Compensation Plan Not Exempt From ERISA If Not Required by State Law
Hernandez v. Jobe Concrete Products, Inc. (5th Cir. 2002). Excerpt: "The issue in this case was whether an occupational injury plan maintained by a Texas employer was subject to ERISA so that an employee's state-law claims in connection with the plan were preempted.... Because Texas did not require the employer to maintain the plan, the plan did not fall within the exemption and was therefore subject to ERISA." (EBIA Weekly)

Integrating Work and Family Life: a Holistic Approach
Excerpt: "In the last half century ... we have moved from a division of labor depending generally on men as breadwinners and women as family caregivers to a way of life in which both men and women are breadwinners. But we have done so without redesigning work or occupational career paths and without making new provisions for family care. The result is a policy and institutional lag that has produced a care crisis and a career dilemma." (Alfred P. Sloan Foundation Work-Family Policy Network)

Long-Term Care Insurance on Track for Federal Employees, Families
Excerpt: "[S]pokesmen from both AARP and the Health Insurance Association of America (HIAA) claim that the federal government, as the nation's largest employer, should serve as a model for others who want to provide access to the benefit." (BenefitNews.com)

Iowa, New Hampshire, West Virginia Legislatures Consider Mental Health Parity Measures
Excerpt: "The following is a summary of recent state action on mental health parity." (KaiserNetwork.org)

Wall Street Journal Addresses Prescription Drug Marketing
Excerpt: "The article examines the 'backlash' against direct-to-consumer prescription drug advertisements from large employers that call the ads the 'prime culprit' for increased health care costs." (KaiserNetwork.org)

No Generally-Applicable Duty to Disclose Incentives Paid to Physicians Under ERISA Plan
Horvath v. Keystone Health Plan East, Inc. (E.D. Pa. 2002). Excerpt: "To control costs, many health insurers and HMOs use incentive payments to participating physicians (e.g., bonus payments that increase or decrease based on the number of special tests, treatments or referrals ordered). Must these incentives be disclosed to ERISA health plan participants or beneficiaries?" (EBIA Weekly)

8th Cir.: Health Benefits Did Not Vest in 3M Retirees; Employer Could Increase Retirees' Premiums (PDF)
Hughes v. 3M Retiree Medical Plan and Minnesota Mining and Manufacturing Company (Feb. 28, 2002). Excerpt: "Because the summary plan description does not contain vesting language and unambiguously reserves to 3M the right to change the ... benefits, we affirm the district court's judgment." (U.S. Court of Appeals for the Eighth Circuit)

Before Senate Committee, White House Health Adviser Defends Bush Tax Credit Proposal for Uninsured
Excerpt: "Senate Democrats on March 12 raised doubts at a committee hearing that President Bush's tax credit proposal would allow the nation's uninsured to purchase 'affordable' health coverage, the AP/Philadelphia Inquirer reports." (KaiserNetwork.org)

Health Leader John Eisenberg Dead at 55
Excerpt: "Since April 1997, Dr. Eisenberg served as director of the Agency for Healthcare Research and Quality (AHRQ), the lead agency of the U.S. Department of Health and Human Services (HHS) for orchestrating efforts to improve healthcare quality, enhance patients' access to care and reduce the cost of care." (Reuters Health via Medscape)

TIAA-CREF Publishes Online Long-Term Care Insurance Premium Calculator
Excerpt: "This long-term-care insurance will pay actual daily charges for care you receive in a nursing facility, assisted-living and Alzheimer's facility, or hospice, up to the maximum you've selected." (TIAA-CREF)

Health Plan Liability, Mandated Benefits Among Top State Issues, According To Blue Cross Report
Extending liability for damages to health care plans and increased state mandates were among the top agenda items of state legislatures this past year, according to a recent analysis of state legislation conducted by the Blue Cross and Blue Shield Association. Blue Cross' ninth annual State Legislative Health Care and Insurance Issues: 2001 Survey of Plans. (Spencernet)

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

Analysis: Economic Stimulus Package Contains Benefit Provisions
Excerpt: "The Job Creation and Worker Assistance Act of 2002 was signed into law by the President on March 8.... This Alert focuses on: Interest Rate Funding Relief for DB Retirement Plans, Technical Corrections for Retirement Benefit Provisions in EGTRRA, and Extensions for Mental Health Parity and Medical Savings Accounts." (Aon)

Andersen's 'Alert: U.S. Compensation and Benefits News Briefs' for March 6, 2002
Articles include: new section 280G excess parachute regulations; valuing compensatory stock options under section 280G rules; frequent flyer miles not taxable, for now; Q&As on employment tax issues for public employees; 2002 version of IRS fringe benefit tax guide; proposed legislation on pension reform & blackouts; CMS issues HIPAA FAQs. (Andersen)

GAO Chief Says Federal Budget Cannot Sustain Current Social Security and Medicare Policies (PDF)
15 pages; testimony provided at Senate Budget Committee hearing on February 27, 2002. Excerpt: "Beginning about 2010, the share of the population that is age 65 or older will begin to climb, surpassing 20 percent by 2035.... Because of the coming demographic shift, the message from our simulations remains the same ... Absent changes in Social Security and health programs, in the long term, persistent deficits and escalating debt driven by entitlement spending will overwhelm the budget." (General Accounting Office Comptroller David Walker)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Benefits & Compensation Tax Manager for PricewaterhouseCoopers
in DC, PA
Employee Benefits Consultant/Administrator for Oxford Associates, LLP, a member of the BST Advisory Network
Retirement Plan Services Administrator for Wayne County National Bank
in OH
Web Benefits Systems Analyst for CitiStreet
in FL
in CA
Conversion/Installation Team Leader for BenefitStreet
in CA
Plan Administrator for xelan Pension Services, Inc.
in CA

Newly Posted Webcasts (Post Yours!)
The Health Care Crisis of the Uninsured: What Are the Solutions? on March 12, 2002
presented by KaiserNetwork.org

Newly Posted Press Releases
BenefitStreet adds Mike Fracisco to Executive Team (BenefitStreet)
Virtually every personnel form you'll ever need is in the "Exhibit Book of Personnel Forms" (Watson Wyatt Data Services)

Subscribe to the Retirement Plans Edition, too (click)

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.