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The BenefitsLink Newsletter -
Welfare Plans Edition
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March 22, 2002 - 6,505 subscribers
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Medical Privacy Changes Proposed
Excerpt: "The Bush administration [on Thursday March 21] proposed changing some of the federal rules designed to protect the confidentiality of Americans' medical records, including the ability of patients to decide in advance who should be able to use their personal health information." (Washington Post)

Department of Health and Human Services Drops Privacy Rule for Patients' Records
Excerpt: "The Bush administration on Thursday eliminated a privacy rule that would have required written consent before patients' medical records are sent to other medical facilities, pharmacies or insurance companies. Instead, health-care providers will only have to notify patients of their privacy rights, federal health officials said." (Los Angeles Times)

Bush Acts to Drop Core Privacy Rule on Medical Data
Excerpt: "The Bush administration [on Thursday March 21] proposed dropping a requirement at the heart of federal rules that protect the privacy of medical records. It said doctors and hospitals should not have to obtain consent from patients before using or disclosing medical information for the purpose of treatment or reimbursement." (New York Times; free registration required)

HHS Fact Sheet on Proposed Modifications to Medical Privacy Rule
Excerpt: "The proposal would promote access to care by removing the consent requirements that would potentially interfere with the efficient delivery of health care, while strengthening requirements for providers to notify patients about their privacy rights and practices.... Under the proposal, patients would be asked to acknowledge receipt of the notice of privacy rights and practices." (U.S. Department of Health and Human Services)

HHS Press Release on Proposed Changes to Medical Privacy Rules
March 21, 2002 Press release. Excerpt: "Secretary Thompson said today's proposed revisions are needed to fix problems with the previously published rule that otherwise could make it more difficult for patients to get quality care quickly and easily. The proposal also strengthens and clarifies the rule's marketing restrictions." (U.S. Department of Health and Human Services)

Advocates Upset About Proposed Medical Privacy Changes
Excerpt: "Under the new proposal, health-care providers and insurers must inform patients of how they use information and tell patients they can restrict that use.... That modification 'strikes at the very heart of the privacy regulation. Without a prior consent requirement, patients will have no control over how their health care information is used or disclosed,' said Georgetown University's Health Privacy Project, an advocacy group for medical privacy rights." (Reuters via Yahoo! News)

HHS Privacy Regs Are Improved But Still Need Work, Says American Benefits Council
Press release. Excerpt: "[W]e renew our urge to HHS to seek clear statutory authority from Congress to establish the final regulations on a single, nationally uniform basis, so conflicting or duplicative state laws would not apply to employer-sponsored group health plans.... We also urge HHS to further define the regulation's ambiguous standard for the use of 'minimum necessary' health information." (American Benefits Council)

Employee Not Entitled to COBRA Coverage Because Plan Had Lapsed Due to Nonpayment of Premiums
Glandorf v. W.G. Products Co., Inc. (3d Cir. 2002). Excerpt: "[The plaintiff's] former employer notified him that he was not eligible for COBRA because the employer's insurance coverage had been canceled prior to his termination.... The court reasoned that the employer's insurance coverage lapsed prior to the employee's termination date even though neither the employer nor the employee knew this at the time." (EBIA Weekly)

Court Properly Denied Penalties for Late COBRA Election Notice
Kerkhof v. MCI Worldcom, Inc. (1st Cir. 2002). Excerpt: "The lower court refused to award the former employee ERISA statutory $110/day penalties for the late COBRA notice and plan documents because the employee had not been harmed by their late delivery and the plan administrator had not acted in bad faith.... [T]he First Circuit Court of Appeals affirmed the lower court's decision." (EBIA Weekly)

State Courts Begin Applying Supreme Court's Egelhoff Decision on Beneficiary Designations
Excerpt: "Three recent state court cases have applied Egelhoff. The first two cases ... provide good examples of the Supreme Court's intent in Egelhoff-- that plan administrators should be able to rely solely on the plan's own beneficiary designation rules when paying death benefits. However, the third case ... raises the possibility of using the doctrine of 'waiver' under federal common law to pay benefits to someone other than the named beneficiary." (Thompson Publishing Group)

Analysis: Appeals Court Upholds Federal Judge's Split Decision on HMO Lawsuit in Miami
Excerpt: "A federal appeals court has upheld a March 2001 ruling by a Miami federal judge that threw out several charges against the nation's largest HMOs but that also allowed other charges to proceed." (insure.com)

Analysis: Supreme Court's Ruling on FMLA Maintains a Cloudy Status Quo
Excerpt: "Is your boss required to let you know of a federal law that may allow you to take up to 12 weeks off from work to care for your illness or that of a family member? Yes and no. That's the consensus of workplace experts and lawyers who were grappling Tuesday with a decision handed down by the Supreme Court on federal medical leave policy." (South Florida Sun-Sentinel via International Foundation of Employee Benefit Plans)

Trial Court Requires Plan to Turn Over to TPA Report of Audit Performed on TPA's Records
Guardsmark, Inc. v. Blue Cross and Blue Shield of Tenn. (W.D. Tenn. 2002). Excerpt: "EBIA Comment: ... [T]his case sends an important warning to sponsors of self-funded plans. If you want to audit because you suspect that your service provider has made errors in paying claims, and if you want to avoid having to turning over the audit report if there is a later lawsuit, make sure you build a record before you contract for the audit." (EBIA Weekly)

Overview: OMB Criticizes FMLA Regs On 'Serious Health Condition' and Intermittent Leave
Excerpt: "In a report OMB issued in December, the agency agreed with employers that the following regulations make the FMLA confusing and burdensome to administer ..." (Thompson Publishing Group)

2d Circuit: QDRO Rules Apply to Both Pension and Welfare Plans
Metropolitan Life Ins. Co. v. Bigelow (2d Cir. 2002). Excerpt: "EBIA Comment: Yet another circuit court, in our view, gets the QDRO issue wrong for ERISA welfare plans.... Notwithstanding what seems to us to be a clear (albeit circuitous) matter of statutory construction, welfare plans in the Seventh, the Tenth and now the Second Circuits must be prepared to have QDROs enforced against them." (EBIA Weekly)

IRS Publishes Revised Version of Form 5305-EA, Coverdell Education Savings Custodial Account (PDF)
Rev. March 2002; 2 pages. (Internal Revenue Service)

CalPERS Contemplates Single Self-Funded Health Plan to Replace HMO Contracts
Excerpt: "As CalPERS gears up for annual contract negotiations with the HMOs that care for about 80 percent of its members, the logic of abandoning these traditional insurers might come down to whether pension fund trustees think the insurers' rate requests are so high that CalPERS could do better on its own ..." (Sacramento Bee)

Aetna Taking Step To Regain Small-Business Health Plan Clients
Excerpt: "Aetna is increasing certain commissions paid to agents in hopes of attracting more small Connecticut employers, after losing small-group business here and in other states." (The Hartford Courant)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
401(k) Administrator for The Pension Group, Inc.
in CA
Senior Regulatory Compliance Specialist for US Airways
in VA
Trust Account Executive for Guardian Life Insurance Company
in NY

Newly Posted Press Releases
Benefit Software Announces New Broker Partnerships (Benefit Software 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.