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The BenefitsLink Newsletter -
Welfare Plans Edition
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March 26, 2002 - 6,423 subscribers
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(Help BenefitsLink to provide this newsletter at no charge to you -- our sponsors pay our way. Remember to visit them periodically; we try to make sure their products and services will be of interest to you. Thanks! --Editor)

Federal Government to Impose Tough Rules on Patient Privacy Next Year
Excerpt: "For doctors' offices, hospitals, nursing homes, insurers and pharmacies, preparing to comply with the rules will be as extensive and expensive as Y2K projects in which computers and other equipment were programmed to correctly read the year 2000 and continue to operate, industry experts say.... While few oppose the need to beef up medical privacy laws, some see shortcomings that need to be addressed." (South Florida Sun-Sentinel)

Sample Communication Materials for a Health Care Reimbursement Account
From 'Exhibit Book of Benefit Communication Programs,' Watson Wyatt Data Services, 2000. (Workforce Online)

Evidence of Standard COBRA Procedures Proved That Election Notice Was Mailed
Smith v. AT&T Broadband Network Solutions, Inc. (N.D. Ill. 2002). Excerpt: "The court noted that sending an election notice by first-class mail to the employee's last-known address was sufficient to meet COBRA's election notice requirements, although the plan administrator must prove that the notice was actually mailed. The court found the employer's evidence of its standard procedures sufficient ..." (EBIA Weekly)

New York Entertainment Unions Push for 50% State Subsidy of COBRA Premiums
Excerpt: "The major performers' unions are urging members to contact their New York state legislators, asking them to support a proposed law to subsidize entertainment industry health insurance." (Backstage.com via Yahoo! News)

Coping With Knudson: Plan Sponsors Should Reexamine Health Plan Reimbursement Procedures
3 pages. Excerpt: "Suppose a participant or beneficiary in your group health plan is injured in an accident, incurs significant medical expenses that the plan pays, and subsequently receives a large judgment or settlement from the other party. Can that participant or beneficiary be forced to pay the plan back? No, said the United States Supreme Court in Great-West Life & Annuity Insurance Co. v. Knudson ... at least not in circumstances like the ones in that case." (Gardner Carton & Douglas)

Employee Injured After Leaving Work on Termination Date Was Covered Under Employer's LTD Policy
Lauder v. First UNUM Life Ins. Co. (2d Cir. 2002). Excerpt: "The appeals court agreed that the employee was covered by the employer's policy when the accident occurred.... The court also agreed that the insurer had waived the right to contest whether the employee was disabled because it chose not to pursue this basis for denying coverage during the claims process." (EBIA Weekly)

Opinion: Health Plan on Trial-- Decisions Bring Responsibility
Excerpt: "'Mixed eligibility and treatment decisions' is a rather bland and bureaucratic combination of words that may nevertheless hold the key to much greater accountability by managed care plans for their meddling in patient care. The outcome of an appeal before the 2nd U.S. Circuit Court of Appeals in New York is expected to signal just how powerful those words might be." (American Medical News)

Federal Employees' Long-Term Care Program Comes Loaded With Options
Excerpt: "During the early enrollment period, people interested in long-term care insurance may choose from three plans, named A, B and C. Plan A provides a $100-a-day benefit payment for three years. Plan B provides $150 a day for three years. Plan C provides $150 a day for five years. Because premiums are linked to the age of enrollees, a spreadsheet listing all the possibilities would fill 147 pages and obviously cannot be shown here." (Washington Post)

Enrollment Begins in Long-Term Care Insurance Program for Federal Employees
Excerpt: "Premiums for the long-term care insurance run from $50 a year for workers under 30 to $6,893 a year for 99-year-olds.... A 55-year-old federal employee who signs up for a $150 daily benefit amount, a three-year benefit period, a 90-day waiting period and inflation protection would pay an annual premium of $1,368." (GovExec.com)

Two Mass. Employer Organizations Endorse Contracting Directly with Providers for Employee Healthcare
Excerpt: "[T]wo of Massachusetts' largest employer organizations have endorsed a program in which businesses would sidestep managed care companies and contract directly with doctors and hospitals to provide care for their employees, the Boston Globe reports." (KaiserNetwork.org)

In New Mexico, Psychologists Get Prescription Pads and Furor Erupts
Excerpt: "As of July 1 ... psychologists in one state, New Mexico, will be authorized to pull out the prescription pad. A new law will grant prescribing privileges to licensed, doctoral-level psychologists who have completed an additional training and certification program." (New York Times; free registration required)

Overview: DHHS Announces Proposed Changes to Privacy Regulations
Excerpt: "Most of the changes address privacy issues arising out of the provider - patient relationship. However, several changes are significant for group health plans and their sponsors and administrators. They are: ..." (EBIA Weekly)

Employer-Paid Cancer Insurance for Retirees is Excludable from Income
Priv. Ltr. Rul. 200210024 (Nov. 29, 2001). Excerpt: "EBIA Comment: The IRS has ruled on many occasions that retirees may be deemed to be employees for purposes of Code Section 106.... The IRS also had no problem finding that payments for coverage under the cancer insurance program at issue qualified as payments for accident and health coverage." (EBIA Weekly)

Study: Proposals To Provide Tax Credits to Uninsured Would Largely Help Those with Higher Incomes
Excerpt: "Current tax credit proposals intended to assist laid-off workers purchase health coverage would mostly benefit those with higher incomes and few health risks, according to an analysis by the Economic and Social Research Institute." (KaiserNetwork.org)

Wall Street Journal Examines Physician's Recommendations To Reduce Health Costs
Excerpt: "The Wall Street Journal on March 21 profiles Dr. John Wennberg ... Wennberg's research has found 'little scientific basis for the differences in the way medicine is practiced' across the nation.... Wennberg has found 'huge variation in success rates' for treatment of a number of diseases, but doctors and hospitals make 'unconscionably little effort' to determine the cause." (KaiserNetwork.org)

Sen. Domenici in Talks with White House on Mental Health Parity; Bill Could Pass Congress in April
Excerpt: "The Bush administration is sending signals to members of Congress that it is willing to negotiate a compromise on mental health parity legislation, CongressDaily reports." (KaiserNetwork.org)

Mandating that Health Plans Cover Certain Services Keeps Insurance Out of Reach for Many, Op-Ed Says
Excerpt: "While legislatively mandated health insurance benefits are 'well-intentioned,' they make it 'harder' for Maryland residents to purchase health insurance, columnist Jay Hancock writes in a Baltimore Sun op-ed." (KaiserNetwork.org)

Pennsylvania Acts to Prevent Long Term Care Insurance Rate Spirals
Excerpt: "[T]he new rules require insurance companies to provide policy applicants with a 10-year history of premium rate increases on applicable or similar products sold in Pennsylvania, or any other state in which the insurer does business. Additionally, the new rules allow the commissioner to ban insurers from selling long term care insurance in the state for as long as five years if they routinely set rates that lowball the marketplace." (insure.com)

GAO Comptroller Testimony Includes Information on Long-Term Care Trends
March 21, 2002. Excerpt: "My remarks today will focus on (1) the pressure that entitlement spending for Medicare, Medicaid, and Social Security is expected to exert on the federal budget in coming decades; (2) how the aging of the baby boom population will increase the demand for long-term care services; and (3) how these trends will affect the current and future financing of long-term care services ..." (U.S. General Accounting Office)

Study: Medical Care Expenditures Under Gatekeeper and Point-of-Service Arrangements
Originally published December 2001. Excerpt: "An additional prominent feature of many traditional HMOs is the use of ... primary care physician (PCP) 'gatekeepers' who must approve referrals to specialists ... Our results suggest that eliminating the requirement that patients access care through a PCP gatekeeper does not necessarily result in higher medical care expenditures in managed care plans." (AHealthyMe.com)

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


Andersen's 'Alert: U.S. Compensation and Benefits News Briefs' for March 19, 2002
9 pages; articles include: IRS revises Forms 8717, 1099-R and 5500-EZ; DOL finalizes proposed amendments to class exemptions; PBGC issues 2002 premium payment package; Court cases on COBRA elections, ERISA and workers' comp plans, disclosure of physician's financial incentives, ERISA Sec. 510 and the hire/re-hire decision, failure to provide plan documents, and late 401(k) deposits. (Andersen)

Option Reform Gains Backing from Pension Fund Group
Excerpt: "Many of the nation's largest pension funds yesterday threw their weight behind efforts to persuade companies to count the cost of stock options for executives as an expense when they report their income. By a voice vote, the Council of Institutional Investors (CII) ... reversed itself on the controversial options issue." (Washington Post)

Stock Options Make Some CEOs' Divorces Messy
Excerpt: "The heavy use of stock options is about a decade old, which means they are now increasingly landing in divorce court. They are often the most valuable marital asset, but their true value rides on future stock performance." (USA Today)




Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Daily Valuation Administrator for WESPAC Plan Services, Inc.
in CA
Pension Administrator 401(k) Defined Contribution for Davey Administration Group
in CA
Defined Contribution / 401(k) Analyst for New England Pension Consultants
in MA
Technical Specialist-Retirement Operations Administration Team for Edward Jones
in MO
Technical Specialist-Retirement Operations Qualified Plan Installation for Edward Jones
in MO
Assistant Plan Administrator for Windes & McClaughry Employee Benefit Services
in CA
Financial Control Specialist for CNA TRUST
in CA
401(k) / Retirement Plan Administrator for Stephen Eldridge & Company, Inc.
in NH



Newly Posted Webcasts (Post Yours!)
Treading Water: Americans' Access to Needed Medical Care, 1997-2001 on March 21, 2002
presented by KaiserNetwork.org



Newly Posted Conferences (Post Yours!)
401(k) Plansin KS on May 7, 2002
presented by Employee Benefits Institute of America LLC (EBIA)
401(k) Plansin MN on May 14, 2002
presented by Employee Benefits Institute of America LLC (EBIA)
401(k) Plansin CO on April 23, 2002
presented by Employee Benefits Institute of America LLC (EBIA)
Cafeteria Plansin KS on May 8, 2002
presented by Employee Benefits Institute of America LLC (EBIA)
Cafeteria Plansin MN on May 15, 2002
presented by Employee Benefits Institute of America LLC (EBIA)
Cafeteria Plansin CO on April 24, 2002
presented by Employee Benefits Institute of America LLC (EBIA)
COBRA Compliance for Group Health Plansin CO on April 26, 2002
presented by Employee Benefits Institute of America LLC (EBIA)
COBRA Compliance for Group Health Plansin MN on May 18, 2002
presented by Employee Benefits Institute of America LLC (EBIA)
COBRA Compliance for Group Health Plansin KS on May 10, 2002
presented by Employee Benefits Institute of America LLC (EBIA)
ERISA Compliance for Health & Welfare Plansin MN on May 16, 2002
presented by Employee Benefits Institute of America LLC (EBIA)
ERISA Compliance for Health & Welfare Plansin CO on April 25, 2002
presented by Employee Benefits Institute of America LLC (EBIA)
ERISA Compliance for Health & Welfare Plansin KS on May 9, 2002
presented by Employee Benefits Institute of America LLC (EBIA)
HIPAA & Other Federal Mandates for Group Health Plansin KS on May 9, 2002
presented by Employee Benefits Institute of America LLC (EBIA)
HIPAA & Other Federal Mandates for Group Health Plansin MN on May 16, 2002
presented by Employee Benefits Institute of America LLC (EBIA)
HIPAA & Other Federal Mandates for Group Health Plansin CO on April 25, 2002
presented by Employee Benefits Institute of America LLC (EBIA)
Retirement Distributions: Estate and Tax Planning Strategiesin NC on July 15, 2002
presented by Professional Education Systems Institute, LLC
Retirement Distributions: Estate and Tax Planning Strategiesin NC on July 16, 2002
presented by Professional Education Systems Institute, LLC
Retirement Distributions: Estate and Tax Planning Strategiesin NC on July 18, 2002
presented by Professional Education Systems Institute, LLC
Tax and Estate Planning with Retirement Assetsin OH on June 27, 2002
presented by Professional Education Systems Institute, LLC
Tax and Estate Planning with Retirement Assetsin OH on June 28, 2002
presented by Professional Education Systems Institute, LLC

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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.