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The BenefitsLink Newsletter -
Welfare Plans Edition
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March 28, 2002 - 6,423 subscribers
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California Governor Orders HMOs to Cover "Morning After" Pill
Excerpt: "Under the directive, HMOs will be required to cover the costs for emergency contraception through participating pharmacists within the HMO's network or, in emergency situations, from pharmacists who do not have a contract with her HMO. Some California HMOs already reimburse patients for emergency contraceptives.... The morning-after pill can prevent ovulation or fertilization when taken within 72 hours after unprotected sex." (KTVU News via BayInsider.com)

Judge in Miami Allows Managed Care Companies to Appeal Racketeering Claim
Excerpt: "U.S. District Judge Federico Moreno decided to allow the appeal to settle the question of whether 80 million patients have a legal basis to pursue claims that the industry fooled them by promising quality care while skimping on the care provided. The decision sidetracks the lawsuit, which is intended by patients' lawyers to serve as a national vehicle for pursuing financial damages ..." (New York Times; free registration required)

Some Are More Eligible Than Others for New Federal Employees' Long-Term Care Coverage
Excerpt: "Civil service, postal and military personnel are being asked to answer seven questions about their health when they apply for long-term care insurance under the new federal program. Government retirees, on the other hand, must fill out an eight-page form ..." (Washington Post)

Analysis: Supreme Court Strikes Small Piece of FMLA Regulation
Excerpt: "As a practical matter, the Supreme Court's ruling notwithstanding, in cases where it is clear the leave qualifies as FMLA leave, the employer should always inform the employee that the leave is being treated as such. This practice should make it possible to avoid misunderstandings and, more importantly, unnecessary legal actions." (Deloitte & Touche)

Model Contract Language and Partial Extensions of Effective Date Included In HHS Revisions of Privacy Rule
A 30-day comment period and model language for contracts with business associates are included in the March 27 proposed revisions to the Department of Health and Human Services privacy rule, which proposes removing advance consent requirements from the final rules published in December 2000. Written comments must be postmarked no later than Apr. 26, 2002, and written comments hand delivered and comments submitted electronically must be received no later than 5 p.m. on Apr. 26, 2002. (Spencernet)

CalPERS Expands Long-Term Care Program to Include Siblings of System Members
Press release. Excerpt: "For the first time, adult siblings of members of the California Public Employees' Retirement System (CalPERS) can apply for its Long-Term Care Program, beginning April 1st.... All California public employees, retirees, their spouses, parents, parents-in-law, and now brothers and sisters, age 18 years and older, are eligible to apply for the 6-year-old program, which covers approximately 160,000 people." (Business Wire via Yahoo! Finance)

Opinion: Reality Check on "Defined Contribution" Health Plans
Excerpt: "So, the moral of the story about employers 'saving money' is that it is possible, but the price is a terrible blow to employees, generating morale problems, and many workers (the smartest, who see what is happening) seeking jobs elsewhere. So, this fails my critera for economics and being humane... and some fail the viability criteria." (Fred Hunt, President of Society of Professional Benefit Administrators)

USA Today Point-Counterpoint Examines Proposed Changes to Medical Privacy Regulations
Excerpt: "By proposing a federal medical privacy regulation change that would eliminate the requirement that providers, insurers and pharmacies obtain written consent from patients before disclosing their medical records, the Bush administration is now 'favoring the health care industry's convenience over patient protection,' according to a USA Today editorial." (KaiserNetwork.org)

U.S. Government Should Implement Single-Payer Insurance System, Commentator Molly Ivins Says
Excerpt: "Ivins concludes, 'Every time we start to get serious about reform, the right wing starts screaming, 'Socialized medicine, socialized medicine.' And then we're all supposed to run, screaming with horror. But if you want to see horror in action, try the emergency room of any large public hospital in this country'." (KaiserNetwork.org)

Insurance Coverage More Important Than Race, Income Level In Assuring Fair Medical Treatment, Say Do
Selected findings from the Kaiser Family Foundation's forthcoming National Survey of Physicians reveal that physicians see insurance status as the key determinant of treatment within the health care system, with more than seven in ten (72%) saying that the system 'very' or 'somewhat' often treats people unfairly based on their health insurance status. This rating is higher than any other factor reviewed, including race and income level. (Spencernet)

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

DOL Expands Programs for Delinquent Filers, Certain Fiduciary Violations
Excerpt: "[A] proposed class exemption [would] provide limited relief from the excise tax imposed on ... four transactions included in the VFC Program ... [T]he Delinquent Filer Voluntary Correction Program (DFVC), established in April 1995, encourages plan administrators to file overdue annual reports by paying reduced penalties. The program has been updated to substantially reduce the penalty amounts for delinquent Form 5500 reports ..." (U.S. Department of Labor, Pension and Welfare Benefits Administration)

Frequently Asked Questions About the DOL's Delinquent Filer Voluntary Compliance Program
These FAQs have been revised to reflect the modifications made to the DFVC program on March 28, 2002. (U.S. Department of Labor, Pension and Welfare Benefits Administration)

DOL Fact Sheet Describing Expanded Delinquent Filer Program (PDF)
Released March 27, 2002. Excerpt: "The basic penalty ... was reduced from $50 to $10 per day ... The maximum penalty for a single late annual report was reduced from $2,000 to $750 for a small plan (generally a plan with fewer than 100 participants at the beginning of the plan year) and from $5,000 to $2,000 for a large plan.... The revised DFVC Program also includes a new 'per plan' cap ... [for] plan administrators who have failed to file an annual report for a plan for multiple years." (U.S. Department of Labor, Pension and Welfare Benefits Administration)

Text of Modified Delinquent Filer Voluntary Compliance Program (PDF)
10 pages, from Federal Register of March 28, 2002. Excerpt: "Following a review of the DFVC Program, as adopted in 1995, the Department has determined to update the Program and adjust the civil penalty structure under the Program in an effort to further encourage and facilitate voluntary compliance by plan administrators with ERISA's annual reporting requirements." (U.S. Department of Labor, Pension and Welfare Benefits Administration)

In Notice 2002-23, IRS Waives Form 5500 Penalties for Persons Using DOL's Delinquent Filer Program (PDF)
Excerpt: "The Service will not impose the penalties under §§ 6652(c)(1), (d), (e), and 6692 (as these sections relate to the filing of a Form 5500) on a person who is eligible for and satisfies the requirements of the DFVC Program with respect to the filing of a Form 5500.... The relief under this notice is available only to the extent that a Form 5500 is required under Title I of ERISA." (Internal Revenue Service)

DOL Fact Sheet Describing Expanded Voluntary Fiduciary Correction Program (PDF)
Released March 27, 2002. Excerpt: "Fourteen specific financial transactions and appropriate steps are available to fully and quickly correct any violations in the program. Corrective remedies are prescribed for the following fiduciary violations ... Delinquent Participant Contributions to Pension Plans ... Delinquent Participant Contributions to Welfare Plans ... Fair Market Interest Rate Loans With Parties-in-Interest ... Below Market Interest Rate Loans With Parties-in-Interest ..." (U.S. Department of Labor, Pension and Welfare Benefits Administration)

Text of DOL's Modified, Permanent Voluntary Fiduciary Correction Program (PDF)
23 pages, from Federal Register of March 28, 2002. Excerpt: "To encourage the full correction of certain breaches of fiduciary responsibility and the restoration to participants and beneficiaries of losses resulting from those breaches, PWBA has decided to implement the VFC Program on a permanent basis." (U.S. Department of Labor, Pension and Welfare Benefits Administration)

IRS Waives Excise Taxes on Four Transactions Described in DOL Voluntary Fiduciary Correction Program (PDF)
Announcement 2002-31. Excerpt: "[T]he Service will not seek to impose the § 4975 (a) and (b) excise taxes with respect to any prohibited transaction that is covered by the proposed class exemption [now being proposed by the DOL] notwithstanding any subsequent changes to the proposed class exemption when it is finalized, provided that all of the requirements specified in the proposed class exemption are met." (Internal Revenue Service)

Should Non-Fiduciary Service Providers Take Action When They Become Aware of Fiduciary Breaches?
Excerpt: "Non-fiduciary third-party service providers to plans are often the first to witness mishandling of plan assets by fiduciaries responsible for caring for those assets. Faced with such knowledge, non-fiduciary service providers often question what they should do when they become aware of fiduciary activity that might constitute a violation of the Employee Retirement Income Security Act of 1974 (ERISA)." (Tess J. Ferrera, Esq. of Kilpatrick Stockton LLP)

United Nations Study: People Over 60 Will Quadruple Over Next 50 Years
Excerpt: "The number of people over 60 years of age will quadruple during the next half century in a worldwide 'demographic revolution' that will strain pension and health care systems, U.N. officials and experts on aging said Wednesday." (AP via Yahoo! News)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
401(k) ERISA Compliance Consultant for Pinnacle Financial Services, Inc.
in FL
Retirement Administrator for Delaware Investments
in PA
Benefits Consultant for Northern Trust Retirement Consulting, L.L.C.
in WA
Implementation Specialist for ExpertPlan, Inc.
in NJ
Operations Specialist for ExpertPlan, Inc.
in NJ

Newly Posted Press Releases
There's Still Time to Participate in Compensation Surveys - and Receive Free Premiums and Discounts Worth Thousands (Watson Wyatt Data Services)
Labor Department Announces Expansion of Compliance Assistance Programs For Employee Benefit Plans (U.S. Department of Labor, Pension and Welfare Benefits Administration)

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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.