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The BenefitsLink Newsletter -
Welfare Plans Edition
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March 29, 2002 - 6,423 subscribers
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Big Business Pressures Hospitals to Cut Mistakes-- and Costs
Excerpt: "Today, Xerox and more than 100 other large corporations (along with a few labor unions, nonprofits and government agencies) are embarked on a campaign to reduce medical errors, increase patient safety and enhance the care of hospitalized Americans.... [T]he campaign potentially offers a more palatable way to control -- or at least slow -- increases in health care costs in the United States ..." (Washington Post)

Aging Work Force Challenges Health Insurers
Excerpt: "America's work force is aging. Already one in three workers is over 55, and the Monthly Labor Review projects the number of workers between the ages of 55 and 64 to increase by nearly 50% between 2000 and 2025, creating a greater demand for employer-provided health benefits. Greater utilization of health plans by a larger population of older working Americans will add to an already increasing problem of keeping health care affordable." (HRHub.com)

2nd Circuit Orders Health Plan to Cover HDCT in Light of Improper Benefits Denial, Medical Urgency
Excerpt: "Empire denied coverage ... because it deemed [high-dose chemotherapy treatment] ... was 'not of proven benefit' or 'was not generally recognized by the medical community as effective or appropriate for that condition, as determined by the Claims Administrator.' ... [P]lans should review their exclusionary language to ensure that the provisions clearly state the intended standard and the level of treatment effectiveness needed for coverage." (Thompson Publishing Group)

Court Affirms Dismissal of Connecticut Attorney General's Suit Against HMOs for Using Formularies
Excerpt: "The U.S. Court of Appeals in New York affirmed a Connecticut district court's dismissal of the lawsuit, which had accused PHS-- now called Health Net-- of denying 'access to safe, effective and medically necessary' drugs. The appeals court ruled that the state lacked standing to bring the suit, but didn't rule on the merits of the case." (The Hartford Courant)

Overview: IRS Decides Not Tax Frequent Flyer Miles
Excerpt: "The IRS will not treat as taxable income an employee's personal use of frequent flyer miles and other promotional items received as the result of business travel-- at least for now, according to Announcement 2002-18, released on Feb. 20." (Thompson Publishing Group)

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)

Overview: MHPA Re-Extended Until End of 2003
Excerpt: "Under the MHPA, group health plans of private employers and state and local governments that provide mental health benefits are prohibited from having annual or lifetime limits on mental health benefits that are lower than the limits for medical benefits. Certain plans are exempt: (1) plans whose costs will increase more than 1 percent by complying with the MHPA; and (2) employers with 50 employees or less." (Thompson Publishing Group)

EBRI Survey: Health Benefits Still Top-Rated Benefit Among Employees
Press release. Excerpt: "In both 1999 and 2001, those who named health insurance as the most important benefit most often chose retirement savings plans as the second most-important benefit. Similarly, among those who named retirement savings plans as the most important benefit, health insurance was the most common second choice." (PR Newswire via Yahoo! Finance)

Finding the Right Work/Life Balance Can Be Essential To Success
Excerpt: "Corporate studies, she says, show that the work-life balance isn't just important to employees-- it's important to employers who want to hire and nurture good people." (Houston Chronicle via Society for Human Resource Management)

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

Analysis: Substantially Reduced Penalties for Late Form 5500 Filings
Item dated March 28, 2002. Excerpt: "[A] new 'per plan' cap is added to the DFVC Program, for plans that have failed to file for multiple years.... Thus, a plan pays no more than the per plan cap for multiple late filings, regardless of whether the late filings involve only two plan years or many more than that." (TRI Pension Services)

ERISA Enforcement of Nonqualified Executive Compensation Arrangements
Extensive outline, presented as an ALI-ABA Business Law course. Excerpt: "Susan Katz Hoffman is a charter fellow in the College of Employee Benefit Counsel and current chair of the Merger and Acquisitions Sub-Committee of the Employee Benefits Committee of the ABA's Section of Taxation. This article has been edited for publication, and was timely as of June 15, 2001." (Susan Katz Hoffman, Esq. of Pepper Hamilton LLP)

Analysis: Hedging Deferred Compensation Does Not Meet IRS Definition of Hedging Transaction (PDF)
Excerpt: "In final regulations on the character of hedging transactions (T.D. 8985, Regs. §1.1221-2), the IRS has closed a potential loophole for Nonqualified Deferred Compensation Plans that was opened by amendments to Code Section 1221 made in 1999.... Providing a tax- and cost-efficient method to informally fund NQDC liabilities remains a challenge for which there is no 'magic bullet' solution." (Vinings Management Corporation)

Stock Options: Boon or Boondoggle?
Excerpt: "Sen. Carl Levin, D-Mich., the co-sponsor of a Senate bill on options, calls them a 'stealth form of compensation' that create a misleading 'double standard.' And none other than Federal Reserve Chairman Alan Greenspan has placed the issue high atop his list of future financial fixes.... In response, business lobbyists have mobilized ..." (ABCNews.com)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Senior DC / 401(k) Administrators for L.A. Area TPA with Ocean View
in CA
Trust Specialist for BenefitStreet, Inc.
in CA
Retirement Plan Services Manager for Ceridian
in FL

Newly Posted Conferences (Post Yours!)
College Savings Plans: How Do They Work, What Are the Benefits?in MD on April 18, 2002
presented by The Baltimore Chapter of ISCEBS
What To Look For In Your Flexible Spending Accountin FL on April 11, 2002
presented by WEB - Jacksonville Chapter
Plan Design and Tax Deduction Issues In Light of EGTRRAin CA on April 18, 2002
presented by Western Pension and Benefits Conference - Orange County Chapter

Newly Posted Press Releases
PBGC Protects Benefits of 82,000 LTV Workers In Largest-Ever Federal Pension Takeover (Pension Benefit Guaranty Corporation)

Newly Posted Announcements of Promotions and New Personnel (Post Yours!)
Jeffrey D. Corso (Rock, Fusco & Garvey (Chicago))

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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.