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The BenefitsLink Newsletter -
Welfare Plans Edition
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April 1, 2002 - 6,423 subscribers
Today's sponsor: Actuarial Systems Corporation

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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)

Electronic Health Care Transactions and Code Sets Standards Model Compliance Plan Published
Excerpt: "If you are a covered entity and will not be compliant with the HIPAA Electronic Health Care Transactions and Code Sets standards by October 16, 2002, you must file a compliance plan. A covered entity is a health plan, a health care clearinghouse, or a health care provider who transmits health information in electronic form in connection with one or more transactions for which the Secretary has adopted standards at 45 C.F.R. Part 162." (U.S. Department of Health and Human Services, Centers for Medicare & Medicaid Services)

Rising Drug Costs a Powerful Issue for National and State Politicians
Excerpt: "The soaring cost of prescription drugs has emerged as a potent domestic political issue, not only nationally, but also at the state level." (New York Times; free registration required)

Brands vs. Generics; Second in Series on High Cost of Drugs
Excerpt: "National concern over soaring prescription drug prices has recently cast a spotlight on the use of generic drugs to save money and on various drug industry practices that critics say keep generics off the market as long as possible." (AARP Bulletin)

Driven by Increased Use and Advertising, Drug Spending Rose 17% in 2001, Study Finds
Excerpt: "U.S. prescription drug spending rose more than 17% in 2001, driven largely by several 'heavily advertised, high-priced' treatments, according to a study released ... by the National Institute for Health Care Management." (KaiserNetwork.org)

Prescription Drug Expenditures in 2001: Another Year of Escalating Costs (PDF)
19 pages. Excerpt: "Spending on outpatient prescription drugs in retail outlets in the U.S. rose 17.1% from 2000 to 2001 ... Retail spending on outpatient prescription drugs has nearly doubled since 1997 ... About half (50.6%) the spending growth occurred in just nine categories of drugs-- to treat depression, high cholesterol, diabetes arthritis, high blood pressure, pain, allergies, ulcers and other gastrointestinal ailments." (The National Institute for Health Care Management Research and Educational Foundation)

Kaiser Permanente CEO Prepares to Retire; Led Kaiser Through HMO Storm
Excerpt: "[David M.] Lawrence stepped into Kaiser's top job when the nation was on the cusp of the managed-care revolution.... To Lawrence, the past 10 years in health care have been turbulent but he expect the next 10 years to be even more so. Advances in biotechnology and microcircuitry, he speculates, will create drugs and devices that will benefit patients enormously -- but at what cost? And who will have access to them?" (San Francisco Chronicle)

Question: How Should We Deliver COBRA Initial Notices to Covered Employees and Spouses?
Excerpt: "[A] COBRA initial notice must be provided to covered employees and covered spouses when their coverage commences. What is the best way to do this? Should we just hand a copy of the initial notice to the employee? Can we send it electronically?" (EBIA Weekly (Question of the Week))

Commentary: Doctors Win Latest Round In Court Battle Against HMOs
Excerpt: "A physician lawsuit accusing managed care companies of violating federal racketeering laws can go forward as is, a federal appeals court has ruled. Managed care companies argued that the proposed class action case filed on behalf of physicians nationwide should go to arbitration rather than proceed in court. But a three-judge panel from the 11th U.S. Circuit Court of Appeals in Atlanta said arbitration isn't necessary." (American Medical News)

Court: Attachment To Employment Offer Letter Did Not Require Employer To Pay Severance
Excerpt: "Judge Hutton noted ERISA applied to the company's severance plan. He held that ERISA does not allow 'oral or other informal modifications' to employee benefit plans including severance plans.... [The plaintiff's] two-page attachment raised the novel question of whether an informal written document prepared by the company could also lawfully amend the company's severance plan." (Nixon Peabody LLP)

Court: Employer's Occupational Injury Plan Was Subject To ERISA, So State Law Claims Were Preempted
ERISA preempted an injured worker's state law claims involving his former employer's occupational injury plan because the plan was not maintained for the purpose of complying with a state workers' compensation law. This was the decision of the Fifth Circuit U.S. Court of Appeals in Hernandez v. Jobe Concrete Products, Inc. (No. 01-50292). (Spencernet)

Commentary: Domestic Partner Benefits Are Just Part of the Package at R. J. Reynolds Tobacco Co.
Excerpt: "In our public life here [in Winston-Salem, N.C.] gay rights is still a dividing line. But in the corporate world gay rights has become a simple matter of crunching numbers and keeping up with the rest of the Fortune 500.... Reynolds wasn't the only old-line local company to embrace gay rights this year. Wachovians, too, can get benefits for their live-in sweeties, gay and straight." (Winston-Salem Journal)

Consultant: Bush Misplayed PR Angle of Privacy Rule
Excerpt: "The Times and many other media outlets didn't report, or downplayed, closure of a glaring loophole in the existing privacy rule that permits the use of identifiable information--without patient consent--for marketing purposes." (HealthDataManagement.com)

Witness List and Written Testimony: Women and Aging-- Bearing the Burden of Long-Term Care
Hearing held February 6, 2002. (U.S. Senate, Special Committee on Aging; and Health Education Labor and Pension Committee, Subcommittee on Aging)

Plenty to Consider About HMO Ratings
Excerpt: "Business owners and human relations managers looking to pick the best health plan for their employees have a dilemma these days. Simply stated, there is plenty of information available, but some of the ratings present conflicting information." (South Florida Business Journal via bizjournals.com; free registration required)

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

Stock Option Plans Surveyed by DOL's Bureau of Labor Statistics in National Compensation Survey
Spring 2001 issue of Compensation and Working Conditions Online. Excerpt: "Using a national sample, the National Compensation Survey program collected data on the incidence and provisions of stock options. For the first time, BLS obtained detailed information on such characteristics as vesting period and number of shares granted." (U.S. Department of Labor, Bureau of Labor Statistics)

Options Draw Scrutiny After Enron's Collapse
Excerpt: "upporters of stock options say they give employees a financial stake in their companies' success, which ultimately benefits all shareholders.... Their opponents say stock options have bred a culture of irresponsible greed, showering executives with outlandish paydays that sometimes reach into the tens and hundreds of millions of dollars." (CareerJournal.com)

Federal Government Says Federal Pension, Health Liabilities Now Exceed Public Debt
Excerpt: "The U.S. government said Friday its chief financial liability is no longer the $3.3 trillion federal debt but the growing cost of pensions, healthcare and disability benefits it provides to its civilian workers, military personnel and veterans." (Dow Jones Business News via Yahoo! News)

Overview: DOL Implements Improvements to Voluntary Correction Programs (PDF)
Excerpt: "The interim VFC Program, established by DOL in 2000 ... was largely unsuccessful because (i) while it provided relief from ERISA remedies and penalties administered by the DOL, the interim program provided no relief from Code §4975 prohibited transaction excise taxes, and (ii) relief was conditioned on the plan sponsor's notifying plan participants of its application under the program, thereby potentially exposing the plan sponsor to lawsuits by participants." (Sutherland, Asbill & Brennan LLP)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
ERISA ATTORNEY for Swift & Associates, Executive Search Consultants, Portland, ME
in ME, NH
401(k) Administrator/Assistant for City National Bank
in CA
401k Plan Administrator for Waste Connections - Corporate Office
in CA
Data Analyst for CIGNA Retirement and Investment Services
in CT
Paralegal/ERISA Attorney for Dynamic Northeast Employee Benefits Firm
in MA
Actuarial Analyst for Northern Trust Retirement Consulting, L.L.C.
in GA
Supervisor Benefits Administration & HR for RSM McGladrey, Inc.
in IA

Newly Posted Conferences (Post Yours!)
Critical Topics Under the FLSA: 2002 Spring Updatein ALL STATES on April 19, 2002
presented by Thompson Publishing Group, 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.