BenefitsLink Health & Welfare Plans Newsletter for April 12, 2002

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April 12, 2002 - 6,439 subscribers

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More Companies Are Hiring Ministers to Serve Their Workers
Excerpt: "The hiring of spiritual advisers as a company benefit has been a quietly growing trend in the U.S. in recent years-- and one that, experts say, has accelerated in the wake of the Sept. 11 terrorist attacks on New York and Washington, D.C." (Chicago Tribune via International Foundation of Employee Benefit Plans)

Insurance for Many Transplant Patients Remains Elusive
Excerpt: "Many patient advocates say they agonize over the fact that state-funded health insurance plans must sacrifice patients like [Oregon teenager Brandy] Stroeder in order to have enough money to provide health insurance for the rest of the patients enrolled in the plan." (insure.com)

Ford Shifts Health Costs to Retirees
Excerpt: "The Dearborn automaker this month began informing its 50,000 white-collar retirees and spouses that they must for the first time pay a monthly premium for their health-care coverage. The change, which takes place June 1, will also require them to pay higher co-payments for their prescription drugs, according to letters sent to retirees." (Detroit Free Press)

Kennedy Sets Senate Hearing on Proposed Changes to HIPAA Privacy Rule
Excerpt: "The Senate Health, Education, Labor and Pensions Committee will hold a hearing on Tuesday to address the Bush administration's proposed changes to the HIPAA medical privacy rule." (iHealthBeat.com; free registration required)

HIAA Distances Itself From Insurer's Practice of Raising Premiums After Chronic Disease Diagnoses
Excerpt: "The Health Insurance Association of America is distancing itself from American Medical Security Group Inc.'s practice of annually reunderwriting individual health insurance policies, CongressDaily reports." (KaiserNetwork.org)

Commentary: Can California Trigger National Trend for Single-Payer Health Insurance Reform?
Excerpt: "[On Friday, April 12, 2002], California will unveil options calling for a major overhaul on health-care financing. The proposed alternatives include expanding health insurance coverage through modifications in existing programs and three proposals calling for a transition to a single-payer system." (San Francisco Chronicle)

Analysis: DOL's Final Electronic Distribution Rules Encompass COBRA Notices
Excerpt: "Plan administrators will be able to furnish COBRA notices electronically to plan participants and beneficiaries inside and outside of the workplace under final rules issued April 9 by the Pension and Benefit Welfare Administration (PWBA) of the U.S. Department of Labor (DOL). However, there may be several limitations for COBRA administration." (Thompson Publishing Group)

Analysis: IRS Suspends Form 5500 Filing Requirements for Fringe Benefit Plans, With a Catch
Excerpt: "[E]mployers whose group health plans are exempt from reporting requirements (e.g., fewer than 100 participants, or a government or church plan) but who have been filing Form 5500 and Schedule F solely for their cafeteria plans, need no longer file either Schedule F or Form 5500 for the welfare plan arrangement." (Christine P. Roberts, Esq. of Mullen & Henzell, LLP)

Health Plan Did Not Prove Illegal Actions Led to Medical Expenses, So Benefits Denial Was Improper
Excerpt: "A federal district court ruled that a group health plan's denial of benefits based on its exclusion of coverage for 'illegal acts' was arbitrary and capricious because no evidence existed that a plan participant's illegal behavior caused his injuries." (Thompson Publishing Group)

Knowledge of Plan's Reimbursement Claim May Make Attorneys Liable for Honoring That Claim
Excerpt: "Two federal district courts recently ruled that whether or not a plan participant's attorney can be personally held liable for reimbursing a group health plan hinges on the attorney's knowledge of the plan's reimbursement right." (Thompson Publishing Group)

Analysis: Proposed Privacy Revisions Could Ease Compliance Efforts for Employers
Excerpt: " The recently proposed amendments to HIPAA's privacy rules could ease compliance efforts somewhat for employers, although the major compliance burdens remain unchanged. Among the provisions that plan sponsors would find helpful are a one-year extension for negotiating and finalizing business associate contracts, and a clarification that group health plans may exchange enrollment and disenrollment information with the employer without amending the plan documents." (Thompson Publishing Group)

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

Liability and ERISA Plans (PDF)
22 pages, April 2002; excellent overview of ERISA fiduciary liability provisions and leading cases. Excerpt: "If you are a service provider, review your retainer agreements and make sure they describe what you really do. Any nonfiduciary service provider can still protect itself against charges of breach of fiduciary duty by acting solely in his or her professional capacity." (David R. Levin, Esq. of Wiley Rein & Fielding)

Overview: DOL Reduces Delinquent Filer Penalties, Modifies Fiduciary Violation Correction Program
Excerpt: "[W]hile fiduciaries can still use the revised VFCP to correct certain violations without having to provide notice of such violations to participants, the remaining notice requirement attached to penalty and/or excise tax relief may certainly discourage fiduciaries from attempting to obtain such relief, particularly when potential penalties and excise taxes are minimal." (Kilpatrick Stockton LLP)

Commentary: Workers at Some High-Tech Firms Find They're Out of Options
Excerpt: "To high-tech firms options are like free money. Their cost doesn't come out of the net income reported to shareholders. But when the option is exercised, the spread between the exercise price and the stock's market value can be deducted from income on the corporate tax return.... [But employees] are ill-equipped to find their way through all the complexities: staggered vesting periods, alternative minimum taxes, cashless exercises and protective collars." (Forbes.com; free registration required)

Opinion: Go Greenspan's Way on Stock Options Accounting
Excerpt: "At issue: How should companies account for stock options they grant to employees when it comes to recording their value on the books? The answer has always been important to investors. Now, Federal Reserve Chairman Alan Greenspan has taken one side of the argument, President Bush the other." (BusinessWeek Online via Yahoo! Finance)

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