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The BenefitsLink Newsletter -
Welfare Plans Edition
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April 19, 2002 - 6,426 subscribers
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Hard Decisions for Employers as Health Costs Soar
Excerpt: "Companies will probably face average increases of 12 to 15 percent in 2003, compared with a projected increase of 12.7 percent this year, according to preliminary estimates from Mercer Human Resource Consulting, based on early discussions some employers are having with insurers." (New York Times; free registration required)

Maine Governor Vetoes Bill Mandating Increased Coverage of Mental Health Disorders
Excerpt: "The bill would have expanded a 1995 state mental health parity law that required health plan policies held by businesses with at least 20 employees to cover treatment of seven mental illnesses." (KaiserNetwork.org)

New Survey Shows Retiree Health Benefits Continue To Decline
Excerpt: "The share of employers offering retiree health coverage has been declining over the past decade and evidence suggests that employer-sponsored retiree benefits will likely erode further because of both rising health care costs and the downturn of the economy." (Henry J. Kaiser Family Foundation)

What Employers Need to Know about the HIPAA Privacy Rules
Excerpt: "Prior to the start of the next plan year, virtually all group health and welfare plans will need plan amendments, changes in summary plan descriptions, changes in plan administration of claims and treatment of medical information, as well as modifications to service-provider contracts. This first Legal Alert provides on overview of the medical privacy regulations (the 'Privacy Rule') issued under the Health Insurance Portability and Accountability Act of 1996 ('HIPAA')." (Kilpatrick Stockton LLP)

New Case May Present FICA Refund Opportunities for Employers Paying Severance Pay (PDF)
Excerpt: "A decision just issued by the U.S. Court of Federal Claims, CSX Corp. v. United States ... (April 1, 2002) may present a FICA tax refund opportunity for employers that have paid out severance in the last several years." (Miller & Chevalier Chartered)

What Employers Need to Know about Electronic Transactions under HIPAA
Excerpt: "This second Legal Alert will now focus on another upcoming HIPAA requirement, the Electronic Data Interchange rule ('EDI Rule').... [H]ealth plans with less than 50 participants and that are self-administered by the employer are not subject to the EDI Rule." (Kilpatrick Stockton LLP)

Overview: DOL Finalizes Electronic Disclosure Rules
Excerpt: " These rules establish a safe harbor for the administrators of all pension and welfare benefit plans covered by Title I of ERISA to use electronic means to satisfy plan disclosure and recordkeeping obligations. The rules become effective as of October 9, 2002." (Kilpatrick Stockton LLP)

ERIC Urges Senators To Oppose COBRA Subsidies In Trade Bill
In a recent letter to the members of the Senate, the ERISA Industry Committee (ERIC) urged senators to oppose a provision in the Senate Trade Adjustment Assistance Bill (S. 1209) that would call for a federal government subsidy for COBRA continuation of coverage premiums for workers displaced by global trade. The Senate Finance Committee approved the bill this past February. (Spencernet)

Integrated Time-Off Saves Money, Gets Employees Back to Work
Excerpt: "By combining short-term disability with other time-off programs, you may be able to save money and help employees at the same time." (Workforce Online)

Benefits Hold Steady Despite Shaky Economy
Excerpt: "An anemic economy has had little effect on major corporations' ability to offer an array of benefits, according to the results of the most recent benefits survey conducted by the Society for Human Resource Management (SHRM)." (Society for Human Resource Management)

Report: Provider Incentive Models for Improving the Quality of Care (PDF)
24 pages. Excerpt: "Provider quality incentives are an important component of value-based purchasing. They create a business case for providers to invest their time and effort in health care quality improvement... The National Health Care Purchasing Institute (NHCPI) commissioned Bailit Health Purchasing (BHP), LLC to identify viable provider incentive models that could be applied by commercial insurers, employers, and employer coalitions contracting directly with providers." (National Health Care Purchasing Institute)

Defined Contribution Health Plans: Tax Issues
Originally published December 3, 2001. Excerpt: "There are a variety of new health plan designs being marketed to employers as a way of capping employee health plan costs. These designs generally are grouped together under the name 'defined contribution health plans.' This memorandum presents a summary of certain issues relating to these designs, and in particular, of issues relating to the federal income tax consequences to employees of these designs." (Miller & Chevalier Chartered)

Implications of the Move Away from Comprehensive Health Benefits (PDF)
28 pages; April 2002 EBRI Issue Brief. Excerpt: "Is there, in fact, a trend toward greater employee cost-sharing or reduced benefits? The evidence is mixed.... more recent opinion surveys suggest a shift may be under way." (Kaiser Permanente)

Individual Health Insurance: How Much Financial Protection Does It Provide, Compared to Groups?
Excerpt: "This paper examines the comparative financial protection provided by individual and group health insurance.... We estimate that individual insurance pays on average 63 percent of the health care bill, whereas group health insurance pays 75 percent. Deductibles are much higher in individual insurance, and covered benefits are more meager." (Health Affairs)

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

Witness List and Written Testimony to Finance Committee on Corporate Governance and Executive Comp
Includes statements from Dr. Carolyn Brancato, The Conference Board; Sarah Teslik, Council of International Investors; Robert Pozen, Harvard University; Ira T. Kay, PhD., Watson Worldwide; Kathryn J. Kennedy, John Marshall Law School; and John H. Biggs, TIAA-CREF; Mark Heesen, National Venture Capital Association. (U.S. Senate, Committee on Finance)

Opinion: Rebutting Stock Option Defenders
Excerpt: "I had intended to stop writing about stock options after critiquing them in my last two columns, but I feel compelled to rebut the self-serving, nonsensical arguments put forward by defenders of the status quo." (Whitney Tilson in The Motley Fool)

Opinion: Just What We Need-- Another Accounting Loophole for Stock Options
Excerpt: "So the question for investors is simply this: Would expensing stock options clarify the understanding of a company's numbers, or muck it up? ... Would some financial managers try to game the system to manage earnings [if stock options were forced to be expensed]? You bet they would." (SmartMoney.com on Yahoo! News)

Stock Options Accounting Change Could Hurt Start-ups
Excerpt: "Entrepreneurial companies would suffer under proposed rule changes regarding the accounting of stock options, a tool used by start-ups and their venture backers for recruiting and rewarding the best employees, a Senate committee was told [Thursday, April 18, 2002]." (Washington Post)

Managing Fiduciary Responsibility: Establishment and Operation of a Benefits Committee
4 pages. Excerpt: "In this article, we will discuss how to establish and operate a benefits committee, the fiduciary nature of the committee's functions, and provide a disciplined approach to meeting a benefit program's business objectives." (Aon)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Financial Services Support Representative for Nationwide Insurance
in OH
Product Manager - Product Development for CIGNA Corporation
in CT
Financial Services Analyst for Nationwide Insurance
in OH
Employee Benefits Attorneys for The Nation's Most Preeminent Employee Benefits Practice
in CA, DC
Pension Analyst for Mutual of Omaha Insurance Company
in NE

Newly Posted Webcasts (Post Yours!)
The Health Care Crisis: The President's Plan for High-Quality, Affordable Care on April 17, 2002
presented by President's Council of Economic Advisors, Washington, D.C.
Senate HELP Committee Hearing: Medical Privacy Issues on April 16, 2002
presented by U.S. Senate's Health, Education, Labor and Pension Committee
Making the Drug Industry Play Fair on April 15, 2002
presented by Families USA, Blue Cross/Blue Shield, Washington, D.C.

Newly Posted Press Releases
San Diego Retirees Get CareCounsel's Healthcare Advocacy Program (CareCounsel)

Subscribe to the Retirement Plans Edition, too (click)

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.