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The BenefitsLink Newsletter -
Welfare Plans Edition
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May 10, 2002 - 6,424 subscribers
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Burlington Northern Settles Genetic Information Case
Excerpt: "The case that thrust the controversy about using genetic information in employment into the spotlight was settled May 6 for $2.2 million. The Equal Employment Opportunity Commission (EEOC) and The Burlington Northern and Santa Fe Railway Company (BNSF) jointly announced the mediated settlement of EEOC's lawsuit that alleged that BNSF violated the Americans with Disabilities Act (ADA) by genetically testing or seeking to test 36 of its employees without their knowledge or consent." (Society for Human Resource Management)

Deal Reached on Trade Package; Tax Credits for COBRA Coverage To Be Provided
Excerpt: "The compromise would give eligible workers tax credits to cover up to 70 percent of the costs of the federal COBRA health care plan or similar state-run group plans." (Washington Post)

10th Circuit Awards LTD Claimant Interest Back to Date of Claim, Not Date of Disability
Caldwell v. Life Insurance Co. of America (10th Cir. 2002). Excerpt: "Mr. Caldwell did not file a claim with LINA until five years after his injury. This delay was due to [his employer's] failure to inform him of the availability of disability benefits through the LINA plan, rather than any delay caused directly by LINA. To award prejudgment interest as far back as 1989, therefore, would penalize a party not responsible for the delay." (U.S. Court of Appeals for the Tenth Circuit via Law.com)

Battle Over Contraceptive Coverage Heats Up
Excerpt: "Because federal legislation mandating contraceptive coverage has yet to pass, supporters are tackling the issue on a state-by-state and even company-by-company level." (USA Today via Society for Human Resource Management)

New Jersey Docs Sue Five Top HMOs for Flouting State's Prompt-Pay Law
Excerpt: "They make MSNJ the fifth state medical society to take nearly identical legal action against HMOs in their respective state courts, following Connecticut, New York, South Carolina, and Tennessee." (insure.com)

U. Pitt Committee Finds Domestic Partner Benefits Would Increase Costs Between 0.6 and 1.6 Percent
Excerpt: "The report said the cost of extending benefits to same-sex partners would equal 0.6 percent of the university's health insurance costs, while granting the benefit to same and opposite sex couples would likely amount to 1.6 percent of the total cost." (Post-Gazette.com)

High-Flying Aircraft Deductions
Excerpt: "After a few years of fighting corporations on the amount of their deductions for executive use of corporate aircraft, the IRS recently said it will follow a court decision permitting the full deduction when the use is appropriately treated as compensation. In an Action On Decision (AOD) issued on Feb. 11, the IRS acquiesced to the Eighth Circuit Court of Appeals ruling in Sutherland Lumber-Southwest, Inc. v. Commissioner." (Thompson Publishing Group)

Privacy Rule Revisions Would Extend Time To Rewrite Business Associate Contracts
Excerpt: "Covered entities would have an additional year, until April 2004, to revise their existing contracts with 'business associates,' under proposed amendments to HIPAA's privacy rules issued in the March 27, 2002, Federal Register ... The proposal also would clarify that group health plans may disclose enrollment or disenrollment information to plan sponsors without amending the plan documents." (Thompson Publishing Group)

New Jersey Enforces Infertility Benefits Law
Excerpt: "The New Jersey Department of Banking and Insurance [on May 10, 2002] ordered all health insurance carriers in the state to immediately comply with a state law effective last November that mandates infertility benefits, including diagnostic tests, medications, in vitro fertilization and artificial insemination." (Modern Healthcare)

Georgia Regulators Continuing Crackdown Over Late Payments by HMOs
Excerpt: "Georgia Insurance Commissioner John Oxendine is set to level fines against most of the state's HMOs for delaying claims payments to doctors and hospitals last year." (Atlanta Journal-Constitution)

Companies Trim Health Benefits for Many Retirees as Costs Surge
Excerpt: "The reductions in health benefits stem mainly from sudden sharp increases in employer spending on prescription drugs last year. Drugs account for 40 to 60 percent of employers' overall spending on Medicare-age retirees' health care." (New York Times; free registration required)

Plans Feel Knudson Ruling's Ramifications in Recent Federal Reimbursement Cases
Excerpt: "Three recent court decisions indicated that, while it may be difficult for a group health plan to maintain a lawsuit to recover benefits from a settlement with or judgment against a third-party tortfeasor, it may not be impossible. In those cases, which were decided in January, the federal district courts made their rulings based on the U.S. Supreme Court's decision in Great-West Life & Annuity Insurance Co. v. Knudson ..." (Thompson Publishing Group)

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). Final rules on electronic communication and recordkeeping by pension and welfare benefit plans ... finalize and expand earlier interim and proposed rules ..." (Thompson Publishing Group)

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

New IRS Employment Tax Rules May Harm Use of Stock Options, Employee Stock Purchase Plans
Excerpt: "[C]ritics say new taxes will discourage employees and companies from participating in what are some of the most widely used benefits to both attract and retain workers, particularly in the hard-hit technology industry.... The tax previously went into effect early last year, when the IRS declared a ban on payroll taxes on certain stocks as obsolete. But the IRS immediately declared a moratorium on the change until it could clarify its potential effect." (CNET News.com via Yahoo! News)

IRS Proposal to Collect Payroll Taxes on Stock Options Faces Challenge
Excerpt: "Rules proposed by the IRS would impose the 15.3 percent tax, which funds Social Security and Medicare, on incentive stock options and employee stock purchase plans. That would reverse a 31-year-old IRS position on the issue. The rules would take effect Jan. 1. Opponents say this amounts to a new tax burden, never authorized by Congress ..." (AP via StarTribune.com)

Newly Posted Conferences (Post Yours!)
Understanding ERISA 2002: An Introduction to Basic Employee Retirement Benefitsin NY on July 11, 2002
presented by Practising Law Institute
Certification Institutein AZ on October 6, 2002
presented by WorldatWork

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.