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The BenefitsLink Newsletter -
Welfare Plans Edition
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May 16, 2002 - 6,379 subscribers
Today's sponsor: EBIA's ERISA Compliance for Health & Welfare Plans

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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)

Health Premiums Predicted To Cost Nearly Half of Entry-Level Salaries By 2007
Press release. Excerpt: "'If health care premiums continue to explode at their current annual average increase of nearly 15 percent over the next five years, employees will suffer as their employers agonize over which to pay: premiums or salaries,' James A. Klein, president of the American Benefits Council, said [May 15, 2002]." (American Benefits Council)

Coalition of Business Groups Asks Congress Not To Pass Patients' Rights, Mental Health Parity Bills
Excerpt: "The Health Benefits Coalition, a group of insurance companies and business executives, on May 15 asked Congress not to pass patients' rights and mental health parity legislation, or 'any other bill that would increase health insurance premiums,' CongressDaily/AM reports ..." (KaiserNetwork.org)

Most Work/Life Programs Grew Last Year Despite Recession
Excerpt: "Despite the perception that employers are quick to cut costs by trimming employee benefits, a new survey finds that most types of work/life programs grew over the past year." (Crain's Chicago Business)

Insurer Must Show That It Was Prejudiced By Insured's Failure To Provide Notice of Disability
A 'notice-prejudice rule' under state insurance law applied to a disability policy and, as a result, the insurer was required to demonstrate that it was prejudiced by an insured's failure to provide notice of disability. This was the ruling of the Ninth Circuit U.S. Court of Appeals in Carrington Estate Planning Services, et al. v. Reliance Standard Life Insurance Company (No. 00-17491). (Spencernet)

Employee Who Could Not Perform All the Duties of His Job Was Entitled To LTD Benefits: Court
An employee who injured his ankle in a fall at the worksite was entitled to long term disability benefits because the employee was no longer able to perform all of the duties of his occupation. This was the decision of the Tenth Circuit U.S. Court of Appeals in Caldwell v. Life Insurance Company of North America (Nos. 00-3256 and 00-3288). (Spencernet)

Terms of ERISA Health Plan Avoid Application of "Make Whole" Doctrine or Offset for Attorney Fees
Johnson v. Ziegler (Wis. Ct. App., No. 00-35545, 4/25/02). Excerpt: "The circuit court granted [the health plan] ... the full amount of its subrogation claim, with no reduction or offsets under the 'made whole' doctrine or for attorney's fees [which Johnson, the plan participant,] incurred in obtaining the settlement [against the third-party tortfeasor]. Johnson claims the court erred in so doing. We disagree and affirm." (Wisconsin Court of Appeals)

District Court Finds Louisiana's Benefits Assignment Statute Not Preempted by ERISA
Louisiana Health Service & Indemnity Company d/b/a Blue Cross and Blue Shield of Louisiana v. Rapides Healthcare System et al. (No. 00-694-D, M.D. La. 2002). Excerpt: "Blue Cross' refusal to recognize certain assignments of benefits by patients is included as a provision in its contracts for health benefit plans, including its ERISA plans.... However, Blue Cross' refusal to honor assignments is in direct conflict with the Louisiana Assignment Statute ..." (U.S. District Court for the Middle District of Louisiana)

Congress Examines Use of Comp Time by Private Employers
Excerpt: "Compensatory time off in lieu of overtime works in the public sector; there's no reason it shouldn't work in the private sector-perhaps with some tweaking. That, in essence, was the message delivered Wednesday by witnesses before the Subcommittee on Workforce Protections of the U.S. House Committee on Education and the Workforce." (Society for Human Resource Management)

Critics Challenge COLI Legislation
Excerpt: "While Washington seems to be ready to charge ahead with legislation that would bar employers from taking out Corporate Owned Life Insurance (COLI) on employees, critics say that the proposed legislation is zoning in on the wrong aspects of the programs." (PLANSPONSOR.com; free registration required)

Florida Commissioner Shuts Down Another Unlicensed Health Insurer
Excerpt: "New York-based Vanguarde Asset Group, also known as Vanguard Asset Group, said it qualified under [ERISA] to do business in the state without a license, the department of insurance said.... However, the department of insurance alleged that Vanguarde offered coverage to unrelated employers and consumers and operated more like a multiple employer-welfare arrangement, or a MEWA, which is required to be licensed in the state." (Hoover's Online)

A Snapshot of the Implementation of California's Mental Health Parity Law (PDF)
36 pages. Excerpt: "The study's purpose was to assess the perceived objectives, initial experiences, and anticipated outcomes of the new law after its first year of implementation. Results from the study are intended to help identify the early successes, as well as the remaining challenges, in implementing the parity law.... [T]he law does not appear to have had any adverse consequences on the health insurance market to date ..." (Mathematica Policy Research, Inc.)

Analysis: Amendments Proposed To HIPAA Privacy Rules
Excerpt: "Often covered entities engage other parties, such as billing agents and third party administrators, to perform functions covered by the privacy rules. The privacy rules apply to these other parties (known as 'business associates') only indirectly, through a requirement that covered entities include certain terms and conditions in their contracts with business associates. The proposed amendments ... introduce two significant developments with respect to these contracts." (Ballard Spahr Andrews & Ingersoll, LLP)

Welcome to new BenefitsLink advertiser HR PLUS
Excerpt: "HR PLUS is an online employee and benefits management system. Streamline your management and deliver an information database to your employees. HR PLUS also developed the CAFEPlus Plan. Using Section 105 of the tax code we are able to increase the savings you currently are realizing on your 125 Flexible Spending plan. HR PLUS melds the convenience of the Internet with payroll processing, benefits management and employee compliance. Request your free demo!"

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

California Law Restricting Use of Social Security Numbers; Implications for Plan Sponsors
Excerpt: "A California law intended to stem the rising tide of identity theft based on improper access to an individual's Social Security number (SB 168, Chapter 720 of the statutes of 2001) will affect retirement and health benefit plans that cover residents of California as well as written employee communications by California employers.... A major question for employee benefit plans that are subject to ERISA is whether the new state law is pre-empted as to them." (The Segal Company)

New Proposed Golden Parachute Regulations
On February 20, 2002, the IRS issued new proposed regulations relating to the tax treatment of golden parachutes under Internal Revenue Code Section 280G. The new proposal applies to any payments that are contingent on a change in control occurring on or after January 1, 2004. Taxpayers may, however, rely on the new proposal for parachute payments made after February 20, 2002. Alternatively, through December 31, 2003, taxpayers may continue to rely on the regulations proposed in 1989. (Sanders, Schnabel & Brandenburg, P.C.)

National Association of Manufacturers Challenges Legality of Regs Imposing Taxes on Stock Options
Press release. Excerpt: "[Bill Blaylock, speaking for NAM, said that] 'Although NAM member companies will comply with final regulations that impose taxation on the spread at statutory option exercise,' added Blaylock, 'many will likely file claims for refund of these taxes on the basis that the regulations are invalid. This claim for refund process will be burdensome on these companies, as well as on their employees and the IRS.'" (National Association of Manufacturers)

Welcome to new BenefitsLink advertiser Monarch Personnel
Excerpt: "Monarch Personnel offers a free, one page, monthly newsletter highlighting current Benefit Jobs and Benefit Candidates in Houston, TX. This is a free listing service available to all actively working Benefit Professionals in Houston. This quick, free newsletter will keep you current on who has moved to new positions, who is qualified and available to hire, and what companies are involved in active searches. Request your free newsletter now!"

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Benefits Coordinator with Attitude for UNX, Inc.
in CA
Junior Administrator for Florida Pensions, LLC
in FL
Manager Plan- Administration Services for Southwest Suburban Chicago, IL Plan Administration and Consulting Firm
in IL
ERISA Attorney- Boston, MA for Swift & Associates
in MA
Conversion/Operations Specialist for Alliance Benefit Group of New England
in NH
Attorney or Paralegal for Howard Simon & Associates, Inc.
in IL

Newly Posted Press Releases
ERIC Disputes Erroneous Cash Balance Report; Calls for Withdrawal (The ERISA Industry Committee)
Alexander Hamilton Institute Releases New Free Report: "Nixing Negativity In The Workplace" (Alexander Hamilton Institute)

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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.