BenefitsLink Health & Welfare Plans Newsletter for May 24, 2002

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Welfare Plans Edition

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May 24, 2002 - 6,398 subscribers

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In Rev. Rul 2002-27, IRS Approves Automatic Enrollment for Cafeteria Plans
Excerpt: "[Issue:] Whether employer contributions used to purchase group health coverage under § 125 of the Internal Revenue Code are included in the gross income of the employee solely because the plan uses an automatic enrollment process whereby the employee's salary is reduced each year to pay for a portion of the coverage unless the employee affirmatively elects to receive the amount in cash." (Internal Revenue Service)

Senate Approves Trade Legislation Including Tax Credits for Displaced Employees' COBRA Premiums
Excerpt: "Its centerpiece is a refundable tax credit, payable in advance, that would cover 70 percent of the cost of health insurance for workers eligible for trade adjustment aid to tide them over while they seek new jobs." (Washington Post)

Analysis: Supremes Limit ERISA Remedies in Great-West Life & Annuity Insurance Co. v. Knudson
Excerpt: "This case may not seem like a big deal since the only practical result is that dollars that might have gone to an insurer instead go to a lawyer. The big deal, however, is the Court's narrow interpretation of Section 502(a)(3). This is the very same provision that the Supreme Court plucked out of obscurity in the Varity case ..." (Nixon Peabody LLP)

Employee Moving Assistance Programs: Whose House Is It, Anyway?
Excerpt: "[S]ome employers have provided additional assistance by helping with or even taking over the process of selling an employee's current house. The employer may provide the relocation assistance directly or through a third-party relocation company. The exact type of assistance provided and the manner in which it is provided may raise different issues and affect proper tax treatment." (Thompson Publishing Group)

Mercer Releases Time-Off Survey
Excerpt: "Employers spent an average of 14.6 percent of payroll on absence-related benefits in 2000, an increase of .3 percent over the previous year ... Out of the 14.6 percent, employers spent 10.2 percent on scheduled absence benefits such as vacations and holidays and 4.4 percent on unscheduled absence benefits ..." (Society for Human Resource Management)

Free-Market Groups Defend Direct-To-Consumer Drug Advertising
Excerpt: "'Direct-to-consumer' prescription drug advertising is not driving up health costs, but could actually be helping to contain them, free-market advocates told a Capitol Hill briefing Tuesday.... 'There's very little evidence that doctors are prescribing inappropriately or people are taking drugs they shouldn't,' said John Calfee of the American Enterprise Institute." (Reuters Health via Medscape; free registration required)

Grading States on Basis of the Uninsured
Excerpt: "Being uninsured is hazardous to your health, according to a new government study. In fact, people without health insurance are more likely to have poorer health and die prematurely than those with insurance, according to the Institute of Medicine, an arm of the National Academy of Sciences." (insure.com)

Transcript: Discussion with Managed Care Health Critic Dr. Linda Peeno
Excerpt: "In the movie ['Damaged Care'], [Laura] Dern plays a real physician named Dr. Linda Peeno of Louisville, Ky. Peeno worked for several managed care companies as a medical reviewer approving and denying claims for payment. She is now one of managed care's strongest critics." (Washington Post)

Transcript: Discussion About Managed Care, with Representative American Association of Health Plans
Excerpt: "[J]oin Post Health columnist Abigail Trafford and her guest Susan Pisano, director of communications for the American Association of Health Plans, to talk about the importance of managed health care." (Washington Post)

Welcome to new BenefitsLink advertiser DataPath, Inc.
Excerpt: "125 Administration Package is a full-service Windows-based solution developed by DataPath, Inc. for administrating § 125 Cafeteria Plans, and integrates with other systems in Datapath's employee Benefit Software Suite. The package is designed for multi-company/multi-user administration, with unlimited capacity for plan service providers. For more information, go to www.dpath.com or email sales@dpath.com."

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