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The BenefitsLink Newsletter -
Welfare Plans Edition
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June 20, 2002 - 6,490 subscribers
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Supreme Court Allows Illinois Statute Requiring HMO to Provide Independent Medical Review on Demand
Excerpt (from unofficial syllabus): 'The Illinois HMO Act is directed toward the insurance industry, and thus is an insurance regulation under a commonsense view.... Congress recognized, the year before passing ERISA, that HMOs are risk-bearing organizations subject to state insurance regulation. That conception has not changed ..." (U.S. Supreme Court)

Analysis: Supreme Court Decision Means States Can Help Fight HMOs
Excerpt: "The court on a 5-4 vote endorsed an effort, like those used in 42 states, to let patients bypass health plan gatekeepers who refuse to pay for a treatment. The ruling also lifts some pressure off Congress, which has failed to pass a national patients' rights plan." (AP via Yahoo! News)

Another Subrogation/Reimbursement Claim Upheld Post-Knudson, This Time Against Bankrupt Participant
Wal-Mart Stores, Inc. v. Carpenter (4th Cir. 2002). Excerpt: "The participant, who had been injured in a car accident, filed for bankruptcy in the face of the resulting medical expenses--nearly $300,000. The participant's employer-sponsored health plan had paid about $100,000 toward the expenses. When the participant received a $125,000 settlement payment from the third party who had caused her injuries, she promptly claimed the amount as exempt under bankruptcy law." (EBIA Weekly)

Entertainers Group Pushes for COBRA Subsidy Bill in Albany But Time Running Out
Excerpt: "[I]ndustry activists - through the New York Entertainment Industry Health Insurance Coalition - are encouraging entertainment professionals to contact their legislators and ask them to vote for the assembly (A7660b) and senate (S6308) bills. Both bills would create a 50% subsidy payment of the COBRA premium for a period of up to one year for performers and other entertainment industry workers who meet eligibility requirements." (Backstage.com via Yahoo! News)

Flexible Jobs Trend Has Dark Side
Excerpt: "The use of electronic 'leashes' by workers shows no sign of waning, with the pressure to stay connected even extending to vacations ... Firms are stepping up their use of software and devices that monitor electronic communications, including 'instant messaging' and Internet discussion groups." (Christian Science Monitor)

Health Advocacy Groups Launch Web Site for Consumers To Voice Concerns About Increasing Drug Costs
A coalition of senior and health care advocacy groups have launched an online action center that will allow consumers to voice concerns about increased pharmaceutical costs and prescription drug coverage for Medicare beneficiaries. The goal of the site is to persuade Congress to add a prescription drug benefit to Medicare, which covers 40 million people over the age of 65 as well as persons with disabilities. (Spencernet)

Confronting Tyrannosaurus Rx: Strategies for Health Plans Being Devoured by Rampaging Drug Costs (PDF)
Excerpt: "Because prescription drug therapies are an essential component of the health care delivery system, plan sponsors need to begin considering effective strategies for managing prescription drug costs. Given the complex nature of the current prescription drug benefit system, con-fronting 'Tyrannosaurus Rx' may seem like an insurmountable challenge, but the beast can be tamed." (The Segal Company)

Health Plan Claimants Winning on Appeal About Half the Time in Michigan
Excerpt: "AARP Michigan is singing the praises of the state's system for health insurance appeals. They say that decisions have helped dozens of patients and that more citizens should be aware of the program. Michigan residents can appeal to the state if they feel their health insurance companies wrongly denied their claims." (insure.com)

Can Defined Contribution Health Insurance Reduce Cost Growth?
Excerpt: "DC health benefits can be part of a solution that enables workers to choose between health care cost and quality, and thereby enforce a discipline on health plans and providers that has not been present before. But DC health benefits cannot force this choice upon an unwilling work force/patient base ..." (Employee Benefit Research Institute)

Out-of-Pocket Limits Going Up for Employees
Excerpt: "As health care premiums continue to rise, employers will increasingly shift the burden of costs to their employees. This is the overriding conclusion of a health care survey conducted by the UCLA Anderson Forecast ... 75.5 percent raised co-payments or deductibles." (CFO.com)

Overview: EEOC Announces It Will Propose ADEA Exemption For Retiree Health Coverage
Excerpt: "The EEOC expects to propose the regulation on by December 2002.... The EEOC's announcement seems to promise good news for health plan sponsors that were disturbed about the implications of the Erie County litigation." (The Segal Company)

Study: Shifting Health Insurance Costs to Workers Can Save Employers More than Reducing Benefits
Excerpt: "Employers who increase employees' share of health insurance costs can save 'as much as or more than' those who reduce benefits, according to a Health Affairs study published June 19." (KaiserNetwork.org)

Healthcare Cost Crisis in Florida
Excerpt: "Big employers have been able to cope with the increases by using their clout to bargain, altering their health plans or shopping for new providers. Many small employers, however, with less leverage in the market, are scrambling. And Florida is a state of small businesses - fully two-thirds of the state's 600,000 businesses have five or fewer employees." (Florida Trend)

Health Care Spending Increases 8.7 Percent in 2001
Press release. Excerpt: "While prescription drug spending continued to grow at the largest annual rate, in both 2000 and 2001, hospital spending replaced prescription drugs as the most important driver of overall cost growth because a much higher share of health spending is for hospital care ..." (Center for Studying Health System Change)

Sufficient Evidence Found to Support ERISA Section 510 Claim for Unlawful Interference With Benefits
Smith v. Hinkle Manuf., Inc. (6th Cir. 2002). Excerpt: "[T]he employee worked for the employer for less than 11 months. While she was employed, her husband was diagnosed with coronary heart disease and her son with hydrocephalus (water on the brain). Treatment for these conditions was covered under the employer's insured health plan. The employee was fired two weeks after her son's diagnosis." (EBIA Weekly)

Jaw Implant Used to Treat a Medical Condition Was Not "Dental Implant" Under ERISA Group Health Plan
Meredith v. MAMSI Ins. Resources Inc. (4th Cir. 2002). Excerpt: "The participant in this case suffered from a degenerative condition that caused her jaw to collapse and prevented her from eating.... [T]he plan excluded 'dental implants,' a term it did not define, and it was on the basis of this provision that the insurer denied coverage for the endosseous implants." (EBIA Weekly)

Wisconsin Hospital Publishes Charge Information Online To Lure Employers
Excerpt: "A Wisconsin health system is posting information on its Web site that compares its charges for procedures with the charges of competing hospitals, in an effort to win the business of local employers, the Milwaukee Journal-Sentinel reports." (iHealthBeat.com; free registration required)

Drug Companies and the Patent Game: Fair Play or Foul?
Excerpt: "It's a common strategy used by pharmaceutical companies to try to retain exclusive rights to make and sell brand-name drugs: applying for a new patent on a secondary component of the medication.... Is this kind of legal maneuver on the up and up, a legitimate attempt by the big pharmaceutical companies to recover the huge costs of developing new drugs?" (The Wharton School of the University of Pennsylvania; free registration required)

Energy and Commerce Committee Continues Debate on GOP Medicare Package Amid Criticism from Dems
Excerpt: "The House Energy and Commerce Committee on June 19 began its markup of a Republican-backed Medicare reform package, which in part would provide Medicare beneficiaries a prescription drug benefit, the Washington Post reports ..." (KaiserNetwork.org)

Need for Speed Has Some Workers Seething
Excerpt: "A decade-long obsession with productivity has been healthy for the corporate bottom line, but workers say they are paying for it with exhaustion and pain. Job speedup is emerging as a top complaint for low-wage employees in sectors as diverse as food processing and tourism." (Los Angeles Times via Society for Human Resource Management)

Links to Items on Executive Comp, Benefits in General
(These items appear in both editions of the BenefitsLink Newsletter)

How to Develop a Global Benefits Policy
Excerpt: "Compensation and benefits are a reflection of the relationship between the corporation and the employee. A global benefits policy should support this relationship, yet keep structure to a minimum to preserve cultural values while, at the same time, allowing local subsidiaries space to breathe. In this article, we present a systematic process that will help you to develop your global benefits policy." (Aon Consulting)

Opinion: When Companies Make Tax Reimbursements to Executives, Shareholders Pay
Excerpt: "Let's say a company makes $100,000 in payments into a supplemental retirement plan on the executive's behalf (perk No. 1). This has tax consequences, but often companies will pay their top executives extra to cover the expense. These are called 'gross-up' payments. So a CEO will get an extra $67,000 -- $40,000 to pay the 40% tax rate on the retirement plan contribution (perk No. 2) and $27,000 to pay the taxes on the $67,000 (perk No. 3)." (Business Week)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Benefit Systems Support II for Washington Mutual
in WA

Newly Posted Webcasts (Post Yours!)
The Medicare Modernization and Prescription Drug Act of 2002 - Energy and Commerce Committee on June 18, 2002
presented by KaiserNetwork.org
The Medicare Modernization and Prescription Drug Act of 2002 - Ways and Means Committee on June 18, 2002
presented by KaiserNetwork.org

Newly Posted Conferences (Post Yours!)
Professional Employer Organizations (PEO) Web Seminarin ALL STATES on June 25, 2002
presented by SunGard Corbel
Best of Great Lakes Workshopsin MN on September 19, 2002
presented by ASPA
Best of Great Lakes Workshopsin IN on September 23, 2002
presented by ASPA
Best of Great Lakes Workshopsin WI on September 27, 2002
presented by ASPA
403(b)/457 Plan Workshopin CO, DC, GA, IL, MN, NY, PA, TX, WI on June 21, 2002
presented by SunGard Corbel

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Editor and Publisher: David Rhett Baker, J.D.