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The BenefitsLink Newsletter -
Welfare Plans Edition
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June 24, 2002 - 6,490 subscribers
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Medicare Prescription Drug Plan Merits Debated Along Party Lines
Excerpt: "The House is set to vote this week on a bill that supporters say could cut Medicare beneficiaries' prescription drug costs by 70 percent-- and opponents say would offer America's elderly and disabled persons little help.... 'You can put lipstick on a pig, but you can't call it a lady,' [Rep. Charles Rangel, D-N.Y.] said." (Atlanta Journal-Constitution)

House Could Approve Republican Medicare Package This Week
Excerpt: "With the Ways and Means and Energy and Commerce committees last week each having approved the House Republican Medicare bill, which in part would offer seniors drug coverage, floor debate is set to begin this week and the bill is expected to pass, Congressional Quarterly reporter Mary Agnes Carey says in this week's 'Congressional Quarterly Audio Report'." (KaiserNetwork.org)

Kennedy Health Bill Would Establish 'Strict' Information Tech Guidelines To Reduce Costs, Errors
Excerpt: "Sen. Edward Kennedy (D-Mass.) introduced legislation this week that would require health care organizations to meet 'strict' information technology standards, in an effort to lower administrative costs and improve clinical outcomes.... Insurers would be required to launch Internet-based claims processing systems and achieve a 99% accuracy rate for claims processing ..." (iHealthBeat.com; free registration required)

Caution Urged When Designing Noncash, In-Kind Benefits
Excerpt: "[W]here do noncash benefits fall in the benefit universe? Unfortunately, ERISA does not directly address the issue. While the statute provides no explicit blanket exclusion for noncash benefits, DOL regulations provide that the following types of noncash benefits fall outside ERISA's regulatory sweep ..." (BenefitNews.com)

Study: Employers Should Track "Presenteeism" Costs
Excerpt: "Five conditions; headache/pain, cold/flu, fatigue/depression, digestive problems and arthritis cost employers more than $180 billion in 'presenteeism' annually, according to a study by AdvancePCS.... Presenteeism occurs when an employee goes to work, but he or she is unable to fully perform due to health conditions. It accounts for more than two-thirds of health-related lost labor costs ..." (Society for Human Resource Management)

NCQA Accredits First Disease Management Organization
The National Committee for Quality Assurance (NCQA) announced that American Healthways, which provides disease and care management services to more than 500,000 patients nationwide, has become the first organization to earn accreditation under its new Disease Management (DM) Accreditation program. (Spencernet)

Philadelphia Inquirer Profiles Debate on Mental Health Parity Legislation
Excerpt: "The Philadelphia Inquirer on June 24 reports that while mental health parity legislation under consideration in Congress would 'make health plans equalize the rules for mental and physical health care,' it would not 'do away with' all coverage disparities." (KaiserNetwork.org)

Consumer Protections under ERISA and California Law Compared
Excerpt: "ERISA prevents states from directly regulating health insurance arrangements established by employers, but allows states to regulate the indemnity insurers and health plans with which employers contract.... [C]onsumer protections vary depending upon whether an employer decides to retain the risk of paying medical claims (that is, to 'self-insure' the employee plan) or to purchase group insurance from a state-licensed insurer or managed care organization." (California HealthCare Foundation)

Consumer-Driven Health Plans Pique Employer Interest
Excerpt: "How do the plans work? Accounts set up for plan enrollees feature employer contributions or credits for current-year medical expense reimbursements that can be rolled over from one year to the next. They're typically offered in conjunction with comprehensive health coverage, such as catastrophic or high-deductible insurance, to provide a benefits safety net." (BenefitNews.com)

Debate over Drug Costs Spark Tobacco-Style Fight
Excerpt: "From Main Street to Capitol Hill, prescription-drug buyers have a blunt message for the pharmaceutical industry: They're sick of rising prices. And their remedy is turning into a legal headache for drug makers. Citizen groups, state governments and federal regulators are piling on with lawsuits reminiscent of the initial legal challenges that confronted the tobacco industry in the 1990s." (The Dallas Morning News via Business for Affordable Medicine Coalition)

Covered Entities as Employers-- How Does HIPAA Apply?
Excerpt: "As a healthcare 'covered entity,' does my organization also have HIPAA responsibilities as an employer?" (HIPAAdvisory.com)

Soft Job Market Gives Rise To Fake Health Insurance Across the Country
Excerpt: "Beware of bogus health care plans. Scamsters are selling pseudo policies to people who otherwise lack insurance. They may be willing to cover expenses immediately for pre-existing conditions -- illnesses you have had or know about -- without making you wait several months for coverage, as is common with legitimate plans. But the out-of-the-ordinary terms are a come-on, says the Florida Department of Insurance, which has shut down six such operations since February 2001." (Knight Ridder/Tribune Business News via Hoover's Online)

Actuaries to Congress: Unwise to Add Medicare Prescription Benefit Before Financing is Addressed (PDF)
Excerpt: "Adding any additional benefits, in particular a prescription drug benefit, without addressing the financing of the entire Medicare program would be unwise given the uncertainties for future funding of the current benefit structure. To keep the cost of a prescription drug benefit to a manageable level, beneficiary cost-sharing is crucial." (American Academy of Actuaries)

Opinion: Supreme Court Opinion Means Fairer Treatment From HMOs, But Uniformity Needed
Excerpt: "It seems perfectly ridiculous that the Supreme Court had to decide last week that some HMO patients may seek outside reviews if they believe they were wrongly denied surgery or other treatment.... Unraveling it, [Justice] Souter wrote, has come to 'occupy a substantial share of this court's time' because its terms 'seem simultaneously to preempt everything and hardly anything.'" (Los Angeles Times; free registration required)

ERISA Did Not Preempt State Law Claims Against Defendants For Disclosing Medical Records
ERISA did not preempt a plaintiff's state law claims against her employer and the administrator of a long term disability plan alleging that the defendants violated a state medical record confidentiality statute and certain other state laws. This was the ruling of the Fourth Circuit U.S. Court of Appeals in Darcangelo v. Verizon Communications, Inc. and CORE, Inc. (No. 01-1679). (Spencernet)



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

Spring/Summer 2002 Issue of IRS' Employee Plans News (PDF)
16 pages. Articles include New Law Makes Some Big Changes to Retirement Plans; Newer and Even More Improved Distribution Rules; Revised LRMs for SEPs, SARSEPs, SIMPLE IRA Plans and Other IRAs; Retirement Plan Life Cycle; Streamlined Procedures for GUST Late Amenders; Crossing an EGTRRA Amendment with a GUST Determination Letter Request; Good News for Fringe Benefit Plan Sponsors; Free 403(b)/457 CD-ROM. (Internal Revenue Service)

DOL Investigating Polaroid's Benefit Plans
Excerpt: "According to the filing, investigators are looking at a range of Polaroid benefit programs, including its pension, employee savings, group life insurance, retiree health insurance, severance, and long-term disability plans." (Boston Globe)

Ex-Enron CFO Wants Moratorium on ERISA Civil Suits
Excerpt: "Enron Corp.'s former chief financial officer wants a federal judge to grant him protection from civil lawsuits as the FBI pursues its criminal probe against him and others. Andrew Fastow created partnerships that earned him tens of millions of dollars and later helped fuel the energy company' s downfall." (StarTribune.com)

Opinion: Companies Need Honest Accounting of Stock Options
Excerpt: "Wall Street has decided it's time to stop pretending that stock options are free and account for them honestly, which means deducting the cost of options from corporate profits. Washington, naturally, has come to the opposite conclusion. Legislation to require companies to come clean about options costs is dying in the Senate ..." (Jerry Knight in the Washington Post)

IRS Wants Tech Firms to Report Option Values in Affiliate Deals
Excerpt: "In a renewed attack on technology companies' use of stock options, the Internal Revenue Service is seeking to force firms to report the options' value in deals with foreign affiliates, The Wall Street Journal reported Monday. If the IRS prevails, many technology companies that use foreign subsidiaries to make their products could be forced to pay hefty taxes on stock awards to both domestic and foreign employees." (Dow Jones Business News via Yahoo! News)




Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Actuary EA Pension-LLY for A Prestigious Consulting Company
in CA
401(k) Plan Administrator for Benefit Consultants
in AL
Associate Consultant for Benefit Consulting Firm
in TX



Newly Posted Webcasts (Post Yours!)
IRS §457 Regulations for Pension Plans on July 12, 2002
presented by National Association of Government Defined Contribution Administrators, Inc.
Social Security and Women: Future Challenges and Opportunities on June 19, 2002
presented by KaiserNetwork.org
Stock Options in the New Economy: Implications for Plan Design and Other Instruments on June 27, 2002
presented by Clark/Bardes Consulting - Compensation Resource Group



Newly Posted Conferences (Post Yours!)
Fundamentals of Retirement Plansin TX on September 12, 2002
presented by D/FW Chapter of ISCEBS
IRA DISTRIBUTIONSin ALL STATES on July 9, 2002
presented by SunGard Corbel
IRA SIMPLE/SEPin ALL STATES on July 23, 2002
presented by SunGard Corbel



Newly Posted Press Releases (Post Yours!)
Lynchval Provides General Release of Distributed Version of LVbatch (Lynchval Systems Worldwide Inc.)
SunGard Corbel Introduces Relius(tm) Government Forms 5500 Client Version - New Technology Automates Delivery of 5500s to Plan Sponsors (SunGard Corbel)
Sentinel Benefits Chooses SunGard for Straight-Through Processing - Growing Retirement Plan Recordkeeping Business Necessitates Automation (SunGard Corbel)
National Association of Government Defined Contribution Administrators Address IRS §457 Regulations for Pension Plans in July 12 NAGDCAST (National Association of Government Defined Contribution Administrators, Inc.)



Newly Posted Announcements of Promotions and New Personnel (Post Yours!)
Stanley K. Purcell (Pension Resource Group)

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