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The BenefitsLink Newsletter -
Welfare Plans Edition
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July 5, 2002 - 6,490 subscribers
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Contracting With Agent to Send COBRA Notices Does Not Constitute Good Faith Compliance With COBRA
Scott v. Suncoast Bev. Sales, Ltd. (11th Cir. 2002). Excerpt: "The employer contracted with a third-party administrator (TPA) to send COBRA notices. The employer argued that it complied with COBRA by providing the TPA with the necessary information and instructing the TPA to send a COBRA election notice to the employee." (EBIA Weekly)

4th Circuit ERISA Preemption Case Has Implications for HIPAA Privacy
Excerpt: "An employee's state-law privacy lawsuit alleging that her employer's plan administrator misused her health information is not necessarily preempted by ERISA, the 4th U.S. Circuit Court of Appeals ruled in Darcangelo v. Verizon Communications Inc. This case, possibly the first to analyze the ERISA fiduciary issues implicated by an alleged privacy breach, could have some bearing on a preemption analysis under HIPAA's privacy rules." (Thompson Publishing Group)

Health Plans Call for Further Changes to HIPAA Privacy Proposal
Excerpt: "General support for the proposed changes to HIPAA's privacy rules was expressed by health plan representatives, in written comments submitted to HHS. However, they called for further amendments to many provisions of the rules, including those governing business associate contracts and marketing. Other commenters were critical of HHS' proposal, arguing that it would weaken privacy protections." (Thompson Publishing Group)

New Online Consultation System Links Patients and Physicians
Excerpt: "Online communication between physicians and patients, long a goal of patient advocates and health care efficiency experts, took a jump forward this month with the launch of a new service that lets patients have email consults with their doctors-- for a price." (iHealthBeat.com; free registration required)

Reimbursements From Plan Covering Only Radial Keratotomies Are Excludable From Gross Income
Priv. Ltr. Rul. 200226003 (Mar. 7, 2002). Excerpt: "[A] radial keratotomy plan ... would be a group health plan subject to ERISA, HIPAA and COBRA. And if the employer maintains a health FSA that also covers radial keratotomies, then the health FSA should not reimburse such expenses until the limits under the benefit-specific plan are exhausted." (EBIA Weekly)

Disability Plan With Lower Mental Health Benefits Does Not Violate State Discrimination Law
Kolton v. Anoka (Minn. 2002). Excerpt: "The employee in this case, disabled as a result of a mental illness, claimed that her employer's long-term disability plan violated the Minnesota Human Rights Act (MHRA), as well as state and federal equal protection laws, because it provided a shorter period of disability benefits for mental illnesses than for physical disabilities." (EBIA Weekly)

Beneficiary Change Was Effective Despite Employee'S Failure to Sign and Date Form
Davis v. Combes (7th Cir. 2002). Excerpt: "The employee in the case was covered by an employer-sponsored ERISA life insurance plan. Shortly before her unexpected death, she had submitted a change of beneficiary form removing her husband and daughter and designating her sister as beneficiary. The change form was accepted by the employer and entered into its records ... However, the employee had neglected to sign or date the form (under the insurance policy, a signature was required)." (EBIA Weekly)

City of Columbus OH Considers Benefits For Domestic Partners
Excerpt: "[Columbus] is looking toward Nationwide's model for extending coverage to domestic partners, which the insurance giant words as 'household benefits.' Nationwide spokesman Dan Orzano says medical benefits are offered to unmarried adult members of an employee's household in an attempt to let the employee determine the definition of family." (Business First via bizjournals.com; free registration required)

Workers Braced To Bolt In Coming Labor Shortage
Excerpt: "The fact is that the recent economic slowdown only served to mask a chronic labor shortage. The coming labor shortage is expected to be worse than ever and experts predict it will last for decades.... Starbucks has initiated flexible work hours and full benefits for part-time workers, specifically aimed at older workers. They are protecting themselves against the shortage of younger workers." (Washington Business Journal via bizjournals.com; free registration required)

Issue of the Uninsured Gaining Momentum in Congress, Philadelphia Inquirer Says
Excerpt: "[W]ith the recent recession and the increasing cost of health insurance, Americans seem more apt to embrace 'more ambitious goals,' including universal coverage, according to several lawmakers and pollsters." (KaiserNetwork.org)

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

IRS Mailed Form 5500 Packages on July 3; No Blanket Extension Foreseen for July 31 Deadline
Excerpt: "Despite the delayed printing, neither the Department of Labor nor the Internal Revenue Service are considering blanket extensions for 2001 Form 5500 filings. Filers who need an extension should be prepared to file the Form 5558 ..." (Internal Revenue Service)

Side Agreements Preclude Workers From Claiming They Were Eligible Employees and Not Contractors
Kiper v. Novartis Crop Protection Inc. (M.D. La. 2002). Excerpt: "[The court] held that, even if the engineers were employees, they were estopped (i.e., precluded) from asserting their employee status.... Each engineer signed a contract acknowledging independent contractor status and agreeing to the base rate plus markup in lieu of benefits." (EBIA Weekly)

IRS Releases Proposed Regs on Split-Dollar Insurance Arrangements
Excerpt: "As indicated in Notice 2002-8, the proposed regulations provide two mutually exclusive regimes for taxing split-dollar life insurance arrangements. A split-dollar life insurance arrangement (as defined in the proposed regulations) is taxed under either the economic benefit regime or the loan regime.... Thus ... the proposed regulations generally provide substantially different tax consequences to the parties depending on which party owns the life insurance contract." (Internal Revenue Service)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Employee Benefits Attorneys Needed for Warner Norcross & Judd LLP
in MI
Pension Consultants/Administrators; F/T & P/T for Northern NJ Mid-Size Pension Consulting Firm
in NJ, NY
401k Administrator for Secured Trust Bank
in TX
Vice President - Actuary for Fanning Personnel
Director of Benefits-Disability for USAA
in TX
Director, Defined Benefit Plan Services for Charles Schwab & Co., Inc.
in OH
Benefits Coordinator/Analyst for a Fortune 200 company in Charlotte NC
in NC
Director of Benefits - Well-Being for USAA
in TX

Newly Posted Conferences (Post Yours!)
The ESOP Workshopin CA on July 11, 2002
presented by N.I.P.A. - Sacramento Chapter
presented by Employers Health Conferences

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