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The BenefitsLink Newsletter -
Welfare Plans Edition
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July 15, 2002 - 6,490 subscribers
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Michigan Senator Will Lead Democrats in Prescription Drug Debate
Excerpt: "When the Senate begins a two-week debate on prescription drugs on Monday, Senator Debbie Stabenow will be at the center of the action, leading Democratic efforts to provide Medicare drug benefits and rein in pharmaceutical costs." (New York Times; free registration required)

Witnesses and Statements: July 11, 2002 Hearing on the Small Business Health Market
Witnesses include Merrill Matthews Jr., Ph.D., Council for Affordable Health Insurance; Mark Litow, Milliman USA; Ray Keating, Small Business Survival Committee; Robert de Posada, Latino Coalition; and Wayne Nelson, Communicating for Agriculture and the Self-Employed. (U.S. House of Representatives, Small Business Committee, Subcommittee On Regulatory Reform and Oversight)

Guidance on Use of Debit Cards for FSAs Is on Treasury/IRS 2002-2003 Agenda
Excerpt: "The U.S. Department of the Treasury and IRS have just released their 2002-2003 Priority Guidance Plan, which contains 250 projects that the Treasury and the IRS expect to complete in the next 12 months. The following highlights some of the items from the Priority Guidance Plan that fall within the scope of three of our reference manuals: Cafeteria Plans, HIPAA and 401(k) Plans." (EBIA Weekly)

Genetic Testing Raises Tough Ethical Issues
Excerpt: "Try to imagine a world in which you plan your health the way you now plan your finances, a truly cradle-to-grave approach that detects and counters the risk of disease. Now imagine paying huge sums or being turned down for life insurance and health coverage by companies that deem you too high a risk -- even though you feel fit as a fiddle." (Reuters via Yahoo! News)

Appeal of Claim Made Two Years After Denial Was Timely Because EOB Failed to Explain Time Limit
Utah Alcoholism Foundation v. Battelle Pacific Northwest Laboratories--Non-Bargaining Unit Employees' Comprehensive Medical Benefits Plan (D. Utah 2002). Excerpt: "The EOB merely said that 'a review of this benefit statement may be requested by following the steps outlined in your benefit booklet.' The court found that 'under a fair reading of the [DOL 1977 claims procedures] regulation, a plan must provide claimants with written notice of the time limit for an appeal.'" (EBIA Weekly)

Court Refuses to Consider Additional Evidence Not Submitted by Claimant During Plan Claims Procedure
Nance v. Sun Life Assurance Co. of Canada (10th Cir. 2002). Excerpt: "In this long-term disability benefit dispute, the former employee seeking benefits asked the court to consider additional evidence of his claimed disability. The evidence had been submitted to the plan administrator several months after the employee's claim was denied under the plan's claims procedures." (EBIA Weekly)

Domestic Abuse Programs Bring Security To Victims
Excerpt: "For abused women, the workplace often can be their only safe haven, which is why employers are being encouraged to sponsor domestic abuse programs that help maintain workers' safety, productivity and morale." (BenefitNews.com)

Family Out-of-Pocket Spending (PDF)
48 pages. Excerpt: "OOP spending on health care services remains a major source of financial insecurity for people with inadequate health insurance coverage.... [W]hile the uninsured are especially at risk, even those with privately purchased individual health insurance can fall victim to burdensome outlays for health care or be forced to forgo needed care." (The Commonwealth Fund)

Small Businesses, Information, and the Decision To Offer Health Insurance
Scroll down page to find link to the above-entitled article. Excerpt: "[T]he link between small firms and uninsured workers remains, and the role of foundations in addressing this problem merits renewed attention.... We hyphothesized that a basic requirement of a well-functioning market-- that participants be well-informed about their options-- had not been met in the small-business market." (Health Affairs via California Healthcare Foundation)

Prospects for Improved Decision Making about Medical Necessity
Scroll down page to find link to the above-entitled article. Excerpt: "The aim of our research was to understand more precisely what type of variation exists [in the process and criteria for deciding whether medical necessity exists] and whether more clarity and consistency in medical necessity decision making could make a difference to consumers and providers." (Health Affairs via California Healthcare Foundation)

Medical Savings Accounts: Another Way to Pay for Health Care
Excerpt: "Although an Archer MSA won't eliminate your need to buy a health insurance policy, advocates say it does make insurance more affordable while also offering tax incentives." (insure.com)

HMO Quotes Show 22% Average Increase
Excerpt: "Employers reeling from a third year of double-digit health plan cost increases are once again in sticker shock as preliminary HMO increases for 2003 are averaging 22%." (BenefitNews.com)

HIPAA Privacy Rules Checklist
Excerpt: "We urge all of our clients to establish an action plan or 'to do list' for their HIPAA compliance efforts." (Winston & Strawn)

Overview: the Impact of HIPAA's Privacy Rule on Employers (PDF)
Excerpt: "[W]hile it is relatively simple for employers to certify that they will not use [protected health information] for employment-related decisions, it is more difficult to ensure that there is an adequate firewall in place in situations where the employees that administer the group health plan are the same employees that manage the employer's health benefits program." (Hunton & Williams)

American Association of Health Plans Retains Hollywood Talent Agency
Press release. Excerpt: "[T]here has been an almost total disconnect between Washington's public policy experts and Hollywood's entertainment experts." (American Association of Health Plans)

Commentary: Down-to-the-Wire Battle Over Drug Coverage Under Medicare
Excerpt: "From now until November, Republicans and Democrats will bombard older Americans with pitches for their own versions of a Medicare drug benefit in the run-up to an election considered critical for control of Congress." (AARP)

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

Coke to Report Stock Options as an Expense
Excerpt: "The Coca-Cola Company, breaking ranks with the vast majority of American companies, said [on July 14, 2002] that it would change its accounting so that its earnings reflect the value of the stock options it grants to executives and other employees." (New York Times; free registration required)

What Is the Effective Date for the DOL's SPD Content Regulations?
Excerpt: "Over a year and a half ago, in November 2000, the DOL issued final regulations addressing the required contents of ERISA SPDs. These final regulations have the force of law and were technically effective January 20, 2001. However, they are not applicable until the first day of the second plan year beginning after January 22, 2001." (EBIA Weekly (Question of the Week))

Biggest Liability in Federal Budget: Pension and Health Benefits for Federal Employees and Military
Excerpt: "Taking over first place as the biggest government liability was $3.36 trillion in future pension and health benefits owed to federal civilian and military retirees." (AP via Lycos News)

The Future of Employee Benefits: a Call for Reform (PDF)
Excerpt: "[N]ow is the time to undertake a fundamental reevaluation of ERISA and the employee benefit system it regulates. The basic premise of ERISA is that the system is voluntary, employers are not required to maintain benefit plans, and that employees are protected by a uniform scheme of federal standards and regulations. The structure itself, however, may have become too difficult, too expensive, too burdensome, and too inflexible ..." (Scott Macey and Gretchen Young of Aon Consulting, published online at eric.org by the ERISA Industry Committee)

Evaluating a Broad-Based Workers' Lobby to Provide Portable Benefits (PDF)
September 28, 2001 version. Excerpt: "I begin with an overview of how organizations form and survive. Section II provides additional background on the broad based workers' lobby suggested by Herbert Gans. I follow this in Section III with a discussion of two highly successful membership organizations, AARP and Common Cause, which might serve as potential models for a workers' lobby.... I conclude with an evaluation of the prospects of a broad-based workers' lobby." (Joni Hersch, Lecturer on Law, Harvard Law School)

Opinion: Is True Corporate Reform Possible Here?
Excerpt: "[T]he Business Roundtable ... issued a statement saying that its members were 'appalled, angered and, finally, alarmed' about the year's run of outrageous business news.... [D]espite the rhetoric, the Roundtable opposes any changes in the accounting treatment of stock options, the seemingly obscure issue that many governance experts say is behind exorbitant executive pay and has fueled the worst abuses of many of the current scandals." (New York Times; free registration required)

Opinion: True Corporate Reform Lies in Stock Options
Excerpt: "Corporate reform is not a minor matter. So what should we focus on? Stock options. Why? They are the key to reform." (Scott Burns of the Dallas Morning News)

Managing Stock Option Fragility
Working paper available for downloading from SSRN.com for $5. Excerpt: "We build a detailed data set on executives' portfolios of stock and options and find that executive options are frequently underwater, even when average stock returns have been high.... We find that, in contrast to the incentives provided by stock, the incentives provided by options are quite sensitive to stock price changes, especially on the downside." (National Bureau of Economic Research)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Senior DC / 401(k) Administrators for L.A. Area TPA with Ocean View
in CA
Sr. Plan Administrator for M.L. Kerns & Assoc., Inc. - Houston, TX
in TX
Internal Wholesaler for Ceridian
in FL
Senior Vice President Benefits for The Elam Group
in DC, MD, VA
Compliance Analyst for Leggette Actuaries, Inc.
in TX
Compliance Consultant for The Segal Company
in MA

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