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The BenefitsLink Newsletter -
Welfare Plans Edition
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August 5, 2002 - 6,490 subscribers
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'Battle' Over Generic Drug Bill Expected in House
Excerpt: "[B]rand-name pharmaceutical companies are preparing to block a Senate-passed generic drug bill from passing the House, CongressDaily/AM reports." (KaiserNetwork.org)

California Could Require Businesses To Offer Benefits For Domestic Partners
Excerpt: "Companies that do not provide domestic partner benefits would be prohibited from doing business with the state under legislation quietly moving through the state Senate. It would make California the first state to mandate that private sector contractors provide partner benefits for gay and lesbian employees." (The Bakersfield Californian)

Federal Retirees Lobbying for Ability To Pay Health Plan Premiums on Pretax Basis
Excerpt: "An expected low cost-of-living adjustment for next year coupled with rising health plan premiums has prompted federal retirees to step up lobbying efforts for legislation that would allow them to pay for health premiums with pretax money, the Washington Post reports." (KaiserNetwork.org)

Court Applies Plan Language on Administrator's Discretion Even Though Added After Accident Occurred (PDF)
13 pages; Smathers v. Multi-Tool, Inc. (No. 01-1045, 3d Cir. 2002). Excerpt: "Here, there was no right that vested, nor is there any issue of retroactivity since the administrator's discretionary authority was in place when that discretion was exercised. We also note that this reasoning is consistent with our view that the concept of 'vesting' under benefit plans is to be narrowly applied, and that there is a presumption against vesting with respect to most aspects of such plans." (U.S. Court of Appeals for the Third Circuit, via FindLaw.com)

Funding Long-Term Care (PDF)
13 pages. Excerpt: "[T]his paper proposes a new funding model, one in which social insurance and private insurance will pay for the bulk of the costs, supplemented by personal payment. When these three sources fail to provide for some individuals, public welfare (Medicaid) will serve as a safety net. These are the same sources of funds presently in use, but will be deployed vastly differently in the proposed model." (Yung-Ping Chen; published by Society of Actuaries)

Opinion: Will Society Allow Baby Boomers' Health Care Savings To Go Bust?
Excerpt: "The reason health care stocks have remained one of the best bets on Wall Street is that as baby boomers get older and sicker, and medical technologies improve, there will be a huge demand for expensive health care services. Absent a government policy to protect patients until they reach Medicare age, health care costs could be the death of the baby boom." (The Foundation for Taxpayer & Consumer Rights)

Doctors Hear Alternatives To Drug-Firm Sales Pitches
Excerpt: "For years, the pharmaceutical industry has been sending salespeople called 'detailers' to doctors' offices to promote their latest patented blockbuster drugs. [Marcia] Drummond is a 'counterdetailer' -- a paid consultant for a prescription benefit company whose job is to question those sales pitches, to counsel doctors to look at cheaper and generic drugs whenever appropriate." (Washington Post)

Health Insurers Wavering On Support for New Oregon Claims Appeals Law
Excerpt: "At least three companies have declined to be bound by outside reviewers. Others have objected to state regulators' interpretation of the law and are seeking rule changes.... In particular, insurers fear the proposed rules would allow independent reviewers to force them to pay for services that their contracts exclude." (OregonLive.com)

Mental Health Costs May Hit Employers
Excerpt: "If public attitudes toward mental health are changing-- and some say they are-- then will business follow? Or, how will it follow? Insurance companies appear to be preparing. PacifiCare Behavioral Health ... for example, launched a new health plan division in July that will offer so-called carve-out plans that other health plans can license to manage their mental health benefits." (East Bay Business Times via bizjournals.com; free registration required)

IRS Paves Road To Consumer-Driven Health Programs
Excerpt: "With medical inflation still roaring and open enrollment about to begin, the regulatory clarifications appear well timed to encourage alternative coverage approaches. Some experts consider the IRS position issued June 26 is as revolutionary as code 401(k) was to retirement plans." (BenefitNews.com)

Foundation Issues Request for Proposals: Tracking California's Health Insurance Markets
Excerpt: "California's health insurance markets are complex and rapidly changing. In the past year, health plans have introduced an array of new benefit packages, many of which involve increased consumer cost-sharing. Prices have risen substantially and are expected to continue to do so in coming years. Because market changes affect consumers and have implications for policy and regulatory audiences, CHCF is seeking proposals for a two-year project ..." (California HealthCare Foundation)

Health Coverage Among 50-64 Year-Olds
Excerpt: "The aging of the baby boom population focuses attention on how those in midlife get health insurance. Because medical problems and health costs commonly increase with age, having health coverage takes on growing importance. This data digest provides an overview of health coverage among persons ages 50 through 64 in 2000. The information comes from analysis of the March 2001 Current Population Survey." (AARP Research)

Mandated Health Insurance Benefits: Tradeoffs Among Benefits, Coverage, and Costs?
4 pages. Excerpt: "An issue brief that looks at mandated health insurance benefits and the tradeoffs among benefits, coverage, and costs. It explores the debate over mandated benefits legislation, the evidence about the impact of mandates, the status of mandated benefits in other states and in California." (Kaiser Family Foundation)

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

Overview: Accounting Oversight and Corporate Responsibility Reform Also Amends ERISA (PDF)
4 pages. Excerpt: "[T]his Alert ... focuses on the new rules that require advance notice of blackout periods for 401(k) and other defined contribution plans, bar insider trading during blackout periods, restrict loans to executives, and limit non-audit services by auditors." (Aon Consulting)

Legislative Update-- Executive Compensation Issues
Excerpt: "Given the apparent bipartisan support and the multitude of recent corporate scandals, it is quite possible that some executive deferred compensation proposals could be enacted later this year as part of Enron-related pension legislation or unrelated tax legislation.... Our summary of the executive deferred compensation proposals in the Thomas and Finance Committee bills follows." (Groom Law Group)

Senator Lieberman proposes stock options bill Requiring More Participation by Rank-and-File
Excerpt: "Lieberman's bill sidesteps the accounting debate. Instead, it includes measures to encourage broad distribution of options and accountability to shareholders, while reducing incentives for executives to manipulate earnings, said ... a Lieberman spokesman. The bill would require [that, in] order to claim tax deductions, companies must offer at least half of the total available stock options to employees making less than $90,000 annually." (ZDNet)

Open Standard for Benefits Enrollment Data Is Expanded and Improved
Press release. Excerpt: "The HR-XML Consortium ... has approved an updated version of its XML specification for employee benefits plan enrollments.... Today, insurance carriers and third-party benefits administrators often use either their own specifications or electronic data interchange (EDI) formats for accepting employee enrollment from external systems.... HR-XML's enrollment specification is easier to implement and more flexible since it is both standardized and based on XML." (HR-XML Consortium)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
401(k) Investment Educator for ADP, Inc.
in GA, MN
Account Executive for CitiStreet
in FL
Market Manager, Defined Contribution for New York Life Benefit Services LLC
in MA
Employee Benefits Administrative Assistant for Columbia Benefits, LLC
in CO
Compliance Testing Specialist for Diversified Investment Advisors
in NY
Trust Officer/Vice President JO#321 for Financial Institution in Eastern US
Daily Valuation Administrator for Union Bank of California
in CA
Compliance Specialist for Union Bank of California
in CA
Employee Benefit Sales for Horne/Guest Insurance Agency
in SC
Senior Regulatory Compliance Specialist for US Airways
in VA
Senior Benefit Administrator (Client Delivery Specialist) for Towers Perrin
in VA

Newly Posted Press Releases
Coverage of EGTRRA, 457 Regulations, and Current Events Attracts Record Number of Pre-registrants to NAGDCA 2002 Annual Conference, September 7 - 11 (National Association of Government Defined Contribution Administrators, Inc.)
DESPITE DOW, PLENTY TO CELEBRATE ON 401(k) DAY (Profit Sharing/401(k) Council of America)

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