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The BenefitsLink Newsletter -
Welfare Plans Edition
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August 13, 2002 - 6,490 subscribers
Today's sponsor: Benefit Software Inc.

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(Help BenefitsLink to provide this newsletter at no charge to you -- our sponsors pay our way. Remember to visit them periodically; we try to make sure their products and services will be of interest to you. Thanks! --Editor)

Trade Act of 2002 Provides COBRA Tax Credit and New, Second COBRA Election Period for Some
Excerpt: "[T]o give workers who did not elect COBRA another chance to make an election after becoming eligible for the new tax credit (or for state assistance in obtaining coverage), the 2002 Trade Act creates a new, second COBRA election period for workers who become eligible for trade adjustment assistance." (EBIA Weekly)

Health Insurance Scams That Will Make You Sick
Excerpt: "It's boom time for medical insurance scams that collect premiums, pay few, if any, claims, then skip town." (Business Week)

Health Club Fees Incurred to Alleviate Obesity May Be Deductible Medical Expenses
Information Letter 2002-0077. Excerpt: "EBIA Comment: We strongly caution health FSA sponsors against reimbursing health club membership fees on the basis of this Letter. It was issued by Branch 1 of the IRS Office of the Associate Chief Counsel (Income Tax and Accounting), and it stands in stark contrast to informal, non-binding comments made by IRS officials from Branch 2 of the same office--that is, that health club memberships, even when prescribed by a physician, are not deductible ..." (EBIA Weekly)

Employee Who Cannot Afford To Pay COBRA Premiums Is Not Entitled To COBRA Coverage
Butler v. Trustmark Ins. Co. (S.D. Miss. 2002). Excerpt: "[Plaintiff] argued that 'he should be excused on equitable grounds from paying COBRA premiums, and that his right to benefits 'vested' as of the time of his diagnosis with cancer.' The insurer and TPA defended by reiterating their right to require payment of COBRA premiums as a condition of providing COBRA coverage to the employee." (EBIA Weekly)

Employee's COBRA Claim Rejected for Failure to Prove Existence of ERISA Group Health Plan
Wagner v. Access Cash Int'l Inc. (C.D. Ill. 2002). Excerpt: "The plaintiff in this case worked as a commissioned salesperson but was terminated for failure to generate sufficient sales. He brought suit alleging that his employer violated COBRA by failing to provide him with a COBRA election notice ... [T]he court found that the plaintiff had failed to prove that his health insurance coverage was an ERISA plan subject to COBRA." (EBIA Weekly)

Groom Law Group Drafts Amicus Brief in Devlin v. Empire Blue Cross and Blue Shield Case
Excerpt: "The Second Circuit's opinion in Devlin v. Empire Blue Cross and Blue Shield, 274 F.3d 76 (2d Cir. 2001), arguably changed the rules for determining whether retiree welfare benefits are vested, identified broad new disclosure obligations for plan fiduciaries and liberalized the requirements for estoppel." (Groom Law Group)

Change of Beneficiary Was Valid Despite Several Errors On Form: Seventh Circuit
An insured validly changed the beneficiary designation under his employer-sponsored life insurance policy even through the insured made several errors on the beneficiary designation form. This was the ruling of the Seventh Circuit U.S. Court of Appeals in Metropolitan Life Insurance Company v. Johnson, et al. (No. 01-3143). (Spencernet)

Judge Granted Disability Pension After Hearing Child Abuse Cases
Excerpt: "A Juvenile Court judge has received an $85,000-a-year disability pension from state officials after her doctors said that listening to cases of abused children was 'torture' because they reminded her of her own long-buried childhood abuse. Judge June C. Miles was allowed by the Governor's Council on a 6-2 vote in June to retire with her full pension, about $35,000 more each year than she would have received if she had taken routine early retirement." (The Boston Globe)

Workplaces See Value of Slumber, Offer Nap Rooms
Excerpt: "Some workplaces don't frown upon sleeping on the job -- they even encourage it. A growing number of companies nationwide, including several locally, offer nap rooms for sluggish employees." (The Washington Times via Society for Human Resource Management)

Some Health Insurers Raise Rates On Sickest
Excerpt: "With reunderwriting, customers who were healthy when they bought their policies can find their rates skyrocketing once they get sick. Even those with large claims for a short-term illness sometimes see their rates rise afterward. Reunderwriting is not unusual in other lines of insurance, such as auto and homeowners.... But reunderwriting by health insurers has historically been taboo; in some states it's illegal." (Orlando Sentinel)

Trimming Pounds and Cutting Healthcare Costs
Excerpt: "Wayne Burton, corporate medical director at Bank One, says his company has promoted weight management for two decades. However, the program really gained impetus over the last four years, following a 1998 study on the relationship between body mass and health and disability costs ..." (PLANSPONSOR.com)

Opinion: We Need National Health Insurance
Excerpt: "We spend 24 cents of every healthcare dollar on overhead, compared to 5 percent for well-run federal healthcare systems, Medicare and Medicaid. The uninsured get the most expensive health care, which is through emergency rooms. Since they don't pay, the rest of us do. In other words, by blocking physicians' office doors to 43 million Americans, we allow their just need for care to be serviced by the most expensive treatment the rest of us can provide." (KaiserNetwork.org)

Newt Gingrich: Specialized U.S. Health Court System Would Ease Nationwide Malpractice Crisis
Excerpt: "A new 'health court system' is the only solution that would be 'fair to all sides' in resolving the 'calamity' of rising medical malpractice rates, former Speaker of the House Newt Gingrich (R-Ga.) writes in a USA Today opinion piece." (KaiserNetwork.org)

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

Opinion: Expensing Stock Options Might Mean New, More Effective Pay Options
Excerpt: "CEOs may find there is a more important advantage to charging earnings for options. By creating a level playing field of pay for the first time, new choices in compensation plans emerge that may prove far more efficient and motivational." (Graef Crystal on Bloomberg.com)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Compliance Specialist for Mellon HR Solutions
in MA, NJ, NY
Trust Accounting Administrator for Associated Pension Consultants-TPA Firm
in CA
Defined Contribution Program Manager for New York Life Benefit Services
in MA
401(K) Recordkeeping Manager for National Rural Electric Cooperative Association
in VA
Premium Only Plan Implementation Specialist for ADP,Inc.
in NJ
Enroller/Contractor for Professional Benefit Services
Actuary for Invesmart, Inc.
in WA

Newly Posted Press Releases
How One 401k Vendor Improved Their Ability to Calculate, Track, Optimize and Reconcile Fees and Commissions (Bonaire Software Solutions)

Newly Posted Announcements of Promotions and New Personnel (Post Yours!)
Rodney Pace (Pension Resource Group)

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