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The BenefitsLink Newsletter -
Welfare Plans Edition
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August 27, 2002 - 7,007 subscribers
Today's sponsor: EBIA's ERISA Compliance for Health & Welfare Plans

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   ERISA Compliance for Health & Welfare Plans is an authoritative
   resource for employers, administrators and advisors. Written by
   leading employee benefits attorneys, this manual has all the
   information you need to bring your welfare benefit plans into
   compliance with ERISA.

   Click on the link to learn more about this valuable treatise,
   which is always kept current through periodic updates.

(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)

How Employers Can Profitably Use Captive Insurance Companies (PDF)
At page 1 of 12. Excerpt: "Funding employee benefit programs via a captive insurance company ... not only can increase an employer's benefit cost controls, but also offers potential tax savings, spreads risks for the captive, and could potentially increase benefits for plan participants.... This article provides information on the DOL's PTE process and explains how an employer ... may reap the advantages of using its wholly owned captive insurance company to fund its benefit programs." (Milliman USA)

Moran Ruling Could Spur Increased Health Costs for Plan Sponsors (PDF)
2 pages. Excerpt: "The recent U.S. Supreme Court decision in Rush Prudential HMO, Inc. v. Moran held that ERISA does not preempt an Illinois law allowing for an independent review to resolve disputes over the necessity of medical treatments." (Gardner Carton & Douglas)

Beneficiary Cannot Recover Benefits Allegedly Lost Due To Employer's Fiduciary Breach
Peterman v. Metropolitan Life Ins. Co. (E.D. Mich. 2002). Excerpt: "The surviving spouse in this case alleged that her late husband's employer breached its ERISA fiduciary duties by providing incorrect information, prior to his death, about his employer-provided life insurance coverage. She brought suit against the employer and the life insurance company seeking damages equal to the life insurance coverage that she claimed her husband would have arranged had he been properly informed." (EBIA Weekly)

Court Upholds Insurer's Determination of "Usual and Customary" Charges
Hickman v. Gem Ins. Co. (10th Cir. 2002). Excerpt: "The plaintiffs in this ERISA class action sought to recover additional payments for certain hospital room and board charges that they incurred under policies issued by the defendant insurance company. The insurer had relied on policy provisions limiting payments to 'Usual and Customary' charges in refusing to pay the claims in full." (EBIA Weekly)

Ninth Circuit Slams Door on Enforcement of Subrogation/Reimbursement Rights Under ERISA
Westaff (USA) Inc. v. Arce (9th Cir. 2002). Excerpt: "Relying on the U.S. Supreme Court's decision in Great-West v. Knudson, 2002 U.S. LEXIS 399 (2002), the Ninth Circuit has rejected a health plan's attempt to enforce its subrogation/reimbursement claim under ERISA." (EBIA Weekly)

ERISA Did Not Preempt State Law Claim of Breach of Contract Over Firm's STD, Vacation Policies
ERISA did not preempt employees' state law claim of breach of contract challenging the post-merger changes in their employer's sick leave and vacation policies. This was the decision of the Ninth Circuit U.S. Court of Appeals in Funkhouser and Pearce v. Wells Fargo Bank, N.A., et al. (Nos. 00-35397 and 00-35410). (Spencernet)

Working Families' Health Insurance Coverage, 1997-2001
Excerpt: "Despite a booming U.S. economy, falling unemployment and moderate health insurance premium growth, the percentage of working Americans and their families with employer-sponsored health insurance failed to increase substantially between 1997 and 2001, according to findings from the Center for Studying Health System Change (HSC) Community Tracking Study Household Survey." (Center for Studying Health System Change)

Los Angeles Times, Wall Street Journal Examine Alternatives to Traditional Health Care Coverage
Excerpt: "The Los Angeles Times and the Wall Street Journal in recent days have examined consumer-driven health plans and small business health insurance pools, two options designed as alternatives to address the rising premiums associated with traditional health care coverage." (

HIPAA Compliance -- Part 2: Which HIPAA 'Bucket' Must You Carry?
Excerpt: "In this article, Kimiko Orosz, an attorney and Senior HIPAA Consultant with Hazen Group Inc., assists employers in determining which regulatory 'bucket' they carry with respect to HIPAA Privacy compliance. How full an employer's bucket is depends on several factors, including the type of group health plan and how it administered." (

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

Benefits and the Middle-Age Boom (PDF)
At page 7 of 12. Excerpt: "The baby boomers are now middle aged.... Before boomers can get old, they have to get older. The important demographic transformation of today is the increasing number of middle-aged adults in the workforce. For human resource and benefit managers, the effect of this shift will be substantial. This article discusses how the physiological changes of middle adulthood taking place in such a large generation will affect employee benefit programs." (Milliman USA)

Eighth Circuit Drops Presumption in Favor of Prevailing Plaintiffs When Awarding ERISA Attorney Fees
Martin v. Arkansas Blue Cross and Blue Shield (8th Cir. 2002). Excerpt: "In this case, the entire panel of the Eighth Circuit has changed the court's stance on the award of attorneys' fees to prevailing plaintiffs in ERISA cases.... Even though the overwhelming majority of the federal circuits apply no presumption in favor of prevailing plaintiffs, the Eight Circuit was-- up to now-- one of the courts that applied the presumption ..." (EBIA Weekly)

Section-by-Section Overview of Sarbanes-Oxley Act (PDF)
9 pages. (Financial Executives Institute)

Summary of the Rank and File Stock Option Act of 2002 (PDF)
3 pages. Excerpt: "On August 1, 2002, Senator Joseph Lieberman (D-CT) introduced the Rank and File Stock Option Act of 2002 (S.2877). Senator Lieberman said that unlike proposals to change the accounting rules for options, his legislation would go a long way toward discouraging the abuse of options without diminishing their use, which has played a critical role in increasing the income and assets of millions of middle class families." (Frederic W. Cook & Co., Inc.)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad

Marketing Consultant (Conversion & Case Management)
for WESPAC Plan Services, Inc. in CA

Pension Administration Team Leader
for Sentinel Benefits Group in MA

Pension Sales Consultant
for Long Island Employee Benefits Group Ltd. in NY

Senior Benefits Analyst - Contract Position
for in CA

Qualified Retirement Plan Administrator
for Benefits Integrity in CO

Plan Specialist
for Transamerica in CA

Newly Posted Conferences (Post Yours!)

Tales from the Crypt: De-mystifying the Actuarial Process
in OH on September 19, 2002
presented by WEB, Worldwide Employee Benefits Network

Newly Posted Press Releases

Alexander Hamilton Institute Releases New Free Report - "State Reference Immunity Laws"
(Alexander Hamilton Institute)

New Section 125 Benefit Protects Children and Their Families
(Global Work/Life Solutions)

Subscribe to the Retirement Plans Edition, too (click)

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