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October 15, 2002 - 7,425 subscribers
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Small Employers Respond to Premium Increases
Issue Brief published Oct. 2002. Excerpt: "In 2000 and early 2001, the Center for Studying Health System Change (HSC) conducted its third round of site visits to 12 nationally representative metropolitan areas and found that while few small employers actually dropped coverage, many increased the employee share of premiums, raised copayments and deductibles, switched products and carriers and/or reduced benefits." (Center for Studying Health System Change)

Doctors Switching Drugs Due to Cost Decisions
Excerpt: "Drug switching remains a controversial practice ... particularly when it happens because a particular pharmaceutical company has cut a better deal with a health plan or [pharmacy benefits manager] to get its drug on the formulary.... Part of the controversy stems from a concern that doctors may be unduly influenced by drug marketers to favor a particular product." (Reuters via Yahoo! News)

Hewitt: Costs of Health Benefits in 2003 to Rise by 15%
Excerpt: "The cost of health benefit plans at big companies will rise more than 15 percent next year on average, according to a study by Hewitt Associates Inc., a private human resources consulting firm." (Dow Jones/AP via New York Times; free registration required)

Employees' Releases Were Sufficient to Waive Severance Benefits Under ERISA Plan (PDF)
9 pages; Chaplin v. NationsCredit Corporation, No. 01-11389 (5th Cir. 10/8/2002). Excerpt: "The terms of the releases unambiguously reveal an intent to cover every imaginable cause of action: '[Plaintiffs] hereby agree to release NCDF from any and all claims, suits, demands, or other causes of action of any kind ... arising at any time in the unlimited past ... [including] all claims arising by reason of or in any way connected with [plaintiffs'] employment relationship with NCDF....'" (U.S. Court of Appeals for the Fifth Circuit, via FindLaw.com)

Failure to Describe Social Security Offset in Summary of LTD Benefits Means No Offset Allowed
Feifer v. Prudential Insurance Company of America, Nos. 99-9451, 00-9568(2d Cir. 10/7/2002). Excerpt: "Several of the Program Summary pages, but not the two discussing disability benefits, contained the following disclaimer, printed in small, bold type: This summary is for informational purposes only and is not intended to cover all details of the Plan. The actual provisions of the Plan will govern in settling any questions that may arise." (U.S. Court of Appeals for the Second Circuit, via FindLaw.com)

District Court Ruling in Favor of Manufacturer of Prilosec Boosts Brand-Name Drug Stocks
Excerpt: "While Astra's Prilosec is the No. 2 selling drug in the country, many other drugmakers benefited from the ruling because they, too, have similar acid-fighting drugs that could be threatened by less costly generic competitors.... [The ruling is] a defeat for generic supporters-- including a coalition of governors, employers and consumer groups-- that held up Prilosec as a poster child for the need to reform drug patent laws." (USA Today)

Analysis: Sale of Assets Created "Presumptive Discharge" and Therefore Violated ERISA Section 510
Lessard v. Applied Risk Management (9th Cir. 2002). Excerpt: "Employees who were on medical, disability, workers' compensation, or other extended leave on the date of the sale ... were eligible for transfer to the buyer's workforce only if and when they returned to active employment.... The Ninth Circuit ... held that 'section 510 is violated when an employer selects for presumptive termination and denial of benefits specifically those employees presently on medical or disability leave.'" (EBIA Weekly)

Employee Who Never Enrolled In Health Care Plan Not Entitled To Benefits, Seventh Circuit Rules
A former employee was not entitled to recover medical expenses following a heart attack because the employee had never enrolled in his former employer's health care plan. This was the ruling of the Seventh Circuit U.S. Court of Appeals in Kamler v. H/N Telecommunications Services, Inc., et al. (No. 01-2995). (Spencernet)

Analysis: DOL Provides Updated MEWA Booklet
Excerpt: "[W]e are disappointed that its discussion of employers under common control (on page 30) was not updated to incorporate the favorable guidance contained in the DOL's FAQs about the Form M-1. In that guidance, the DOL indicated that using a 25% threshold (not 80%) to determine whether a group of employers is under common control, and thus not a MEWA, would constitute good faith compliance, at least for purposes of determining whether a Form M-1 was required to be filed ..." (EBIA Weekly)

Links to Items on Executive Comp, Benefits in General

Plan Administrator Could Not Interpret 'Participant' Two Ways Under Single Plan Document (PDF)
12 pages; Reich v. Ladish Company Incorporated, No. 01-3790 (7th Cir. 10/7/2002). Excerpt: "The [lower] court found no conflict between the definition of the word 'Participant' in the deferred vested retirement part of the Plan and the use of that same word in the disability benefits part of the Plan." (U.S. Court of Appeals for the Seventh Circuit, via FindLaw.com)

Overview: Conference Board Issues Executive Compensation Best Practice Suggestions (PDF)
6 pages. Excerpt: "On September 17, the Conference Board, arguably the world's leading business network, joined the New York Stock Exchange, the NASDAQ, and other regulatory and business organizations in proposing a wide-ranging series of reforms to strengthen corporate compensation practices so as to restore trust in America's corporations and financial markets." (Frederic W. Cook & Co., Inc.)

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

Employee Benefit Services Relationship Manager
for UMB Financial Corporation
in MO

Fun & Challenging DC Compliance Position
for Louis Kravitz & Associates, Inc.
in CA

ERISA/Employee Benefits Associate Attorney
for Ruder, Ware & Michler, L.L.S.C.
in WI

Manager FSA/HRA Administration
for Baltimore Employee Benefits Firm
in DC, DE, MD, NJ, PA

Newly Posted Press Releases

CNA Trust Hires Costantini As Regional Sales Director For Northwest
(CNA Trust)

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