November 18, 2002 - 7,973 subscribers Today's sponsor: BenefitsLink Yellow Pages (Click on company name or banner to learn more.) Outsource benefits tasks by selecting a vendor from our online directory Your employee benefits service or product can be advertised in an online directory sponsored by the nation's leading employee benefits web site-- BenefitsLink. Your listing can take readers directly to your web site, or to a full-page advertisement we'll create. Just $200 per year (or $400 per year for a premium listing)! More Heat For Disability Insurer on Hot Seat in California: UNUMProvident Excerpt: "U.S. Magistrate James Larson has dropped a 62-page grenade on the nation's largest disability insurer in a first-of-its-kind order that could add fuel to a firestorm of suits against it. The strongly worded injunction tells Tennessee-based UnumProvident Corp. to stop using biased medical examiners, targeting categories of claimants for review, destroying medical reports and withholding benefits information. If it doesn't, the company could be subject to a contempt order." (The Recorder via Law.com California) In Massachusetts, Towns and Unions Spar Over Health Costs Excerpt: "With health insurance costs climbing steeply, local officials are struggling to find a way to minimize the impact on their budgets. For many, that means passing on some increases to employees. Unions in several communities have filed grievances with the state Labor Relations Commission ..." (The Boston Globe) California's Largest HMO Agrees To Pay $1 Million Fine Excerpt: "Kaiser Permanente, the state's largest HMO, has agreed to pay a $1 million fine, the largest in state history against a full-service health plan. The HMO previously had contested the fine by the state Department of ManagedCare, unsuccessfully filing a contempt complaint against department director Daniel Zingale in federal court." (The Foundation for Taxpayer & Consumer Rights) Survey: Most Employees Believe They Can Find Better Pay/Benefits at Other Companies Excerpt: "Inadequate communication about the true value of their compensation and benefits has led many workers to conclude that the grass may be greener at other organizations when it comes to rewards, according to the new Watson Wyatt WorkUSA® 2002 Survey. Only two out of five employees believe their pay and benefits measure up to those offered to their peers in similar positions at other companies." (Watson Wyatt's Insider) What Can Employers Do With Health FSA Forfeitures That Ripen Into Experience Gains for the Plan? Excerpt: "QUESTION: I administer our company's calendar-year health FSA, which is fully funded by salary reductions under a cafeteria plan. One of our participants has just asked what we do with health FSA moneys that are forfeited after the plan year because of the use-it-or-lose-it rule. How should I respond?" (EBIA Weekly (Question of the Week)) 2002 Version of Publication 502 (Medical and Dental Expenses) Includes Significant Changes Excerpt: "The IRS has recently released the 2002 version of Publication 502 (Pub. 502), which taxpayers may use to determine which medical expenses are eligible for a deduction under Code Section 213.... The 2002 version of Pub. 502 contains several significant changes, including the following new and revised items: Disabled Dependent Care Expenses ... Health Reimbursement Arrangements ... Health Insurance Credit ... Weight-Loss Program and Health Club Dues ..." (EBIA Weekly) Insurer Improperly Terminated LTD Benefits Where There Was Extensive Evidence of Disability An insurer abused its discretion when it terminated a beneficiary's long term disability benefits because there was 'extensive medical evidence' that the beneficiary continued to be disabled. This was the ruling of the Eighth Circuit U.S. Court of Appeals in Norris v. Citibank, N.A. Disability Plan and Aetna Life Insurance Company (No. 01-2886). (SpencerNet) Participant's Failure to Exhaust Plan's Claims Procedures Excused; Benefit Denial Overturned Combe v. La Madeleine, Inc. (E.D. La. 2002). Excerpt: "With the DOL's new claims regulations becoming effective January 1, 2003 for calendar-year group health plans, we found this recent case on processing health plan claims instructive even though it was decided under the old regulations.... [T]he new regulations require formal denial of a post-service claim within 30 days after the date the claim is filed and allow claimants up to 180 days to appeal a denied health claim." (EBIA Weekly) Republican Majority Could Be Shot in the Arm for Tort Overhaul Excerpt: "When it's all over, the rules governing tort actions-- the civil lawsuits, usually for money, claiming wrongful conduct by defendants, usually companies-- may well change drastically.... George W. Bush, as governor of Texas, pushed through sweeping limits on tort suits." (New York Times; free registration required) Overview: IRS Amends Rules on Substantiating Incidental Expenses Excerpt: "The proposed regulations became effective Nov. 12 and are applicable to expenses incurred after Sept. 30, 2002. The proposed regulations amend Treas. Reg. §1.274-5T to give the IRS Commissioner the authority to establish a way for taxpayers to use a specified amount for incidental expenses paid or incurred during travel away from home instead of substantiating the actual expenses." (Thompson Publishing Group) Top Nine Questions Every TPA Needs To Ask Their Clients Excerpt: "An overwhelming number of TPAs tell us that their clients have not started the process to comply with the HIPAA Privacy regulations. With the following questions, your Plan Sponsors will begin thinking about the impact of these regulations. Just ask them!" (SunGard Corbel) Health Insurance Fraud Investigation a Growth Industry November 18, 2002 issue. Excerpt: "Blue Shield [of California] is representative of a trend in health care that has seen large insurers nationwide implement or beef up in-house operations to eliminate fraud-- and with estimates of health care fraud nationwide ranging from $45 billion to $130 billion a year, there's plenty of room for improvement. Health care fraud runs the gamut, from small-time affairs in which doctors bill for one test too many to sophisticated multinational operations ..." (California HealthCare Foundation) Overview: HHS Guidance Clarifies Who Is a "Business Associate" Excerpt: "HIPAA's privacy rules generally do not require 'business associate' contracts between a covered entity and its service technicians, janitors and couriers because they do not need protected health information (PHI) to perform their duties, according to [an Oct. 8, 2002] HHS guidance document. Another clarification of interest to plan sponsors is that covered entities may contact individuals other than the patient if necessary to obtain payment." (Thompson Publishing Group) Tax Credits for Individual Health Insurance: Effects on Employer Coverage (PDF) Excerpt: "[T]ax-credit proposals that provide credits for only nonemployer-group coverage could be modified to reduce the incentives that could cause some employers and employees to drop coverage. Three potential modifications are suggested for consideration [including:] ... Allow firms the option to convert their entire employer group ... to an arrangement where workers can receive the tax credit but the employer contribution is not exempt from income tax (but is exempt from FICA taxes)." (Economic and Social Research Institute) Links to Items on Executive Comp, Benefits in General Field Assistance Bulletin 2002-3: DOL Addresses Disclosure and other Obligations Relating to "Float" Excerpt: "A number of financial services providers, such as banks and trust companies, acting as non-discretionary directed trustees or custodians maintain general or 'omnibus' accounts to facilitate the transactions of employee benefit plans. The service provider may retain earnings ('float') resulting from the anticipated short-term investment of funds held in such accounts. Typically, these accounts hold contributions and other assets pending investment directions from plan fiduciaries." (U.S. Department of Labor, Pension and Welfare Benefits Administration) Many Companies Cutting Back on Employee Benefits Excerpt: "Workers are facing some of the most dramatic cuts and cost shifts in more than a decade. Almost every company, it seems, has chiseled away at employee benefits. Many of the gains employees made during the economic boom of the late-1990s are being lost as anemic job growth and a weak economy leave workers with few options.... But if companies don't cut, some analysts say, they won't be able to survive today. Companies are cutting in large part because their own costs are rising." (USA Today via Yahoo! News) Another Question is Answered in the Stock Options, Restricted Stock and Other Long-Term Employment Incentives Q&A Column Can a company authorize additional shares to be issued as employee stock options, after the company goes public? For example, I know a public company that already has unexercised employee stock options representing roughly 25% of the common shares outstanding. (BenefitsLink.com) Newly Posted or Renewed Job Openings Daily Valuation Plan Manager for Mid-Size Recordkeeping Firm in SC Defined Benefit Administrator for The Senex Group in CA Pensions/401(k) ERISA Compliance Specialist for Dayton Group Ltd. in NJ, NY Newly Posted Press Releases (Post Yours!) CNA Trust Offers Pure Mutual Fund Product With Redesigned 457Custom (CNA Trust) Handy Links:
Feel free to send this email to friends, colleagues or clients, if you copy or forward this email in its entirety (including this boilerplate part). Copyright 2002 BenefitsLink.com, Inc. Published by: BenefitsLink.com, Inc. https://benefitslink.com/about.html 1298 Minnesota Avenue, Suite H Winter Park FL 32789 (407) 644-4146 Fax: (407) 644-2151 Editor and Publisher: David Rhett Baker, J.D. Housekeeping: |