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December 10, 2002 - 8,019 subscribers
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(Help BenefitsLink to provide this newsletter at no charge to you -- our sponsors pay your way. Remember to visit them periodically; we try to make sure their products and services will be of interest to you. Thanks! --Editor)
Compensation Is Getting Personal
Excerpt: "Companies are mining employee data to identify the perks that spur productivity. Critics see a new tool for dividing the labor force." (Business Week Online)

Merck Settles Lawsuits Alleging PBM Overcharged Customers
Excerpt: "Merck on Dec. 9 offered to pay $42.5 million to settle 'long-running' class-action lawsuits alleging that its pharmacy benefit manager subsidiary Medco Health Solutions, the nation's second largest PBM, overcharged clients, the New York Times reports." (KaiserNetwork.org)

Catholic Group to Challenge Maine Domestic-Partner Benefit Law
Excerpt: "Catholic Charities Maine is taking the city of Portland [Maine] to court over a requirement to offer domestic partner benefits to its employees." (PLANSPONSOR.com; free registration required)

Court Refuses to Allow Stop-Loss Insurer to Overrule Plan Administrator's Coverage Decision
Computer Aided Design Systems, Inc. v. SAFECO Life Ins. Co. (S.D. Iowa 2002). Excerpt: "The plaintiff in this case was the sponsor of a self-insured ERISA health plan. It sued its stop-loss insurer for reimbursement of benefits paid for the cancer treatment of a covered spouse. The treatment (autologous peripheral blood stem cell transplant) had been pre-authorized by the company, as plan administrator, over the objection of the insurer ..." (EBIA Weekly)

Insured Plan Sponsor to Pay $17,000 Penalty for Failure to Furnish SPD
Sunderlin v. First Reliance Std. Life Ins. Co. (W.D.N.Y. 2002). Excerpt: "This case illustrates some of the difficulties faced by insured plans in satisfying the SPD requirement. Even though the plan administrator is legally responsible for SPDs, insurers often provide a descriptive document (e.g., a certificate of coverage booklet) intended for distribution to covered employees.... Key information may be missing or the insurer may not be aware of information that should be reflected ..." (EBIA Weekly)

Minneapolis Might Require Same-Sex Benefits for Contractors
Excerpt: "Companies with city contracts worth more than $100,000 would be subject to the new provision. The ordinance has a number of exceptions, including companies with fewer than 21 employees and faith-based contractors." (StarTribune.com)

PC Makers Sending Employees Home for Holidays Without Pay
Excerpt: "Personal computer makers Hewlett-Packard and Gateway are sending employees home without pay for the December holidays, a money-saving tradition that has become familiar to technology industry workers in the two-year downturn." (ZDNet)

GAO Report: Effective Use of Flexibilities Can Assist Federal Agencies in Managing Workforces (PDF)
Excerpt: "Existing flexibilities that are most effective in managing the workforce are work-life programs, such as alternative work schedules, child care assistance, and transit subsidies; monetary recruitment and retention incentives, such as recruitment bonuses and retention allowances; special hiring authorities, such as student employment and outstanding scholar programs; and incentive awards for notable job performance and contributions, such as cash and time-off awards." (U.S. General Accounting Office)

Economy Puts Squeeze on Employers' Ability to Absorb Health Costs
Excerpt: "Employers this year absorbed the largest annual increase in health benefit costs since 1990. The average per-employee cost rose 14.7 percent nationally, according to the National Survey of Employer-Sponsored Health Plans 2002, released today by Mercer Human Resource Consulting." (The Kansas City Star via Society for Human Resource Management)

In Response to OTC Claritin, Many Health Plans To Raise Cost of Prescription Allergy Medicines
Excerpt: "Although the allergy medicine Claritin's shift to over-the-counter status this week will eventually drive down the cost of the drug, the move also could affect the cost of 'whole variety of other allergy drugs' as many health plans raise copayments for such medicines, the Wall Street Journal reports." (KaiserNetwork.org)

Employers Anticipating 14.6% Increase in Health Care Costs Next Year, Survey Says
Excerpt: "Employers nationwide anticipate their health costs will rise 14.6% next year, on top of a 14.7% increase this year, a rate nearly seven times inflation and the sharpest rise since 1990, according to a new survey, the Los Angeles Times reports." (KaiserNetwork.org)

Opinion: Treasury Secretary O'Neill's Resignation Bad for Healthcare Reform Efforts
Excerpt: "The resignation of former Treasury Secretary Paul O'Neill marks a loss in the health care debate 'that Congress and the Bush administration now seem ready to begin,' David Broder writes in a Washington Post column." (KaiserNetwork.org)

Maryland Group Unveils Proposal for Universal Health Coverage in State
Excerpt: "The Maryland Citizens Health Initiative on Dec. 9 introduced a plan to provide health coverage to the state's 600,000 uninsured residents, the Baltimore Sun reports. The plan would require businesses in the state that do not offer health insurance to employees to pay 5% of their payrolls into a fund for the uninsured." (KaiserNetwork.org)

Opinion: Errors Are a Medical Enron
Excerpt: "[T]he medical profession is making scandalously slow progress in reducing the rate of medical errors in hospitals -- errors that, according to an Institute of Medicine study three years ago, kill between 44,000 and 98,000 patients annually while injuring perhaps 1 million more." (Washington Post)

Gore Advocates Single-Payer Health System on ABC's 'This Week'
Excerpt: "Former Vice President Al Gore, a potential Democratic presidential candidate in 2004, on ABC's 'This Week' on Dec. 8 discussed his proposal for a single-payer health care system." (KaiserNetwork.org)

More Insurance Executives Advocating Universal Health Care
Excerpt: "The New York Times on Dec. 7 examined the increased number of insurance executives 'pressing for new steps toward' universal health coverage." (KaiserNetwork.org)

Retiree Medical Accounts Provide Viable Option To Traditional Plans: Watson Wyatt Report
With employers increasingly cutting back on retiree health care benefits, a small but growing number of companies have begun introducing retiree medical accounts (RMAs) as an alternative to traditional retiree medical benefits, according to Watson Wyatt. RMAs typically provide limited employer contributions as compared to traditional retiree medical plans, and are a way for employers to offer a retiree health benefit that is predictable and manageable in order to attract and retain employees. (SpencerNet)

Links to Items on Executive Comp, Benefits in General

IRS Approves Arrangement to Swap Excess Sick Leave for Contribution to Defined Contribution Plan
PLR 200247050 (Aug. 26, 2002). Excerpt: "In this Private Letter Ruling, the IRS approved an arrangement that allowed employees to exchange up to five days of unused sick leave for an employer contribution to a 'discretionary defined contribution plan with a salary deferral feature' (apparently a 401(k) plan)." (EBIA Weekly)

Research Counters Popular Thinking On Stock Options
Excerpt: "As the country marks the first anniversary of Enron Corp.'s bankruptcy this week, University of Washington Business School research is questioning the ongoing claim that stock option compensations benefit executives to the detriment of shareholders." (The [Tampa Bay] Business Journal via bizjournals.com; free registration required)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

401(k) /Pension Administrator
for Great Lakes Pension Administrators, Inc.
in MI

Individual Consultant
in MN

401(k) / Pension Administrator
for Ingham Group
in FL

401(k) Plan Administrators
for PFPC
in MN

Associate Attorney
for Wolf, Block, Schorr and Solis-Cohen LLP
in PA

Section 125 Manager
for Security Benefit Group of Companies
in KS

DC or DB Plan Administrator
for Pension Administrators, Inc.
in IL

Retirement Plan Administrator
for Jones & Roth, P.C.
in OR

Plan Administrator
for Management Recruiters of Portland
in WA

Qualified Pension Administrator (QPA)
for Third Party Pension Administration and Actuarial Firm
in CA

Benefits Specialist
for Phillips Van- Heusen Corporation
in NJ

Benefits Analyst III
for Raley's
in CA

Operations Manager
for Benefit Consultants, LLC
in AL

Newly Posted Webcasts
(Post Yours!)

Presentation of Kaiser-Hewitt Retiree Health Benefits Survey, Including the Employers' Perspective
on December 5, 2002
presented by Kaiser Family Foundation and Hewitt Associates

Newly Posted Press Releases
(Post Yours!)

ASPA Benefits Council of Atlanta Names 2003 Officers and Committee Members
(ASPA Benefits Council of Atlanta)

Radiant Systems Expands Benefit Services
(Radiant Systems, Inc.)

CMC Interactive, LLC Chooses SunGard for Straight-Through Processing
(SunGard Corbel)

(U.S. Treasury Department and Internal Revenue Service)

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