April 28, 2003 - 8,177 subscribers Today's sponsor: International Foundation of Employee Benefit Plans (Click on company name or banner to learn more.) New! International Foundation Books Available on BenefitsLink. When you have the right resources, you can answer the questions that come your way. Each year, the International Foundation teams with respected authors and publishes books on a variety of topics. Whether you're managing pharmacy benefit costs, designing a cash balance plan or communicating benefits to your employees, the International Foundation is your single source of benefit and compensation information and education. (Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor) Mass Transit Fare Media Might Include Debit Cards Excerpt: "The IRS is studying the issue, said John Richards of the IRS Office of the Assistant Chief Counsel ... Speaking at a conference of the Employers Council on Flexible Compensation, Richards said that the IRS has not issued guidance on the use of debit cares as transportation vouchers." (Thompson Publishing Company) DHHS Provides the Official Word on Health Flexible Spending Accounts and Privacy Excerpt: "We are happy to report that DHHS has now resolved whatever concerns it had on this question, concluding that health FSAs must comply with HIPAA privacy. Here is the full text of the DHHS Question and Answer: ..." (EBIA Weekly) Election Notice Sent Via Certified Mail Was Proper Even Though Requested Receipt Was Not Returned Gotay v. Becton Dickinson Caribe Ltd. (D. P.R. 2003). Excerpt: "EBIA Comment: ... [A]lthough the court discounted the absence of return receipts in this case, we think some courts might find that a plan administrator is obligated to follow up ... if a requested return receipt for a COBRA election notice does not materialize. Consequently, we continue to recommend mailing election notices by certified mail (with no return receipt requested) or first-class mail (with a certificate of mailing) ..." (EBIA Weekly) Claimants Had No Vested Interest in 'Banked Hours' in ERISA-Covered Welfare Plan (PDF) 8 pages. S. Illinois Carpenters Welfare Fund v. Carpenters Welfare Fund Of Illinois No. 02-1984/2489 (04/22/03, 7th Cir.). Excerpt, from FindLaw.com: 'Banked hours' that union members left in a welfare fund were not vested benefits under ERISA, and claims arising from exclusion of representatives from decision-making process were barred by the three-year statute of limitations applicable to claims of breach of fiduciary duty breach under ERISA. (FindLaw.com) 7th Circuit Holds for Claimant in Fibromyalgia Disability Case (PDF) 9 pages. Hawkins v. First Union Corp. Long-Term Disability Plan, No. 02-3100 (04/22/03, 7th Cir.). Excerpt, from FindLaw.com: 'A plan medical consultant's findings as to a fibromyalgia patient's total disability and ability to work were arbitrary and capricious under ERISA, thus denial of an application for long-term disability benefits was unreasonable." (FindLaw.com) 2d Circuit: Certain Mixed Eligibility/Treatment Decisions Raise State-Law Malpractice Claims Cicio v. John Does 1-8 (2d Cir., Feb. 11, 2003). Excerpt: "State-law medical malpractice claims against managed care organizations or health insurers are not preempted by ERISA if they are the result of medical decisions made during 'prospective' utilization review (UR), the 2nd U.S. Circuit Court of Appeals ruled." (Thompson Publishing Company) Kansas City Considers Domestic Partner Benefits Excerpt: "The City Council of Kansas City has taken the first step toward providing benefits to gay, lesbian and unmarried domestic partners of city employees. The council voted unanimously Thursday to direct City Manager Wayne Cauthen to implement a domestic-partner benefit program by May 1, 2004." (AP via KMBC-TV) FDA Criticized for 'Scaring' People Who Buy Medicines from Canada Excerpt: "The controversy over importing prescription drugs from Canada took a new turn recently when several members of Congress accused officials from the Food and Drug Administration (FDA) of trying to 'scare' older Americans from taking part in the cross-border trade." (AARP Bulletin) State Efforts to Insure the Uninsured: An Unfinished Story (PDF) 6 pages. Excerpt: "Over the past decade, the states have been the laboratories for trying new approaches to insuring the uninsured. These include regulatory reform, adopting purchasing alliances, expanding public programs, providing new public subsidies, and shoring up the safety net--the configuration of public hospitals and clinics that provide health care to those without insurance. offering insurance." (RAND) FDA Says It Can Take Away Drugs' Prescription Status Excerpt: "The Food and Drug Administration has concluded that it can force drugmakers to switch some of their prescription drugs to over-the-counter medications as a way to make them cheaper and more easily available to consumers, senior FDA officials said [on Friday, April 25]." (Washington Post) Cutbacks Imperil Health Coverage for States' Poor Excerpt: "Millions of low-income Americans face the loss of health insurance or sharp cuts in benefits, like coverage for prescription drugs and dental care, under proposals now moving through state legislatures around the country." (The New York Times; one-time registration required) The Long-Term Outlook for Long-Term Care Insurance Excerpt: "Premiums are up, but policyholders and prospective buyers can expect more stable rates in the future." (Kiplinger's Retirement Report via International Foundation of Employee Benefit Plans) Long-Term Care Insurance Success Requires Careful Product Positioning Excerpt: "Growing acceptance and awareness of the need for long-term care insurance (LTCI) among both plan sponsors and individuals could finally unleash the products' sales potential-- assuming brokers know how to effectively position it." (BenefitNews.com) Links to Items on Executive Comp, Benefits in General DOL OKs Amendment to Shift Retiree Health Expenses from General Assets to Overfunded DB Plan AO 2003-04A, 3/26/03. DOL's description of the request: 'Regarding the application of ERISA to an employer's amendment of its plan to eliminate life insurance benefits for certain retirees and the amendment of its defined benefit pension plan to add similar benefits for those retirees, and the implementation of those amendments.... [Do] the amendments, along with their implementation, would not violate the anti-inurement, exclusive benefit and prohibited transaction provisions under ERISA." (U.S. Department of Labor, Employee Benefits Security Administration) Execs, Not Workers, Get Pension Security Excerpt: "A number of large companies are setting aside millions of dollars to protect pensions of top executives, even as they forgo contributions to financially strained pension plans for other workers." (The Wall Street Journal via the Contra Costa Times) Must an ERISA Amendment Provision Identify an Individual Person Having Authority to Amend It? Excerpt: "In a recent review of our company's ERISA plan documents, I have discovered that each one provides that the company (XYZ Corporation) reserves the right to amend or terminate the plan. But, when I look at ERISA (Section 402(b)(3)), I see it requires 'a procedure for amending [the] plan, and for identifying the persons who have authority to amend the plan.' Should our language be more detailed and should it identify an individual person with amendment authority?" (EBIA Weekly (Question of the Week)) Delta Shareholders Approve Curb on Severance Pay for Execs Excerpt: "Spurred by corporate excess, Delta Air Lines shareholders have approved nonbinding proposals to curb severance payments and expense stock options.... Under the severance proposal, shareholders must approve all payments to departing executives that are more than 2.99 times their salary plus bonus." (AP via the Las Vegas Sun) Opinion: You Have a Voice in Bringing Executive Pay Back to Earth Excerpt: "Executive comp plans typically pass handily when presented to the shareholders for approval. But shareholder voting is dominated by institutional interests, many of which are eager to remain cozy with management-- if for no other reason than to know enough to get out ahead of the little guy if the company goes sour." (Washington Post) Stock Option Cutbacks Hurting Rank-and-File, Some Experts Say Excerpt: "[C]ompanies say they will be cutting back on stock options. Fewer options should mean fewer reasons to manipulate earnings for personal gain, or so the logic goes. Trouble is, compensation consultants say all that's really happening is that fewer options are being given to average workers." (AP via the Detroit Free Press) Apple Computer Inc. Shareholders Want Stock Options Expensed Excerpt: "Apple Computer Inc.'s shareholders have voted to advise management to expense employee stock options, rejecting the company's wishes to keep the costs off the books." (AP via Yahoo! News) Opinion: Excessive CEO Pay is Welfare for Capitalists Excerpt: "[A] flourishing capitalist system ought to bestow great fortunes on people who create huge enterprises or revive flagging old ones. But great fortunes should not routinely go to people who merely preside successfully over existing firms. The CEO conceit is that everyone near the top of the corporate staircase should become a multimillionaire several times over." (Robert J. Samuelson in Newsweek via MSNBC.com) Newly Posted or Renewed Job Openings Retirement Plan Administrator for Growing, Local, Private Trust Company in PA Document Production Coordinator for Transamerica in CA HR Benefits Specialist/Associate Staff Analyst for MTA New York City Transit in NY HR Benefits Administrator/Staff Analyst for MTA New York City Transit in NY Newly Posted Press Releases (Post Yours!) MK Consulting, Inc. Expands Service Offering with MK Recruiting (MK Recruiting - A Division of MK Consulting, Inc.) AHI's BENEFITSALERT RELEASES NEW FREE REPORT: "Work/Family Conflicts" (Alexander Hamilton Institute - AHI's BenefitsAlert.com) Labor Department Obtains Court Order Appointing Independent Fiduciary (U.S. Department of Labor, Office of Public Affairs, Boston) Newly Posted Conferences (Post Yours!) EPCRS and the New Rev Proc - an IRS Presentation in CA May 13, 2003 Sacramento Chapter of NIPA "Benefits...And All That Jazz!" in CA May 16, 2003 San Diego Chapter of the Western Pension & Benefits Conference Handy Links:
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