January 15, 2002 - 6,377 subscribers

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High Court to Weigh State Laws on HMOs
Excerpt: "The 7th Circuit found that the Illinois provision 'relates to' ERISA plans but was saved from preemption because it regulates the HMO industry as insurers.... Four judges dissented from the court's later denial of rehearing en banc. Judge Richard Posner, one of the dissenters, said the state law 'interferes with the federally specified system for enforcing' entitlement under ERISA plans." (Law.com)

High Court to Examine HMO Dispute Reviews
Excerpt: "The Supreme Court on Wednesday will take up the health insurance industry's challenge to what many experts laud as the most promising legal reform in health care: independent medical review of HMO disputes. In recent years, California and 41 other states have adopted laws that give patients a right to a second opinion if their HMO refuses to pay for a medical treatment." (Los Angeles Times)

2nd Circuit Revives Suit Seeking Interest on ERISA Benefits
Excerpt: "An action to recover interest on late disability payments is considered 'appropriate equitable relief' under the Employee Retirement Income Security Act of 1974, the 2nd U.S. Circuit Court of Appeals has ruled. Joining two other circuits, the court said the interest on late payments cannot be deemed 'extracontractual, compensatory money damages, which are generally not recoverable under ERISA.'" (Law.com)

Supreme Court Ruling Bars Federal Lawsuits to Achieve Third-Party Recoveries
Excerpt: "The U.S. Supreme Court, in a 5-4 ruling, affirmed an appeals court's ruling that group health plans cannot sue in federal court to enforce its right to subrogation or reimbursement because it is a legal remedy that is not available to plans at the federal level." (Thompson Publishing Group)

In Great West Decision, Supreme Court Gives Teeth to Its Mertens Decision
Excerpt: "Applying its earlier Mertens decision, the Great West Court concluded 'equitable relief' does not include (i) injunctive relief to compel the payment of money past due or (ii) 'restitution' of amounts due unless the money, property or its proceeds is still in the possession of the defendant." (McCalla Thompson)

Alabama Bad Faith Tort Action Preempted, Even Where Brought by Sole Shareholder
Gilbert v. Alta Health & Life Insurance Co. (11th Cir. No. 01-10829, 12/27/01). Court rejects plaintiff's contention that he is exempt from ERISA preemption due to sole shareholder status; 11th Circuit sides with 3d, 4th, 5th, 8th, 9th and 10th Circuits in holding that once plan is an ERISA plan (here, the plan covered common law employees as well as the shareholder) then the shareholder is a participant for purposes of ERISA preemption of state law claims. (U.S. Court of Appeals for the Eleventh Circuit, via Emory Law School)

Ninth Circuit Affirms Dismissal of Action Against Death Benefits Insurance Company
Everhart v. Allmerica Financial Life Insurance Co. (9th Cir. No. 99-17094, 12/27/01). After a dispute as to the amount payable under the employer's group life insurance plan upon a participant's death, the participant's widow settled with the employer but then brought suit against the insurance company that underwrote the group policy. (U.S. Court of Appeals for the Ninth Circuit)

Supreme Court Narrows Law On Disabilities
In a 9-0 unanimous decision, the Supreme Court has ruled that to qualify as disabled and be protected by the Americans With Disabilities Act, an individual must be substantially limited in performing 'major life' activities, and not merely those associated with the workplace. The case is Toyota Motor Manufacturing, Kentucky, Inc. v. Williams (No. 00-1089). (Spencernet)

2002: the Claims Odyssey Continues (PDF)
Excerpt: "All ERISA disability plans, even those with non-calendar year plan years, [are] required to comply with the new rules for claims submitted on or after January 1, 2002.... The new claims procedure rules take effect for claims filed under an employer's health plan for plan years beginning on or after July 1, 2002, but not later than January 1, 2003 (for calendar year plans, the rules will be effective for claims filed on or after January 1, 2003)." (Gardner Carton & Douglas)

Spencer Begins Collecting Data For 12th COBRA Survey
Charles D. Spencer & Associates, Inc., is collecting information now for its 2001 Spencer survey of COBRA continuation of health coverage. Charles D. Spencer & Associates has been collecting and analyzing COBRA survey information since 1990. This biennial survey requests information concerning the costs, administrative procedures, and problems associated with COBRA. The information provided will be collated and published by Charles D. Spencer & Associates, Inc. (Spencernet)

Opinion: Health Insurance for the Unemployed is the Better Prescription
Excerpt: "Congress should make assistance for the unemployed its first priority of the new year. It should extend generous individual tax relief--or premium subsidies for those who don't have the money--to families so they can buy the health coverage of their choice." (Robert E. Moffit published by the Heritage Foundation)

Is More Information Better? the Effects of 'Report Cards' on Health Care Providers
Working paper, available to download for $5 from SSRN.com. Excerpt: "Whether report cards are good for patients and for society depends on whether their financial and health benefits outweigh their costs in terms of the quantity, quality, and appropriateness of medical treatment that they induce." (National Bureau of Economic Research)

Healthcare Costs Squeezing Employers
Excerpt: "Health care has been a touchy political topic since the 1994 reform debacle led by Hillary Clinton. But now, from small business owners and corporate giants to politicians and policy analysts, an election-year consensus is forming: It's time for Congress and the White House to tackle rising health-care costs." (The Columbus [Oh.] Dispatch)

Odds Improving for Patient Protection Bill
Excerpt: "Bets are on patient protection legislation to become law, possibly even early in the 107th Congress, say many close observers of the Capitol Hill health care scene. However, another major issue, coverage of the nation's 43 million uninsured people, will require more coalition-building." (American Medical Association)

AAHP Urges Washington To Address Growing Cost Crisis in Health Care System
Press release. Excerpt: "Since that time, the managed care industry has played a significant role in holding down health care costs, helping consumers gain access to high quality health care. Unfortunately, the past five years has seen more than its share of political scape-goating, and attempts to litigate and regulate our way to better health care. There is a price for this approach, and consumers are paying it, dearly." (American Association of Health Plans)

Doctors May Be Helping Inferior Managed Care Plans to Prosper
Excerpt: "One-third of physicians in a new national survey believed that capitated health plans provide inferior care compared with the care provided by other forms of managed care. As a result, those doctors were twice as likely as others to steer sicker patients away from such plans." (Modern Healthcare)

Doctors' New Practices Offer Deluxe Service for Deluxe Fee
Excerpt: "The extra hand-holding is possible because the fees let doctors slash the number of patients they see. Dr. Flier and Dr. Busch will go from thousands of patients a year to 300 each. The rest of their patients will have to find new doctors. Critics, many sympathetic to the doctors' frustrations, ask whether patients who cannot or will not pay the fees are being abandoned." (New York Times; free registration required)

Wary Workers Negotiate Severance at Hire
Excerpt: "Severance is joining salary, benefits and vacation as a key component of the job negotiation process. More than 60% of job seekers agree it's important to negotiate severance agreements up front, according to a study ..." (USA Today via International Foundation of Employee Benefit Plans)

Workers Willing To Pitch In For Family Benefits
Excerpt: "It may sound far-fetched to ask workers to chip in with their employers to help pay for work/life benefits--not just for themselves but also for family-friendly benefits they themselves might never use. But a noted researcher recently has asked employees how they feel about what would be additional deductions from their paychecks." (Chicago Tribune)

Why Work-Life Chaos Might Not Be So Bad
Excerpt: "The never-ending struggle to get organized has us questioning whether the attempt to tame the chaos of daily life is even realistic -- or desirable. Are there other, more important things that we ought to be thinking about instead?" (CareerJournal.com)

Polaroid Retirees Lose Benefits But Executives Get Bonuses
Excerpt: "The retirees' struggle shows how easily employees' financial safety nets can be torn away when company business fortunes change. It also illustrates a growing willingness by once-loyal workers to mobilize when benefits, 401(k) savings or severance are in jeopardy." (USA Today via International Foundation of Employee Benefit Plans)

(Following items are in both editions of the BenefitsLink Newsletter)

Andersen's Alert: U.S. Compensation and Benefits News Briefs, January 7 Edition
10 pages; includes articles on user fee waiver for retirement plans of small employers, updated 402(f) notices, DOL advisory opinion on investment advice, 404(k) dividend elections, more. (Andersen)

Analysis: SEC Adopts New Disclosure Rules for Equity Incentive Plans (PDF)
Excerpt: "These amendments enhance disclosure of the number of shares to be issued upon exercise of outstanding options, warrants and rights granted to participants in equity incentive plans, as well as the number of securities that remain available for future issuance under these plans, including plans which have not been approved by shareholders. Companies must be in compliance with the new disclosure rules for their Form 10-K filed for fiscal years ending on or after March 15, 2002 ..." (Frederic W. Cook & Co., Inc.)

Kodak Proposes "Value Neutral" Stock Option Repricing
Excerpt: "Kodak tells shareholders in the filings that while their approval 'is not required by law, by any regulations or by the terms of our stock option plans, we believe that sound corporate governance dictates that the program not be implemented unless it is approved by you.'" (Graef Crystal, on Bloomberg.com)

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Copyright 2001 BenefitsLink.com, Inc., but you may freely distribute this email newsletter in whole. This newsletter is edited by David Rhett Baker, J.D.

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