February 26, 2002 - 6,505 subscribers

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Implementing the Federal Health Privacy Rule in California
Includes link to 'A Guide for Health Insurers and Health Care Service Plans.' Excerpt: "The Federal Health Privacy Rule became effective in 2001, as part of the implementation of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). In the broadest terms, the Privacy Rule imposes new restrictions on sharing health information and creates new safeguards for consumers over their own health information. Providers must comply with the standards by April 2003." (California Healthcare Foundation)

Liability for Bad Faith Claims Processing and ERISA
Excerpt: "In two cases decided this year, participants were denied long-term disability insurance benefits.... In both cases, the courts ruled that the insurers were not liable under state law, but they reached their conclusions in startlingly different ways." (David Levin of Wiley Rein & Fielding LLP)

Both Sides Claim Partial Victory In Consumer Lawsuit Against HMOs
Excerpt: "A federal judge has dismissed a portion of claims in a lawsuit against some of the nation's largest HMOs but has also ruled that the remaining claims can proceed.... The judge did allow the remaining ERISA claim of breach of fiduciary duty to proceed. HMOs are accused of interfering with doctor-patient relationships by imposing 'gag' orders on doctors." (insure.com)

ERISA Preempted State Law Allowing Pension Benefits To Pass To Former Spouse's Heirs
ERISA preempted a state community property law that allows a predeceased spouse's interest in her former husband's pension plan to pass to her heirs. This was the ruling of the Ninth Circuit U.S. Court of Appeals in Branco v. UFCW-Northern California Employers Joint Pension Plan (No. 00-15884). (Spencernet)

How Sick Is Too Sick to Go In To Work?
Excerpt: "Another complication is a change in the way many employers dole out days off. According to the Society for Human Resource Management in Alexandria [Va.], the proportion of companies that provided a general paid-time-off benefit -- rather than separate amounts of vacation time and sick leave -- jumped from 12 percent in 2000 to 62 percent in 2001." (Washington Post)

Work/Life Help Endures Despite Many Cutbacks
Excerpt: "Some firms are merging their work/life benefits staffs into their human resources departments, holding off on adding new programs and no longer giving them the special attention they once did ... [but] 'There is nothing about flexible scheduling that makes it less affordable in a recession. There is no reason for employers to cut back on it--and they're not,' [said economist Eileen Applebaum.]" (Chicago Tribune)

2002 Version of IRS Publication 15-B, Employer's Tax Guide to Fringe Benefits (PDF)
24 pages. Excerpt: "[T]he maximum benefit an employee may exclude for combined commuter highway vehicle transportation and transit passes increases to $100.... The exclusion for educational assistance has been extended to years after 2001. Expenses for graduate level courses may be excluded for courses beginning after 2001.... Beginning with 2002, the amount of payments and reimbursements that can be excluded under an adoption assistance plan increases to $10,000 for each eligible child." (Internal Revenue Service)

Enrollment Period for Federal Employees' Long-Term Care Coverage Just a Short Way Off
Excerpt: "How much will long-term care insurance cost? That's the big question that many federal employees and retirees are asking the Office of Personnel Management.... In a new posting on its Internet site, OPM says, 'We think it will be worth the wait -- low group rates, great benefits and a nifty rate calculator.'" (Washington Post)

UnitedHealth Group Becomes Nation's Largest Health Insurer
Excerpt: "UnitedHealth Group had more than 16.5 million members as of Dec. 31, 2001, and projects that its January 2002 enrollment will exceed 17 million. Meanwhile, Aetna's enrollment fell to 15.6 million in December 2001 ..." (insure.com)

Humana Tries Alternative Care Coverage in Phoenix
Excerpt: "A survey released earlier this week found that patients who have full insurance coverage for complementary and alternative medicine providers are more likely to use that type of care. Among the more than 2,000 survey respondents, those with full coverage were five times more likely than those without coverage to visit a [complimentary and alternative medicine] provider frequently ..." (The Business Journal of Phoenix via bizjournals.com; free registration required)

Health Benefits Fine, Hewlett-Packard Tells Retirees, But HP-Compaq Agreement Troubles Some
Excerpt: "In response [to a flurry of emails and phone calls], HP posted a statement to employees on its internal Web site late Wednesday that said: 'Coverage under any HP benefit plan is determined by the terms of the plan in question and not by the terms of the merger agreement. HP has not in any way agreed to change HP retiree health benefits in connection with the Compaq merger.'" (San Diego Union-Tribune)

Opinion: MSA Provisions in Patients' Rights Bill Could Drive Up Premiums and Number of Uninsured
Excerpt: "Recent media accounts indicate that informal conference negotiations have commenced on the Patients' Bill of Rights legislation, which passed both the Senate and the House last year. The House-passed version (H.R. 2563) includes provisions that would make Medical Savings Accounts (MSAs) universally available and substantially alter MSA policy in a number of other ways, with the goal of dramatically expanding use of MSAs." (Center on Budget and Policy Priorities)

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

IRS Publishes List of Approved Non-Bank Trustees and Custodians; Announcement 2002-12 (PDF)
At page 553. Excerpt: "Archer medical savings accounts ... custodial accounts of a pension plan ... custodial accounts described in § 403(b)(7), trust or custodial accounts of individual retirement accounts ... and custodial accounts of eligible deferred compensations plans described in § 457(b) will not be tax exempt if the trustee or custodian of such accounts is not a bank ... or an approved nonbank trustee or custodian." (Internal Revenue Service)

Opinion: What's Best When It Comes to Options Accounting
Excerpt: "Senator Carl Levin has taken aim once again at the forces of evil-- namely, the chief executive officers and their lobbyists who devoutly believe Moses brought down an 11th commandment from Mount Sinai: 'Thou shalt not charge thine earnings for the cost of stock options.'" (Graef Crystal, on Bloomberg.com)

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Copyright 2002 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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