January 7, 2003 - 8,030 subscribers

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Today's sponsor: International Foundation of Employee Benefit Plans

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When you have the right resources, you can answer the questions
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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)

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Wellpoint to Waive Co-pays for Generic Drugs
Excerpt: "WellPoint, one of the nation's biggest health insurers, said that it would refund the full price of generic prescription drug to encourage its 13 million members to switch to the cheaper versions of popular drugs. Big employers would have a zero co-pay, and smaller employers, which traditionally offer slimmer health benefits, would get up to a $10 discount on the co-payment under the WellPoint plan." (Reuters Health via Medscape; free registration required)

Consumer-Directed Health Plans Expected to Quadruple Among Large Employers This Year
Excerpt: "Last year, only 4% of large employers (those with 1,000 employees or more) offered a CDH option to their employees. Among large employers that participated in an online survey, 16% planned to offer a CDH plan this year. The percentage is expected to increase to 24% in 2004." (Inside Consumer-Directed Care via AISHealth.com)

Cost of Treating Aging Baby Boomers Will Be Less Than Earlier Anticipated, Study Says
Excerpt: "Health care costs for aging baby boomers when they reach their 80s and 90s will not increase as much as is commonly expected, according to a new study in the Journal of Gerontology, Scripps Howard/Nando Times reports." (KaiserNetwork.org)

Republicans See Gains In Tax-Based Plan for Expanding Health Insurance Coverage
Excerpt: "Lobbyists who have been working with the Bush administration on health care say the president is backing a plan to allow employees and employers to make tax-free contributions to medical savings accounts for paying medical bills. The administration is also backing a plan to provide tax credits to help people buy health insurance." (The Boston Globe)

Obesity Called 'Threat' to U.S. Security
Excerpt: "An overweight America is killing itself with excess, and all that can save it is a major cultural transformation led by individuals and families, the U.S. surgeon general said Monday." (The San Francisco Chronicle)

Opinion: Conventional Wisdom on Risks of Obesity is Distorted
Excerpt: "[S]ubject to exceptions for the most extreme cases, it's not at all clear that being overweight is an independent health risk of any kind, let alone something that kills hundreds of thousands of Americans every year. While having a sedentary lifestyle or a lousy diet--both factors, of course, that can contribute to being overweight--do pose health risks, there's virtually no evidence that being fat, in and of itself, is at all bad for you." (The New Republic Online; free registration required)

Employer May Not Terminate Coverage Without Notice, Even If Employee Fails to Return From FMLA Leave
Tornberg v. Business Interlink Services, Inc. (E.D. Mich. 2002). Excerpt: "Among other things, the FMLA imposes various notice requirements on employers, including the requirement to provide an employee who gives notice of the need for FMLA leave with written notice detailing the specific expectations and obligations of the employee (including those relating to payment for health benefits) and explaining any consequences of a failure to meet these obligations." (EBIA Weekly)

Allegedly Unreasonable Medical Charges by Surgery Center Are Not ERISA Prohibited Transactions
Surgicore, Inc. v. Midwest Operating Engineers Health and Welfare Fund (N.D. Ill. 2002). Excerpt: "The ERISA group health plan in this case was sued after it refused to pay a large percentage of charges submitted by an out-patient surgery center ... The plan ... counterclaimed ... that the Center was an ERISA party-in-interest and that the level of reimbursement it sought constituted more than reasonable compensation under ERISA's prohibited transaction rules." (EBIA Weekly)

Court Refuses to Impose "Prospective" Constructive Trust to Enforce Plan's Reimbursement Claim
Primax Recoveries Inc. v. Goss (N.D. Ill. 2002). Excerpt: "In this decision on subrogation/reimbursement claims under ERISA, the court relies on the U.S. Supreme Court's decision in Great-West v. Knudson to reject an ERISA plan's effort to have a constructive trust imposed before a plan beneficiary received proceeds from a third party." (EBIA Weekly)

Knudson Does Not Preclude a Plan From Seeking Restitution Under ERISA for Benefits Paid by Mistake
Iron Workers Tri-State Welfare Plan v. Jaraczewski (N.D. Ill. 2002). Excerpt: "This case has a subrogation flavor, but at the time benefits were paid, the beneficiary had already recovered more than the amount of her medical expenses. Therefore, the payment was mistaken at the time it was made and the plan's claim was not for reimbursement, but for return of improperly paid benefits." (EBIA Weekly)

ERISA Plan Insurer's Subrogation/Reimbursement Claim Under State Law Is Preempted by ERISA
Community Ins. Co. v. Morgan (6th Cir. 2002). Excerpt: "[T]his decision from the Sixth Circuit because it addresses an issue left open by the Supreme Court in its Knudson decision-- whether an ERISA plan, unable to enforce its subrogation/reimbursement rights under ERISA, may do so under state law." (EBIA Weekly)

Responding and Remembering When Death Hits the Workplace
Excerpt: "What happens in a workplace when someone dies suddenly? Tragic deaths immediately thrust leaders into situations for which there is no real training and, thankfully, little or no experience." (StarTribune.com)

Labor Shortage Ahead When Economy Turns Around?
Excerpt: " government-projected shortfall of some 10 million workers by 2010 could trigger widespread turmoil at workplaces in need of skilled employees, contends Joyce Gioia ... Workers empowered with multiple job offers, and fed up with bosses who 'just don't get it,' will seek work elsewhere, she says, making the corporate world's scramble for skilled employees in the late 1990s seem like a warm-up session." (The Christian Science Monitor)

Overview: HHS Issues Revised Version of Comprehensive Privacy Guidance
Excerpt: "The U.S. Department of Health and Human Services has updated its comprehensive privacy guidance, originally issued in July 2001, to reflect the agency's August 2002 changes to the rules, and address many additional questions raised since the prior version came out." (Thompson Publishing Group)

The Approaching GASB Standard for Retiree Medical Benefits (PDF)
2 pages. Excerpt: "The Government Accounting Standards Board (GASB) has slowly been making its way towards an accounting standard for retiree medical benefits.... If GASB can adhere to their current schedule, an exposure draft will be approved in January 2003 and a final accounting standard will be issued by the end of 2003." (Milliman USA)

Consumer Reports: Slowdown in FDA Review Leaving Consumers Vulnerable to Misleading Messages
Excerpt: "[A] Consumer Reports computer-assisted analysis of the regulatory letters the FDA posted on its web site from January 1997 through November 2002 ... revealed a broad and disconcerting range of misleading messages: ads that minimized the product's risks ... Worse, many people appear to believe that drug advertising is meticulously regulated." (Consumer Reports)

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Links to Items on Executive Comp, Benefits in General

The U.S. Aging Crisis Revisited
Excerpt: "Reviewing new and emerging research that bears on the likely dimensions and consequences of population aging, the report focuses on research dealing with demographic, health, and economic issues surrounding population aging. The analysis concentrates primarily on research dealing with the United States ... It concludes with a discussion of implications for the way both individuals and policymakers think about retirement planning for an aging population." (AARP)

ABA Tax Section Members File Comments on Proposed IRS Regulations on Split-Dollar Life Insurance (PDF)
30 pages; dated Dec. 31, 2002. Excerpt: "On July 9, 2002, Treasury issued extensive proposed regulations concerning split-dollar life insurance arrangements and their treatment for income, payroll and transfer tax purposes. Consistent with Notice 2002-8, equity split-dollar life insurance arrangements would be subject to tax depending upon the ownership of the policy under one of two mutually exclusive regimes." (Members of the American Bar Association, Section on Taxation)

The Unnoticed Pay Gap: CEO-to-CEO
Excerpt: "What could possibly explain the pay gap as wide as the one between Berkshire Hathaway Inc.'s Warren Buffett -- who earned an average of $350,000 a year over a three-year period -- and Citigroup Inc.'s Sandy Weill -- $127.5 million a year, or 364 times as much during the same time?" (Graef Crystal on Bloomberg.com)

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Newly Posted or Renewed Job Openings


Qualified Plan Administrator - Valparaiso, Indiana
for Pension Consulting Services, Inc.
in IN

401(k) Implementation Specialist
for PFPC
in MN

Retirement Plan Services Manager
for Fifth Third Bank
in OH

Defined Benefit Plan Administrator
for Pension Investors Corp. of Orlando
in FL

Trust Business Development Representative
for Regions Financial Corporation
in LA

Project Manager for Implementations
for Northern Trust Retirement Consulting, L.L.C.
in GA

Implementations Specialist (Senior)
for Northern Trust Retirement Consulting, L.L.C.
in GA

Defined Contribution Plan Administrator
for R. J. Michalski, Inc.
in CT

401k Client Relationship Manager
for Great West Life & Annuity
in PA, TN

Benefits Manager
for The First Church of Christ, Scientist
in MA

Defined Contribution Plan Administrator
for Plan Consulting and Administration Firm
in OH

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Newly Posted Webcasts
( Post Yours! )

Consumer-Driven Health Benefits
on January 6, 2003
presented by Employee Benefit News

Health Reimbursement Arrangements
on January 16, 2003
presented by International Foundation of Employee Benefit Plans

Sarbanes-Oxley Act of 2002 - A Changing World for Accounting, Executive Compensation and Benefits
on January 22, 2003
presented by International Foundation of Employee Benefit Plans

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Newly Posted Conferences
( Post Yours! )

16th Annual Employee Benefits Management Forum & Expo
in CA
September 21, 2003
Employee Benefit News

Pension Legislation and Regulatory Developments
in FL
January 14, 2003
Employee Benefits Council of Central Florida

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