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COBRA Corner On December 30, 2002, the IRS issued Revenue Ruling 2002-88 concerning the timing of an employer's responsibility to offer a soon to be ex-spouse COBRA benefits. The ruling states that, even if an employee drops coverage for a dependent spouse in anticipation of a divorce, the employer is not required to offer the 36 month extension until the actual qualifying event takes place. The ruling recognizes that there may be a gap in coverage but it is not the employers responsibility. An employer must offer the opportunity to elect COBRA only if notice is provided with 60 days of the qualifying event. onque.com/cobraupdatedetail.htmlCOBRA Corner In September of 2002, The U.S. District Court of Connecticut issued a finding that employers do not have to send separate COBRA notifications to minor children. The Court ruled in McDermott vs. Town of Windham Public Schools, that as long as the notification letter clearly states that the continuation is for "family" coverage, the employer is showing good faith effort and does not need to send a separate notification to the dependent children. onque.com/cobraupdatedetail.htmlService Story Of The Month An employee of one of our Seacoast clients has been trying to have a baby for a couple of years. During our routine renewal meeting, the subject of infertility came up. Because the employer has employees in all six New England states, their plan of health coverage is an Anthem Regional Plan. We had heard that these plans incorporate the best contract provisions from each state and that all subscribers, regardless of state residency, have access to all benefits. Since Massachusetts mandates infertility testing and treatment, it seemed logical to us that our client's employees ought to have access to the total infertility benefit. We have been dealing with insurance companies too long to assume that the obvious is true. Also, a reading of the Anthem Regional Contract is non-specific about exactly what is covered (no surprise). Ginny Connors, Senior Service Manager in our office, headed a small committee of our employees to chase down a final and definitive answer. After three weeks and dozens of phone calls to the marketing, underwriting and legal people, Anthem did finally specify that a New Hampshire resident, enrolled on a regional plan, does have access to infertility testing and treatment benefits. There is specific criteria must be met in order to be eligible for this benefit. (Call us for details.) Once the answer became irrefutable and in writing, Ginny informed the employee that her two year wait for a miracle was over. The news may have created a defining moment in this family's life. This is just one example of how our knowledge, capability, contacts, and determination benefits our clients and their employees. Massachusetts taxes Rx: Or do they? Effective January 1, 2003, pharmacies registered and licensed in the State of Massachusetts are required to pay an assessment on all non-Medicaid and non-Medicare prescriptions. The statute does not say how the pharmacies are to find the money to pay their assessment. However, the Massachusetts Legislation is aware that some pharmacies are requiring their customers who are purchasing prescriptions to pay the assessment. Here are some facts on this assessment:
The Pharmacy assessment is supposed to be sufficient enough to generate $36 million annually. This money will be credited to the Health Care Security Trust Fund. It will be used to fund Mass Health's spending for prescription drugs. Leap Frog Just Crawling In 1999, a survey by The Institute of Medicine found that nearly 98,000 Americans die each year from preventable medical errors in hospitals. From the report, a consortium of 120 Fortune 500 companies and many hospitals formed the Leap Frog Group to make recommendations to reduce hospital error. They identified three areas of 'low hanging fruit.'
The project is off to a slow start, because of resistance to physician mandatory reporting, a national nursing shortage and expenses associated with implementing necessary monitoring technologies. We will keep monitoring the situation and keep you posted. Newsletter Note: The above information is offered to our clients and prospective clients as a service. It is a compilation of pertinent articles we have read, information we have collected from seminars attended and general trend information. It is not to be taken as legal or tax advice. If you have any questions about the information contained in this newsletter, please feel free to call us. Before acting on any legislative or law changes, you should consult your legal and/or tax advisor. View the Current NEMIA Newsletter View the January 2003 NEMIA Newsletter View the August 2002 NEMIA Newsletter |
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