Benefits May 6, 2003

Company Adds Coverage For Some Montana Uninsured

May 6, 2003 (PLANSPONSOR.com) - Some Montana residents currently without health coverage will soon have access to limited insurance restricted to doctors' office visits and generic drugs.
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The coverage, which comes from New West Health Services, will be available to the uninsured for as little as $25 per month, according to Washington-based legal publisher BNA. The policies exclude inpatient or outpatient treatment at a hospital, emergency-room services, or brand-name prescription drugs.

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The Montana Department of Insurance recently estimated that about 18% of the state’s population does not have health insurance.

Before New West was able to offer the plan, the recently adjourned 2003 Montana Legislature had to exempt the company from existing state law that requires any company offering health insurance in the state to cover hospitalization and emergency room treatment. That exemption came in House Bill 384, introduced by state Representative Joe McKenney, which carried strongly in both houses and has been signed by Governor Judy Martz.

Under the test program, New West plans to enroll 1,000 Montana residents living in either Helena or Billings and to closely monitor the plan’s performance and customer satisfaction for a year, the company said. The program is scheduled to begin in July and then can be renewed in one-year increments for up to five more years. The state insurance commissioner must approve the annual renewals.

The coverage includes unlimited doctor visits, generic drugs, and routine lab work. Prescriptions without available generic substitutes are not covered under the policy but are available at a discount from participating pharmacies. The coverage comes with no deductibles or pre-existing condition exclusions. But, it does include a coinsurance clause that requires participants to pay from 10% to 30% of the costs. The level of the coinsurance payment will be set by income, but there is no income cap limiting participation in the program, the company said. Income also will be used to set premium levels, which will range from $25 to $100 a month.

To participate in the program, people must be residents of either Helena or Billings, under age 65, and uninsured for either the past six months or for seven of the past 12 months.

Compliance May 5, 2003

Ex-Pan Am Worker Group Asks for Favorable PBGC Case Ruling

May 5, 2003 (PLANSPONSOR.com) - A group of ex-Pan Am workers and retirees that has been battling the federal pension insurer over the size of its members' pension payments for seven years, has now asked a New York federal judge to decide the case in the group's favor before a trial.
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>The request by plaintiff the Association of Former Pan Am Employees (AFPAE) came in the group’s 1996 lawsuit in the US District Court for the Southern District of New York, according to an AFPAE news release. The suit alleges that that the Pension Benefit Guaranty Corporation (PBGC), the agency that backs private sector traditional benefit pensions for bankrupt or ailing companies, has underpaid former employees of Pan Am since taking over their five plans in July 1991.

>Among those taken over was Pan Am’s Cooperative Retirement Income Plan, which was underfunded by over $900 million. The PBGC currently pays out $900 million in benefits annually to 14,000 former Pan Am employees.

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>Since the plan was taken over, the Oceanside, New York-based AFPAE has been waging a campaign to draw public attention to what it claims is the agency’s mismanagement. The group faults the PBGC for poor administration and six years of delays in notifying Pan Am retirees and beneficiaries of its calculation of their retirement benefits. In some cases,  the AFPAE also says the agency’s calculations were wrong.

>The objective of the lawsuit is to have a third party appointed trustee instead of the PBGC, which would then recalculate the benefits. The plaintiffs expected that would raise the benefits about 75% from the levels the PBGC is currently paying to early retirees (See  Reversal Of Fortune).

>Early retirees, such as the lead plaintiffs , are particularly unhappy with the PBGC’s decision to set their benefits at levels they feel are lower than what the Pan Am pension plan provided. The plaintiffs claim that the agency is paying only 45.2% of prior salary levels, while participants are, in fact, owed 79% under agreements Pan Am had with its workers. The PBGC contends that those early retirement benefits could only be given to those who were age 55 with 10 years of service at the time of the plan’s termination. Those who have reached 55 since 1991 are not eligible for those benefits, the agency has contended.

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