Compliance September 2, 2005

PBGC To Replace Checks Lost Due to Katrina

September 2, 2005 (PLANSPONSOR.com) - The Pension Benefit Guaranty Corporation (PBGC) is offering next day direct deposit of benefits missed due to Hurricane Katrina.
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In its news release, the PBGC said September benefit checks were issued August 29, but due to emergency conditions, mail delivery to many Gulf Coast zip codes has stopped.    The agency says around 1,400 of the 3,500 individuals who receive benefits from them in these zip codes receive a hard copy check in the mail.

Recipients can request a direct deposit of their benefits into an already established bank account by calling the PBGC’s Customer Contact Center at 1-800-400-7242 from 9:00 a.m. to 8:00 p.m. Central Standard Time on Monday through Friday.    The agency said the direct deposit will hit the recipient’s account on the next business day.

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Those who still wish to receive a paper check can call the contact center with a new or temporary address or can e-mail the address to  mypension@pbgc.gov .   Replacement checks should arrive at the new address within six days, according to the release.

The PBGC has also extended the deadline for certain required filings by sponsors of defined benefit plans.    Information on these extensions can be obtained  here  or by calling 800-736-2444 or 202-326-4242.

Compliance September 1, 2005

Judge: Oral COBRA Notice Legally Sufficient

September 1, 2005 (PLANSPONSOR.com) - A Michigan man suing his former employer over his health coverage won a mixed legal victory when a federal judge cleared the engineering firm of wrongdoing on one issue but paved the way for more proceedings on another.
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US District Judge Robert Holmes Bell of the US District Court for the Western District of Michigan ruled that Dreisenga & Associates had satisfied the notice requirements of the Consolidated Omnibus Budget Reconciliation Act (COBRA).

Even though President Daniel Dreisenga did not specifically refer to COBRA in his conversation with plaintiff Thomas Joiner, the interaction with Joiner allowed him to make an informed decision about his ability to continue coverage after he retired, Bell said.

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According to Bell, Joiner and Dreisenga discussed continuation of coverage and agreed Joiner would be responsible for the premium. This notification allowed Joiner to make an informed decision, the court said.

While Dreisenga “may not have specifically referred to [Joiner’s] continuation coverage as a benefit conferred under COBRA, the notice given adequately informed him of his ability to continue coverage. Thus, [Joiner] was able to elect to continue coverage that would otherwise terminate due to his retirement. In short, through [Dreisenga’s] notification and continuation of [Joiner’s] coverage, the purpose of COBRA was served,” Bell wrote in his opinion.

However, Bell refused to dismiss the remainder of Joiner’s case alleging that Dreisenga violated the Health Insurance Portability and Accountability Act (HIPAA) by terminating his coverage after learning he had prostate cancer. Bell said because there was conflicting testimony about how long Joiner was supposed to be covered and whether the employer was informed of the cancer before or after it terminated insurance coverage, Joiner had the right to keep that part of the case alive.

The company alleged that Joiner was entitled to coverage only until age 65 and that it notified Joiner it was terminating his coverage before he informed them he had cancer. Joiner asserted that the agreement on continued coverage did not have a specific termination date and that he notified the company of his cancer before the termination of coverage.

The case is Joiner v. Dreisenga & Associates Inc., W.D. Mich., No. 1:04-CV-437, 8/29/05.

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