Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!americast.com!americast.com!americast-post Newsgroups: americast.wpost From: americast-post@AmeriCast.Com Organization: American Cybercasting Approved: americast-post@AmeriCast.com Subject: Determining a State's Role in Regulating Benefits for WorkersBy Daniel B. Date: Mon, 26 Oct 92 04:30:31 EST Message-ID: <3.1992Oct26.043031@AmeriCast.com> Determining a State's Role in Regulating Benefits for WorkersBy Daniel B. Moskowitz The Employee Retirement Income Security Act (ERISA) has one of the broadest preemption clauses ever fashioned by Congress, mak- ing the federal regulation of worker benefits "supersede any and all state laws insofar as they may now or hereafter relate to any employee benefit plan" covered by the statute, with some specific exceptions. Courts are constantly trying to decide just what role that leaves the states. In 1981, the U.S. Supreme Court used the preemption clause to strike down a New Jersey law that said dis- abled workers could collect whatever was due them under a disa- bility pension plan as well as their workers' compensation bene- fits. Such offsets are one legitimate way of administering a pen- sion plan, the Justices explained, and New Jersey could not under ERISA limit the choices of plan administrators. Last month the U.S. Court of Appeals in Cincinnati considered a mirror image case, asking whether it is allowed under ERISA for Kentucky to permit an employer to reduce workers' comp payments by the amount a person is getting from a disability payment. The judges ruled 2-1, saying if the high court in 1981 found in- tegration of two payment schemes a legitimate alternative that had to be open to an employer, it follows logically that the Ken- tucky approach is allowed. It gives employers just that freedom. Moreover, the Cincinnati judges noted in the Sept. 14 ruling in Saylor v. Parker Seal, states traditionally have had authority over the details of workers' comp plans. And since it is the workers' comp payment that is reduced under the Kentucky approach, the worker gets the full funded pension promised under the ERISA plan. In fact, Judge Nathaniel Jones noted, other workers in the pension plan might end up with higher payouts if the employer passed on to them the money saved on workers' comp. The dissenting opinion, however, pointed out that because the two plans are allowed to be integrated, the worker ends up with less money than he or she otherwise would have had, and called that just the kind of interference with benefit plans that ERISA was supposed to prevent.< In other cases, courts ruled that:Leewaygiven taxpayers in applying for income-tax refunds doesn't apply to refunds of other federal taxes. The U.S. Court of Appeals in Denver, by a 2-1 vote, sided with the Inter- nal Revenue Service in refusing to give back excess windfall pro- fits tax paid for 1980, 1981, and 1982 on behalf of a couple who owned an interest in a federal oil and gas lease. A 1986 change in Bureau of Land Management policy reduced the couple's interest in the property retroactively - and reduced their tax liability. The Tax Code has provisions for taxpayers getting refunds in such situations even for years on which the files have been officially closed, but the majority read those provisions to apply only to income taxes. Hall v. U.S., Sept. 16>Thegovernment has to have a reason before it can go poking around a hospital's records on which doctors get privileges and which do not. The U.S. Court of Appeals in New Orleans found a probe by the Department of Health and Human Ser- vices into whether a Fort Worth, Tex., hospital was being unlaw- fully discriminatory in its review of physicians was too in- trusive and would breach the confidentiality necessary for pro- fessionals to honestly review colleagues' performance. The judges said for a probe to go forward, HHS has to have some evidence that the anti-bias law was being violated or has to be applying some neutral criteria in picking targets. In the Fort Worth case, the HHS regional director made the selection on his own, with the written approval from senior officials that the department's internal regulation required. U.S. v. Harris Metho- dist, Sept. 1>Pedophilia isn't a disabling condition under a standard disability insurance policy. An optometrist found guilty of lewd and lascivious conduct with a minor was ordered, as part of his sentence, to give up his license and go to prison. He claimed he should be able to collect on the policy that promised to pay if a medical condition prevented him "from performing sub- stantially all of the duties of his usual occupation." That con- dition, he said, was his pedophilia. But the Vermont Supreme Court, in what the justices found to be the first such case to come up involving a private disability in- surance policy, rejected the argument. Noting that the op- tometrist practiced for least a decade after his disorder mani- fested itself, the court found his inability to practice stemmed not from pedophilia, but from the fact that he got caught. Daniel B. Moskowitz writes about legal trends and their impact on business.<02:03 10-26C9999----- Copyright 1992, The Washington Post. This story is from the Washington Post's Capitol Edition On-Line and is not to be ar- chived or redistributed. For more information, send-email to American Cybercasting Cor- poration (usa@AmeriCast.COM)