Contents
Mar 2004

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Contents
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QUOTE OF THE MONTH
UPDATES-COMPLIMENTARY SUBSCRIPTION FOR YOU
FAKE INSURANCE LEAVES MILLIONS IN BILLS UNPAID
CONSUMERS WANT CHOICE
SECURITY ALERT
SUGGESTED READING
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Quote of the Month
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What would men be without women?
Scarce, sir, mighty scarce.

(Mark Twain)

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UPDATES
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FAKE INSURANCE LEAVES MILLIONS IN BILLS UNPAID
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Wed Mar 3, 2004 02:40 PM ET -- By Julie Rovner -
WASHINGTON (Reuters Health) - More than 15,000 employers
bought 144 separate bogus health insurance plans that left
an estimated 200,000 policyholders with at least $252
million in unpaid claims between 2000 and 2002, the
General Accounting Office told a U.S. Senate Committee
Wednesday. With premiums for legitimate insurance rising
at double-digit rates, "lower-priced policies that appear
to provide comprehensive coverage can be very attractive,"
said GAO's Kathryn Allen.

The GAO study, presented to the Senate Finance Committee,
also found that the bogus insurance problem is growing,
with nearly twice as many fake plans identified in 2002 as
in 2000. Every state was affected, although the problem
was more widespread in southern states. Among the biggest
scams was one perpetrated by a company that called itself
Employers Mutual LLC, a name similar to a legitimate Iowa
firm, Employers Mutual Casualty Company. The fake
Employers Mutual collected approximate $16 million in
premiums in 2001 from an estimated 22,000 people, and left
more than $24 million in unpaid medical bills.

Nearly $500,000 of that total came from Joan Piantadosi of
Deerfield Beach, Florida, whose husband nearly did not get
a needed liver transplant when it became clear their
insurance was fake. "We feared, among other things, that
my husband might die while we were attempting to deal with
the predicament of being uninsured despite having paid
premiums to what appeared to be a legitimate health
insurer," she told the committee. A key problem with
catching operators of health insurance scams, testified
Texas Insurance Commissioner Jose Montemayor, is that many
plans manage to avoid state officials by claiming to be
exempt under the Federal Employee Retirement Income
Security Act, ERISA.

"There does not appear to be any specific federal criminal
or civil penalty for falsely representing a plan to be
exempt from state regulatory authority," he said. "There
are penalties for impersonating a lawyer or a doctor. Why
should a scam artist be able to represent to the
unsuspecting public that his plan is exempt from state
regulation when it is not?" Mila Kofman, an assistant
research professor from Georgetown University, said
another problem is that the U.S. Justice Department has
not been active enough. "Civil actions do not stop those
who engage in criminal conduct," she testified. "They
change their name, move to another state and repeat the
scam. What is necessary are criminal actions that result
in a jail sentence," she told the committee. For tips on
how to select a carrier (including research on financial
stability);
http://www.thebenefitnetwork.com/cgi-bin/arp3/arp3-t.pl?l=4

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CONSUMERS WANT CHOICE
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Preparing for Consumer-Driven Healthcare
The New Direction —Transforming the Landscape of Healthcare

What began as a quiet trend is rapidly arising to become
what many consider a major transformation of our nation's
healthcare industry. Employees have not only taken the
head seat at the healthcare table, they are now also
taking charge of the podium.
Employees have become a driving force in the healthcare
industry, demanding choice and access in their managed-
care plans, spending cash out-of-pocket on alternative
medicine and self-care services, and making healthcare the
number-one topic searched on the Internet. Pharmaceutical
companies launch billion-dollar drugs overnight by
utilizing direct-to-consumer marketing campaigns..
One indicator of the growing importance of this transition
is the recent super bowl advertising blitz of new
impotence drugs. The drug companies have found it
profitable to offer choices because consumers (and
employees) have shown that they like choices. For a quick
low-down on how employers and employees view having
benefit choices;
http://www.thebenefitnetwork.com/cgi-bin/arp3/arp3-t.pl?l=5

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IMPORTANT SECURITY ALERT
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On March 2 and March 3, 2004, new variants of a worm known
as Beagle (also known as Bagle) were released on the
internet. The Beagle worm affects all modern Windows
operating systems (Windows 95, 98, NT, ME, XP, and 2000).
This worm will attempt to send copies of itself out in an
effort to spread the infection using addresses which
appear to come from your ISP. The worm arrives as a .zip
or .pif attachment in your email and contains a message
which appears to come from The Benefit Network. These
messages do not come from The Benefit Network and The
Benefit Network will never send you a .zip or .pif
attachment in this manner. It is good practice, if you
are not expecting an attachment, to delete attachments or
e-mail the sender with questions regarding the
attachments. More information about these
worms can be found at the following websites:

http://sarc.com/avcenter/venc/data/w32.beagle.j@mm.html
http://sarc.com/avcenter/venc/data/w32.beagle.k@mm.html

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Suggested Reading
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Employee Benefit Plans in a Nutshell
Jay Conison New $23.50!

Employee Benefit Programs
Robert M. McCaffer...New Book!

The Handbook of Employee Benefits
Jerry S. Rosenbloom ..New $115.00!

Check Them Out Here;
http://www.thebenefitnetwork.com/cgi-bin/arp3/arp3-t.pl?l=6

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