News Briefs
ILLINOIS
Garrett Bonham, 29, seeks more than $75,000 in a lawsuit filed last month for injuries sustained in his 10 years of employment as a performing knight at the Schaumburg, Ill., Medieval Times, according to the Chicago Tribune. Although filed as a class-action lawsuit on behalf of other former employees, the suit has yet to be certified.
A separate suit filed last year by another “knight,” James Killis, contends he was fired for filing workers’ compensation claims after six years as a performer. Killis claims the company offered him $10,000 in lieu of compensation claims, and when he refused to accept it, he was fired.
Both plaintiffs allege that Medieval Times managers circulated a memo in April 2003 indicating the company’s concern with the increasing cost of workers’ compensation claims. They also allege that managers threated employees with firing if they filed such claims. Both plaintiffs said they received workers’ compensation settlements for previous injuries.
When performing as knights, the plaintiffs wore armor costumes of cotton and polyester and used real swords and lances in their jousting competitions. In their lawsuits, they allege they were “required to engage in dangerous activities such as physical battles, jousting matches, and riding horses in an enclosed space at full gallop speeds of up to 35 miles per hour.”
Medieval Times operates eight dinner theaters throughout the U.S. and Canada.
Segal Ruled Competent for Sentencing: A federal judge has ruled that jailed Illinois insurance mogul Michael “Mickey” Segal has the mental competency needed to be sentenced, according to Associated Press.
Segal was found guilty of stealing more than $30 million from a trust fund in June 2004.
After Segal was convicted, his attorneys argued that he was mentally incompetent and unable to defend himself during a sentencing hearing. Federal Judge Ruben Castillo ruled that Segal is competent and set Segal’s sentencing hearing for Nov. 30.
Prosecutors argued at trial that Segal looted a restricted account at his Near North Insurance Brokerage to fund a high-end lifestyle. If he were declared mentally incompetent, Segal could have been sent to a prison medical facility for treatment.
MICHIGAN
House Passes Whistleblower Act: The Michigan House of Representatives passed H.B. 4577, the Medicaid Whistleblower Protection Statute, by a 106-2 vote. Rep. David Law (R-Commerce Township) unveiled the legislation in March 2005.
The statute would amend the Medicaid False Claims Act to provide whistleblowers with legal protection. This bill will also provide financial incentive to those persons willing to bring a civil suit against and assist in the investigation and prosecution of a violator of the Medicaid False Claims Act.
According to Attorney General Michael Cox, national studies estimate that between 3 percent and 10 percent of a state’s Medicaid costs are founded in fraudulent claims. For Michigan, this equates to anywhere between $225 million to $800 million. In addition to the savings to the Medicaid budget, the successful prosecution of the fraud will result in penalties that are three times the amount of restitution awarded to the state.
The Attorney General’s Health Care Fraud Division is one of 49 federally certified Medicaid Fraud Control Units. Medicaid fraud investigations and prosecutions include false billings, unlawful delivery of controlled substances, practicing medicine without a license, kickbacks, and bribery schemes. Abuse and neglect investigations and prosecutions include physical assault, criminal sexual conduct, identity theft, theft of residents’ property and funds, and harmful neglect in Michigan residential care facilities. The division also initiates civil actions, including asset forfeiture and claims for Medicaid overpayments.
MINNESOTA
NW Smokers to Pay a Surcharge: Northwest Airlines plans to begin charging some of its workers who smoke an additional fee for health insurance, according to Knight-Ridder Newspapers.
The Eagan, Minn.-based airline will be joining a small but growing number of companies targeting smokers as they look for ways to tap workers for a growing share of the escalating cost of health care.
Northwest’s 35,000 salaried employees will begin paying the fee Jan. 1, 2006, according to an internal company memo. The airline’s proposals to revamp its union contracts also include the tobacco-use fee, which means it’s eventually likely to apply to all Northwest workers.
“It is something a lot of companies are looking at,” said Blaine Bos, the office business leader for Mercer Health & Benefits in Minneapolis.
Health-care costs in 2006 are expected to increase another 8 percent, more than twice the rate of inflation, reports Towers Perrin, a benefits consulting firm. That comes after a string of double-digit increases that has made rising health-care costs a key competitive issue for companies.
However, most employers still prefer options that encourage smokers to kick the habit, such as covering a portion of the cost for nicotine patches and other remedies and providing smoking-cessation classes. Other companies use a surcharge against employees who smoke as a way to encourage employees to be healthy or simply to cut costs.
For instance, General Mills, the Golden Valley, Minn.-based food giant, charges smokers a surcharge of $20 per month for salaried employees and $10 per month for production employees.
Northwest declined to discuss specifics of its tobacco fee, which is among changes Northwest is seeking as it overhauls its medical plan, part of an effort to cut its annual labor costs by $1.4 billion.
As pilots, flight attendants and ground workers unions negotiate new contracts with Northwest, observers say the company is in a strong position to get the changes it wants.
That’s because Northwest is restructuring under bankruptcy court protection, and it already has asked the bankruptcy judge for more leverage in the event it can’t get its unions to agree to cuts.
For workers, the smoking fee comes on top of demands for pay cuts ranging from 5 percent to 28 percent and potentially thousands of additional job cuts the airline says it needs to survive.
MISSOURI
Auditor May Axe Insurance Tax Credit: Missouri State Auditor Claire McCaskill has proposed that the state consider eliminating a tax credit that helps insurance companies offset their costs of state reviews.
An audit by McCaskill’s office said Missouri is one of just five states that allow insurance companies to receive tax credits for their state examination costs. For the 2003 and 2004 tax years, insurance companies claimed nearly $6 million of those tax credits, reducing by an equal sum the amount of money that went into the state’s general revenues, according to Associated Press. The audit recommended the Department of Insurance consider seeking legislation to reduce or eliminate the examination tax credit.
DOI spokesman Matt Barton said the tax credits are part of an operational review already under way at the agency.
A spokesman from the Missouri Insurance Coalition said McCaskill’s suggestion was a poor one, and that Missourians would pay for state regulation of the industry one way or another, probably in the form of higher premiums.
The Department of Insurance conducts two types of insurer examinations: one assessing financial stability, the other reviewing compliance with Missouri insurance laws.
Under state law, insurers are billed for the examination expenses, and also pay a 15 percent surcharge to help cover the supervision of examiners. Insurers can deduct their examination costs from their state taxes, which are based on the total amount of premiums they collect in the state. Those tax credits can be carried forward for five years.
According to a spokesman from the American Insurance Association, the DOI is keeping an eye on the 15 percent surcharge issue because it creates a situation in which the fee is becoming a revenue-generating vehicle often when there is no need for such examinations. AIA dismissed McCaskill’s proposal as a “local political debate between two regulating agencies of different political leadership.”
NORTH DAKOTA
DOI Offers Counseling on Rx Program: The North Dakota Insurance Department is assisting state Medicare recipients with counseling on choosing a prescription drug option, according to state officials.
The sign-up starts this month for the prescription drug benefit known as Medicare Part D.
North Dakota Insurance Commissioner Jim Poolman said more than 100 volunteers are trained and available for counseling over the phone or in person. The counseling is offered through the federally-funded Senior Health Insurance Counseling program, officials said.
More than 100,000 North Dakotans are eligible for the new prescription drug benefit, and they also may be eligible for low-income help, according to the Associated Press.
The Senior Health counseling number can be reached at (888) 575-6611.