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Uncashed health plan claim payments - unclaimed property reporting?


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6 replies to this topic

#1 akwallace

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Posted 24 February 2005 - 04:08 PM

An employer has a self-insured health plan, and funds payment to the insurance carrier on a checks cashed basis.

The carrier is now telling the employer that any uncashed checks (even though the employer did not fund these) are now the employer's responsibility to report to the state due to the unclaimed property laws.

Is this required by the employer?

#2 mbozek

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Posted 24 February 2005 - 04:27 PM

State laws are preempted from applying to a self funded plan subject to ERISA. There are DOL rulings on this issue. The uncashed checks should be cancelled by the carrier once they are stale. Who is the carrier that is giving this advice?
mjb

#3 akwallace

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Posted 24 February 2005 - 04:51 PM

CIGNA

#4 GBurns

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Posted 24 February 2005 - 05:32 PM

I do not quite understand.

I will assume that your really meant claims administrator/payer and not insurance carrier since you did say that this was a self-funded plan.

I understand your post as saying that The claims were made against the self-funded health plan not the employer and the checks were issued by CIGNA not by either the employer or the health plan.

Since the checks were issued by CIGNA, how is the employer responsible for reporting that a check that was not theirs was uncashed? If state unclaimed property is applicable, what would this employer have that could be turned over?
George D. Burns
Cost Reduction Strategies
Burns and Associates, Inc
www.costreductionstrategies.com(under construction)
www.employeebenefitsstrategies.com(under construction)

#5 akwallace

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Posted 24 February 2005 - 05:34 PM

Yes, CIGNA is the claims administrator for the self funded health plan, and issued checks on behalf of the Plan.

#6 mbozek

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Posted 24 February 2005 - 07:19 PM

In an unfunded plan the benefits are deemed paid by the employer not the insurer. If the benefits are not exempt from income they are taxed as wages and reported on the w-2.

Never rely on ins co for answers on self funded plans. Ins co are subject to state laws for escheat for payments made under insured plans and they dont understand that state laws are preempted from applying to self funded plans.
mjb

#7 GBurns

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Posted 25 February 2005 - 12:19 AM

Wages, W2 and benefits would not apply here, these apparently are payments made to service providers.

CIGNA adjudicates the provider claims , makes the payments and then is reimbursed by the health plan. It should CIGNA's checks that are uncashed and CIGNA has not been reimbursed by the health plan because the checks were not cashed. So CIGNA has not had an expense and neither has either the health plan nor the employer.

Essentially it should be on the books as a provider claim with an uncashed check that is now stale dated but which was never received by the service provider.
George D. Burns
Cost Reduction Strategies
Burns and Associates, Inc
www.costreductionstrategies.com(under construction)
www.employeebenefitsstrategies.com(under construction)