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HRA Account Help Needed


Guest lmccormick
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GBurns:

Whether the plan is an ERISA plan, is a federal determination, IMO.

Can you provide a link to one state's insurance code that would say differently?

Also, could you provide another link in which the state insurance code mandates benefits for the ERISA plan, as opposed to the commercial insurer of the plan?

Don Levit

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Guest lmccormick

Don,

I am in Florida. I don't follow most of what has been said here since I'm not familar with some of the language used by you professionals. I did want to add however that in order to get a small group policy in Florida (for groups under 10) the participation rate must be 75% of all eligible employees. If you aren't covered by a group plan elsewhere you are eligible.

Thus as was the case with us at one time when we had 8 employees we could not meet the eligibility requirements and they didn't have to write us a policy. We had 4 employees with group coverage elsewhere so they were deemed "not eligible". Of the remaining 4 two had individual policies they didn't want to give up and the other two would have taken the group coverage but 1 was in another state and thus "not eligible" leaving us with 3 eligible. Because of the low number they required 100% participation (if I recall) and so the 2 who had individual coverage would have had to drop their coverage in order for us to obtain the group policy.

We simply gave the other two employees in need of coverage a payraise and told them to get their own individual policies because that was the least costly way to go.

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Are you saying that the 2 people who had individual policies were still considered eligible? Why would these policies not count towards the minimum participation requirements, which would leave only one person eligible?

If these policies were not "comparable" plans to the group plan you were looking at, I could see some justification for not counting towards the 75%.

But, again, my question still would be: Is there any regulation in the FL. code

which would prohibit insurers from honoring individual policies, even if they don't count towards the 75% minimum?

For example, assume an employee bought a mini med plan which pays $50,000 of benefits a year, with a lifetime max of $1,000,000.

Could this group insurer still require participation from this employee, but provide a plan exactly like the group plan, with a deductible of $50,000?

Don Levit

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Guest lmccormick

>>Are you saying that the 2 people who had individual policies were still considered eligible?<<

Yes. Having individual policies does not meet their requirement of "having eligible coverage elsewhere". They WANT you to pay the higher group premiums they're charging and don't want to allow the healthy folks to obtain less expensive private coverage on their own so they don't permit them to opt out. It's an insurance company rule and because of the small nature of the group I suppose the state allow them to set certain minimum participation requirements and this is one of them.

>> Why would these policies not count towards the minimum participation requirements, which would leave only one person eligible?<<

Probably because that insurance company isn't taking in any of the premiums!

>>Is there any regulation in the FL. code which would prohibit insurers from honoring individual policies, even if they don't count towards the 75% minimum?<<

Not that I'm aware of. I've been told it's an insurance company rule.

>>For example, assume an employee bought a mini med plan which pays $50,000 of benefits a year, with a lifetime max of $1,000,000.

Could this group insurer still require participation from this employee, but provide a plan exactly like the group plan, with a deductible of $50,000? <<

I suppose they "could" but then they'd have to offer that plan to the other members of the group as they're not individualized. Heck, there is not even such a thing as a small group catastrophic plan (major medical). I remember the last time we checked on group coverage in Florida for our small business. To just insure our family in of four in a typical PPO type plan it was about $900 a month. We could get comparable individual coverage for almost half that amount. Group coverage stinks in Florida.

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Thanks for your detailed reply.

The fact that individual policies are not recognized as eligible policies is very disturbing, because individual plans, if pooled properly, could be the way to provide for more affordable, permanent coverage.

I find your analysis encouraging, though, because it does seem to be company practice, as opposed to state law, regarding individual policies being able to "qualify."

I learned recently that Aetna and UHC in Fl. do not recognize group OR individual policies in Fl. as eligible policies, but that BCBS does. So, apparently, companies can set the guidelines in this area.

Did you check with BCBS?

Don Levit

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