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Guest Gerardo
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Guest Gerardo

Our company's board of directors has expressed interest in participating in our group health plan. Our plan is self-fund and we are subject to ERISA. What are the challenges and constraints? This project does not seem like a career enhancer for me.

Any advice is greatly appreciated.

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Your comment about "career enhancer" is probably right on target.

Rarely does a plan allow board members to be eligible. When you look at the make-up of a board you usually have two groups; 1) employees of the company, and 2) outsiders. The first group (employees) are presumable covered/eligible already, so it is the "outsiders" that you are focused on for this project.

You are self-funded, which gives you more flexibility when it comes to eligibility, so making coverage to the "outsiders" available is not too difficult. First check your plan documents and see if they are eligible as of now. If they are, no big deal and your career is enhanced! Assuming that they are not, you will need to change the eligibility language and have your employer adopt this new policy. If I were you, I would also have some estimates of expected claim cost that these new participants might have on your plan experience. It may or may not be a big issue. Then I would kick this up the ladder to a senior exec/president to make the decision. This gives you some cover.

Hope this answers your question. Good luck.

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Guest Gerardo

Thank you very much. Call me old fashioned but I always thought "employee welfare plan" meant for employees only and not for nonemployees. Any thoughts on the tax or DOL implications? I'm a babe in the woods on this one (or lamb ready for slaughter?).

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Guest Benefits Broker CO

If your current document does not include the "outside" directors in an eligible class, and if you have Specific and/or Aggregate Stop Loss coverage, you would also have to get approval from your reinsurer to add the outside directors.

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