Retiree Only

[Guest JWB19]

Suppose a plan sponsor has a group health plan that consists of medical coverage options for actives and separate medical coverage options for retirees. Plan year begins January 1st. There is one plan document/written instrument and it files one form 5500. Does anyone have any thoughts on whether, to avoid PPACA compliance for the retirees, the employer could create a separate group health plan for the retirees (that is, create a separate plan document and begin to file separate form 5500s) effective January 1? Other than sparking challenges from the participants, I can't see any reason why this would cause a problem, since the preamble to the GF regulations discussing the retiree-only exception does not limit the exception to existing-retiree only plans. I'm wondering whether anyone had thought about this or perhaps has identified other risks. Thanks.

[vebaguru]

There are no legal obstacles to such a design unless the plan is established pursuant to a collective bargaining arrangement.