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Is this a "group health plan"?


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Small employer currently has no group health plan.  If the employer pays a "minute clinic" a flat per head fee (say $200) that entitles its employees to utilize the limited medical services the minute clinic provides at a discounted rate (say $40 per visit instead of regular $90 walk-in rate), has the employer established a group health plan subject to the ACA and ERISA? 

The problem here, of course, is that if this arrangement is a group health plan, it does not comply with the ACA and ERISA for several reasons, including, no free preventive services and no documentation of the "plan." 

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Why would this not be a group health plan?  It is a plan contributed to by an employer to provide employees with health care.   I assume the minute clinic does not provide medical services for excepted benefits only.  

As for being subject to ERISA, more facts are needed.  Is it a governmental employer?  Is it an ongoing administrative program?  Are the four prongs of Donovan met?  Is there another fact that should be considered?

 

 

 

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Thanks for your reply.  I think the arrangement I described may be a group health plan, but it seems to me that there is a decent argument that it is not. 

Here is why.  Under the analysis adopted by some courts, the fact that the Donovan prongs are clearly met does not mean there is an employer plan for purposes of ERISA.  See, e.g., Lanpher v. Unum (D. Minn. 2015) .  In my case, the employer has no discretion or administrative responsibilities whatsoever. So, there may well not be an ERISA plan at all.

If the arrangement  I described is not an ERISA plan, then maybe the arrangement is not a group health plan.  As you know, a "group health plan" is defined under the ACA in part as  being "an employee welfare benefit plan to the extent that the plan provided medical care . . ."  It seems credible to take the position that there cannot be a group health plan if there is no employee welfare benefit plan, i.e., no ERISA plan.

Make sense?

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I did not look at the case that you cite but I am guessing that case involved whether the employer had sufficient involvement to take the plan out of ERISA's "voluntary plan" exception.  As you describe it, the employer is paying the cost of the arrangement, which almost certainly is more than enough involvement to take it out of this ERISA exception.

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On ‎3‎/‎5‎/‎2018 at 1:49 PM, Bill said:

Thanks for your reply.  I think the arrangement I described may be a group health plan, but it seems to me that there is a decent argument that it is not. 

Here is why.  Under the analysis adopted by some courts, the fact that the Donovan prongs are clearly met does not mean there is an employer plan for purposes of ERISA.  See, e.g., Lanpher v. Unum (D. Minn. 2015) .  In my case, the employer has no discretion or administrative responsibilities whatsoever. So, there may well not be an ERISA plan at all.

If the arrangement  I described is not an ERISA plan, then maybe the arrangement is not a group health plan.  As you know, a "group health plan" is defined under the ACA in part as  being "an employee welfare benefit plan to the extent that the plan provided medical care . . ."  It seems credible to take the position that there cannot be a group health plan if there is no employee welfare benefit plan, i.e., no ERISA plan.

Make sense?

First, I would be surprised if the employer has no discretion here.  Discretion in this sense is not discretion to decide claims.  It is a larger sense of discretion, such as deciding the plan's design.  The employer is paying for the costs of the clinic.  That alone is discretion in the plan's design.  Even if we are talking about discretion to decide claims, I would guess if an employee went to the clinic for some durable medical equipment, such as a cardiac implant, the clinic could not send the bill to the employer and get paid without any input by the employer.  The employer would deny the claim.  Second, just paying the costs is by itself enough for the employer to be involved for purposes of what you are discussing.  Similar issues come up with wellness programs, where the employer pays for employees to get blood work to check their health. Those are generally considered to be group health plans.

If the employer already has a group health plan, just wrap this into that plan by adding it as one of the benefits.

   

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This is an interesting discussion, and I do not know the answer.  My guess is that it would need to be decided via regulatory or courts.  But one issue I thought of that makes me believe it is not a group health plan is that it appears to be a voluntary program, and if it is voluntary then it does not meet the definition of a welfare plan...am I correct?

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