HRA - employee accidentally not covered by group plan

[p2tso]

Hello,

Our group plan carrier messed up and failed to enroll an employee back in April when we submitted her application. However, because we didn't know that until September, she has been enrolled on our group HRA since April. So, we were/are out of compliance for the five months she was not covered by our group health plan.

The carrier has since enrolled her onto our health plan as of 9/1, but our broker doesn't think they will consent to back-enrolling to April. If they don't, what do you think we should do? Fortunately, she didn't have any medical claims until September, but she did use her HRA for some dental/vision charges prior to September. We would like to make the employee whole, since it wasn't her fault, and ideally get back into compliance. Should we:

1. Report her HRA employer contributions as taxable for those five months she was not covered and give her a bonus to cover the taxes;
2. Reset her HRA active status date to 9/1 and give her a (taxable) bonus to cover the HRA contributions for those five months;
3. Not even bother asking the carrier to back-enroll her to April and just ignore the fact she was not covered by our group plan for five months (what are the risks here?);
4. Or something else?

Of course, if the carrier won't back-enroll her to April, we will also reimburse her premium payroll deductions. 

Thanks for any advice!

[Chaz]

Speak with benefits counsel.

 

[leevena]

I agree with Chaz.  But on a separate note, have you fixed this issue to prevent it from occurring again?  To some extent I understand the employee not catching this error, even though they should have received confirmation and materials.  But who is tracking your enrollment and verifying the final enrollment?  If she was not enrolled, what was the administrator doing with the extra money?  Who is coordinating the monthly transactions for the employer and why did they not pick up on this?  Not trying to be mean, but if this happens once, it could happen more.  Good luck.

[p2tso]

Thanks for the advice, and yes, it won't happen again!