oriecat

Thank you!! I think I need to have my dental plan bank account name changed too!

Thanks for your replies! Let's say that the account got set up and the person who set it up added "Flex Plan" to the description, so we know what's what... and then suddenly we have a funded plan with plan assets, is that right? What other requirements would we be under? We would have to make it a trust account? (What exactly does that mean anyway?)

Previously our Sec 125 TPA would keep our experience gains and roll them from year to year, to use for admin fees or to fund any new expenses that hit before there were enough contributions for the new plan year. This year we just got a letter from them saying they won't be doing that any more, due to IRS guidance regarding the use of a trust and some other rule changes, and they sent us a big check to cash out our account for the last plan year. So I am pondering how to deal with these funds, and I thought I would set us up a separate bank account, to keep them segregated (as they are plan funds which must be used exclusively for plan participants or admin fees), but then I started thinking of my tiny amount of ERISA training and things like funded and unfunded and plan assets started going through my head and now I am wondering if maybe that wouldn't be the best thing to do, because it will change our ERISA requirements? But I really don't know, it is all very confusing. Can anyone help me determine the best place to keep those experience gains and what sort of ERISA obligations could occur with each method? Also on the letter from the TPA, they said they could pay claim out of any bank account we set up if we provide them with the information, so I thought that sounded like an interesting idea, so then we could receive the interest of the money, but again, I was wondering if that would further complicate things... Thank you!

b2kates, I agree with everything you posted, except the above. These 2 items are specifically excluded as de minimus benefits in the Regulations. But yes, if the employer is the one actually providing these certificates, they are W-2 taxable wages. There is simply no exclusion for any form of cash given, and gift certificates are considered as cash.

Yes, medical spending accounts are eligible for COBRA, with some exceptions for when the participant would have to contribute more than they would be able to get back out (or something like that...)

I would say no, as it is not to treat a specific existing medical condition, but to prevent.

You wouldn't have to send a new SPD, you can do a Summary of Material Modifications. That would definitely be a Material Reduction in covered services. See (d)(3) at the regulation below http://www.dol.gov/dol/allcfr/ebsa/Title_2...2520.104b-3.htm

Unless I am misunderstanding, I think some of this is spelled out in the HIPAA regs. http://www.dol.gov/dol/allcfr/Title_29/Par...CFR2590.702.htm

Yes, ALL qualified beneficiaries have independent election rights. As the child is a minor, then the parent would also have the right to elect for the child.

My personal opinion only here - if you want to do something like this, you should still follow the COBRA notice procedures as required. You could then have a policy that says if someone elects their COBRA, that the company will pay for it. Or I guess your COBRA rate chart would just show a rate of $0 per month. First off, what if someone doesn't want the coverage, because they have other? You don't want to be paying for them to be covered if they don't want it, so you need to make sure they elect it. And then you also don't want to get into a situation where someone can finagle 18 additional months by saying they were never put on COBRA. Also if in the future, the company decides to stop doing this, it would be a lot easier to just publish new COBRA rates than to redo the SPDs and everything.

The COBRA notice is correct. Flex COBRA is only available if you have a balance to use up. Since you were already reimbursed for your full annual election, there is nothing for you to gain by electing COBRA, therefore it isn't required to be offered. I have often seen things that suggest that employers can always ask for the overspent funds to be returned, but they don't have any actual recourse to get it. It's possible they are just bluffing and seeing if you will send it. Many employees probably don't know that they aren't required to pay it back.

Interesting question. But why would the safety glasses only be looked at as a work expense? People have and use them at home also. I don't personally see it all that different than paying for prescription sunglasses.

If she isn't eligible to be covered as a dependent, then I believe she has to come out of the family group. She would then be charged her own premium as an individual.

Why would the dependents lose cobra coverage due to the "QB" moving out of state? If the dependents were covered on the plan prior to it being COBRA, they are all QB's and all have independent cobra rights. Their coverage shouldn't be cancelled due to the original QB moving.

Ahh, interesting... thanks! Do you recall the reasoning for his position on that?

I am no expert, but the above post is not my understanding at all. When someone prepays $5000 for the orthodontia they have not actually incurred eligible expenses, as the treatment has not been received yet. Reg 1.125-2 even says this: That's why, to my understanding, plans pay back the orthodontia expenses in periodic payments to coincide with the actual treatment being received, despite the prepayment.

I'm confused. If the seller doesn't have a health plan, then those 2 employees wouldn't be covered now, and therefore would have no loss of coverage, right? If there is no coverage to loss, what coverage would they continue through COBRA?

Health plans are a form of welfare plan. "Welfare plan" is a broader, generic term for non-pension fringe benefit plans covered under ERISA. It encompasses a lot of those other types of plans. This is my understanding anyway.

Doubled it... now someone needs to find a 16 year old thread

I don't understand the issue. Divorce is a 36 month qualifying event.

Why are you resurrecting an 8 year old thread??

No. The COBRA regs specify what are Qualifying Events. 26CFR54.4980B-4

Contributed, either by the employee or by the employer on the employee's behalf.

From the 125-2 Regs: (7) FSA experience gains. If a health FSA has an experience gain with respect to a year of coverage, the excess of the premiums paid (e.g., employer contributions, including salary reduction contributions and after-tax employee contributions) and income (if any) of the FSA over the FSA’s total claims reimbursements and reasonable administrative costs for the year may be used to reduce required premiums for the following year or may be returned to the premium payers (the participants for premiums paid by salary reduction or employee contributions) as dividends or premium refunds. Such experience gains must be allocated among premium payers on a reasonable and uniform basis. It is permissible to allocate such amounts based on the different coverage levels under the FSA received by the premium payers. However, in no case may the experience gains be allocated among premium payers based (directly or indirectly) on their individual claims experience.

And the reference to 414(d) for Governmental plans takes us to the IRS Code: (d) Governmental plan For purposes of this part, the term “governmental plan” means a plan established and maintained for its employees by the Government of the United States, by the government of any State or political subdivision thereof, or by any agency or instrumentality of any of the foregoing. The term “governmental plan” also includes any plan to which the Railroad Retirement Act of 1935 or 1937 applies and which is financed by contributions required under that Act and any plan of an international organization which is exempt from taxation by reason of the International Organizations Immunities Act (59 Stat. 669).