oriecat

#2 - The length of COBRA is determined by the qualifying event type. This is a good FAQ from the DOL that covers the basics of COBRA. http://www.dol.gov/ebsa/faqs/faq_consumer_cobra.html

I don't know if it makes a difference between fully or self-insured, but IRS Pub 15-B states that COBRA premiums paid on behalf of a former employee are not taxable income.

I was wondering that too, but when I worked through the issue at Change of Status.com it seems to only apply if the change of residence causes an actual loss of eligibility.

On what basis would employees get assigned to each HRA plan?

I agree with JerseyGirl. The qualifying event here is not related to the girlfriend changing her job, it is the employee changing the daycare provider.

What are the COBRA concerns? I haven't seen/heard anything.

10 years?!! Wow! Congratulations and much thanks!

According to the Change of Status website the addition of a new benefit option does not allow employees to change their FSA election. So they would need to stay in for the rest of the year and join next year.

Taxable wages go in Boxes 1, 3, and 5 (and any applicable state or local wages boxes).

If you have outside insurance, check with your carrier to see if they provide any discount programs to their members. Both of our carriers have various discounts on health clubs, alternative care, glasses, etc.

I think that's why she asked for a 'sample' so she could then modify it to make it fit. I don't have a form, I just send a letter to the employee, explaining the eligibility and requesting proof that their covered dependent is still a full time student and therefore remains eligible.

The current 90 day period for submitting claims is not a grace period, but a runout period. If you decide to adopt the 2 1/2 month grace period for incurring claims, you can then extend your runout period for submitting them as well. That is up to the plan to decide if they want to do that.

IRS Pub 15-B says: "Because you cannot treat a 2% shareholder of an S corporation as an employee for this exclusion, you must include the value of accident or health benefits you provide to the employee in the employee's wages subject to Federal income tax withholding. However, you can exclude the value of these benefits (other than payments for specific injuries and illnesses) from the employee's wages subject to social security, Medicare, and FUTA taxes." So my question is then, what does "other than payments for specific injuries and illnesses" mean? So a general health plan would be excludable, but something that only covered a specific illness, like an AFLAC cancer plan, wouldn't be? The W-2 instructions says "Cost of accident and health insurance premiums for 2% or more shareholder-employees paid by an S corporation, but only if not excludable under section 3121(a)(2)(B)." 3121(a)(2)(B) says "(B) medical or hospitalization expenses in connection with sickness or accident disability" So based on all this, I think I would agree that it is probably excludable for FICA. But definitely confusing.

No doubt. I too thought it was a good post.

I don't think forever is ever a good word to use when it comes to the IRS.

Well that wasn't clear from your post. Maybe they have realized that they have been violating the plan and are attempting to correct their mistakes. We can't know that. Did you ask them why the discrepancy in treatment?

I think your benefits people did a very poor job of explaining and probably caused more confusion than they should have. Termination is not the only qualifying event that triggers COBRA coverage. There is also the qualifying event of reduction of hours, so that you are no longer eligible for the plan. As a non-working employee, you are probably not eligible under the group health plan any longer (most plans require employees to be actively working a certain # of hours each week or month). FMLA coverage does not count towards that, so you are still considered an active employee while on FMLA, but once your FMLA is used up, so you are technically not an active employee and therefore not eligible for the plan. Thus, you have to be put on COBRA or you would need to be removed from the plan all together. Regarding your partner - all plans can be written with different terms. So perhaps her employer has a special clause that allows them to offer the one year of medical leave, or perhaps they were just in violation of their plan.

Unless I am misunderstanding, an important piece is missing in your interpretation, the carried over funds. It sounds like you wouldn't have any carried over funds, since you said your expenses far exceeded your elected amount. Since you wouldn't have any carried over funds, your expenses would have to come from the new plan year election.

I would think that's stretching a bit. It's still a plan year, a year is 12 months. The grace period isn't extending the plan year. It's just giving a grace period.

I think those are good questions, jreddi. In my opinion, if there are still funds leftover from 2005, then it should be paid from 2005 first. If the point is to reduce forfeitures, then why would you use new funds before old? And since the expense would technically qualify in both plan years, it seems reasonable that the reimbursement could come from both years. Again, just my opinion.

Why would they need to compensate for it? Edit - but no, I don't see how this would qualify for making a change anyway.

Seems like you could extend the run out, but I don't see where you would have to...

Sounds great!

According to http://www.changeofstatus.com/ a decrease would be allowed. And here's the full reg: (e) Entitlement to Medicare or Medicaid. If an employee, spouse, or dependent who is enrolled in an accident or health plan of the employer becomes entitled to coverage (i.e., becomes enrolled) under Part A or Part B of Title XVIII of the Social Security Act (Medicare) (Public Law 89-97 (79 Stat. 291)) or Title XIX of the Social Security Act (Medicaid) (Public Law 89-97 (79 Stat. 343)), other than coverage consisting solely of benefits under section 1928 of the Social Security Act (the program for distribution of pediatric vaccines), a cafeteria plan may permit the employee to make a prospective election change to cancel or reduce coverage of that employee, spouse, or dependent under the accident or health plan. In addition, if an employee, spouse, or dependent who has been entitled to such coverage under Medicare or Medicaid loses eligibility for such coverage, the cafeteria plan may permit the employee to make a prospective election to commence or increase coverage of that employee, spouse, or dependent under the accident or health plan

Based on how you phrased your original post, I would think he is entitled to a refund of the entire amount. But we would probably need to know exactly what the provisions of the CBA say.