oriecat

Thanks, GBurns. That is good advice, and I will try to remember it. We tend to often rely on our broker as the middle man when dealing with our carriers (they should do something to earn all that commission they get!). We have learned a lot lately that they really don't know a lot outside of their little area, especially erisa issues.

We have two closely controlled corporations under one plan. We also have a separate company that is currently not under the plan, but we would like to add it. It is not a corporation, but a sole proprietorship, if that matters. All 3 are 100% owned by the same person. We contacted our broker to look into adding the third company to our plan. She talked with the carriers (or one anyway) and is now telling us that we can't do that because they all have separate tax ID#s. So we are confused. Is what they are telling us correct? Wouldn't the insurance contract be with the plan and not the company, so if the plan included multiple companies then so would the contract? But I assume they would have to agree to that, and is it common that an insurance company wouldn't? They are saying that we would have to have separate contracts for each tax ID#, but can you have separate contracts for one carrier under a single plan. That just seems weird. Any thoughts on this would be greatly appreciated. Thank you! Edit to add - Especially confusing is because we already have two taxIDs that we consider as part of the plan, so are we then in violation of our contract because they are only using one taxID#?

There was an interesting article in the Winter issue of the SSA/IRS Reporter that discussed some of these issues. See "What Should You Do When Someone Wants Your Social Security Number?" on pages 4-5. http://www.ssa.gov/employer/winter2002.pdf

Thank you, Mike.

Thank you for your responses, Mike and Chris. We file one 5500. (They were filed as a GIA previously, but we just filed one as single employer, since the premiums were not paid out of a trust. The instructions make it clear that closely controlled corporations are a single employer plan. Right?) We only have one insurance contract (with each carrier). The terms for each company are the same, except for an additional ER contribution. I am not following what you are saying about the liabilities. Each company pays their correct share of the premiums, but then it is all lumped together for experience and claims purposes. The problem with the EIN is because since Co B is the big company now, that's who everyone thinks we are, so they use that name, but then they have the EIN for the plan (Co A) on file from before, so they use the name they know with the EIN they know, and it gets all mixed up. That's why I am trying to fix it now that I am involved with it.

If both types of benefits are under one contract though, why would the benefits change? Closing of the one business shouldn't cause the insurance contract to change, at least until renewal. I would think.

You have to look deeper, in the FMLA CFRs to see the definitions. The DOL website doesn't spell every detail out. From the definitions:(http://www.dol.gov/dol/allcfr/ESA/Title_29/Part_825/29CFR825.800.htm) Son or daughter means a biological, adopted, or foster child, a stepchild, a legal ward, or a child of a person standing in loco parentis, who is under 18 years of age or 18 years of age or older and incapable of self-care because of a mental or physical disability. Incapable of self-care means that the individual requires active assistance or supervision to provide daily self-care in several of the ``activities of daily living'' (ADLs) or ``instrumental activities of daily living'' (IADLs). Activities of daily living include adaptive activities such as caring appropriately for one's grooming and hygiene, bathing, dressing and eating. Instrumental activities of daily living include cooking, cleaning, shopping, taking public transportation, paying bills, maintaining a residence, using telephones and directories, using a post office, etc. What they don't define is "mental or physical disability", at least that I see.

We only have one plan, and it covers both employers. Both employers are owned by the same 100% shareholder, closely controlled. Is it necessary to terminate the old plan instead of simply transferring the sponsorship? My reasoning behind being retro would be so that next year's 5500 would all be as the newly named and sponsored plan. Does that matter? Or would the 5500 be filed as whatever the plan was at the end of the plan year? It just seemed like it would be better to be the same plan for the whole plan year. But I don't really know about these things. Because of the changes in past years, most of our insurance contracts come under the name of Company B, but use Company A's EIN, since that is the EIN of the plan. That's why I wanted to get these changed over, so it is all under Company B. It's all inconsistent and a mess. So I'm trying to get it cleaned up, and this seemed like a simple place to start.

My insurance contract has a two page section on Third Party Liability (Subrogation). There should be something in her plan about that as well, I would think.

Is it ok to make a retroactive plan amendment to change the plan name and sponsor? Our plan has included the words "long term and temporary disability" in the name, even though those benefits were dropped several years ago. I would like to change the name to just "Welfare Benefits Plan" or something more simple like that. Also the plan is currently shown as sponsored by one of our companies, which now only has 4 employees, I would like to switch it to shown as sponsored by the main company (300 ees). Can we go back and say that this change happened at the new plan year (Nov 1st) or should we wait and make the changes next year? I am just trying to get all of our plan stuff cleaned up. Thank you for any thoughts!

Maybe I'm missing something, but I don't see what the problem is. Can you explain what problem you think that creates?

I agree that a separate HIPAA board would be beneficial, especially considering the volume of questions on this board that have been HIPAA related lately.

The Proposed Treasury Regs 1.125-2 are available on the IRS. http://www.irs.gov/pub/irs-utl/tres_reg-1125-2.pdf

Don't most insurance companies have actively at work clauses? It seems like these LTD employees wouldn't be eligible anyway, once the maximum leave is used (it's three months on my plan) and they don't return to active work, at which time they should be able to take COBRA coverage. The LTD plan might say that the ees remain employees for two years, but I doubt an insurance plan would say that, in my (albeit limited) experience.

How can you exclude termination from being a qualifying event? If the employee isn't employed any longer, how do you force them to continue paying for the cost of the benefit? I am confused on this one. Anyway, my matrix says the following regarding terminations, although this may be specific to my plan: Termination of participant with rehire within 30 days: Elections made prior to termination are reinstated unless another event has occured that allows a change. Termination of participant with rehire after 30 days: Participant may make new elections.

The certificate says inside: Policy, Certificate, and Covered Insured Information Coverage is provided under Group Policy Number: 3000 Issued to Group Policyholder: Firstar Bank, NA as Trustee of the Baltimore Life Insurance Company Trust Participating Entity: Our Company Covered Insured: EE Name Certificate Number: Certificate Effective Date: Participating Entity is defined in the booklet as "means an entity that participates in the Trust identified on the Policy, Certificate and Covered Insured Information".

Our previous 5500's for the welfare plan were filed as Group Insurance Arrangements, but our premiums are not paid through a trust, so I don't think we can/should continue doing that. If we change to show as a single employer plan, does that raise any red flags? Can/should we file as a single employer plan, when we actually have two employers participating? But I believe due to being closely controlled, they would qualify as single employer still, based on what I have read, but I am not sure. Thanks!

Another question - would the fact that the certificates show "Participating Entity" with our company name in any way influence the endorsement aspect?

It is my understanding, that pre-tax premiums are considered employeR paid, therefore since the employeE didn't pay anything, there would be nothing to reimburse. So any payment made would then be taxable income. See here: http://www.ebia.com/weekly/articles/2001/C...1227Double.html

Are there any model QMCSO Procedures available? I have no idea where to start with this.

I am trying to get my brain around this, and hope I am getting this right. We have a 125 plan, it includes pre-tax premiums for our health plans, a health FSA, and a DCAP. The DCAP is not an ERISA plan, so nothing required. The pre-tax premiums are not ERISA regulated, but the health plans themselves, of course, would be. The health FSA is an ERISA plan, and therefore a 5500 would be required, unless exempted. At the beginning of the 11/01 - 10/02 plan year, there were 47 participants in the health FSA, so it would be a small plan (unless bundled with other plans). The part that loses me is the funding. All monies are pre-tax employee contributions. They are sent to our TPA, who processes the claims. So does that make it a funded plan with plan assets, and a 5500 is required? Or because the contributions are paid through the 125 plan, then Technical Release 92-01 could apply, and it could be seen as unfunded and no 5500 needed? Thanks.

My FSA Reimbursement matrix says regarding battery powered toothbrushes - "Possibly, but only if prescribed to treat a specific dental ailment".

Oh I see. I thought you were talking about your own plan(s). Regarding the 5500 - if they are filing one, then it must be an ERISA plan, otherwise there would be no requirement to file one. (I think.)

If you require participation in certain benefits, such as you must enroll in both medical and dental coverage, what language in the wrap around doc should be used to convey that, and in what section would it go? What about if you require all employee premiums to be made pre-tax through the 125 plan?

I would agree that it doesn't really fit with the culture of this message board, which from what I have seen is very professional. I visit another message board, where it is mainly for fun and people get to know each other well, so there are often big "Happy Birthday!" threads based upon the birthday info that shows on the board, but I personally don't really see that happening here, so then what's the point of having the b-days, IMHO.