leevena

could you be a little more specific? What do you mean by "top-hat", I am a little confused?

As for the HRA issue, you are partially correct. There does need to be testing done also. I am confused by the second part of you posting, where you discuss the $2k and $3k stipend, specifically the statement "However for medical expenses other than premiums, I'm thinking that should be contained in an official plan document and the amounts made available to all employees." I am confused because I thought you said earlier that the stipend is for reimbursement of individual medical premiums. Yes, the employer can accomplish what he is trying to do. You may want to look at a Section 105 plan to compliment your HRA. Good luck.

I agree with papogi. I do have a couple of questions for BenefitsBenefits. The first is what was the conflicting information? You mention what the broker/plan adminstrator told you to do, but what was the other formula and who provided it to you? The second is why would you not believe your broker/plan administrator? Don't get me wrong, I know there are many brokers/administrators that make mistakes, but it seems to me that if you are unwilling to believe them, then you must have some history of problems in the past. And if you have had similar problems, why do you still use them.

I do not pretend to be an expert on COBRA, but I do not believe that the ex-employees in the first scenario are eligible for COBRA. I say this because the DOL defines a qualifying event as "Voluntary or involuntary termination of employment for reasons other than gross misconduct". The key is termination of employement. It would seem to me that the current carrier (and maybe past carriers) believed these employees to be active. Most group plans require participants to be active employees, other than retirees. So if these employees were terminated but kept on the plan as active employees, it appears that fraud was committed and that they are not eligible for COBRA. That being said, since the carrier does not know about this, they could probably submit their request for COBRA and receive it. Also, if they were on some type of approved extension (such as terminated employees with coverage extended) they may be ok. Don't envy you on this, and I hope I am wrong.

An FSA can be part of the cobra package, and assuming that the employee elected fsa for their cobra, and that the employee is still covered in the extension time frame. Something did confuse me. You state the employee elected FSA, so why wouldn't they have coverage during the extension time frame? Is it something to do with your 2nd sentence (X administers COBRA under the medical FSA by allowing all COBRA beneficiaries the right to continue coverage for the remainder of the plan year (a calendar year).) I read this as "the employer limits the extension until the end of the plan year, or in this situation, 2+ months? Is that true?

Sorry, never heard of anything like this. But, you could probably put something together that would make sense for your department. I have been in companies like this and have seen the HR or Benefits department develop programs to meet the needs of your supervisors/managers. It sounds like your department is responsible for the benefits within your company. If that is the case, you could do a variety of things. Just spit-balling off the to of my head, I am thinking about the following. 1. on the individual level you could develop awards and incentives for employees to obtain professional designations (CEBS, LUTC, HR designations, etc.) 2. Ask the employees of your company to grade your department on a variety of things, such as value of each benefit offered, how well they are communicated, the customer service your department delivers, etc. Once a base line of scores is developed, you could create improvement plans and goals. Over the years you can develop a scorecard. These are just suggestions, but you could do something like this very easily.

Your issues will depend upon what type of a plan you have. To begin with, is it self-funded or insured? Under a self-funded plan you are free to do whatever you want. You can add any provider you wish, you decide on referral or not, you decide payment amounts, etc. Under a fully insured, you now run into possible conflicts with the contract and the network. See Kristines comments for a few of these. In todays world of increasing health care costs and decreasing benefits, your employer seems to be a nice one to work for.

QDROphile...I seem to be a little confused by your comments. My comment "No, you cannot require payment be made" is in response to the question asked by AEA about if the employer can require the FSA participant to pay their medical bills with the dollars distributed from the FSA account. Are you saying that I am wrong and that this employer can require the employees to use their FSA distribution to pay their bill? Let me know when you get a chance.

Sorry that I came late to this discussion. I'd like to clarify something about the card...is this for a HSA account? I am assuming that it is. If so, HSA amounts are owned by the employee, and they are free to reimburse themselves for anything. Employers are free to structure help/assistance for the employee, such as asking the card provider to screen expenses for qualification, and even notify the participant that the expense is not a qualifed expense. But if the participant wants the money anyway, it must be paid.

My initial reaction is to say not to do this. I have two comments about why I would not recommend doing this. The first is you are adding a level of complexity to your administration for rehires. Someone has to check and make sure the rehire took cobra. Then, where do you draw the line? What if someone took cobra for less than the six months, say for 3. How would you classifiy that? Or, what if an cobra eligible employee indicated that they wanted cobra, waited till the last minute to pay, and then was rehired. Was that employee on cobra? My point is you are opening yourself up for some tough situations. The second comment is why would you reward the cobra employee? The average cobra member incurs more claims than an active employee. Also, depending on your type of health plan (self-funded, insured etc.) having more cobra on your plan is actually a negative. So you want to reward people who cost you, but the other rehires who did not cost you, you penalize. Hope this helps.

Bamma...could you be a little more specific and tell us what plan or plans your question is about?

No, you cannot require payment be made. Regs state "incurred", not "paid" as a requirement. As for your problem about employees not paying their bills, this seems to be a situaiton that can be settled in the employers HR department, or collections department. You have an employee who purchases a service or a good from you and then does not pay? At first, I would go after them as non-payment, just like any other customer that does not pay their bill. If that does not work, why not just fire them. I know this sounds harsh, but I would view what they are doing as stealing from the employer. Good luck.

If by HRA, you mean a Health Reimbursment Arrangement, then you need to check your plan document. To begin with, a HRA is an employer controlled, self-funded account. The money does not go to any insurance company, and the account does not need to be funded until claims are submitted. Whoever told Jrzy girl that the money goes to the insurance company was either confused by the question, or does not know what they are talking about. As for the question...Must the employer continue the HRA until all participant accounts are depleted?--the answer is no. Any dollars not used, whether funded or not, revert back to the employer. Beware, there are technical/legal issues that need to be followed when terminating this type of a plan, such as notification dates, submittal of claims dates, etc. Hope this helps.

I am in San Diego, and some of larger groups are offering concierge service, in-house day-to-day services such as laundry, and personal health records. Good luck.

Are you sure you have the story right? FSA contributions are employee, not employer. Wow, I stand corrected. I did not realize that ER's could contribute.

What possible violation? How is the employer blocking his COBRA rights? So far all we know is that the employer cut his pay in half. There is a concern that he might cancel his health insurance, but as of now it is not been canceled.

Lmccormick...I do not mean to be disrespectful, but you are not correct. Small groups are not exempt from any of this. Remember, all the employer is doing here is putting some money (appears to be $25k per year) into a pot and then reimbursing 7 employees for their out of pocket expenses. And do you really believe that an employee of this firm can really determine what is eligible expense and what is not an eligible expense? Come on, trained claim adjudicators don't always get it right. No one is saying that this can't be done...I am saying that the probability of this being done correctly and legally is slim.

Lmccormick, I don't think there is much disagreement between you and the other posters, other than the use of a TPA. If you read some of the earlier posts, many people suggested that the employees purchase a high deductible health plan and use the money to reimburse out of pockets. Your comment about small groups not needing a TPA is correct, and no one is arguing that. Rather, it is a sense of reality that is being discussed here. Do you really believe that a small group, not use to processing claims, can properly, legally, and within all privacy rules/regulations run an operation like this? Not very likely, which is what the flavor of the prior posts has been. This employer is in no position to adjudicate claims, let alone develop a system and process to protect privacy, or at least that is what is being communicated from WAID10. Also, who will develop the SPD's, do testing, create and maintain bank accounts, distribute records, etc.?

It's possible. Employers need to treat "classes" of employees the same, and cannot discriminate towards an individual within the class. I say possible because of your statement that he cut your pay in half. Did he cut your pay in half by reducing your hourly rate/salary, or did he reduce your hours? If your hours were reduced, perhaps you do not meet the requirements for hours worked to receive health insurance.

B52Blond...while I agree that there are problems with this, I would like to suggest that you might want to ignore it, IF YOU ARE NOT RESPONSIBLE FOR THE PLAN. If you are responsible, then I would be concerned, but if you are not, why worry? This person who is a senior manager clearly has the juice to make this happen. Let me explain. 1. There are ways that the OE could be reopened legally. 2. And while it does appear that not all of the staff were notified, are you abosolutely sure that they were not? 3. I doubt if a reputable consultant or TPA would allow this to happen illegally. 4. If I were that person, and had that much juice with the company, why not just change the submittal date on my form? That is much easier and safer than changing the whole process. I understand your feelings, but I have found that often times when we start to do more research, we find that our understanding of the facts are different. good luck

Jeanine..my thoughts exactly. I mentioned the same things early on, yet people keep posting and avoiding the 900 pound gorilla in the room, that being the employer is trying to get out of his plan. Waid...Yes, he can set up a side fund and give you money for your claims. As I have said earlier, this is ill advised. Read Jeanine and my earlier comments. Unless the employer purchases a high-deductible health plan, I see no other alternatives (given the facts you have told us) for a reasonable plan to be set-up. If I were you, and you were staying with the employer, see if you can get an individual policy, and pay for it from the funds he sets aside. By the way, not matter how hard he tries, and not matter how much good will he puts into this hair-brain scheme of the side fund, he will screw it up. I am so confident of this, that I am willing to be a large peperoni pizza and a six-pack of Pepsi!

Waid10, your question needs more clarification. An HRA, is a relatively new product, and is somewhat misunderstood. What I define as an HRA plan is a combination of a medical plan (fully insured or not) with signficant out-of-pocket exposure and a side-fund funded by the employer to off-set the out-of-pocket amounts. For example, an employer may purchase a $5,000 deductible, 100% thereafter plan. The premium for this is very low. Then the employer will determine an amount (for example $2000) to be set aside for each employee to use as an offset the out-of-pocket amounts. The employer funds the set aside amount through premium savings. No to answer your questions. Yes, an HRA is viewed as another health plan. However, based on your prior postings, it appears that your employer is considering offering only a "pot of money" for the employees, without an insurance plan. If this is the case, this would not be considered an insurance plan. Yes, he does have a self-insured plan. Technically, when an employer promises benefits, and they fund those benefits through their own assets without an insurance contract, that is self-funded. Your problem is that the employer is only promising a small amount of benefit dollars to cover the medical expenses. good luck.

Waid10...thanks for the additional information. I want to address the 7 possible self-funded employees, not the others. If I understand your question, the employer is going to put 7 employees into a self-funded plan and put the premium into the pool to reimburse the employees. Sounds great, but what can he possible expect to put into the fund, $25K per year at the most? One operation or large claim and the money is gone. Either he is getting bad advice, or your boss is out in LA LA land.

This may sound harsh, but if I were the client, I would give serious consideration to finding a new broker. He/she was ready to manipulate and decieve all for the advancement of his/her agenda, not the group or the employees.

Sounds like you are speaking with an Aetna rep, not an independent agent/broker. Try an agent/broker who is can represent all carriers.