Chaz

I have the same problem when I do searches and want to change my search terms.

vebaguru - Are benefits captives practical only for very large employers or can moderately sized employers use them as well?

I think the cops will know where to look for the prime suspects.

Most of your questions fall in the area of traditional labor law, of which I am unqualified to answer but I can say that, if the loss of coverage is solely due to the termination of the plan's coverage, there is no qualifying event and thus no required COBRA coverage. I do have a questions though. You write: What do you mean that the "plan is not insurance"?

It's just a matter of balancing the risks.

There is no definitive guidance on this but the regs define "employer" as being all entities in the 404 "controlled group," etc. The logical interpretation that follows is that a transfer within the controlled group is NOT a termination of employment and not a QE even if it resulted in a loss of coverage. That being said, I would hesitate in advising a client not to offer continuation coverage in such a circumstance if for no other reason that the possibility of a claim along the lines of what leevena raises. The insurer would have to consulted on this, however.

Is this a baseball reference of which I am not aware or did you mean "strychnine"? I crack myself up.

Yes, that might be a problem under HIPAA's nondiscrimination rules. HIPAA permits such questions to be asked as part of a voluntary wellness program but based on your description of the facts, this does not appear to be voluntary.

These types of programs are generally okay under the HIPAA privacy rules (depending on whether the plan and employer have otherwise complied with the rules), but there are a number of other laws including HIPAA's nondiscrimination rules, the ADA, and GINA that makes what you describe (an involuntary program) definitely problematic. COBRA is not probably not an issue unless COBRA participants are treated differently than active employees. It's difficult to come to any conclusions based on the limited facts that you describe but I imagine a discussion with counsel would be helpful.

Basically, qualifying children and qualifying relative are concepts under Code Section 152, which requirements had to be met in order to provide tax-favored health coverage under Code Section 105. These categories have various relationship, residency, support, age (for qualifying children, must be under age 19, or age 24 if student) and other requirements. Certain of these requirements still are relevant for other purposes, including for determining qualifying individual status for DCAP purposes and for eligibility for individuals who are not the employee's spouse or under age 27 child. PPACA changes the old rules and provides that coverage is tax free for an employee's child until the end of the year in which the child turns age 27, whether the child is married or unmarried, lives with, or is supported by, the employee or not, etc. (i.e., the child does not have to meet the Code Section 152 tests). At the end of the year in which the child turns age 27, however, he or she can receive tax free health coverage (including health FSA) only if he or she meets the Code Section 152 requirements. So, to answer your question, you are correct that an under age 27 child need not be married or dependent on the employee in order to receive tax-favored health coverage.

I don't necessarily disagree with you but there has been at least one court that does. If I recall, one of the reasons running a voluntary program through a cafeteria plan is problematic is that the tax savings enjoyed by both the employer and employee tie the program to the employment relationship.

DOL Reg. 2510.3-1 contains the safe harbor for voluntary plans. There are a lot of cases that look at what is employer "endorsement" including some that address including the program in a cafeteria plan. There is also a lot of DOL advisory opinions on employee endorsement although I cannot recall anyone that specifically looked at the cafeteria plan angle. I'm not aware of any IRS guidance except to state what benefits can be offered in a cafeteria plan, but I don't think this is an area where they would get involved.

Danger, Will Robinson, danger! Permitting participants to pay for voluntary benefits on a pre-tax basis through a cafeteria plan is a strong indicator of employer "endorsement" for purposes of determining whether an ERISA plan exists. It's not definitive and depend on other circumstances, but I would not attempt it without having a short conversation with your counsel. There are unfavorable consequences if ERISA does end up applying to these benefits.

Generally, no. Only expenses that have been "incurred" are eligible for reimbursement. Payment alone is not enough. There is an exception for medical treatments such as orthodontia that may cover more than one period of coverage. I'm not sure if that's the case here.

A POP is the term that is sometimes used for a cafeteria plan that is in place just to permit employees to pay their portion of the premium pre-tax, so, yes, a POP is simple cafeteria plan (as compared to other cafeteria plans that offer FSAs and other benefits). As I stated in my earlier post, it doesn't matter if the coverage is self-insured or fully insured (in the self-insured context, an employee contribution is still a "premium"; it just goes to the employer rather than an insurer). It also doesn't matter if the employee is paying the full boat (as is sometimes the case with dental and vision coverage) for the coverage or the employer contributes a portion. Does this make sense?

Any thoughts on this? Any TPAs out there?

You may want to take a look at 45 CFR 164.502(a), which is I think where the regs spell out the permitted uses and disclosures of PHI (e.g., for TPO purposes). These permitted disclosures are limited by the minimum necessary standard as you state, except in limited circumstances.

Under health care reform, nongrandfathered health plans, including self-insured plans, must contract with independent review organizations to conduct external reviews of appeals. Under Q/A 9 of the Affordable Care Act Implementation FAQs Part I, the regulators stated that a self-insured plan does not need to directly contract with any IRO and that the plan's TPA can contract with the IRO. That doesn't answer the question whether a plan whose external reviews are being arranged by their TPAs must nonetheless execute a business associate agreement with the IRO. I've seen some secondary sources that say that a BAA is required. Does anyone have any thoughts on this? What are TPAs doing who take on the responsibility of contracting with IROs? As always, thanks for any help.

In general, a POP plan exists to permit participants to participants to pay for qualified benefits on a pre-tax basis. It doesn't matter whether the qualified benefit is self-insured or fully insured.

As mentioned above, ERISA Section 102 requires a notice of assistance to be included in an SPD if the plan reaches the enumerated threshold of foreign speaking participants. PPACA has a similar requirement to provide notices "in a culturally and linguistically appropriate manner" if the plan has the same threshold of non-English speaking participants. My question is, in practice, how can the plan determine this, especially if the number of participants are close to the threshold limit? Does anyone have experience in doing this?

Jeez, don't encourage the guy.

I don't know, maybe I am missing something. I am under the impression that if the ER allows all of the employees to participate in the POP plan, than the in fact have passed the eligibility test. Is there something different? I read the link that was provided and that document says the same thing. The proposed regs added a benefits component to the eligibility test. See the above cited examples. Take a step back: Do you think it is likely that the IRS would permit an employer to contribute 99% of the cost of coverage for HCEs and 1% for NHCEs while still passing the eligibility test? I don't think so. I think the IRS added the safe harbor because it felt comfortable with it given the new benefits component. [WRITTEN BEFORE JRG'S LAST POST]

What am I missing? It is correct that there is a safe harbor for POP plans from the contributions and benefits and key employee nondiscrimination tests. It is my understanding, however, that this does NOT mean that an employer can provide higher levels of contributions to HCEs. See the examples in Prop. Treas. Reg. 1.125-7(b)(3)(iv) (particularly examples 2 and 3). Again, am I missing something?

This is not helpful. . . . and possibly defamatory. Something more for the administrator's and moderators' consideration, in my view.

PPACA does not change the normal rules regarding elections. Assuming the employee pays for coverage through a cafeteria plan and does not elect to cover the child in open enrollment starting 4/1, the employee may not add the child except in accordance with Code Section 125. If the employee does not pay for coverage through a cafeteria plan, the employer does not need to permit the employee to add the child mid-year (except in the case of HIPAA's special enrollment requirements, which PPACA did not change). In this latter case, the insurance contract and/or plan document will govern mid-year elections. Note that it is not just "dependents" under age 26 that must be covered; it is "children."