Chaz

Thanks, that's what I figured. Anyhow, in my particular circumstances, I think the employee will be able to change the coverage because the spouse had a change in "residence" (as it were) to a place outside the service area of the HMO the employee was enrolled in (per 1.125-4©(4) example 4), and thus it is a qualified change in status.

I have a question regarding the opposite situation. The employee's spouse has just been incarcerated for a sentence exceeding two years. The employee currently has family coverage. The state covers an inmate's medical expenses but bills the inmate's private insurer if such insurance exists. Can the employee drop the spouse from coverage? Thanks.

The hours were 0 when the person was on STD but the employee had medical coverage until going on LTD so there was no qualifying event when STD started and thus there is no COBRA obligation. My question is whether a qualifying event occurred when LTD started.

Actually, an employer can offer "COBRA-like" coverage. But the employee is not ENTITLED to receive COBRA.

Employee is over 65 and entitled to Medicare. Employee was on short term disability but will shortly move to long-term disability. When this occurs, the employee will lose medical coverage. Employee does not currently intend to retire or otherwise terminate employment. Has a COBRA qualifying event occurred because medical coverage was lost because of a reduction in hours (to 0)? Or is the employee not entitled to COBRA? Any other considerations that I should be aware? Thanks.

Gompers - I came across this PLR in my research. The facts in the PLR differ from my situation in that our client wants to provide the participants in the multi-employer plan with the opportunity to use pre-tax dollars to pay their contributions for premium payment and to fund an FSA. In the PLR, there is no employee money involved (at least it didn't seem to be discussed) and the participants could not "opt out" and receive their full salary instead. I am getting the sense that there is no statutory construct in which a multiemployer plan can sponsor a cafeteria plan for the employees of member firms. I guess the only way to accomplish the stated goals would be for each member firm to adopt its own plan on behalf of its employees and have the multiemployer plan provide administrative services. Does anyone have insights?

I asked the following question in the Cafeteria Plan board but have not received a definitive response, so I figured I'd try here: Can a multiemployer fund sponsor a cafeteria plan for the benefit of the employees of its member employers? Q-3 of the proposed 125 regulations seem to indicate not because a "cafeteria plan is a plan maintained by an employer for the benefit of its employees." Is there any way that a cafeteria plan (with premium payment, FSA, and DCAP features) can be structured to be located at the fund level and with only one Form 5500 filing for the FSA feature? Any suggestions are welcome.

Thanks for your attention. See below for my responses to your questions: 1. Does the plan exist pursuant to a CBA? (Was is bargained for?) YES 2. Would employers adopt on or participate by being signatories to the CBA? YES 3. Why would a "fund" sponsor the plan rather than the union? WELL, THE EMPLOYERS ARE MAKING CONTRIBUTIONS TO PAY PART OF THE PREMIUMS. THE FUND HAS EQUAL NUMBERS OF UNION AND MANAGEMENT TRUSTEES. My initial view is that is should be possible for a Taft-Hartley plan to sponsor a Section 125 plan. My only sticking point is the requirement that the plan sponsor be the participant's employer. My research turned up no examples of such plans; I just found some in which the participant does not have the choice to opt out (and thereby take cash); indeed in all such examples, the employee did not have to contribute anything. Such plans are, by definition, not cafeteria plans. Can you point me in the direction of any examples of Taft-Hartley plans sponsoring a cafeteria plan? That would be MOST helpful and appreciated. Thanks.

Can a multiemployer fund sponsor a cafeteria plan for the benefit of the employees of its member employers? Q-3 of the proposed 125 regulations seem to indicate not because a "cafeteria plan is a plan maintained by an employer for the benefit of its employees." Is there any way that a cafeteria plan (with premium payment, FSA, and DCAP features) can be structured to be located at the fund level and with only one Form 5500 filing for the FSA feature? Any suggestions are welcome.