Jacmo

Once the money leaves the control of the employer, ERISA requires a trust.

Nini--that's exactly what we do--i.e, make a statment in the docs that the amount is to be reviewed annually. Just be sure that the ER keeps a copy of the annual notice or statement to the employees with their Plan Doc/SPD file.

Aside from a/d problems with HCEs, there should be no problem with a pick and choose basis for contributions. The employer can do the same with insurance premiums, i.e. pay more for some than others.

I can see no legal reason why the 3rd company can't be added. If they did it for 2, why not 3? It doesn't make sense. Did they give you a reason why?

"UHC is a big player in HRA and HSA markets" Yeah, and they've just created/cornered a new niche. I assume AFLAC and COLONIAL won't be far behind.

Must FSA elections be spread equally over the plan year? Group is faced with almost impossible task of getting national enrollment done by the first pay period in the new plan year. They want to start with the second pay period and divide FSA elections equally over the remaining pay periods. Anybody?

Chaz, there are probably a lot of TPAs represented on this bulletin board. Any of which would probably do a good job. But ideally, you want a relatively local TPA with good credentials. Barring that, you might want to contact several brokers in your area that represent various TPAs and obtain proposals.

The date of service is key to everything. The provider needs to break out what services were rendered on what date, for what charges, so you can pay from the correct plan year.

I don't see it as based on pay. It seems to be based on production, regardless of pay (unless someone has carelessly made a pay related statement). But as you noted, production parameters will have to be spelled out in the documents. A loss of eligibility would be a triggering event under a 125 plan. I would be interested in seeing all the facts and circumstances in the COBRA case.

I'm wondering if it would be legal to limit FSA elections below the stated plan max based on marital status.

Since you're not getting any help here, you might want to try contacting an official at your local VFW for direction.

They're both employees and each has the option of putting in the plan max of 5,000 for a total of 10,000.

Now for the $64,000 question: What do the rates look like? Are they based on the level of deductible you qualify for? If this is legal from all standpoints (and I doubt a large carrier would be careless enough to endorse something shady), then it has the potential to blow away HRAs and HSAs. Depending on the rates.

It should not matter that the carrier is not licensed in the state the employee is moving to. It seems to me that the contract between the carrier and the employer is bound by the rules of the state that the employer is headquartered in (where the contract was written). Unless this is an HMO, and the carrier has no providers in the new state. The contract between the carrier and the employer should address this situation and spell out how it will be handled. In the meantime, I would think if someone is losing coverage due to a geographic change, then that would trigger COBRA, except that "similarly situated full time employees" would no doubt be treated the same way, i.e., no coverage outside the agreed to geographic area.

You've got a little bit of adverse selection going on. Depending on your plan's open enrollment requirements and other coverage requirements (per Mary C's post), the spouse should be able to come back in at open enrollment, at the 12 month or 24 month mark. It seems your plan needs tightening up, both as to entry and other coverage rules, and more accurate COBRA rating.

Is the employer paying the premium, or does the employee pay all?

afreeling: I believe it is possible. The plan should be in compliance on any given day of the plan year. If the test can be passed on the date that the key man's change was made, I see no reason to disallow. It's a new event, new circumstances.

An employer can pay for Medicare Supplement policies thru an HRA or MERP. See IRS Notice 2002-45 which references Code 213 expenses which includes supplement insurance premiums.

I respectfully disagree with part of the last reply. Any "co-ordination" is done by the employer. That is, make sure that employees are not participating in both accounts. I don't know how an insurance carrier would "co-ordinate" those 2 accounts. It's done at the employer level. What do you want the TPA to do? There are 2 levels of service from TPAs: Recordkeepers (the highest level), and "facilitators" (for lack of a better word?), that provide startup help, and perhaps ongoing technical and legal assistance, employee info source, etc. Ultimately, TPAs are not really needed after the initial startup of an HSA. The custodian should be able to provide full service for the HSA.

As I understand it, an HRA is a separate plan, regardless of how intertwined it may be with the connected health plan and would therefore be subject to most or all of the same requirements as the base health plan.

Seems to me that both the carrier and the TPA work for the employer. If one or the other is being obstinate, it's time to change vendors. Can Delta Dental afford to lose this account over this matter? How do they justify their position? A carrier can require whatever they think meets their needs to properly administer COBRA. The question is--does that position stand up in the marketplace? Can the TPA not add the arbitration language to their notice? It looks like everyone is protecting their own interest and the employer is trapped in the middle.

Quicksilver: The two levels of coverage might be this: IRS regs provide a specific exception to the Code 105(h) nondiscrimination rules for medical diagnostic procedures (including medical examinations) that are provided to employees only (not dependents). Under this exception, medical diagnostic procedures are not considered to be part of the employer's self-insured medical reimbursement plan for purposes of non-discrimination testing. I.E., executive physicals! See Treas. Reg. 1.105-11(g)(1). I'd like to know how they handle the self employed (LLCs, LLPs, Partnerships, sole proprietors, S-corps) Your description shows no disclaimer for that category. I'm wrestling with the self employed problem and suspect it might be possible to rely on Section 104(a)(3) to allow self-employed individuals to participate in an HRA on an after tax basis, and use the COBRA rate as the value of the plan, to be added to the owner's W-2. I wonder if they're doing this.

jblank: 1) You are required by ERISA to provide "disclosure" for H&W plans. (You are exempt from the other major ERISA requirement--"reporting, i.e., Form 5500"--until you have 100 or more participants at the beginning of a plan year). Disclosure requires a Plan Document and SPD--makes no difference if self funded or fully insured. The Plan Document is the "Philadelphia legalese" that gives a legal description of the plan. As noted by LarryM, the SPD is a summary of the plan document, written in everyday terminology that the average employee is supposed to be able to understand. 2) A Certificate of Coverage or Master Group Policy is not the only document required UNLESS it meets the ERISA requirement for a Plan Document and SPD. (Which is very rare). 3) The burden of ERISA disclosure is on the employer, not the insurance carrier. Very few small employers actually have bona fide ERISA H&W Plan Documents/SPDs. The major reason--the high cost of the needed legal expertise to create them AND maintain them. Especially the maintenance--small employer benefits are constantly changing. Most ignore the requirements and don't pay the "penalty" until an employee sues. At which point, all the employer has for disclosure is handouts and verbal statements.

If you refuse to sign the form, (which you can), then your employer might tell you that it is unable to process your claim within the confines of the law. Their hands will be tied concerning the transfer of private health information. You could possibly justify (depending on the nature of or reason for, your leave) narrowing the list of "lookie-loos" by crossing out, for instance, the Disability management companies' affiliates; and checking off only those records needed for your situation.

Since this methodology was recommended by a large national consulting firm, it may be their way of showing the employer how they can "enhance" the value of their health insurance to the employees. But I still say it's a dangerous misrepresentation of the facts.