GBurns

Without arguing or insinuating discrimination etc is possible for you to find out from the owner/CEO/President why you do not get health insurance? As it stands, it might be said that you never requested it. Also some of the first things that any regulatory agency will ask are Who told you that the others get it? Have you asked for it? What were you told?

I, personally, have no idea what it is that you are trying to explain. In an HRA, the employer allocates and funds a predetermined amount to an account from which the employee spends, any unused amounts roll over to another period etc. In a MERP, the employer does not have a predetermined amount (although there might be a cap or limit) and does not pre-fund. The employee only gets money as reimbursment AFTER they have had an expense. There is no unused amount and no rollover. If the plan that you are talking about is going to cover deductibles, it can either: 1. Fund an account from which the employee can draw as needed but only for deductibles. This could be a HRA. 2. Reimburse the employee for any amount spent on deductibles only. This would be a MERP. From what you have posted there is the added complication of the employee deciding about other expenses. However, you did state that "they will need to plan for coinsurance above and beyond the deductible as well as any Section 213 expenses not covered by insurance." This implies employee contributions and I presume on a pre-tax basis. This is not allowed in an HRA but is allowed in an FSA or a MERP.

Your post raises a lot of questions: Why would you have to join a union? If you joined a union, why would owners and managers be eligible? If the VEBA is being sold through the union, what authorizes an insurance agent to represent the union? What authorizes anyone other than a union organizer to get you to join a union? How is ratification and the CBA going to be done if you go through this agent's process? If it is sold through the union and therefore also being sold to other companies, Why is this not a MEWA? If it not a MEWA where is the DOL PWBA certification? If it is a MEWA, where is the state DOI certification? If it is not a MEWA, then is it a Multiple Employer Trust? If it is a MET where is the DOL or DOI certification? Why would a MET need a union? Who are the Trustees etc? Who is the TPA? Are they licensed/registered with your state DOI? If not, Why not? I suggest that you do some investigation into VEBAs, MEWAs, METs and call your state Dept of Insurance Fraud/Unlicensed Entities Investigators (not the telephone customer services reps)after you have investigated. Your state DOI, like many state keeps a notice on their website explaining alleged "Union", "ERISA" and fraudulent or unlicensed plans. Read the notices and warnings. Call a few other unions and see what they think of this plan. What does the insurance company itself say about their product being sold in this manner? Have you read and understood the IRS Determination Letter and any other supporting documents that you might have been shown? Was it relevant? Remember this is their sales material, if it was not in their favor they would not have used it, take it with a grain of salt. The DOL PWBA also has a new publication explaining and warning about the fallacies of many plans being sold as VEBAs and MEWAs. Attached is an article from the ASPBA that should be of help. Remember selling mutiple employers into the same VEBA should create a MEWA which is why many of the articles focus on MEWAs rather than on VEBAs. A change of name does not change anything. http://users.erols.com/spba/p0000035.html As a previous poster suggested... Get an experienced lawyer of your own choosing.

I have never heard of an "over all" limit, although there are limits on each individual plan, whether statutory or plan document imposed. There are limits to the amount that can be contributed to a 403(B) and DCAP that are statutory and as you show the FSA has a plan limit. What you have posted does raise some questions: If the HRA takes care of the "100% in-network deductible" will that not affect the employee's use of the FSA? How will the employer know how much to contribute to the HRA? If this was a straight 105(B) MERP, I could understand, but you said it was an HRA. It seems that your plan design will not be economically justified for the employer.

Dolores, On this same VEBA Board there is a current thread regarding Vacation benefits in a VEBA. You might want to read it especially the posts such as the one by mbozek regarding the employer paying the employee then getting reimbursed by the VEBA (of course the same would apply if the VEBA advanced the money to the employer who then paid the employee) thereby creating state regulation of the VEBA. This is one of the reasons why I asked, Why would anyone want to put this concept under a VEBA? I question their understanding of the whole issue. You should also look at the new IRS Info-Letters 2002-0113 and 2002-0117 regarding Qualified Transportation Fringe Benefits, which is currently available on "Benefits Buzz". These should give you further reasons to question the viability of these benefits if used in this plan that you have asked about.

Aside from the other issues of TPA licensing, violation of the health insurance contract etc etc. I suggest that you first read Revenue Ruling 2002-41 and Notice 2002-45 which relate to HRAs. For a plan to be able to roll over unused money to another year, that plan must qualify as an HRA. An HRA cannot be funded by employee salary reduction either directly or indirectly. It also cannot be conditioned on the employee's participation in the health insurance (or presumably any other plan). Also what authority can they give for being able to advance reimburse the employee for medical expenses, DCAP or any other expense? What is the claims substantiation process? What does the employee have to turn in? Does this meet the IRS substantiation requirements? What happens if the employee terminates employment during the year? There are very many questions that should be asked.

The use of the term "cosmetic surgery" is not necessarily "blatantly wrong". It depends on what he meant. There is a lot of corrective surgery that is classified under the general term "cosmetic surgery". I would have asked him to explain what he meant before making statements. In the context of this article, How would "Risk-Shifting etc" be applicable? and How could any article focused on the "use it or lose it" aspect be anything but negative?

If you do search on either google or yahoo you will find references. The hits show that it is an informal association with members and officers such as: Todd Langton of CHITA at 206-224-3950 ext 22 Gary Gannaway, Pres/CEO First Choice Margaret Stanley at Regence Premera Wa. State Board of Health A call to the Executive Office of any of the above should get you someone who can give you all the info that you need.

Here we go again. "Double Dipping" has been the subject of previous threads over the last 2 + years. This is just a "Variation on the theme" as was predicted in the article in the May issue of PlanSponsor. The "original" version claimed to be able to reimburse the premium that was deducted on a pre-tax basis by claiming that since "insurance premiums" were included in the wording of 213(d) it was a reimbursable expense. When the IRS investigation, negative press (all those "Double Dipping arrangement articles) and Revenue Ruling 2002-3 make it very difficult to sell the plan, it was changed. The change was that the reimbursement was now claimed to be from a medical expense reimbursement plan. However, some of the sales reps realized that medical expenses would not be enough to substantiate the "reimbursement" given to the employees, so they added these other plans. One group decided to go even further and decided that since the "original" promoter had also run into action from a number of state DOI and Attorneys General, they would try to evade all state jurisdiction by providing their plan through a VEBA. Why anyone would think that they could use Qualified Transportation Expenses and Qualified Tuition Reimbusement in such a scheme is unbelievable. However it seems that a number of small employers are believing the sales pitches. The marketing seems aimed at small employers who either have no access to competent legal/tax advice (which is difficult to get anyhow) and not to larger more sophisticated employers. The first hurdle involves the use of a TPA for the claims adjudication etc. Most states require that the TPA be licensed/registered etc. Is the TPA licensed/registered in the state in which the employer/client is located? The answer is most likely NO. The second hurdle has to do with State Small Group Health Insurance Law or insurance contract provisions. The majority of states either by law impose a mandatory employer percentage contribution or allows the small group insurer to file its small group product with this percentage as part of the rate structure. Outside of small group this is usually a part of the initial RFQ/Application on which the quoted rates are based and which becomes a part of the contract. If the 100% of the insurance premium is moved to the employee, Where then is the mandatory employer percentage contribution???? If an insured violates a contract and then continues to submit claims and collect benefits, most carriers and state laws view this as Insurance Fraud. The third hurdle has to do with the Qualified Transportation Expense and the Tuition Reimbursement. Most employers in most parts of the country do not have any employees who would qualify for these plans anyhow, so it really is unusable for most. If however there is an employer in an area where these are applicable and who has enough employees who qualify for these plans there is still a problem. The reimbursement under such plans is already the employee's money regardless of whether or not this scheme is used. If the employer has a Transportation and a Tuition Plan the employee has to get reimbured anyhow and does not need to be a participant in the health insurance anyhow or in any new arrangement and so this scheme is not applicable. The fourth hurdle is DCAP. Most employees have no DCAP, which makes this of little value in the plan structure. Additionally, an employee does not have to be in the health insurance plan to have DCAP expenses so these employees would have had no deduction, so why and how would the employer use this VEBA arrangement for these employees? In any case DCAP expenses are the employees money that is being reimbursed. Additionally, the IRS has pointed out that as a general rule you cannot advance medical expenses, the same also applies to Transportation, Tuition and especially DCAP. What is the authority cited for being able to give the employee this money each payday before the expenses are incurred? By the way, What do they say happens when the employee does not have enough expenses or has no expenses? Does the employee return the "excess" amount advanced? What happens to those employees who left the job or were fired during the year? What happens if the employee does not return the "excess" because the employee only assumed the employer's portion of the health insurance premium because of the understanding that they would get back the money? If the employee gives back, does the employer also give back the employee the amount that the employee paid for the employer?? Have you checked to see how VEBAs are supposed to be set up and what can be provided through VEBAs? 419 limitations on deductions etc? Trust and Trustee requirement? DOL approval? Are VEBAs sold by agents or are the provided by lawyers? There are other issues that these plans raise but I think that the point has been made that while the structure is legal, the plans might be of no value or even a loss to most employers.

Almost all the Plan Documents that I see, whether isured or self funded plans, state that the Employer is the Plan Sponsor and the Plan Administrator. Why is the employer the Plan Administrator and not the claims paying etc TPA? Any cites and links to explanations would be very helpful in helping me to explain not only that this is the industry standard but also Why?.

It seems that nearly all Plan Documents state that the Employer is the Plan Sponsor and is the Plan Administrator, whereas the Claims Administrator, the TPA, is regarded as being a service provider. Can anyone explain why this is done? Any cites and links to explanations would also be helpful because I need to not only explain and show that this is standard practice but also give the Why?.

In all the plans that I have seen the Employer is the Plan Sponsor and also the Plan Administrator, whereas any TPAs (record keepers, Trustees etc) are service providers. Can anyone explain why this is done? Why is the TPA not the Plan Administrator? Any cites and links to explanations would be very helpful because I need to explain this to a client, not only as being standard practice but why.

The employer charges the COBRA rates as supplied by the insurance company (if fully insured) or by the Claims Administrator (if self funded ).

Does North Carolina or the state/states of domicile of these employers allow MEWAs?

Are there really any significant number of employers about to install or have recently installed any of these "new" consumer directed or DC healthplans or is it still marketing hype (hope)? Would love to get some feedback about the selling activities also? Have you been getting many offers or solicitations? If yes, are these multiple solicitations from a few vendors or are there many vendors?

What says that section 125 is even applicable? The post did not state how or why section 125 was applicable to the parent. If the parent has no section 125 plan in place why would 125(g) prohibit the sub from having one?

If you look at your health insurance you will see that pregnancy, and any complications of that pregnancy, are treated as any other disease. In fact that phrase "treated as any other disease" is fairly common language in health insurance. Coverage for pregnancy exists without maternity coverage. Maternity is a separate issue usually covering delivery and some post-natal care.

Would you have reimbursed for the services of a Midwife? What is the difference?

The first thing is to contact your State Dept of Insurance for their rules. Each state has different rules. Also be aware that if you enroll residents of other states the rules of the other state also applies. There are also separate rules for whatever it is that you are providing through the MEWA. If you can meet the state requirements then the DOL is the next step. There are no IRS rules for MEWAs, however, there are rules that apply to whatever is being provided through the MEWA. Since MEWAs are either prohibited by most states or are severely limited and regulated, Why a MEWA?????

What is the rationale for stating that you are now being penalized? The fact that you are being charged an additional $ 18,000 for a fairly standard procedure that is expected to help in controlling unnecessary usage and costs has nothing to do with whether or not you had it before or believe that you did not have it. $18,000 might also be a low charge because you did not state how many covered lives.

I have never heard of a rating system for TPAs but now that you mentioned I think that it would be a very good thing to have. I do not know of NAA but have heard very good things about Great West. You might hear of jokes about their real name being Great Waste but all it really means is that they seem to go to great lengths to give you even more than you asked for or expected therefore at times seeming to have created a waste. But you will eventually find out that it is always better to have more than you need, even too early rather than less too late.

Don't you think that all Congress is really doing is pointing out that these "best practices" were never really very good and were really wishful thinking packaged by fancy salesmen?

In my opinion your payroll is too small for it to be cost effective to outsource, it also would be just as easy to do it yourself rather than filling out the input sheets etc. The next issue is whether or not any PEO can really provide you with health benefits other than what you would have received yourself. How do you think the PEO will help with health insurance? Will you be joining the plan that they already have or will they be selling you a new plan? Who will be the policy holder? What sort of plan do they have, single employer trust or mulitple employer trust, fully insured or self insured? Who is the insurer? What rates did that same insurer quote you? There are a lot of questions that you might not have asked as yet, but so far you seem headed in the wrong direction.

You state that the benefits are "through" the PEO and not that the benefits were provided by the PEO. Who was the entity (insurer) who actually provided the benefits? What do they say? What does the Master Policy state and to whom was it issued? What does your Dept of Insurance say? In some states the refusal to provide claims experience for the purpose of getting a competitive quotation is an unfair or deceptive trade practice governed by either Insurance law or Consumer law, What does the governing state law say?

Is this plan being offered to US based employees, non-US employees or all employees (domestic and international)? Who is offering it?