GBurns

How do you blend the rates in 2 separate plans? The OP stated that a "retiree" plan was going to be added as a new benefit. I read that to be a new separate plan for these "retirees". Even if there was 1 single plan, Would blending be allowed? Is there legal standing to charge 2 similarly situated participants different rates? For example 2 single females both age 45 residing in the same zip code, with the only difference being that 1 is a "retiree" and the other still an active employee. Or better yet, the same 2 single females, but the active employee is curently being treated for terminal cancer. Are you saying that there is legal support that allows the active to be charged more than the "real" rate and the "retiree" to be charged less or vice versa, solely because of job status?

I really do not see why you have a problem. What am I not understanding? Q&A 22 and 23 seem to adequately address periods of less than 12 months. Various periods are illustrated. It should not matter to the arithmetic whether the change is to another HDHP or termination with no continuing HDHP.

For those employees with spouses: "You cannot have an HSA if your spouse’s FSA or HRA can pay for any of your medical expenses before your HDHP deductible is met." Note the "can pay". It is not will pay or may pay.

LarryM I wonder where you saw data that "implies retirees have about a 40% higher claim cost than actives of the same age. and sex".? In any case such data would probably not be relevant to the posted scenario. This will not be the usual "aged" retirees but will be rather young retirees, probably even as young as 40 years old. I doubt that any data has been collected of a group such as this. I also doubt that you can "blend" rates in the manner that you describe even in a self-funded plan. The OP stated that the retiree would be paying the premium. In self funded plans the premium (imputed cost) is calculated, as far as I know, to cover not only expected claims but also with a "margin" for reserve and a "margin" for error in estimating unexpected claims. The purpose is to try and negate any employer liability under all scenarios. So barring actuarial miscalculation there is no employer liability even in self-funded plans. Additionally self-funded plans are usually capped and any thing over the cap is covered by stop-loss insurance. the purpose of the stop-loss is to take care of the unexpected and/or any catastrophic claims. This is another reason why there is no employer liability. What did I miss?

LarryM Even if blended, which I think most plans are, the OP stated that the premium was employee paid (employer contribution is being considered but not now a factor). If the plan is fully insured and the employee pays the premium, How can there be any employer liability? If the plan is self-insured and the employee pays the premium (imputed cost), it seems obvious that the premium would have been actuarially determined and set at a level that would negate employer liability. I thought that that was the purpose of using actuarial calculations in cases like this? If the premium is set too high and the retiree cannot afford it, then the employee would not enroll and therefore would not be covered by the plan. If a retiree is not covered there can be no claims liability. So again, How can there be any employer liability? What did I miss? jsb Bear in mind that this is not the usual "old age" retirees. These will potentially be working age fairly young retirees. Even in their early 40s. This lower age "retiree" group should mirror the active employees in both age and health and should have the same claims and utilization profile.

http://www.irs.gov/pub/irs-drop/rp-06-27.pdf

I have not read it as yet, but isn't the new Revenue Proc 2006-27 applicable in this case? http://www.irs.gov/pub/irs-drop/rp-06-27.pdf

I doubt that it will be possible to waive fees, commissions etc. Many Rep contracts are not very flexible. The usual "solution" is to have another agent write the deal. Remember that the deal will be with the company as plan sponsor not with the mother as an individual. The son can then be the enrolling agent for everyone other than the mother. The erolling agent commission/fee split can be changed to give all the "writing agent" commission to the son.

I have not read the RR, but I am not surprised. Disability Waiver of Premium is getting the same treatment that Disability Income Rider gets in PLR 200339015 etc and Return of Premium gets in Cancer and other plans in TAM 199936046. The reasons are mainly because of the employer contribution and that the benefit is not for either medical expense nor personal physical injury or illness.

As far as I know it did and that is why it is has not since been allowed in section 125 cafeteria plans. However, that does not mean that it could not be employer paid and deductible as an expense by the employer. I think that the premiums paid would be includable in the employee's gross income and taxable, if not, I am not sure that the benefits would be tax free. But I doubt that this is what the OP had in mind. Usually I see legal plans paid by the employees on an after tax basis. The employer only provides the payroll deduction facility thereby getting group qualifications. The better legal plans (Hyatt and ARAG) are all group plans as far as I recall.

The DataPath software should also be able to handle it quite easily and with good technical support. Try www.dpath.com and see if they can give you some TPA users.

Just in case I really had become out of touch, I gave you the benefit of the doubt, but as quite often has been the case I cannot find any support for your position. Aside from Mom & Pop's, closely held, 1 man entities etc, which really do not use Boards or have Board meetings of the sort being discussed, I have not been able to find or come up with anything that would indicate any "limited time". Board meetings are apparently both pre-scheduled and as needed. In other words a Board meeting is called when 1 is needed in addition to whatever is regularly scheduled (e.g 2nd Tuesday of every month). Board meetings last as long as they need to last. They are not set to meet for a finite time. No 2 hours and we are out of here. Although there will be an agenda of scheduled items that will be addressed, there are usually open items, whether motions for items for the agenda of the next meeting or current items that are addressed although not on the current agenda. Invariably the floor is open for motions. In other words the Boards that I can find meet when needed for as long as is needed to attend to matters and are not subject to the "limited time" and restrictions that you see in the Boards that you are so much in touch with. I wonder what the experiences of others are? As for "Adoption of welfare plans do not require board action it because it is not material to the companys' operations." That is the point. Boards do not handle the day to day operations, so since adoption of a welfare plan is not material to the operation, it is therefore a Board matter. You cannot have it both ways.

Yes, but ALL EEs pay 7.65% up to the SSTWB (wage base limit), which is about $94,200 for 2006, BEFORE it drops to 1.45%. So at the start of the calculation ALL EEs are included at 7.65% then a few will drop down to 1.45% when they reach the wage limit.

Which EEs have only a 1.45% rate? The devil is in the details.

Don All I can say is Huh? VEBA trust? "Deducting claims from future benefits"? "for this is a defined contribution plan, not a defined benefits plan"? "Just as in a retirement defined contribution plan, the more benefits you use, the lower is your total benefits."? What are you talking about? Employer health plans are invariably group health plans. They are either fully insured or self-funded. If they are fully insured the coverage has to be available from an insurer who has a state approved policy. The rest of what you posted ....well.. some of us have tried to explain health benefits to you many times before, apparently wothout any success. It makes no point to go over ground that was already recently adequately covered by me and others.

Don Where would the employer get such a plan? How does that solve the "young" retirement and keep till I die regardless, problems ? What does 2 years for eligibility have to do with the retirement eligibility of 20 years etc? What would cause any employee to contribute for 2 years while having no coverage and possibly no tax benefits ? How would your suggestion affect/discourage adverse selection? In any case, Can you have a group plan in which benefits are controlled by individual claims made? Wouldn't this be discrimination against those who submitted claims? Is such discrmination allowed in group plans?

Where is the employer liability? Will you be able to get an insurer to provide this coverage? I see them declining for fear of adverse selection. Imagine someone who started working there at age 22. They would be eligible for retirement at age 42. If they decided to "retire" and go start their own business, instead of having to worry about securing individual health or small business coverage, they could opt to stay on this "retiree" plan. This is even more likely if they have a medical condition that restricts health insurance availability. I see the plan as getting loaded with adverse selection in a hurry. You need 20 years PLUS a minimum age, at the least, and end coverage upon Medicare eligibility.

Aside from 213 not being in control of what is reimburseable under 105, what is reimburseable in this case might depend on the particular facts. Why is the autopsy needed? Who will be autopsied? If the autopsy is needed in order to determine a genetic or hereditary disposition towards a suspected medical condition in the surviving plan participant, then it might be regarded as being for the diagnosis or the treatment etc of a disease. If the autopsy is to determine cause of death with no connection to the medical condition of the surviving plan participant, then it should not be reimburseable.

PiP Thank you. It helps but it still leaves me with the issues of fiduciary responsibility to follow the participant's directive, namely to send the money to the selected investment. Sitting in a Trust etc does not meet that requirement and while it is there it also is not under the control of the plan participant who owns that money. I wonder if anyone knows of or can easily find any cases where the DoL did do what wsp wonders about and fined etc for a breach or any court cases. As wsp puts it "And, since the money is in a trust account there is really no reward for this liability risk...why would you do it? ".

I do not know and have not seen it done but that could be because an employer doing this would not be readily visible. I do not think that a SEP would normally have the no vesting, non forfeiture and other features required of plans used for DBRA. But that does not mean that it could not. I suggest that you contact any of the TPAs that handle large numbers of DBRA plans and see if they have such a SEP and if not Why not? Why are you making a connection between employees on DBRA projects and employees who are not? They cannot/ should not be in the same plan, would not be working on the same projects and also do not have the same payscale etc etc, So why the connection?

Pensions in Paradise Where can I find an explanation of what is meant by "deposited" ? Deposited where, why and for what purpose?

You disagree with what? Whether or not there are 2 standards is irrelevant. My car uses both oil and coolant. That they are different is understood but irrelevant. When fluid levels are checked BOTH are checked. As a previous poster experienced in an audit, BOTH get checked. It did not matter that there were different standards. In any case, you still have not pointed out what these standards are and their application as far as this thread is concerned. You stated that "This is why the correction is along the lines of a prohibited transaction" regarding the segregation issue, but you again evaded the other issue. How would the investment delay issue be resolved?

Think about it. Of what use would it be to just segregate the money? The purpose of the rule was to get the employee's money to where it was agreed to send it, namely, the selected investment. This money either belongs to the employee (employee deferral) or was promised (employer match etc) to the employee. It no longer is the employer's money, is it? Taking from the employer and depositing it into the plan's account would still not get it to where it was originally agreed that it should go. It was agreed that it should go to the selected investment. As I see it, the purpose or intent of the rule was to get the money to the investment asap. So just getting it from the employer's general assets etc would not complete the picture and satisfy the intent. That means that BOTH the segregation and the depositing to the investment have to be considered together.

If it was his/her check being used to return the money to the IRA and it bounced, a redeposit after the 60 days would still be after the 60 days so Why would it be a non-issue? Wouldn't that depend on when the Custodian records the receipt of the funds? If the last day of the 60 days was April 8, but the Custodian received the check on April 7 and recorded that as the date but the check bounced after being deposited on April 10 with notice being sent to the Custodian on April 15. The Custodian or bank does not do automatic redeposit so the check is sent back snail mail to the Custodian who receives it April 18 and then redeposits it on April 20. How will the Custodian record the transactions especially the date of receipt. This is clearly after the end of the 60 day window. But it could very well depend on whether or not the Custodian changes the date of receipt because of reversing the original entry. A slightly worse situation would be if the transactions occurred at the end of a month and overlapped into the next month. In that case the entries most likely would be reversed. Think of what would happen if the check bounces again and now cannot be further redeposited. Can it be claimed that the payment was even made just because a check was received? Does it not matter if the check is good?

leevena Let me try agin, but first I will start with a fully insured plan in which the employer pays 80% and the employee 20% of the premium (health plan cost). The fraud would be committed against the insurance company not the employer and not the employer's health plan or plan sponsor. Prosecution would be at the discretion of the insurance company not the employer and not the employer's health plan or plan sponsor. Now consider a self-insured plan. The only difference is that there is no insurance company insuring the benefits (the covered services). Everything else is the same, is it not? The employer is still the employer and the plan sponsor but is still not the health plan. There are employer duties, there are plan sponsor duties. These are separate entities. Then there are the adjudication etc duties, those are now performed by the TPA (Claims Administartor) and still not by either the employer or the plan sponsor. The fraud is committed against the entity that pays the claims, since it is a false claim whether it be for coverage (ineligible individual) or services rendered. The entity that pays the claims is not the employer but the health plan.