GBurns

I do not understand your issue. I thought that the P&C 10% etc was commission rate not fee structure. In my experience compensation is as per and provided by the insurance companies or claims administrators not by the Plan Sponsors, although in large enough plans that are bid, the PS can try to limit the amount of compensation that will be paid to agents etc. This compensation is usually a commission % although in self insured plans it is often a $ per head compensation rate, but still not a fee structure. Fees that I see paid by Plan Sponsors have nothing to do with the compensation paid by the providers, whether self insured or fully insured and sometimes are paid in addition. There are some states that require a different license if there is a fee structure since fee structures are usually caused by consulting as opposed to compensation caused by selling. Fee = consultant. Commission = Sales Agent/Broker.

In other words, 1. They might not have been eligible to receive the entire balance amount because they might not have been fully vested and therefore only entitled to a portion of the account balance. 2. Taxes or something else might have been withheld. 3. It could have been a partial distribution with more to follow. Was there any accompanying explanation?

SoCalActuary Just do a Google search using terms such as ""abusive tax shelter" KPMG" ""abusive tax shelter""law firms"" ""abusive tax shelter" law firm opinon" and that should give you a good idea of the number of lawsuits that have taken or are taking place since 2002 involving such names as Sidley Austin, Jenkens, Locke, Sullivan, KPMG, E&Y, PwC, BDO, UBS etc. And what you see should not include some cases that were settled or which are related to other issues such as COLI programs etc. What the outcome and what the liabilities will be is something that I guess we will have to wait and see although KPMG and some law firms are trying to settle.

Regulating insurers and insurance policies has nothing to do with developing or designing insurance policies. Regulating insurance policies has nothing to do with designing employee benefits including health insurance benefits. I do not understand what you mean by "experimental policies" and am not able to find it as you cited. Can you provide a link so that I can see what it might mean rather than speculate? The links that I use to read the Texas Insurance Code are: http://www.capitol.state.tx.us/statutes/i1.toc.htm http://www.capitol.state.tx.us/statutes/in.toc.htm In neither of these can I find any mention of "experimental" policies. I am also at a loss to understand what you mean and see as "tension". As far as self insured health plans are concerned, whatever exists between plan sponsors and state regulators, exists to almost the same extent between plan sponsors and Federal regulators and regulations. A self insured health plan does not exist in a vacuum and have a free to do as it pleases mandate. There are regulations there too which also include coverage and benefits mandates along with other restrictions.

Steve, Thanks for clearing that up. I could not find where you even implied such a thing.

Steve Don somehow has arrived at the understanding that you " have had little success convincing them of their latitude to do so is more of a dearth of their willingness to dialogue, rather than their legal inability to do so." Can you clarify this? I must have missed where you stated or implied this. Don, The fact that a plan is either an ERISA or a Non-ERISA has no bearing on what state regulators can do or are willing to do. An employer, in fact most if not all employers, most likely have ERISA plans. If this ERISA plan provides the benefits or coverage through an insurance policy, then, in general, the state insurance regulators have jurisdiction over that insurance policy. They still do not have jurisdiction over the employer's plan. Being an ERISA plan has nothing to do with the insurance policy. ERISA does not mean that the employer's plan is self funded. Insurance is not provided "through fully insured ERISA plans, or self insured ERISA plans". It is the benefits (coverage) source that is provided through insurance or self insurance. The state regulators have no latitude to explore innovative ways to provide insurance, it simply is not within their jurisdiction nor scope. I also do not see waht innovative ways to provide insurance has to do with innovative ways to provide employee health benefits. Insurance is not benefits and vice versa.

At $50 it should not qualify as a gift and since it is not a reimbursement of a medical expense, it seems that it should be taxable income, but that is just my off the cuff gut reaction, I really have not looked into it. A problem I see is who and how it gets reported or even recorded. The vendor would not be reporting it on a 1099 and the employer seems to have no way of including it on the payroll or otherwise. That leaves it up to the employee. I would have thought that the answer and legal support for any position taken regarding the taxation, should have been provided by the vendor as part of their technical support. You might also want to ask a few of the large firms that have a similar program, How they treat it and why.

FLMaster I was not aware that any state approved policies for specific uses. Which states have approved what policies for use as 412(i) policies? As for the law firm slipping out the back door, that should only be temporary and I wait to see what action will eventually be taken against them. KPMG etc and the law firms that supported those tax shelters certainly are not escaping the consequencies of their opinion letters as yet and neither should this one.

On large groups it really is case by case and driven by competition or negotiation. Generally across the country it seems to range from 1% to over 6% in total paid out, however as Mr. Spitzer has pointed out some or more is sometimes hidden or imbedded under other items. It also depends on the level you are looking at. There is the Writing Agent/Broker, the General Agent, the Managing General Agent, the National Marketing Organization or IMO, etc etc etc all taking a piece of the pie. So it depends on whose commission level you want to find out about. The only general source of information that I have come across, is what was filed with the state regulators for the product approval. Usually there is a Matrix that covers the pricing with commisssions at levels starting from even 0% and going up to the maximum planned. However, that max only covers what is being termed as commissions. Other terms can be used which cover "other" producer compensation. I have seen things such as brochure design and brochure delivery costs paid to agents as a way of keeping the disclosed commissions at a level acceptable to the unsuspecting client.

I suggest that you take heed of leevena's advice. I do not think that any employer should get involved in claims adjudication. Be the last point of appeal but do not handle the day to day decisions etc. Plus there are the privacy and notice etc issues that might apply either now or when larger.

But in this case the employee is being reimbursed for a medical expense. It is not the employer discounting an employer service or item which is what I think 15B refers to. It is the physicians etc who will be invoicing the employee and providing the service (item) at the rate available to the "public". The employer will not have any input into what the physician charges and the employer will be providing nothing and invoicing (charging) nothing.

I think that it is the health plan that owns the data not the employer. There is probably a struggle not because of ownership of the information but more likely because the TPA has reservations about turning over this detailed personally identifiable PHI to the employer who has no ability to use it and therefore no reason to get it. There probably will be no problem with the TPA if the information was being turned over to a service provider who enters in a Business Associate Agreement or is a health plan or otherwise eligible party. In fact, I have heard opinions that giving such information to most employers would be a HIPAA and state privacy violation, mainly because most employers are not set up in the manner required for privacy issues assuming that they have an acceptable reason to receive it. As for the ability to actually create the data in a useable format, that is another story. Although it seems that most of the software packages have such reports as standard reports or easily created reports, surprisingly, there seem to be a number of TPAs who do not know how to use their software. Every time that I find one I then have to shudder at the incompetence of the claims adjudicatiion etc. You should find it much easier if the request is made by and the format dictated by the "external vendor" who will be doing the analysis etc.

leevena I am curious about where you found out that section 105 MERPS "..... were used primarily in the ag business, mostly small farmers". I have never heard that claim before and do not remember even AgriPlan saying that, but who knows?. I have no opinion, I am just filling my research and knowledge, so to speak.

oriecat Why 20%? latwz Why would the reimbursement of an identifiable and substantiated medical expense be wages? From your figures I did not see any amounts that were excess reimbursements. You might be anle to get some thoughts from a somewhat relevant PLR such as PLR 19915054.

It looks like what you have is a simple section 105 Medical Expense Reimbursement Plan. You should be looking at the Treas Regs 1.105 in particular and Rulings related to these. Where have you been looking?

Don, Maybe we are just not understanding the language and terminology that you use. What difference does ERISA make to the funding of a Plan? Why do you think that "ERISA provides employer freedoms in designing plans" ? How does ERISA do this? There is nothing wrong with any insurer taking any requested modifications to any Dept Of Insurance for approval. But that insurer has to decide whether to use Riders or a new Policy with which to file the application. But even before that the insurer has to determine the actuarial impact and rates etc. Before any of this is done the insurer has to decide if it is worth the effort in the first place considering the considerable costs involved and the time lag. The end result is that it will be very rare, if ever, that this is done. It is just not practical to accomodate ad hoc employer requests for modification of existing policies.

Don, You are still not understanding that there is a difference between the employer's ERISA plan and the health benefits coverage (fully insured or self funded).

Yes. In a nutshell, in a fully insured plan, an employer is limited by what is available from the insurers, and the insurers are limited by what has been approved by the state or what is practical for them to seek approval on, whereas in a self insured plan the limitations depend on what the limitations are and the effect on the overall viability of the plan, keeping in mind any federal mandated items.

leevena points out that it will be a question of "is the employer doing it correctly?". but there might be more to this issue than those things listed. This discount is being given only to children. Nothing is being given to other dependents such as spouses. Nothing is being given to employees who have no children or who cannot afford family or dependent coverage. The discount will only be given to those who have children AND who can afford to have family or dependent coverage. To some this means that the employees most in need will not benefit whereas those who can already afford more will get more benefit. Could this be regarded as being discriminatory? Could this raise 105(h) and other issues? I guess more information really is needed.

It is irrelevant that "You can't pay premiums out of an FSA anyway." and I do not see where anyone said that it would or could. The OP and stated that dental insurance will now be offered and also asked if this would allow employees "to change their elected amounts?" It is doubtful that the question related solely to FSA unreimbursed medical spending account since the OP used the phrase "change their elected amounts". IMHO the use of the plural "elected amounts" implied more than 1 amount and I interpreted that to mean BOTH premium and FSA. In any case the employee would first have to enroll in and then pay the dental onsurance premium in order to be covered by the dental plan. Normally and usually such dental insurance premiums would be paid through the section 125 Cafeteria Plan and therefore their elected amount (salary reduction agreement) would have to be changed, wouldn't it? The OP wanted to know if the election could be changed and my interpretation was that there were 2 different changes in question: 1. Change of election for the additional dental insurance premium, and 2. Change of election for better handling of out of pocket expenses using the FSA in any of the ways that QDROphile points out. Do I have to address every issue? No. Am I free to give an opinion about a selected issue or aspect ? Yes, I think so even if you, Kirk, did not give permission.

I thought that this would be allowed as a significant coverage change under Tres Regs 1.125-4(f) 3)(ii). You might want to run it through www.changeofstatus.com and see what comes out or run it through EBIA if you have access.

Kirk As usual you state that I make erroneous or otherwise postings, but you never state what is wrong, why it is wrong nor what is correct. Is it that you are afraid to state your facts because someone might show that you are wrong? Is it that "the giving of tax advice, tax planning and opinions on the IRC and Treas Regs, was not the practice of law"? If that is the case, How do you account for CPAs, EAs, KPMG, E&Y, Jackson Hewitt etc etc.? Is it that "there are Bar rules apply to lawyers regarding tax matters "? Is it that I saw that "the document/contract which could create 2 separate issues"? Come on, Have some guts and state your position instead of making your usual cowardly type of attack. At least this one is not like the many others that the moderators have had removed..

It might help if you name the particular countries that you are interested in. The term international benefits is rather vague. Also consider that some European countries have national health coverage, or are welfare states etc.

In your experience, where do you usually see the language that the OP is seeking? I have been out of that market for quite a while but I recall that it occurred in more than 1 place, the SRA, the payroll agreement, the enrollment/participation form and the blanket Hold Harmless. ********* The Hold Harmless is usually required by the SD as a condition of getting the payroll slot. Without a payroll slot there would be no salary reduction hence no payment of premium etc. except for transfers between providers, of course.

Isn't such wording already part of either the SRA or other documents that the employee had to sign when enrolling with each provider product?