GBurns

I read the posts as being regarding an operational failure rather than a qualification fialure.

Since W-2s are involved, I have to ask, How long did this go on for? I have no answer for you. This is something that defies imagination especially if it went on for many pay periods without either the participants, the payroll dept, the accounts payable dept or the bookkeeper and accountant at the end of 1 of the periods either month or quarter, noticing it. I wonder what was the authorization used by AP to draw the checks and then How did the Bookkeeper made the entries?

I do not think that the Cadmus article explains enough about the refusal to cooperate in order to use it as precedent etc. Additionally Cadmus and any others are all still new and have yet to be tested with litigation or otherwise. I am curious to see what responses you will get. I have always wondered about how far an employer can go with "during employment" medical testing without violating ADA which requires that it be job related and consistent with business necessity. And since there will be many who will not be covered under ADA, I wondered about those who are covered under such things as the Pregnancy Discrimination Act. Then if the employer makes concessions for those under ADA or PDA, will that be discrimination or reverse discrimination against the others? I also wonder how it squares with HIPAA and the state version of "HIPAA"?

Yes, I have heard it used but that was always by persons who knew very little about employee health benefits. Some were promoting such things as a Coordination of Benefits program used to reduce claims much in the same manner that this Broker is doing the PM. That program had much potential but never got anyhwere as far as I know because of the lack of knowledge about health plans. The term health plans includes MERPS. A "high risk MERP" has meant a MERP that covers only high risk (cost) individuals. I have yet to see 1 that passes 105(h) and 125 non-discrimination etc. In fact, I have yet to see 1 that was eventually implemented, anyway. There were other ways of getting the same result or better. It seems that products sell better if there is an acronym or a buzzword. Plus it is easier to appear exclusive if you use terms that seem that way. The idea should not be to remove "high cost" persons, but to arrange more economical and effective care. These can be done within the confines of what you already have with some tweaking and supplementing.

It's George D. Burns. As also pointed out by leevena, it really is not new. I have used it to determine the potential for a DM, C of E, Carve-out Rx, checking employee utilization, provider effectiveness, provider competence and other things. Primarily I use it for determining cost reduction strategies. Using PM you can see where the money is being spent which is the first step in trying to reduce the costs of providing employee health benefits, isn't it? That in a nutshell is what I use it for, without giving away some "secrets" of my strategies.

I agree, you need competent counsel not only to represent you if there is any action that can be taken but also to explain to you the inconsistencies, errors and/or questionable items that you have posted in this thread. It is always better to understand terminology before forming opinions.

You missed his point. If PA allows no MEWAs or METs therefore under what license or Certificate of Authority is this Association operating? There have been others before this Association that he has shut down for being Unlicensed Entities. Do a Google search on "Pennsylvania Unlicensed Entities" and you will see some of these statewide associations who mainly sold to employer groups and which he took action against. Some were fully insured even by some of the same insurers involved with this association. NJ also took many actions that negated the need for PA action. As in most of those cases people did call in to the DOI but their questions did not get them the answers that would have protected them even though the answers were correct. It was the questions that were wrong. I suspect that his responses were conditioned by what you told him, which might have steered him in the direction of answering that which you asked and not that which would be related to the actual facts of the situation. But whether you have valid coverage is still a separate issue from your premium remittance issue. What does it natter and what would you be able to do anyhow, if your employer has/is violating ERISA or state law? You cannot fire your employer. You cannot fine your employer. BUT your employer can fire you possibly even for just being a nuisance and creating an issue on the worksite. So I wonder why you are even pursuing this, when there is nothing that you can do about it? The simple solution is to change your method of paying the premium.

Nothing new, it has been around for years but just starting to get used for a few reasons. We have been doing it when useful since 2000. Such Predictive Modeling is available from many sources and should be even available from your current claims administrator. If not any of their competitors should be able to do it. The problem is that most might not even know that they have the capability. Other than that, there are a few other providers available. As far as I know very few would require any sort of confidentiality or non-compete agreement (which is what I think you are really being asked to sign). The biggest potential problems might be employee reluctance, availability of required coverage and ADA violations. What would you be advised to do if an employee who is currenly under care for major cancer (or any other high cost, disease) refuses to change? Additionally since this is self funded, what will the stop loss insurer say? You better get that answer before you even start thinking aboutlooking at this program. I am curious as to why this Broker thinks that it might be necessary to have these "high cost" employees in a separate plan when you are self funded. I supect that your Broker either does not quite understand the issues and is making it more difficult than necessary. But then again, I do not know what his provider told him or how they think it needs to be done. Think about it, If you implemented a Disease Management program or a Center of Excellence provider program, you would be focusing thes on exactly those same "high cost" employees, wouldn't you? You would have identified them in a very similar manner to Predictive Modeling, wouldn't you? To do any of these you would not need to put them in a "separate" plan or much else,, would you? I am also suspicious of what you are being told about DoL and state non-discrimination. That person might just have been looking in the wrong direction. What about the IRS with sections 4980, 105 and 125 etc? Are they considering HIPAA as being DoL? Lots of questions to be asked. But you might get simpler easier answers using other providers of this service who might also have more answers and more experience. I noticed that you only contacted 1 other prospective client, Is that all that this company has or is that all that this Broker has? You might want to use what the company has instead of what the broker has as referrals. Of course there are some providers who give no references or referrals for a number of valid reasons.

I see many problems in your approach. If you call your DOI as you did you will of course be referred to Dol/EBSA as did happen. The reason that you were referred there was probably because you asked about ERISA governed Life Insurance. There is no such thing. ERISA governs the plan NOT the life insurance policy. Your state DOI governs the life insurance policy. Did you find out if the Association is authorized as such in your state? Did you find out if it was a MEWA or MET and was it authorized to operate in your state? I suggest that you call your state DOI division that handles such items. Probably the person to speak to is Victor Dicicco at 717 787 4372. Telephone Customer Service Reps will not be able to tell you much especially if you keep giving them your interpreatations instead of just giving the facts and letting them make the decision as to what is applicable. I also suggest that you separate the issues both in your mind and in your correspondence, especially with the DOI and regulators. ERISA and it rules might or might not apply. If you keep assuming that ERISA applies and is the only way to find the solution, you will be severely limiting yourself. If the answer or easiest solution is in your state labor laws, state insurance regulation or in the employer agreement, but you were pursuing the ERISA angle you will never resolve the issue. Who knows, you might have an ERISA plan but no insurance coverage because your state does not allow it in the first place. By the way, How do you know that the association is state wide and has thousands of employers? Because a brochure or website says so does not make it so. Nor does a name make it statewide. In any case your premiums are paid after tax and the policy is portable. Have you asked the insurance company to deduct from your bank account or credit card instead of through payroll? This way you would not have an employer holding up the remmittance of your premiums.

What are you hoping to find that would help you in selling 401(k) plans that you think that you will find by looking at F5500 without first having something to follow ( a specific purpose)?

QDROphile Are you saying that it could be done at open enrollment but just not mid-year?

Why an HSA instead of the FSA, or IMHO, an HRA? I would do a comparison of actual costs for each before choosing any 1 over the other.

Is this "splitting" of the employer contribution okay only because it is the spouse? Would it be okay if it was some other non-relative employee? If so, just so that I understand, you are all saying that an employer could also split this so that the employee gets $5,000 and the owner gets $53,000 as long as the Plan Document has such an allocation formula, of course subject to whatever the limit has to be for any non-discrimination etc?

Shouldn't the employer contribution be a per particpant calculation rather than on a total payroll basis? What allows equal sharing?

Your analysis is as complete as it needs to be. There is not much that can be added. This situation seems to be quite acceptable in the Hawaii market and seems to work well for them. Hawaii's DOI does have a very good record regarding protecting the public from things that do not work well or which present questionable exposure or risk to its citizens. They have had only a few bad incidents so it would be hard to justify any change especially a change that has no proven track record of being better than what is already in place and well understood.

I trust that you meant "Long Term Care" insurance agent. I was referring to group health/medical insurance agent. Notice that the thrust of the EBSA publication is Get the documents, read the documents, consider seeing a lawyer.

I have not seen a recommended procedure and doubt that there could be one since it is a facts and circumstances driven issue. What might have been promised and how it might have promised could differ from employer to employer. What I do recommend is that any employer who desires to take such action should seek competent experienced legal advice. ********** After I posted, I wondered why an employer would want to do this especially a small employer. How many retirees and how much money is involved here? What will the effect on morale of the current employees be? Also since a small employer is quite often owner operated or family, wouldn't stopping retiree health benefits also have the effect of also stopping the benefits when this owner and family members retire? At only 25% of premium it might be a case of cutting off one's nose to spite one's face. I am sure there are other ways to handle this cost. Maybe this employer just needs a better insurance agent and also possibly better tax and business planning.

Sometimes it is necessary to ask more questions just to make sure that we understand and are on the same page. A salary reduction is an amount that is deducted on a pre-tax basis (such as Cafeteria Plan employee contributions) whereas salary deductions are after taxes are deducted from your paycheck. Only certain types of plans can use salary reuctions. It makes a difference and it helps in trying to understand. I will assume that you pay the premiums after tax and they are therefore salary deductions. I have not yet come up with an answer regarding ERISA since there were issues that I did not yet understand. The state payroll law issue seemed to be of more immediate importance. From what you posted, I think a greater concern is whether or not this MEWA is legal in your state. In general, MEWAs are mainly state regulated. Many states do not even allow new MEWAs and those that do severely regulate them. As a result there are not many MEWAs in most states. Most of those that I see involve large groups and are therefore not available to smaller employers etc. From what you posted I get the feeling that your employer is fairly small. I suggest that you immediately contact your state Dept of Insurance to verify that this MEWA is legal. Then I would contact my state office that regulates payroll or labor issues to see what the law states about the payroll deductions. I am also curious as to what the documents that you were given state about who regulates this MEWA. Do a Google search on MEWAs and you will see why I have concerns. What state are you in and the name of the MEWA?

You still have not really cleared the issue. Is this a stand alone Voluntary insurance program that happens to use UL policies paid for by employee salary reductions or deductions? Or is this part of a Pension/Retirement Plan which has a Death Benefit or Benefit Completion feature which is provided through this UL policy which is paid for by employee salary reductions or deductions? Or is this some other type of program using this UL policy which is paid for by employee salary deduction or reduction? Is it part of a Qualified Plan or is it stand alone insurance?

I do not know the answer for sure regarding California, but I vaguely remember them as 1 of the states that has no licensing for TPAs for anything. I have to tell you that calling any DOI can be frustrating and the answer can change with each different person to whom you speak. I once went through the exact same thing here in Florida. Fortunately I was aware that there was a division in our DOI that did issue licenses and knew who was the head even though the person ( a Supervisor no less) on the phone who worked there was not even aware of that division. Florida licenses TPAs but the definition might/might not include section 125, FSAs etc. The divison head was sure that no license was required but that was based on his own personal opinion and not Department edict. There was nothing definitive but precedent. I then canvassed a number of TPAs who handled both 125 POP and FSAs to see whether they had a Florida license or not. I think it was slightly more than 50% who did not. Many of those who did, had done so for safety. The problem in Florida is one of definition. The definition of accident and health plans relates to insured plans and section 125 plans are not insured even though the products that are funded by the 125 salary reductions are. I hope that a couple of our Florida TPAs who post to this Forum will respond, at least about Florida. With their reasoning about Florida plus your knowledge of Texas, you should be able to put together a better picture regarding CA and how to proceed. Maybe you might be lucky and get some responses from CA TPAs. You might also want to ask your document provider and software provider for their input. I have used documents from MHM, in the past, and they were very helpful about many things even beyond what I paid for.

If you are not handling any funds and not adjudicating any claims, What will you be administering?

Was I the only one who "ran" with an item? I have a hard time with you using the title of a proposed website to determine anything about anything. Maybe you will next make decisions about other things by considering my last name.

Who else offers such a service? Who charges less for the same service? How did you compare the service, if you do not know where they are going to look for the money, nor even how they get paid?

A license to do what? Many states require that Claims Adminstrators and TPAs be licensed to administer the plans. The license is not for Cafeteria Plans it is for claims adjudication and handling of funds etc. I know of no state where the DOI is responsible for section 125 plans. What do you mean?

Shouldn't your state payroll deduction laws be also of concern?