Christine Roberts

A participant in a group health plan via a Sec. 125 cafeteria plan switched (outside of open enrollment - the insurer made an exception for her) from a HMO option to a PPO option, in order to obtain coverage for 'natural childbirth' benefits. After the child was born, the employee added the child as a dependent under the PPO, then asked if she could switch back from the PPO, to the HMO, because the PPO was too expensive to maintain. My understanding is that the birth of the child created a late enrollment event allowing the employee to add the child to *existing* coverage, but that switching back to the HMO is not permissible under the irrevocable election concept. Would the answer be different if the employee held off on adding the child as a dependent, unless and untill the employer could guarantee the switch back to the HMO??

NFP employer with existing ERISA 403(B) plan is amending matching contribution formula to base matching percentage on years of service w/employer. The proposed formula passed preliminary non-discrimination testing. If plan demographics change, is cross-testing a permissible alternative means of passing nondiscrimination testing? Are there any prototype 403(B) plan documents out there that contain the necessary language??

A single-participant DB plan is terminated in 1985 and a favorable Determination Letter for the termination issues 2 years later. However, plan assets are not distributed due to difficulty of locating IRA custodian/trustees for certain unusual plan assets. Plan continues to file Form 5500 EZ to current day; plan assets remain undistributed (but IRA custodian/trustees now are equipped to house plan assets). Due to ongoing existence of wasting trust is it necessary or preferable to re-terminate the plan? Or simply file final Form 5500 EZ?

Employee has a dependent child (age 19) on the group health plan. Dependent child will be getting married and is pregnant. My understanding is that the spouse and child can be covered under COBRA only if (a) the dependent child loses dependent status (which will happen under the terms of the plan when she marries) and elects COBRA; and (B) the formerly dependent child also elects coverage for spouse and child. In other words, the daughter's marriage is a qualifying event in that it causes her to lose dependent status, and hence group health coverage. A related thread is: http://www.benefitslink.com/boards/index.p...t=ST&f=4&t=6926

The discussion of SSNs is a little bit of a detour; I am familiar with the problems and arguments this issue raises. I am more concerned with general opinion re: means to opt out of Social Security/medicare withholding. My research suggests the From 4029 is the sole legitimate means of doing so .... any other opinions??

Generally it is just objection to the entire federal taxation scheme. Often this is teamed with a refusal to provide a SSN.

It is my understanding that the only grounds for employees of private employers to opt out of social security is as a member of a "recognized religious group," and that it is necessary to waive SS benefits by executing IRS Form 4029. I am seeing an increasing frequency in clients' employees claiming exemption from Social Security taxes and want to make sure that this is the only approved means to opt out of the system. Any comments appreciated.

An employee of "Company A" who is on extended workers compensation leave is paying his portion of group health insurance with after tax money. Company A is continuing to subsidize its portion of coverage. Employee's spouse has lost job with Company B and employee wants to add her as a dependent to his plan, in lieu of her selecting COBRA with Company B. Can Company A require its employee to pay the full portion of dependent coverage for his spouse (no employer subsidy)? I am presuming there is no way to force the spouse to elect COBRA coverage.

Gentlemen, thank you for your comments. To take matters slightly off-topic, would a participant's ability, with the employer's mutual consent, to modify the definition of "normal retirement" (which is also a trigger event), cause constructive receipt? From EAKarno's second post it would seem to be OK (i.e., no constructive receipt) if the parties agree to the changed definition before the participant reaches normal retirement age as originally defined under the plan.

What are conditions imposed on a NQ deferred comp. plan if the sale of the sponsor's business is an event triggering distribution?

Employer offers signing bonuses to new employees but bonuses are not paid until after employee completes 90 day introduction period. For an employee hired in November, 2001, who completes her introductory period in February, 2002, would the signing bonus be included in her 2002 income, or the year prior?

Is an employer responsible for covering the delivery expenses of an employee who is acting as a surrogate mother? The employee is otherwise covered under the employer's group health plan. I would think that the delivery is not a covered expense since the surrogate motherhood is a "business venture" outside of the employee's employment. Any comments or experience with this issue?

If an employer offers a Sec. 105(h) self-insured medical expense reimbursement plan to HCEs only but provides a fully flexible Sec. 125 plan for rank and file (which includes a medical expense FSA), can nondiscrimination testing of the Sec. 105(h) plan take into account the rank and file employees' participation in the medical expense FSA?

An employer sponsoring a self-funded plan (stop loss coverage only) subsidizes 15% of premiums for active employees, and 0% of premiums for COBRA recipients. The employer recalculated its group health premiums and found it had to raise them substantially. In order to prevent passing this increase on to the active employees it is increasing the percentage it will subsidize to 20% of the increased premium. However it is passing on the increase to the COBRA recipients. Since the premium amount is the same for actives and COBRA recipients, this still meets the "similarly situated" requirement, does it not?

Duty to spouse would not be contractual or based on any employment law principles but would come from community property laws, particularly where spouse has asserted (e.g., by notice to the employer) a community property interest in stock options granted during the period of the marriage.

An executive (living in a community property state)with a variety of stock options and deferred stock is in the process of getting divorced - is his employer potentially liable to the former spouse if the employer allows the executive to exercise stock options during the pendency of the divorce?

Does anyone know the citation to the rule that if an employer does not comply in full with all aspects of ERISA Section 404©, then the exclusion from fiduciary liability is not available??

Employer provides several group health benefits, including group medical and a cafeteria plan, and files separate 5500 forms for each plan. Employer wants to consolidate plans under a "wrap document" so as to file a single Form 5500 with applicable schedules (e.g. Sched. F for cafeteria plan). Provided employer adopts wrap document before the end of the applicable plan year(s), can it file a single 5500 for that year? Or does the existence of separate plans at any time during the applicable plan year require that the employer file separate Form 5500s for each separate benefit?

Would a tax-qualified retirement plan covering only partners be required to comply with ERISA; i.e. a 401(k)/PSP limited to partners of a p'ship?

A client in the health field operates a self-funded plan and is inquiring as to how to handle requests by employees to see care providers who are also employed by the client -- evidently the dual rel'shp. doctrine is a byproduct of the psychiatric and drug dependency fields (i.e. for ethical reasons, co-workers should not also have physician/patient rel'shps.) The question then becomes, should this doctrine extend to less privacy-sensitive forms of treatment, such as dental care, acupuncture and the like? I believe the doctrine originally came from either (a) insurance law principles or industry protocol or (B) rules of professional responsibility in the medical/psychiatric field. Or a combination of both.

Is anyone familiar with the "dual relationship" doctrine that discourages provision of certain types of health care (e.g., psychiatric/drug counseling) between co-workers, where the caregiver and the patient are both employed by the health care organization that sponsors the [ususally self-insured] group health arrangement??

Can the assets of a terminated Money Purchase Pension Plan be transferred to a defined benefit plan sponsored by the same employer?

Kip, your point is well taken about the types of differences in coverage making a difference. Ideally, the employer should probably present employees with a chart comparing coverages, copays, exclusions, lifetime limits, and the like, before the employee makes a final decision about COBRA versus the less comprehensive plan. Here is the thing that confuses me - if the employee is "upgrading" from part time to full time, is there any qualifying event?? Should COBRA be offered nonetheless because of the premium increase required under the full-time plan? Finally, according to the Paul Hamburger COBRA book, if alternative coverage is selected in lieu of COBRA, no further COBRA need be offered to the employee upon termination of the alternative coverage, but only to dependents of the employee upon his or her death or disability. I dont think this rule should apply in the PT-FT situation, but it appears to be the technically correct answer for alternative coverage in general.

Kip, I agree w/you re: no obligation to subsidize COBRA. What I am wondering now is whether the part time coverage constitutes "alternative coverage" for the employees switching from full time, such that there is NO further COBRA obligation to the employee if the employee rejects COBRA and takes the alternative coverage. As I understand it the dependents get a COBRA election if the employee dies or is divorced, even after the 18 month period, but when the alternative coverage ends for reasons other than the employee's death/divorce, there is no COBRA obligation. In the case I am dealing with there is a lot of switching back and forth between FT and PT and I can't think the employees doing so would expect to forfeit COBRA coverage simply by accepting the alternative plan. Do you have any thoughts in that regard?

Kip, I agree with your analysis. I was thinking of this Q&A -- http://www.benefitslink.com/cgi-bin/qa.cgi...feteria_plans-- but that involves dropping coverage during mid-year upon joining a spouse's plan. Thanks for the reply!