lvena

You need to be very careful with the program you are describing. There are many laws (HIPAA, GINA, ADA, and maybe even local/state) that you will need to navigate. An employer can require the physicial if it is "job-related and a business necessity". This is allowed so that the employer can determine if the person can perform the essential functions of the job. If the reasoning behind the required physical is other than this, it should be voluntary. I don't know the specifics on this situation, but you might want to consider a Health Risk Assessment (HRA) tool over the physical. I like the HRA for a few reasons. To begin with, the physical can be time consuming and threatening to an employee. An web-based HRA can be easier and quicker. The employee would get their results and can react as they see fit. If your company has a wellness provider (medical staff, etc) the employee could contact them and see what can be done.

sorry, let me clarify. The trust is used for the segregating of funds (ee). I could have clairified my answer better.

There is no legal requirement that you use a trust. Usually what drives the employer's need for a trust is to either help with the segreation of funds and/or the need to keep reserves. Audit's should be done on any trust that holds funds, but not required if your using gen assets. Issues with the audits center around fiduciary responsibilities from ERISA, Sarbanes Oxley, or just wanting to make sure everyting is ok.

My guess is that the carrier has some kind of contribution/participation requirement, which would be violated by this action. So if your client changed contribution to 0, the carrier could (and probably would) cancel the contract. You may want to check your carrier for these rules. Administratively, this would be the easiest, no more health plan.

All true, but what I am pointing to is not the premium increase, but the "cost-share" increase. I could envision an argument "that since the 125 went away, the acual cost of the coverage was therefore increased to the emplyoee", and the govt agreeing.

Most of the wording I see is "cost-sharing", not premium. Let's look at an example. The cost for my share of medical family premium is $400 per month and my tax is 20%, so my savings is $80 per month. If the pre-tax feature is eliminated, my "cost-sharing" just rose by $80 per month. To pay devil's advocate by using a somewhat ridiculous example, if premiums were paid after-tax before PPACA and the employer gives the employee a raise such that the employee is in a higher tax bracket causing the employee's "cost-sharing" to go up, would that cause the plan to lose grandfathered status? Don't know for sure, as I mentioned earlier, and again, this is my own opinion. My guess is that "cost-sharing" would be defined along the lines of "what an employee's cost would be after the employer contribution". It would more than likely exclude any "raise" to offset the additional cost to me. By the way, again my own opinion, but I doubt very much if many fully-insured plans will keep their grandfathered status too long. Forget changes in benefits or costs, as it appears now if the employer simply changes carrier, it loses grandfather status. Or if the carrier changes health plans, that will cause group to lose grandfather status.

Most of the wording I see is "cost-sharing", not premium. Let's look at an example. The cost for my share of medical family premium is $400 per month and my tax is 20%, so my savings is $80 per month. If the pre-tax feature is eliminated, my "cost-sharing" just rose by $80 per month. Yes my taxes changed, but so too did my "cost-sharing" for the medical plan. I am not an expert, and clear regulations have not been provided, which is why I cautioned that this is my own 2 cents.

My initial thoughts are that it would cause the plan to lose it's grandfather status. The law is not very specific about what is meant by increasing the cost to employees, other than to say vauge words such as "reasonable". (Most of what I have seen/heard is a 5% change) But what is reasonable? Now, look at some of the language and interim final rulings of late and they appear to be much more restrictive that we were lead to believe...remember "you can keep your own health plan" statements? With the premiums being paid outside the 125 plan, we all agree that the cost to the employee will rise by some %. Is this enough for the plan to lose it's grandfather status? I don't know for sure, but it sure smells like it does. Just my two cents.

Nice point, but somewhat lacking. Yes, Tampa did win more games, and yes, they may even win the series this year. But remember two very important things; 1) their spending puts them in a position to get to the series (almost every year for the past 20 years), something us fans like, and 2) they give the other teams money through the luxury tax. Got Rings?

See Section 132(e)(i). It allows for non-taxation of de minimu services, which is what you have here. By the way, if the employee/patient has an account based plan (hsa), there must be a charge to the employee/patient. Good luck.

Your post is not specific enough for me to answer directly, for example, what is "large group" defined as, and what kind of "welfare plan" are your asking about? But go to this link, it should give you the answer. http://www.irs.gov/pub/irs-pdf/i5500.pdf

Residence cannot be used to deny coverage. While I have not found anything specific about citizenship, I would suspect that if the dependent in question meets the requirements of "eligibility", then coverage would probably need to be made available.

Does this decrease the employer tax? It seems to me that the employer has a tax issue now that their payroll cost has been decreased.

Thanks, Ivena, I agree with you. I think pretax cannot be used. The attorney advising my client says pretax is used and then that income is imputed as well. He is from a fairly big firm and has a powerpoint explaining that DP premiums are to be pretaxed and then how to impute the premium. I have never heard of that before. Opps... I meant "he" may be doing this wrong, not you. Glad you understood what I was trying to say. Lee

I am only 99% sure about this, but you may be doing this wrong. The Fed Govt tax laws do require the employer contribution to included as income to the employee, as you have advised. But pretax cannot be used. This does not apply in situations where the DP is in a common law situation, or is defined as a IRS dependent. Hope this helps, and hope I understood your question.

Just a quick thought, and it may not be much of an impact, but you may need to calculate the value without the employer administrative load on the cobra rates. With so much unknown still out there, it seems to me that the term "value" will be defined along the lines of the actives costs. Just a thought.

Just re-read it, and yes, you are correct. I was answering it early this AM after 4 hours of sleep. Thanks.

Sorry, but I must be stupid or blind. What does "being catholic" have to do with this...not a criticism, just confused? Am I missing something?

I knew I smelled something funny about the question. I believe my initial answer to still be correct, since the cobra coverage is part of the group plan, they are still on the group plan. But you need to check Company's A documents for actual wording. I would still submit the application to Company A and put the ball in their court. If they decline, ask for explanation and go from there. I just thought of something else, when you say 31 days from loss of group coverage, do you mean Company A's group plan (which was years ago) or some other? If from Company A, then the individual appears to be out of luck.

In situations like this, I always tell people to go ahead and apply, what do you have to lose? If Company A takes you back on their Retiree coverage, it becomes a non-issue issue. If the person is not eligible, the plan with A will decline and provide you with a reason. Your post says that the person can enroll in Company A by showing loss of a group plan, which did occur. The loss of coverage issue is not with the cobra policy, rather the event/date that the group plan coverage was termed. Is there more to this? It feels like I am missing something or maybe not understanding your question. Hope this helps.

My guess is that the situation you presented does not make the self-funded plan lose it's grandfather status. The fly in this ointment is the reason why the execs were transferred. If employees are transferred into a grandfathered plan, that plan does not generally lose it' grandfathered status. However, if the employees were transferred to from a "non-grandfathered" plan to a "grandfather plan", just to get them into a grandfathererd plan, then yes, it is a violation. Since this is still a moving target, this is my best guess. Does this help?

Yes, di premiums can be structured to become non-taxable, but I doubt that you would want to do it. If the premium becomes non-taxable, then the disability payment to the disabled employee becomes taxable. Let's assume a 25% tax, a premium of $40 and a monthly benefit of $1000 (helps the math challenged people like me). The $40 prem creates a tax of $10 to the employee, but if the $1,000 were taxed, it would be $250. Also, during disability periods, the disabled person can actually see an increase in their expenses.

So far, I agree with you, who knows what might change though. Here is a link to the fed source I use, which confirms my belief. http://edocket.access.gpo.gov/2010/pdf/2010-11391.pdf

I am going through something similar right now. We were left a time share in a will (and I thought my in-laws loved their daughter and son-in-law) and we do not want it. I contacted an attorney and he will be drawing up a disclaimer so that we can refuse the time share. As mentioned earlier, there are strict time limits, usually 9 months from the date of death, that the disclaimer needs to be submitted. See an attorney. It was the best money we ever spent.

It would be impossible to keep the self-funded plan completely void of high risk/high cost ee's, but it is not difficult at all making it less desireable for them, as I mentioned earlier. Knowing who is a high cost employee, and who may be a high cost employee, is not as difficult as you may think. With information (from such places as Health Risk Assessment or claims experience) the employer can begin to understand what types of expenses EE's are incurring, or potentially incur. The benefit design can be tweaked to accommodate. For example, if the data shows an increase in Alzhiemers drug use or diagnosis, they can changed their plan design/PBM to limit/exclude this condition. Think of what a groups experience would be like if it were able to eliminate, or greatly reduce, just EE's with chronic conditions. If I design the benefits to have high hospital out-of-pockets the chronic EE's would likely see the private market as a better alternative. The employer did not need to ID them, nor encourage them to leave. Rather, the high risk EE compared the OOP hospital costs in the Employer plan to the better benefits in the Individual market, and leaves. You may want to read the study again. Other than the Free Choice Voucher, all of what they authors have identified have been strategies used in the past. With the voucher it will make it much easier for employers to keep their private plan much cleaner and lower cost. I am already incorporating this into my discussions with groups right now. Hope this helps.