Mary C

My first reaction is what state are you in? Massachusetts and Rhode Island both have state laws (applicable to fully insured plans) that allow ex-spouses to remain on the plan if the divorce stipulates until either one remarries or the employee no longer is eligible for coverage. mary

Alexa - Minnesota also includes grandchildren in their definition of eligible dependents. Like Texas, Minnesota requires that the grandchild be dependent on the grandparents for support and reside in the grandparents house from birth. m.c.

I don't think its allowed, but not for the same reason as your TPA. In the preamble to the final regs issued 1/10/2001, it states that they have broadened the definition of other coverage to include any coverage offered by another or same employer, government or educational institution, such as a state program SCHIP. However the next sentence, and the following is lifted directly from the preamble, says: THE REGULATIONS DO NOT ALLOW A CAFETERIA PLAN PARTICIPANT TO CEASE PARTICIPATION IN A CAFETERIA PLAN IF HE OR SHE BECOMES ELIGIBLE FOR SCHIP COVERAGE DURING THE YEAR BECAUSE OF A CONCERN THAT SUCH A RULE WOULD VIOLATE A FUNDAMENTAL PRINCIPLE OF TITLE XXI OF THE SOCIAL SECURITY ACT THAT SCHIP COVERAGE NOT SUPPLANT EXISTING PUBLIC OR PRIVATE COVERAGE. Since the other coverage he is using as an event to cancel is SCHIP, and since the above passage says you can't supplant private coverage by SCHIP, I don't think its an event to cancel coverage.

What do you do for other employees who are on a leave of absence when they're eligible for the plan? If they're allowed to enroll, then you must allow the employee on a military leave to enroll. USERRA says they need to be treated no less favorably as you would treat any other type of leave.

We have a self insured plan that just started intermittent disability pay on advice of our ERISA attorney and employee relations attorney. Our admin assistant was diagnosed with diabetis this summer. She spend 1 wk in the hospital getting her blood sugar under control and being educated on diet, exercise, insulin, etc. That took up her 5 days of 100% paid sick pay. Since her return, she's had a difficult time getting her blood sugar up to normal in the mornings and has missed quite a bit of work. She was granted intermittent FMLA and when she can't get her blood sugar up or needs to attend an education/care class, she gets 1 day of disability pay (66-2/3%) up to 90 days in a rolling 12 month period under our plan.

Your STD plan may be incorporating intermittent leave in response to intermittent leave required under FMLA - Family and Medical Leave Act of 1993. The act mandates that companies with 50 or more employees allow up to 12 weeks leave within a 12 month period for either their own serious medical needs or to care for a family member with serious medical needs. The leave does not have to be taken all at one time and the regulation permits it to be taken in increments as needed such as one day a week to receive treatment. Generally, FMLA leave is unpaid. The act only guarantees the amount of time you are entitled to and that you can have the leave without jeopardizing your job (in most cases), not that the leave be paid. Since receiving pay for leave is not mandated, you should check the summary plan description of your STD plan to see if it allows payment for intermittent disabilities.

Kip - she chose to go outside and participate in a Medicare HMO due to cost factor and provider network. We require employees to pay 50% of the group premium - the risk HMO was substantially cheaper. We did not offer the HMO network the risk plan did and she wanted to keep her own providers. Although I agree the "right" thing to do is let her enroll, I'm having trouble explaining why loss of personal coverage qualifies as a family status change when the regulations specific other group coverage. The carrier is hesitating about enrolling her until I can come up with an explanation. mary

We have an over age 65 employee who has Medicare A & B and is currently covered under a Medicare HMO plan. The HMO is dropping the Medicare plan in the county where she resides and she has requested to enroll in our group plan. Our open enrollment takes place in July and this would be a mid-year enrollment. Because the 125 regs specifically state it must be loss of coverage provided by another employer to allow a mid-year enrollment, we denied her request. She's gone to the DOL who claims a loss of other coverage (even personal) entitles the employee to a special enrollment period under HIPAA. (I've confirmed this with out local DOL office). Because this disagrees with the 125 regs, I've been trying to get some guidance from the IRS and have been on hold for over 35 minutes with various departments. I'd appreciate any guidance or suggestions anyone may have. Or a phone number of someone at the IRS who may be able to help.

In general, if there is no company, there is no health plan to continue. If the health care plan is terminated, there is no COBRA.

Yes, a medical reimbursement account or FSA is subject to COBRA regulations for continued coverage after termination and may be subject to HIPAA, too. Couple points to consider - expenses incurred after termination of employment usually are not eligible to be reimbursed from an FSA unless the participant has continued the plan via COBRA. Therfore, if I have an unreimbursed balance of $2,500 and know I'll be incurring expenses next month, it would be to my advantage to continue on COBRA with after tax dollars to recoup my unreimbursed balance rather than lose it. And depending on whether the medical reimbursement account plan is HIPAA exempt or not, COBRA may only need to be offered for the remainder of the plan year in which the termination occurs. (An FSA plan may be HIPAA exempt if it is funded soley by employee contributions and the maximum benefit an employee can receive is limited to these contributions and the employer has another health care plan not exempt from HIPAA.)

I'm afraid your representative was half correct. The COBRA regulations state that as soon as a participant is enrolled in other group coverage with no pre existing exclusions, their eligiblity for COBRA ends. So if your husband now has prescription coverage through your plan, and he was not enrolled in your plan before he elected COBRA prescription coverage, his former employer and/or prescription carrier has every right to cancel his COBRA coverage. And depending when they find out and cancel his coverage, you may be out of the time period allowed to enroll him in your plan.

125 regs only state the change must be requested in a "reasonable" time. Also, the HIPAA regualtions have a special enrollment period of 30 days after birth, adoption, etc. So it is reasonable to use the 30 days for all changes since HIPAA mandates that period for certain enrollment. As usual, the regulations only state the minimum - plans could be more liberal as long as they do it consistently and in a non-discriminatory manner.

We have an over 65 employee who voluntarily canceled our group health care coverage during annual enrollment in 1998 to go on a personal Medicare HMO risk plan. The HMO is pulling out of the Medicare business in the county where she lives 1/1/02. She has asked to enroll due to a loss of other coverage. We have incorporated the Section 125 events into our plan to allow enrollments mid-year. However, Section 125 states loss of other GROUP healthcare coverage as the event, not loss of personal coverage. I'm aware that HIPAA also states that there is a special enrollment period for someone who declines enrollment due to other coverage (including personal coverage, I presume). Any suggestions or advice on whether this is permitted, and what do you base it on?

Kip is right - OTC drugs are not covered even if prescribed. You can deduct any unreimbursed medical expenses on your tax return, but you cannot deduct any expense you made an FSA claim for. In your example above, the employee has $4,000 expenses and gets $500 back from the FSA. $3,500 could be deducted on the tax return.

April - The answer is yes and no (remember nothing is ever clear cut when government regulations are involved). The regulations governing COBRA say that the COBRA coverage can end early if you become ENROLLED (not just eligible) in another employer group health care plan. Now if the coverage in the new plan is automatic as soon as you are eligible and you don't have to do anything to be enrolled (fill out a form, pay part of the cost, etc), then technically your COBRA coverage should end. There is, of course, an exception to this - if the new employer group health care plan has pre-existing condition limitation, you can continue your COBRA coverage in order to cover these pre-ex conditions until they would become covered under the new plan. Then there's the enrollment criteria under the new plan to consider. Maybe the only time you can enroll is when your initially eligible, for example 11/1, and there are no provisions to allow you to enroll in it in four months. Would it then be worth giving up coverage till an open enrollment period just to keep your COBRA? This is something you should also check out. Hope this helps. Mary

Yes, the expense is reimburseable. Just a couple of points - first, she has till 10/31 to pay the flex amount for October. Don't assume she isn't participating anymore because she hasn't paid yet, she still has 1 week. Second, she was participating when the expense was incurred, 9/28. Everything I've read said expenses incurred while a participant are payable up to the total amount elected whether the participant is an active employee or on COBRA.

Jo - when you say denied under your cafeteria plan, I am assuming you mean a flexible medical spending account under your cafeteria plan. While you can DEDUCT medical expenses from your tax return in the year in which you pay for them, REIMBURSEMENT from a flexible spending account is based on the date your incur the expense. While a copy of what the insurance company is paying may be required so you do not claim a reimbursement for more than what you are acutally out of pocet for, it is still based on the date services were received. Also, you can't deduct on your tax return the same expenses you claim from your flexible spending account. Check your summary plan description for a full explanation of eligible expenses, documentation needed for reimbursement and how long you have to file claims after the end of the plan year.

COBRA may not be denied if the member has any other coverage prior to electing COBRA. After they have enrolled in COBRA coverage, COBRA may be ended early if they enroll in other group health care coverage that does not have a pre-existing condition limitiation.

Congratulations on your new baby. However, whether you can change your election depends on your plan. While the regulations do recognize the birth of a child as an event to allow a change in your election, you have to keep in mind that the plan does not necessarily have to allow changes. But if changes are allowed, the regulations list the permitted events. Bottom line is read your summary plan description or contact your benefits department to see what is allowed.

Everything I've read and use for guidance indicate it has to be a loss of other "group" employer coverage in order for it to be considered an event to allow a change to the cafeteria plan election. Was the prior plan considered a "group" plan or was it a personal plan anyone could buy?

There's a very good chance the TPA did not know any earlier than you. Former employer had a self funded plan and we were only billed quarterly by the claims administrator (TPA). Therefore, we could theoretically go six months without paying an admin fee. Also, the account that checks were written on to pay claims was controlled by the employer, not the TPA. We deposited the money and reconciled the account, the TPA just adjudicated the claims and issued checks.

Motor - I'm not a lawyer, but our ERISA attorney has reviewed the cases we've had where the employee or family did NOT notify us within 60 days of the loss of eligibility for the health care plan due to no longer meeting the definition of a dependent, and we determined no COBRA was available. We've been challenged by the employee/parent and have had a complaint filed with the DOL over not offering COBRA and the DOL has backed our decision up. Without being enrolled in COBRA coverage or eligible under the parent's coverage, it makes sense that the insurance company would not pay claims. I don't understand where COBRA laws are being violated. mary

Iagree with Sandra 100% with one big IF - The regulations state the parent or child must notify the employer or plan administrator within 60 days of the loss of eligibility to be eligible to receive COBRA continuation coverage. The plan participant can't assume they know the child turned 19 and automatically offer COBRA - most plans don't work that way.

We use a defined contribution approach where the company contributes $x for each year of service toward the cost of the retiree's coverage. The retiree pays the difference, if any, between the company's contribution and the full premium and pays the full premium for any dependent's coverage.

Kelli To answer your first question - as long as you already had coverage with your employer BEFORE you elect COBRA from your husband's employer, its OK. Its only when you obtain other group coverage AFTER you elect COBRA that your COBRA coverage will terminate. As for dual coverage - it used to happen all the time under the old fashioned traditional type coverage. However, some HMO's do not allow dual coverage, particularly if both employer plans are with the same HMO. You should check with your HMO to be sure. To answer your second question - you should check each plan's summary plan description to determine which is primary and which is secondary. Generally, the plan from your employment is primary for you and your spouse's plan secondary. Same for your husband, the plan from his employment is usually primary and your plan would be secondary, but you'll need to check the SPD to be sure.