Mary C

We heard that hospitals in the Catholic Health Systems sent letters to people dated 10/12 that they would drop Aetna/USHC effective March 2001, but they subsequently signed a new contract with Aetna/USHC on 10/26. Needless to say, they haven't mailed out a retraction which is really frustrating.

COBRA regs state that if a regular monthly payment falls due within the 45 day grace period for the initial premium, then that month's payment isn't due till the end of the 45 days initial premium grace period. If they elected 9/17, then they have 45 days or until November 1 to pay the initial premium for August and September and any the additional monthly premium for October which was due within the 45 day initial premium grace period. In this case, it adds one additional day to the grace period for October.

All of our health care options are geographic based HMO coverages. We have an employee who shares custody of her children with her spouse who lives out of state and out of her service area. She has elected to pay for the cost of her health care coverage on a pre-tax basis under the 125 flex plan. She would like to add the children to her health care coverage when they are with her and take them off when they are with her spouse. We are trying to determine where or even if this fits in the new 125 regs. Can anyone help or offer an opinion?

The employer may not be required to offer COBRA coverage to the dependent. According to the COBRA regs, (4980B(f)(6)©) the employee or the dependent is responsible for notifying the employer within 60 days of a loss of dependent status, including a dependent child ceasing to be a dependent child under the plan. If the employee or dependent does not notify the employer within 60 days, then COBRA does not have to be offered.

We haven't heard of any provisions being withdrawn. Can you be more specific and where did you hear of it?

How about the Medicare Secondary Payer provisions? The 2000 Instruction booklet from HCFA has several sections highlighted in red. Some of them are: "An employer cannot offer, subsidize, or be involved in the arrangement of a Medicare supplement policy where the law makes Medicare the secondary payer." or "If they reject coverage under the employer plan, you may not offer them, facilitate or subsidize a plan intended only to supplement Medicare benefits." and lastly, here's part of the IMPORTANT WARNING . . .. HCFA wishes to make sure that employers understand the legal consequents of purchasing directly or indirectly and individual Medicare supplement (Medigap) policy for an employee or spouse of an employee. This arrangement constitutes a GHP (group health plan) uner Medicare law and the Internal Revenue Code. . . . In addition, the plan, because it takes inaccount the Medicare entitlement of the beneificary is also a non-conforming GHP which would subject the employer to possible excise taxes. According to the booklet, the underlying regulations are in Section 1862(B) of the Social Security Act (42 U.S.C. Section 1395y(B))and at 42 C.F.R. Part 411 (1990)

Its my understanding that the standard National Medical Support Notice isn't due out till this fall. But the regs do say that the "request" can be issued by any governmental office, which we have interpreted to mean DA's office, Department of Human Services, Child Support Enforcement Bureau, etc. We get orders from all over the US and none of them are on a standard form or come from the same governmental department as yet. If all the required information is contained in the letter/request/order, then it should be considered a QMCSO.

For Dustd - go to http://www.irs.gov/plain/forms_pubs/pubs/p50301.htm to download IRS publication 503 - Child and Dependent Care Expenses. It will tell you what you can and cannot claim for dependent care expenses on your tax form whether you participate in a dependent care reimbursement plan or not.

Before contacting any governmental officials, did anyone consider that since she was employed by a diocese, she may very well have been covered by a church plan which is not subject to COBRA regulations? As such, they do not even have to offer her continuation of coverage and if they do, they do not have to use the same election periods and grace periods as plans subject to COBRA.

Final 125 regs issued 3/23 state that if there is a change in employment status of the employee that affects that individual's eligiblity under a cafeteria plan or a qualified benefits plan, then that change constitutes a change in status. They cite the example of an employee switching status from salaried to hourly resulting in the employee ceasing to be eligible for coverage under the plan, then that change constitutes a change in status that would allow a corresponding chang in election. Your employee should be allowed to drop the STD plan since they are no longer eligible for it.

The former wife's new coverage does not prevent her from being eligible to elect COBRA. It was in place before she was notified of or elected COBRA. She will have to look at the provisions of her employer's plan to see if she can disenroll -- some plans paid for with pre-tax dollars will not allow cancellations during the year.

The original Cal-COBRA passed in 1995 applied to employers and plans and was preempted by ERISA. A replacement version was effective in 1996 and included in the state insurance regulations. It puts all responsibility for administering Cal-COBRA on the insurers and carriers, not the employers or plans and is therefore NOT preempted by ERISA. The plan/COBRA administrators are only responsible for notifying participants they may be eligible for continuing coverage if they meet certain criteria. The carriers may charge up to 213% of the applicable group premium for continuing coverage. All of our carriers in California, HMO and POS inlcuding Blue Shield, comply with the regs and list them in their certificates of coverage.