Mary C

At the risk of starting another war, yes, "substantial" can be interpreted different ways. We interpret it to mean the if the provider changes the cost substantially or a change in providers due to a relocation changes the costs substantially. The key is that care is still being provided at a change in cost. We do NOT consider going from paying for care to no care as a change in cost. And as Papogi states, it still must be done within the time frame allowed by your plan AND be consistent with other changes the plan has allowed under this category, if any.

That is correct. If the parents do not notify the Plan Administrator in the time frame allowed, they cannot drop coverage. Further, any day care expenses incurred AFTER the date employment, attendance at school or looking for work stops is NOT reimbursable by the plan. (We allow ex-employees 90 days in which to submit expenses only up to the date of termination to claim reimbursement from our plan. Even if they get another job, we do not allow reimbursment from our plan for expenses incurred after termination because we cannot monitor whether they are really employed or not.) It does sound harsh, but these types of plans reduce taxable income and the IRS is harsh when it comes to trying to avoid taxes by incorrectly reducing or under-declaring your taxable income. This is our company's and our ERISa attorney's interpretation.

You also need to refer to the plan document or summary plan description. Essentially what you are overlooking is that under regulations, daycare is only reimbursable in order to allow you and your spouse to work or attend school. When your spouse quit attending school, you became ineligible to receive reimbursement of your day care expenses and technically to participate in the plan. Our summary plan description and plan are written that the date of the qualifying event is the date you became ineligible for the plan, not the date you withdraw the children from daycare. Any changes as far as dropping the coverage or reducing the contribution to the coverage, under our plan, had to be made within 31 days of the event (when you became ineligible). My bet is that your plan may contain similar language.

In August of 97 or 98, I believe, the government amended the secondary payer rules so that CMS (formerly HCFA) has a 3 year look back for claims reimbursement REGARDLESS of any timely filing limits. And the 3 years is measured form the date they became aware of the outstanding claims and first mailed a notice to you. We are experiencing receipt of a large number of unpaid "demand" letters for reimbursement - cases they say they originally sent anywhere from 1 to 7 years ago that they claim have not been responded to. They are getting quite aggressive with collecting these and are employing several collection agencies which use typical strong arm collection agency tactics. While you don't mention what your defence is, in my experience, the only valid defenses they have recognized are 1) the Medicare beneficiary had no coverage from us 2) the Medicare beneficiary is not/was not every employed by us 3) claims were previously submitted to carrier at time of service and carrier paid them. Even the fact that the beneficiary was covered by a fully insured plan is not a recognizable defence.

An employee can voluntarily drop employer's coverage in favor of Medicare, but the employer cannot directly or indirectly offer them an inducement to do so. Information that accompanies any Medicare Secondary Payer Act packages state that the regs (and I haven't looked at a source document to confirm) are contained in the Social Security Act, Section 1862(B), 42 C.F.R. Part 411 passed in 1990, applicable to employers with 20 or more employees. It specifically prohibits the employer from offering, subsidizing or being involved in an arrangement of a Medicare supplement policy where Medicare would normally be the secondary payer (i.e., employees over age 65 still working and eligible for the employer's plan). Even collecting a supplemental or gap policy premium and forwarding it to the carrier on behalf of the employee is prohibited. If the employer does so, the that supplement will be considered by Medicare and the IRS as a separate group health plan and will be non-conforming subjecting the employer to possible excise taxes.

The new (3/23/00) proposed regs specifically address the problem of different open enrollment dates. They permit an employee to make an election change in the event that a spouse or dependent makes an election change during the open enrollment period of the spouse's or dependent's employer even if it does not coincide with the employee's open enrollment period if the change is on account of and consistent with the change made under the other employer's plan.

I think Proctor & Gamble does something similar based on if coverage is available to the working spouse and at what price. I've had to provide many letters to spouses of P&G employees stating what we charge for single and family coverage. Maybe someone familiar with P&G's policy can fill us on in what it is.

While I agree about providing notice as the start of COBRA, be careful about putting in writing that all employees who are disabled may have COBRA for 29 months. In order to qualify for the 11 month extension (after the initial 18 months), the employee must be determined by Social Security to have been disabled on or before the qualifying event, or within the first 60 days of it. (not all of our participants who left disabled get a Social Security Award) And if they were determined to be disabled as of the qualifying event and eligible for the extension COBRA could terminate early if they should become eligible for Medicare before the end of the 29 months.

I think mroberts missed the point regarding the 60 days. Actually, the COBRA regs and guidance state that an employee or divorced spouse has 60 days to tell the company or health care plan of the divorce in order for the ex-spouse to receive COBRA. If they divorced 1/30, the call in May was way outside the 60 days in which to notify the plan in order for the ex-spouse to be eligible for COBRA.

While the government and the booklet may regard the 30 day timeframe as "at least" in reality that is all many if not most benefit administrators allow. In addition, fair and non-discriminatory means following a set guideline for all members - if 31 days is the rule and you did not do it within that time, there should be no special provisions for you that are not made for others, regardless of your feelings. As a mother, I personally feel empathy for you, but in a highly regulated environment which is what benefits has become, I also see the need to follow the plan provisions.

Current COBRA regs require that only core (medical) coverage be offered on a stand alone basis. You can also offer core plus non-core (medical plus dental and vision) but do not have to offer non-core coverage alone. I don't believe the regs address FSA and medical as combined or stand alone, but since FSA is considered a separate medical plan, I would offer separately.

I work for a large, nation-wide employer and we, too, would have rejected your appeal. Contrary to what you think and what others have told you, employer ARE required to follow Section 125, HIPAA and plan provisions. HIPAA allows a 30 day "special enrollment" period in which to add a newborn. Section 125 does not specifiy a time period, but all changes made to coverage under a Section 125 plan must be consistent with the event and non-discriminatory, that is applied to all employees in the same way. In addition, most plans have written in their provisions and detailed in the summary plan description and certificate of coverage the time frame for adding newborns. Should the company plans be audited by the IRS and find that they are administrating the plan any differently, there would be severe penalties. By the way, we base the answers on appeals on the plan provisions, the governing regulations (both federal and state), and consistent administrative practices, not on whether there would be any "legitimate harm" to the company. I'm sure most employer committees follow these guidelines, too.

If your STD plan is an ERISA qualified plan and not just a payroll practice, the administration must be consistent. There can be different administration for different classes of employees (exempt vs. non-exempt for example). Also, although an employer may try to be consistent and is consistent most of the time, please remember, we're only human too and could make mistakes on how one person's leave was administered at some point in the past.

Section 125 requires that the change be consistent with the change event. You changed the number of your eligible depedents by having a baby. Adding this baby to the plan would be consistent with the event, but changing the carriers would not be. Also, by reading your post, I am assuming you are on COBRA. The regs for COBRA allow you to continue only the coverage you were enrolled in immediately prior to your COBRA qualifying event. COBRA regs also only allow you to make changes a similarly situated actively employed person would be allowed to make - i.e., enroll a new dependent, change carriers at annual enrollment etc. If your active group health care plan does not allow a change in carrier with the birth of a baby, then a COBRA participant may not change carriers because of the birth of a baby.

The way flexible spending accounts work under the regulations is that the entire amount to be deducted during the year MUST be available to reimburse expenses from the first day of the year. That means if the expenese were incurred on day two of the plan year, the employer is responsible for reimbursing up to the full yearly amount BEFORE the deductions are taken from payroll. However, the services must have been received while covered. Most plans will only reimburse you for expenses while you are employed and contributing to the plan. You will need to get a copy of the SPD to see how long after he terminates you have to submit bills for reimbursement of the expenses incurred while he was employed. Orthodontia costs are typically for an entire span of treatment and part of the up front cost is attributable to future, on-going visits. Recent guidance from the government concerning this type of reimbursement is that the cost is reimbursable as visits or treatment is incurred, that is the entire cost is pro-rated over the expected treatment period and reimbursed as services are received. Finally, if you husband is continuing to be paid through August, and they take deductions out of his check through that time, then the account cannot be "shut down" next month as long as they are taking money from him.

Preamble to final regs 2001 Changes from the March 2000 Proposed Regulations (Under Cost and coverage rules) - "Commentators also requested clarification as to whether a cafeteria plan could allow participants to drop coverage in response to a significant change in cost or coverage of a qualified benefit. . . . . In addition, the final regulations allow a cafeteria plan, in its discretion, to treat certain other events as a loss of coverage. These events include a substantial decrease in medical care providers (such as a major hospital ceasing to be a member of a preferred network or HMO), a reduction in the benefits for a specific type of medical condition or treatment with respect to which the employee or the employee's spouse or dependent is currently in a course of treatment, or any other similar fundamental loss of coverage." and "For purposes of these rules, a significant curtailment occurs only if there is an overall reduction in coverage provided so as to constitute reduced coverage generally (.e., a reduction in the fair market value of the coverage). Therefore, in most cases, the loss of one particular physician in a network does not constitute a significant curtailment." In cases where provider access is significantly curtailed to make it impossible to find provider, as stated above, we allow a change to a different HMO option, but we do not allow cancellation altogether. The actual wording of regs refer to it as "Significant curtailment without loss of coverage."

Depends on what is considered substantial. For example, if your personal group of physicians drops out, you would consider that substantial, but it may only be 1% of the entire network and would therefore not really be considered substantial. Similarly, if one hospital drops, but other are available, its not substantial. Its more about how it limits access to providers and hospitals and how your plan defines adequate access. We rely on the insurance industry's definition of adequate access to decide if the change in providers is substantial enough to allow a change in pre-tax coverage.

I don't believe a time limit of how long someone needs to work part time hours before they are considered part time is specified in any regulations. We run a report quarterly for average hours. If someone falls under the required plan minimum, we give them thirty days to increase hours before we cancel health care coverage. They would then revert to our part time admin policies regarding vacation, sick pay, etc.

From Social Security's point of view their is no problem. They will pay what the employee is entitled to if they judge he is disabled. From STD's point of view - it depends on how the plan is drafted. In my experience, most STD plans only pay for a limited amount of time, usually 26 weeks, sometimes 52. If its a 26 week plan, then benefits usually stop prior to the end of the Social Security waiting period. If STD pays longer than 26 weeks, the plan must specify if benefits are integrated or reduced by Social Security benefits in the summary plan description.

Joey - Under the most recent final regulations, an employee may change his or her election in response to changes made during another employer's open enrollment season. In your situation, if the wife canceled coverage in March during her open enrollment for any reason, it can be considered an event to allow the husband to enroll her in his employer's plan within 31 days. Mary

RAJ This may be a stretch, but under Section 125, you cannot take premiums on a pre-tax basis for a retro enrollment. For example, employee gets married 1/1 and completes forms to enroll the new spouse on 1/25. Forms are processed 2/2 and premums calculated to cover the new spouse from 1/1 are taken from check on 2/15. Section 125 prohibits these premiums from being taken on a pre-tax basis. I haven't encountered a problem with taking reto premiums on an already enrolled person, though. In fact, under FMLA an employee on leave can wait till they return to pay for coverage while on leave on a pre-tax basis. Mary

The DOL has issued several advisory opinions that EAPs who provide counseling services are employer maintained health care plans. In labeling EAPs an employee welfare benefit plan providing health benefits, it becomes subject to COBRA. If the plan is strictly a referral service, i.e., no counseling is given, only referrals to health care professionals at the request of the employee, then it is not considered an employee benefit plan providing health care services since the employee. Unfortunately, there is no written guidance on how to determine whether an EAP is subject to COBRA or not and it appears the determination is being left up to the discretion of the sponsor.

We are a large multi-state company that is almost exclusively insured managed care options under our plan and several of our POS options do have pre-ex exclusions written into them.

A leave can be considered a change in employment status allowing a change in election. Remember, DCAP accounts can only reimburse expenses incurred so you and your spouse can work or attend school (unless spouse is incapacitated and cannot care for self). Therefore, expenses incurred while on leave or vacation are not reimbursable.

I suppose its a mandate. The state laws are worded that the group plan "allow" the ex-spouse to remain on the plan after a divorce if the decree stipulates that regardless of the eligiblity provisions. We challenged it once and lost.