Sandra Pearce

COBRA continuation is as it states continuation for QB's that were covered prior to the qualifying event. The mother will have to wait until open enrollment.

Another take on the original post could be that the participants are former employees who were paid an amount up to the amount they elected for the year, but that they terminated prior to contributing their entire annual election. In that case there would be no error and nothing to correct.

Our form requires the employee to elect a dollar amount per payroll. We enter that as a separate deduction from the % election made for their normal contribution. We put a stop on the normal 401k deduction (% of pay) with a maximum of $13,000. We put a maximum on the other deduction of $3,000. We adjusted the maximum allowable contribution in our payroll system to $16,000.

If the employee had continued coverage under COBRA and added the baby to that coverage the baby would then be a Qualified Beneficiary with separate election rights and I believe could continue under COBRA without the employee (former employee). However, since it was the spouse of the employee who elected COBRA I believe that the child born is not a QB and does not have separate election rights. 26 CFR Section 54.4980B-3 Qualified beneficiaries

We simply complete the enrollment form in the HR department and attach the court order. If the employee wants to sign it fine. If not fine.

You have to look at the dates involved. If the COBRA QB elects (signs) for your COBRA coverage AFTER the date that he is entitled (enrolled) in Medicare, then the QB has the right to continue COBRA coverage for the normal period, 18 months. If the COBRA QB elects (signs) for your COBRA coverage before the date he is entitled (enrolled) in Medicare, then the QB may be cancelled. As someone else mentioned entitlement and enrollment in Part A is automatic and occurs at the beginning of the month that the person turns 65.

If the employer's plan allows for a mid year change due to open enrollment in the spouse's coverage (and this change is at open enrollment). Otherwise, no.

Our health plan follows the strictest interpretation of the regulations. We require a copy of the COBRA offering and if the prior plan was being run properly there would be no COBRA offering on a drop at open enrollment, or we require a statement from the prior employer stating that employment terminated, hours were reduced, etc. We also do not have open enrollments in our health plan.

I agree in part with Oriecat, the dropping of coverage at open enrollment is not a COBRA qualifying event. However, I do not totally agree with the second part of the comment regarding HIPAA Special Enrollment rights in the other plan. The loss of other coverage due to choice (dropping the coverage) is not required by the Act; however, the other employer's plan may have more generous language related to the loss of other coverage than that required by the Act.

I would think that if the election notice gave the appropriate payment information and the COBRA QB did not pay the premium in the specified period of time, billing or no billing, the COBRA QB would be at fault.

There is no regulation requiring an invoice. However, if you normally send an invoice and for some reason did not then the obligation is the Plan's. Your COBRA election notice should state specifically how and to whom payments are to be made.

The dependents are of course COBRA QB's due to the death of the employee. They can elect continuation coverage for up to 36 months. The mother is already a QB who could under the special enrollment provision add them to her coverage. The mother's coverage would end at the end of her maximum period. If this was our plan I believe I would have the children elect COBRA coverage (in our plan this would be at a dependents rate which is greater than an individual rate but less than employee and dependents). I would probably simultaneously have the mother file a change form to add the children to her coverage turning it into family coverage. When she lost her eligibility I would allow the children to continue for the remainder of their 36 months. This is the way I feel I would approach this. A similar situation has never occured in our plan.

If the union plan adheres to the special enrollment provisions of HIPAA, then this would be a loss of coverage for the dependent children which would allow the mother (COBRA QB) to add the dependent children to her coverage.

I agree with the previous post. Are you sure what the determination period is? Ours does not coincide exactly with the plan year because we choose to give rate increase/change information to our participants well in advance of the change. Additionally, having Medicare as primary should actually lower the cost to the plan and not increase it.

When your materials have left you without a definitive answer then you should probably allow whatever interpretation is most favorable to the employee/participant. Then clean up the language in your documents and materials.

Anytime you add a benefit you take the risk of claims and expenses for the health plan rising. Even though the employer is going to allow the retirees to pay the premium for the coverage, the experience of the retirees will effect the group, fully-insured or self-insured. There is also the FAS 106 financial reporting liabilities to consider. An amendment to the plan would be required.

The TPA for our 125 always provides a canned-version SPD when we restate or amend our plan. I always take that canned SPD and remove the items that we do not offer, and reword anything that I feel is confusing.

An employee in most cases is only paying a small percentage of the total cost or value of their health insurance coverage, with the employer paying a share of the cost. When someone terminates employment they are generally offered COBRA continuation coverage at the full cost or value of the coverage plus 2% administrative fee. This is almost always a considerably higher amount than the person was paying while still employed.

There is nothing in FMLA that requires you to be classified as a "full time employee" by your employer. You must meet the criteria of the Act itself as an "eligible employee." The criteria is that you must have worked for the employer for at least 12 months (not consecutive months) and have worked at least 1,250 hours during the previous 12-month period. Therefore someone who has worked 25 hours per week during the prior 12 month period for the employer would be eligible for the protection of the unpaid Family Medical Leave Act.

Of course you would be setting a precedent and should treat anyone in a similar situation the same. Another thing to consider would be whether any insured benefits you offer employee will consider someone on leave for this period of time, and not mandated by FMLA, as an active employee. It is possible that some benefits would be "lost" during the leave period. Examples might be life insurance and long term disability.

Although we pay on a bi-weekly cycle and not twice a month, we are always taking contributions/premiums from our employees after the fact and not in advance as you indicate your company does in your original statement. I would suggest that you actually verify your payroll practices regarding deductions? In other words for someone who is effective on January 1st are you actually deducting a premium for half a month on January 1st or is the first deduction really on the 15th, thus paying for the period January 1 - January 15? Just something to consider.

I see the issue of what is payable as a giant can of worms also. However, since you could be more restrictive in what your plan reimburses than what the regulations actually allow, couldn't you just not allow OTC?

I agree with b2kates, the only health insurance that an employer sponsored 125 plan can allow to be paid through that 125 plan is that employers sponsored group health plan. Someone paying a COBRA premium to another employer or company cannot be paying that on a pre-tax basis.

I would not allow reimbursement in our 125 plan due to the fact that the clip on could be used by anyone and could not be construed as intended for the use of the participant.

See IRS Publication 15-B, Employer's Tax Guide to Fringe Benefits. There is no exception for retired employees.