Sandra Pearce

We have a self funded group health plan that uses the maximum pre-existing limitations - look back of 6 months, pre-ex excluded for 12 months.

Using HIPAA guidelines the plan can exclude coverage for pre-existing conditions (HIPAA specific definition) unless the person has 18 months of creditable coverage (without a significant break in coverage - also HIPAA specific definition). Prior carrier should be able to provide certification of period of coverage. Since the person has only provided a certificate with 5 months of coverage you should only give him credit for 5 months. Additional proof should be obtained for the period prior to May 2001.

I read your question too hastily and replied thinking that the COBRA participant was actually an employee at the time of the divorce. The COBRA participant (ex-employee would have the remainder of his/her 18 months). Upon divorce (a second qualifying event) the ex-spouse would be eligible for a total of 36 months. The children, if they are the employee's, would not have a second qualifying event and would have the same 18 month period as the employee. I don't believe the divorce is a second qualifying event for the ex-employee.

The ex-spouse will be eligible for 36 months of coverage from the date of the divorce. The children, if they are the employee's biological or adopted children would not lose eligibility for coverage. If the children are step-children and would no longer qualify as dependents then they would also be eligible for 36 months of COBRA coverage from the date of the divorce.

We send out one notice that includes health plan, dental plan and health spending account.

A dispensing fee is part of the prescription cost when you go to the corner drugstore to purchase a prescription. I would reimburse.

No documentation to provide other than the fact that a medical spending account reimburses participants for the cost of services and supplies which are used to treat or relieve a medical condition. I would not reimburse tax or shipping.

A participant in a health plan who is enrolled in Medicare prior to a qualifying event, or prior to enrollment in the COBRA continuation coverage, would be a qualified COBRA beneficiary eligible for COBRA continuation coverage. If the qualifying event was termination of employment the length of COBRA continuation would be 18 months. The extion to 29 months would be determined based on if and when the QB is determined by the Social Security Administration to be disabled and when the QB provides that information to the plan. (A COBRA qualified beneficiary who later - after the qualifying event or the COBRA enrollment - enrolls in Medicare would lose COBRA coverage at that time.)

no

If the employer is subject to state or federal FMLA requirements, and the employee qualifies for FMLA leave, the employer is required to maintain the employee’s group health benefits on the same terms as if the employee continued to work during the FMLA leave.

While a divorce is a family status change that could allow a participant to change the annual election to their Section 125 medical spending account, the change must be consistent (make sense) as it relates to the family status change. Adding dependents seems more consistent with allowing an increase in the election. On the surface, I would not have allowed an increase in a medical spending account due to a divorce or loss of dependents. With that said, even if the increase was consistent with the family status change I do not believe that the expenses prior to the change would be eligible for reimbursement from the portion of the account that represented the increase.

If the employee took an unpaid leave of absence for the birth she may have the right depending upon the wording in your plan document to stop participation. Regarding making a change to decrease the annual medical savings account election due to the birth of a child I believe this change would be prohibited because it appears inconsistent with the family status change. Adding a dependent to the family should increase the cost not decrease it. The fact that the employee did not make a valid determination of out of pocket expense would not be an acceptable reason to allow a change in the FSA election.

We use previous claims experience and other data available from our broker and our reinsurer to calculate premium.

No, you can not make a retroactive election. The money in the FSA will only be available as reimbursement for future expenses.

In our plan we state, "Children of a Domestic Partner may be considered eligible on the same basis as children of a legal spouse, with the same rights as children of a legal spouse, with the exception that they will not be extended COBRA continuation privileges upon termination of coverage." These children must be unmarried, natural children or adopted children of the Domestic Partner, must live with the employee, be under age 19 (or in school full time up to age 24) and the employee must provide over half of the child's support. We only have employee coverage and family coverage. The tax would be taken on the difference between the two.

I am basing my answer regarding the determination of fair market value of premium on the guidance given by the San Francisco Commission on Human Rights Commission. "Where the premium is difficult to determine, for example where an employer is self-insured, the fair market value may be determined by using the COBRA rate minus any administrative fees." Self-insured plans use past claims history and actuarial assumptions to determine rates, including COBRA rates. There is not a regulation to address the calculation. There might be IRS letter rulings on the subject of establishing COBRA rates for self-insured plans but I do not have a copy of one.

The premium paid for the domestic partner (in the case of our plan it would be the difference between employee only coverage and family coverage) would be after tax premium. For a self funded plan the fair market value is considered to be the plan's COBRA rate less the 2% administrative fee.

Unless the domestic partner qualifies as a dependent by IRS regulations the premium must be taken after taxes. Additionally the fair market value of the employer's portion of the insurance is taxable income to the employee.

If you consider the qualifying event to be the employee's termination of employment (retirement) then the dependent is eligible for 18 months of COBRA. As to who pays that premium and in what amount that is really up to the company. However, you should always be consistent.

Just my interpretation of the question. Only Talisa knows the answer for sure.

Employer provided health care benefits for spouses and dependents of employees are allowed by IRS to be excluded from the employee's gross income. No such exclusion exists for benefits given to an employee for his domestic partner. The money paid by an employer for health care benefits for the employee's DP is income that is taxable.

Maximum COBRA coverage 36 months.

I have just gone through a similar situation. The final COBRA regulations specifically address stock and asset sales. Rules are different depending upon the type of sale. Our acquisition was a stock purchase. I do not believe the acquiring company would have any COBRA obligation for those employee who terminated previously (unrelated to the purchase) and were not eligible for federally mandated COBRA coverage. However, in a stock purchase I believe that any employee who loses coverage because of the purchase or after the purchase would be eligible for COBRA coverage from the purchasing employer plan (this assumes that the selling company was not a part of a multiple employer group and their is still coverage available on the selling side of the equation).

It depends upon the definition of a dependent in the plan document. If a child who reaches age 19 no longer qualifies as a dependent in the plan, and if the plan is subject to COBRA, the answer is yes that is a qualifying event. The child would then be eligible for up to 36 months of COBRA continuation coverage.

Eligibility alone does not terminate previously elected COBRA coverage. If the new employer's coverage is elected and the new coverage was not in effect prior to the COBRA election, then that would be a reason for COBRA continuation to end. For most people staying on COBRA continuation coverage with a prior employer is a costly proposition.