KIP KRAUS

I believe that most STD plans do not offset disability payments by vacation pay. Therefore if an employee wants to waist vacation on a disability I don’t see the issue. I also believe that the employee could apply for STD payments and get them paid concurrent with vacation pay. They don’t need to wait. What does your STD policy say about this offset issue?

I don’t see why not. However, what types of limited benefits would you offer them?

What I have done in the past with HMO plans id to draft an SPD supplement to the HMO certificate. ERISA attorneys have advised me that the supplement can refer to pertinent items in the employee’s certificate rather than including them in total in the SPD supplement. A statement in the supplement should also inform participants that when there is a conflict between the SPD supplement and the employee certificate that the certificate will take precedence over the supplement language.

You are correct. The carrier that granted the waiver is on the hook. Typically when a group policy has a disability waiver of premium the rates are loaded for this possible libility.

If you have a medical plan with deductibles and co-pays I don’t see the increase in financial liability while traveling for the company unless the employee travels to an area where medical costs are higher than at home. This of course assumes that the employee has a need for medical treatment while traveling for the company. What if they’re on vacation and something happens to them? Finally, outside of a travel accident policy I’ve never heard of a company increasing medical coverage for employees traveling on company business, but I haven’t seen it all. I don’t see this as a legitimate concern.

It would seem to me that at some point the employer needs to determine whether or not they expect this employee to ever return to full time employment. If not, they need to terminate her employment and offer her COBRA. If the employee is on WC then the employer knows what her condition is and should be able to make a decision.

Eafredel Your Q&A example doesn’t address whether or not the retirees have enrolled in Medicare. Does that make a difference in you opinion?

I agree

Christine: If we are assuming that the spouses and dependents are not enrolled in Medicare I agree with your conclusion that only they should get COBRA. On the other hand, if a spouse is enrolled in Medicare the spouse shouldn’t get COBRA.

To make things simple, or maybe not so simple why not design one self-insured plan that combines all of the favorable benefits of both plans into one plan? Not knowing the design, experience or cost of either plan makes it difficult to suggestion anything other than one self-insured plan. It doesn’t make sense to me to have 6,000 employees self-insured and 1,000 fully insured. Even if the 1,000 employees are in HMOs or PPOs you can still design one self-insured medical plan that should fit for all employees. Why do you have this situation?

It sounds as though you are applying individual underwriting policies to group insurance plans. Do the people who don't smoke, are within normal weight ranges and have good cholesterol and blood pressure readings drive racecars on the weekends, sky dive, drink excessively, fly airplanes, or do any other risky activities? Can you guarantee that dependents don’t have medical problems? From a group medical plan underwriting standpoint it doesn’t make sense to offer discounts to seemingly healthy employees since you can’t guarantee that they, or their dependents will not have an accidental injury or contract an unforeseen disease. Good idea, but misguided in my opinion. In addition, as judicially pointed out by Kirk you may have ADA issues. In addition, you may have ADE issues.

Don: Stated simply, group insurance arrangements are rated on the basis of the group’s risk and its expected claims. I’ve never heard of an insurer taking someone’s individual health policy into consideration when rating a group. Group insurance is exactly what it means, it insures a group of people and the risk is spread among the group. The fact that one person has an individual policy that pays before the group policy is of little concern to the group insurer or employer it only lessons the claims experience of the group. Think of it this way if spouses have group coverage in addition to coverage with the employee’s employer this also lessons the claims risk where the spouse’s medical expenses are concerned. I hope this makes sense.

The Draper v. Baker Hughes court decision is very interesting. What do the courts say about COBRA rates when employees of a controlled group participate in various HMOs in different geographical areas where the rates of the HMOs are different? It’s interesting that the court ignored geographical differences in medical costs when making their decision.

Gburns is correct. State insurance law is where you will find your answer. However, to my knowledge there is no requirement for a self-insured plan to provide conversion coverage.

If the prior group life plan had a disability waiver of premium provision the affected employee should file a claim for waiver of premium with the prior carrier.

Jfp: I can see a major problem if the employer doesn’t have a written leave policy above and beyond the mandated FMLA. The DOL or Fair Labor Standards act may apply as well as ADEA and ADA. Besides, in a large national corporation who’s going to monitor this type of situation to ensure that none of the fair employment practices are violated absent a written policy applied equitably? Why put yourself in the position of having to justify your position in court to find out how legal it is?

I doubt you will find any legislation that prevents an employer from canceling insurance on the date of termination. That is a typical arrangement. As GBurns indicates the SPD should state when insurance cancels. I agree that the employee should not have to pay for coverage after it cancels. Refund the payment and save yourself some grief.

Employers often pay 100% of single coverage and require an employee contribution for family coverage. There is nothing discriminatory about that type of policy as long as it applies to all family contracts.

I am going to assume that your employer and the Comp. Carrier doesn’t think that your finger problem is related to the accident that injured your leg. You don’t mention if there was a separate accident or possible repetitive motion causal relationship affecting your fingers. What are you claiming is the reason for your finger problem?

I assume you are talking about a Wrap Plan Document. If that’s the case I have seen Plan Documents reference the COBRA legislation and the SPD booklets contain the details.

Does this make sense? If a person is paying 100% of the cost of supplemental insurance, and the supplemental rates are higher than the Table I rates then there would be no imputed income, right? Also, is the amount of supplemental life in excess of the first $50,000 eligible for pre-tax premiums?

I disagree with Kirk. The Plan Document is not a detailed description of the plan(s). It is a formal document that merely establishes the plans upon corporate resolution and describes eligibilities, duties, responsibilities and authorities of the participants and/or plan sponsor(s). I see nothing wrong with referring to SPDs in the plan document for practical purposes.

If there are multiple plans, multiple employers, multiple eligibilities, etc. I don’t see anything wrong with the plan document incorporating these provisions by referring to the SPDs. This of course assumes that the SPDs are accurate and kept updated. Typically, more plan details are in the SPDs any way.

I was under the impression that if the supplemental life is group term, and the rates that the employees pay are less than the Section 79 Table I rates then the benefit is taxable to the extent that the group rates are lower then the Table I rates.

JerseyGirl You must not have read my post accurately. I was merely explaining the rational behind requiring an original bill for reimbursement. I wasn’t assuming anything about EIKH’s plan provisions.