KIP KRAUS

I agree with QDROphile. Just because someone makes an error in how much medical expense he or she will have doesn’t justify a change. What if a person thinks he/she has to have surgery and then finds out that physical therapy, which is much cheaper can resolve the condition, does that mean they can change their FSA contribution, no it doesn’t.

Sounds to me as if there shouldn’t be a pre-existing condition problem, because your husband seems to have credible coverage under HIPAA? Sounds to me like the new plan may not cover as much in terms of reimbursement for your husband’s condition. If that is the case I don’t think he can be enrolled in both plans.

Hank: That’s an interesting PR ruling. However, if the regulations are otherwise silent on the collective bargaining issue as PAX says why would an employer have to open up the plan as an option to bargaining employees in the middle of a contract period? As an example, if the contract period is a 3-year period and the employer wants to offer the plan to salaried employees during the second year of the contract, why would they have to bring it to the union? As you know there are numerous employee benefit plans that routinely exclude bargaining employees, and unless they become a subject of bargaining the union never gets them. That’s one of the reasons people feel the need to have unions so they can bargain for the benefits they dream up, not what the companies want to offer employees. Why should this type of plan be any different?

Shelley: GB’s post makes sense. From your original post it sounds as if you have a group dental plan that is 100% employee paid and you are required by the insurer to remit premiums on behalf of the plan participants. In this case I can’t even imagine how cost effective the plan could be to employees. I also am amazed that any insurer would write such an adversely selective plan. Only people who know that they are going to have claims exceeding their premiums are likely subjects for coverage. The premiums have to be astronomical. In any event, if it is a group dental plan COBRA is applicable.

Christine: Sounds shaky to me. I personally wouldn’t feel comfortable basing a medical plan projection on that type of claims information unless, and I really would feel uncomfortable using such rates for COBRA rates. I’m more confused now about how their plan operates. Some services are provided in-house and some are provided by outside venders, right? Who pays the outside venders, a TPA? I wouldn’t want to be the subject of an audit using the insurer’s rates. Of course, they may have made some acceptable underwriting assumptions regarding the dependent claims. If they are willing to argue that their assumptions are reasonable and made in accordance with acceptable standards of medical underwriting methods you might get away with using them. Just out of curiosity, what rates did they come up with and how many employees are covered? If you don’t want to post them here feel free to e-mail me.

Thanks

G: What is an HI Plan and why would an employer want one? Was some other threads in the past that explained this concept?

Christine: I guess I must have misunderstood you. I didn’t know that the insurer used the actual claims experience of you client, the medical provider. If they were using this experience for the immediate past three years and projected it forward I would use the rates. In my opinion it should be the insurer (or some other expert) that makes the calculation if there is no one in house that knows how to do it. How did they get the experience? Was your client fully-insured immediately prior to becoming self-insured? I need more information now, because every time I see a new post it seems there are different facts. I would also suggest to the client that they figure a way to determine their experience in the future.

The Blue Cross Blue Shield organization in your area may also do self-insured plan administration and provide stop loss. We use them in Rochester NY, and found that they were more competetive than othe TPAs plus you get the Blues discounts if participants use the local Blues network .

If you are subject to COBRA laws, dental must be offered.

Christine: If the entity is in fact a hospital I am not surprised that they don’t have a handle on their claims cost. I’ve never known of any hospital that has an accurate enough accounting system. I’m not sure I would agree that having an insurer giving a premium rate related to another group would be acceptable, except that in the event that the plan was going into its first year without previous claims experience. I think you may need to use the COBRA recommended alternative method in determining COBRA premiums. I personally would not want to use the excuse in court that the entity doesn’t have a grasp on its claims experience, and total plan cost. Does this make sense?

I’m not sure what the attorney is referencing, but it’s my understanding that the NAIC COB provisions say that the if a person has two group medical plans and they both are using the NAIC version of COB then the plan that covers the person as an employee is primary. Therefore, since you say the person has COBRA coverage form his former employer, I would argue that the COBRA coverage would be primary. I still fail to see how any employer allowed an active employee to continue to cover a dependent who had coverage on his own at his place of employment? I’m aware that a person can have COBRA coverage in addition to other coverage, but this person had to have been covered under his parent’s plan before he went to work and subsequently terminated employment and went on COBRA. In most employer plans once a dependent becomes covered as an employee of any employer he is no longer eligible for coverage as a dependent. Do I have the timing of events correct? If so, I challenge whether or not the person is even covered as a dependent in the other plan, thus leaving only the COBRA plan. Sounds like a nasty divorce situation to me.

I don’t know of any specific site to find a sample COBRA notice, but if you try searching on www.Google.com you may find some notices used by other employers. By the way. For future reference if you want to save any documents you create at work e-mail them to your home computer, and if you don’t have one at home now may be the time to invest in one. Saving information on floppy or CD can be risky, as you’ve found out.

G: How can a fortune 100 or 1000 company not know what their paid claims are? How can they not know what their TPA claims expenses are? Even if they are processing their own claims and don’t use a TPA they should be able to figure out their admin. cost. If they have stop loss insurance they should know that cost. They should be able to, and in fact should be booking a reserve. All of these elements are part of figuring out a fully insured equivalent rate. How can they develop an employee benefit budget without knowing their medical plan costs? Am I missing something here? Please enlighten us. :confused:

The premiums are not taxable to the employee but when an employee recieves monthly LTD payments the payments are fully taxable to the employee if the employer pays 100% of the premium.

deacon: I guess I must be confused. You have an active employee who has a dependent who is covered under his/her medical plan, but the dependent also is covered under his/her own former employer’s COBRA plan, right? First off I don’t see how a dependent of an active employee can be covered if the dependent had his/her own coverage at his/her place of employment. Most group medical plans I’ve been involved with do not allow an employee to cover an otherwise eligible dependent if such dependent is covered for medical as an employee by any employer, which would include COBRA Coverage. If however, this is the case I would suggest that most COB provisions would consider the coverage as an employee as promary and coverage as a dependent as secondary thus the COBRA coverage would be primary. Am I making myself totally misunderstood? Which came first the chicken or the egg?

Actuarially equivalency rates are an acceptable way of determining COBRA premiums for a self-insured plan. It is also an acceptable method of determining the percentage of the medical plan cost employees will pay. While all of the elements of a fully-insured plan are not present in a self-insured plan the underwriting assumptions don’t change, i.e. claims are claims; admin. Is admin.; reserves are still booked; stop-loss premiums are still paid, medical trend is still applied, and total costs are projected. Having said this, I would argue that these rates should be based on the employer’s own plan and not the comparable plan of another employer. If such rates can’t be determined on the employer’s own plan then the suggested COBRA alternative method should be used. Does Congress and the DOL know how to underwrite group medical plans? This is just a rhetorical question.

Even with as few as 10 enrolled employees one should be able to get composite group rates. Sounds like it may be time to look for another carrier. since I've never dealt with a COBRA issue of this nature I guess i can't offer any real advise.

I’m really confused now. Typically when an insurer develops group composite rates they will take demographics, among other things into consideration, but the group rates would be used to determine COBRA rates. I don’t know of any reason to be looking at individual COBRA enrollees as different from active employees except for the 2% that would be added to the group rates for billing COBRA premiums. I guess I've never seen a true group insurance plan billed on the basis of individual enrollees' sex and gender. I'd like to know more about that arrangement, because it doesn't sound like group insurance to me. Hope this makes sense.

One manager with a general background in all three areas and a clerk should do the trick.

What kind of continuation coverage are you talking about; COBRA, State mandated, or conversion coverage? Need more information please.

I'm assuming that you are not old enough to get an in-service withdrawal, and except for a hardship withdrawal, you can't get your money out of the plan until you terminate employment. Even if you had a hardship you couldn't get 100% of your money.

Question. What happens when the IRS audits the TPA? Does the TPA have to prove that the expenses he's been reimbursing fall under the IRS regulations?

Oh!

I still say No Jeanine. What if does senarios don't count as medical expenses. Maybe in GBurn's senario where there could be a real medical reason for storage it might be considered a covered item.