KIP KRAUS

Christine; The first thing is that the spouse has a qualifying event, because group coverage was lost. Assuming that the employer is treating other dependents similarly, I see no reason why the employee can’t be forced to pay the full dependent premium. Having said that, however, the employer may have a written policy regarding medical coverage while on Workers’ Comp., if so, it may be different than the policy for active employees. What is the employer’s policy?

Absolutely not, unless the employer wants to offer an opt-out payment to those who don’t take the employer’s medical plan. In this case the opt-out payment is usually not as much money as the employer would pay if the employee were enrolled in its plan. Also it typically only applies to family coverage. I find it hard to believe that an employee can find better coverage on an individual basis unless he is enrolled in some other employer sponsored plan. In any event, he should have no expectation that the employer pay anything for his individual coverage. It’s strictly up to the employer expectations or not.

I disagree with the health agent, what ever that is. If there is no substantial change in coverage there is no qualifying event. It doesn't sound like there is a substantial change in coverage.

Actually if you look at Schedule A Part II item 7 i you will see that this item is labeled Stop loss ( large deductible). The instructions to this item states in effect that if the stop loss insurance premium is paid for out of the general assets of the company they are not plan assets and not reportable on Schedule A.

Christine: I’m not an accountant or CPA, but it has always been my understanding that most individuals are on a cash basis accounting for income tax reporting. Therefor, if this person actually receives the payment in 2002 then she reports it as 2002 income. I’m not aware of any exception. In addition, the way you describe the bonus one could argue that she not entitled to receive it in any event until 2002. Thus it was earned in 2002.

Lindy: You have posted several questions regarding this “LTD Settlement”. Are we to assume that the LTD carrier originally denied your claim, you went to court and won? What exactly happened? LTD benefits are far as I know are taxable income. There may be some tax relief for person who are totally disabled, but I’m not aware of them. The amount taxable to you depends on the % of the premiums you paid. Your employer must make a calculation of a three-year average as described in IRS Publication 952. Therefore, if the contribution was changed during any of these years the % taxable could be different than the current percentage split.

Christine: I’m kind of with Jeanine on this one. I’ve never heard of any cases that cover this situation, but if the plan covers employees in general for maternity care I agree that pre and postnatal care should be provided for the mother. I don’t see how the employer's plan could be relieved of its responsibility to cover at least the pre and postnatal expenses of the mother unless the plan document specifically addresses this issue. I would also agree that the child should be eligible for dependent coverage under the birth mother’s policy until such time as the child was legally adopted. On the other hand, like Jeanine says if sate law determines the status of the child at birth the eligibility of the child to be a covered dependent may change. In my opinion the idea that being a surrogate mother is a “business venture” shouldn’t have anything to do with determining the status of the birth mother’s rights to maternity coverage under the employer’s medical plan. Any employer or insurer that has thought of denying maternity coverage to surrogate mothers has done a lot of micro-management of their plan’s cost containment features and the amount of money they would save by doing so would be miniscule. Then again, like Jeanine nothing would surprise me.

Numerous LTD plans off set for individual SSA benefits and or Family SSA benefits. This is common practice. However, even if they do an off set they usually pay minimum benefits. Your SPD should outline these provisions. I wouldn’t expect that dependent residence would mean any thing to the LTD carrier.

Thanks SLuskin, that's what I thought.

It seems that I’ve seen this discussed before, but can’t find the thread. If your doctor stops participating in the HMO you are in does this result in a qualifying event? Can you change to another HMO that the doctor participates in, or do you have to find another doctor and wait until open enrollment to make a plan change?

Very interesting LarryM. I would love to see how that judge made the determination on how the spouse got ½ of the retiree’s medical benefits. I would still argue that the judge over stepped his bounds by including a benefit that the employer may not ordinarily provide to a non-dependent. It seems to me that an ERISA plan participation requirements would preempt a state ruling, but then I’m not an attorney and not surprised at anything the courts presume to take action on in the name of justice. Maybe the judge, being a group insurance expert as well as a judge, knows some way to force an insurer, or self-insured medical plan to allow non-dependents to participate in an employer’s medical plan. I could be wrong about all of my arguments, but then I try to use logic, not precedent when making my arguments.

I agree with Joe. Unless the employee has a qualified change in status that would otherwise allow him to revoke his FSA election, I'd require him to continue payroll deductions. FMLA leave, in and of its self does not mean he had a change in status under the FSA plan. Sounds like a scam to me.

Meggie I’m going to take a stab at this from a practical viewpoint and past experience, but don’t have any site to quote to you. As far as I’m concerned, a QDRO applies to pension benefits only. Most medical continuation programs for retirees that I have been involved in provide for the retiree medical coverage in the medical plan document and not the pension plan document. Having said that, even if the pension plan document did provide for retiree medical coverage in its document I would be surprised if it would allow for continuation of an ex-spouse’s medical coverage. Likewise, I would make the same assumption about the medical plan document regarding ex-spouses. My other comment is that QDROs cannot require a plan to provide benefits that it would not otherwise provide absent a QDRO. COBRA may be your only option, but check the plan documents.

Let me get this strait. The beneficiary received more on the death benefit than what was legally due and wants to keep it. My answer would be no you can’t keep the overpayment. You were not entitled to it. I don’t know what you mean by criteria could be used to honor a so-called overpayment waiver. Never heard of such a thing. In addition, if it's an ERISA plan you can't pay more than the benefit from the plan. I'm sure that your insurere wouldn't agree to overpay beneficiars

I would not agree that former employees would be eligible.I would agree that consultants may be able to do it.

I don't know of any law that would require you to participate in the school's plan, but, in my opinion, they do not have to give you an opt-out payment if you do not meet the opt-out requirements. What makes you say that the school's plan is inferior to a individual pay Blue Cross plan?

Unless your 125 premium payment plan defines consultants as eligible to participate, I’d say no it is not permissible.

Dale: In most opt out plans I’ve been involved in if an employee can provide evidence that he/she has group medical coverage elsewhere (through a spouses’ employer for instance), then the company pays these employees an opt out payment, which is regular income and taxable. The employer does not force the employee to purchase coverage, it merely allows them to receive the opt out payments if coverage is provided elsewhere. The chances of an employee purchasing coverage on an individual basis at the level provided through an employer at a price any where near the employer’s price is slim and none, so in my opinion, it becomes a mute point as to how expensive the employer’s plan is. On the other hand, if you choose to go without medical coverage, that's your prerogative.

aus10 You may be correct about other retirement and stock purchase plans, but I would argue that 125 plans have no relationship to pension, retirement or stock purchase plans. Our plan document for instance says that the participant must suspend contributions to the 401(k) and all other employer qualified plans. Qualified plans, I don’t believe means 125 plans.

Jon Chambers: Since you brought it up, the engineering issues involved in building a nuclear power plant are; oh never mind.

Unless that provision is written in the 401(k) plan, or just happens to be the employer’s policy, I don’t know what FSA contribution suspension would have to do with the 401(k) plan. There certainly is no regulation that I’ve ever heard of that would require suspension of FSA deferrals based on a Hardship Withdrawal from a 401(k)plan. If there is such a reg. it wouldn't be the first time I've seen rediculus legislation.

I’m not sure about the defined contribution route. However, if an employer wants to provide a self-insured medical plan that provides a maximum annual benefit of $10,000 per employee and they don’t have a problem with discrimination I say there’s no reason why they couldn’t. Maybe just giving each employee a $10,000 FSA each year would work, again as long as such an arrangement doesn’t favor the Highly Compensated Employees, I don’t see what could stop them

Mary Is it correct to assume that you do not have a dental plan? If you do, however, the claim should be processed first through the dental plan and if it determines that the procedure is not medically necessary then I'd apply the dental plan's not medically necessary determination to the FSA.

It sounds like your employer uses Liberty Mutual simply to process disability claims if they are truly self-insured. You should appeal to the employer in accordance with the claims appeal procedure in your SPD. They should have the power to instruct Liberty to find a way creative way to process your disability. If you are in fact disabled and your disability cannot be determined to have been self-induced you should be able to have your doctor provide sufficient evidence to prove your disability. Good Luck

In my opinion the employer should have informed your wife that she was on COBRA during her disability in some manner. Perhaps it’s is explained that way in the SPD, but I would be surprised if it was. If there was nothing in writing stating that your wife was on COBRA during her disability period I would question the COBRA start date. Was she paying the COBRA premiums or the regular employee contribution that active employees pay? If she was paying active employee rates I’d be suspect that she was on COBRA in June 2000. It’s not uncommon for an employer to allow an employee to continue medical coverage for a period of time during a disability and then offer COBRA. I’d call them on it and then if you don’t get a positive response you may want to contact an attorney or the DOL.