KIP KRAUS

It’s very unlikely that an employer would continue COBRA beyond the required time period established by COBRA. In fact, if it weren’t for COBRA they would be unlikely to continue group coverage beyond termination of employment. If you COBRA coverage is insured you may be eligible to convert your coverage to an individual policy with the insurer.

OK. I give up. What's a DH, and why would RCK assume that a DH is gernally at least age 591/2.

Scraf: I agree with your statements about self-insured plans. However, I disagree somewhat with your statement about insured plans. If a group is large enough and they are fully experienced rated, and they want to expand the definition of eligible dependent, I’m sure the insurer will find a way to accommodate them. In fact, if they can cover same sex, and domestic partners, they can surely cover dependent parents, siblings, aunts, uncles, in-laws and any other dependent an employer may want to include. This would still be crowd insurance. Just have one HCE have the need and “thy will be done”. Of course all similarly situated employees would have the same option. The neighbors comment was a stretch and a joke!!!!!

Hey Greg: I guess an employer who wants to foot the bill for the extra claims costs can pretty much allow anyone they want to participate in their medical plan, especially if it’s self-funded. I’m sure, if state regulations don’t prohibit it, an insurer would also underwrite such a plan. Heck, why not write crowd insurance and let employees put siblings and neighbors on the plan.

Christine: The most often restrictions I have seen related to this type of situation is denial of coverage if services are performed by a family member, or if services are performed by someone who would normally not charge for their services. I’ve never seen that type of “dual relationship” exclusion in a group policy. However, as I said before it makes sense to me that you would want to discourage employees from getting involved with each other’s medical problems, especially psychiatric and drug and alcohol abuse. It may even become an ADA issue.

What kind of bonuses are paid in a defined benefit plan?

kredlin: The major differences I see are self-insured medical plans are more formally designed plans that specify what medical procedures are covered, what dollar limits there are for covered items, what items are not covered, and various other restrictions and limitations that are not typically in a Section 125. Get hold of a fully insured group insurance contract and read it. Then compare it to the Section 125 regulations and you’ll get a good idea of the differences. I may be wrong, but another thing different is that I believe Section 125 plans are not ERISA plans, self-insured medical plans are.

CECELIA I don’t know that there is any textbook reason that employers do not cover parents as dependents under their group medical plans. However, it occurs to me that there is at least one major reason that they wouldn’t want to; higher exposure to higher medical expenses. I always try to put this type of employee question in perspective. The company cannot afford the possible high claims exposure by opening up enrollment to dependent parents.

Christine: I've never heard of it, but it makes sense to me. Why do you ask?

You may want to contact the Health Insurance Association of America (HIAA)at the following web site. http://www.hiaa.org

Sounds more like crowd insurance to me unless the owner’s daughter is an employee. Don’t know what you are going to do unless you want to contact the state insurance commission and see what they say. Doesn’t sound like an employer I’d want to work for.

Lissi: A former employer I worked for simply prorated the vacation schedule on the basis of the required workweek using 40 hrs per week as the regularly scheduled workweek for full-time and if a part-time employee’s regular scheduled workweek was, say 30hrs., per week vacation was prorated at 30/40 or 75% of the full-time schedule. Thus if after 2 years service vacation for full-time employees was 10 days, a part-timer working 30 hrs./wk received 7 ½ days. This would be the program even if the part-time employee on occasion worked more than 30hrs., because the PT employee was hired specifically as a PT employee and assigned a normal workweek in terms of hours expected to work. Anyone scheduled to work less than 30 hours per week was not eligible for vacation. If you do not require a regular schedule for part-timers this could be a problem.

iris: You work for an interesting company to say the least. I may be mistaking, but in order to have a true group plan in NY I think you need at least 5 participants. I also believe that any group insurance plan sited in NY must preclude individual selection, which means that it must be offered to each eligible employee based on some eligibility provision that precludes individual selection. I would contact the insurer and get the eligibility provisions from them, or the Department of Labor. As to the 12-month waiting period for late enrollees in a dental plan they typically only require a wait for major work and only cover preventive work during the first 12 months.

Linda: I agree with you on the reduction in hours point. However, I believe that a QE may be argued to occur under sect. 54-4980B-4 Q&A 1( c ) in this case that Christine is talking about,because there would be a loss of coverage under the terms of the PT plan. Just my guess.

Thanks folks. It makes sense to me!!!!!! I take that back, it makes sense that the government came up with it. To get those evil HCEs everyone has to be subject to the minimum distribution rules. You think that helped to create the infamous federal deficit? You think they were wearing masks when they enacted this provision?

Iris: Who is the insurer, and is the medical plan individually underwritten based on a health questionnaire, or is it a true group plan with no medical underwriting?

Pax Are you a psychic or what? I wouldn’t have thought of that since I never worked for a municipality. Please enlighten us with the pitfalls. I’d be interested to know what they are.

For ever and ever is a long time. Is this a trick question, or does it just sound like one? Absent of a collective bargaining agreement, I don’t know of any laws that would prohibit an employer from increasing employee contributions to a medical plan. However, if they were ever given anything in writing that would suggest that they would never have a change in contributions I’d have an attorney look it over.

Iris I don’t know of any section of COBRA that requires an employer to continue medical coverage for any period of time following an employee’s termination of employment. Termination of coverage upon termination of employment is typically dictated by insurance policy or self-insured plan provisions. It is not uncommon for coverage to terminate on the date of employment termination or at the end of the month following employment termination. However, once a person elects COBRA coverage the coverage is re-instated retroactively so that there is no laps in coverage.

I have never heard of this type of coverage being covered under a group health plan. I've never seen it specifically described as a covered item or an exclusion in a group health plan. This doesn't mean it hasn't been. If the plan is denying coverage, check with the state insurance department to see if it is a mandatory coverage.

Something sounds fishy. I don’t know how they can be singling you out as a non-eligible employee unless there is something different about your employee status. Are you on the company payroll or are you being paid through a temporary employment agency? If you are on the company payroll and eligibility is 30 or more hours of employment, I’d ask to see the Summary Plan Descriptions and read the eligibility provisions. You can also contact the local Department of Labor and complain to them.

Christine: You see what these legislators do to make our lives miserable. In the absence of specific guidance, I would assume that going from PT to FT does result in a QE. Don’t forget it is a change in employment status that effects the plan that the employee is eligible for even though the new plan is a better plan. I would take the same position that you do regarding the alternative coverage interpretation in your COBRA book that it does not apply in the case of this particular situation. I would argue that it only applies in the situation where there is a QE related to termination of employment of the employee. I would also argue that the intent of the COBRA is not to penalize an employee and that if you applied the alternative coverage rule to these employees who keep switching from FT to PT and PT to Ft you in effect would be penalizing them at no fault of their own.

Thanks for the philosophical comments. I know I needed it. Maybe using the term advice on my part was inappropriate. I usually just give my point of view as simply that, my point of view. On the other hand, of course, if advice is free one is always free to take it or leave it, and it doesn’t hurt my feelings.

At the risk of sounding dumb could someone explain to me why we need minimum distribution rules in pension plan other than the fact that it is in the IRC?

Everyone seems to be coming from his/her individual area of interest regarding this issue, and I guess that’s good for discussion, but not so conclusive for Cindy. The longer the posts get, the less my original position has been swayed. My advice goes back to me original post, if there is any doubt tell the AP no on the hardship withdrawal and explain that a total distribution can accomplish the same thing. You may be surprised if they accept that position, and if they don't you go back to the drawing board. Good luck.