KIP KRAUS

jeanine; I would expect that the spouse may be eligible for a converted policy to cover him/her during the period before the COBRA event happens. Assuming, of course that a conversion policy is available. Otherwise it sure appears that the spouse would SOL in this situation unless his/her attorney was clever enough to find a way to prohibit the employee from dropping spousal coverage prior to the final divorce. .

This sounds even goofier. He's the owner? How does he have a qualified distribution before he leaves the company? Sounds like he gave himself a distribution before he left the company. If so, that would probably be contrary to plan provisions. Sick the DOL on him.

Earl: This seems to need some clarification, or maybe I just don’t get it. Are you saying that this person was an employee/participant of the 401(k) of which he was also a Trustee? If so, how was he able to do a rollover without signing the Annuity Waiver Form? Sounds like a breach of fiduciary responsibility, if he did this on his own signature as a Trustee.

I’m not sure exactly what you are trying to get at, but will give it a stab by answering this way. It’s my understanding that under ADEA, not EEOC, that one option an employer has is to do a one time reduction in group life insurance amounts beginning at age 65 from 30% to 40% and if justifiable by its own experience reduce it more than 40%. So your former employer may be within legal limits. As to your comment that the employer’s rates were not age based you may be somewhat mistaken. If his group life program was a true group life program then the flat rate per $1,000 of coverage was established on the basis of everyone in the group’s sex and age, and then a composite single rate was charged. There may have been other underwriting factors also taken into account in developing the composite rate, such as claims experience, industry loads, etc. The vesting schedule for the 401(k) plan is favorable schedule, and I believe it falls within the perimeters of allowable schedules.

The only other thing I would add to Joe’s comments is that when section 125 premiums are not in effect an insurer or employer will allow an employee to cancel medical/dental coverage ant any time they wish regardless of a family status change. However, if they do, they usually cannot get back into the plan until open enrollment regardless of a family change.

David: I know of no reason from a legal or otherwise standpoint that an employer cannot offer auto and homeowners insurance to employees. However, I can tell you my reasons for not offering them. 1. Other than the convenience of payroll deduction for payments there doesn’t seem to be any other benefit to doing it. 2. I don’t want to put the company in the position of recommending any particular insurer for employees to by such insurance. 3. The first time an employee finds out they can get this insurance cheaper from some other insurer it makes it look as though the employer has something to gain from the insurer. 4. Generally, I don’t want to give an insurance salesman access to by employees so they can try to sell them other personal lines insurance. 5. There are 100s of insurers out there that employees can solicit quotes from.

I think pax hit the nail on the head. Commissions are about 20% to 30% on the premiums. Would be a nice Christmas present for the agent.

Sounds more like a state insurance commission concern to me. I would check with them.

Sylvia; Time to get back to everyone so we know how things stand. At this point everything is based on assumptions. What progress or actions have you taken?

I don't know what BCN is. However,the premiums you are paying seem to be reasonable to me. In additon, a 10% increase seems reasonable. Your employer is more than likely on a calendar-year schedule with its insure for a 12-month rate increase effective January 1. They appear to be passing the renewal increase on to you, which they can do. If you still feel uncomfortable with that, you could still contact the DOL or Insurance Department.

I didn't get the impression that RW's original post was related to a COBRA notice, but to an active employee. However, I agree with Jeanine's post related to COBRA.

I would think that unless the plan document and trust agreement allow for outside investments it shouldn't be allowed at all. Just my guess.

If the plan document by definition, covers only legally married spouses then canceling coverage at divorce is standard whether or not the employee notifies the employer or not. I have never seen a document that says what method is to be used to notify the employer and don’t think it needs to be defined, but then I’m no attorney. As to whether it can be a legal issue It seem that almost anything these days can turn into a legal issue. Employees need to take some responsibility to let their employers know when someone is no longer an eligible dependent. Most people would at least expect that if they got divorced their former spouse would no longer be eligible for coverage and let their employer know.

Louise: It sounds like your former employer has elected to administer COBRA internally. This is admissible under the COBRA regulations and common. The premium that they are allowed to charge you is equal to 102% of the actual monthly premium charged by the insurer. Therefore if you, for instance have single coverage and the insurer charges $260.00 per month the employer can charge you $265.20. Probably the reason the employer is requiring you to write the check to them is because they simply leave you no their standard premium statement and pay active and COBRA premiums on the same statement, which can be a common practice when an employer is administering its COBRA. If you think something is wrong contact the local Department of Labor and/or state or commonwealth Insurance Department. It may be helpful if you could tell us what coverage you have (single, Family or two person) and the premiums you are paying then we at least may be able to let you know if it looks reasonable. The city and state where you live would also help in making this determination.

Why wouldn't you request the certificate of creditable coverage day one if you have a pre-ex provision? I see no reason why a plan couldn't deny a claim based on a pre-ex if no ceritificate was given to the plan Administrator at enrollment. However, if a new participant hasn't recieved it from his former employer I would re-open the claim for redetermination upon reciept of the certificate.

The only thing I recall reading in the Regs. paraphrased of course, is that payments may not be made less frequently than on a quarterly basis. I don’t recall ever reading that this must be on a calendar quarter. However, after having said that, I wonder if quarterly means at least every three months or every 90 days or does it in fact mean a calendar quarter. These days, quarterly may mean whatever you interpret quarterly to mean to you. Right Bill?

I give up Lisa. What's Health Plan work group?

In my opinion, and the way we administer COBRA, if an employee choses only to take dental COBRA, the subsequent attainment of medical (with no dental coverage) does not force a termination of COBRA dental. At the same time, because medical and dental are separate COBRA events with our plans if a COBRA participant picks up medical and no dental, we do not force termination of COBRA dental.

I say no. You file Schedule A.

In my opinion, HIPAA has no authority to allow plan coverage changes. To my way of thinking changes are governed by Section 125 provided you are utilizing 125 pre-tax premiums. Doesn't sound like your situation would be authorized under 125. Just my got feeling.

Kirk: Even while I will agree that technically employees are not charged premiums under a self-insured plan the contributions that they pay are typically related to a fully insured equivalent rate. With the exception of insurer risk charges and profit margins most elements of a self-insured plan are identical to the elements of a fully insured plan and equivalent rates can be actuarially developed from this information. This is how you can determine what percentage of the cost of the plan you wish your employees to pay. In addition, you also get your COBRA rates from the equivalent rate.

Jeanine: I think you will find that in any group medical plan that is experience rated, the employer bares the risk of claims and cost of stop-loss premiums regardless of whether they self-insure or fully insure. Even in the case of a non experienced fully insured plan the cost reflects the claims experience. Therefore, any mandated benefits are going to end up costing the employer/participants.

1. The disabled employee will more than likely be required by the new carrier to be actively at work in order to get coverage. I have never, in over 20 years heard of any regs. state or fed. That require the employer to cover anybody in this instance. Then again, I don’t know what each stet may do. 2. All affected employees should be informed of change in carrier, including the disabled ones. 3. Options for coverage are governed by the group insurance policy. Check the policy. They could be covered by disability waiver of premium, or disability continuation of coverage, or a conversion privilege. 4. Group life is not a COBRA coverage. Why not ask the insurers? They should have all of this information. Employers change group life carriers every day even when employees are out on short-term disability and don’t encounter problems.

Larry: Thanks, but no thanks to the feds. Overseeing the insurance industry. However, I do agree that state mandated benefits are a major problem for insurers and employers. It would be advantageous to everyone to have a national standard, but I fear the special interest groups would have a major problem with that. How else would acupuncturists, chiropractors, psychologists, midwives, message therapists, nurse practitioners, osteopaths, podiatrists, social workers and other such practitioners get their piece of the pie? Why should only 5 states mandate coverage for acupuncturists? Is it because they have a concentration of acupuncturists? What about only 19 states mandating coverage for nurse practitioners, 28 states cover nurse midwifes (must be the sparsely populated states????) If my memory is correct, I believe that New Hampshire mandates coverage for a hair prostheses for loss of hair after chemotherapy (did some politician’s family member have a claim denied?). Then we have the great Bible belt state of North Carolina that mandates coverage for pastoral counselors, Huh? Birthing centers in Pennsylvania? I don’t know anything about birthing babies Ms Scarlet!!!! There are too many special interest groups out there to have a national agreement or standards on what practitioners or medical coverages should be mandate in medical policies. Keep self-insuring when you can and maybe the insurers will put enough pressure on the insurance commissioners to do something that makes since.

I seem to recall, but my memory is getting foggy lately, that providing executives with increased medical benefits on an insured basis was done years ago. I seem to recall that Met. Life would write these benefits back in the 80s. as an insured product. Back then it was my understanding that such plans were taxable. What has changed since then? KGibson. Is KPMG Peat Marwick's(I believe now known only as KPMG)opinion used in Guaranty Life's marketing materials, or did your company request the opinion?