KIP KRAUS

AmAu_99: Your formulas are making me dizzy. The way I would calculate the imputed income would be as follows: $160,000-50,000 = $110,000 110 X .17 = $18.70 $18.70 x .5 = $9.35 170,000-50,000 = $120,000 120 x .17 = $20.40 $20.40 x .5 = $10.20 Imputed income for the month= 9.35+10.20= $19.55 The above calculation is based on a GTL Plan equal to 2 x Earnings with the employee paying nothing for this coverage or for supplemental coverage. If he were paying for supplemental coverage, the amount he pays would be deducted from the total imputed income figure. Check out the following site http://www.phl.com/group/utable.htm for a good example of how to calculate imputed income. It looks like you have the right idea

ibsnyder: Why is a group this small self-insuring any portion of their medical Plan? Claims experience on a group this size has no credibility. Up to what amounts per person are they self-insuring? Are there community rated HMOs in the area? If so, I'd investigate their rates.

HIPAAdrome: Unless there is absolute security on line, where no one can tamper with the beneficiary designations, I would not recommend nameing beneficiaries on line. I'm no attorney, but since typically an employee can name anyone as beneficiary(except the employer) he/she wants to under a group life plan, I could see major litegation arising from an employee naming someone other than a spouse if done on line. If the desination is in writing, and signed by the employee, it would be hard to refute. It also may be a state insurance regulation that beneficiaries be designated in writng. As much as some employers may want to eliminate as much paper as possible, I think it prudent to have this kind of information in writing.

Kenneth: Are you sure your employer is talking about Workers' Comp. Insurance and not auto insurance? I have never heard of any insurer needing personal information about an employee's driving record to underwrite WC insurance. If you drive a company vehicle, on the other hand, they would be interested in your driving records. I know that WC varys from state to state, however, it typically is mandatory coverage imposed on the employer and if an insurer is underwriting Comp. insurance in your state I would think they must follow the state requirements for providing such coverage. I don't know what the regulations are in your state, but you should be able to find them on the state's web site.

I agree with SLuskin. However, I don't see how moving to an ajacent apartment could result in loss of an HMO coverage. One would think that the entire apartment building or even an adjacent apartment building would still be in the HMO area. HMO coverage areas usually are defined by cities, counties/parishes and or towns, not by streets and buildings, or latitudes or longitudes.

pinsall: First of all, I have never seen a definition in a medical plan that denies spousal coverage because the spouse does not live with the covered employee, unless they are legally separated. It is also common to allow dependent children of divorced parents to be covered when they do not live with the employee. Second, if the husband's plan is covered by state insurance regulations, it may be illegal to deny coverage in this situation. If the husband's SPD does not specifically state that a legal spouse must reside with the employee in order to have coverage, then the employer cannot, in opinion deny coverage. If what has happened is legal and above board, it clearly should prompt a COBRA qualifiying event. However, your employee would probably be better off paying your company's contribution in staed of electing COBRA. I suggest that your employee demand a copy of the husband's SPD so she can read the eligibility provisions. Finally, if the husband's medical plan is not part of a Section 125 plan he could probably drop his spouse and dependent child from coverage at any time. I wouldn't believe that a legally married person could be dropped from coverage by the employer until I saw it in writing in an SPD.

Justin: It occurs to me, just a guess, that if you made a change on a sizeable plan to allow for lump sum distributions it would require an immediate actuairial increase in the funding of the plan unless the plan is way over funded. Have you run this by your actuary for such a possibility? That may be an immediate draw back.

RMV: I have always only included in active employees those employees at plan year end that are cosidered actively working and who have an account balance, whether curently contributing or not. As for retired/separated persons entitled to future benefits I include all terminated former employees at plan year end that continue to have an accoutn balance. I don't intrepret the new forms as requiring anything different.

Thanks for the clarification. As long as the plan allows for periodic timed distributions, I would allow the person to make a change in the absents of Plan language to the contrary. However, I certaintly believe that you should require a reasonable notice period in advance of making such a change. I was envolved in a plan in the past that did periodic distributions to terminated/retired participants, but I would not recommend this, especially if the employer is footing the bill for recordkeeping on a per head basis, or asset basis. If you have been allowing the periodic payment on an administrave basis, you may only be able to stop doing so safely by amending the plan for future terminated participants. In addition, if you plan to continue to do these types of distributions, you may want to establish some perameters and provide for them by amendment to the plan. There are grey areas, in my experience as to what you can do admistratively and what you have to do by plan provisions, but I suspect periodic distribution practices should be in the document. Check with your legal council.

John: It sounds more like you are talking about a defined benefit plan. I realize that some DC plans have payment options, but I can't understand why they would have a 10 year certain option when most dollars in a DC plan are fully vested at the very least in 7 years. If the plan is a DB plan it most common to disallow a change in the form of benefit payment once benfit payments begin.

Sounds reasonable to me Hank. Thanks for the input.

I didn't interpret RW's "what if" question as verifying that the attorney was representing the deceased's estate. It was a question, not a clarification. I would hope RW would not refuse information to an attorney who represents that he is representing the deceased's astate. Thanks PJK for clarifying the purpose of the Message Board. I guess I was confused all this time.

I guess you haven't gotten the picture yet. I agree that if there is written representation that an attorney is representing the estate of the deceased, one should honor the request for information. I know the commonality of attorney requests for information in these cituations. However, if the attorney is representing someone other than the deceased's estate, or executor and there is no evidence that this person has any rights under our ERISA Plans, I'm going to be looking for a court order before releasing confidential information. Let us not be mistaken, plenty of attornies write letters that have little or no veracity. Everyone cooperates with attornies when cooperation is necessitated. Lighten up out there folks. No one is doubting your rights to request information that you or your client is entitled to.

I don't know that requiring reasonable evidence from the requesting attorney is being a tuff guy. If the requesting attorney has a legal right to the information, he/she should expect to prove that he/she does, and the Plan Administrator has a the feduciary liability of insuring that what it provides is being provided on a right to know basis.

RW Get the evidence before releasing anything.

I agree with nb. The plan that I was envolved with had few takers on smoking cessation or weight loss program reimbursements. In addition, while I agree that healthy lifestyle programs have the potential to cut down on medical costs and absenteism, I have never seen hard specific dollar savings that could be directly associated with the money spent on such programs. My theroy is that people are exposed to so much healthy lifestyle advertising that if they are motivated they will make the changes on their own, and no employer sponsored programs are going to make a diference. These programs are nice perks, if you can afford to spend the money, but in my opinion not cost effective. If someone can show me the cold hard dollar fact savings directly related to these programs, I'd be sufficiently shocked. Come people, I know you're out there. Show use the data.

jeanine: I base our self-insured medical and dental COBRA premiums on standard underwriting assumptions, which include the following: 1.Prior years paid claims 2.Adjustments for any change in participants 3. Adjustment for claims credibility 4. Adjustment for any shock claims 5. Claims fluctuation margin 6. Medical and dental inflation trend 7. Reserve adjustment 8. TPA fees 9. Stop loss premiums (medical only) In addition, if you have made any major plan design changes, these need to be considered in projecting future claims. If your plans have deductibles, you may also want to include an adjustment for deductible erosion. Once you have determined the total projected cost for the next 12 months, you establish the premiums on the basis of the particpants and add your 2%.

deweiss: Just something to think about. Shouldn't your TPA be able to provide you with a siting from the Regs? I would expect the TPA to back up his/her position by siting the Section of the Regs. That are applicable.

RW: I personaly would consider beneficiary information to be confidential. In the absence of a court order I wouldn't provide any information related to plans or named beneficiaries. This is just my management opinion and not founded on any quotable legal precedent. Contact your ERISA attornies.

Try contacting the employer direct.

I know this is a radical thought, but why not file the forms to best of your ability and let the DOL figure out that their fantistic idea wasn't so fantastic after all???????? I'm sure that with all of their creative people they will figure out what to do?????

I think if one got somewhat creative, one could find a way to accomodate the employee and it would be transparent to any auditor.

Read the plan description to determine who has ultamate authority to approve plan reimbursement. What is the employer's reason for not paying the claim? Was the claim timely filed? April seems to be a long time for 1999 incurred claims to payed on a run out provision.

I agree with JL. However, to avoid future problems, I would design the plan so that if an employee has family coverage(even if only husband & wife) when a child is born, the child would be automatically covered at birth, even if not reported within 30 days of birth. Of course, the child still should be reported in order to avoid future claims problems.

John: I would start by looking to the Plan Document for definitions of an eligible employee, and Plan Participant. If the owner doesn't fit the definition of an eligible employee/participant, and doesn't work for the company any more, you may have a good case for treating him as terminated. However, someone else out there in Benefits Land may know of a ruling regarding Company owners and their status as terminated employees.