KIP KRAUS

Brian: In most Short Term Disability (STD) policies I've seen over the years Workers' Comp. claims are specifically not covered. If the employee is not going to return to work because of a WC related illness or injury, based on my experience and opinion,STD benefits should be denied. As long as the illness/injury is not being contested by the Comp. carrier, I know of no instance where a comp. claim becomes an STD claim. It sounds as though an Independent Medical Examination(IME) has been performed by the Comp. Carrier doctor and thus the reason for them denying future weekly payments? It sound to me like it is still a Comp. issue and not an STD issue. Hope this helps.

Interesting Cituation. If coverage is non-contributory, technically the employee is covered automatically when eligible subject to being actively at work on that date. However, if coverage is contributory, they must enroll in order for coverage become effective, and typically they must do it within 31 days of becoming eligible to do so. If this person did not enroll for contributory coverage, he/she is not entitled to COBRA unless you want to retroactively enroll the person and then provide coverage, but this would require retroactive contributions. On the other hand, if coverage is noncontributory, you should enroll him/her on the effective date and offer COBRA. This is the best I can come up with given the information you have provided.

OK. Now that the commercial messages are over, I'd like to ask a stupid questions. Where in any regulations is there information that says an employer/plan sponsor has any obligation to give investment advise? Maybe I missed it. It has always been my understanding that providing the necessary investment information to participants is the only requirement. I would not advise an employer to give direct investment advise to participants nor would I advise hiring an investment advisor to avoid fiduciary responsibility, because there is no such ultimate avoidance. I know I'm a kermudgin (how ever you spell it), but I see no need in providing investment advise to participants as long as the plan has a reasonable invetment selection strategy and provides a flexible investment policy. Why not ask the government for investment advise, they seem to have all the answers when it comes to telling employers how to run their benefit plans. Good golly, is that a political statement?????????????? Sorry.

EMC: I believe that any requirement to provide a life insurance conversion notice to a terminating employee is a requirement by state insurance law. However, we have always included the conversion notice in the SPD. In addition, we remind a terminating employee of this right in the a letter that describes what happens to all benifits at termination. I would check the group insurance laws in the state or commonwealth where the policy is issued.

Has the 60-day rollover period expired? If so, I'd say the participant is stuck with a taxable distribution. If not, it depends on whether the trust will cancel payment on the check and amend any tax filing already done. On the other had, if the participant is still within the rollover period, he/she could sign the check over to the plan as a rollover and include the 20% witheld taxes and take the tax deduction on his/her income tax return. This is me just thinking out loud. Any body else want to touch this?

robkt: I don't recall seeing anything in the COBRA regs. that requires extending COBRA coverage to any domestic partners. Even though you allow coverage to actives employee's partners,it's my understanding that you do not have to offer COBRA to them, only the employee.

So was I Kirk. Thanks for your in put. [This message has been edited by KIP KRAUS (edited 01-05-2000).] [This message has been edited by KIP KRAUS (edited 01-05-2000).]

What's your point Kirk?

My experience has been that employers do not generally want the liability of providing direct investment advise to 401(k) plan participants, but will provide employees with the necessary information to make an educated investment decision. When asked, my advise to participants is not to take investment advise from anyone unless They are paying for the advise.

BILL: Either have your prior TPA do the run out claims or have the new one do it. It would be easier for the prior one to do it otherwise you are going to have to transfer claims history data to the new one, and believe me it will be a disater. Cut a deal for a one year run out with the prior TPA. They are the ones most qualified to do run out. It will be a night mare to do it yourself.

It shouldn't make a diference if the plan is a protoype/standard bank plan. Usually the adoption agreement to a prototype plan will define who is a participant and include a difinition of eligible compensation, especially if there is a company match. I doubt that a consultant would be considered an employee, nor would deferred compensation be eligible compensation. You need to find the adoption agreement. The bakn would most definately have it and the employer should have it.

Robin: The answer to your question regarding what you need to consider when bringing your HR, benefits, payroll and risk management in-house depends largely on the experience of your HR and accounting personel. I would assume that your PEO has been providing the expertise with regard to all of these matters? Are you going totally in-house with the payroll using your own in-house systems? Do you have a benefits Broker/Consultant? Do you have a Property Casualty broker? You are bringing in-house a lot of functions that will require more than a passing knowledge of their applicablity to your organization. If you do not have the qualified personel to handle all of these functions, you will probably need to continue to use outside consultants. Are you prepared to add a staff person? Sorry, I can't provide more info, but without knowing more about your in-house expertise it's diffult to assess and answer your question with any kind of detail. [This message has been edited by KIP KRAUS (edited 12-22-1999).]

I agree with Brinda, and if the plan states 15% of compensation it probably does not include compensation prior to becoming a participant. Therefore,the 15% would apply to the going forward half years salary. Unless the plan document specifically allows for make up contributions, which I'm not sure is even allowable,the employee is stuck with the half year contribution rate. In fact, in order to allow the employee to make the maximum contribution for the entire year you would most likely have to allow him/her to put more than 15% in the plan on a payroll deduction basis, and the plan only allows 15%.

Dsilver: I don’t know how difficult it would be, but maybe you could set up the contribution to allow for the total employee cost of coverage to be deducted from more than one commission check over the course of the plan year. Perhaps limiting the deduction to a percentage of the commission check so that a disproportionate amount does not come out of one check. This could abate the problem of non-payment, if not eliminate it. Getting back to your original question as to allowing the employee back in at open enrollment, unless your plan document has specific language regarding not allowing a person back in because of non-payment of previous premiums, I would be reluctant to not let him/her back in the plan. That being said, I would have the plan amended to cover this situation beginning with the new open enrollment period. Hope this helps. Maybe someone else out there can find a siting for this particular case, but I would think it is very unique to a few employers.

Allan: Unfortunately, I think a self-insured medical plan can deny coverage for any specific medical procedure for which they wish to do deny. One of the main reasons for having a self-insured medical plan is to avoid mandated state group insurance coverages. As an example, many states mandate coverage for psychiatric coverage (which in most cases could be argued to be medically necessary), but a self-insured plan can specically deny, or limit such coverage. On the other hand, if the self-insured plan document/SPD does not specifically deny coverage for breast reductions, and defines plan coverage as covering procedures that are not experamental in nature and medically necessary, I would say your client should appeal the denial. Have her folow the appeals procedure set up by the plan. Good Luck

Ok Folks. What if the prototype plan has been frozen as to employer contributions since 1988, and the plan only allows for forfietures to be used to reduce employer contributions? The plan is terminated in 1999, 11 years later, and there is still a balance in the forfeiture account, what then? We currently have this situation facing us.

dsilver: It sounds like you are administering a Bar Association Plan that allows members to purchase medical coverage through an association group plan? Otherwise, I can't see how he could not have paid premiums. Need clarification.

Robin: Contact the Industrial Management Council in Rochester. They should have such information specific to your geographic area. By the way. Unless you are recruting from out of the area, you want to be competative with local employers and should be more concerned with what they are doing as apposed to what out of area companies are doing.

Does this trigger a COBRA qualifying event for the family members who will be losing coverage? It doesn’t appear to loosely fit any of the Qualifying Event definitions, but it is termination of coverage on a voluntary basis. Anyone seen any cases similar to this, or know of any rulings?

Thanks Linda, I didn't think so, but these days who knows what the courts could decide.

Robin: There is a procedure call "Due Diligence" that Buyers/sellers got through preceding a sale/purchase of a business that would analysis, among other things, benefit plan issues. try the following web site for an education on types of information analysised. http://infoseek.go.com/?win=_search&sv=M6&...ing/Selling+A+B usiness,+Due+Diligence,+Valuation, +Negotiation+And+Franchising+...&top= [This message has been edited by Dave Baker (edited 12-09-1999).]

Michael: My experience has been that in companies in the size class of 50 to 250 employees the controller or some other finacial person is usually in charge of the benefits. They may not make the final descisions, but I would start by contacting them. Are you attempting to sell something?

beth: I'm not an attorney, but until a distribution is made from a qualified plan to an IRA, in my openion, the beneficiary designation under the qualified plan is the ruling document. I would argue that until the money is distributed to the IRA, the care, cutody and control of those moneys come under the provisions of the 401(k) plan document, and if the original beneficiary designation under the 401 (k) plan is legitimate it should be recognized as the only beneficiary designation. Another thing, if the clear intent was to give the money to B, then the deceased could have changed the beneficiary under the 401(k)plan at any time provided he/she was not legally married, or if married, obtained written permission from the spouse to change the beneficiary. Sounds like A is your client. Good luck.

Bill: What I'd Like to know is have you found what you were looking for? If so, where did you get it?

Is it some kind of new IRS numbering system for qualified plans? I give up.