KIP KRAUS

You may also want to call some of the HR people at other companies in the area and ask them if yo can have a copy of their medical plan document.

kiu: Adding any coverage to your health plan can affect the cost. Adding a "rider" typically relates to HMOs and maybe some PPOs, but traditional medical plans just say from some point on coverage for additional provider will be covered. If you have an HMO they should be able to tell you the additional cost. If you have an experienced medical plan, regardless of how you are financing it costs will go up. Check with your insurer, if this is the case.

msearle: Our ERISA Attornies have advised use that FMLA provisions are required to be in the Plan document and SPD.

What kind of modifications are you making? If they are material and will materially affect the information contained in the current SPD, yes it would be wise to issue a new SPD among other things.

msearle Depends on what you are going to modify. Some modifications may require amending the plan document, others may be done administratively. Need more information.

Jacgues: I've never heard the term correctable disability. However, it sounds like a disability that can be corrected by some sort of medical or other procedure. How was it brought up? If you have an insured disability plan you should be asking your insurer about denying claims because a person refuses to have surgery. I have never heard of that kind of provision in a disibility plan. Usually plans simply require that the disabled person be under the continuing care of an appropraite health care professional. As for disability statements from more than one Dr., I have seen that, usually in the case where a general practioner signs the initial paper work and later a specialist signs disability paper work.

Steve: The availability of a "Benefits Package" and what flexability you will have in designing it will depend largely on how many employees you are going to end up with. How many current employees do you have? Do these current employees have a benefits package? How many employees do you plan to add, and during what time frame? If you can give some insurers this figure they should be able to at least tell you what types of benefits they would be willing to offer you, but without a census, they can't quote a future group of employees. If I knew the answers to my above questiosn, I might be able to make some other suggestions. My other suggestion, find an independent insurance broker/agent that specializes in employee benefits and talk to them. They will talk to you for free if they can see potential.

LisaL: While it seems odd that a married couple with eligible dependent children have family coverage for one spouse that covers the children and the other spouse carries single coverage, if the spouse covering the eligible dependents quits working, I would allow the other spouse to pick up the dependents provided they are his eligible dependents under your medical plan. In my opinion, this would be a qualified change in family status. With regard to the contributory life and dependent life insurance, you need to check the group life policy provisions related to late enrollments. Typically, group life policies require evidence of insurability for those employees who do not enroll within 31 days of first becoming eligible to do so. The employee will typically be required to submit this medical evidence to the insurer for approval to enroll. Most group life policies I have seen will allow a person to enroll for contributory coverage at any time, provided the insurer accepts him/her for such coverage based on the medical evidence submitted.

sborrow: Are we still talking about the same case as posted on 10/15? If so, there seems to be a few holes yet. I haven’t had to opportunity to read Kirk Maldonad’s article. However, I agree with him that the employer could be in trouble. I wouldn’t mix up the ERISA language regarding J&S benefits and the employer relying on participant’s representation that he/she has no spouse with the responsibility of an employer to be reasonably sure that an employee none to be married has been legally separated. In my opinion, the employer should require reasonable evidence that the employee is legally separated in order to project the integrity of the tax-exempt status of the cafeteria plan. Did the employer issue a COBRA notice to the alleged former spouse? If so, and it was timely, the alleged former spouse would have known within the 31 day period for cafeteria plan changes. In any event, keeping in mind that I’m no lawyer, I would advise the employer to pursue reinstating the spouse and pay the back premiums. The employee can then drop his/her spouse at open enrollment. Hope this helps.

SBorrow: Legal separation to me means that there must be a legal written document that describes the "legal Separation", without such evidence, we do not allow a change in family status change for separation. The other thing that occurs to me is that if in fact the change was allowed,and the employer was subject to COBRA, the former spouse would have know about the dropping of coverage well befor a "fwe Months". In any event, I would argue that the Plan administrator/Employer would be reasonably expected to verify a legal separation or divorce befor acting in an employee's statement.

GBurns One thing we don't know because we haven't heard from Aaron E. since this topic was started is are we talking about eligiblity for medical/dental,etc. being different than for salaried vs. hourly thus applying the same eligibility to the Section 125 plan? If so, I see no problem with the different eligibilities, and doubt that it would affect the discrimitory provision of the Section unless the employer has a ton of HCs. In any event, you can do a preliminary test to see if it may be discriminatory, same as you do for 401(k) ADP testing. Most plans I've been envolved with apply the same eligibility for Medical/Dental as for 125 POPs. Since the savings is also reaped by the employer I don't see why they would allow a person to participate in a Medical/Dental plan earlier than they would let the same person pay premiums via a 125 POP. By the way, isn't this government discrimination testing for welfare plans getting to be little redicules? Unless they start a full scale audit of welfare plans, I don't see getting all worked up about, just try to do what makes since people.

Larry: Have you tried going to the Wisconcin state insurance commission web site and seeing if you can find the answer? Sometimes the state insurance commission sites can give you the answer. Good Luck

I agree with nb. If these dependent children were previuosly eligible but not previuosly covered our plan would not allow them to become participants just becuase of a marriage, but would allow them to become covered at open enrollment. Just because a participant changes to family coverage do to a qualifying event does not mean he/she can automatically add other dependents.

EdwardF: I have always interpeted that question to apply to loans from the Trust to outside parties. I have never included Participant loans in that question, and have never had an auditor question it. However,I don't know of any sitation that specifically addresses that issue.

Aaron: I don't see how having a shorter waiting period for salaried employees in and of itself can be discriminatory regarding a premium only 125 plan. Plenty of employers have shorter waiting periods for salaried employees than they do for hourly employees. If the discrimination testing passes then it doesn't seem to me that it can be an issue. Sorry I don't have a siting for my opinion, which it is, my opinion and I would operate any such plan in the same manner until it proved to be a problem.

Chris Why don't you try to contact the person to whom the check was sent? I wouldn't issue another check until I attempted to talk to the that person to find what the story is. It semm obviuos that the check was not returned because it was undeliverable? So you must have a good address.

Rich L Maybe you should include your e-mail address in you profile and Benefish could e-mail you.

Thanks Linda. Actually, since posting this message I have read that section of the Regs. and agree that COBRA should offered.

I don't know if this question has been asked before, but when the employer maintains separate medical and dental plans does the issue of Medicare Eligibility come into play with regard to the separate dental plan? In other words can we assume that regardless of a person's Medicare Status(i.e.,covered or eligible for coverage)if the person is age 65 can we refuse to offer COBRA Dental and/or automatically cancel COBRA dental at age 65? By the way, what is the real answer to not offering any COBRA to an employee who terminates employment at age 65 or older? Do you even have to offer COBRA?

Chris: Being that your client worked for a county hospital I'm guessing that he might have been in a 403(B) plan, which I don't know that much about. However, it seems highly unlikely that he would not be eligible for some kind of vested benefit after being in the plan for 17 years. I would request a copy of the plan document in effect in 1974 when he left the hospital and any amendments thereto through his most recent last date of employment with them. Just because it was some time ago, I still feel the hospital must be administering their plan in accordance with a plan document that indicates how deferred vested benefits were calculated back then. If the hospital will not cooperate, go to directly to the plan trustee. I would be very interested in what you find out. You can e-mail me at kkraus@lappinsulator.com

Not knowing all of the details of the purchase it's hard to answer in generalities. However, if the purchase is being conducted the way I have experienced company purchases, the attornies for bothe side should include such maters in their due diligence procedures. A purchasing company may not want to take over a K plan if the plan didn't have an IRS qulification letter, had not filed timely (and all) required 5500's, not issued SARs or SPDs, or if any major financial maters are unresolved with regard to plan assets. Let the attornies duck it out.

RJ You should also read Sections 825.209 through 825.215 of the Regs.

Benefish: Thanks for your response and the Revenue Ruling reference. I will read it as soon as I get a chance. By the way, I agree with you about relying on insurance companies for COBRA information. I have talked to many people envolved in benfits and found that insurers often times give out wrong COBRA advise. That's why I questioned their refusal to allow COBRA eligiblles to select individual coverage rather than family coverage. They tend to make their decisions based on revenue rather than participant needs. I sold group insurance for a major carrier for two years and know their mentality well. Thanks again for your response.

Final Regs. 54.4980B-6 Q&A 6 States that “each qualified beneficiary must be offered the opportunity to make an independent election to receive COBRA continuation coverage.” In a scenario where an employee who covers his spouse only as a dependent and the employee terminates employment, can the spouse and the employee elect to be covered separately under single COBRA coverage as apposed to jointly under family coverage? Single coverage for each would be the cheapest way to obtain COBRA coverage. Some insurers are saying they cannot elect single coverage on an individual basis, but must be covered by a family contract (or two-person contract). My contention is that they should be allowed to have single coverage, because of the above referenced Q&A 6. Anyone have a decision on this?

G. BURNS: You are so wrong. Large employers have been designing their group insurance plans for years. If a large employer (1,000 empls. and above for example) has a group insurance finacial arrangement with an insurer which is covered by state insurance laws, once you get past the mandated coverages required by the states, the employer and insurer have the latitude to provide non-mandated levels of benefits, especially if claims liabiltiy is totaly the employer's responsibility. Take as an example invitro fertilization, which is mandated in only 6 states. If the large employer's contract is written in a state that does not mandate this coverage, that employer certaintly will have the authority to tell the insurer that they want this to be a qulified item of coverage. All group insurance contracts are not off-the-shelf contracts. I'll give you another example. I don't know of any state that mandates coverage for some-sex partners, but a lot of companies provide this coverage. I can assure you that if Kodak, for instence wanted to cover same-sex partners their group insurer is not going to say no because it is not something in their standard contracts and underwriting procedures. You might want to contact some large employers and find out from them how much power they weild with their insurers.