KIP KRAUS

Lisa It would appear, after reading Section 152(b)(2),in Sheryl's case the newborn was nat a dependent. What do you think?

Sheryl: Seems like a very generous insurance company to pay for the birth of a non-dependent child. If they did, what expenses are left to be paid? Does the employee have an EOB that shows that his insurer paid for the birth? What rational did the employees'insurer use for paying for the birth? It just seems odd to me unless there are some mitigating surcomstances surounding the adoption proceedings. I would not consider the cahrges prior to custody as being eligible for a Medical Reimbursement plan. But maybe someone has seen a specific ruling on this.

Kurt: Now that I think about it, such a transaction may a "Prhibited Transaction" as defined in ERISA Sec. 406, because it would be a "party in Intrest" transaction if the money goes to a relative. If all else fails, pose the question to the IRS.

Why get envolved with the IRS? Have the participant take out the loan, pay it back via payroll deductions, and then lend it the other person for whatever intrest rate he wants to charge? Why would the IRS need to be envolved? I may be trying to over simplify the problem, but wouldn't this work? I don't see how an outsider could be eligible to obtain a loan from another person's plan any other way????

Kelly: We do not offer part-timers medical benefits. However, where I worked before we offered part-timers medical coverage. They had to work at least 30 hour per week on a regular basis and they paid 50% of the cost of coverage. Full-time employees paid only 20%. We had a relatively medium sized permanent part-time group of employees, so to keep them employed we offered them medical coverage. We also had to include them in our DB pension plan and 401(k) plans because they worked over 1,000 hrs. during the plan years. They were not eligible for any other benefits except the mandated New York State disability coverage. Unless you have a significant part-time group that is permanent, and critical to your business, I would not recommend offering medical coverage to them.

Tom.jenkins: What state mandates are your referring to? The only states I know of that mandate short term disability are Cal., New York, New Jersey, Ghode Island and Hawai. These plans are exempt from ERISA. It is my understanding that you cannot avoid the state madated benfits in these states. You can however, provide higher levels of benfits in these state. I guss I don't understand your question. I also agree that salary continuation plans that pay benefits solely from employer assets are exempt from ERISA. If the STD plans, in nopn-madte states were insured or partially insured it is my understnading that they could subject to ERISA.

Does FMLA require an employer to pay holiday pay to an employee while on FMLA if he/she would otherwise qualify for holiday pay?

Gwen: I totally agree COBRA participants, if in a COBRA medical plan, may choose to be enrolled in one of the othe company offered medical plans. I also agree that each COBRA participant has a separate/individual option to choose which plan to be enrolled with. I would still argue that the regs. do not intedn to allow COBRA participants to elect types of coverages that they did not initially elect or that they were not covered by at the time of the qualifying event, i.e. If the employer has separate and distinct medical plans and a dental plan, and the eligible person enrolls in COBRA medical and not in COBRA dental then he or she is never eligible to pick up the dental coverage at open enrollment or at any time. Otherwise, why would the regs. say that a person must be enrolled in coverage immediately prior to the qualifying event in order to have COBRA rights? Ever since COBRA has been in existense, the employers I have worked for have allowed COBRA participants to change their medical coverage at open enrollment. It only makes since to do so, but to allow them the enroll in a coverage that they did not initially elect is redicules. If the IRS is aying that this should be allowed, I suggest we all fight it. Is the IRS that inept? Maybe!!!

I agree that the regs. say to treat COBRA participants the same as employees with regard to Open Enrollment. However, I would argue that this portion of the regs. applies to allowing COBRA participants to select from various medical or dental plan options once they are enrolled in one of those COBRA medical and/or dental plans. I would also argue that a person is not a COBRA participant if the person never elects COBRA coverage in a particular plan and therefore is not eligible to do so at open enrollment. What if an employee elects COBRA dental only and then after finding out that he/she has to have major surgery sometome near Open Enrollment? Do you allow that person to take the medical coverage that was not initially elceted only so the surgery will be covered? I know I wouldn't. I guess the only way to find out the IRS's position on this is to ask them for clarification in writing. Maybe someone out there will.

I totally disagree with Gwen. Even though the her reference to the regs is correct, if person does not elect coverage, he or she forfeits the right to elect it later even if there is an open enrollment that allows employees to pick up coverage previuosly refused. In addition, COBRA election is only for coverage in effect at the time a person has a qualifying event, so how can a person later becoame eligible for COBRA coverage? Until I see a ruling on this subject, i will continue to disallow a COBRA participant to pick up a coverag that he/sahe was not enrolled in at the time of the qualifying event. Don't you think this government fiasco is getting a little ridiculous? While I'm on the soap box, let me say that any dental plan that allows employees to pick up coverage after having initially refused it should only allow preventive services to such a person during the first 12 months of his/her coverage to avoid having them pick up the coverage for major foreseeable dental work.

here is a decent site for insurance info. http://www.insure.com/health/

EMK: I assume you people are talking about Claim reserves when you use the acronym IBNR? If so, you need to undestand that claim runout(for which you reserve)depends on the medical plan design,i.e. it takes longer for comprehensive claims to mature than for base plan claims without deductibles. I have also seen major claims lag with hospitals. I'm not sure why this happens, but my experience over the years with hospitals is that they have terrible accounting procedures thus terrible billing procedures. I have seen hospital bills take as long as 3 to 4 months to hit the claims administrator's desk.

Carmel: I can understand a company doing something like that, but to give a new employee from a former employer credit is not wise.

I agree with scottN. However, if you have more than one medical plan and COBRA medical coverage is elected, at open enrollment the COBRA participant has the same option to switch to a different medical plan on the same basis as an active employee. On the other hand, if a person does not elect, for instance, dental COBRA coverage then he cannot elect dental coverage at open enrollment. The same would hold true if medical was not elected.

I'm not sure that an employer can show a their medical claims cost are higher for smokers vs. nonsmokers. If they can't, why reduce the non-smoker's premium costs? While it is widely known that the long term effects of smoking is bad for your health, each individul employer's experience with this health risk would be different. I think you will find that most effects of smoking are at the end of a long period of a person's smoking for years. If your work force is relatively young, you probably wont' see a disproportionate effect in your healthand absentism costs. I would do the research and see what the effects are before going for a touchy-feely reduction in non-smoker premiums. Just me slanted point of view. direct correlation of claims between cost of medical claims and smoking or non-smoking, and from that

nac: Thanks for your response. You've satisfied my curiosity.

I have never in twenty years seen a group insurence contract give an employee credit for deductibles and co-pays from his/her former employer. By the way, if an employer group is large enough,and totally experience rated, the employer most certaintly has flexability to cover a lot of things that a normal group contract would not cover, including non-mandated state benefits. If a large enough employer on an experienced rated contract wanted to give credit for prior employer deductibles and co-pays they could. It wouldn't make since to do it because of claims exsperience.

nac: That's interesting. How do you controle eligibility? How do you know if a DP is a real DP? What evidence do you ask for? Do you cover dependent children of DPs? How do you controle this? I've never worked for an employer who offers DP coverage so I'm curious about controles for this type of program.

That's very interesting PeterGulia, but how would one know if such an Order is accepted by a state? Have you ever heard of such a case?

You need to get a copy of the written retirement offer. I would hope the employer would not offer such a program without a document explaining benfits and eligibility requirements and any other special offers. There are legal ways to deselect certain employees. One way I know of is by department for instance. If the employer is smart they have checked out what they can do legally. Get a copy of the written offer it must tell you who is and is not eligible. Without knowing the details it's hard to say if there might be a case. In any event, she should see an attorney only after getting all of the details.

According to the definition of a "Qualified Beneficiary", domestic partners would not have COBRA rights. A QB must be a spouse or dependent child of a covered employee. This was discussed earlier this month. Check the previuos postings. The answer is it depends on what is concidered a substantial increase. Your judgement should come into play here.

Good call Pax. I agree. If the DRO is determined to be a QDRO and is filed in a U.S. court, the plan must abide by it's terms. I'm no attorney, but if a DRO comes from a foreign court the plan may be able to ignore it. If it did come from a foreign court, you should check with an attorney. The ironic thing about allowing expatriates to participate in U.S. pension and welfar plan, they have to take the good eith the bad just like us colonists.

I don't know how the DRO you have is worded, however, most I've seen related to a 401(k) plan simply state a dollar amount to be assigned to the AP. In this case, in my opinion, it would be irrelevant how the AP and attornies arrived at the dollar amount as long as there is enough money in the participant's account to cover the AP's portion assigned by the QDRO. I feel our attornies would reject a DRO that mentioned moneys from a terminated plan and let the AP's attorney re-write the DRO.

No. The COBRA event occures at the end of the FMLA leave. See Prop. Regs. 54.4980B-10 Q&A1.

Joe: Check the current life policy to see if there is a disability waiver of premium provision. If there is, the employee who is on disability may be covered by the current life policy provided he is considered by the insurer to be totally disabled at death. Read these provisions and you should find the answer.