KIP KRAUS

If you don't have a difinition of salary in the plan document, you should. Most plans I've been envolved in define salary, or compensation. I have never seen a plan that allowed an employee to make contributoions on prior earning, i.e. earnings prior to becoming eligible to contribute. In your situatio, oru plan would only allow contributions from eligibility date forward. If the 15% doesn't get the employee to the annual IRS max too bad. If contributions are payroll deducted, which in most cases they are, if you allowed the employee to max out based on prior earnings, he/she would have to contrinute a percentage hogher than 15%, which is contrary to the plan's maximum percentage allowable.

There is no obligation for your new employer to give you credit for any deductibles or co-insurance payments that you satisfied from your former employer. HIPAA has no bearing on this type of situation.

sborrow: We have taken the position that an alternate payee,for whom 401(k) funds must be segregated, are being put into an account for a non-active plan participant. Therefore, we allow the alternate payee to take a distribution on the same basis as any employee who terminates employment. We, of course incourage the distribution because we don't want the additional admin. expense for non-actives. Our plans do not specifically allow for distributions to alternate payees, but we have been advised by ERISA legal council to amend the plans to do so. QDROs for DB plans of course are totally different.

Christine: I've never heard that requiring a waiver on any group insurance is a legal requirement, but it sure is a prudent idea to get a waiver. Most medical plans require election and enrollment within 30 days of becoming eligible to do so, or medical evidence of insuability is required before a person can enroll. On the other hand, if the premiums are paid through a Sec. 125 plan employees can enroll during the open enrollment without evidence of insurability, and if your medical contract is sited in New York, there more than likely is no pre-existing condition limitations. The waiver can serve as evidence that coverage was offered and refused incase the employee later decides he/she should have taken coverage.

I've never sean a spicific example as to what the IRS considers a signicant increase. They proably don't know either, but I might consider a 9% increase in an employee's contribution a significant encrease. If the 9% increase is applied to , say a $50/mo contribution resulting in an additional $54 per year it may not be considered significant to one person ,but could to another. On the other hand, if the 9% is applied to a $150 contribution resulting in an additional increase of $162 per year such an increase may be significant to everyone. Unless you can come across some spcific IRS guidelines, I suggest using your best judgement.

There has to be more to the story. Why would her employer single her out as someone not eligible for health insurance? Does she meet the definition of an eligible employee,i.e full-time,or salaried. By the way, with a plan that small, if your wife meets the eligibility requirements, the insurance company is obligated to insure her. If her employer will not offer her the coverage, have her call the insurer. If that doesn't work have her contact the state insurance commission.

In my experience and opinion, non-resident aliesns are not protedted by any employee benefit laws of the U.S. and the employer need not exclude them in the plan document, but it wouldn't hurt to exclued expatriots who may come to work for the U.S. company on on a temporary visa.

Can we assume that company Y has it's own name and employer indentification Number? If so, it would seem that if the adoption agreement wasn't amended to allow employees of Company Y to participate, you shouldn't have a problem with disallowing union employees. On the other hand,in such a case, the non-union employees of company Y couldn't participate either. The adoption agreement should identify the employees who are eligible to participate. If it does, and by exclusion union employees are not mentioned as eligible, I would think you are OK. What does the TPA say?

Lilly: I recommend that you attend seminars on COBRA and HIPPA. I have attended FMLA and COBRA seminars put on by A.E. Roberts Company and found them to be excellent. They also have HIPPA seminars. I'm sure there are other companies that do a good job as well. You can contact A.E Roberts at 651-681-7887 Semionars are usually one day seminars and you will receive a book with detailed information on the requirement of the laws.

Back on 6/8/98 an employee took a loan and it slipped through at 7%, but should have been 9.5%. I'm sure we should go back and adjust it. Can we recalculate it and spread the additional interest over the remainder of the loan payments, or do we require the past due interesdt to be paid to-date? These or any other suggestions will be appreciated.

Didlad: You obviously have a number of concerns, which are of a technical nature. I hope I can help inthis limited space. 1. It is not uncommon for LTD plans to off-set payments by payments recieved from Social Security (SS. However, most plans provide for a minimum monthly benefit even with offsets applied. If there is a minimum benefit, you would not have to send back all of the payments to the insurer. They should be required to show you how they figure what they overpayed you. Check your plan document or insurance certificate for this provision. 2. I doubt your plan has ever provided an 80% benefit. Most state insurance departments will not allow an insurer to sell a group policy that provides more than a 66 2/3%, in some rare cases they may be able to go up to 70%. I do not know the insurance law in your state. The 80% provision you read may be related to income indexing with regard to partial return to work provisions in your plan. 3. As far as federal taxes go, I know that the IRS requires you to pay taxes on the total LTD benfit payments if the employer pays the total premiums for the policy. You may have to talk to a tax advisor to determine the effects of reimbursing the insurer. You may be eligible for a refund of federal taxes after you reimburse the insurer. I'm sure you cannot be taxed twice for the same ampount of income. When you find out more information, and have more questions, please post them and we'll see what else we can help you resolve. Good luck.

K: Unfortunately,according to my understanding of COBRA legislation your mother would not be eligible for the disability extension unless she can prove that she was disabled prior to her COBRA event or with the first 60 days of COBRA continuation coverage. I agree with James, however that she should look into a converted policy if offered. She may also have what is sometimes called "extended medical coverage' for a particular health condition following termination of group coverage. If this provision is in her group coverage it would only cover expenses related to her current medical condition. Check with the former employer and/or the insurer. Good luck

Christine: There shouldn't be any confusion to COBRA participants, because COBRA requires Self-insured medical plans to develope fully-insured equivalent rates to be used for COBRA. These rates would include all of elaments of a fully-insured plan (e.g.,paid claims, a reserve assumption,trend, any stop loss premiums, claims administration charges, etc.) Perhaps the claims administrator may be able to help with calculating these rates. Once the rates are developed, and revised annually you simply bill them to COBRA participants as fully-insured rates plus 2%.

Joy: I agree with the majority of information Penn has provided and it is could giudance. However,I would not recommend concidering a typical sick days policy in determining an elimination period for STD. If you have a separate sick day policy(e.g., 5 days per4 year)such days should be reserved for personal sick time or sick time to care for a dependent child. Typically, STD plans are for longer durations, and more serious ailments. I reasonable STD plan designe may be require a 7 day waiting period for illness, and no waiting period for accident or hospitalization with a duration of 13 to 26 weeks. I would reccomend a 50% benefit for STD and 66 2/3 for LTD.

Pam: There could be a number of situations that could bring rise to what you are eligible for, if anything. If you were disabled prior to the date the disability policy terminated, you still may be eligible for disability payments. If so, contact the insurer directly. If you live in New York, California, New Jersey, Rhode Island or Hawai, you may be able to file for disability with the State fund. Insurance companies have minimum participation requirements to write and/or continue to write group insurance for small employers(sounds like you work for a small employer)and reserve the right to cancel the policy if these minum participation requirements are not maintained. I don't know of any state or federal laws that would require an employer to compensate you because coverage was canceled. An attorney may have a different slant, if so, I'd like to know about it. In the absence of insured or state disability benefits, contact social services in you area and see they can help. Good Luck

Connie: If your Plan document hasn't been amended to reflect the name change, I'd recommend doing it. I'm assuming, that at the very least, employees were notified when the insurers was droped. SARs are only used for summerizing the 5500 information, as far as I know. An amendment to the SPD may be in order, but I'm not sure I would call a plan name change a material plan change. Maybe a simple memo to all employees would be in order. Good Luck

Gayle: Unless you have been funding the self-insured claims via a 501©(9)trust or some other type of fund, in my opinion changing from one financial arrangement to another does not require reporting to anyone. If you are dropping a vendor in favor of another vender, you simply inform the IRS via your 5500 report by completing the Schedule C, which informs them of vendor changes.

I agree with Hillary P. I don't really see a reason to combine them anyway. Ther are, by necessity, too many references to Code Sections and the law in plan documents that would muddy the waters for the average plan participant. By the way, it is my opinion that information such as COBRA, HIPAA, QMSCO and FMLA which are required to be in the Plan Document are also required to be in the SPD. Actually, I feel more detail is required to be in the SPD regarding these issues than is required in the plan document. The Plan Document can merely reference the actual laws without going into detail. I'm not sure what is accomplished by having both documents combined into one?

Charlie: I have always been under the same assumption that std or salary continuation from general assets is not considered an ERISA plan. As far as participation, eligibility, waiting periods and % of pay requirements,I would argue that ERISA still does not apply. I know of no ERISA regulations, other than Highly compensated discrimination rules, that would care how benefit is set up. In any event, I feel sure that to benefits paid from general assets rule is the desiding factor.

SCAMERON: Unless there is a state insurance law in the state where your group life contract is sited that prohibits naming a non-spouse, the answer is no. The only restriction I've ever seen on beneficiary designation is that the employee can not name the employer as beneficiary. I have never, in 20 years seen spousal provision such as you are asking about. Check also with the group insurer who is underwriting the group plan.

Dawn: It's a little more clear to me now what your situation is. Sounds like a generous supplemental health & dental plan. So you allow coverage in the self-funded supplemental plan to employees who are enrolled in the ULICO Medical Plan. However, those who are not enrolled in the ULICO Plan are not allowed to participate in the self-insured plan. I see nothing wrong with this policy and know of no IRS or ERISA regs. that would prevent you from taking this stance. I see nothing wrong with requiring other coverage for spouses before allowing them to participate in the supplemental plan. It need not be a nightmare. If you require evidence of other coverage and it is not provided, then the dependent is SOL. Simple as that. By the way, the chances of a non-working spouse, or any individual having a personal policy covering dental or vision expenses is a 99.9% improbability, unless it's COBRA coverage. If such coverage exists, which I don't think it does,it would be cost prohibative to purchase. If anyone is selling it I'll believe it when I see it. COB or Non-Duplication of benefits should be included in your fully insured ULICO plan. Read the contract provisions or the SPD to get an explination. Alternatively, contact the ULICO representative for an explination. If you can't obtain it this way, I can e-mail you the explination I use for COB in our SPDs.

We maintain a separate Section 125 plan for premium contributions only. We also maintain a self-insured dental plan and one self-insured medical plan and several fully insured HMO medical plans. We take the postiion that there are no employer premium contributions to the self-insured or medical plans because claims are paid from general assets. However, we do include the medical stop loss premiums in item 6 of Schedule F and premiums for the HMOs. We file several welfare plans separate from the Section 125 plan, and do not include paid claims on a Scedule A or Schedule F. From our perspective,and because how we have set up our plans, I agree somewhat with Priselac with regard to including claims costs with the 5500 filing. If anyone knows of an IRS interpretation or reg. that is contrary to what we are doing I would appreciate knowing about it.

I agree with Joe provided the self-insured plan is funded only from the general assets of the company. If they are funded through a trust of some sort, then I think financial information is required to filed with the 5500.

Dawn: Am I correct in assuming that you have a full blown self-insured medical Plan? If so, allowing dependents to participate is simply a matter of policy. Obviosly, your costs will increase if you do. If you want to require dependents to be insured with another employer before allowing them to participate, require them to provide evidence to that effect from their employer. In addition, as dsilver says incorporate non duplication of benefits or Coordination of benefits into your plan to lesten the cost increase. No mater what you do, if you allow dependents into the plasn your costs will obviously increase. If you have additional concerns, please post them or feel free to e-mail me.

Abby: It has always been my understanding that COBRA compliance is the responsibility of the Employer. The employer may have a third party administer COBRA, but the ultimate responsibility remains with the employer. An insurer or claims administrator, in my opinion has no responsibility to inform anyone that a person is entitled to COBRA. Most employers cancel a persons coverage until that persaon elects COBRA. If a TPA or insurer does not receive an application for COBRA coverage, there is no responsibility to pay claims during an election period. If claims are incured during the election period and COBRA is elected and coverage is reinstated retroactively the claims incured during the election period are eligible for adjudication and payment. The insurer or claims administrator should not be telling a health care provider whether or not a person is eligible for COBRA. If a provider wants information as to a persons eligibility for COBRA I would suggest contacting the employer. Hope this helps.