KIP KRAUS

SLuskin: Has the IRS issued an interprative Bulliten or Opionion Letter regarding this subject? If not, my inclination is to continue to allow employees to make such changes, because it is to our advantage to have employees opt out of our medical plan. What if the other employer does not allow our employee to enroll in their plan during our open enrollment? I don't think open enrollment is considered a change in family status, is it? Any additional information on this subject would be appreciated.

I guess no one wants to touch this one, btu I haven't been able to find anything in the IRS Code that would dissallow medical claims paid in a foreign country. If it were me, I'd allow it and reimburse the employee in accordance with the exchange rate in effect when the charges are incurred. Maybe someone else can come up with an IRS interpretation letter on the subject, but I couldn't find anything.

Each plan that I have been envolved in, including our current plan, allows an employee to cancel our plan during his/her spouse's open enrollment period. Therefore, if an employee's spouse's OE is July 1 as apposed to our December 1, we will allow him/her to swithc to the spouse's plan July 1.

JCOBB: Do you mean coverage such as around the clock personal medical care? You need to provide more detail.

Jenn T: Over the years I have been advised by ERISA council that a premium only Section 125 does require a Plan Document and SPD. In fact, we currently have a premium only plan and it is established by a Plan Document and we issue an SPD.

Michelle First off, it dosen't make since not to receive the medical plan benefits first. Secondly, most plans I've been envolved with require an EOB showing denial by the insurer, and if there is COB envolved, a copy of the secondary/primary insurer's EOB. Lastly, if your plan requires the clzaim to be filed, case closed.

My first inclination is to check the insurance contract. The contract should specify when coverage terminates followinf termination of employment. Some contracts terminate on date of termination of employment, and some terminate at the end of the month in which employment terminates. In my openion, the employer should have no say as to when coverage terminates except if given the option when the coverage is initially purchased. Go to the insurer and ask them to show you the tremination of coverage provisions.

My first inclination is, Why put after-tax dollars into the FSA? I dought the employee will be able to deduct this contribution form income taxes. Secondly; I don't know of any situation in which a pre-tax plan can accept after-tax dollars. Maybe someone out there knows of an acception, nothing these days would suprise me. If it is that important to the employee, I suggest allowing him/her to make up pre-tax contributions upon return to work.

Help For Gayle: My advise is to ask the compnay for a current Summary Plan Description, and/or a copy of the most recent plan document. Your answers should be in there. If you are talking about a defined benefit pension plan, your first oprion of a partial distribution is probably unrealistic. I never heard of a DB plan making partial distributions. Most DB plans I have been envolved with have had disability benefit provisions, but I'm not sure if it is required. If you cannot read the SPD and plan document, have someone read the applicable plan provisions to your,then ask your questions if you need to. [Note: This message has been edited by ERead]

This is for Angie. Depending on who the insurer is it could take them as long as two weeks from receipt of your COBRA application to get you into their claims system. Even new employee enrollments can take this long. If I were you I'd call the insurer's claims office and ask them when they would expect to have you in their system. In any event, once you are your coverage will be retroactive to March 1and any medical expenses incurred since then should be processed by them. They should be able to give you the best information. Good Luck.

This is to Robin. I agree with larry M with regard to the employer not being required to split up dentla and medical provided the emplopyer requires active employees to be enrolled in both coverage and does not allow them to take dental only. This by the way is not uncommon. The other point Larry M. makes is the economics of paying the dental COBRA premiums if the premiums outway the projected cost of your dental care.

Does anyone out there know where I can find statistical information on the amount of FICA taxes (nationwide) that are being diverted from the SS system via Cafeteria Plans?

Thanks gentlemen, I'll give it a try.

I am going to assume that this part-time employee is a regular employee who otherwise works year round??? If so, if the 401(k) plan document specifies, as one of its qualifications for participation requirements, that a person must have a minimum of 1,000 hours worked in order to participate, such employee may be eligible for participation. Of course, the employee must meet any other plan requirement. Check your plan document for eligibility.

GAshley I'm not sure exactly what you are asking, but here's my take on self-insured medical plans. Not only are claims considered part of the the plan cost, but any related expenses such as TPA fees, stop-loss Insurance premiums and estoimated claims reserve. From these elements of the self-insured plan an actuarial fully insured equivalent rate should be determined for single coverage and family coverage. These rates are then applied to participant/employer cost. Also such a rate must be calculated to determine COBRA rates. This is a more complicated situation, apparently than your question indicates. If you would like to e-mail me with more details I'd be happy to reply with further information.

gaham: Grossing up the HCEs may be the best strategy, provided the gross up does not outweigh the savings to the employer on his matching fica contributions for the non-HCEs.

I think the bigger question may be "do you have a descriminatory medical plan"? There has to be some non-descriminatory definition of eligibility to receive medical benefits at no employee cost. I would not think that basing such eligiblity soley on being highly compensated would qualify as non-descriminatory. For instance, do some salaried employees have to pay while others don't? This would concern me first, then I'd worry about the pre-tax premiums.

Fay: I don't know about the up-front money for child car, but I do know that if an employees has money in an FAS account, they can get reimbursed for qualified expenses while on disability leave. It sounds to me like your administrator is generalizing.

KM: I've never heard of this. I would be interested in knowing why this kind of program would be benificial to an employer and/ or employees.

Fay: What exactly do you mean when the administrator says you cannot participate? If you have money in your Dependent FSA account, you surely can request reimbursement while you are on maternity leave. Please explain more about your situation.

I don't know how you can prove the 1 out of 4 theory, but I'm sure that the mandated benftis provision of each state increase the cost of health care insurance. Insurance companies have to employee attornies to keep up with the different laws and how they apply to contracts. Some laws apply to cvontracts issued in a state, while some apply to contracts issued in the state and to employees covered by such in-state contracts even if they reside outside of the contract sited state. The majority of the coverage laws are no doubt politically motivated by special interest groups. This is not to say that a majority of them don't make since. I think most of them do. However, I would think it would be to the advantage to all concerned to establish a national acceted standard of mandated coverage items and qualified health care professionals. But then, special interest groups would lose their foothold, and become unnecessary. Wouldn't that be a shame????

Liz: Need more information. Are you talking about a full blown self-insured medical plan , or are you talking about only reimbursing employees for medical expenses through a section 125 reimbursement account? Either way, you should set the plan up with a written ERISA plan document. If the plan is large enough, you will have to file a 5500 at plan year end. I know of no filing requirements to set a plan up since the elimination of the EBS-1 filings.

This has been discussed under the the major category of Health Plas(Including COBRA and HIPPA) on this site dated 1/22/99. Read the responses that were put there and you will get some good guidance. [Note: This message has been edited by Sheila K]

Girlie; Read your Medical Plan summary Plan Description(SPD) and/or your Section 125 SPD, if available. These documents should explain dependent eligibility and enrollment provisions. What you have said came from your employer is not uncommon. If the SPD clearly describes these policies, you may be out of luck. I would also suggest, because of your recent marriage, that you review your beneficiary desinations on other employee benefits such as 401(k) and group life. t

Valerie: My experience is the same as Lori's. Typical billing is after delivery, and FSAs usually will not reimburse medical claims without an EOB showing the amount denied by the medical plan. Maybe the doctor could bill for each visit, but I would would first check with the insurer to see if they will pay on that basis.