KIP KRAUS

If a new plan option is offered at mid-year it is logical to have an open enrollment so that EEs cna make a selection. Otherwise, why install a new plan design? If an employee gasins or loses eiligibility under one or more of the company's health plans, a mid-year election change may be made. You asked, what if the new plkan is not part of the cafeteria plan? My question is, why would it not be? Also, what advantage is there for not having it be part of the cafeteria plan? Don't forget, one of the major financial breaks to the company in a cafeteria plan is no Social Security match on EE contributions. By the way, your large insurance company TPA should be able to provide guidance with all of your questions.

Actually, a major increase in the cost of medical coverage can qualify as a change in status under IRC Section 125. Therefore, if your employee's spouse experiences a major increase in the cost of coverage at his/her employer's open enrollment, you can allow the change to your plan. You are, however, allowed to require evidence from the other employer plan that the cost has increased, and by how much. Your Section 125 Plan should completely describe the conditions under which plan changes can be made. In addition, these conditions should be fully described in your SPD. By the way, the plan administrator, using the guidelines of Section 125, has some descrition to make reasonable interpretations as to what qualifies as a change in family status.

IT WOULD HELP TO KNOW WHAT THE OBJECTIVES OF THE PROJECT ARE. FOR EXAMPLE, COST CONTAINMENT, RECRUITING AND EMPLOYEE RETENSION OR LOCAL COMPETITION. ARE EXISTING BENEFITS BEING REVAMPED? IF SO, WHAT ARE THE EXISTING BENEFITS? ARE YOU THINKING OF INSTALLING NEW BENEFITS? IF SO, WHAT ARE THEY? I'VE BEEN ENVOLED IN ALL OF THESE SITUATIONS, AND WOULD BE HAPPY TO PROVIDE SOME GUIDANCE.

LOOK AT YOUR INSURANCE CONTRACTS FOR THE DEFINITION OF FUL-TIME EMPLOYEE. A STANDARD INSURENCE CONTRACT USUALLY REQUIRES 30HRS. OR MOR E PER WEEK TO DEFINE ELIGIBLE EMPLOYEES. HOWEVER, YOU, AS THE PLAN SPONSOR HAVE THE RIGHT TO REQUIRE 40 OR MORE HRS PER WEEK AS FULL-TIME ELIGIBLE EMPLOYEES. I KNOW OF NO LAWS THAT REQUIRE EMPLOYERS TO PROVIDE GROUP HEALTH, DENTAL, LIFE/AD&D, LTD AND OTHE SIMILAR GROUP INSURANCES. IF YOU ARE IN A STATE THAT REQUIRES SHORT-TERM DISABILITY, THEN YOU MAY HAVE TO PROVIDE STD TO PART-TIME EMPLOYEES. STATES THAT I AM AWARE OF THAT REQUIRE THIS ARE NEW YORK, CALIFIORNIA, ROHDE ISLAND, NEW JERSEY AND HAWAHI.

Even though you say your employer's former plan was partially insured, it might be a good idea to contact the State Insurance Department in your state or commenwealth. Even if they have no authority over the self insured portion of the plan, they still may be able to lead you in the right direction. You should also call more attornies, because it sounds as though you are going to need someone to put pressure on your employer.

Even though you say your employer's former plan was partially insured, it might be a good idea to contact the State Insurance Department in your state or commenwealth. Even if they have no authority over the self insured portion of the plan, they still may be able to lead you in the right direction. You should also call more attornies, because it sounds as though you are going to need someone to put pressure on your employer.

YOUR EMPLOYER SHOULD BE MAINTAINING THEIR TUITION PLAN VIA A WRITTEN DOCUMENT THAT SHOULD ADDRESS THIS SITUATION. IF THEIR PLAN IS NOT IN WRITING, YOU ARE AT THE MERCY OF YOUR EMPLOYER. I HAVE NEVER HEARD OF ANY REGULATIONS THAT WOULD REQUIRE TUITION REIMBURSEMENT AFTER BEING LAID OFF. EMPLOYERS HAVE THE OPTION TO ESTABLISH THEIR OWN POLICY WITH REGARD TO LAID OFF EMPLOYEES. ASK THEM FOR THE WRITTEN POLICY. GOOD LUCK.

Tara: I was a Benefits Manager for a company here in the US, but owned by the Brits. When Brits came to work in the US they participated in our 401(k) Plan because they were on our payroll. When they returned to the UK, we considered them terminated and allowed them to leave their money in the plan or take a distribution. Most left it in because they couldn't roll it into any plan in the UK and avoid the distribution taxes. Our case may have been a little different than yours, but I know of no tax free roll overs available outside the US unless there are some in US territories.

Providing medical, dental, life insurance, retirement or 401(k) benefits is voluntary. I've never heard of these types of benefits being required by law. Sinces you are in Minn., you are not required to provide short-term no-occupational disability coverage either. However, you are more thanb likely required to provide workwers' compensation coverage for yoiur employees. Check with the local Comp. Office.

As long as there is no federal or state legislation prohibiting the total exclusion of a person who does not enroll when intitiially eligible to enroll, and as long as the plan document spells this out, and as long as any other persons similarly situated are treated the same, I guess this can be done. However, I would not want to administer a plan in this way. I would rather see the plan require medical evidence of good health before automatically denying coverage. In addition, I would prefer that the plan allow participation, but exclude coverage related to a pre-existing medical condition. Having a self-insured health plan provides an employer with many options for plan designs which differ from those mandated by state insurance law, and this is one of the reasons employers opt to self-insur. However, sometimes employers out smart themselves by designing plans that could cause them grief and money in future law suits. I wish you the best of luck.

Paula: If your self-insured plan is an ERISA plan, my suggestion is that your eligiblility requirements should be designed so that you treat every employee similarly situated in a non-descriminary fasion, i.e., if all full time employees are eligible to participate, then you cannot refuse one of them enrollment. Once you decide what class of employee is to be eligible, you must treat each employee in such class equally. Descrimination type legislation, in my opinion is the only legislation you need to be concerned about when estiblishing eligibility. You may design your plan so that an eligible person must enroll within 30 days of first becoming eligible to do so. If the person does not enroll within this 30-day period, you may require him/her to wait until the next open enrollment period unless there is a change in family status. It's hard to determine from your question, what your real concerns are. However, hopefully some of the answers you are getting may address the real problem. Good luck.

COBRA notices should be mailed to the employee and the spouse, if the spouse is covered at the time of the employee's termination. There are no specific requirements for notices to be sent via certified mail. As to the 10/30/98 termination of coverage, I suspect the employer made a mistake and meant to say 10/31/98. While some medical plans end coverage on the date of termination, others terminate coverage at the end of the month in which employment terminated. There is not requirement that I know of, state or federal that requires coverage to continue to the end of the month. Call the insurer (From your profile, I assum it's Rochester Blues or Preferred Care), but even if it is some other insurer, they will be able to tell you when coverage ended. I would e-mail you, but for some reason I can't e-mail to an aol address. I can only receive it from aol. A pain in the you know what. If you want to e-mail me with a phone number, I'd be glad to discuss your situation if need be. Good Luck.

I have done this in the past and the IRS insisted that we file a short plan year and then file for the new plan year. Of course, that could just be the requirements of the particular IRS office I dealt with. If you don't file the short plan year, you'll receive a late filing notice. If you have the number for the IRS service where you file your 5500s I'd suggest calling them.

By self-directed I assume we are talking about selecting investment options outside the normal ones offered by the plan? If so, it sounds like a record keeping nightmare to me. I'd want to know how record keeping is coordinated and what the extra cost is.

CHECK THE BENFIT PLAN SUMMARY PLAN DESCRIPTIONS FOR ELIGIBILITY. MOST PLANS, ESPICIALLY INSURED ONES, REQUIRE A MINIMUM OF 30 HOURS PER WEEK FOR ELIGIBILITY FOR BENEFITS. FOR OTHER BENEFITS, NOT RELATED TO INSURANCE OR SELF-INSURANCE, SEE IF THERE IS AN ELIGIBILITY SECTION IN AN EMPLOYEE HANDBOOK.

Julietur: Unless your SPD specifically excludes the procedure you have described, you may not find the answer there. I suggest you call the insurer or third party claims administrator (whomever processes claims for the employer) and ask for the specific reason for the denial. If after finding out the reason for the denial you still do not agree, follow the written claims review procedures that should be in your SPD.

Leigh: What I have typically seen in the past, is that normal expenses for defined benefit plans were deducted from the plan assets. We currently do this on our DB Plan. Normal expenses include items such as actuarail expenses, investment fees, distribution fees and trustee fees. etc.. Other than individual investment management fees, and loan initiation fees, my experience is that the employer pays all other admin. fees outside the plan. A recent survey of 401(k) plans by Charles D. Spencer & Associates, Inc. shows that a majority of employers pay admin. expenses other than loan fees and investment management fees.

Melanie: Unles the employee lives in a state where it is required by law to pay accured vacation at termination of employment, the policy to pay or not to pay is up to the employer. I'm not aware of any state that requires payment. This employee may be out of luck.

When a new employee signs up for a dependent care FSA, it is my opinion that it is the Plan Administrator's obligation to make sure that the new employee does not exceed the legal limits for deductions. If deductions have already begun, you should automaticaly make an appropriate adjustment and notify the employee of the problem. I don't feel that a change in family status even comes into play in this particular situation.

To my knowledge, ERISA does not mandate the type of benefits to be covered under any welfare plan, including medical plans. Most medical plan coverage requirements are mandated by individual states, and insurance companies. One of the reasons for employers to self-insure medical plans is to avoid state madates. Not covering a person for injuries sustained in an auto accident when not wearing a seat belt seems extreem to me. Whether it's legal or not may only depend on whether or not they could when a law suit if challenged. My question would be, what is the employer's perceived estimated plan savings by eliminating these types of claims, and is it worth a possible law suit? You may want to contact the DOL or State Insurance Department to see if tthey can provide guidence.

If the son is the legal son of either employee and is otherwise eligible for medical coverage as any other similarily situated dependent child would be, I would allow the son to be enrolled. To me, living outside the U.S. and then moving to the U.S. would qualify as a CIFS. Unless there is some question as to the legal status as a dependent of the employee(s) I wouldn't think being an alien should not preclude medical coverage for the son while residing in the states.

I've managed employer group life plans over the years that allow for continuation of coverage during temporary lay off, retirement, leaves of absence and during long term disabilities. Most group insurers, depending on the size of the group insured, will allow an employer to amend the gruop contract to cover employees not otherwise actively at work. A rule of thumb for having some flexability in underwriting is typically 100 or more covered employees. Some insurers may require 200 or more covered employees. I would suggest that your employer persue this with the current insurer, and if need be, look for an insurer who may allow for this flexability.

I am assuming that you are talking about an insured short-term or LTD plan? If so, usually contractually, when a person first becomes disabled that person is coverd by the contract provisions at his date of disability. Unless such disabled person returns to active work, I don't think the employer or insurer can subject him to retroactive plan changes. State insurance law should provide some insight if the plan is an insured plan. [This message has been edited by KIP KRAUS (edited 10-08-98).]

Your perceived loss of money due to an inability to move money around clearly depends on your ability to time the market and may be difficult to argue with your employer. However, changing record keepers, which is what it souds like to me shouldn't inhibit the flow of employee contributions or company matching contributions. Therefore, I don't undestand your loss of these two items. No matter how your plan is set up, there shouldn't be a problem with contributions and matches. Almost six months to switch record keepers could happen depending on the capabilities of both record keepers to transfer employee data smoothly. Three to four months could be expected. This transition is never a piece of cake. Your loss of contributions and company match concerns me. I'm not sure this makes legal sinse, but then legalities are not always logical. Talk to your employer.

You are right. Some just apply in 1998. I haven't seen any TPRA 1998 information. In fact, I'm unaware of any. If anyone else knows of separate 1998 information other than that contained in TPRA of 97, please let us know. [This message has been edited by KIP KRAUS (edited 09-29-98).]