KIP KRAUS

Chances are that the policies you speak of are not group term policies, because as far as I know employers are not eligible to be beneficiaries on group term life plans. The policies you have are probably individual policies written on each executive. I believe you can get the taxability information from the insurance agent/broker that sold the policies to the company. I also believe that if the executives have no financial interest in the proceeds or cash values of the policies there would be no taxability to them. All of this may depend on the state of issue. If, as I suspect, these policies are individual policies the agent/broker has a responsibility to give you this information.

What is your purpose? Do you have employees in many states? If you don’t have many states you may just want to go to the state insurance web sites and find the information and create your own matrix. If your medical plan is insured by a commercial insurer they can get this information for you. If you are self-insured you probably don’t need it.

Kirk: I don’t see any creditability in one 12-moth period of claims because they are not mature claims. Depending on plan design there could be at least 2 to 3 months of claims lag (incurred but not paid) involved. If you had at least 15 to 16 months of claims and wanted to take a chance I’d say have at it, but it still is a crapshoot in my opinion. 36 months at a bare4 minimum is a better determinant for claims projections. As to Vebaguru’s comments, if you are a medical underwriting actuary you must know that most group insurers will not even write an experienced rated medical plan for groups of under 200 lives, because the claims experience in their opinion is not 100% credible. My comments are based on years of experience consisting of work with a major group insurer, as employee benefits broker and from designing and negotiating benefits as an employee benefits manager. Your examples of partially self-insuring medical plans based on the designs you used have merit. However, whether the insurer cuts checks or a TPA cuts them there will be a charge for claims processing. In addition, stop-loss premiums for a small non-credible group would probably be prohibitive not to mention that in my experience that stop-loss premiums go up each renewal by 15% to 25% regardless of any claim hits. Finally, given the way stop-loss carriers (except maybe Kamikaze Life and Six Gun of Texas) are cherry picking its risks I find it hard to believe that one would even consider insuring a non-credible group at any price. My advice for groups for up to 200 lives is to continue to work with insurers to design a cost effective medical plan until that is exhausted. If this doesn’t work then go for self-insuring if you think you can predict future claims and can get the catastrophe claims covered at a reasonable price.

I agree with Kirk. Self-funding of a group as small as 190 employees is risky at best. Especially if you have no idea what the current claims experience is. Your best bet is to follow Kirk’s advice about finding a brokerage firm that specializes in employee benefits, particularly group medical. However, I think life years are more related to group life plans. My rule of thumb is that you need at least 300 employees in a plan before considering self-funding. Even on a group this size without credible claims experience for at least the past 3 years is risky for self-funding. Some will say 200 lives is a candidate for self-funding, but I personally disagree.

Many health care plans have a three tier rating system where there is a rate for a single contract, employee plus one dependent and employee with two or more dependents. The rates for each class are different; therefore if you apply an even percentage contribution rate to each rate (i.e. 20%) then you would have rates related to three family sizes. However, I wouldn’t advise trying to charge employees by the total number of their dependents beyond a three tier rating system.

It makes sense to me provided the insurer goes along with it and it's not contrary to ste insurance law.

Katieinny: I have written several health plan SPDs. I’d be happy to email some samples to you, but your profile does not allow you to receive emails through this forum. Email me through this forum.

If you are in an insured medical plan there may by state insurance law that requires that a conversion policy be available to you at the end of COBRA. Some conversion policies may cover more than hospitalization. Contact the insure for this information. Conversion policies are also usually expensive.

Jeff V: I don't see how employer health plan contributions can be considered wages since they are not taxable income to employees.

I agree with mroberts.

Who else have you looked at? Are they providing stop Loss coverage?

You are correct. Your medical condition has nothing to do with your husband’s. The insurance company should determine your medical claims separate from your husband’s.

What you may want to do for the future is to have the insurer bill you for two sub groups of employees, this done on a regular basis. Then they can provide the 5500 information on each group. In the mean time mroberts’ suggestions seem logical to me.

What do you mean no one will provide you with the 5500 information? The insurer is required to provide this to the Company/policyholder.

If you have a fully insured group medical plan the insurance company should be able to answer your question. Some state mandated benefits apply to persons who reside in the state and some apply to the group contracts issued in the state.

I agree with QDROphile. Let the participants and attorneys figure it out. I don’t see that the plan has any obligation to calculate the settlement amount in a 401(k) DRO. Not only is it tedious it’s almost impossible to come up with a number that will satisfy both parties. Let them figure it out with all of the data provided to them, or let the attorneys figure it out.

You need to get an attorney that will pursue the employer. The employer may have allowed a change in plan status on the basis of your husband telling them that you were divorced. Two years is a long time. Get an attorney.

These types of exclusions are typically in dental plans because most health plans will cover accidental injury to sound natural teeth in the event of an accident.

Read this article on www.ebia.com/weekly/questions/2002/COBRA020912.html

Why should you have to pay premiums for a terminated employee? The way most employers handle this situation is to cancel the coverage and reinstate it back to the cancellation date when the employee elects COBRA. I think your insurance agent just wants to get the commissions for the additional premium. Contact the insurance company directly and ask them. If that doesn’t work contact the state insurance department.

If I’m not mistaken, ERISA specifically exempts state mandated benefits such as mandated STD in Cal., NJ, NY, Mass. and Hawaii. Therefore, the argument could be that ERISA doesn’t apply. Christine, can I assume that this provision applies to employees residing in Cal. Even if the employer is not in Cal.?

From my experience I don’t understand the rational. Most eligibility provisions for spousal coverage as a dependent typically requires that they be legally married. I can’t imagine that Kaiser has an eligibility requirement that a legal spouse must reside with the employee in order to have dependent coverage. I would contact the state insurance department of the state in which the employer has been issued the medical contract with Kaiser. You may also want to contact the US Department of Labor.

Sandra is right. If you go to the U.S. Department Of Labor web site and read their published brochure on COBRA rights you will read that Loss of “dependent child” status under the plan rules is a qualifying event. I wouldn't want to go to court over this one trying to prove that the regs. doesn't apply to a loss of cudtody. There are many specifics not published in the regs., but that doesn't mean that the ones published cannot be intrepreted in favor of the claimant.

Mary C: If a dependent loses coverage because he/she loses eligibility as a dependent COBRA coverage is offered. I don't understand your post.

I agree with Sandra. If the child is covered under your medical plan as an eligible dependent and then as a result of your employee losing custody, the child loses coverage in accordance with the medical plan the child would be eligible for COBRA.