mroberts

When talking about the 60 day rule for electing COBRA, the former employee or divorced spouse has 60 days from notification of COBRA rights to decide whether he or she wants the coverage. This is not necessarily going to be 60 days from the date of the event that triggered COBRA. When did you mail out COBRA notices? If you didn't mail it out until February 1st, then even if the participants signed the election of COBRA form on April 2nd, they most likely did so within 60 days of notification.

Yes, but whatever the employer reimburses the employee for is taxable income.

I've seen several health plans that are set up this way. Also, a lot of insurance carriers are now setting up tiered hospital plans. The more expensive the hospital, the more money that will come out of your pocket. On a side note, you just want to be careful that you aren't violating any privacy laws under HIPAA when streamlining your employees into your own netowrk. Since you are self-insured, you probably have a TPA and this isn't an issue, but I thought I'd throw it out there.

This is very similar to how some insurance companies pay their participating providers and is known as capitated payment. I have not yet seen it work where the employee pays the doctors directly however. Does your company negotiate directly with doctor groups or do you go through an insurance carrier?

While I feel your case has merit versus someone trying to get enrolled in the medical plan after they found out they had cancer, they still have to follow Federal law as Mary C has indicated. Once you start letting the picture become gray rather than black and white, then that's where the employer can get sued. On the flip side, I would just ensure that there wasn't an error on the carrier or employer's side first. You may have already done this since you already filed an appeal under ERISA, but a lot of employers use an automatic enrollment that does not record any dependents until claims come in. This is done by the insurance carrier to lessen administration. Being on the carrier side, this would seem like a simple enough fix and I know many employers would go ahead and grant this exception even though they could be subject to some kind of penalty in the future, however, it seems like your employer has already made its decision.

There shouldn't be a problem converting the employees to a pre-tax premium arrangement as long as something in the policy doesn't indicate that it can't be done. Since you said it was an extremely old plan, you never know what kind of funky provisions the dinosaurs have. Imputed income only deals with employer paid life insurance. Therefore, even if I elect $5 billion dollars worth of supplemental life insurance, there's no imputed income tax to worry about.

I'm not an expert at the Florida mini-COBRA law, but here's how it works for regular COBRA: 1) If the employer changes health plans, then the former employee on COBRA changes health plans with you; 2) If the employer goes out of business, then the former employee on COBRA then loses coverage simply because there is no health plan to continue any longer. As far as conversion goes, that's going to be policy specific. If may indicate what needs to be done if conversion is allowed somewhere in the policy or summary plan description. From what I understand, Florida is a state that allows medical conversions.

i agree with you on the retoractive part. that's why i took the stance of getting at least a ballpark number for the employees to make their decisions on. if it's a couple percent higher or lower, no big deal.

papogi - wouldn't the cost increase have to be "significant" in order to allow the employees the ability to make a change in elections? if we assume a 15% increase in medical premiums this year, the only way i see a "significant" cost increase is if all 15% is passed on to the employees. with a union involved, i don't think that's very likely.

i started originally typing that, but then i didn't see anything mentioned about a union so i thought the negotiation was between the carrier and employer. how far apart are the two sides in the negotiating? does the employer only want to pay 50% for the insurance and the union wants the employer to pay 100%? or does the employer want to pay 70% for the insurance while the union wants the employer to pay 75%? if it's this close, i would simply indicate that the company is going to be paying 70% for coverage while the employees will have to pay 30%. if it turns out that the union is able to negotiate the extra 5%, that's great news the employer can pass on to its employees. if the two sides are far apart on the negotiations, they should do something to bridge the gap quickly since i don't think retro elections are going to fly per the plan document or the insurance carrier.

From what you described, no. If your plan document covers retirees the same way as active employees (except for contributions) then they must be treated the same. Therefore, you can not offer COBRA before a spouse is truly eligible for it.

a lot of things run through my mind, such as what kind of negotiations are going on that can possibly take 3 months? is the employer looking at switching carriers? if that's the case, there is a whole new set of problems since the employees are making elections based on one carrier and then the employer delivers another one. why isn't the annual open enrollment already coinciding with the medical/dental/life renewal rates? this seems to be the easiest solution going forward. however, the employer should still decide what the contribution level is going to be for 7/1.

If the company is exempt from COBRA it really depends on what the policy states. Most policies will only allow for an employee to continue coverage until the end of the month after termination. Is there a provision in the policy that indicates the employee can convert the coverage?

Ginny - if an employer pays for disability coverage or if an employee pays for disability coverage on a pre-tex basis, the benefit is taxable. If the employee pays for the coverage on an after-tax basis, it is not taxable. Now, if you actually gross up the employees' wages to pay for the coverage, then the benefit would be not taxable, but this is a little bit of a loophole. If your employees pay for disability coverage, you may want to offer them the choice of whether or not they want to pay for it pre-tax or post-tax. Obviously it costs the employees a little bit more up front, but it saves them 30% to 40% of the benefit down the road when they really need it.

I'm not so sure there is a requirement when it comes to enrollment forms. When I worked for a large national carrier, there was pretty small print on some of the enrollment forms. I would just use your judgement. Obviously don't do the enrollment form in font size 4 or 5, but 8 or higher should be sufficient. Now for SPDs or booklet certficates, there is.

Simply put, a Section 105 plan is a flexible spending account that an employer funds and a section 125 plan is a flexible spending account which is funded by the employee. I would be a little hard pressed to recommend putting one of these in these days simply because you may as well use whatever money you were considering to allocate to offset the medical premium increases. These were more popular in the 90's when managed care had medical premiums in check. What industry are you in? Shoot me an email if you'd like to discuss further.

I would always err on the side of caution in cases like these. What's the worst case scenario of reimbursing a procedure that a doctor says is necessary versus not reimbursing it and ending up in court? Remember, carriers usually do what's most profitable for them, not what's always best for the employees, thus they are going to deny more expensive forms of treatment. Not having FDA approval makes life a little easier on them in court. A good example I always use when illustrating a carrier's profit motives are implants. Why aren't implants covered under most dental plans? Because carriers claim they are experimental, right? Well, implants have been done for over 20 years, so at what point is something not considered experimental? Carriers don't want to start covering the procedure because it costs more than a bridge, however, these days only slightly. You can bet that other procedures could have been done for this employee that were less costly and that's why the carrier is denying the claim. If the doctor prescribed the BTI, and there's nothing saying that the employee was getting the procedure done for kicks, just approve it.

Good points Kip. Depending on how the drug plan is running, I may even take a little harsher view, like 60/40 or 50/50 cost sharing. Either way I agree that employees have to make good consumer decisions, especially when it can be as simple as asking if there is a generic available.

I have to agree with Mary on this one. I have read so many reports about PBMs that have conflicting information on savings. Some reports even go as far to say that there aren't any. Perhaps if you're GM or UAL or a company of that size you can get some volume discounts, but even then I would think it's minimal. For example, there are several drugs currently on the market that do not have any competition. Why would the company that makes these prescriptions sell you these for less even if you were buying them in a large volume? It's not like you can go to another company and purchase a similar drug. And unfortunately, these are the drugs that are the most expensive.

I would suggest you give Ameriflex a call and have them give you a demo. There are measures in place to prevent people ringing up bags of potato chips and Advil at the prescription counter. Obviously nothing I'm going to say is going to convince you otherwise.

Most of the time health benefits begin on the date of hire. But as papogi indicates, it is specific to industry. I have seen a lot of plans in which health benefits were effective on the first of the month following. It's really up to you on how you want to handle it. Just remember, by making the benefit effective the date of hire, you are opening yourself up to more of a chance when it comes to adverse selection.

I didn't miss that point of SLuskin's at all. There are codes assigned to every single product on the market, usually via the bar code. If someone tries to add shampoo and conditioner in addition to his or her prescription drugs, the debit card will recognize the codes as not reimburseable immediately and the sale will not go through. The sales for every item being submitted via the debit card are double checked, so if the item happened to slip through the first time, it would be caught by the TPA handling the FSA. I'm can't recall how the adjustment is made (sending a bill to the employee vs some other employer mechanism), but there are safeguards.

gburns - that wasn't what I was saying. HIPAA has nothing to do with this whole thing. What I was saying was that if the qualifying event coincides with a significant rate change it could be done. The additional info provided by the poster confirms my assumptions and my stance is the same - no, it can't be done and the employee will have to wait until open enrollment.

That they do. But this poster didn't mention anything about a significant premium hike, only a family status change. I was focusing on the latter. If the former happens to coincide with the latter, then he can go ahead and do it.

I'm not sure of a family status change that would allow an employee to move from a high plan to a low plan. Usually medical plans are set up for single and family, so if an employee was getting a divorce or losing custody of his or her kids, it still wouldn't be a justification to switch medical plans. Perhaps from family to single or single to family in the event of a marriage, but that's about it.