mroberts

I have never heard of an EAP plan falling under COBRA.

Having the consultant take a look at claims info should not pose a concern unless you think he or she is going to use the information in some other way. When it comes to disability claims, I usually work with the carrier directly if there are questions or problems with a claim. Depending on the realtionship I have with the carrier, they usually give me information that is personal and that I would not relay on to the employer. However, in order to really solve a problem, sometimes you need all the information. Also, HIPAA would not apply in this instance unless the consultant was giving you very specific details about individuals who are receiving medical care. For instance, your consultant can tell you that 5 people are being treated for cancer, 10 people for heart diseases and so on. That's not a problem. If they said Bob Smith is being treated for complications due to a sex change operation, that is a problem.

I agree that it may not be specifically laid out, however, I have seen it occur a number of times and the employees have been offered COBRA. Additionally, creating contracts for North America's largest insurance carrier, a loss of benefits that targets a specific class was considered a qualifying event. The spirit of COBRA is to allow employees to continue their health care benefits when they are no longer eligible. To say that an employee that has his or her hours reduced is eligible for COBRA and an employee whose class is losing the benefit because of a change to the contract is not eligible is an extremely fine line. I agree with your assertion that not offering COBRA could create some major headaches for the employer down the road. I would offer the benefits and let the chips fall as they may. One other factor to consider is the group in question is less than 70 employees. Because of the company size, it should not be experience rated when it comes to their medical plan. Therefore, offering COBRA to 17 employees, of which only a couple will actually take the benefit, should not negatively impact the employer financially. Obviously some additional administrative work will need to be taken on, but it far outweighs the legal costs that could be waiting around the corner.

Since the class (non-salaried employees) is losing coverage, it would then be a qualifying event. As a rule of thumb, whenever an employee or group is losing coverage, COBRA will most likely need to be offered.

What Kip is basically saying is it depends on how your plan is written. Check out your company's SPD and look under deductible and see how an employee or dependent can meet the requirement of satisfying it.

I believe you are truly trying to differentiate between a section 105 plan and a section 125 plan, not a cafeteria plan. The main difference is how the medical spending account is funded. Under a section 105 plan, the employer deposits funds into the account for employees to use. Under a section 125 plan, the employee has amounts deducted from his or her paycheck to fund the account. If you are talking about a cafeteria plan, this usually encompasses all of an employer's benefits in which an allotment for benefits is given to each employee and the employee decides on how to spend the money. If the benefits elected happen to begreater than the allotment, then he or she has the difference deducted from future paychecks. Hope this helps. Email me if you need more info since I could really type about 20 minutes on these two different plans.

In this case it would seem that the funds from Company A could be rolled into Company B since the employees are not being terminated. Since an FSA is basically an employer account holding the deductions of employees until they use it for incurred expenses, it all works out the same. Work with the TPA who is handling Company's B Flex Plan to do the necessary contract work.

The best advice I have for you is get some advice from a tax specialist. I was with MetLife when they went stock a few years back and let me tell you, nothing seemed straight forward.

Not 100% sure, however, that would go along with my previous comment concerning the degree of changes from this year versus last year's plan document.

Is there a reason he is terminating the plan? Does the acquiring company have a flex plan and are all the acquired employees being moved under this plan?

If there were any substantial changes, yes. If everything is pretty much the same, no. If any changes were made no matter how small, I would at least send a rider or amendment.

Oops....sorry....I wasn't referring to you wzdmckr. I meant the original poster....Steelers. In response to your question, yes it is legal. California is the only state that I'm aware of that the employer is required to pay for accrued vacation time at all upon termination. The view on this is that any vacation time an employer gives you is a perk/benefit and the employer has the right to dictate the terms of it.

That part is true, but there's more to the equation. An employer must provide all employees with a summary plan description within 90 days of the coverage being effective. If there have been substantial amendments to the plan, a new SPD needs to be distributed at least every 5 years and if there hasn't been any substanital changes, a new SPD needs to be distributed at least every 10 years. The chances of anyone suing the employer if SPDs were never distributed are extremely low. Most of us either throw the things in the bottom of our cabinet or garbage without even looking at them. The times it may come up is if an employee had a problem with a claim, especially LTD or medical.

1. The courts would look at the case as one infraction regardless of whether 10 dependents or no dependents are involved. The penalties imposed could be federal or for damages for not notifying the employee or his or her right to COBRA. 2. The federal fines for not notifying someone could continue. For example, if the fine was $100 per day, and the employer finally notified you after one year and you had different coverage after six months, the employer could have to pay the government $36,500. Of course, there are mitigating factors in the court's determination of how much the employer should have to pay. If the court found that the employer acted in good faith, it may not have to pay anything. 3. Lastly, I'm sure you could bring a class action law suit against just about anything these days. My question would be why would you want tor? It's not like the court is going to award you money just because the employer didn't notify you. You have to show harm was done by not being notified and the amounts the court will reimburse you will be for charges that you incurred for medical expenses and legal fees. The employer would have to pay additional fines, but these would be going to the government and again, there's no guarantee any fine would even be imposed depending on the situation.

I'm not sure about the second question, but the employer can be fined up to $110 per day under ERISA for not distributing an SPD to its employees. Additionally, if there is a problem with a claim and the employee did not receive a booklet, the court tends to favor the employee over the employer when making a decision.

This is kind of a general question. What prompts it? You're not going to get anything worth a lick asking a general question to people all around the country in industries of different type and size with 10 people responding.

A buy back plan would be a company policy. If you give an employee $3000 a year to buy benefits and they don't use it all, it's your perrogative if you want to compensate them in any way. Some companies set up in a cafeteria plan will not give their employees anything. I've never seen a cafeteria plan document with wording relating to a buy back although that doesn't mean it is legal or illegal. My suggestion would be to keep it out of the cafeteria plan document. Besides, if you ever have to amend your buy back policy, it's less messy to change your company policy rather than a cafe plan doc.

Check with your group contract. It should specify last day of employment or end of the month after termination. If it doesn't specifically indicate anything in the contract go with how you would treat an employee who didn't have any vacation time and was terminated. Some companies continue benefits until the end of the month while others cut them off right away. Paying an employee vacation time after termination is more of a serverance kind of thing and should not keep the employee active beyond the termination date.

kredlin: Check with the carrier and see if it is allowed or if it is self-insured as you indicated, check your plan documents. There's no reason why this couldn't be covered since most carriers allow children to be covered if there is a court-order document indicating legal guardianship. matt

This would be treated as any other qualifying event.

A huge reason employees love DC health plans is because there are no networks and no managed care. Remember the doctor who treated your entire family and that you no longer go to because he's not in your network? This is no longer a problem. Better yet, if you needed brain surgery, how would you like your choices limited to three or four doctors in your area only? Additionally, there are a lot of reasons that employees may have given their medical plans a high mark. First, how many times do you go to a doctor and not get better? Any one who feels lousy and then has a doctor fix them up is bound to be fairly positive in a survey. Secondly, if you are in an HMO or similar product and don't mind going In-Network, why would you dislike the medicl product? $5 or $10 copays sound like a great deal to me. The problem is, these employees are happy going to the doctor because they only pay $5 or $10 and get better, but they won't be happy when the amount they have to pay for insurance goes up considerably. And that's the path we are on. It's just an assumption, but I would think most of the people who moved to the DC health plans are the more highly educated employees since they can figure out that it makes sense to have an ever-increasing medical spending account, which should in the long run reduce the amount of dollars coming out of their pocket. The employees probably ran the numbers on roughly how many times their families are going to visit the doctor and saw that it made sense to move over to the DC plan.

I was simply trying to compare DC health plans to something that we do know a lot about. The only way to help employees understand is through education, education and more education. As I indicated in one of my previous posts, this is not an overnight process, but it's a process that needs to begin now. The fundamental idea of here's $2000 you can spend any way you want on medical services is not overly complex at all. It's called a budget. Of course it's difficult to understand if you haven't had an expert come in and explain it to you. Once that occurs, it's not as complex as you're making it sound. Does it put more of a burden on the employee? You bet. Do employees who switch to the DC plans like it? Overwhelmingly yes. We all have a fear of things we don't completely understand. Once we understand it, it's not overly complex. Sort of like indoor plumbing. Now, is this plan for all companies? Of course not. Larger companies that have many employees in one location are best, but it depends on the industry as well.

A lot of the companies prefer the health plans to be called consumer driven rather than DC for just that point on clarity. The basis for almost all of them is a medical spending account usually funded by the employer. After this account has been exhausted there is a corridor in which the employee will have to spend some out of pocket dollars before major medical kicks in and the rest is covered. I think it's a great idea - the people who use the medical benefits most pay for them. And as far as the opponents of these plans go, no they don't pay a lot. Usually less than most PPO plans that are out there. There's going to be a lot of opinions on it and yes, you could say that forcing employees to be consumers on medical is not going to work. But you know what? It's going to have to unless we turn to a government run medical program. Right now most employees have no idea of the true costs associated with visiting a doctor. They really think it costs $5 or $10 rather than the real cost of $100, $200 and more.

It's through benefit experience, a thorough understanding of the plans and just normal every day things I read in the newspaper that I base my opinion. I indicated that the tax issue is not clear as day when it comes to these plans, but the pros clearly outweigh the cons. If these plans weren't going to come to fruition, would Humana, Atena, BCBS, CIGNA and every other big carrier be designing them for rollout in the not so distant future? These plans are obviously not something you just throw out there and not endorse if you are an employer. It takes a lot of work to communicate it properly. Additionally, employers who are offering these plans to their employees are not simply saying this is the only plan, take it or leave it. A DC health plan is usually offered side by side with other health plans. It's necessary for a natural and gradual transition. Most of these plans are based off of a self-insured model as well, which basically means you need to have at least 300 employees before you consider it. There are some companies that work this product off of a fully-insured platform, however, they are usually only filed in a couple of states and probably would not be a great fit for a large firm. Employers really need to take a look at these plans and the sooner the better. How long are we going to be able to continue to absorb 10 to 15% increases on our health insurance?

As what jeanine indicated. This is especially true when dealing with cities in California. Nonetheless, even if you have a self-insured plan and the letter that you received is basically a "back scratching" initiative, you will need to add the domestic partner provision if you expect to do business with that company or city.