mroberts

Given the current state of the managed health care systems, I am actually a proponent for the DC Health Plans. While I agree that the tax issue is in the limbo, there are many signs pointing to the fact that the government will shortly endorse them. Additionally, Bush is high on the idea of medical spending accounts, which DC Health plans are really based off of. If you would like to discuss further, drop me an email.

When you say the employee made arrangements to continue her coverage back in 1994, was that through COBRA? If she was offered COBRA back then, I would term her immediately since she's had a free ride for about another 36 months. If she wasn't given COBRA notice, my thoughts would be that you would have to go through the process and grant her COBRA. This is an extreme case though since we are talking about 8 years.

Alexa: I would go back to either your carrier if you're fully-insured or your TPA if you're self-insured and have them do the legwork. Texas and Florida are extra-territorial states, meaning that their laws prevail no matter where the contract is sitused. Even though Mary has indicated Minnesota has a similar law, I don't believe Minnesota is an extra-territorial state so it would not apply to you. If you would like to discuss further, just send me an email. =) Matt

I'm not aware of any state or federal laws that could help your employees. Insurance carriers need a way to identify employees in their systems. They can't do it by name since there can be 53 Robert Smith's. The only other way of doing it is by ID number. This is something that you may already have internally or it's something that a carrier can create. The problem is, this will usually pose a bigger problem for your employees because they are probably not going to be able to remember a random 10 digit number. Just out of curiosity, who leaves their medical and prescription ID cards laying around? Most people keep them in their wallets and present them upon a doctor's visit or picking up a prescription. Heck, most driver's licenses have a person's SSN on them. Some of the most suspicious looking people I've ever met are bouncers at a bar. What is a person supposed to do then? Occassionally you hear a story about someone's SSN number getting ripped off, but something tells me the majority of these cases aren't from someone scoping the person's prescription ID card out at the pharmacy. Tell your employees to be smart about it.

I'm not entirely sure what you mean by clients. If you mean the company's employees, then you need to address it in the employee handbook, SPD or some other source of information to cover your butt. If you are a broker and mean the employer, again, something that fully describes the plan would suffice. Check with a local TPA. You could pay them to create one or they may have a sample document you could use.

Since it was prescribed by a doctor and it could fall under therapy or chiropractic care, based on the information provided, it would be covered.

taylorjeff: i'm wondering if this varies from state to state. i just went through this process and from what i was told was that if you set up a section 105 or 125 plan, you can not indicate what the funds could be used for. now, you can decide whether or not you want to include dependent care reimbursement, but when it comes to health, i was told if it was on the list of covered expenses in the regs, it can be reimbursed. let me know if you have some backup. thanks!

People like Kennedy have to pull something out of their butt once in a while to make it look like they actual do something. No, this isn't going to work. If employers are forced to provide coverage, they will just take it out of the employees pay checks. Or, they could provide some cheapo plans that pay for doctors' visits and nothing catastrophic. It's a nice idea, but so is communism.

I just had one of my clients want to do this and you can run into all kinds of discrimination problems, so be careful regardless of what you do.

Yes and no. If you just want to reimburse them every time they incur an expense, the amount is going to be taxable. Your best bet is to set up a section 105 plan. This is very similar to a section 125 plan except that the employer puts the funds into the account for the employee to use. The one problem with this is that you will not be able to determine how the employee uses the funds in the account. Meaning, the employee could decide to use the funds in the account for vision or dental benefits just as much as health benefits. The important thing to note when setting up this plan is to not be discriminatory. If you would like to discuss further, please feel free to send me an email!

I'm not at all familiar with the Evergreen Act, but all I know is that all employees are required to turn in section 125 elections from year to year. The closest to not doing so that I've seen is a printout of the previous election amounts during open enrollment in which an employee just needed to sign to continue the same amount. Even then, I would be surprised if any employee did not change that amount. Prescription costs change, dependent care costs change, vision care needs change. This is the whole reason a new election form must be turned in. If you are not having any success with HR, you have a witness to your turning in the election form, and you have a photocopy of the form that you turned in, take it to someone above HR. I'm not sure how many employees your company has, but if HR has done as bad as a job as you've noted, I'm sure they will be more than interested in knowing that.

As long as you don't really care how your employees are spending their off days, go with a general PTO bank and don't worry about whether any days off are vacation, sick days or whatever else. It's much more administratively friendly. As far as determining the number of fixed holidays, most companies have between 7 and 10 days. Do the pharma companies shut down for maybe the day before and day after Christmas or is it for a week or two? Since you are a smaller company and geared towards sales, maybe you don't need your employees around for a week or so. Most sales oriented companies don't care where you are as long as you're producing. There are a lot of things to look at when determining how you want to handle a PTO bank, so if you would like to discuss further, just send me an email. Take Care!

If you have a legitimate witness, then the company should work with you a little. If they won't, then I'll let one of the HR experts chime in as what to do. My thoughts would be to go over your HR person's head. I would only use this as a last resort but it doesn't sound like you're getting anywhere doing it the direct way.

There are probably timing issues and that's why the employer isn't budging. I'm surprised they wouldn't work with you a little. But also put yourself in their shoes.....how many employees claim they turned their enrollment forms in and HR must have lost it or something to sneak one by the employer? I'm not saying you don't have a legitimate complaint, but obviously it depends a lot on if they believe you or not.

You should offer the same plan to all employees or else you probably will have a discrimination problem on your hands at some point in the future.

Actually, most companies do not offer the employees the exact amount of cash back as put towards the benefits. They usually buy back the unused cafeteria dollars at say $0.50 on the dollar. This way, the dollars are being used for what they are meant for - employees getting necessary insurance. As indicated, there are many things to look at when creating a plan like this. =)

There's a lot of things that could be done when looking at cafeteria plans. It sounds like your medical plan isn't the greatest and that many employees have better luck getting coverage elsewhere, especially when they have a spouse. One of the things that you can do is change your plan a little and give your employees x dollars for benefits annually. Whatever they don't spend can be paid to them in the form of cash throughout the year and whatever they spend in excess of this amount would be deducted from their checks. There are a lot of things to determine before you do this, such as amounts given to single employees, employees with dependents, the correct amount to give and so on. If you would like help with these next steps, let me know and either I can assist you, or refer you to someone in your area. Thanks, Matt matt.roberts@bbinsurance.com

It would make sense to leave it up to the actuaries. Obviously last year your organization had a bad year, but what if this year is a fantastic year? I believe there is a law anyway that a tax exempt organization needs to follow to determine reserves. It's only a minimal amount, so if you wanted to go above that level, so be it. As far as a lump sum adjustment goes, it should be legal. Again the whole tax exempt thing is throwing me off. I've worked on a number of employers' self-insured plans and at times they have made lump sum payments to catch up. Regardless, I would work with your broker or actuaries to get the best advice. It's not worth over reacting if you just had a bad year.

It is illegal. I also wanted to point out that it really isn't worth the headache of trying to figure out a way to mitigate your liability on the FSAs. It all balances out in the long run. There are about 1111 studies that point this out. I can see some possible shortages on the employer side with the way the labor market is right now, but things will return to normal shortly.

If the employee was covered in 2000 and from the election form for your open enrollment for 2001 it is clear that he or she wanted to continue coverage you should address this with your carrier. If you are not getting the response you are looking for, get your broker involved. If the carrier agrees that the employee should have been covered for 2001, the employee will be responsible for paying all of 2001's premiums. You could have a degree of difficulty with the carrier because the carrier may point out that the employee should have realized that premiums were not being deducted from his or her paycheck for a whole year. If the employee is in good health and wants to save all of 2001's premium, he or she can just go ahead and have the medical underwriting done. Obviously he or she did not need the LTD coverage in 2001. If the employee becomes disabled while going through medical underwriting, he or she is probably going to be SOL. With voluntary LTD, coverage will not usually begin until the employee is AAW. Therefore, even if the employee was not disabled when submitting the evidence of insurability, but then becomes disabled while waiting for approval, he or she will not be AAW when the decision is made. Therefore, coverage will not begin until he or she comes back to work. If the employee is not disabled, then coverage will commence once the carrier approves the request. As far as the last point goes, I don't think the employee would want to be covered if he or she didn't use the coverage. It's your call as the company. Since the carrier isn't looking for the cash, I would say let it be. As always, review your contract thoroughly. The above comments were made to what is standard in the industry. If you would like to discuss further, do not hesitate to email me. Take Care, Matt

Good point Jeanine! I forgot to mention on that part about finding out what the claims are for. Due to hungry, hungry HIPAA, I would not recommend having the employer find out too much about any claims. It's one thing to just monitor a claims paid report or even a general report indicating what kinds of claims have been covered. It's totally another thing to find out specifically what kind of claims any one person is dealing with. This could stick in the back of an employer's mind when it comes to decision making in the future and if an employee were to ever find out about this......

Coming from North America's largest insurance carrier, we did not request proof of a dependent. Unless your carrier is specifically requesting this information, it may not be needed. If the children have different last names, I would not even bother. With so many remarriages these days, it seems almost impossible to not have employees whose children have different last names. If the spouse has a different last name, I would just address it with your employee. Obviously there aren't too many women that keep their maiden name once married. That's even something that would draw a red flag from an insurance carrier. Do you allow for domestic partnerships or common law marriages (required in some states)? If you do, carriers have domestic partnership and common law marriage affidavits that need to be filled out in certain instances. Your best bet would then be to go back to your carrier and ask, what do you need to be filled out? I hope this helps! If you would like to discuss further, do not hesitate to send me an email! Take Care, Matt

Yvonne: It sounds like it would fall back on state law as to whether or not you could take away a half day of a person's vacation. However, since vacation time is merely a perk and not required by law in any state, you can enforce the rule better by possibly reducing the employee's vacation time the following year if they do not follow the rules. For example, if an employee were to get three weeks, but did not conform to the prerequisites the previous year, perhaps you only allow them 13 or 14 days rather than the 15 days off. You also should be careful that this doesn't cause your workers to become disgruntled. If you think this could hurt your chance to retain your employees, don't do it - plain and simple. If you decide to create a policy to address this issue, I would highly recommend adding it to your employee handbook since it is then clearly laid out. You could simply indicate that not turning in the necessary paper work could lead to denial of vacation time. I'm sure this will help enforce the policy without creating a pessimistic perception from your employees. Lastly, I would recommend applying whatever rule accross the board regardless of class. There's nothing that bothers employees more knowing that other classes get treated differently, especially when it comes to rules similar to these. If you decide to overlook it for key employees, then nobody else has to know.... If you would like to discuss further, do not hesitate to send me an email! Take Care!

Annette: I'm relatively sure that your HR manager and CEO are not looking at these numbers for possible termination. Even if they were, an employee would be able to continue coverage for up to 18 months with the claims experience still hitting the company's own experience. In a situation where an employer is self-insured at less than 75 employees, any big claim probably gives these two an ulcer. As previously mentioned, for a group your size, your best bet is to think about going fully-insured. Thanks, Matt

If you feel that the changes are significant and were not indicated prior to the open enrollment period I would tend to think that you could allow your employees to make some changes. Their decisions were based on your previous health plan coverage, not the new one. It really depends a lot on the events leading up to 1/7/2002. Such as, how many health plans do you offer, what the changes were and so forth... If you would like to discuss further, just drop me an email. Thanks, Matt matt.roberts@bbinsurance.com