mroberts

If I were you, I would offer him COBRA and be done with it. Of course, check with your insurance carrier first and see what their feeling is first. But not offering him it could be the start of a lawsuit.

This would be pretty tough since most insurance companies' underwriting standards is to either insure all the employees or walk away. In certain instances where a group is split in half and in different states or completely different regions, carriers will look at the applicable groups and realize an all or nothing philosophy might night work, but these tend to be regional carriers only. BCBS, UHC, CIGNA, Aetna....all have nationwide networks, so they probably will not budge on their underwriting requirements, especially since the entire population is only 80 employees. If you have 8000, then you could probably negotiate something. The pitch I would make to the two groups is simple - 50 tends to be the magic number when it comes to health insurance. Carriers will be more aggressive for these size cases, more markets open up, experience may be taken into consideration (if it's good it should slightly offset future increases), and more importantly, marketings down the road should be simplified since carriers usually only ask a generic group questionnaire rather than individual questionnaires when it comes to underwriting. As you probably know, if you go down the individual questionnaire road, it can be very difficult changing carriers if you have a couple sick employees or dependents. The group questionnaire doesn't totally eliminate this possibility, however, most of the time I've run into problems is when someone's dependent has some major illness that no one knew about and this is not always general information to the HR people.

They would not have to add part-time employees to the testing pool simply because they are not eligible for benefits. And since part-time employees and seasonal employees do not fall under the same classification as full-time employees offering them different benefits with different funding mechanisms are not a porblem.

Yes, show him the Section 125 non-discrimination rules. All members of the same class have to be treated equally or else his actions will put the plan in jeopardy. If he wants to negotiate something different for this individual, he should make up the difference in pay and outline the reasons for not being able to pay the entire cost for healthcare.

UHC has some kind of mini-health plan. Additionally, there's a company called SRC out there that can put something similar on the table. Please let me know if you'd like to discuss further.

I don't see a problem deducting the necessary contributions in this scenario. Whenever you would normally terminate employees out on disability would be the breaking point. At this point, offer the ex-employees COBRA and be done with it.

How about making it easier. Instead of dropping them to a level where they can be increased, why not give them a probationary period to get their sales up or else they would be dropped to a lower level, thus causing a "significant increase" in the cost of coverage and allowing them to drop the plan if they wish? Again, I don't see a correlation between sales output and medical insurance. I suppose one could argue that if a person made more money they are likely to spend more money, thus paying for medical insurance, but I think it's a little bit of a stretch. I see it as any bright individual, which sales people generally tend to be in the scheme of things (I know, arguable!!), understands the risks associated with not having healthcare and would particpate in the plan even if they had to pay the lion's share of premium. Additionally, this is an example of someone with waaaaaay too much time on his or her hands. Why even think of something this complicated? If a sales person isn't pushing his or her weight, why not just get rid of him? By keeping a standard contribution ratio, this will also allow an above-average sales rep to have a down year every now and then. Let's face it, even the best sales people have peaks and valleys.

It depends on how the contract is written. For STD, an employer can set up a contract so that the insurance company pays the employer the disability benefit and the employer then pays the disabled employee through payroll. The employer then can go ahead and make any necessary deductions for medical insurance, dental insurance..... Remember, if someone is out on disability, they still have the responsibility of paying their share of premiums for any coverages they contribute to. Some employers require you to send in a monthly check while out on disability, some let you catch up when you come back and some could just deduct it from your benefit. For LTD, I'm not aware of any insurance carrier that will send a disability check to the employer so it can continue to pay the employee through payroll. I suppose it's possible, but once the employer terminates the employee, this would have to stop and the ex-employee should receive the disability check directly from the carrier.

COB issues vary from plan to plan, region to region and state to state. As far as I'm aware of, there is nothing in the COBRA regs that deems which plan would be either primary or secondary. Just out of curiosity, why is this person on COBRA and your health plan? I know it's possible that there could be some advantage to this depending on the richness of either plan, however, it is very unlikely. If this person wants to waste a couple hundred bucks a year, I'd be more than happy to forward you my mailing address.

Since you have other plans that would cover this individual, yes you need to offer him the option of choosing one of the other plans. If, on the other hand, you only offered a local HMO, then this person would unfortunately lose coverage.

I could several problems with administering the plan this way. First, as roc points out, it could favor highly compensated employees, depending on how many sales people there are, how many other employees there are, and what percentage of premium is paid for by the company for the other employees. Second, even if a Section 125 plan could allow for this, which I don't think it could, what does the underlying plan say about this? I don't think too many medical carriers out there would allow for this kind of change unless you had some heavy negotiating clout. Instead of making this so complex, why not just give your sales people an extra bonus if they increase their sales significantly? Chances are there is no direct correlation between the increased sales output and the desire to have medical insurance. Additionally, if a sales employee declined to have coverage because the costs are too high, what's to say he or she didn't elect it under his or her spouse's plan during open enrollment?

From my experience, most employers that do gross the benefit up also take into consideration the tax consequences. For example, if the cost of premium is $400 annually, the employer will actually gross the employee's salary up by say $500 or $550. If the employer does not take taxes into consideration, I then would say that no, it cannot require employees to take the coverage since there is technically some cost to the employee. With that being said, I think proper communication would make this a no brainer to any employee regardless of the slight tax consequence. What kind of knucklehead wouldn't take an employer sponsored LTD plan in which the benefit was going to be non-taxable if ever used for the slight cost of a couple more dollars a month in taxes? Then again, I know they're out there.

I haven't seen anything written about jail time, only that the maximum fine not being in compliance with HIPAA is $100 per day, up to $25,000 annually. What kind of law do you think is being violated here that would warrant jail time?

I am also pro-HRA in the right situation, which I don't feel is really the case here. If dental premiums are getting outrageous, I would suggest analyzing what's making the premiums outrageous and find a way to change the plan to keep pricing stable. For example, does your dental plan have a managed care aspect? If it's a PPO plan, have you thought about having a MAC or Value plan to keep costs down? I can go on and on with the ways I would analyze the plan to make sure I'm doing everything possible to keep costs in check. As for the vision plan, why not make it voluntary if only half the employees are utilizing the benefit? Some carriers will not allow a voluntary vision plan due to adverse selection, but others will price it accordingly and allowed it to be offered this way. Or you could do a high low plan for the vision benefits in which you pay 100% of the cost on the low plan, which might provide minimal benefits such as an exam and scaled back lens and frame coverage and allow employees who have additional needs to buy up to a better benefit? There are just a lot of different avenues I would go down before I would assume an HRA plan is going to be the panacea for any cost problems the employer is having. The other big question I have is how large is the client? There's a certain cut off where HRA's could make sense and will they definitely wouldn't make sense, especially with coverages like dental and vision. Again, the costs for these coverages are a fraction of what they are for medical insurance.

I'm also a little fuzzy on this one. I really don't see what the advantage of an HRA would be for dental and vision plans. In theory, HRA's are designed to make employees better consumers when it comes to medical services. Overutilizing lab work, diagnostic services, emergency room visits, sick visits and prescription drugs are all common problems of medical plans, however, I just don't see where this is too much of a problem on vision and dental plans. Dental and vision costs are pretty much in check (dental trend is under 8% and vision trends are under 5%), and the costs of these two plans combined are about a seventh of the cost of medical plans. So what would your company gain by subjecting these coverages to an HRA? Additionally, are you just dropping your insured plans whether they are fully-insured or self-insured? If this is the case, I agree a Section 105 plan would be a much better option.

I think the next time SPD's are created the new HIPAA Privacy Notice should be incorporated. In the meantime, I don't see a problem with distributing it as an amendment and without the SPD.

If the broker is solely helping in the enrollment, I might go along with that. But if the broker is also performing utilization reviews, administration, data analysis, monitoring the plan and performing marketings, my understanding is that he or she should should at least be entered into an agreement with the health insurance carrier. For self-insured arrangements, the broker would also need to be entered into an agreement with the client.

If the group is under 50 or 100 lives, the enrollment form may include a detailed medical questionnaire. Some states allow an insurance company to then rerate the case based on the overall medical health of the group. Regardless, even if that's not the case, strict interpretation of the new HIPAA regs require brokers to be treated as business associates. Chances are your broker has already signed an agreement with the insurance company that's handling your health insurance and this shouldn't be an issue.

Just about all LTD plans have a reducing benefit duration once an employee goes out on disability past age 60, so no, the plan would not be in violation. Most plans end payments at age 65 for employees who were disabled prior to age 60 since that is still considered the normal retirement age. As far as retirees go, how would they be eligible for disability benefits? The purpose of disability insurance is to help replace one's salary. If a person is retired, he or she isn't working and therefore, isn't receiving a salary.

I agree with all of the other posters. What Lugeguy is referring to is simply obtaining catastrophic coverage. If an individual wants to purchase this directly from a local carrier, it should be less expensive. On the flip side, routine doctor vists and Rx probably won't be covered. Forty-nine out of 50 times, COBRA is the least expensive way to go if the individual wants similar coverage.

Agreed. It's really up to the company if they want to or not. Since the company hasn't established the practice of paying employees who do not elect medical insurance, I would probably err on the side of caution and not start doing it. A lot of insurance companies require 75% participation for medical plans, especially if the client is paying 100% of the cost for single coverage. Obviously doing the math, the company's already at 66%. I can see the other side of the argument as well, however - employees complaining that they should get some compensation for not electing medical insurance. The way it should be handled by the employer is that if an employee chooses not to take advantage of company provided benefits then that's his or her own perrogative.

The problem you're going to have is finding a medical carrier that is going to write this business. In general, no medical carrier will insure a fully-insured association plan. The risk of adverse selection and a death spiral down the road is just too great.

The 12 month rule when it comes to FMLA counts time actually worked, not length of employment. Therefore, if this employee has not been working at all (total disability), he or she would not be eligible for FMLA and you have no predicament.

Agreed. Even if the employee had his or her child in the day care one day per week, the cost is still going to be $225. Therefore, the full allotment should be reimbursed.

I agree with Steve about the internal tracking. When I used to work for a large, well-knowned carrier, one of my colleagues accidentally had access to the eligibility system. Needless to say there was tons of information that he shouldn't have been looking at but was doing so for kicks. With today's regulations, that could be a very big problem.