papogi

I can think of nothing in the regs which would preclude this. Maybe you're thinking of something I'm not, but it sounds good to me.

Absolutely.

I'm not sure, but somehow they must not be included there. That box is used in preparing Form 2441 to determine any taxable portion, so they must not be in there (already taxed).

With so little apparently documented, there is no real way to say what is required. I would use the opportunity to set a precedent, and stick to it going forward. In the meantime, better documentation should be prepared and distributed to employees.

I have always heard that they are. It makes sense to specify "only if they address specific medical issues such as labor, delivery, breathing techniques, and nursing." That provision should be easy to satisfy each time, as that defines the typical chidbirth class.

The best place is Treas Reg 1.125-2 Q-7(b)(6). You can acess it here: http://www.125plan.com/Section%20125-2.pdf This guidance has still left much for interpretation, as previous posts on this tolic will show you.

There have to be plan administative costs paid from general assets over the years that those forfeitures could be applied to. That's the first thing that forfeitures are typically balanced against, and this would deplete a huge portion of the forfeitures.

The growing plan design is one where spouses can come on the plan only if they elect coverage at their employer, if they are employed and eligible for medical coverage. The benefit to the plan in question, of course, is that these spouses will only be paid secondary. Or some of these spouses will terminate off the plan if they feel that the cost to participate is too high for the benefit they might receive having a secondary payer. I know of a handful of plans that have this policy that I have dealt with directly. By the nature and tradition of one of these businesses, most employees are female. The men who these females are married to are almost all employed, and have coverage. There were very few situations where the husband was forgoing coverage at his employer in favor of dependent coverage under his wife. Implementing this policy did not have a great effect. If the employer employs mostly men, however, this policy could generate a good number of spouse terminations, and reduced risk by moving several spouses into secondary paying situations. Each business and industry needs to judge their own population. They need to look at the ratio of males to females, and the types of jobs that your employees’ spouses have (do the spouses have benefits to sign up for, or are they poor benefits), and your particular employee base (are your employees of the mindset that the husband oversees things such as benefits, and they might not even consider using the wife’s employer’s plan). In many cases, a policy like this is just another administrative layer to get through. Or, it allows policymakers to sleep at night knowing that they have knocked on every potential cost-saving door they could. It is possible for this provision to have measurable results on claims costs. I deal only in the self-funded environment, and the legality of these provisions does not seem to be in question. There certainly could be a bad view of the policy by employees, and that can hurt morale and employee satisfaction, but it appears to be technically legal.

When someone participates in the health plan, are payroll deductions (if any) being taken pre-tax? If so, those individuals are still participating in the cafeteria plan. They don’t have to take the cash option to be participating in the cafeteria plan. If the goal is to make sure that employees don’t go without insurance, you can have a cash option, and require that all waivers of coverage supply proof of other insurance.

This makes no sense. It sounds like the policy was set in an attempt to make all covered persons secondary on the plan, but it doesn’t work. Person A has a spouse, and is covered as a dependent under that spouse’s plan. Person B has a spouse, and is not covered as a dependent under that plan. Person A and person B would still be covered as primary under your employer’s plan. Coverage under the spouse’s plan is inconsequential. Many employers are putting policies in place whereby a spouse can only come on the plan if they take any coverage they might be eligible for where they work. This way, they are secondary on the plan in question. Perhaps they want to exclude from the plan those people who ARE covered under a spouse’s plan. They have coverage elsewhere, so your employer doesn’t want them on their plan. They can get the cash. Employees who have no spouse for coverage can then come on the plan. Marital status is not a “bona fide business classification,” and basing eligibility on this does not seem to be legal.

The below is taken from a legal firm's website: "Generally, courts have found gross misconduct to be that which is intentional, willful, wanton, reckless or in deliberate indifference to an employer's interests. See Collins v. Aggrek Inc., 884 F. Supp. 450 (D.Utah 1995)(operating a company vehicle while under the influence of alcohol was gross misconduct); Adkins v. United International Investigative Services Inc., No. C 91-0087 BAC, 1993 WL 345186 (N.D.Cal. March 27, 1993)(security guard's desertion of post and falsification of duty log in order to generate additional paycheck was gross misconduct); cf. Zickafoose v. UB Services Inc., et. al., No. Civ. A. 3:97-0980, 1998 WL 774332 (S.D.W.Va. Nov. 2, 1998)(employee's assault on a co-worker, which occurred outside of the workplace, was gross misconduct). But see Paris v. F. Korbel & Brothers, Inc., 751 F. Supp. 834 (N.D.Cal. 1990)(employee's breach of a company confidence was not gross misconduct)." Also, see cite 27 at this link: http://www.hr-esource.com/index.asp?rightf...Chapter_44.html This would indicate that even though something constitutes disciplinary action, gross misconduct has not necessarily occurred.

HIPAA does not require that an insurance company or TPA send out HIPAA certs which vouch for any more coverage than their system itself proves. When an employee terms off of the plan under your new insurance company, the carrier is only required to send out a HIPAA cert showing the coverage under that carrier or TPA. Without a cert from the previous carrier, things will get messy. The previous carrier should produce HIPAA certs. The new carrier can require certs, although HIPAA does not require this. Under HIPAA, other forms of proof of coverage are acceptable (even a documented phone call to an employer), so I would think that some sort of verification from the employer would suffice. You’ll have to work that out with the new carrier. Either way, if the new carrier won’t produce certs which vouch for coverage prior to their involvement, then your previous carrier does need to get certs in the hands of the participants.

As far as I know, only outright and provable theft has been consistently upheld in court as "misconduct." Safer to offer COBRA in all cases.

It's really going to boil down to what the Plan Sponsor (Employer, in this self-funded case) wants to do. If this preauthorization has been to an external review (hopefully the stop loss carrier has done this, and that's why they are saying they would not pay this if it hits the specific deductible), and has come back as experimental, then the Plan Sponsor is on their own if they want to pay this outside of the plan language. My recommendation is to deny the preauth. If an external review of "prefessionals" deems this experimental in nature, then the Plan has language which addresses this. Deny.

There really isn’t anything in the regs regarding this because it is assumed that if the individual is eligible and is making required contributions, then they are an active participant in the plan, and dates of service falling within that time are reimbursable. Treas Reg 1.125-2 Q-7(b)(3) comes closest when it says that the period of coverage under a health FSA terminates if the employee ceases to make required premium payments. By definition, an employee who is making required contributions must still be in the period of coverage. As you stated, dates of service are what matter.

I have heard of one provider doing this in the Chicago area, and I'm sure it's something that is growing. As far as the FSA, my thinking would be yes. It is a necessary charge in order to receive medical care from the provider.

Check out this thread for some help: http://benefitslink.com/boards/index.php?s...t=0entry59282

Try here: http://www.125plan.com/FlexLinks.htm#Inter...e%20Regulations

Jeanine, we are seeing that, as well (I’m also with a TPA). Many employers (our clients) are allowing spouses of employees on the plan only if that spouse is covered primary on their own employer’s plan. This way they are only secondary on your client’s plan. DianaM’s post deals with simply getting employees off the client’s plan. The employee can opt out of your client’s plan if they show that they are covered under their spouse. If the spouse’s plan has the provision that you describe, then the employee obviously should not opt out of your client’s plan. An employer could adopt both approaches at the same time. One to turn spouses into secondary coverage whenever possible, the other to get employees off the plan and turn them into a fixed expense.

Yes, but paybdb's post says nothing about these employees not working there, It sounds like a case where they are still employed there, but they have been given too much money through their FSA.

In March, 2002, Harry Beker of the IRS said that if a health FSA reimburses an expense that is later determined to be in error (e.g., the expense was not for medical care, or the expense exceeded the employee's limit), the employer cannot just report the excess reimbursement amount on the employee's Form W-2 as imputed income. Rather, the employee must repay the amount to the employer with after-tax dollars (e.g., by writing a check). These were non-binding remarks, however. I think the IRS has backed off this a little recently, but I can't remember where I saw this more relaxed opinion. In any event, going the route of asking the participants for the money seems to be the safest. Depending on the situation involved, the employees might return the money with little problem.

Agreed. I am of the opinion that a 125 plan would need to be in place, as well.

I can’t think of anyplace where the IRS specifically disallows this, but this would have to be something that the employer offers to everyone, and the employee cannot make this demand of his or her employer. It seems to go against the intent of the legislation, and also sets up the employer for some potential problems should the employee terminate mid-year (e.g., undue risk to the employer in a DC area where there should be no real risk-shifting)

Check this link to another post: http://benefitslink.com/boards/index.php?s...l=concentration

An employer can do this. Employers often take this money and put it in a Health FSA for the employee. Or the money can be in the form of increased taxable wages to the employee. If you are fully insured, you’ll have to check with the carrier regarding minimum participation, and that might be an issue. If you are self-funded with stop loss, the stop loss carrier will probably have minimum participation rules in the fine print, as well. Typically, the healthy people are the ones who opt out, so you can run into adverse selection.