Brian Gilmore

COBRA participants have the same OE rights as actives. Nothing about OE rights changes the standard 60-day election period or 45-day period to make the first premium payment. I'll defer to you and your COBRA TPA for the specific procedures of the distribution of materials and election process for your plan. More details: https://www.newfront.com/blog/open-enrollment-rights-for-fmla-leaves-and-cobra-participants-2 Slide summary: 2024 Newfront COBRA for Employers Guide

Yes, loss of coverage caused by a reduction in hours is a COBRA qualifying event. That's also true if the reduction in hours causes the loss of coverage at the end of the applicable ACA look-back measurement method stability period. More details: https://www.newfront.com/blog/the-cobra-triggering-events It doesn't matter whether the employee is eligible for active coverage at that point. By definition they aren't be eligible for active coverage, otherwise they wouldn't have lost it and had the qualifying event. In other words, basically everyone on COBRA is no longer eligible to enroll in active coverage at open enrollment. Here's a quick overview-- https://www.newfront.com/blog/loss-of-health-plan-eligibility-caused-by-move-to-part-time-work Employees who do not average at least 30 hours of service over the full standard measurement period (i.e., generally do not reach 1,560 hours of service in the typical 12-month standard measurement period) can be removed from coverage as of the start of the new stability period (generally the start of the new plan year) because the employee will be treated as part-time for ACA purposes for the duration of that stability period. This will be a COBRA qualifying event as of the end of the plan year in which the employee loses coverage (loss of coverage caused by a reduction in hours).

Yeah the termination date on the individual policy is irrelevant here. It might not have even terminated yet. The ICHRA doesn't control the individual policy enrollment. It'll all be the same as if the employee lost traditional employer-sponsored group major medical from the employer. The employee will have 30 days from the loss of the ICHRA coverage to request enrollment in the spouse's plan. Coverage under the spouse's plan must be effective by the first of the month following the date of the election change request. Any gap between the loss of ICHRA and the enrollment in the spouse's plan can be addressed the individual policy (which can be maintained regardless of ICHRA enrollment) and potentially also by COBRA (for continued access to the ICHRA payment stream). Here's an overview-- https://www.newfront.com/blog/hipaa-special-enrollment-events-2 HIPAA Special Enrollment Events: General 30-Day Election Period Employees must have a period of at least 30 days from the date of the event to change their elections pursuant to a HIPAA Special Enrollment Event. Employers wishing to offer a longer election period should first seek approval from the insurance carrier (or stop-loss provider). ... HIPAA Special Enrollment Events: General First-of-the-Month-Following-Election Effective Date Rule The general rule is that an election to enroll in coverage pursuant to a HIPAA Special Enrollment Event must be effective no later than the first of the month following the date of the election change request. For example, assume that Jack marries Jill on January 19. Jack submits the election change request to enroll Jill on January 22. Jill’s coverage should be effective no later than February 1. Now assume that Jack marries Jill on January 19, but does not submit the election change request to enroll Jill until February 14. Jill’s coverage should be effective no later than March 1. For more details: When Mid-Year Election Changes are Effective Here's a slide summary: 2024 Newfront Section 125 Cafeteria Plans Guide

First issue is to make sure you're not inadvertently creating a potential MEWA situation. So you'll want to confirm that A and B are in the same §414 controlled group (that should sound familiar from your retirement side work). Second issue is to notify carriers/stop-loss, update the wrap docs, and coordinate with ACA reporting vendor. Here's an overview of those first two issues: https://www.newfront.com/blog/adding-a-new-ein-to-the-health-plan 2024 Newfront M&A for H&W Employee Benefits Guide Third issue is to address the class-based structure. There's a number of considerations there that may vary based on fully insured vs. self-insured. You'll have to deal with the §105(h) rules if it's self-insured. The main considerations are: Clearly Communicate Class Distinctions in Plan Materials; Confirm Class Distinctions with Insurance Carriers/Stop-Loss; and Structure the Approach to Comply with Applicable Nondiscrimination Rules. Here's a overview of the third issue: https://www.newfront.com/blog/designing-health-plans-with-different-strategies 2024 Compliance Considerations for Self-Insured Plans Guide

Yeah ICHRA requires a (mostly interesting/fun) shift in many ways thinking. One is that the ICHRA itself is the group health plan. More importantly for these purposes, it's a non-excepted group health plan subject to the HIPAA portability rules, including special enrollment rights. The underlying individual policy is not an ERISA plan and not connected to the employer in any way. With that in mind--when an employee loses eligibility for the ICHRA (from termination of employment in this case), it's a HIPAA special enrollment event for the spouse in the same manner as if the employee had lost a traditional employer-sponsored group major medical plan. That event gives the spouse the right to enroll the employee and spouse in the spouse's plan. The underlying policy is irrelevant here. More details: https://www.newfront.com/blog/hipaa-special-enrollment-events-2 Even with traditional employer-sponsored group major medical plans we have an issue of how to substantiate the loss of coverage since the end of HIPAA certificates of creditable coverage back in 2014. The most useful is usually a letter from the employer showing the period of coverage. In this case it would be the period of ICHRA coverage. More details: https://www.newfront.com/blog/documenting-prior-coverage-after-hipaa-certs-2 Here's a slide summary: 2024 Newfront HIPAA Training for Employers Guide

A distribution from the HSA is treated the same regardless of whether it's via the debit card or a standard withdrawal. So a distribution for a qualified medical expense will always be tax-free whether via debit card or a reimbursement to yourself. A non-medical distribution will be taxable and (if under age 65) subject to a 20% additional tax. Here's a quick summary: https://www.newfront.com/blog/using-an-hsa-for-non-medical-expenses Here's the recordkeeping rules-- IRS Publication 969: https://www.irs.gov/pub/irs-pdf/p969.pdf Recordkeeping. You must keep records sufficient to show that:. The distributions were exclusively to pay or reimburse qualified medical expenses, The qualified medical expenses hadn’t been previously paid or reimbursed from another source, and The medical expenses hadn’t been taken as an itemized deduction in any year. Don’t send these records with your tax return. Keep them with your tax records.

One option would be to reach out to the applicable state banking regulator: https://www.consumerfinance.gov/ask-cfpb/how-do-i-find-my-states-bank-regulator-en-1637/ Another option would be to submit a complaint to the CFPB: https://www.consumerfinance.gov/complaint/ Note that even if your debit card is deactivated, you should still be able to perform withdrawals from your HSA account to your bank account.

The consistency rule is difficult to apply in some cases because it is often open to interpretation/judgment where there isn't an example in the regs directly on point. In this case my understanding is the employee and spouse have lost medical coverage through the spouse's employer, and they are going to use that event enroll in the HDHP through the employee's coverage. My reading of the consistency rule there is it likely would not permit the employee to drop the health FSA. As you noted, this means that the employee would not be HSA-eligible. However, I would be open to an argument that because the §1.125-4 rules predate HSAs, there should be wiggle room to treat revocation of the health FSA election as consistent with enrollment in the HDHP. It's a tough call.

Whether the employee can revoke the health FSA election depends on the type of permitted election change event that the employee experiences. The change in status events set forth in §1.125-4 include the consistency requirement that all election changes must be on account of and correspond with the event that affects eligibility for coverage. That will vary from event to event. This isn't an exhaustive list, but it attempts to summarize those events and the election changes they permit: 2024 Newfront Section 125 Permitted Election Change Event Chart Here's the cite: Treas. Reg. §1.125-4(c)(3): (3) Consistency rule. (i) Application to accident or health coverage and group-term life insurance. An election change satisfies the requirements of this paragraph (c)(3) with respect to accident or health coverage or group-term life insurance only if the election change is on account of and corresponds with a change in status that affects eligibility for coverage under an employer's plan. A change in status that affects eligibility under an employer's plan includes a change in status that results in an increase or decrease in the number of an employee's family members or dependents who may benefit from coverage under the plan. (ii) Application to other qualified benefits. An election change satisfies the requirements of this paragraph (c)(3) with respect to other qualified benefits if the election change is on account of and corresponds with a change in status that affects eligibility for coverage under an employer's plan. An election change also satisfies the requirements of this paragraph (c)(3) if the election change is on account of and corresponds with a change in status that effects expenses described in section 129 including employment-related expenses as defined in section 21(b)(2)) with respect to dependent care assistance, or expenses described in section 137 (including qualified adoption expenses as defined in section 137(d)) with respect to adoption assistance. (iii) Application of consistency rule. If the change in status is the employee's divorce, annulment or legal separation from a spouse, the death of a spouse or dependent, or a dependent ceasing to satisfy the eligibility requirements for coverage, an employee's election under the cafeteria plan to cancel accident or health insurance coverage for any individual other than the spouse involved in the divorce, annulment or legal separation, the deceased spouse or dependent, or the dependent that ceased to satisfy the eligibility requirements for coverage, respectively, fails to correspond with that change in status. Thus, if a dependent dies or ceases to satisfy the eligibility requirements for coverage, the employee's election to cancel accident or health coverage for any other dependent, for the employee, or for the employee's spouse fails to correspond with that change in status. In addition, if an employee, spouse, or dependent gains eligibility for coverage under a family member plan (as defined in paragraph (i)(5) of this section) as a result of a change in marital status under paragraph (c)(2)(i) of this section or a change in employment status under paragraph (c)(2)(iii) of this section, an employee's election under the cafeteria plan to cease or decrease coverage for that individual under the cafeteria plan corresponds with that change in status only if coverage for that individual becomes applicable or is increased under the family member plan. With respect to group-term life insurance and disability coverage (as defined in paragraph (i)(4) of this section), an election under a cafeteria plan to increase coverage (or an election to decrease coverage) in response to a change in status described in paragraph (c)(2) of this section is deemed to correspond with that change in status as required by paragraph (c)(3)(i) of this section.

If the furlough period is unpaid, you may be required to pay the employee-share of the premium on an after-tax basis outside of the Section 125 cafeteria plan during the layoff period. However, they may offer pre-pay or catch-up payment options that allow you to pay on a pre-tax basis through the Section 125 cafeteria plan through compensation paid before or after the layoff period. If the furlough period is paid, it is likely that the company will continue to take the employee-share of the premium on a pre-tax basis through the cafeteria plan in the same manner as when actively at work. In short, there are multiple way to handle, so you'll want to check with your employer for the specifics. 2024 Newfront Health Benefits While on Leave Guide

For a single employer plan where the employer plan sponsor is the ERISA §3(16) plan "administrator" (essentially all single employer plans), the DOL enforces the 30/14 day rules as a combined 44-day limit. The COBRA TPA is not the ERISA "administrator"--they are just being delegated COBRA administrative responsibilities by the employer. So having a COBRA TPA doesn't change the timing approach here. Here's the cite: 29 CFR §2590.606-4(b): (2) In the case of a plan with respect to which an employer of a covered employee is also the administrator of the plan, except as provided in paragraph (b)(3) of this section, if the employer is otherwise required to furnish a notice of a qualifying event to an administrator pursuant to §2590.606-2, the administrator shall furnish to each qualified beneficiary a notice meeting the requirements of paragraph (b)(4) of this section not later than 44 days after: (i) In the case of a plan that provides, with respect to the qualifying event, that continuation coverage and the applicable period for providing notice under section 606(a)(2) of the Act shall commence with the date of loss of coverage, the date on which a qualified beneficiary loses coverage under the plan due to the qualifying event; or (ii) In all other cases, the date on which the qualifying event occurred. Here's a slide summary: 2024 Newfront COBRA for Employers Guide

No it's not out of compliance, it's just an unnecessarily restrictive plan design. I don't think I've ever seen a plan condition health FSA enrollment on simultaneous enrollment in the main health plan. There's no reason I'm aware of to impose that eligibility restriction.

The Section 125 cafeteria plan nondiscrimination rules are going to create issues here. A "stipend" in this context would likely have to be a flex credit to meet the §125 requirements and avoid constructive receipt. That flex credit would subject to the same Section 125 nondiscrimination issues as a simple increase to the employer contribution of the premium. In other words, HCPs generally could not have access to flex credit amounts that non-HCPs do not. The main exception would be for regional classes. The workaround here is far more simple. They can pay the affected employees more in wages. If those employees use those additional amounts to pay for the increased cost of coverage on a pre-tax basis through the cafeteria plan, the net result can be the same for both parties. Here's more discussion: https://www.newfront.com/blog/designing-health-plans-with-different-strategies Here's the relevant cite: Prop. Treas. Reg. §1.125-7(c)(2): (2) Benefit availability and benefit election. A cafeteria plan does not discriminate with respect to contributions and benefits if either qualified benefits and total benefits, or employer contributions allocable to statutory nontaxable benefits and employer contributions allocable to total benefits, do not discriminate in favor of highly compensated participants. A cafeteria plan must satisfy this paragraph (c) with respect to both benefit availability and benefit utilization. Thus, a plan must give each similarly situated participant a uniform opportunity to elect qualified benefits, and the actual election of qualified benefits through the plan must not be disproportionate by highly compensated participants (while other participants elect permitted taxable benefits)…A plan must also give each similarly situated participant a uniform election with respect to employer contributions, and the actual election with respect to employer contributions for qualified benefits through the plan must not be disproportionate by highly compensated participants (while other participants elect to receive employer contributions as permitted taxable benefits).Prop. Treas. Reg. §1.125-7(e)(2): (2) Similarly situated. In determining which participants are similarly situated, reasonable differences in plan benefits may be taken into account (for example, variations in plan benefits offered to employees working in different geographical locations or to employees with family coverage versus employee-only coverage). Here's a slide summary: 2024 Newfront Section 125 Cafeteria Plans Guide

First of all, do you feel confident you're meeting the other prongs of the DOL's voluntary plan safe harbor? They're notoriously difficult to satisfy--especially the "no endorsement" piece. As to your specific question, I agree with Peter that it matters whether the life plan is employer or employee-paid. If it's employer-paid basic life, I would see that as consideration to the employer that blows the safe harbor. There are probably other cases out there addressing this issue, but here's an example of a court grappling with something similar and finding it didn't blow the safe harbor: https://law.justia.com/cases/federal/district-courts/FSupp/849/1451/2139942/ Determining whether the life insurance plan meets the fourth criterion, whether AFC received any consideration in connection with the life insurance program, is also a close question. AFC did not receive any compensation for payroll deduction services from the life insurance plan. However, when employees signed up for the insurance plan, AFC received tax savings from their simultaneous participation in the cafeteria plan. AFC also saved the expense of having its own managers go to its various divisions and explain the cafeteria plan; Metropolitan Life agents went to the various divisions instead at the expense of Metropolitan Life. The court is nevertheless convinced that benefit AFC received was too indirect and tenuous to conclude that the Metropolitan Life plan falls outside the safe-harbor regulation. Here's an overview of the voluntary plan safe harbor generally: https://www.newfront.com/blog/the-erisa-voluntary-plan-safe-harbor Slide summary: 2024 Newfront ERISA for Employers Guide

I would argue that in the asset deal scenario it's no different than going on a hiring spree. Employees of the seller are first termed then (if continuing) rehired by the buyer, and the buyer does not acquire the corporate entity (stock) itself. Under that approach, you stick to the standard rule that ALE status is always based on prior-year headcount. So the influx of new employees wouldn't potentially make the buyer an ALE until the next calendar year--and even then only if it averaged 50+ full-time employees (including full-time equivalents) over the course of the whole preceding year. More details: https://www.newfront.com/blog/becoming-an-ale-subject-to-the-aca-employer-mandate-2 Slide summary: 2024 Newfront ACA Employer Mandate & ACA Reporting Guide