Change of Status Proof

[Guest BeneGal]

As a TPA when a Change of Status is received from the client's HR Dept. for an employee making a change such as reducing their premium account and medical reimbursement account due to "Spouse's change in employment status"... do you require that HR person to provide proof or documentation of that change (in this case spouse's new employment) or do you make the assumption that because the HR person signs the COS also that they have the needed "proof" on file????? :confused:

[papogi]

In an ideal world, the HR department should make the correct determination, and you, as the TPA, should simply administer the account based on the info provided from HR. On one day, employers often want TPA’s to do exactly what they tell them to, and on other days, they look to TPA’s for compliance guidance. I would contact the client to get details about the change in status. If it turns out not be a status change or does not satisfy the consistency rules, then the client is usually surprised, and you look good for protecting them from potential problems in an IRS audit. If the status change is legitimate, you can just say that you are asking for further information in order to protect the qualified status of their 125 plan. As liability is slowly shifted to TPA’s (as it has been over the past several years), you have every right to ask for further information.

[jsb]

Does the "Scope of Services" section of your contract spell out who is responsible? Because this is apparently an issue, it needs to be spelled out.

We (employee benefits office in HR department) control eligibility for changes. Our TPA implements what we send. We have agreements with our carriers (fully insured plans) which also allow us to control changes and certify the the changes to the carrier. They accept that our process will be at least as stringent as anything they might come up with.