Grandfathered retirees on health plan

[Guest avh41]

Some years ago my company agreed to cover a handful of retirees indefinitely - not under COBRA and not under a retiree health plan, just continued coverage as if they were active. As we are self-insured we simply told the TPA to list them as covered.

Right now we have two of these retirees left, with one of them a board member. The problem is our plan document makes no mention of covering these employees. I am concerned about our stop-loss carrier refusing to reimburse us should their medical costs become significant.

I am trying to come up with a way to amend the plan document to include them, perhaps by specifically naming them or putting in some generic language such as 'cover ex-employees at company's discretion'. I'm not sure what the ramifications of this might be - our TPA said we'd lose ERISA protection from these two. We could live with that, if that is the only ramification - does anyone know if there are any other problems?

[Steve72]

If they were highly compensated individuals, you likely have an issue with 105(h) discrimination.