Summary Annual Report

[Guest Jensen]

I am trying my hand at drafting an SAR for a client for whom we did a Form 5500 for its Health Care Plan. I am following the format outlined in Sec. 2520.104b-10(4). It states that if any benefits under the plan are provided on an uninsured basis, the SAR should include language that "Sponsor has committed itself to pay (all, certain) (state type of) claims incurred under the terms of the plan." Here's my question: how do I phrase this if the sponsor has excess coverage that pays for anything over a certain $$ amount?

If I understand how the excess coverage works, the employer/sponsor is responsible to pay all claims incurred by participants, but once the claims go over the set $$ amount, the excess coverage carrier will reimburse the employer/sponsor. So I'm thinking the SAR should state that "sponsor has committed to pay all claims incurred under the terms of the plan."

Anyone have any thoughts on this? Thanks!

[Guest b2kates]

For my self insured clients, assuming the excess policy is between the company and the carrier we use that all claims language.

It gets more complicated if there is a VEBA and the plan contracts with the excess carrier.