Dollar Bank

[Guest MC2]

A participant in the multiemployer welfare fund has what is called a dollar bank and for each hour he works he earns an amount equal to the contribution rate for the Fund. Upon establishing the required contribution amount in his dollar bank, the participant becomes eligible for participation in the Fund. If the participant has a shortfall in his dollar bank, he is allowed to self-pay in order to maintain he coverage. If the participant has a balance in his Dollar Bank that does not meet the eligibility for coverage, and he does not choose to make self-payments to maintain coverage, the participant will be offered COBRA. If the participant does not elect COBRA and he does not provide documented proof that he is eligible and enrolled in other health coverage, any existing Dollar Bank balance will be forfeited.

Is it legal for the Fund to forfeit the participant's balance in his dollar bank keeping in mind that the contributions are part of a wage package?

Thanks

[Effen]

Since no one else has responded I will throw in my 2 cents.... This type of tracking mechanism is fairly common, although I usually see it referred to as an "hours" bank, not a "dollars" bank. I would imagine that no actually money is being segregated, but the fund is just using the technique to determine who is eligible for benefits in the quarter.

Most health funds are funded like defined benefit plans. All of the money supports all of the benefits. Although the contribution amounts are based on so many $/hr worked, the money doesn't get credited directly to any specific participant. The hours bank or dollars bank is just a way to help the fund keep track of who is actually working and who should receive health benefits.