Need to know more about details of Self Insured Medical Reimbursement

[Guest Dawn]

Our employees are requesting that their dependents be covered under our Self insured Medical Reimbursement Plan. What are other company's doing about this? We have no proof that they are not insured somewhere else? Should we care?

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Dawn Forest

[Guest dsilver]

Why would you add this benefit? In any case, who cares if they are covered elsewhere--you should have the standard duplication of benefits wording.

[KIP KRAUS]

Dawn:

Am I correct in assuming that you have a full blown self-insured medical Plan?

If so, allowing dependents to participate is simply a matter of policy. Obviosly, your costs will increase if you do. If you want to require dependents to be insured with another employer before allowing them to participate, require them to provide evidence to that effect from their employer. In addition, as dsilver says incorporate non duplication of benefits or Coordination of benefits into your plan to lesten the cost increase. No mater what you do, if you allow dependents into the plasn your costs will obviously increase.

If you have additional concerns, please post them or feel free to e-mail me.

[Guest Dawn]

We have a full blown "insured" medical plan through ULICO Casualty

Company. We also have a seperate "self-insured" medical reimbursement

plan which reimburses employees for vision, dental, or excluded medical

expenses. Our company pays the full cost of this plan. Employees do

not pay anything. We allow a $1300.00 benefit for single employees and

a $1800.00 for those who have families.

Employees that have family coverage under our medical plan are allowed

to submit expenses for themselves and their families currently. We also

have a few employees who are insured for health insurance under plans

outside the company. These are the people that are requesting benefits

for their spouse or family for dental, vision, or excluded medical

expenses.

At this point, we feel that we have no way of getting "proof of

insurance" or "no insurance", and therefore, employees could be getting

double coverage. If we required some documentation from the spouse's

employer, is it an administration nightmare? What if the spouse is not

employed, but has a private dental or vision plan? How would we ever

know?

It would be nice to know if there are any IRS guidelines in this area.

Are other companies providing this benefit? And if so, what guidelines

do they use? I am not quite sure what you mean about incorporating non

duplication of benefits or coordination of benefits into the plan.

Any information you could provide me would be most helpful.

Thank you for taking the time.

Dawn Forest

Human Resource Representative

Ned Davis Research Group

Venice, FL

(941)-484-6107

[KIP KRAUS]

Dawn:

It's a little more clear to me now what your situation is. Sounds like a generous supplemental health & dental plan. So you allow coverage in the self-funded supplemental plan to employees who are enrolled in the ULICO Medical Plan. However, those who are not enrolled in the ULICO Plan are not allowed to participate in the self-insured plan. I see nothing wrong with this policy and know of no IRS or ERISA regs. that would prevent you from taking this stance.

I see nothing wrong with requiring other coverage for spouses before allowing them to participate in the supplemental plan. It need not be a nightmare. If you require evidence of other coverage and it is not provided, then the dependent is SOL. Simple as that.

By the way, the chances of a non-working spouse, or any individual having a personal policy covering dental or vision expenses is a 99.9% improbability, unless it's COBRA coverage. If such coverage exists, which I don't think it does,it would be

cost prohibative to purchase. If anyone is selling it I'll believe it when I see it.

COB or Non-Duplication of benefits should be included in your fully insured ULICO plan. Read the contract provisions or the SPD to get an explination. Alternatively, contact the ULICO representative for an explination. If you can't obtain it this way, I can e-mail you the explination I use for COB in our SPDs.

[Joe Priselac]

Dawn,

I agree with Kip Krause. We administer plans such as you describe. You can link the participation in the self-funded reimbursement plan to participation in your insured medical plan.The parts become one "package" of benefits that you offer employees. Medical plans typically have coordination of benefits clause to avoid duplication of benefits. This is to prevent a participant from profiting by receiving double payment for a medical expense. You should include such language in your self-funded reimbursement plan document.

[SLuskin]

Is this self-funded medical reimbursement plan done on a pretax basis? I had someone ask me about that the other day, and I do not know enough to answer the question. Thanks.