Elizabeth Vollmar, an employee benefits attorney with Willis North America, spoke at the Society for Human Resource Management’s 2013 Employment Law & Legislative Conference last week. Although attorneys aren’t in the business of dispensing free advice, attendees got lucky, as Vollmar’s senior-level discussion, “Tales from the Trenches: How Employers Can Avoid Common Health Plan Compliance Pitfalls” covered everything from in-house administration functions to avoiding financial exposure. Vollmar also fielded audience questions on benefits topics from wellness programs to SPDs. To pass along the knowledge to benefits pros who couldn’t attend, here are Vollmar’s responses.
What’s the difference between a certificate of coverage versus a summary plan description?
The certificate of coverage is either part of your insurance policy, or a separate booklet that that they’ve given you to describe benefit. And typically what it has in it is a nice description of benefits, and you will want to use that description of benefits, because that’s what they’re administering. But you will want to add to that, some of those supplemental [data]. There’s a very long list of things that has to be in a health plan SPD.
For dependents up to the age of 26, you can’t require full-time student status, unmarried or other types of conditions, correct?
Under the health care reform provision, up to the age 26, if this is an employee’s child, none of those conditions can be applied. In would be inaccurate to still have that in your SPD. Now, you could have coverage that goes beyond age 26, in which case you could impose those conditions, or they could have children covered that don’t fit under the definition of “child.” One of the things that we often find is exactly that situation — you’re discovering an ineligible dependent more than 60 days after they’ve lost eligibility. Either somebody dropped the ball, the employee didn’t tell you, something like that, and [so you think], “OK, so what do I do now? I’m going to take this child who is now 26 off my plan, but what happens with coverage? Do I have to offer COBRA, or am I excused from offering COBRA?” The key there is: What does your SPD say, and did you provide an initial notice of COBRA rights to the employee’s spouse? Now, what does providing to the employee’s spouse have to do with a dependent child? Who knows, but that’s what the rule is. So that initial notice of COBRA rights is absolutely a crucial document.
Q: The qualifications for a tax dependent — that’s kind of difficult to get from an employee who’s claiming a domestic partner.
Right. When you have a same-sex spouse or domestic partner enrolling, and the question is: Is this person my tax dependent? I think the only thing you need is employee representation, and the best representation is [to tell an employee that] the tax code says, “This person is your dependent if this, this or this.” Now you can have children, again, up to age 26, who are not dependents but are covered.
How aggressive are you seeing people get with their wellness plans?
You can do a medical inquiry under a voluntary wellness program. There’s a question: If you provide an incentive, is your wellness program “voluntary” according to the Equal Employment Opportunity Commission’s definition? A recent court case said it doesn’t matter whether it’s voluntary or not, it’s part of the bone fide health plan — you can impose whatever you want to on it. And in that case they had a $20 every two week incentive for filling out a health assessment.
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