Recently the owner of a CalCPA-member firm contacted Banyan Administrators, LLC, managers of the CalCPA ProtectPlus health and welfare programs, about adding a new employee to his firm’s ProtectPlus medical plan. The new employee, it turned out, was a close relative, and the owner wanted to get him enrolled and covered as soon as possible—preferably, right away.
The fact that the new employee was related had, in fact, no bearing on how the matter was handled. What was relevant, however, was the firm’s written policy, clearly spelled out in its benefit plan subscription agreement (an employer’s master application and agreement with the Group Insurance Trust or other carrier), that new employees had to complete a two-month waiting period before being eligible for benefits. Naturally, the firm’s owner was disappointed that his relative would have to wait the same as any other new hire. Nevertheless, he was also appreciative that Banyan had helped him keep his firm in compliance with both HIPAA and ERISA rules. The Department of Labor (DOL) is concerned about fair treatment of employees and issues of discrimination immediately arise if employees are not treated equally.
Because Banyan service center representatives had the information at their fingertips in their computer system, they were able to provide an explanation to the firm’s owner on the phone. Even if the owner had not contacted Banyan proactively, Banyan would have flagged the employee’s enrollment form when it came in because it did not meet the employer’s established policy. An important feature of Banyan’s computerized recordkeeping is to help member firms prevent unintended regulatory violations.
At the same time, the Trust provides flexibility by offering member firms a broad range of options in setting their own policies. A firm can choose to add new hires to their existing plans on the first of the month following the day of hire or up to six months after, provided they are consistent. Existing rules are subject to change as the Patient Protection and Health Care Affordability Act (health care reform) is implemented and the specifics of the law are ironed out. The Trust and Banyan will continue to monitor evolving regulations and keep you informed as health care reforms solidify.
Generally, employers may change their benefit waiting period and other employee eligibility policies during the annual open enrollment period. It makes sense to review these policies each year to ensure that they are consistent with your firm’s hiring practices. If you are not sure about your company’s benefits eligibility policy as stated in your ProtectPlus Subscription Agreement, or if you are not sure whether the subscription agreement is consistent with your employee handbooks or other new-hire materials, call the Banyan Service Center at (877) 480-7923 or email email@example.com. A Banyan member service representative will be happy to answer your questions.