Group health plans offer health care options for employees. Employer group health plans are generally extended to full time employees and their dependents. When administering group health plans, employers are required to comply with all federal and state group health plan law, including the Consolidated Omnibus Budget Reconciliation Act.
Definition of Group Health Plan
According the the Department of Labor, a group health plans is a welfare benefit plan for employees maintained or put in place by an employer or an employee group, like a union. A group health care plan gives employees and their dependents medical care benefits through reimbursement or insurance. In order to be eligible to participate in group health insurance, companies may be required to have a certain number of employees, such as more than 50. Businesses sometimes form a consortium in order to have enough employees enrolled to qualify for a group plan.
Employee Retirement Income Security Act
Employee Retirement Income Security Act (ERISA) is a federal law that requires health plans to provide minimum standards for employees. For example, if a health care plan is in place, the plan administrator must give information to participants about funding and plan features. ERISA requires those parties who manage financial responsibilities for the plan to adhere to fiduciary guidelines and gives plan participants the right to sue plan administrators for breach of fiduciary duty or for benefits.
ERISA Termination Requirements
In addition to laying down requirements for the establishment and administration of health care plans, ERISA also has requirements for the termination of benefits. In order to amend or terminate a health care plan, employers must notify plan beneficiaries in writing about the amendment. The written notice must be executed by an authorized party, such as a plan administrator, and the language of the notice must make it clear to the beneficiary what the amendment entails.
Consolidated Omnibus Budget Reconciliation Act
Employer health care plans must also comply with the Consolidated Omnibus Budget Reconciliation Act (COBRA), which extends health care benefits for employees after they leave employment for a qualified reason, though minus the employer subsidy. In general, qualified reasons are being laid off, quitting, or being terminated from a job for anything other than gross misconduct. Employees can in many cases stay under the employer administered health care plan for up to 18 months after leaving their jobs.
Tags: health care, health plans, care plan, health care plan, Budget Reconciliation, Consolidated Omnibus
