Employee Medical Reimbursement Plan

[MSA80]

I have a acquired a new client who had a question about a “medical reimbursement plan” she had working for a small S Corporation who had established it for her for a $1000 a year acting as the fiduciary of the plan. The plan document created by the employer stated claims would be paid within 10 days of submitting to Corporate Treasurer. This was done nearly 14 months ago and the employer will not respond nor pay the claim.
I know an employer has typically 30d ays with an additional or possible 15 days beyond that to make an initial benefit determination on the claims. They have not even done this to date and they have acknowledged receipt of the claims.
My question is beyond her claims for the actual benefits being paid; are there any enforcement rights or penalties to the employer similar to requesting plan documents of$ 110 day that would be applicable for the employer dragging their feet for 14 months?
Thanks- MSA80

 

[somarco]

MERP's are the precursor to HRA plans. They are "regulated" by the IRS.

Unless you have access to the plan document, and all history associated with this claim, you are really not in a position to advise.

Assuming this plan was filed for approval, there could be any number of legitimate reasons for the delay/denial.

 

[MSA80]

Somarco, thank you for the reply. Here is the entire plan document that the employer created. We are rather certain the plan was never filed. Therefore, not certain what penalties can be assessed for not filing the plan and not upholding the parameters set. If you have any thoughts on the plan or penalties she should pursue I would greatly appreciate it. Here is the plan document created by the employer:

QUALIFICATIONSTO PARTICIPATE: Only full time employees who have been
employed continuously for a period of (1) year qualify for the benefits set out herein.
EFFECTIVE DATE: This plan shall become effective as to all expenses incurred by a
participant on or after January 1,2011, or the date on which an employee first qualifies
for benefits herein.
- LIMITATIONS - GENERAL: The Corporation will reimburse a qualified participant
for approved medical and/or dental expenses in an amount not to exceed $ 500.00 per
annum.
The benefits are on a year-to-year basis and cannot be accumulated from year to year.
APPROVED MEDICAL AND/OR DENTALEXPENSES: Medical and dental expense
will be approved:
'~
1. If incurred on behalf of a qualified participant of this plan, the participant's
spouse or dependent child only.
2. If the expense is incurred for the diagnosis, cure, mitigations, treatment or
prevention of disease, or for the purpose of affection any structure or function of
the body.
3. If the expense is not reimbursable under any other method available to the
participant.
PROFF OF PAYMENT: The participant must submit proof of payment acceptable to the
corporation.
PAYMENTPROCEDURE: Participants in the plan will present their claim and the
substantiation to the corporate treasurer. Payment will follow within ten business days.
DEFINITIONS:
FULL TIME EMPLOYEES: Any employee who regularly work a minimum of30 hours
per week.
CALANDARYEAR: The period of twelve (12) month from January 1, through
December 31.
DEPENDENT CHILD: Same as the definition of a dependent child as set forth by the
Internal Revenue Code of 1954, as amended.

 

[leevena]

Sorry to throw a monkey wrench into this, but I need to respectfully disagree with my friend Somarco. And MSA, you may want to hold off and maybe not even get involved. Just my two cents.

First off, there is no legal requirement to "file for approval" with the govt. You can go to DOL for this. http://www.dol.gov/ebsa/publications/ghpfiduciaryresponsibilities.html

Secondly, the plan describes a $500 reimbursement, not $1,000.

Third, are you abosolutely positive that this person has met all of the requirements for not only eligibility into the plan but also claim eligibility?

Fourth, how confident are you that the claim was submitted properly, and the employer has ignored it?

I have never met any of these people involved, but after 30 years of employee benefit work, I am willing to be a large pepperoni pie that there is probably more to this than what is being told to you. I hate to sound negative, but I don't quite believe the story being told to you.