Discrimination favoring management or highly paid employees is not permitted for deductible health and accident insurance plans. For self-insured medical reimbursement plans (i.e., direct payment or reimbursement by the employer of the medical bills of the employee or family), no discrimination, either in eligibility or benefits, is permitted if "highly compensated individuals" are to receive all plan benefits tax-free. The plan must benefit, in general, at least 70% of employees who are not highly compensated employees. However, there are exceptions. A "highly compensated employee" is one who has a significant ownership interest in the company, or who is one of the five highest paid officers or employees. An alternative designation is an income threshold, currently $80,000. If a self-insured plan is discriminatory, an employee who is considered a highly compensated employee must include the amount of discriminatory benefits received in gross income.
California Corporate Resolution Establishing a Self-insured Medical Payment Plan for Key Employees Title: Understanding the California Corporate Resolution Establishing a Self-insured Medical Payment Plan for Key Employees Introduction: A California Corporate Resolution Establishing a Self-insured Medical Payment Plan for Key Employees is a legally binding document that outlines the establishment of a self-insured medical payment plan for key employees within a corporation. This resolution allows the corporation to provide healthcare benefits to key executives and employees through a self-funded insurance arrangement instead of relying on traditional insurance providers. Types of California Corporate Resolution Establishing a Self-insured Medical Payment Plan for Key Employees: 1. Basic Self-insured Medical Payment Plan: This type of resolution establishes a straightforward self-insured medical payment plan for key employees. It outlines the eligibility criteria, coverage details, funding mechanism, and administrative procedures for providing healthcare benefits to key executives and employees. 2. Comprehensive Self-insured Medical Payment Plan: This type of resolution goes beyond basic coverage and includes additional benefits such as dental, vision, mental health, and wellness programs. It may also incorporate provisions for dependent coverage, COBRA administration, and flexible spending accounts (FSA's). 3. Bonus Incentive Self-insured Medical Payment Plan: This resolution combines a self-insured medical payment plan with bonus incentives for key employees who actively engage in the corporation's wellness programs, thereby promoting a healthier workforce. Such plans often include wellness initiatives, preventive care bonuses, and rewards for maintaining a healthy lifestyle. 4. Key Employee Retirement Health Benefits Self-insured Medical Payment Plan: This type of agreement addresses the provision of healthcare benefits for key employees after retirement. It establishes a self-insured medical payment plan to ensure continued coverage in retirement, helping key employees transition smoothly into their post-employment years. Key Components of a California Corporate Resolution Establishing a Self-insured Medical Payment Plan for Key Employees: 1. Eligibility criteria: Clearly define the category of employees eligible for coverage under the self-insured medical payment plan, such as key executives or employees meeting specific job roles or tenure requirements. 2. Coverage details: Outline the scope of healthcare coverage, including medical, dental, vision, and any additional benefits, such as mental health or wellness programs. Specify the extent of coverage for each benefit and any limitations or exclusions. 3. Funding mechanism: Describe how the self-insured medical payment plan will be funded, either through direct contributions from the corporation or a combination of employee contributions and employer contributions. Consider specifying the funding formula and any contingency measures in case of unexpected claim fluctuations. 4. Administrative procedures: Provide a detailed outline of the administrative procedures involved in managing the self-insured medical payment plan. This includes the appointment of an administrator, reporting requirements, claims processing, and compliance with relevant laws and regulations. 5. Favorable tax treatment: Address important tax considerations associated with the plan, such as complying with the Employee Retirement Income Security Act (ERICA) and ensuring the plan qualifies for favorable tax treatment from the Internal Revenue Service (IRS). Conclusion: A California Corporate Resolution Establishing a Self-insured Medical Payment Plan for Key Employees plays a vital role in ensuring that key executives and employees receive comprehensive healthcare coverage. By exploring different types of self-insured medical payment plan resolutions, corporations can customize their approach to meet their unique needs and provide exceptional healthcare benefits to key individuals within their organization.
