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.
Keyword: Delaware Corporate Resolution Establishing a Self-insured Medical Payment Plan for Key Employees Description: A Delaware Corporate Resolution Establishing a Self-insured Medical Payment Plan for Key Employees is a legal document that outlines the establishment of a self-insured medical payment plan specifically designed for key employees within a Delaware corporation. This resolution serves as an official declaration by the corporation's board of directors or shareholders to create a medical payment plan that provides coverage and benefits to key employees for their healthcare expenses. The self-insured medical payment plan is a cost-saving measure that allows the corporation to assume some or all of the financial risks associated with providing medical coverage to its key employees. By self-insuring the plan, the corporation can bypass traditional insurance companies and directly provide coverage, resulting in potential cost reductions and customization of benefits tailored to the unique needs of key employees. The Delaware Corporate Resolution Establishing a Self-insured Medical Payment Plan for Key Employees typically includes several key elements: 1. Purpose: This section states the objective of the resolution, which is to establish a self-insured medical payment plan for key employees. 2. Definitions: It provides definitions of important terms such as "key employee," "medical payment plan," "claims," and "coverage," to ensure clear understanding and consistency throughout the resolution. 3. Authorization: This segment grants authority to specific individuals or committees within the corporation to take necessary actions and implement the self-insured medical payment plan. 4. Administration and Funding: It outlines the responsibilities and procedures for administering the plan, including collection and allocation of funds, claims processing, and reporting requirements. It may also address the establishment of a trust or reserve account to ensure sufficient funds are available to cover potential claims. 5. Eligibility and Benefits: This section lays out the criteria for key employee eligibility, including job level or compensation thresholds. Additionally, it specifies the benefits covered by the plan, which may include medical, dental, vision, prescription drugs, and other essential healthcare services. 6. Risk Management: This aspect covers strategies and measures to manage potential risks, such as setting loss limits, acquiring reinsurance, and regularly assessing the financial viability of the self-insured medical payment plan. It's important to note that while the general outline of a Delaware Corporate Resolution Establishing a Self-insured Medical Payment Plan for Key Employees may remain consistent across different corporations, the specific details and terms used may vary. Some variations may include provisions for retiree benefits, varying levels of coverage, different funding mechanisms, or specific limitations based on state laws or industry regulations. Each corporation should consult legal and insurance professionals to ensure compliance and appropriateness for their unique circumstances.
