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.
Title: Understanding Tennessee Corporate Resolution Establishing a Self-insured Medical Payment Plan for Key Employees Introduction: A Tennessee corporate resolution establishing a self-insured medical payment plan for key employees is a legal document that outlines the establishment of a self-insured healthcare plan specifically designed for essential personnel within a company. This resolution empowers corporations to customize their employee healthcare program, offering a range of benefits while assuming financial risks associated with medical expenses. This article aims to provide a comprehensive understanding of the various aspects related to such resolutions. 1. Key Benefits of Tennessee Corporate Resolution Establishing a Self-insured Medical Payment Plan for Key Employees: — Customization: This resolution enables corporations to design healthcare plans tailored to meet the specific needs of key employees, providing flexibility in coverage, deductibles, and cost-sharing arrangements. — Cost Control: By self-insuring, companies can exercise control over premium rates, enabling potential cost savings in comparison to traditional, fully insured healthcare options. — Enhanced Employee Benefit: Key employees enjoy superior healthcare coverage with access to a wide network of healthcare providers, including specialized medical services. — Budget Flexibility: Self-insured plans allow corporations to set aside funds in a reserve account, providing financial flexibility for unexpected claims. — Enhanced Employee Retention: Offering a self-insured medical payment plan for key employees can be a valuable tool to attract and retain top talent in highly competitive industries. 2. Tennessee Corporate Resolution Establishing a Fully Insured vs. Partially Self-insured Medical Payment Plan: — Fully Insured Plan: In this type, the employer pays a premium to an insurance carrier, transferring the financial risk associated with medical claims to the insurer. The insurer assumes responsibility for claims processing, payments, and risk management. — Partially Self-insured Plan: Employers assume a portion of the financial risk by paying claims out-of-pocket up to their predetermined self-insurance limit. Beyond this limit, claims are covered by stop-loss insurance, which safeguards against excessive claim expenses. 3. Legal Requirements and Considerations: — Compliance: Companies establishing self-insured medical payment plans must ensure compliance with applicable federal and state laws, including the Employee Retirement Income Security Act (ERICA), Affordable Care Act (ACA), and state-specific regulations. — Documentation: A comprehensive Tennessee corporate resolution establishing self-insured medical payment plans should include a detailed plan document, trust agreement, summary plan description (SPD), and other required filings. — Reporting and Disclosure: Employers must adhere to reporting and disclosure obligations, including filing annual Form 5500 reports with the Department of Labor and providing employees with plan-related information such as PDS and summaries of material modifications (SMM's). Conclusion: A Tennessee corporate resolution establishing a self-insured medical payment plan for key employees offers various advantages, enabling corporations to design customized healthcare plans while assuming financial risks associated with medical treatment. By understanding the benefits and complying with legal requirements, corporations can provide superior healthcare coverage, attract top talent, and achieve cost savings in the long run.Title: Understanding Tennessee Corporate Resolution Establishing a Self-insured Medical Payment Plan for Key Employees Introduction: A Tennessee corporate resolution establishing a self-insured medical payment plan for key employees is a legal document that outlines the establishment of a self-insured healthcare plan specifically designed for essential personnel within a company. This resolution empowers corporations to customize their employee healthcare program, offering a range of benefits while assuming financial risks associated with medical expenses. This article aims to provide a comprehensive understanding of the various aspects related to such resolutions. 1. Key Benefits of Tennessee Corporate Resolution Establishing a Self-insured Medical Payment Plan for Key Employees: — Customization: This resolution enables corporations to design healthcare plans tailored to meet the specific needs of key employees, providing flexibility in coverage, deductibles, and cost-sharing arrangements. — Cost Control: By self-insuring, companies can exercise control over premium rates, enabling potential cost savings in comparison to traditional, fully insured healthcare options. — Enhanced Employee Benefit: Key employees enjoy superior healthcare coverage with access to a wide network of healthcare providers, including specialized medical services. — Budget Flexibility: Self-insured plans allow corporations to set aside funds in a reserve account, providing financial flexibility for unexpected claims. — Enhanced Employee Retention: Offering a self-insured medical payment plan for key employees can be a valuable tool to attract and retain top talent in highly competitive industries. 2. Tennessee Corporate Resolution Establishing a Fully Insured vs. Partially Self-insured Medical Payment Plan: — Fully Insured Plan: In this type, the employer pays a premium to an insurance carrier, transferring the financial risk associated with medical claims to the insurer. The insurer assumes responsibility for claims processing, payments, and risk management. — Partially Self-insured Plan: Employers assume a portion of the financial risk by paying claims out-of-pocket up to their predetermined self-insurance limit. Beyond this limit, claims are covered by stop-loss insurance, which safeguards against excessive claim expenses. 3. Legal Requirements and Considerations: — Compliance: Companies establishing self-insured medical payment plans must ensure compliance with applicable federal and state laws, including the Employee Retirement Income Security Act (ERICA), Affordable Care Act (ACA), and state-specific regulations. — Documentation: A comprehensive Tennessee corporate resolution establishing self-insured medical payment plans should include a detailed plan document, trust agreement, summary plan description (SPD), and other required filings. — Reporting and Disclosure: Employers must adhere to reporting and disclosure obligations, including filing annual Form 5500 reports with the Department of Labor and providing employees with plan-related information such as PDS and summaries of material modifications (SMM's). Conclusion: A Tennessee corporate resolution establishing a self-insured medical payment plan for key employees offers various advantages, enabling corporations to design customized healthcare plans while assuming financial risks associated with medical treatment. By understanding the benefits and complying with legal requirements, corporations can provide superior healthcare coverage, attract top talent, and achieve cost savings in the long run.
