b'normal premium contributions. The FFCRA ex- in which this might occur, but the most common panded FMLA leave for specified reasons related toare: (1) allowing an employee to participate in the COVID-19 (e.g. coronavirus sickness, quarantine,plan even though he or she does not actively work or the care of a minor child), and extended leavethe required number of hours or otherwise satisfy requirements to all private employers regardless ofthe employers eligibility criteria; (2) allowing an the number of employees. ineligible family member to participate in the plan; COBRA: This federal law generally requires(3) allowing a terminated employee to remain on the employers with 20 or more employees to offer theplan after termination or retirement; (4) allowing an option of continuing the group health insuranceemployees former spouse to remain on the plan; (5) coverage after an event that would otherwise causeallowing an employees dependent child to remain them to lose their coverage (e.g. termination, reduc- on the plan after the child no longer qualifies as a tion in hours, death of employee spouse or parent,dependent; or (6) adding a relatives child or a grand-retirement, etc.) Coverage is available for 18 monthschild that does not satisfy the criteria of a dependent (36 months in certain situations), and absent anunder the policy.altruistic gesture from the employer, the former planFederal and state laws are clear that individuals who participant is responsible to pay the premium. If ando not satisfy the eligibility requirements of a group employee furlough constitutes a qualifying eventhealth insurance policy are prohibited from partici-that results in a loss of insurance eligibility, COBRApating in the plan. This is true whether the individual might be the easiest way for the employee (and hisis an employee or a dependent, and regardless of or her dependents) to continue the group healthwhether the employer is aware of, or otherwise al-insurance coverage. Some states have similar mini- lows, the improper participation to occur. Employers COBRA laws (i.e., state extension laws) that applyhave an obligation to notify WMI when participants to smaller employers that should be considered whenlose eligibility, and any person who illegitimately the employer has 19 or fewer employees. participates in a group health insurance program Plan Language and Insurance/Funding Mechanism:can be charged with insurance fraud and subjectedIf you have questions Many insurance policies or self-funded plan docu- to criminal and civil penalties. These charges andabout this article or ments contain language that specifically allowspenalties, along with the possibility of regulatorywould like to discuss furloughed or absent employees to continue theiraction by the United States Department of Labor,your companys health group coverage for a specified period of time withoutmay also be levied against companies and individu- insurance progam, feel violating the governing terms and conditions of theals who knowingly or willingly allow or participatefree to contact me at coverage. This is the easiest and cleanest way toin this conduct. (801) 263-8000 or protect employees from losing coverage during theIn addition to the potential criminal and civil liabil- info@wmimutual.com. COVID-19 pandemic, but verification with the insur- ity, it is important for financial reasons that employ-ance company would be wise. Even when cover- ers maintain the integrity of the insurance policys age is provided through a self-funded plan that iseligibility criteria. Specifically, WMI contracts with designed and administered by the employer, the planlicensed reinsurance companies to provide financial would be advised to double-check with the stop-lossprotection for claims once they reach a certain dollar carrier to ensure reinsurance protection in the event aamount. When a persons claims hit the reinsurance high-dollar claim triggers a reinsurance claim. retention level, the reinsurer will usually perform a For those of you keeping score at home, here is mydetailed audit to ensure coverage eligibility before March 2020 memo to all WMI employer groups. Itthey accept liability on the claims. If the reinsurer has widespread application regardless of the em- discovers an individual was ineligible to participate ployer, insurance company, or self-funded status, andin the plan but was improperly allowed to partici-I hope you find it helpful. pate, it is quite possible that the reinsurer will deny the claim and leave the employer (and other involved *** individuals) responsible to pay the claims.It has come to our attention that there may be in- If ineligible individuals are currently participating in stances where employers are allowing individuals toyour companys group health insurance plan, it is im-participate in their group health insurance plan evenperative that you discuss this matter with your legal though the individuals do not satisfy the eligibilitycounsel and to take appropriate action to immedi-requirements of the policy. There are many waysately rectify this problem. SWPMA News / Summer 202021'