Health Insurance Question

[BamaGutShot]

It has recently come to my attention that my employers have not been depositing the our Health Insurance Premiums into our Health Insurance Fund. The fund is now 1 million short of where it should be. They mislead our insurance committee by telling them there was only 400,000 (which there was but there should have been 1,400,000 in there) in the account and need to raise our rates, which in turn they agreeed and voted to raise. I have talked to several employees on this committee who stated that had the correct amount of money been in there they would not have voted to raise rates. Now this Insurance Premium comes directly out of our pay check. It isn't given to us, it is our money. We also sign a contract every year that states we will pay said amount of money and it will go to our health insurance fund. My problem is now our rates are raised and our fund is missing the interest that the million dollars would have earned. And basically that my employer took my and other employee's money to pay bills instead of putting it where it needs to go. What can we do about it?

******EDIT*****

And not to mention that not all of the missing Million has been repaid

 

[Zigner]

It has recently come to my attention that my employers have not been depositing the our Health Insurance Premiums into our Health Insurance Fund. The fund is now 1 million short of where it should be. They mislead our insurance committee by telling them there was only 400,000 (which there was but there should have been 1,400,000 in there) in the account and need to raise our rates, which in turn they agreeed and voted to raise. I have talked to several employees on this committee who stated that had the correct amount of money been in there they would not have voted to raise rates. Now this Insurance Premium comes directly out of our pay check. It isn't given to us, it is our money. We also sign a contract every year that states we will pay said amount of money and it will go to our health insurance fund. My problem is now our rates are raised and our fund is missing the interest that the million dollars would have earned. And basically that my employer took my and other employee's money to pay bills instead of putting it where it needs to go. What can we do about it?

Your situation is WAY too complex for an internet forum to help. Start talking to employment attorneys and they may be able to point you in the right direction.


I'd usually tell you this forum is for US Law Only, as you neglected to mention your state, but I'm going to ASSume you're from 'bama, based on your user name.

 

[BamaGutShot]

Yes my bad.. From Alabama.. I just figured there might be someone on here who would know.. thanks though

 

[Beth3]

I can't tell from your post what type of health plan "fund" your employer has. Normally, insurance premium deductions from employees' paychecks do not go into a "fund" that accrues but rather are used immediately to pay that month's insurance premiums along with the employer's contribution.

If you think your employer is playing fast and loose with employee contributions, then contact the federal Department of Labor and file a complaint. The federal DOL has jurisdiction over qualified health and retirement plans and they will investigate and determine if the employer has violated any pertinent regulations and engaged in any fraud.

 

[pattytx]

I'm unclear on the "fund" as well. Is this a self-insured plan?

 

[BamaGutShot]

We are Self-Insured and thus have a "fund" at least that is what the people in charge call the account.

 

[blueturnaround]

Depends on what kind of company it is, and in relation to that, what kind of fund it is.

I don't think your employer would NOT deposit payroll deductions that are designated for health insurance...that's like....soooooooo illegal....like go to jail illegal.

Anyway, are you sure the fund's assets weren't just lost via the poor market? If the company really didn't deposit the money....go to the DOL. They are the ERISA police, which the healthcare fund would fall under.

 

[pattytx]

Generally speaking, if the company is self-insured for medical, there is no one to "pay" the deductions TO except the company itself.

The deductions from the employees offset the benefits paid out.

 

[blueturnaround]

Generally speaking, if the company is self-insured for medical, there is no one to "pay" the deductions TO except the company itself.

The deductions from the employees offset the benefits paid out.

The plan must still comply with ERISA & the IRS...and if the employer just willy nilly decided to use payroll deductions for the health fund for oh.... a new plane for the executives....thats a problem.

Actually, if you know the name of the company, you can look up the form 5500 and take a look at where the money went. Health benefit plans DO NOT require a minimum funding requirement.

I'm certain IRS laws are being broken IF your payroll deductions for health insurance are being taken pretax...but then are somehow not put into the fund.

 

[pattytx]

blueturnaround, perhaps your can cite the ERISA regulation that requires the employer to "fund" self-insured medical plans, and to "deposit" the premiums deductions into some separate account.

 

[blueturnaround]

blueturnaround, perhaps your can cite the ERISA regulation that requires the employer to "fund" self-insured medical plans, and to "deposit" the premiums deductions into some separate account.

It wouldn't be ERISA. It'd be IRC 125 (and related codes)...it deals only with the employee payroll deduction. I say that ERISA doesn't mandate minimum fund requirements, however, what you do with tax free money...the IRS cares a lot about that. Also, if the OP is telling the truth, it just doesn't pass the *sniff test* in my opinion...maybe some fiduciary liability issues here? I suppose an ERISA attorney could speak to that.

 

[cbg]

And where in IRC 125 do you find that regulation?

 

[blueturnaround]

And where in IRC 125 do you find that regulation?

Thats too much work not to bill for. Anyway, If the OP thinks injustice was done to him, then those 2 places I mentioned would be a good place to start looking.