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90 Day Benefit Wait - Extension Ohio

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  • 90 Day Benefit Wait - Extension Ohio

    Hello,

    I was wondering if we as a company can extend our 90 day waiting period on benefits for one of our employees?

    Thanks

  • #2
    What type of benefits are you asking about? Thanks.
    Too often we underestimate the power of a touch, a smile, a kind word, a listening ear, an honest compliment, or the smallest act of caring, all of which have the potential to turn a life around. Leo Buscaglia

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    • #3
      Probably not. You need to comply with what your group health plan document says regarding eligibility for group health insurance. If it says for example, "First of the month following 90 days of continuous employment" then that's it.

      I take it you have a new employee whose probationary period you want to extend for another 90 days. You can delay eligibilty for company benefits such as holiday pay, vacation, paid sick time, whatever (assuming your handbook doesn't guarantee these benefits after 90 days), but you can't violate any plan documents you have, such as for group health.

      For what it's worth, every time I've approved an extension of someone's probationary period, I've regretted it each and every time. They've typically gotten through the next 90 days by hook or by crook, and then gone back to their old ways of excessive absenteeism, poor attitude, or whatever as soon as their probation was over. As an old boss/CEO of mine used to say "When in doubt, boot 'em out." I know it sounds harsh but it proved to be very good advice.

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      • #4
        Originally posted by Beth3 View Post
        For what it's worth, every time I've approved an extension of someone's probationary period, I've regretted it each and every time. They've typically gotten through the next 90 days by hook or by crook, and then gone back to their old ways of excessive absenteeism, poor attitude, or whatever as soon as their probation was over.
        I'll second that. In the Feds the probationary period used to be a year--may still be. I had many managers who would wait through 11.5 months of marginal or worse performance before taking any action. During the last two weeks the employee would improve enough to pass probation, then revert to less than they had ever been. I can count on one finger the number of employees who improved their performance after getting off probation by the skin of their teeth.

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        • #5
          Agreed. Also, be very careful about the difference between actions which are merely bad ideas and those which are likely illegal. If you are talking about Health Care plans only, then that is covered by the federal ERISA law. You must have a formal written plan and if you violate the exact wording of the plan for any reason, legally very bad things will happen to your company. Now not all benefit plans are ERISA. You need to be very specific about exactly which benefit plan(s) you are talking about and you need to not assume that all benefit plans have the same rules. And whether or not extending probationary periods for non-benefit plan purposes is a good idea or not, it is legally very different then messing around with an ERISA level benefit plan.

          Lastly, any time you have one "rule" for one employee and a different "rule" for everyone else, you are making it easy for the one employee to claim an illegal action on your part. No certain, but having a "Bob" specific rule potentially opens up doors which would not otherwise exist.
          Last edited by DAW; 01-17-2012, 11:07 AM.
          "Reality is that which, when you stop believing in it, doesn't go away".
          Philip K. **** (1928-1982)

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          • #6
            [QUOTE=Beth3;1172217]You can delay eligibilty for company benefits such as holiday pay, vacation, paid sick time, whatever (assuming your handbook doesn't guarantee these benefits after 90 days), but you can't violate any plan documents you have, such as for group health.QUOTE]

            HI,

            Our handbook states that they are eligible for benefits after a 90-day waiting period. Would this constitute a guarantee?

            Thanks!

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            • #7
              The federal ERISA law requires companies with health care plans to have a formal written plan that follows certain specific formats. A mention in the company handbook by itself does not comply with the ERISA law. If your company truly does not have a written plan, sometimes called a Summary Plan Document and your company is not filing the 5500 form with IRS as required, then your company has much more serious problems then the one you just raised.

              Is there someone else in your company who knows more about this then you do? You really need to find the SPD if it exists, and you really need to read it. A mention in the company manual by itself is not legally sufficent. ERISA is a law with serious consequences if you violate it.

              http://www.dol.gov/dol/topic/health-...nformation.htm
              "Reality is that which, when you stop believing in it, doesn't go away".
              Philip K. **** (1928-1982)

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              • #8
                Is the SPD separate from the Plan Documents provided by the Insurance Carriers? Our Retirement Plan does not fall under ERISA.

                Thanks

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                • #9
                  I am skeptical that your retirement plan does not fall under ERISA. My understanding is that all private sector retirement plans fall under ERISA.
                  http://www.dol.gov/ebsa/faqs/faq_com...e_pension.html

                  If you are talking about health care coverage only, the following information should help.
                  http://www.dol.gov/ebsa/publications...ibilities.html

                  Could you please spell out exactly what type of benefit plans you are talking about? It really makes a difference.
                  "Reality is that which, when you stop believing in it, doesn't go away".
                  Philip K. **** (1928-1982)

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                  • #10
                    [QUOTE=csu12;1172282]
                    Originally posted by Beth3 View Post
                    You can delay eligibilty for company benefits such as holiday pay, vacation, paid sick time, whatever (assuming your handbook doesn't guarantee these benefits after 90 days), but you can't violate any plan documents you have, such as for group health.QUOTE]

                    HI,

                    Our handbook states that they are eligible for benefits after a 90-day waiting period. Would this constitute a guarantee?

                    Thanks!
                    Unlikely. I assume your employee handbook includes the typical disclaimers that the handbook doesn't constitute a guarantee of employment/contract and that manamagement may disregard the policies stated therein as they see fit? Assuming it does (and if it doesn't, you need to get that fixed pronto), then you can postpone an employee's participation in any non-qualified benefit plans as you see fit.

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