Employer Legal Questions - MERP

  1.  "Discrimination" means treating people differently, which happens all the time, such as salaried employees getting one benefit while hourly employees get a different one, or union employees getting one benefit while non-union employees get a different one. It's a legal problem only if the difference is based on a prohibited factor, such as age, race, sex, national origin, etc.

    The MERPs do not treat employees differently based on any prohibited factor. For example, the MERP treats employees differently based on whether they are eligible for group health coverage under a plan of their spouse's employer, which is not a prohibited factor.
  1. COB comes into play only when two plans both cover the same expense; that does not happen with the MERP. Specifically:
    1. The MERP reimburses for employee contributions required under the plan of the spouse's employer, but the plan of the spouse's employer doesn't cover employee contributions, so there is no overlap;
    2. The MERP reimburses for deductibles, copays and other co-insurance amounts under the plan of the spouse's employer, but by definition those are all amounts that the plan of the spouse's employer does not cover, so there is no overlap between the plans;
  1. The MERPs are "employee welfare benefit plans" under ERISA, but the ERISA requirements for welfare benefit plans are essentially limited to (a) documentation (plan document and summary plan description), (b) reporting (Form 5500), (c) COBRA continuation coverage, and (d) the limited set of substantive requirements in Part 7 of Title I of ERISA (discrimination based on health status factors, etc.).

    The documentation and administration of the MERPs are deliberately designed to comply with all those requirements.