PLANSPONSOR - December 2018/January 2019 - 17

Way-Smith advises that if a plan
sponsor and recordkeeper disagree about
a person's eligibility or vesting service,
they should consult with a benefits
attorney about the specific case.
Breaks in Service
Rules regarding eligibility and vesting are
complicated when employees transition
directly from part-time to full-time work,
but can be even more complicated if the
employee terminates and is later rehired.
The length of employment before
the break, the length of the gap in service,
the timing of the rehire-e.g., whether
during the eligibility computation period
or after-and the plan terms are all important
to consider, Way-Smith observes.
If the gap is brief, the employee might
continue to earn eligibility service as if
he had never left. But if it is lengthy, he
may have to start anew. For instance, the
law allows a plan sponsor to treat a rehire
as new for purposes of plan eligibility if
the person had five breaks in service or
breaks in service equal to the years of
service prior to termination, whichever is
greater, Way-Smith says. Or, an employer
may take a " wait-and-see approach, " postponing
restoration of any past eligibility
service for a year. Every plan should
specify the rule that will be applied.
Chisholm says many plans are written
so that, if an employee is rehired, he is
immediately eligible as long as he satisfied
eligibility requirements when formerly
employed, even if that was in a part-time or
seasonal capacity. If he never did so when
working part time, though, he would have
to satisfy eligibility requirements as if a
brand new employee. For vesting, however,
Chisholm adds, because the computation
period is different, it is possible a part-time
or seasonal employee could have years of
vesting service from the time he became
eligible until the break in service.
For these reasons sponsors need to
read the law and plan provisions together.
-Rebecca Moore
TALKING POINTS
Average Health Benefit Cost Per
Worker Tops $13,000 for Midsize
And Large Employers
Small employers* were hit with a 5.4% increase in 2018.
Midsize and large employers held cost growth to 3.2%.
2017
All employers
Employers with 10 - 499 employees
Employers with 500 or more employees
2018
$12,228 $12,666
$11,527 $12,148
$12,615 $13,018
Source: Mercer, National Survey of Employer-Sponsored Health Plans 2018
*Mercer defines " small employer " as an employer with fewer than 500 workers.
News at Public Plans
■ Millennials ■ Generation X ■ Baby Boomers
Public Companies
Need Younger Generations
Of Employees
The public sector needs to attract
young employees-Millennials
comprise just one-quarter of
government workers.
Millennials Want
Benefit Choices
Millennials, more than older
workers, would like customized
plan options based on their
personal information-e.g.,
their health condition and
behavioral assessment.
Source: MetLife, Public Sector Report
48%
25%
25%
73%
59%
44%
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