This information was sent via e-mail to all Heller Special Counsel, Associates, Associates and Professional Staff last evening:
Heller Ehrman LLP
Frequently Asked Questions
For Professional Staff, Associates and Special Counsel
This first edition of Frequently Asked Questions addresses many issues regarding the firm’s dissolution. You should not interpret these to be a guarantee of coverage or eligibility. In some instances, we do not yet have full answers and have indicated that. As we get reliable assurances from carriers and vendors, we will provide you more information, so check back frequently to this posting.
1. Will medical coverage be in effect past the date of dissolution? If so, how far past? End of the month? 30 days?
We recognize that health insurance coverage is a very important issue for our employees and their families. CIGNA, our primary medical and dental care insurance provider, has confirmed that coverage for all personnel insured under that policy is in place for October. We can also confirm that our premium payment terms are current with our other providers, Kaiser and Group Health Cooperative, and we have no reason to believe that those benefits will be discontinued provided we continue to meet our premium payment schedule, something we have every intention of doing.
2. What if I want to get my own plan or enroll in my spouse or domestic partner’s plan right now because of the uncertainty?
Until your coverage ends with Heller Ehrman, you will not be able to enroll in a plan offered by your spouse or domestic partner’s employer, unless that employer is conducting an Open Enrollment. This is in accordance with federal regulations. See question 3.
If you wish to purchase private insurance, you may do that at any time. See question 7.
3. What if I can go on a spouse or domestic partner’s plan? When can I do it and what is the timing once I lose coverage?
Every employer conducts an Open Enrollment. During Open Enrollment, employees are free to change coverage and add dependents during a specified period of time. If your spouse or domestic partner’s employer is conducting Open Enrollment, you will likely be able to enroll in that insurance coverage. This is a general rule. Please check with your spouse or partner’s employer for specifics.
If you are able to enroll in a spouse or domestic partner’s coverage during an Open Enrollment period, your coverage will likely begin at a later date; for instance, January 1.
If you are able to enroll in a spouse or domestic partner’s coverage, you will still be required to pay premiums for Heller Ehrman’s coverage until a) your employment ends or b) you are notified of the cancellation of the coverage In the event that your firm coverage is canceled, you will be notified in advance. You have 30 days from the date you lose coverage under the firm’s plan to enroll in your spouse or domestic partner’s coverage. No Open Enrollment period is required, but you must enroll within 30 days of losing coverage to take advantage of this option.
In many instances, your spouse or domestic partner’s employer will want some or all of the following documentation:
- Verification that coverage has ended with Heller Ehrman
- Check to see what the employer will accept. Your WARN notice may be sufficient
- If coverage ends because of cancellation, your notice of cancellation may be sufficient
- Certificate of Creditable Coverage
- Payflex and our medical carriers send out these Certificates. Be sure that the firm has your most current address. Update your address with iPAN.
- Marriage certificate or Certificate of Domestic Partnership (in those states/cities that issue them)
- Birth certificates of children
4. Can I have a Certificate of Creditable Coverage in advance of leaving the plan?
Whether you leave Heller Ehrman prior to the termination date of your WARN notice or on the last day, you will receive a Certificate of Creditable Coverage within 30 days. Termination of coverage will automatically trigger the issuance of a Certificate from our healthcare providers.
5. Will COBRA be available?
Cobra will not be available after the date our carriers terminate our contracts, if they terminate them. COBRA coverage requires an existing plan as a platform.
6. If we are going to continue coverage past 2008, what kind of coverage will it be?
If our carriers allow it, we will likely be limited to a single plan, mostly likely a point-of-service (POS) plan. A POS plan provides both in- and out-of-network benefits. In-network benefits must be authorized by your Primary Care Physician and services must be provided by the carrier’s network of doctors and facilities. If you choose to utilize the out-of-network benefits, you may choose to see any physician you wish. Out-of-network claims must be filed by you and are at a higher cost to you.
7. What are my health care insurance options if the group plans are canceled before my last day of employment with Heller Ehrman?
There are three possibilities in that event:
- Individual coverage, including HIPAA-protected (Health Insurance Portability and Accountability Act) individual coverage
- Group-to-individual plan conversion
Employees can contact health insurance companies to arrange for an individual plan covering them and their family. Issuance of coverage requires medical underwriting and can be denied. This coverage is offered by many major health insurance carriers in each state. Without endorsing any provider, some of these providers include CIGNA, Aetna, Kaiser, and Blue Cross/Blue Shield. You may also want to access an on-line selection tool like ehealthinsurance.com. We are also contacting individual health insurance coverage brokers and will provide contact information upon request.
HIPAA protects those who are unable to qualify for individual health insurance due to medical reasons. This federal law guarantees access to individual insurance policies and state high-risk pools for eligible individuals.
If you meet the criteria, you are eligible to purchase a HIPAA individual policy whether you quit, were fired, or laid off. To be eligible for HIPAA coverage, you must meet all of the following criteria:
- Had coverage for at least 18 months, most recently in a group health plan, without a significant break;
- Lost group coverage but not because of fraud or nonpayment of premiums by the employee;
- Are not eligible for COBRA coverage; or if COBRA coverage was offered , elected and exhausted it; and
- Are not eligible for coverage under another group health plan, Medicare, or Medicaid; or have any other health insurance coverage.
You have 63 days from the date your group health insurance ends or, if you qualify, your Federal COBRA or Cal-COBRA ends, to apply for HIPAA. When you apply for a HIPAA plan, you should provide a Certificate of Creditable Coverage from your last health plan. Termination of coverage will automatically trigger the issuance of a certificate from our healthcare providers.
Finding a HIPAA Plan
All health plans that sell individual plans must offer their two most popular individual plans to people who qualify for HIPAA.
What are my benefits in a HIPAA Plan?
The available HIPAA plan(s) will probably not have the same benefits or the same premiums that you had with our group plans. You should compare the benefits and premiums of the HIPAA plan(s) with the benefits and premiums of the conversion plan, if you qualify for one.
It is possible that employees can convert from our existing group plans (CIGNA, Kaiser, or Group Health Cooperative) to individual plans.
The group plans have not yet confirmed whether a conversion option is available.
MEDICARE and other government-sponsored options
Employees over 65 are eligible for Medicare and can enroll directly. Information about Medicare options is available at:
Former employees of the federal or state governments may also be able to get coverage through their former employer.
8. What if I am currently under care of a physician and have to change plans?
If your health plan changes and it was not your choice to switch to a new plan, you may be able to keep seeing your doctor or visiting the same hospital. This is called “new enrollee” continuity of care. In order to qualify, you must call your new health plan to ask for continuity of care and your doctor or hospital must agree to keep you as a patient.
Only people with certain kinds of health problems or conditions can get continuity of care. Check with your new health plan to determine if you qualify for continuity of care. As part of this process, you will need to be ready to discuss your medical information, such as the name of your doctor or hospital, your medical condition and treatments you are receiving. You can also ask for a copy of your health plan’s policy on continuity of care at any time.
9. Should I accelerate treatments?
You need to talk to your doctor about the appropriateness of any treatment plan.
10. Are we self-funded?
None of Heller Ehrman’s healthcare plans are self-funded.
11. Is our 401(k) plan still available to us?
Yes. Contributions can still be made through your last day of employment. If you want to change your contributions, you can do so in the usual ways:
- By calling Vanguard at 800-523-1188
- Or visiting your account on line at http://www.vanguard.com
12. I have a loan outstanding. What happens to the loan when I leave the firm?
The answer to this depends partially on whether the 401(k) Plan is amended to allow loan payments by terminated participants.
Upon your termination of employment, you become eligible to take a distribution from the Plan. If you do take a distribution, any loans outstanding will default and the balance will become taxable income to you. In this event, you should look for a 1099 R from Vanguard Fiduciary Trust Company in January of the following year for inclusion in your tax return.
If you leave your money in the Plan after termination, you may be able to continue to make loan payments. This depends upon whether the Plan is amended to allow loan repayments after termination. If the Plan is not amended and you leave your money in the Plan, your outstanding loan(s) will default the quarter following the quarter in which you terminate.
You can payoff the entire outstanding balance of a loan at any time prior to taking a distribution or the loan being defaulted. To pay off a loan, see the loan payoff instructions and form published on our Intranet under
Tools>Forms Heller Ehrman>Human Resources>Benefits>401K
13. Will I be required to take my money out of the 401(k) Plan?
Eventually, yes. The 401(k) Plan will terminate and participants will be notified that they must take a distribution. You will be able to rollover to a new employer’s plan, to an IRA, or take a cash or a combination of cash and rollover. You will not be able to take installments as a type of distribution.
14. Can I take a distribution now or is there anything I can do now to begin the process of taking a distribution?
You are not eligible to take a distribution from the Plan until after your termination date. In general, you should be able to take a distribution the week following your termination. Vanguard processes distribution request usually within 48 hours. You can take a distribution
- By calling Vanguard at 800-523-1188
- Or visiting your account on line at http://www.vanguard.com
Remember to check with your new employer’s plan before requesting a rollover to that plan.
15. How can I verify that my contributions are going into my Plan account?
Payroll deferrals (contributions) are deposited after each pay day. You can check your account on line to confirm the timing and amount of deferral deposits made into your account.
16. Will I lose my 401(k) account when the firm dissolves?
Your 401(k) account is held in trust by Vanguard. Whatever happens to the firm, your account will remain in trust with Vanguard. The firm has no ability to either take your money or cause your money to be taken.
In the event that the firm is unable to pay recordkeeping fees, it is possible that Vanguard may assess a fee on each participant’s account. However, one of the virtues of Vanguard are their low fees. Therefore, you would likely experience a small quarterly deduction shown on your account statement until you take a distribution from the Plan.
17. I received an Associate Retention Bonus. What happens to that?
If you have five or more years of service with the firm, your retention bonus account has vested and will be included when you take a distribution. If you received an Associate Retention Bonus contribution but do not have five years of service as of your date of termination, you should wait until at least November 28, 2008 to take a distribution. On that date, the Plan will experience a partial termination under the IRS rules and your account will vest.
18. FLEXIBLE SPENDING ACCOUNTS: Are we still eligible to use the medical and dependent Flexible Spending Accounts?
Yes. You will continue to be able to incur and be reimbursed for expenses up to your last day of employment.
19. CHILD CARE: How long will emergency child care be available?
It is available to employees through December 31, 2008.
20. LONG TERM DISABILITY: If I am receiving long term disability benefits, will those end when my employment ends or when the contract is terminated?
Long Term Disability benefits are insured through Unum. Benefits are paid based on the date of disability and are not impacted by termination of employment. If the date of disability occurs within a valid contract period, cancellation of a contract will not impact eligibility for LTD benefits.
21. COMMUTER BENEFITS: Are we still eligible for a commuter subsidy?
22. Do the firm’s cash flow calculations include meeting all non-shareholder payroll obligations through the end of the year?
Yes. However, all payments, including payroll, are subject to approval by the bank.
23. How confident can we be that accrued and unused vacation and sabbatical will be paid out when the doors finally close?
These are included in our cash flow projection.
24. Are we paying 2000 hour bonuses?
These are included in our cash flow projections.
OTHER IMPORTANT QUESTIONS
25. The firm’s policy is to respond to reference checks by only giving the “name, rank, and serial number” of a former employee. What would be the case in the event of a dissolution?
We will continue to give the firm standard information.
26. What can I tell firms with whom I interview?
Be honest: The firm is in dissolution and all employees have received a termination notice.
27. For associates who would normally pay back bar exam fees, etc., paid by the firm if they departed one prior to year of service, will they be required to still pay back those expenses?
28. For those for whom the firm is sponsoring either an H1B visa or permanent residency application, what happens?
HR will contact each employee regarding their specific situation.
29. Will we be reimbursed for expenses submitted or about to be submitted?
The firm is processing appropriate expenses as they always have.
30. How much notice do I need to give the firm if I leave before the firm closes?
Employees should discuss departure dates with their supervisor.