Jump to content

Audit Requirements


Guest PORTE

Recommended Posts

We have a situation where a large health plan went from a fully funded plan with a VEBA to a fully insured plan midway through the year. As a fully insured plan, we have no audit requirement for that portion of the year. But the trust stayed open and paying benefits until very late in the year and then reverted monies back to the employer. I believe that this is not allowed. Should the trust have used the remaining funds to pay premiums to the new insurance company or does it matter if they revert to the employer then pay the premiums?

Second question: Does the audit requirement extend until the trust is liquidated, or does it then end immediateley upon the plan becoming fully insured?

Any help would be greatly appreciated.

Link to comment
Share on other sites

#2 If any benefits are paid out of a trust during the year, then the whole plan is audited for the entire year (including monies that don't run through the trust).

#1 I recommend against money reverting to the employer, but I've seen others do it.... A trust is not required for employer contributions to a welfare plan, so it may be okay (although there may be a tracing requirment or something?) Maybe someone else can tell you. Even if there is no rule against it, sometime the trust terms limit the use...

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...