Randy Watson Posted June 21, 2007 Report Share Posted June 21, 2007 How exactly do you calculate the bonding requirements for welfare plans when the assets are quickly eaten up to pay benefits? Link to comment Share on other sites More sharing options...
JanetM Posted June 21, 2007 Report Share Posted June 21, 2007 Wouldn't you calculate it the same as retirement plan? Based on snapshot at plan year end? JanetM CPA, MBA Link to comment Share on other sites More sharing options...
Randy Watson Posted June 21, 2007 Author Report Share Posted June 21, 2007 Wouldn't you calculate it the same as retirement plan? Based on snapshot at plan year end? It's possible that there would be very little cash on the last day of the plan year. It doesn't seem appropriate to focus on that day alone when significant amounts of cash flow in and out during the course of the year. Link to comment Share on other sites More sharing options...
Guest taxesquire Posted June 22, 2007 Report Share Posted June 22, 2007 Wow! Someone please give a cite to a statutory exemption from the bonding requirements for commerciall-insured plans - I hadn't thought of this before!!!! Link to comment Share on other sites More sharing options...
Randy Watson Posted June 22, 2007 Author Report Share Posted June 22, 2007 Wow! Someone please give a cite to a statutory exemption from the bonding requirements for commerciall-insured plans - I hadn't thought of this before!!!! I'm not sure I follow. Link to comment Share on other sites More sharing options...
Guest taxesquire Posted July 2, 2007 Report Share Posted July 2, 2007 the posts here imply that welfare plans are subject to the same bonding requirements as retirement plans, and I had not thought of that issue before. I hope someone else gives a citation explaning why welfare plans are not subject to this requirement so that i do not have to look into this myself!!! Link to comment Share on other sites More sharing options...
jpod Posted July 2, 2007 Report Share Posted July 2, 2007 taxesquire: A "funded" ERISA-governed welfare plan must be bonded. For example, a health plan that is fully or partially funded through a VEBA would have to be bonded, based on the VEBA's assets. Or, a self-insured plan partially funded with employee contributions would have to be bonded. Randy Watson's posts imply that he is looking at a funded plan (although I am not attempting to take a crack at answering his question concerning the calculation methodology). A fully insured welfare plan (if all employee contributions are immediately used to pay premiums), or a welfare plan that is 100% self-insured by the employer out of its own - and not a separate trust's - assets, does not have to be bonded. Link to comment Share on other sites More sharing options...
Guest taxesquire Posted July 3, 2007 Report Share Posted July 3, 2007 thank you! Link to comment Share on other sites More sharing options...
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