Guest newtobenefits Posted January 27, 2010 Share Posted January 27, 2010 Everything I've found seems to make clear that salary reductions to a Health FSA are plan assets when they can be reasonably segregated from the employer's general plan assets, even if they are not actually segregated. Employer holds salary reductions in a large general account and uses the funds to reimburse a TPA who pays the actual claims. Anyone see and leeway here to avoid calling these plan assets since they are held in large generally named account?? any help/cites are appreciated. Link to comment Share on other sites More sharing options...
J Simmons Posted January 27, 2010 Share Posted January 27, 2010 Everything I've found seems to make clear that salary reductions to a Health FSA are plan assets when they can be reasonably segregated from the employer's general plan assets, even if they are not actually segregated. Employer holds salary reductions in a large general account and uses the funds to reimburse a TPA who pays the actual claims. Anyone see and leeway here to avoid calling these plan assets since they are held in large generally named account?? any help/cites are appreciated. You're right, amounts corresponding to the salary reductions are plan 'assets' in essence commingled with the ER's general account assets. However, the DoL has a non-enforcement policy yet in effect as to the requirement that these particular plan assets be held in a separate trust subject to ERISA audit and reporting rules. ERISA Technical Release 92-01, 57 Fed. Reg. 23272 (June 2, 1992). For a fact sensitive application, see Phelps v. CT Enterprises, No. 05-2071 (4th Cir. 08/09/2006). More problematic is whether also exempted would be as your title points out (a) the plan's net experience gains for a plan year from flex accounts, particularly to the extent such might exceed the plan's operational costs and past years' net experience losses, and (b) amounts paid by COBRA continuees for their coverage. John Simmons johnsimmonslaw@gmail.com Note to Readers: For you, I'm a stranger posting on a bulletin board. Posts here should not be given the same weight as personalized advice from a professional who knows or can learn all the facts of your situation. Link to comment Share on other sites More sharing options...
Recommended Posts
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 accountSign in
Already have an account? Sign in here.
Sign In Now