Leaderboard

I just wanted to take a moment and publicly thank everyone involved in this board from Dave and Lois to the people that are constantly providing answers and guidance. Not sure how I would have survived in this business without this board. Thanks and I hope everyone has a wonderful Thanksgiving! WCP

Under the Affordable Care Act, a cafeteria plan cannot be used to pay premiums for individual policies providing major medical coverage. It is possible to permit payment of premiums for individual dental policies but it raises COBRA and ERISA issues for which you should speak to counsel or at least your insurance broker before doing so.

I have had this argument before and I agree that you CAN remove the safe harbor prior to the first day of the SH plan year. However, I don't think it strictly a yes or no question. First, it depends on if it is a non elective or a match. A non elective I think you can remove at any time prior to the start of the SH plan year since it would not influence NHCEs decision to defer. If it is a match, it comes down to whether the employees had a reasonable opportunity to change their deferral election after the employer amended to remove the SH. Can you show that all employees who wanted to stop deferrals after you eliminated the match had an opportunity to do so? If yes, I think you are in the clear. A small company could easily have all their participants sign something to affirm or change their previous election even with a few days notice. This might be an issue for bigger companies and at that point I think they should stick with the 30 SH suspension notice period. I think there is at least an argument to be made that if an employer cancels the match on 12/31/2016, and cannot show that all employees had a reasonable opportunity to change their election, the employees are entitled to 30 days of matches on their deferrals.

Affordability is not a global, all or none, determination, but is determined on an employee by employee basis. So you'll have to compare the compensation of each employee to the lowest cost option available to that employee.

no, because the definition is governed by the Code 414(q)(1)(B) which says "for the preceding year" no one, no document provider has the authority to change that. you might possibly be thinking of using 'calendar year comp' for a non-calendar plan year, but you still can't use current year comp.