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I would like to point out that there is a point of confusion for some employers about Entry Dates =/ Deferral Change Dates. They are not the same. The plan can absolutely still only have plan entry dates twice a year, but also allow deferral changes each pay period. The semi-annual plan entry date would be in the legal plan document / adoption agreement. As others have pointed out, the deferral change frequency may or may not be in the plan document, as many treat it as an administrative election. Sometimes folks equate the plan entry date with an open enrollment period, similar to health insurance. Retirement plan entry dates don't work that way. It is much more common to allow starts, stops, changes, as needed, without waiting for a specific date such as 1/1 or 7/1.

If the participant’s loan agreement mandates payroll deductions: While I’ve never rendered advice on this issue (and don’t now), I’ve heard the analysis go something like this: Obey the participant’s loan agreement, without exception if the State wage-payment law that governs the employer’s payment of the participant/employee’s wages allows an irrevocable authorization or does not make taking a payroll deduction without the employee’s authorization a crime. but allow a deviation if the governing wage-payment does not allow an irrevocable authorization and taking a payroll deduction without the employee’s continued authorization is a crime. ERISA § 514(b)(4): “[ERISA § 514(a)’s preemption] shall not apply to any generally applicable criminal law of a State.” https://www.govinfo.gov/content/pkg/USCODE-2017-title29/html/USCODE-2017-title29-chap18-subchapI-subtitleB-part5-sec1144.htm

There is no reason to wait for another restatement; this is an easy amendment to implement. And the statistics continually show that if you allow people to change their elections any time they want, you get FEWER changes than if you only allow changes at limited times during the year, so the payroll clerk won't have that big a deal in making changes. And, changes in payroll deferrals are EASY to implement: you go into the payroll program and just change the number or percentage to the new number or percentage for that person. It ain't complicated at all. And, who runs the business, the payroll clerk? Make the change now; it's best for the client AND the participants and it is almost NO EFFORT to implement.

First, that is a dinosaur or a plan that only allows changes twice a year. The reality is that the plan should be changed to allow changes in the deferral amount at any pay period. Now, as to your situation, the employer was not permitted to take out deferrals starting in September. Since you are still within the same calendar year, I would probably have the employer reverse the deferrals through the payroll system (which means they will be paid back to the employee now) and treat the money that went into the plan as part of the employer contribution for 2019. There are other options, but this is most likely going to be the easiest (other than amending the plan to make this ok by allowing changes anytime, which is what my plan would have said from the beginning so this issue would not have arisen. FWIW.

Beware of informed arrangements that use payroll deductions as part of the arrangement to secure loan payment. They are not part of off-the-shelf loan documentation and third-party administration so the risk of stumbling over them is small — but they resolve questions about employee participants electing to stop payments and they protect the fiduciaries.

I don't think so. Even if the plan permitted it, the participant did not elect it. I think it needs to come out of the participants account, adjusted for losses not gains. The employer can make the employee whole by correcting the payroll and paying the employee the funds that way. I would normally suggest the employer transfer the overpayment to a forfeiture or plan account and use it to offset future contributions. This avoids the hassle of processing a distribution from the plan to refunding it to the employer and any appearence of a reversion. Some recordkeeping systems permit negative contributions which can be a very easy way to correct the transaction on the plan end.

Did the money go into the plan? If not, then it's not a plan issue, it's a payroll issue, and yes, presumably you would pay him any incorrectly withheld monies.

Self-funded plans are not required to cover essential health benefits (EHBs), but if they do, they cannot place dollar limits on them. However, the air ambulance can be capped, because it is not clear that it is considered an EHB (unlike normal ambulance transport coverage). There is mention of Air Ambulance services in the ACA, but not relative to benefits - only in regard to payments/allowable rates for those services. My colleagues and I interpret this to mean a self-funded plan could place limits on the benefit with a maximum per trip amount. Of course, even if this was an EHB, I would look at the state benchmark plans to see if any of them have limitations on air ambulance services. If one does, a self-funded plan is allowed to follow the benchmark of any state, as long as their benefits are consistent with that state, they remain in compliance. Some commenters requested clarification as to whether air ambulance transport and other emergency transportation is within the scope of the term “emergency services.” The Departments decline to provide a rule addressing this issue. These final regulations continue to provide that the terms emergency medical condition, emergency services, and stabilize have the meaning given to those terms under EMTALA, section 1867 of the Social Security Act.[88] - https://www.federalregister.gov/documents/2015/11/18/2015-29294/final-rules-for-grandfathered-plans-preexisting-condition-exclusions-lifetime-and-annual-limits