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I think that makes for an awful tasting pate!

While I say nothing about whether any guidance is an appropriate interpretation or explanation of any law, consider these FAQs. January 10, 2022 https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-51.pdf Q1 states: “[A] plan or issuer may . . . require a participant, beneficiary, or enrollee who purchases an OTC COVID-19 test to submit a claim for reimbursement to the plan or issuer (in accordance with the plan’s or issuer’s reasonable internal claims procedures, consistent with applicable federal and [not superseded] state law).” Consider whether a claims administrator might look to a Universal Product Code as some evidence about whether the thing someone bought is a test that meets the conditions specified in the statute. Further, Q4 states: “A plan or issuer may require reasonable documentation of proof of purchase with a claim for reimbursement for the cost of an OTC COVID-19 test. Examples of such documentation could include the UPC code for the OTC COVID-19 test to verify that the item is one for which coverage is required under section 6001 of FFCRA, and/or a receipt from the seller of the test, documenting the date of purchase and the price of the OTC COVID-19 test.” For more background, see these FAQs. October 4, 2021 https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-50.pdf February 26, 2021 https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-44.pdf February 26, 2021 https://www.cms.gov/files/document/faqs-part-44.pdf June 23, 2020 https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-43.pdf April 11, 2020 https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-42.pdf April 11, 2020 https://www.cms.gov/files/document/FFCRA-Part-42-FAQs.pdf

Has the plan sponsor ever maintained a plan before?

There is nothing precluding a sponsor from amending their plan, however the IRS is not reviewing, or providing determination letters, for plan amendments. They will still provide a D letter upon plan termination.

Despite whatever tolerances the Internal Revenue Code might allow about one or more conditions for treatment as a tax-qualified plan, consider that not amending the plan to end the participation of the no-longer-commonly-controlled organization might result in a multiple-employer plan. A multiple-employer plan might affect consequences under laws beyond tax law, including ERISA’s title I and banking, insurance, and securities laws. The plan’s sponsor, administrator, trustee, and investment manager might check the plan’s investment arrangements to find whether any requires the investor to be a single-employer plan. Some collective investment trusts and other kinds of investments not registered under one or more securities laws are available only to a single-employer plan. Others might respond to your question about whether all three organizations may or should share in a contribution for a year for which the three organizations were two (unrelated) IRC § 414 employers.

Jakyasar, it seems BenefitsLink neighbors have given you a range of potential solutions to consider. But to consider how the plan, before a change, applies, test the employer/administrator’s assumption about whether the individual lacks 1,000 hours of service. If that owner is a partner of a partnership or a member of a limited-liability company (and not an employee), does the “employer” service recipient count the self-employed individual’s time worked? Labor department rules interpret how to count and credit hours of service for some purposes under ERISA §§ 202-204 and Internal Revenue Code §§ 410-411. See, in part: 29 C.F.R. § 2530.200b-3 https://www.ecfr.gov/current/title-29/subtitle-B/chapter-XXV/subchapter-D/part-2530/subpart-A/section-2530.200b-2 29 C.F.R. § 2530.200b-3 https://www.ecfr.gov/current/title-29/subtitle-B/chapter-XXV/subchapter-D/part-2530/subpart-A/section-2530.200b-3#p-2530.200b-3(a) These rules recognize that not all workers punch a time clock, and provide ways to approximate a measure of service. These rules even recognize situations in which a service recipient does not count a worker’s hours, days, weeks, or even months. Rather, a worker might be paid or entitled to payment without regard to any unit of time worked. “In the case of an employee whose compensation is not determined on the basis of a fixed rate for specified periods of time, the employee’s hourly rate of compensation shall be the lowest hourly rate of compensation paid to employees in the same job classification as that of the employee or, if no employees in the same job classification have an hourly rate, the minimum wage as established from time to time under section 6(a)(1) of the Fair Labor Standards Act of 1938, as amended.” 29 C.F.R. § 2530.200b-2(b)(2)(ii)(C) https://www.ecfr.gov/current/title-29/subtitle-B/chapter-XXV/subchapter-D/part-2530/subpart-A/section-2530.200b-2#p-2530.200b-2(b)(2)(ii)(C) Thus, a working partner’s draw of as little as $7,250 might get 1,000 hours of service. It’s unclear whether this concept (or any of the equivalencies 29 C.F.R. § 2530.200b-3(d)-(f) provides) applies to someone who is not an employee. But a plan’s administrator might interpret the plan to analogize methods for crediting hours of service for a nonemployee the Internal Revenue Code treats as a deemed employee.

Lastly - are the hours recorded for payroll purposes, such as with a corporation? You mention partners - if this is a partnership then hours may not be so readily accounted for? A partner might not be onsite but might be still leading/pondering the future of his company from his hospital bed.

Only if you are using a new comparability (with everyone in their own group) style of PS allocation. If they are using a design based safe harbor PS, then you lose that flexibility as you cannot pick and choose who you are going include or not include.

Agree with BG - you can't do an -11(g) amendment that only increases an HCE. David's suggestion may be helpful, but I usually see disability defined with respect to the Social Security Act. If the participant is not disabled within the meaning of Social Security then that may not matter. For the PS, there is the overkill option of adopting a new plan retroactive to 1/1/2021 under the SECURE rules, put benefits in it only for this one person, and aggregating it with the existing plans for testing. For the CB plan there is generally no reason why you can't adopt an amendment to increase past benefits, as long as the plan is not restricted by its AFTAP. The increase would have to be tested in the current year, i.e. 2022, since it wouldn't qualify for -11(g) treatment. Assuming the individual returns to work in 2022, they may have a double accrual for 2022 testing. When you say the DC plan is 401(k) + SH, is that a safe harbor non-elective? If so then I would suggest removing the 1000 hours and last day requirements. There is no benefit to having them in this type of plan design. All it does is limit your flexibility.

11-g is out. One of the requirements is non-discrimination.

Does the plan include any reference to disability? For example, might it impute hours while disabled?

I'll just add that in a case like this, I believe it should be filed as a superseding return rather than an amended return. A superseding return can be filed after the first filing but before the due date (as extended). A superseding return will be considered the first return except for the SOL on assessments and refund claims, which start with the superseded return. It gets more technical, but I think the gist of it is that a superseding return will be treated as the original return, whereas an amended return changes something that was filed in the original return. Im not sure that it makes a big difference in this situation, but a superseding return can change things that an amending return cant.

Maybe I'm not reading the question the way meant it, but you cant defer compensation you don't have. If you have $20,000 in compensation, you cannot defer more than $20,000 under any scenario. I think that what you are really referring to is whether you can contribute catch-up in excess of the annual additions limit in 415(c), which is the lesser of $61,000 or 100% of compensation for 2022. Catch-up contributions are not considered for annual additions, so it is possible to have total contributions in excess of the annual additions limit, and total contributions in excess of compensation. What your scenario is missing is employer contributions. For example: Does that help?