Leaderboard

Many of you know that BenefitsLink is headquartered in the mountains of North Carolina. Thankfully, we're safe and sound, albeit without cell service and primary internet (thank goodness for StarLink!). Many around us are not. We know that Florida and Georgia experienced significant damage. The mountains of North Carolina and Tennessee took a devastating hit. Over 2' of rain fell in a large swath of the NC mountains; the runoff put rivers at historic flood levels. Power, cell and internet service are all down over a large area, roads are collapsed or otherwise impassable, and many homes and small towns are completely isolated -- or washed away. Two of the four interstate routes in/out of Asheville -- the two that cross the mountains to the west -- have washed out; a third route (to the east) is blocked in several places. The damage is almost unbelievable -- and the affected area is almost the size of Massachusetts. This area is not equipped or prepared for this level of catastrophic destruction. Mountain people are self-reliant survivors, both individually and collectively, but this will be quite a stretch. It will be a long, difficult road forward. Please keep all in this area in your thoughts and prayers. And if any of our BenefitsLink neighbors have been affected, please reach out on this thread - we'll do what we can to help. Lois and Dave

Where I personally land is that we all seem to agree that the law does not say there is a requirement for a sweep. You only have people who are saying it was "probably what they meant." I fail to see how anyone can be faulted for applying what the law actually says. Now if you limited your EACA to anyone whose last name started with a Z I'd be concerned for you.

Thank you so much -- this area needs all the help we can get. More info is coming out, and it just looks worse and worse; the toll both in lives and in economic loss is going to be staggering. Samaritan's Purse is on the ground -- distributing food and water, setting up field hospitals, etc. Operation Airdrop has been in the air for two days -- helicopter is the only way to get to many locations The Y'all Squad -- they're buying and installing portable StarLink units; communication (even among first responders) is the biggest struggle right now.

And some multiemployer plans suspend a pension if the retiree works for a nonunion employer in work of a kind the same as similar to the work covered by the plan.

EBECatty, consider whether to suggest your client not amend the plan until applicable law becomes clearer or tax law’s remedial-amendment period soon will end, whichever happens first. (Alternatively, one might write a provision that the plan’s student exclusion does not apply to the extent that ERISA § 202(c) commands that the exclusion not apply.) Before an amendment, a plan’s administrator might interpret the plan to include (only) the provision ERISA § 202(c) commands. See, for example, Lefkowitz v. Arcadia Trading Co. Ltd. Benefit Pension Plan, 996 F.2d 600, 604 (2d Cir. 1993) (for a defined-benefit pension plan that omitted to provide for a qualified preretirement survivor annuity, the court interpreted the plan as providing a QPSA); Gallagher v. Park West Bank & Tr. Co., 921 F. Supp. 867 (D. Mass. 1996) (for an individual-account retirement plan that omitted to state any qualified preretirement survivor annuity or other survivor provision, the court interpreted the plan as providing a 50% QPSA); see also, by analogy, Laurent v. PricewaterhouseCoopers LLP, 945 F.3d 739 (2d Cir. 2019) (If a plan’s document states a provision contrary to ERISA’s title I, a court may reform the plan.) Remember, ERISA § 404(a)(1)(D)’s charge to administer a plan “in accordance with the documents and instruments governing the plan” applies only “insofar as such documents and instruments are consistent with the provisions of [ERISA] title [I][.]” While one administers the plan by interpolating ERISA § 202(c), that fiduciary would form prudent interpretations about what ERISA § 202(c) commands (or doesn’t). The potential exclusion would apply only for “a student who is enrolled and regularly attending classes at [the] school, college, or university[.]” I.R.C. (26 U.S.C.) § 3121(b)(10). So, if you’re seeking to compare your potential interpretations (several interpretations might be within an administrator’s discretion) to other lawyers’ interpretations, you might prefer them from one who has at least one college or university that employs students (and before 2025 excludes them elective deferrals). This is not advice to anyone.

Above is correct

Yeah this is a what does the document say question.

A well drafted document will answer this question. Does the plan say a person becomes 100% vested if they terminate because of death or disability? If so, I don't think they become 100% vested as they did not terminate becasue of those causes. It is pretty rare but I have seen plans that are pretty clear that if a person dies after they terminate they become 100% vested. I don't think I have seen that for disability. But this to me it is very important to read the document very carefully and note all the words and what triggers full vesting upon death or disability. One last note: As a matter of facts it can be hard to detect a terminated becasue of disability. Since some plans define disability as determined by the Social Security Administration and they can take over a year to make a determination you should look at the date of the determination. They will retro the determination back to when the process started. So you could have a person leave the company and over a year later be determined as disabled around the date of termination. To be very clear that is a question of facts not document. Your first question can ONLY be answered by reading your document. But it would be a rare document that says you are correct in my experience.

FWIW - I think you can continue to use the exclusion, BUT, it cannot serve to exclude (from making deferrals) those students who work the 500-1,000 that you mention.

The plans may be optionally (the word in the reg is "permissively") aggregated for coverage and nondiscrimination. If they pass separately, then they do not need to pass combined. If the plans are aggregated for either coverage or nondiscrimination, they must be aggregated for both. In other words, you have to use the same options for both coverage and nondiscrimination. All plans of the employer must be aggregated for the average benefits percentage test. If both plans cover a Key employee, then they are part of a required aggregation group for top heavy purposes.

Does a $1000 personal emergency distribution help? Never had to repair a septic system, so $1000 may be a drop in the bucket, no pun intended.

Is someone writing a term paper? A treatise? A court brief? Verbs such as "describe" and (especially) "provide" seem very strong. What's in it for us? What else is going on? What is the context for this "request"?

I put your request into Google Gemini and this is what it produced: Pre-USERRA Veterans' Reemployment Rights: A Diachronic Survey Prior to the Uniformed Services Employment and Reemployment Rights Act (USERRA) of 1994, veterans' reemployment rights were primarily governed by state laws and federal regulations that were often inconsistent and lacked comprehensive protection. This resulted in significant disparities in the treatment of veterans returning to civilian employment. Early 20th Century: World War I: While there were no specific federal laws, some states implemented laws to protect the rights of veterans returning from service. World War II: The Servicemen's Readjustment Act of 1944 (the GI Bill) provided veterans with educational benefits and loans, but did not explicitly address reemployment rights. Post-World War II: The Korean War and Vietnam War: Federal laws were enacted to provide veterans with certain benefits and protections, but these laws were often limited in scope and did not fully address reemployment issues. The Vietnam Era Veterans' Readjustment Assistance Act of 1974: This law provided veterans with a broader range of benefits, including job training and counseling, but it did not guarantee reemployment rights. Key Challenges Prior to USERRA: Inconsistent state laws: Different states had varying laws regarding veterans' reemployment rights, leading to confusion and uncertainty. Lack of federal oversight: There was no federal agency or law specifically tasked with enforcing veterans' reemployment rights. Limited protections: Existing laws often did not provide adequate protection for veterans returning to civilian employment, particularly in terms of seniority, benefits, and promotions. Impact on Vesting and Benefit Accrual: Inconsistent treatment: Veterans' vesting and benefit accrual rights varied widely depending on state laws and employer policies. Loss of benefits: In some cases, veterans returning to civilian employment faced difficulties in maintaining or regaining their previous benefit entitlements. Discrimination: Veterans were sometimes subject to discrimination in terms of benefits and promotions, particularly if they had been away from their jobs for extended periods. The passage of USERRA in 1994 significantly improved the protections afforded to veterans returning to civilian employment. The act established a federal standard for reemployment rights, including provisions related to seniority, benefits, and promotions. This helped to address many of the challenges faced by veterans prior to USERRA.

Thanks So what I gather is that Uncle Sam will get his taxes for each year. He allows you to push it off for the first year but then you get hit twice the second year. After that it's year to year.

You can’t merge a 401k into a 403b. But I think that’s the least of the issues. seems like the guy is wanting to use a not for profit entity to pay the wages of the people that actually work for his for-profit business. I would have to imagine there are legal issues with that and I would avoid it. If you can insulate yourself by having his CPA and an ERISA atty drive the decisions, then you should be good.

I've seen many interpretations of that provision. The way I read it is that a plan not meeting the integrated standard in 4(c) can follow the 1, 2, 3, and either 4(a) or 4(b) approach. As you noted, an HDHP will not meet the integrated standard because its deductible by definition is higher than the 4(c) $250 limit. So HDHPs (even if they have a prescription drug benefit combined with the medical), will use the alternative the 1, 2, 3, and either 4(a) or 4(b) approach. That approach basically makes the entire point of emphasis on meeting the 60% Rx standard in 3. The others generally are not in question or irrelevant since ACA. Here's my take in more detail: https://www.newfront.com/blog/ira-changes-affect-notice-of-creditable-coverage-considerations Determining Part D Creditable Status of Employer’s Health Plan There are currently two permitted approaches to determine a group health plan’s creditable status: Simplified Determination; or Actuarial Equivalence Determination Simplified Determination: May Not Be Available After 2025 Though the simplified determination is not as “simple” as the title might suggest, it at least avoids the need to work with an actuary. Initial draft CMS guidance stated the simplified determination would no longer be available starting in 2025 because the IRA changes provide that “it will no longer be a valid methodology to determine whether an entity’s prescription drug coverage is creditable or not.” Fortunately CMS backtracked on this approach in the final guidance after receiving a wave of upset commenters at the approach, and perhaps also in part because they “received no comments supporting the elimination of the simplified methodology.” Commenters appropriately “opined that, without a simplified methodology…plans would be required to make an annual actuarial determination…which would represent a substantial new burden on these plan sponsors.” Nonetheless, CMS has not pledged to maintain the simplified determination beyond 2025. The final guidance states that CMS will “permit use of the existing creditable coverage simplified determination methodology for CY 2025 and will re-evaluate the continued use of the existing or a revised simplified determination methodology for CY 2026 in future guidance.” Under the simplified determination as it currently stands at least through 2025, different tests apply depending on the plan’s structure and deductible. In most situations, employer’s prescription drug coverage is considered “integrated” for purposes of the simplified determination because it is combined with medical coverage. These typical employer plans that are integrated but have a deductible in excess of $250 must meet the following requirements to be considered creditable under the simplified determination: Provides coverage for brand and generic prescriptions; Provides reasonable access to retail providers; The plan is designed to pay on average at least 60% of participants’ prescription drug expenses; and The prescription drug coverage has no annual benefit maximum benefit or a maximum annual benefit payable by the plan of at least $25,000, or the prescription drug coverage has an actuarial expectation that the amount payable by the plan will be at least $2,000 annually per Medicare eligible individual. In most situations, the only aspect of this criteria in question is whether the plan is designed to pay on average at least 60% of participants’ prescription drug expenses. Employers often are aware of that the plan’s overall actuarial value for purposes of determining is at least 60% for purposes of meeting the ACA minimum value standard (i.e., at least as rich as Bronze-level plan on the Exchange), which is also specified in the plan’s SBC. It is often not as clear whether the prescription drug component by itself meets that 60% standard. Bottom Line: In many cases, the plan’s insurance carrier or third-party administrator will perform the creditable status determination and notify the employer of that determination. However, such access and expectations can vary regionally, and may be in jeopardy more broadly if the simplified determination is no longer available or more burdensome in 2026 and beyond. Actuarial Equivalence Determination This approach requires the assistance of an actuary to perform an analysis as to whether the cost of prescription drugs under the employer’s plan is at an actuarial value that equals or exceeds the actuarial value of Part D coverage. Again, employers often have the ability to rely on a determination performed by their insurance carrier or TPA that avoids the need to directly engage with an actuary. However, that access may be in jeopardy going forward, particularly as creditable status becomes more difficult to achieve and determine. CMS Commentary on HDHP Creditable Coverage Status The most common type of employer-sponsored coverage to face challenges meeting the Part D creditable standard are high deductible health plan (HDHP) options designed to be HSA-compatible. Such coverage must impose a minimum deductible to qualify for HDHP status, which is $1,650 for individual coverage and $3,300 for family coverage in 2025. In the 2025 Part D Redesign Program Instructions addressing the changes made by the IRA, CMS responded as follows to a concerned commenter that Part D eligible individuals may have reduced access to creditable HDHP coverage: “We agree that it may be more difficult for high deductible health plans to qualify as creditable coverage. Sponsors of group health plans can address this by offering plan choices that do meet creditable coverage requirements…Part D eligible individuals that choose not to enroll in Part D or a plan that provides creditable coverage may face a Part D late enrollment penalty (Part D LEP) later if they do enroll in Part D.” Accordingly, HDHP plan options will be less likely to meet the creditable coverage standard in 2025 and beyond under the higher bar set by the IRA. Bottom Line: Employers sponsoring creditable HDHP plan options in 2024 should not assume the plan option will remain creditable in 2025. Employers should be working with their vendors to ascertain the creditable status of their plans—and particularly their HDHP plan options—early this year to be aware of any potential changes heading into 2025.