Leaderboard

Better call Saul.

If you elect the 4% SF nonelective up to the last day of the following plan year, you are a SF for the year. So if that is the only employer contribution you are deemed not top-heavy. Though you would need to make it to all eligible (though I believe you can exclude HCEs still), not just the deferring because you can't add a retroactive SF match.

I would recommend everyone lawyer up and walk away like a dealer at a blackjack table.

I would view this in the other direction--meaning the employer should take steps to immediately remove all §213(d) expenses from the LSA. And also look for a new LSA TPA for not flagging the issue! I suppose in theory you could offer COBRA for the LSA, but it is not clear how that would operate given (as you noted) there are health and non-health components to the plan. I think you could treat it like an EAP and make all types of benefits (including non-medical) available through COBRA, or try to segregate a medical-only component that is accessible through COBRA. I'm doubtful the TPA could do that, but in theory it could work. To me that would be the least of the concerns, though. Think of all the issues with the LSA that could not be readily addressed: ERISA plan doc/SPD HIPAA privacy/security PCORI fees §105(h) nondiscrimination ACA reporting ACA integration to satisfy market reform provisions HSA eligibility Multiple CAA potential issues So I would recommend against trying to shoehorn a COBRA approach into this, and instead reverse course on the medical benefit inclusion asap. More details: https://www.newfront.com/blog/lifestyle-spending-account-compliance-considerations Slide summary: 2025 Newfront Fringe Benefits for Employers Guide

It depends on what the PsOA and plan documents provide. Who or what do you think you represent or answer to? Any interested (directly or indirectly) fiduciary needs to ask if they need to engage an independent fiduciary. And what Bill Presson said. EDIT: Replaced “interested” with “independent”

ahhh to be so idealistic.....