Assume an employer did not offer a group health plan, but was interested in purchasing access to a health clinic for its employees and their families. This clinic is not located on the employer's premises, it offers an array of primary care services, and will be shared with other employers.

There is an exception to the ACA requirements for "on-site medical clinics," but that term does not appear to have been defined by the regulators or courts. Because of the scope of benefits offered (more than minor injuries/illness or first aid), the location of the services (not on employers premises) and the fact they will available to family members, this will be treated as a group health plan. 29 CFR 2510.3-1(c). It also wouldn't meet the requirements to be avoid COBRA obligations. 26 CFR 54.4980B-2, Q&A 1(d). Many commentators seem to hang their hat on the ACA exception for "on-site medical clinics" to open the door to allow this kind of arrangement, but I'm not sure I see it.

Can an employer offer certain essential health benefits through a shared clinic without triggering the ACA rules on caps, preexisting conditions, etc.?

I apologize in advance for my ignorance, but I haven't had this question come up before. A company acquired an existing 401k plan (stock purchase). Can the new company get the tax credit (as if it were a new plan, new company)? There is a new EIN, new trustees, etc., but the same, existing plan.  

Also, this company plans to purchase other companies soon, but they plan to have them terminate their existing plans (if applicable), as part of the purchase agreement. They would then add them (as controlled groups) to the current plan. (Same 1 owner (and spouse) on all companies.) In those instances, can they get the tax deduction for each and every new company as they are established?

I am certain I will never be able to provide enough information for anyone to form an opinion. I am just reaching out to see if folks think that the client should absolutely obtain legal advice regarding ASG, or if I am totally over-thinking the ASG issue.

I received a call from a potential client (with no plan in place currently). He is a surgeon who works for a hospital as an employee and participates in the hospital's 403b plan. He gets both elective deferrals as well as employer contributions.

He is also an eminent researcher, who then forms companies to commercialize on his research. He has some equity ownership in these companies, as well, usually between 3%-15%. The companies have their own management and employees. He is not an employee of any of these companies. However, some of these companies pay him, via 1099, for “consulting” to that company. He would like to establish a retirement plan for the 1099 “self-employment” income he receives from these companies.

1) Is it possible that there might be an ASG between his “self-employed business" and any of the businesses in which he has equity ownership? I wonder if his self-employment business could possibly be an A-org, or B-org to any of the companies he has helped to set-up. There is certainly some common ownership, he is being paid for providing services, and these companies are in the medical field. Thoughts?

2) Assuming that a plan for his self-employment income could be established, do we need to aggregate any of his 403b benefits from the 403b plan with ANY plan he establishes for his self-employed income (since he is a 100% owner of his self-employed business). It is my understanding that 403b and DC retirement plans must be aggregated for 415 limits. Does this aggregation also apply for any reason (like deduction limits) between a 403b plan and a Cash Balance Plan, for example?

Thank you for your thoughts.

When calculating the Top Heavy account balance determination, and there is a profit sharing contribution that is partially deposited before the end of the plan year and partially deposited as a receivable, how do you handle that in your testing?

Here is a good one:

Safe Harbor NEC plan.  Plan does an additional match of 25% up to 8% of compensation.  So ACP testing is required.

Question:  Can you run an ADP test (assuming it passes) and the run the ACP test with borrowing from the ADP side?

For a calendar year NFP 403b plan, they want to make their deposit sometime in August (for Reasons).  But they intend on filing their 990 at the regular deadline (5/15/24, 4.5 months after the end of the year).  I know that in the for-profit world, this means that they can't take the deduction for it in the prior year, so they might run into a 404 issue in 2024.  Does that apply to a NFP?  Any part?

Thanks.

So, suppose a calendar year plan is terminating in March. The plan must, of course, amend for SECURE and SECURE 2.0 - (CARES amendment was done way back).

I believe that technically, since the amendment is ADOPTED in 2024, and there is a 210 day period following the end of the PLAN YEAR IN WHICH THE AMENDMENT IS ADOPTED (hence 210 days into 2025) that no SMM is required. Now, employees were previously notified if certain provisions applied - QBAD's, for instance, albeit not in a formal SMM.

If I'm correct, this makes the plan termination process easier, because the SMM's can be wildly variable with the voluminous possible changes, and are a royal PIA.

Thoughts?

Does the successor plan rule in Treas. Reg. § 1.403(b)-10(a)(1) apply to a church 403(b) Plan that contains elective deferrals? I do not see anything exempting a church plan from being subject to that rule. Thank you. 

I know adopting a SH plan for 2023 is out.  What about just a PS plan and then converting it to a SH plan for 2024?  That should be perfectly fine, right?  

Date of adoption would be say today, 2/2/24

Effective date I could say 1/1/2023?

I own a LLC (taxed as S Corp) that offers a SIMPLE IRA to employees and myself.

I also have additional sole proprietary self-employment income from other activities(no employees, just me).  Can I setup a SEP IRA to put some of that income into a retirement account?

Does anyone have a good website for the actual text of internal revenue code, specifically that incorporates the changes from SECURE 2.0?

The ones I usually use, such as the Cornell Legal Institute don't have those sections updated yet, and I don't know when they will be. So when I want to see how the updated language works with the prior language, I have to have both the text of SECURE 2.0 open as well as the code as it was pre-SECURE 2.0. Its getting a little old. 

When I want to really understand something, I do try to read the source material, not just other's articles and interpretations, so having an updated integrated source of the IRC would be so helpful. 

http://actuarialtools.com/cctable.html

I've been using this site to pull the covered comp tables for years but the 2024 tables are not yet available. Anyone know where to pull them from?

Under HIPAA, a business associate must notify a covered entity health plan no later than 60 days from the time it discovered a breach of unsecured protected health information.

If a business associate has, say, thousands of covered entity clients and discovers that only a few participants of only a few of the covered entity health plans are affected by a breach (and the business associate does not know which ones until later), when does that 60-day window start?

Does it start when it determines which specific covered entities are affected?

Or does it start when it discovered the breach (which would require that it notify all of its clients, most of which would ultimately be unaffected)?

I could not find any HHS guidance on point.  

Thanks.

I've got a PEO MEP.  One of the members terminated their service agreement with the PEO effective 1/31/24.  Is there some kind of timeframe or requirement that their assets have to leave the MEP?

In case it matters:
> There is a SHNEC deposited after we calculate it EOY.
> They have not yet made arrangements for their portion to be spun off (no TPA or asset custodian chosen, etc.).
> They have also not made arrangements for anyone to administer their spin off going forward, so I told them that they have to cease deferrals at least temporarily (because there is nowhere to submit them).  I'm not 100% sure that is correct; is there a better option?  I'm presuming this won't affect SH status since they will still all get 3% of full year comp when someone does the annual 2024 administration.

Obviously, the PEO sponsoring the MEP would like them gone as soon as the product platform can get them out.

Thanks.

Group:

IRS audited clients retirement plan an esop. 

In the USTC declaratory action retirement plan is disqualified. 

Typically on an appeal from USTC the bond amount determined from tax deficiencies. 

However since the Dec action doesn't have a tax deficiency how do you proceed with appeal? 

File a bond with $0?

What companies have you used for appeal bonds? 

Thank you 

An individual is receiving some large NQ plan distributions for the next several years and is looking for a way to avoid some of the taxes.  He could not use those payouts as a basis to establish a solo 401k plan for himself and defer into the plan on a tax deferred basis could he?  I'm pretty sure the answer is no, but just checking around for him.

Thanks

Hi

In general I do not work with/accept take overs unless all is in good order.

A CPA friend of mine asked to take over a plan that did not restate for cycle 3. I will need to help out.

401k/PS plan established in 2014 using PPA document. It is a pre-approved document. Calendar plan.

Cycle 3 was due 7/31/2022 and not done. also, no interim amendments were done/provided.

Reading RP 2021-30 for SCP and trying to determine if can be a SCP and also if within permitted time frame.

• Under section 4.1.b, looks like a plan document failure
• Under section 9.2, have up to 3 years to correct

The restatement would be done using a pre-approved document and completed by end of February 2024.

Am I correct or missing something here?

Thanks

Group:

Seeking an expert to assist a US Tax court case on a few narrow issues dealing with S-ESOP prudent investing standards. 

Please reply privately. 

Thank you 

A single member plan owner asked if they can make a Voluntary contribution to the plan now (in 2024) for 2023.  AND, can it then be converted into ROTH money.  

Follow up question is, I know the client can not contribute in excess of the 415 limit.  They would be limited to the 415 limit or whatever their compensation is... whichever is less, right?

hmmm, if the voluntary contribution is after tax going in, when converted do we withhold taxes on the conversion?  

I have to look around and see what I can find.

I understand how the deferral limits are combined/prorated under the new SECURE 2.0 rules. This is not about that. this is about the employer contributions. 

Admittedly I haven't thought this all through, so there may be obvious considerations I have overlooked, so please feel free to point those out as well. 

Scenario A

SIMPLE IRA program is terminated as of 6/30/2024, new 401(k) plan effective 7/1/2024, calendar year plan. Assume all the requirements for a replacement plan under SECURE2.0 are met. The sponsor could do an employer contribution to the new plan, subject to the pro-rated 415 limits, correct? None of those contributions are combined for any limits with any employer contributions to the SIMPLE that I can tell. Is that correct? 

Scenario B

Same fact pattern, but the new plan is effective 1/1/2024 for employer discretionary contributions, with the deferral and safe harbor pieces effective 7/1/2024. In this scenario I think the 415 limit wouldn't be prorated for the new plan, and any employer contributions to the SIMPLE would also be ignored. 

Additional question: Since 415 limits are per participant, and also include deferrals, would the employee contributions to the SIMPLE IRA in scenario B have to be considered when checking the 415 for the new plan? I think the answer is NO, even though it would mean in theory a participant could end up with total contribution to the 401(k) plan that is the full 415 amount AND an employer contribution,  and they have their employee contribution to the SIMPLE for the first part of the year. So their total contributions in a single calendar year are higher than they would have been able to do if there had been only the SIMPLE or only the 401(k) plan for the year. 

What say all you lovely people?