A participant in a self-insured group health plan has committed fraud against the plan by "doctor shopping" and filling multiple prescriptions for the same presciption pain meds at multiple pharmacies (and submitting claims for each).

The employer would like to amend the health plan to provide that a participant is terminated from the plan upon committing fraud against the plan.

The HIPAA portability regs seem to contemplate such a termination (as they provide that an individual is not an "eligible" individual for purposes of avoiding the pre-existing condition exclusion when obtaining individual insurance if the individual has been terminated from a prior plan for committing fraud against the plan).

My one concern is that the health plan will almost certainly disclose some PHI to the employer when the employee is terminated from the health plan. Where in HIPAA is such a disclosure of PHI permitted?

Many thanks!

Due to economic conditions there was a partial plan termination in 2008. At the time of the partial plan termination the affected participants were 100% vested. Some of the affected participants that were terminated are now rehired. Are the affected participants subject to the vesting schedule for employer contributions made after the terminated employees are rehired? That is, are the rehired employees 100% vested on the employer contributions made after the date of rehire or are they subject to the vesting schedule provided in the plan document?

The new notice suggests, "You may wish to consult with the Plan administrator . . . before taking a payment from the Plan."

By Plan admnistrator, do you think the notice had in mind the 19 year old or the 25 year old?

Hi,

I am trying to figure out how to fix this. The participant had a new baby. She returned to work in Jan 2009 and elected the max $5,000 towards dependent care benefits. Her husband did the same with his employer. They have just realized they made a mistake.

I don't have a change in status now, so the participant must continue withholding. My questions is, what amount does the employer report on W-2 box 10? Is it the amount withheld during the year or the amount reimbursed? The employee does not have enough expenses to have the full amount reimbursed.

Thanks for your help!

Going in circles on the tax forms. We've been having a little conversation. Suppose you have an unincorporated partnership. Let's make it easier - no common law employees. No partnership contribution to the Profit Sharing account. A partner has income, assuming all other income/expenses have been taken into account other than the deferral, of $100,000. Partner defers $15,000.

1. It appears that this deferral would be listed on Line 13 of the K-1. Yes or no?

2. Does this reduce the K-1 income to $85,000 as reported on the Schedule E which is used on Line 17 of the 1040, or does it remain at $100,000?

3. When completing the 1040, is the deferral listed on Line 28? Yes or no? (This will depend upon the answer to #2 above, since you obviously wouldn't deduct it twice)

Any other thoughts/observations?

Thanks!

Our client just informed us that they own 100% stock of another company back in 2007. This group will be adopting the current Plan. However they have a Plan and eligibility is less than the current Plan. I know they have to be tested for 2009, do I need to use the lesser requirement for 410b and ADP testing? Moving forward these employees will have to wait 1 yr (based on the current Plan Doc) Can we do a one time entry for the acquired group or do we have to let both companies in the Plan?

The valuation date was changed from 12/31/2008 to 1/1/2008. The Schedule C income for 2008 was very low compared to prior years so I need to use some of the carryover balance (COB) to offset minimum required contribution (and apply towards late quarterly contributions due to high COB)

Does the plan sponsor have until the filing of the 2008 Schedule SB to make this election? I believe I have until the filing of the Schedule SB to use some of the COB to offset the Minimum Required Contribution but didn't know if it was different due to the late quarterly contributions.

Say each quarterly contribution installment is $5,000, the EIR is 6%, the plan has over $200,000 in COB as of 1/1/2008. Would I do the following:

-first installment due 4/15/08: use $4,916 of COB as of 1/1/08 since $4,916 x 1.06^(3/5.12) = $5,000

-second installment due 7/15/08: use $4,844 of COB as of 1/1/08 since $4,844 x 1.06^(6/5.12) = $5,000

and so on?

A small dentist office who has a flexible spending account would like to terminate the plan effective immediately. Her thought is to refund any money in the plan to the participants. Is there any issue with terminating the plan prior to year end and is any formal notice/disclosure required to be sent to the participants or IRS? Any guidance would be appreciated.

This is an interesting situation:

A doctor group operating under entity X owns 100% ownership of entity Y, which includes less compensated staff members (set up this way in order to offer differing benefit packages between the highly compensated doctors of X vs. less-compensated staff of Y. Makes sense.

So, X is selling Y to a hospital in an asset purchase agreement. After the purchase, Y will essentially be out of business- it will no longer exist. Of course, X will.

My question: Since Y will not be a surviving entity, but X will, does Cobra apply (just in case Y employees decide they do not want to work for the hospital so they quit?) That is, would X be responsible to offer Cobra after the purchase even though entity Y will no longer be in existance?

I have looked everywhere for some insight into this situation, but cannot find answers. Any insight or suggestions are greatly appreciated!

THANKS!

As it's audit season again, the issue has again arose regarding the footnote regarding assets representing 5% or more of current assets. For years, we have used the asset figure as of the beginning of the year; now, there are those who feel it should be as of the end of the year. There is nothing in the audit guide or Form 5500 instructions as to whether or not to use BOY or EOY assets to determine the 5% level.

Opinions? Or, if there is a thread to previous conversations on this topic, it would appreciated. Thanks much!

Does the beneficiary of a life insurance policy held in a 401(k) plan have to be the plan? Can the participant name an individual on the life insurance beneficiary form?

Section 415 regulations require a plan to include as compensation any payments made by the later of 2 ½ months after severance from employment or the end of the limitation year that includes the date of severance from employment if such payment would have been paid to the employee prior to a severance from employment if the employee had continued employment with the employer and are regular compensation for services during the employee’s regular working hours, compensation for services outside the employee’s regular working hours (such as overtime or shift differential), commissions, bonuses, or other similar payments.

If our plan excludes bonuses, commissions, shift premiums, allowances, fringe benefits and all other types of remuneration from regular compensation, do we have to include it if it fits within the 415 language above? I’m having a difficult time reconciling the two.

An employer that maintains a one-participant retirement plan will file its Form 5500EZ reports for calendar plan years 2008 (on extension), 2007 (a slight amendment of a timely filed report), and 2006 (seeking delinquent-filer relief). For the 2007 and 2006 reports, is it okay to use the current forms? These will be handwritten, not electronic.

Does an 11(g) amendment need all the same disclosures as ordinary amendments (such as a summary of material modifications)?

Company was destroyed, trustee died, the rest of the company execs now live in another country. Assets have been distributed to the participants, but we don't know who should sign the final form 5500. Ideas? I have searched the DOL and IRS sites and it doesn't seem to address this exactly. We are the TPA only.

Assume for a moment I have statistics to prove a 58 or 55 retirement age is "reasonable"...

How do you calculate the Max 415 pension at say 58 or dare I say 55?

My plan uses for actuarial equivalence....

5.5 Pre (no mortality)

5% Post 83 GAM

Thanks in advance!

The 5-year cycles for IDPs seem fairly straight forward. However, the 6-year cycle for prototypes and volume submitters has me hopelessly confused. I am lost in Rev. Proc. 2007-44 land right now. The way I read it, the EGTRRA remedial amendment period ends on January 31, 2011. However, I have read in numerous other places that the plans must be amended/restated and (if necessary) filed with the IRS by April 30, 2010. However, I can't find the April 30 date in any of the guidance, including Rev. Proc. 2008-56 (unless I am blind). Can somebody help me nail this down once and for all? It would be most appreciated!

I would like to combine two plans for coverage and non-discrim. One is the existing cash balance plan that runs for the full calendar year. The other is a new 401(k) profit sharing plan which also uses the calendar year, but because it is a new plan, there is a short plan year.

2 questions:

1. I know that in order to permissively aggregate, plans must have the same plan year. Does the short year in the 401k mean that I cannot combine the two plans?

2. If I can combine the two plans, what period is the compensation measured over? The cash balance plan uses the full year's comp, and the 401(k) uses the short year's comp.

This was just forwarded to me...

"Like many recent college graduates, Raechel Holtgrave was planning to accept her first full-time job this year — a position with State Farm Insurance. But now that she’s been crowned Miss Hooters International, those plans will have to wait.

she majored in mathematics and actuarial science"

huh. what's the world of actuaries becoming?

gotta love her quote

“You’ll never find an easier job, and you’ll never find a job where you have this much fun,” she said. “That’s why I’m worried about my next job that I’ll be bummed it’s not as much fun.”

http://www.columbiatribune.com/news/2009/j...-spreads-wings/

We recently discovered that a broker surrendered a participant's insurance policy during 2008 and placed the proceeds into the participant's personal account. Therefore, the participant had a taxable distribution from the plan in 2008 for the amount of the cash surrender. Federal withholding was not done and the particiant was never issued a 1099R.

What is the best way to fix this? Issue a 2008 form 1099R now and pay late penalties? Does the employer need to pay the federal withholding? What about the 945 filing for 2008?

Any suggestions would be greatly appreciated.