My company will be implementing a high deductible health plan at annual enrollment 7/1. We will have two carriers nationwide because of network access in various parts of the county. We will have a $1,500 single deductible/$3,000 2 party or family deductible. After the deductible is met, there is a 80%/20% coinsurance until the OOP maximum is met.

Recently one of the carriers came to us and said because of regulations governing HDHP in order to allow an HSA with the plan, the deductible must work differently than what we thought. According to the carrier, if you have a family of 3 and one person has $1,600 in claims, benefit co-insurance will not begin for that individual because the family deductible of $3,000 has not been met.

Can anyone confirm this or provide the legal site for this?

thanks in advance for any help you can provide.

We have one client whose welfare benefit plan is funded by insurance and a veba. We are confused as to how to report this on F5500. If I'm understanding this correctly, there is only one F5500 filed and we would select the "Funding and Benefit Arrangements" at Line 9 as Insurance and Trust? Is this correct? If so, what detail is needed for the trust? We have Schedule A for the insurance but what would be needed for the VEBA (trust) portion? This would be schedule H or I, correct?

The facts are:

An S corp owned by two sole proprietors; the s corp is in the employee benefits business and receives commisions for group medical insurance and life insurance. The S corp has 4 employees, the employees service the business of the s corp as well as process and service business of 2 non owner non employees who pay the s corp a management fee for services which include rent and phones, etc. The s corp also services some business for the 2 sole proprietors that are 50% owners.

The sole proprietors income is schedule c income primarily 75%+ from investment management fees and commisions paid to them by a broker dealer, the other 25% is from insurance commisions.

The plan is to have a SIMPLE IRA for the S corp and seperate Profit Sharing and/ DB plans for the sole proprietors. We are receiving conflicting info as to whether or not this is an ASG.

Thanks for any input

I have heard that you can withdraw the amount invested in a Roth IRA without penalty if needed. I am no where near retirement age, but I need to pay some debts, and was thinking of using some of my Roth IRA to do so. Is this possible if I only withdraw some of the money I originally placed in the Roth IRA? It was all post tax dollars, so there shouldn't be any penalty right?

Thanks.

A client would like to have a new plan set up with an eligibility requirement of 6 months and 500 hours of service. I was previously told that if a plan requires less than 12 months of service, an hours requirement cannot be used. I've also seen volume submitter documents that allow you to specify a number of hours required for each month during the eligibility period (seemingly even if the period was less than 12 months long). Is not having an hours requirement for less than 12 months of service a safe-harbor rule or can you have an hours requirement no matter what the circumstances are and no matter how short the eligibility period is? All help is appreciated.

Hello,

If I am not mistaken, there are several states that require tax withholding on pension/retirement plan distributions whenever there is federal withholding. I believe Virginia and Colorado are two such states; however, I think that there are maybe up to ten more.

Does anyone have an idea which are the other states?

Thank you,

ADMINREX

Company A acquires the stock of Company B in December. Under the terms of the acquisition agreement, Company A is required to establish a pension plan for employees of Company B that mirrors the plan sponsored by Company B's former parent, to be effective as of the closing date. Is there a requirement that the new plan document must be executed by the end of the calendar year of closing, or, since it will take some time to draft, review and finalize the plan, is it OK if the plan is executed early the following year, effective retroactively to the year of closing?

Does anyone have any thoughts on how to handle a situation where an FSA administrator failed to withhold any wages in accordance with the FSA plan participant's salary deferral election? Note, the plan year ended 12/31/05 (with the exception of the 2 1/2 month grace period and administrative run-out period). The employer has indicated that it is okay with reimbursing the ee for his qualified medical expenses as a 106 expense. My thought is that this fix would be okay (however, the participant would, in theory, be a "zero" for nondiscrimination testing). Any thoughts? Is there any guidance on this issue? I can't seem to find any.

can you exclude severence pay from eligible comp under the SIMPLE IRA plan and thus not have to withhold or match that severence pay?

Does anyone have any thoughts on how to handle a situation where an FSA administrator failed to withhold any wages in accordance with the FSA plan participant's salary deferral election? Note, the plan year ended 12/31/05 (with the exception of the 2 1/2 month grace period and administrative run-out period). The employer has indicated that it is okay with reimbursing the ee for his qualified medical expenses as a 106 expense. My thought is that this fix would be okay (however, the participant would, in theory, be a "zero" for nondiscrimination testing). Any thoughts? Is there any guidance on this issue? I can't seem to find any.

I currently have a 401K with my current employer and one from a previous job. I am looking to roll the old 401K money into the current plan. The current plan has a loan outstanding. To pay off the loan, the current plan only accepts bank certified checks. Why can't I use some of the rollover proceeds to pay off the loan? The old 401K money will eventually be invested in the current plan, why can't it just pay the loan off to get there? Thanks.

Question in brief: Has anyone seen (or prepared) legal analysis analyzing whether it is permissible under the ADA to require that employees complete a detailed health risk assessment and submit to a medical examination in order to be eligible to participate in an employer-sponsored group health plan?

Here is additional detail:

Several employers have asked me whether they can require employees to complete a detailed health risk assessment and submit to a medical exam in order to become eligible (or continue to be eligible) to participate in the employer's group health plan. The medical exam would consist of a blood screening and a cholesterol test. The medical exam would be administered by a third party health professional and no individually identifiable health information would be shared with the employer. The employee's job would not be affected by the result of the test, and the cost of participating in the health plan would not be affected by the result of the test. The medical information would be communicated to the employee to guide them in improving their health.

If an employee refused to take the exam he or she would not be eligible to participate in the group medical plan.

The short version of my answer has been: this violates the Americans with Disabilities Act (the ADA), which prohibits employers from requiring that employees submit to a medical examination. There is an exception for "voluntary" examinations, but an exam is not voluntary if an employee is penalized for refusing to participate.

However, some employers have questioned this advice, citing their knowledge of other employers who have implemented such a program. One employer cited a recent article posted at benefitnews.com, which reported that "Cadmus Communications has taken a radical approach to employee wellness: It requires employees to take a health risk assessment, blood pressure screening and cholesterol screening. Seventeen employees at the publishing services company in Richmond, Va., lost their health coverage in 2005 because they didn't cooperate." See the entire article at http://www.benefitnews.com/health/detail.cfm?id=8494 The article says that Cadmus checked with their lawyers and determined that this program was permitted.

Can anyone provide legal reasoning as to how such a practice could be permissible under the ADA? (And, just to foreclose discussion of things that would work, but are different from what's described the above -- I do believe that an employee could be offered an incentive to take the exam as long as the proposed HIPAA bona fide wellness program rules are complied with, and I also believe that this mandatory screening could be given prior to an employment offer because the ADA only prohibits mandatory exams with respect to employees.)

Thanks in advance for your thoughts.

Can someone provide a primer example of a loan issued from a Roth 401(k) account. How is the loan repayment applied to the account. What are the default tax implications. Is there a code reference? Does the answer change if the participant has / has not satisfied the qualified distribution criteria?

I am looking for a copy of a 1986 Money Purchase Pension Plan prototype. I am also looking for a copy of a 2002 Money Purchase Penson Plan prototype which refects the 2002 GUST law changes. Thank you.

Hi,

I'm a stay-at-home-mom who used to work and have accumulated a little bit in the 401K which I want to rollover in an IRA since I am not going back to my ex-employer.

1. Which path is best to take? Roth IRA or traditional IRA?

2. Since Roth IRA, takes the taxed dollars...it doesn't seem to make sense if I can roll-over the pre-tax dollars from 401K.

3. If I go back to work, combined income may go beyond 160K, can we still contribute to the Roth IRA?

Thanks.

Do you treat the employer match any differently for an owner employee than you do for a regular employee?

An individual who has a business that employs commom law employees is considering establishing a C-corp that will be owned by an irrevocable trust. The C-corp. will establish and maintain a qualified plan for the benefit of this one employee. Under Code Section 1563, is it only important that the plan be established after the irrevocable trust is established and stock in the C-corp. is transferred to avoid a controlled group existing? Does the fact that a controlled group might have existed prior to the transfer taint (1) the entire year or (2) the entire structure? I'm aware of the other concerns. At this point, I am only looking at the stock attribution rules. Thanks in advance. Ed

I cannot find what the penalty is for filing Form 945 late. The tax payments are not late, just the timing of filing the form. The IRS directed me to page 24 of Pub. 15, but that not only deals with Form 941, but also deals with tax due (which in this case there aren't any).

Does anyone know the penalty for filing Form 945 late (after Feb 10)?

Thank you in advance for any and all assistance you may be able to give me.

We had a client install a new 401(k) plan for 2005. The employees elected to defer. The payroll company calculated the deferrals and actually took the deferrals from the checking account to deposit into the plan. However, the deferrals were never actually withheld from the participants. How should this be handled and/or corrected?

My initial thought is this is payroll issue and the company is going to have to amend the W-2s. Any other thoughts?