What is the HCE definition for 2006? $95,000?

Hi everyone,

I posted this on another topic board but didn't get an answer - can anyone here help? Thanks....

I've read everywhere (including right down to the code) that the plan can have "qualifying employer real property" in the plan. The IRS website even mentions that this can be mortgaged by the plan (I realize that you have to watch for a PT).

However, what I cannot find are specifics about mortgages in a qualified plan- how much can be mortgaged, specifics of payments, etc.

Can anyone point me in the right direction? I'm looking for specific citations, etc. Also, if anyone knows of any examples it would really help!

WASHINGTON, DC -- Today the IRS and Treasury issued proposed regulations with respect to the comparability rules for employer Health Savings Account (HSA) contributions. The proposed regulations generally follow the previously issued guidance on comparability rules. The rules also provide additional clarification with respect to a few issues not previously addressed.

Unlike many other employer-provided tax-favored benefits, the HSA rules do not have nondiscrimination rules restricting the amount of benefits provided to highly compensated employees. Instead, the HSA statute requires that all employer pre-tax contributions to employee HSAs be comparable. That is, all employer contributions to employee HSAs must be the same amount or the same percentage of the High Deductible Health Plan (HDHP) deductible for all employees with the same category (self-only or family) of HDHP coverage. These rules, as provided in prior guidance, provide an exception from the comparability rules for employer contributions to HSAs made through cafeteria plans.

See, Link to Proposed Regulations

My ex-husband died this year. I did not know I was entitled to benefits until

his union contacted me. I have since filed a QDRO. What are my chances.

The firm I am working with says very good any opinions?

Has anyone ever had the occasion to design a report or have a report designed that would list, by plan, cash flow?

For example:

1. Secify a period (month or quarter)

2. print out a list by plan to Excel that shows for all plans, individually, for the period:

Plan Name Total Transfer in/out Total Def dep Total ER dep Total Distributions

Did you design it? Have Relius design it?

Thanks

Do you have to impute compensation for purposes of calculating the 3% safe harbor contribution for participants on active military duty?

CAN PLAN EXPENSES BE SHOWN AS A PAYABLE FROM THE PLAN (INCURRED BUT NOT YET PAID)?

For a C corp, a person's "compensation" seems basically salary as would be shown on W-2. For a sole proprietor, "compensation" would be net earned income (profit). What about a small corporation with a sub-S election where a business owner has both salary and profit?

Suppose an owner / partner pays himself a base salary of $40,000 and the business has a good year and ends up with a profit of $150,000 allocated to that owner / partner. Would a 3% employer match be calculated as 3% of $40,000 = $1,200 or 3% x $190,000 = $5,700?

Reference?

Any different implications if the company had a SIMPLE 401(k) rather than SIMPLE IRA?

Thanks.

I have an employee who was called to active duty in 2002-2004. Employee has 2 months of earnings in 2002 but none in 03 and 04. Do we need to distribute a revised W-2 if he decides to contribute for 2002. Additionally, is there a certain way we should be coding these contributions. Any guidance would be appreciated.

Thanks,

I've seen conflicting statements regarding what exactly is supposed to go into Code Y of Box 12 on the W-2. A Paychex bulletin states "employees' annual deferrals", Vanguard states to report "all vested amounts deferred during the tax year from all sources", my ERISA attorney states "all current year deferrals, inlcuding earnings on those deferrals", and finally our friends at the IRS state "Include current year deferrals udners a section 409A NQDC plan. Any earnings during the year on current year and prior year deferrals must also be reports here".

I'm going with what my atty and the Service state. However, it looks like I'll need the help of my recordkeeper to determine the earnings on those deferrals.

I'm kind of shocked at the levels of misinterpretation out there. Has anyone else given any thought to this fun little extra step we now need to get done?

Thanks

We have a QDRO that directs the amount to be put in a separate account established under the plan, with language directing that distribution options then be provided to the AP. The plan does allow for payment to AP as a triggering event, but the Participant is over 50 anyway.

Can the AP subsequently rollover the segregated account to an IRA?

Company M offers a SEction 125 plan to its employees. One of the available coverages is long-term disability coverage. Company M pays for the entire premium for LTD coverage equal to X% of pay. Employees may select, during open enrollment, LTD coverage equal to x% of pay, 10+% of pay or 20 + x% of pay with employees paying the pre-tax premiums for coverages exceeding x% of pay. Assuming the coverage is self-insured, can Company M take advantage of Rev. Rul. 2004-55 by having an employee elect to include premiums in gross income, by having Company M impute in employees' gross income the cost of coverage equal to x% of pay with employees continuing to pay the difference but on an after-tax basis? Does it make a difference if the plan is self-insured? The facts of the Rev. Rul and PLR 200527012 were based on an employer buying an insurance policy from a third party carrier.

I've read everywhere (including right down to the code) that the plan can have "qualifying employer real property" in the plan. The IRS website even mentions that this can be mortgaged by the plan (I realize that you have to watch for a PT).

However, what I cannot find are specifics about mortgages in a qualified plan- how much can be mortgaged, specifics of payments, etc.

Can anyone point me in the right direction? I'm looking for specific citations, etc. Also, if anyone knows of any examples it would really help!

Vicki

Do I understand this correctly that small employers who self-administer an HRA are not subject to HIPAA if they have 49 or fewer participants?

And if they have fewer than 20 they are not subject to COBRA?

How would COBRA apply anyway when the employer doesn't have group health insurance but only offers funds the employee can tap to pay for actual out of pocket medical expenses? Does it just mean we have to allow them to deplete their account balance even if they are no longer employed (in order to be COBRA compliant) ?

can a plan be a limited or general partner?

We have a client that wants to offer an HSA and some of the employees are participating in an FSA. Can we ammend the FSA as a Limited Coverage FSA (dental and vision only) for those that want to make the switch in the middle of a plan year?

Recently discovered that a client, who utilized a brokerage house Prototype Plan Document, never had the Plan Document amended for GUST or EGTRRA. Through mergers and change in Brokers, the Amendments were not processed, yet the Plan operated in compliance throughout the years. Would you recommend VCP assistance for this Non-Amender and the resulting Plan Document Failure? What other alternatives can you suggest?

Recently discovered that a client, who utilized a brokerage house Prototype Plan Document, never had the Plan Document amended for GUST or EGTRRA. Through mergers and change in Brokers, the Amendments were not processed, yet the Plan operated in compliance throughout the years. Would you recommend VCP assistance for this Non-Amender and the resulting Plan Document Failure? What other alternatives can you suggest?

I have a 401(k) plan being audited and one of the IRS requests is a copy of the statement under 6057(e).

Would a standard quarterly participant account statement which is provided to the ex-employee suffice? It contains their name and account balance and vested account balance and they continue to get the statement quarterly unitl such time as they take a distribution from the plan.

I'm sure someone has a ready answer for this. I purchased a laptop about 3 years ago when in hindsight, I was better suited for a desk top (and could have saved about 50% on the cost). In fact I am essentially using it as a desktop at this point, and that is where my question comes up. Since I rarely have to move it around, it is plugged in (ac/dc power) almost always. Rarely do I need it to run on battery. Therefore, it is always fully charged. Is this a problem now or will it be one in the future? I've had 2 different friends in high IT places who have provided opposite answers. FWIW, it is a Dell Inspiron 8200.