Hello,

I work for a contact lens retailer that is looking to accept payments from Credit Cards issued for Flex Account and HSAs. Currently, these cards get declined when customers try to order with them since I am assuming my business is not recognized as a health service/product provider.

What I would like to know is how my business can be recognized as a health/medical product provider so we can accept payment from these cards. Do we have to register with the companies providing these accounts, or the government? How do they usually verify we are in the business of providing medical products?(contact lenses)

Any help you could give me would be much appreciated. Thank you.

Hello,

I work for a contact lens retailer that is looking to accept payments from Credit Cards issued for Flex Account and HSAs. Currently, these cards get declined when customers try to order with them since I am assuming my business is not recognized as a health service/product provider.

What I would like to know is how my business can be recognized as a health/medical product provider so we can accept payment from these cards. Do we have to register with the companies providing these accounts, or the government? How do they usually verify we are in the business of providing medical products?(contact lenses)

Any help you could give me would be much appreciated. Thank you.

How is everyone classifying Exchange Traded Funds on the Schedule H?

A participant dies with an outstanding participant loan and two beneficiaries. My question is how to treat the outstanding loan balance. I assume that the two beneficiaries will split the cash remaining in the account and get 1099's. Is a third 1099 issued to the estate administrator for the amount of the outstanding balance of the participant loan?

A plan has a 6 month eligibility requirement with no hours therefore part-time employees are eligible to participate after fulfilling the 6 month requirement.

In excluding employees who are statutory exclusions in the plan test, are we limited to excluding those employees who have worked less than 12 months of service or can we exclude longer sevice employees who have never worked more than a few hundred hours in any year?

I have a child of a more than 5% owner who is terminated, would they be considered a key ee for top heavy testing or would they be considered a former key ee? The father owns 70% of the voting stock.

Also, this company has a participant who is a 5% owner but does not make more than 150,000. Would this individual be considered key for top heavy purposes. Everything I have read indicates that you have to own "more than 5% or make 150,000 to be considered key.

Have picked up a new client, self employed doctor. Plan has been in exsistence since 1992. Doc never filed a 5500 because he thought if the assets were under 100,000 he didn't have to file.

Problem is that he has other employees. One part-timer who works less than 800 hours a week. And a full time nurse. Everything else, like plan documents, seem to be in order. We have recalculated the plan's assets to give the nurse a benefit.

I think that we would have to go to thru DVFC. How far back can you file 5500s?

The regs indicate that the QJSA for a married participant must be as least as valuable as other optional forms of benefits, except lump sums. The relative value regs permit banding or the grouping of forms of benefits that are "close", such as between 95 percent and 100 percent of the normal form in certain circumstances so that the plan can say the various forms are equal.

What happens when the QJSA is 97 percent of a single life annuity? Can I band or group the benefits in acordance with the relative value regs to say the QJSA is equal? Is there anyway of reducing the value of the single life annuity (I think not, but I have to ask)?

What software are you using to prepare the 5500's. I have been using ATX Saber for years. I like them, but it takes them forever to get the form approved. It's still not ready.

An executive was granted phantom stock in 2001. Under the arrangement, on the "payment date", he will receive in cash the excess of the stock's fair market value over the "initial value" of the award, which was the fair market value of the stock at the time the award was granted. The payment date is the earliest to occur of (i) 10 years after the date of grant, (ii) a change of control, or (iii) termination of employment (provided that if he is fired for cause or resigns other than for good reason, he will forfeit the award.

The employer is about to be purchased, which will trigger a payment date. The executive, who will continue employment after the change of control, doesn't want to receive the payment yet, and the company wants to accomodate him if possible. The proposal is to amend the arrangement to remove change of control as a payment date so that he will be paid at the earlier of (i) 10 years after the grant, or (ii) termination of employment.

Will such an amendment cause any problems under 409A?

As it now stands, it appears that the phantom stock award meets the SAR exemption from nonqualified deferred comp under Q&A-4(d)(iv) of Notice 2005-1 because it was granted under a program in effect before October 3, 2004, the initial value ("exercise price") is not less than the fair market value at the date of grant, and the award does not include a feature for the deferral of compensation other than the deferral of recognition of income until the exercise of the award.

I can see an argument that the proposed amendment might cause the award to be subject to 409A. In light of the fact that a payment date (the change of control) is pending, the amendment could be viewed as adding a "feature for the deferral of compensation" that would blow the SAR exemption above.

Under that scenario, the award would become nonqualified deferred comp, and since it was not earned and vested as of 12/31/04, it would be subject to 409A. Under 409A, it seems that the amendment would constitute an election to delay a payment, and since the change of control will occur within the next couple of months, I'm not sure that the election would satisfy the requirements of 409A(a)(4)©.

Does anyone have any thoughts on this? Am I totally off base, or do you think the proposed amendment could pose a problem?

NJ state tax return allows employees to exclude 401(k) salary deferrals from taxable income. Does this apply also to sole proprietors and partners? There doesn't seem to be any place on the NJ1040 to deduct deferrals for a sole proprietor. For a partner, the deduction is usually already taken out of the K-1.

sugarfree

Does anyone have a Short Term Disability program which excludes coverage if a request for a medical leave is due to cosmetic surgery? It is my understanding that SDI programs cover elective surgery so I am assuming this would include cosmetic surgery. Thanks.

We have a client that consistently( for two years) has made late 401(k) deposits( on average 1 month from the maximum statutory limt). The late deposits have been reported on the 5500, we have a a large amount of correspondence with the client on the issue but the 5330s and earnings makeups have not been done. The client is very profitable and has no other issues other than the one mentioned. Would anyone out there terminate this client? What liability do we really face given that we have no control over the timing of deposits? Any input would be appreciated.

I'm trying to figure out whether a DB plan is a 412(i) plan. Is there anyway to figure this out by looking at the plan document and nothing else?

We have an existing calendar year profit sharing plan which was amended effective 11/01/04 to include a 401(k) feature. When calculating the ADP/ACP for the 2004 plan year, do we consider compensation for the full plan year if it is defined so in the plan document or is it required to consider compensation only from the effective date of the CODA?

I have a sole proprietor client that has a SEP. He contributes for himself and all eligible employees.

He is over 50. Can he make a catchup contribution to his SEP?

From the research I have done previously it appears that he could only make a catchup contribution if he had a SARSEP. Is this correct?

Any help or advice will be greatly appreciated.

A small company that shall go nameless sent us the data to run their tests, but there were many discrepancies and odd things in the data. There are two categories of discrepancies: (1) matching contributions were allocated to participants who made no deferrals; (2) most employees hired in the last two years were admitted to the plan seemingly at random (actual requirements are 21 & 1 year with semi-annual entry; plan year=calendar year).

The match formula is 100% of deferral up to 3% of comp. There are no service requirements for the match. None of the actual contribution amounts bore any relationship to the formula.

I finally got hold of the plan administrator, also the company president, and discussed refunds and alternatives. He now claims the plan is safe harbor.

There is nothing in our records to indicate that the plan is, in fact, safe harbor. They never formally amended or notified employees or informed us about the plan's new status - until now. In any case, the plan has not been administered properly. Employees are participating that shouldn't; employees who terminated during the plan year received no "safe harbor" contributions; contributions are not 3% of comp; the one NHC who actually deferred in 2005 was allocated this pseudo-safe harbor contribution but no match; etc.

It's plain that two of the three HCEs must take refunds of excess contributions. And the plan should go into EPCRS. But, at the moment, what should happen to all of the bogus safe harbor contributions?

I'm a retired 57 year old and collecting a pension, would i be able to open a Roth IRA. i want the stretch for my grand kids.

Thanks

We have a defined benefit plan that is terminating and we are putting together the Notice of Plan Benefits. Can we advise participants that their choice will be between a lump sum and an annuity to begin paying monthly as soon as the plan termination is approved, or do we have to offer them an annuity payable beginning at their retirement date, too?

Thanks.

Plan fails adp testing. Client's nonqualified plan provides for a "transfer" of adp refunds to the nonqualified plan. Once they have made a qualified coda, I did not think that those monies could be transferred to the nonqualified arrangement because of the constructive receipt requirements under IRC 409A.

Am I missing something?