We have a Dr with a medical practice (Dr. owns 100%) and approximately 30 employees. The Dr. also owns 3 hotels (100%) that collectively have more than 50 employees. The employees of the hotels are paid through a management company. The Dr. does not want to cover hotel employees in his medical practice plan. Is there a way to do this?

A self funded plan is offering a HDHP as of May 1 which coincides with their

annual open enrollment period. They have a section 125 plan.

They wish to have two open enrollments in the future; one at the normal time of

May, and one in Dec to allow employees to enroll in the HDHP for the next tax year

if they choose to do so.

I know that elections to an FSA must be for 12 months, but is there a similar requirement for premium only 125 plans?

Can an employee maintain 2 open enrollment periods without jeopardizing the 125 status?

Thanks!

We currently offer a Medical Expense Reimbursement Plan for ee's who "opt out" of our health insurance plan, as well as a Medical Expense Reimbursement Plan for retirees. The plan docs for these two plans state that they are intended to meet the requirements for qualification under Section 105 of the Internal Revenue Code.

These plans were established long before I came to my position here and I haven't been able to track down much history as to how or who provided guidance on their establishment...

Here's are my questions:

Is a Medical Expense Reimbursement Plan under Section 105 the same thing as a Health Reimbursement Arrangement (HRA) under section 105?

Secondly, if yes. The plans I have are currently set up as "use-it or lose-it" plans. I recently read that under a HRA it IS permissable for the plan to carry over un-used funds to the next year. Is this a requirement of the internal revenue code? I'm trying to determine if I need to amend my plans as such.

When must catch-up contributions for 2003 be made to an IRA?

401(k) contributions have to be made from compensation currently available. They can also be made from year end bonuses, paid up to 2-1/2 months after PYE. Other than this "exception", a sole prop could not make 401(k) contributions to his 12/31/2003 plan (which covers his other 2 ee's) in 2004.

Can anyone confirm some or all of the above and if possible, provide a section/reg site that I can reference? A new client was told that as a sole prop, he had up until 4/15 to make his own 401(k) contributions to his plan, and have it count towards the previous year. I do not think he is right, and may need to show him the code section/reg to convince him.

Thanks

It is my understanding that this act does not change the 417e minimum lump sums. For example, if the plan's act eq is 5% and the 417e rate is 4.37%, the minimum lump sum would still be based on the 4.37%. My question is regarding maximum 415 lump sums. Would the 5.5% rate override the other rates for 415 or would the 417e lump sum take precedence since that would provide a larger lump sum than the 415 (if the participant's accreued benefit was at the 415 lmt.)?? Thanks.

This might have been asked before, but I can't find it so...

In attempting to pass 401(a)(26), what would preclude a DB offset plan being set up where the owners' benefits are not subject to being offset, but the ancillary employees' benefits are? Note that all of the ancillaries' DB amounts would be completely offset by their DC nonelective balances.

I have procrastinated on my taxes (again) and will be paying for it shortly.

My question is on my husband's W-2. During 2003, he had some money withheld during the year for a flex medical reimbursement account. Now that I am preparing our taxes, I noticed that the amount withheld for reimbursement is reported in box 10 of his W-2 as dependent care benefits. Problem is, we shouldn't have had dependent care benefits for 2003 since we have no dependents--no kids, no disabled persons, no one who would fit the definition of a qualifying person. Our household consists of two working adults--my husband and I--and a very spoiled kitty cat.

The instructions for Form 1040 say that amounts listed in Box 10 of the W-2 should be included in the income line (along with wages, etc. from Box 1 of the W-2), but I don't feel that the Box 10 entry is correct in our case. Am I way off base? Are we better off filing everything as it is, or should we wait for a corrected W-2 (if I'm not off base) and extend our taxes? The amount in question is only $300, but we already have to write a big check to the government, so I'd rather not increase our payment or do anything to trigger a question on our return.

By the way, I'm not an accountant. This is the deepest I've EVER had to dig into the instructions.

Thanks for all replies.

Can someone tell me whether an employer can make matching contributions from an employee's compensation? Here are the facts:

Employees are permitted to make elective deferrals under the plan. There is a discretionary matching contribution and the source of the match is the employees' compensation (pre tax). The employees earn a salary and a % of gross revenues as their compensation. If the match is not made, the employer simply pays those amounts to the employee as compensation.

This is how the employer was operating before we got involved, so we are not sure what authority they are relying on. Would this situation change at all if the employees were owners of a partnership?

Is there any Fiduciary Liability to Plan Trustees when a Mutual Fund they have selected for their plan is involved in unethical procedures such as the market timing and mutual fund scandal currently going on?

We have a bunch of participants who received employer (profit sharing) contributions and then terminated. They were not vested but the employer hasn't requested the distribution of these accounts -so on statements, it's still under their name.

On the 5500, are they counted as being "separated & entitled to future benefits"? And/or as a participant with an account balance?

I'm thinking the money should be considered forfeitures but I'm not really sure. Any insight is appreciated!

Thanks,

Rachel

Has anyone used the BlazeeSSI product PENTRAK? Can you share your opinion / experience with this product?

I have a multiple employer 401(k) plan for which I need to test approximately 82 participating employers individually for top heavy. I use Relius Admin software. Does anyone have any ideas on an efficient way to accomplish this? I'm about to tear my hair out because I really don't want to have to do this by hand - but it's looking like I will have to. I appreciate any input.

Cust establishes new Roth IRA, contributes $850, then closes it and transfers the $850 (plus earnings) into another Roth IRA.

Customer wants to recharacterize the $850 into a Trad IRA contribution.

The regs say that IRA transfers cannot be recharacterized (1.408A-5 Q & A 10). But then again, it says that you can disregard transfer and recharacterize the amounts as if they were contributed under the first Roth IRA.

Can they or can't they, and please explain why.... finding these rules really, really mind bending...

What is the due date for a profit sharing contribution to a 501© organization???

Participant requested a hardship withdrawal with spousal consent (plan offers annuities). Something happened between them and now the spouse wants to withdraw her consent. Payment hasn't occurred yet.

Does anyone have any thoughts on whether we should accept the rescission or treat the consent as irrevocable? Before anyone says follow the plan document, the plan document doesn't say.

Thanks

We are having some debates on the effective dates for covrages changes in relation to QLE. Is there a one-stop resource to determine what we should be doing?

Example: An employee of ours has coverage under a spouse. The employee and the spouse get marrieed. The ex-spouse's plan drops our employee effective the date of the divorce (April 5th) - are we to allow the employee to enroll in our plan effective April 6th or the 16th?

When you add too much to an existing ROTH what might be the best way to determine gain/loss only on that money? Can't find anything helpful in IRS Pubs. Thank you to all.

Any thoughts regarding whether we have to provide a HIPAA privacy notice also in Spanish? The regulations appear to be silent on this issue, and I would appreciate any guidance!

if a participant receives a lump sum distribution because of a social security defined injury, do they get the 10% penalty for early withdraw. and if so, since a 1099 does not need to be attached with filing, do they have to have one reissued?

thanks, Andrew