Facts: Client has about 7,000 employees at 28 different companies, all in a controlled group. All but 1,000 employees are covered by fully-insured health/dental plan. The remaining 1,000 employees, who are all employed at one of the subs., have a choice among 3 self-insured health/dental plans. There are HCEs in both the fully-insured plan and the self-insured plans.

105(h)(8) states that the 105(h) discrimination rules apply on a controlled group basis. The benefits test in 105(h) states that any benefit provided to a HCE must be provided to a NHCE, and the regulations tell us that we look at both the type and value of benefits. The regulations also tell us that we can aggregate plans for purposes of satisfying the 105 non-discrimination tests. Further, the regulations tell us that we can offset benefits provided in other plans for purposes of satisfying the tests. There seems to be little guidance out there on how to practically apply these rules.

What if there are some components/benefits in the self-insured plans that are more favorable than the fully-insured plans? In comparing the plans, some of the benefits in the fully-insured plan are better than the self-insured plan(s) and vice-versa. Also, what is a "benefit"? What if a copay or deductible in the self-insured plan is lower than a copay or deductible in the fully-insured plan - is the amount of a copay/deductible a benefit? What if some surgery is covered in the self-insured plan(s) that is not covered in the fully-insured plan?

There is certainly no intent to discriminate and the differences in the plans, from a practical standpoint, seem that they should be ok. However, the benefits test in 105(h) is strict in that it says every benefit offered to HCEs has to be offered to NHCEs. So, if cosmetic surgery is covered in a self-insured plan (which would cover an HCE) and is not covered in the fully-insured plan at another subsidiary which has NHCEs participating, 105 is violated because there are NHCEs out there who cannot get this benefit? Surely this can't be the outcome . . .

Any thoughts on this would be appreciated!

Hopefully someone can help me with this. Mr. P ownes 100% of P&P. His wife Mrs. P is an EE of P&P. Mr. P's step-son (Mr. C the son of Mrs. P from previous marriage) is also an EE. Would Mr. P, Mrs. P, and Mr. C all be HCE's?

Is there any double attribution here?

Any help would be appreciated.

Carson

Is there a year look back period for HCE's?

What's the best way to handle a plan when a partner leaves and is not 100% vested? Should the vesting schedule be amended to 100% immediate or settle outside of plan (tax consequences not good)?

FACTS:

300 Employees

Employer offers two health plans

The employer will pay $200 towards employee premium

The employee pays the difference

One plan costs more than the other

If employee elects the expensive one - all employers $ goes toward the premium

If employee elects the cheaper one there is about $80 left

QUESTION:

Can the employer set up just an FSA (medical and dependent care reimbursement accounts) which obviously allows employees to elect salary reductions for either category but at the same time seed the $80 into the accounts of only the employees who elect the cheaper medical insurance?

For Form 5500 count for a welfare plan, what is a participant ?

Is it someone who is eligibile for plan or who is also actually benefiting?

Takeover Plan: Prior year FASB had a prepaid pension cost but then reflected the Additional Liability to adjust balance sheet liability to equal the unfunded accrued liability (ABO-Assets).

Current Year: Assets are greater than the ABO (barely) so I believe the Additional Liability goes away, but I'm unsure if my year-to-year balancing equation (prior year Accrued Liab. + periodic pension cost - contrib.) starts with last years Balance Sheet Pension liability (which reflects the Add'l Liab.) or whether it starts with the prior year prepaid pension costs (ignoring the prior year Additional Liability for this purpose) ?

Also I believe MGB previously mentioned that once assets > ABO again (this year) that the prior prepaid cost will reappear on the books (net of any periodic pension costs since that time). What adjustments do I need to show for this ? There is only 1 year of net periodic pension since the Add'l Liab. applied.

Does the net earnings from self employment # on K1 ( I beleiev it's lien 15 of K1)already have excluded the Section 179 expense amount?

I am a CPA auditing a 401(k) plan. The plan is a prototype plan. The employer has always used Oct-1 and Apr-1 as entry dates, though plan doc states Jan-1 and Jul-1. An employee began deferring on Oct-1, his first entry date after the plan's required 6 months of service. Subsequent to the plan year-end, it was determined he was not eligible. The administrator instructed the trustee to refund the contributions less fees and investment losses. They then enacted an amendment to reflect the Oct-1 and Apr-1 entry dates, though not retroactively. Is it proper to deduct fees and investment losses if he was deemed inelgible? Should this be reported as a distribution payable at year-end? The administrator is not including this participant on their year-end reports at all - no contributions, no balance, no loss allocation. However, his contribution receivable is included in total contributions receivable at year-end.

Under ERISA 408©(2) funds are permitted to

pay "reasonable compensation" to trustees who suffer

a loss in wages while attending meetings, conferences,

etc.

My understanding of this section of ERISA as well

as the regulations is that the plan may compensate

the trustee for the full value of his missed time...both

wages AND benefits.

Assuming the fund does not directly contribute

to the applicable fringe benefit plans,

is it "reasonable" to pay the trustee the full value of the

wage and benefit package? Keep in mind that

the plan can document the Davis-Bacon rates through

the DOL or applicable state agencies.

We have an employee whose step daughter recently became a full time college student. In the process of enrollmnet for college it was discovered that the natural father as well as the step father have the child enrolled on their health insurance plans. The health plans are both with the same insurer; however, different groups and different benefits. The step father's plan is a sec 125 POP.

My question is would it be allowable for the step father to remove the step child outside of open enrollment just because it would be cheaper for him (going for family to 2 person coverage), or would there have to be an "event" that would allow this change?

My thought is that there needs to be an event due to consistancy rules of sec 125, and there is not any event since the child is not newly eligible for other coverage and dual coverage or cost of coverage is not itself an reason to terminate at will.

Any thoughts, insights or opinions are welcome and appreciated.

(sorry for any spelling errors, but a study at cambridge univ. says I only needed to get the first and last letter correct)

Can someone explain the below from the 5500 instructions for Schedule T, 4c, regarding certain parts of a plan that must be disaggregated?

4. A plan that benefits both collectively bargained employees and noncollectively bargained employees. None of the employees benefiting under a plan are considered collectively bargained employees if more than 2% of the employees covered by the plan are professional employees.

If I have a plan that covers both collectively bargained (70%) and noncollectively bargained employees (30%), do I disaggregate for schedule T purposes or do I not? I am very confused by the statement "None of the employees benefiting under a plan are considered collectively bargained employees if more than 2% of the employees covered by the plan are professional employees".

Thanks

I apologize in advance if my question seems elementary to the bulk of 403(b) experts that frequent this board! I am fumbling through my first 403(b) takeover!

My client has a 403(b) with deferrals and an Employer match of dollar for dollar up to 5%. I believe the Plan is exempt from ADP testing, but has a real tough time passsing 401(m).

Assuming the existing 403(b) Plan Document allows it, would it be a good idea to convert the Plan to a 401(k) Safe Harbor Plan, since their Employer Match is already satisfying the Safe Harbor guidelines? Also, since EGTRRA relaxed the rollover rules, there is no reason that I need to keep the 403(b) assets seperate, correct?

Any guidance would be greatly appreciated.

We have a participant who is the beneficiary of his wife’s qualified Plan. His wife has passed away and he is asking if he can roll the death benefit (from the deceased qualified plan) into his qualified plan. His plan does allow rollovers but I thought there were regs about death benefits being rollover eligible.

Any help would be great!

418(b)(7) states that the Unfunded Vested Benefit is the difference of the value of the vested benefit, less "the value of the assets of the plan".

I couldn't find anything else defining "value of assets". Is this actuarial value or market value?

P.S. I know this probably belongs on the mult-employer board, but it wasn't seeing much action over there.

I have a client who has a population of EE's who are strictly commission who are eligible to participate in the plan.

Question is, if the monthly commission is not enough to cover deductions can the employee be switched to a direct bill status and not lose their pre-tax benefit?

Also, any other advice that anyone has on administering this population in the most effective manner would be greatly appreciated.

Thanks!

Facts: Client has about 7,000 employees at 28 different companies, all in a controlled group. All but 1,000 employees are covered by fully-insured health/dental plan. The remaining 1,000 employees, who are all employed at one of the subs., have a choice among 3 self-insured health/dental plans. There are HCEs in both the fully-insured plan and the self-insured plans.

105(h)(8) states that the 105(h) discrimination rules apply on a controlled group basis. The benefits test in 105(h) states that any benefit provided to a HCE must be provided to a NHCE, and the regulations tell us that we look at both the type and value of benefits. The regulations also tell us that we can aggregate plans for purposes of satisfying the 105 non-discrimination tests. Further, the regulations tell us that we can offset benefits provided in other plans for purposes of satisfying the tests. There seems to be little guidance out there on how to practically apply these rules.

What if there are some components/benefits in the self-insured plans that are more favorable than the fully-insured plans? In comparing the plans, some of the benefits in the fully-insured plan are better than the self-insured plan(s) and vice-versa. Also, what is a "benefit"? What if a copay or deductible in the self-insured plan is lower than a copay or deductible in the fully-insured plan - is the amount of a copay/deductible a benefit? What if some surgery is covered in the self-insured plan(s) that is not covered in the fully-insured plan?

There is certainly no intent to discriminate and the differences in the plans, from a practical standpoint, seem that they should be ok. However, the benefits test in 105(h) is strict in that it says every benefit offered to HCEs has to be offered to NHCEs. So, if cosmetic surgery is covered in a self-insured plan (which would cover an HCE) and is not covered in the fully-insured plan at another subsidiary which has NHCEs participating, 105 is violated because there are NHCEs out there who cannot get this benefit? Surely this can't be the outcome . . .

Any thoughts on this would be appreciated!

A DB plan had employee contributions which were suspended over 20 years ago. A participant over 65 is now retiring. Assuming the participant leaves the accumulated value of the employee contributions in the plan...the plan document says that the employee portion is ADDED to the accrued benefit under the plan. This is done by taking a certain percentage of the accumulated value of the employee contributions. Does the accumulated value of the ee contributions at late retirement date need to be compared to the actuarial equivalent of the accumulated value at normal retirement date? The plan document does not specifically say to treat the additional employee contribution portion like so, but the accumulated value at Late Retirement is less than the actuarially adjust value from normal retirement date.

Thanks.

Assume 401(a) plan has operational defect for a few years or maybe even only one year. Employer discovers the error and corrects it prospectively only, but not to take advantage of any of the available EPCRS alternatives. Assume timely and accurate 5500s with Schedule Ps filed every year.

I believe the IRS' position is that the plan remains subject to disqualification FOREVER. In other words, even if IRS examines the plan AFTER the SOL has closed on the last year in which the defect occurred, it can still disqualify the plan currently and assess back taxes, etc., for all open years. However, I'm not sure where this position is stated specifically (other than the inference from the EPCRS Rev. Procs.). Can anyone provide a citation?

What testing requirements does a Safe Harbor Enhanced Match subject to when they made an additional pro rata $25k contribution to the plan? Do they lose their safe harbor status?